<PAGE>
================================================================================
As filed with the Securities and Exchange Commission on August 28,1996
Registration No. 333-7575
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
---------------
CHASE MANHATTAN AUTO TRUSTS
(Issuer of Securities)
CHASE MANHATTAN BANK USA, N.A. CHASE MANHATTAN BANK USA, N.A.
(Originators of the Trust described herein)
(Exact name as specified in registrants' charters)
United States United States
(States or other jurisdictions of incorporation)
11-2741948 22-2382028
(I.R.S. employer identification numbers)
200 Jericho Quadrangle 802 Delaware Avenue
Jericho, New York 11759 Wilmington, Delaware 19801
(516) 935-9935 (302) 575-5000
(Address, including zip code, and telephone number,
including area code, of registrants' Principal Executive Offices)
ANDREW T. SEMMELMAN ANDREW T. SEMMELMAN
Secretary Secretary
Chase Manhattan Bank USA, N.A. Chase Manhattan Bank USA, N.A.
802 Delaware Avenue 802 Delaware Avenue
Wilmington, Delaware 19801 Wilmington, Delaware 19801
(302) 575-5033 (302) 575-5033
(Name, address, including zip code, and telephone number,
including area code, of agents for service)
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<S> <C> <C>
Copies to:
MARTIN R. JOYCE LAURA PALMA WILLIAM A. GRAY
The Chase Manhattan Bank Simpson Thacher & Bartlett Orrick, Herrington & Sutcliffe
270 Park Avenue 425 Lexington Avenue 666 Fifth Avenue
New York, New York 10017 New York, New York 10017 New York, New York 10103
</TABLE>
Approximate date of commencement of proposed sale to the public: From
time to time after this registration statement becomes effective as determined
by market conditions.
If any of the securities being registered on this Form are to be
offered pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act Registration Statement number of the
earlier effective Registration Statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
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<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Amount to be Aggregate Price Per Aggregate Offering Registration
Registered(1) Registered(2) Unit(2) Price(2) Fee(2)(3)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset-Backed Securities $5,000,000,000 100% $5,000,000,000 $1,724,138
================================================================================================================================
</TABLE>
(1) The Securities are also being registered for the purpose of market making.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Of which $1,723,793 is paid herewith, and $345 has been previously paid.
================================================================================
Explanatory Note
- ----------------
The Seller with respect to each of the Trusts described in this
Registration Statement will be one of two national banking association
subsidiaries of The Chase Manhattan Corporation, each of which is named Chase
Manhattan Bank USA, N.A. See "Chase USA (New York) and Chase USA (Delaware)" in
the Prospectus. The Seller with respect to any Trust will be Chase USA (New
York) until the Chase USA Merger is consummated; following the Chase USA merger,
Chase USA (Delaware), the surviving bank, will be the Seller.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus Supplement and the accompanying Prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED AUGUST 28, 1996
PROSPECTUS SUPPLEMENT
(To Prospectus dated ________________, 199__)
[$____________]
CHASE MANHATTAN AUTO GRANTOR TRUST 199__-__
$___________ ___% Automobile Loan Pass-Through Certificates, Class A
$___________ ___% Automobile Loan Pass-Through Certificates, Class B
Chase Manhattan Bank USA, N.A.
Seller and Servicer
The Chase Manhattan Auto Grantor Trust 199_-_ (the "Trust") will be formed
pursuant to a Pooling and Servicing Agreement, to be dated as of ___________,
199_, among Chase Manhattan Bank USA, N.A., in its capacities as seller (the
"Seller") and as servicer (the "Servicer") and _________________, as Trustee.
The Trust will issue $______________ aggregate principal amount of ____% Asset
Backed Certificates, Class A (the "Class A Certificates") and $_______________
aggregate principal amount of ____% Asset Backed Certificates, Class B (the
"Class B Certificates" and, together with the Class A Certificates, the
"Certificates"). The Class A Certificates will evidence in the aggregate an
approximate ____% undivided ownership interest in the Trust, and the Class B
Certificates will evidence in the aggregate an approximate ____% undivided
ownership interest in the Trust. The rights of the Class B Certificateholders to
receive distributions with respect to the Receivables are subordinated to the
rights of the Class A Certificateholders to the extent described herein.
Principal and interest to the extent of the Pass-Through Rate generally will be
distributed to the Certificateholders on the _th day of each month (or, if such
_th day is not a Business Day, the next following Business Day), beginning
______ __, 199_. The Trust property will include a pool of [simple interest]
[actuarial] retail installment sales contracts and purchase money loans secured
by new and used automobiles and light-duty trucks, certain monies due [or
received] thereunder on or after ___________ __, 199_ (the "Cutoff Date"),
security interests in the vehicles financed thereby, benefits under a Cash
Collateral Guaranty and the Cash Collateral Account securing such guaranty and
proceeds from claims on certain insurance policies, all as more fully described
herein. [The final Distribution Date of the Certificates will be ______ __, ____
(the "Final Distribution Date").]
(continued on the following page)
----------------
There currently is no secondary market for the Certificates and there is
no assurance that one will develop.
The Underwriter expects, but is not obligated, to make a market in the
Certificates. There is no assurance that any such market will develop or
continue.
THE CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT REPRESENT
INTERESTS IN OR OBLIGATIONS OF CHASE MANHATTAN BANK USA, N.A OR THE CHASE
MANHATTAN BANK OR ANY AFFILIATE THEREOF. A CERTIFICATE IS NOT A DEPOSIT AND IS
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC"). THE
RECEIVABLES ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospective investors should consider, among other things, the information
set forth under the heading "Risk Factors" in this Prospectus Supplement
commencing on page S-7 and in the accompanying Prospectus.
<TABLE>
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================================================================================
Price to Underwriting Proceeds to
Public(1) Discount the Seller (1)(2)
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Per Class A Certificate % % %
- --------------------------------------------------------------------------------
Per Class B Certificate % % %
- --------------------------------------------------------------------------------
Total $ $ $
================================================================================
</TABLE>
(1) Plus accrued interest from ________ __ , 199_, if any.
(2) Before deduction of expenses estimated at $___________.
This Prospectus Supplement may be used by Chase Securities Inc., an
affiliate of the Seller and a subsidiary of The Chase Manhattan Corporation (the
"Underwriter"), in connection with offers and sales related to market-making
transactions in the Certificates. The Underwriter may act as principal or agent
in such transactions. Such sales will be made at prices related to prevailing
prices at the time of sale.
<PAGE>
The Certificates are being offered by the Underwriter, subject to prior
sale, when, as and if issued to and accepted by the Underwriter, subject to
approval of certain legal matters by counsel for the Underwriter. The
Underwriter reserves the right to reject orders in whole or in part. It is
expected that the Certificates will be delivered in book-entry form, on or about
_________ 199_ (the "Closing Date"), through the facilities of The Depository
Trust Company ("DTC"), CEDEL and Euroclear.
----------------
[UNDERWRITER]
----------------
The date of this Prospectus Supplement is _______ __, 199_
ii
<PAGE>
(continued from previous page)
The Certificates initially may be represented by Certificates registered
in the name of Cede & Co., the nominee of DTC. The interests of beneficial
owners of the Certificates will be represented by book entries on the records of
DTC and participating members thereof. Definitive Certificates will be available
only under the limited circumstances described herein.
Until __________ __, 199_ (90 days after the date of this Prospectus
Supplement) all dealers effecting transactions in the Certificates, whether or
not participating in this distribution, may be required to deliver this
Prospectus Supplement and the Prospectus. This delivery requirement is in
addition to the obligation of dealers to deliver this Prospectus Supplement and
the Prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT THE
OFFERING OF THE CERTIFICATES. ADDITIONAL INFORMATION IS CONTAINED IN THE
PROSPECTUS. PROSPECTIVE INVESTORS ARE URGED TO READ BOTH THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE CERTIFICATES MAY NOT BE
CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Upon receipt of a request by an investor, or his or her representative,
within the period during which there is a prospectus delivery obligation, the
Underwriter will transmit or cause to be transmitted promptly, without charge
and in addition to any such delivery requirements, a paper copy of this
Prospectus Supplement and a Prospectus or this Prospectus Supplement and a
Prospectus encoded in an electronic format.
iii
<PAGE>
TABLE OF CONTENTS
Page
PROSPECTUS SUPPLEMENT...................................................... i
SUMMARY OF TERMS.....................................................S-1
RISK FACTORS.........................................................S-7
THE TRUST............................................................S-8
THE RECEIVABLES POOL.................................................S-9
CHASE USA...........................................................S-14
USE OF PROCEEDS.....................................................S-14
WEIGHTED AVERAGE LIFE OF THE CERTIFICATES...........................S-14
YIELD CONSIDERATIONS................................................S-14
THE CERTIFICATES....................................................S-14
POOLING AND SERVICING AGREEMENT.....................................S-19
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.............................S-21
CERTAIN STATE TAX CONSEQUENCES......................................S-24
ERISA CONSIDERATIONS................................................S-25
UNDERWRITING........................................................S-27
LEGAL MATTERS.......................................................S-27
INDEX OF TERMS......................................................S-28
ANNEX I
PROSPECTUS
SUMMARY OF PROSPECTUS..................................................6
RISK FACTORS..........................................................17
THE TRUSTS............................................................21
THE RECEIVABLES POOLS.................................................22
WEIGHTED AVERAGE LIFE OF THE SECURITIES...............................29
POOL FACTORS AND TRADING INFORMATION..................................30
USE OF PROCEEDS.......................................................31
[CHASE USA (NEW YORK)] [CHASE USA (DELAWARE)].........................31
DESCRIPTION OF THE NOTES..............................................32
DESCRIPTION OF THE CERTIFICATES.......................................37
CERTAIN INFORMATION REGARDING THE SECURITIES..........................39
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS..................47
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES..............................61
ERISA CONSIDERATIONS..................................................63
PLAN OF DISTRIBUTION..................................................66
RATINGS...............................................................67
LEGAL MATTERS.........................................................67
INDEX OF TERMS........................................................68
iv
<PAGE>
SUMMARY OF TERMS
This Summary of Terms is qualified in its entirety by reference to the
detailed information appearing elsewhere herein and in the Prospectus. Certain
capitalized terms used in this Summary are defined elsewhere in this Prospectus
Supplement on the pages indicated in the "Index of Terms" or, to the extent not
defined herein, have the meanings assigned to such terms in the Prospectus.
<TABLE>
<S> <C>
Issuer........................ Chase Manhattan Auto Grantor Trust 199_-_ (the
"Trust" or the "Issuer").
Seller........................ Chase Manhattan Bank USA, N.A., a national
banking association ("Chase USA"), a
wholly-owned subsidiary of The Chase Manhattan
Bank (in such capacity, the "Seller" or
individually, the "Bank").
Servicer...................... Chase USA (in such capacity, the "Servicer").
Securities Offered............ The Trust will issue Automobile Loan
Pass-Through Certificates pursuant to the
Agreement in an aggregate initial principal
amount of $[____________]. The Certificates
will represent fractional undivided interests
in the Trust.
The Certificates will consist of
$[________________] aggregate principal amount
of ____% Automobile Loan Pass-Through
Certificates, Class A, and $[______________]
aggregate principal amount of ____% Automobile
Loan Pass-Through Certificates, Class B. The
Trust property will include the Receivables,
[with respect to Actuarial Receivables, all
monies due thereunder on or after the Cutoff
Date and, with respect to Simple Interest
Receivables, all monies due or received
thereunder on or after the Cutoff Date],
security interests in the Financed Vehicles,
benefits under the Cash Collateral Guaranty
and Cash Collateral Account described below,
proceeds from the exercise of the Seller's
recourse rights against Dealers, proceeds from
claims on certain insurance policies, rights
with respect to repossessed vehicles and
certain rights under the Pooling and Servicing
Agreement (the "Agreement") between the
Seller, the Servicer, and
______________________, as trustee (the
"Trustee").
The Class A Certificates will evidence in the
aggregate an approximate ____% undivided
ownership interest (the "Class A Percentage")
in the Trust, and the Class B Certificates
will evidence in the aggregate an approximate
____% undivided ownership interest (the "Class
B Percentage") in the Trust. The Class B
Certificates are subordinated to the Class A
Certificates to the extent described herein.
The Certificates will be offered for purchase
in denominations of $1,000 and integral
multiples thereof. See "The
Certificates--General" herein and "The Trusts"
and "Description of the Certificates--General"
in the Prospectus.
</TABLE>
S-1
<PAGE>
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<S> <C>
Registration of the
Certificates.................. The Certificates initially will be represented
by Certificates registered in the name of
Cede, as the nominee of DTC.
Certificateholders will not be entitled to
receive a Definitive Certificate representing
such person's interest in the Trust, except in
the event that Definitive Certificates are
issued under the limited circumstances
described in the Prospectus.
Certificateholders may elect to hold their
Certificates through DTC (in the United
States) or CEDEL or Euroclear (in Europe). All
references herein to Certificateholders shall
reflect the rights of Certificateholders, as
such rights may be exercised through DTC and
its Participants (including CEDEL and
Euroclear), except as otherwise specified
herein. See "Certain Information Regarding the
Securities--Book-Entry Registration" and
"--Definitive Securities" in the Prospectus.
Pass-Through Rate............. ____% per annum (the "Pass-Through Rate"),
calculated on the basis of a 360-day year
comprised of twelve 30-day months, payable
monthly.
Distribution Date............. The __th day of each month (or, if such __th
day is not a day on which the Trustee and
banks located in New York, New York, [and
_____, ____] are open for the purpose of
conducting a commercial banking business (a
"Business Day"), the next following Business
Day) commencing ______ __, 199_.
Interest...................... On each Distribution Date, interest will be
distributed to the holders of record of the
Class A Certificates and the Class B
Certificates (the "Class A Certificateholders"
and "Class B Certificateholders,"
respectively) as of the date immediately
preceding such Distribution Date or, if
Definitive Certificates are issued, the last
day of the immediately preceding calendar
month (each such date, a "Record Date"),
generally in an amount equal to (i) the
product of one-twelfth of the Pass-Through
Rate and the Class A Certificate Balance with
respect to the Class A Certificates and (ii)
the product of one-twelfth of the Pass-
Through Rate and the Class B Certificate
Balance with respect to the Class B
Certificates.
Principal..................... All payments, including full and partial
prepayments, of principal collected by the
Servicer during the preceding Collection
Period and certain other payments allocable to
principal, as described more fully herein,
will be distributed by the Trustee on each
Distribution Date pro rata to the Class A
Certificateholders and to the Class B
Certificateholders of record on the preceding
Record Date. See "Description of the
Certificates-- Distributions on Certificates"
herein. The rights of the Class B
Certificateholders to receive payments of
principal will be subordinated to the rights
of the Class A Certificateholders to receive
payments of interest and principal to the
extent described herein. The "Class A
Certificate Balance" and "Class B Certificate
Balance" will initially equal
$[________________] and $[_________________],
respectively, and, in each case, will
thereafter equal the initial Class A
Certificate Balance or the
</TABLE>
S-2
<PAGE>
<TABLE>
<S> <C>
initial Class B Certificate Balance, as the
case may be, reduced by all principal
distributions on the Class A Certificates and
the Class B Certificates, respectively.
Subordination of Class B
Certificates................ Distributions of interest and principal on the
Class B Certificates will be subordinated in
priority of payment to interest and principal
due on the Class A Certificates to the extent
described herein. The Class B
Certificateholders will not receive any
distributions of interest with respect to a
Collection Period until the full amount of
interest on the Class A Certificates relating
to such Collection Period has been deposited
in the Class A Distribution Account. The Class
B Certificateholders will not receive any
distributions of principal with respect to
such Collection Period until the full amount
of interest on and principal of the Class A
Certificates relating to such Collection
Period has been deposited in the Class A
Distribution Account. See "Risk
Factors--Subordination; Limited Assets" herein
and in the Prospectus.
Advances...................... On each Deposit Date, the Servicer may, in its
sole discretion, make an Advance with respect
to each [Simple Interest] Receivable (other
than a Defaulted Receivable) equal to the
excess, if any, of (x) the product of the
principal balance of such Receivable as of the
related Settlement Date and one-twelfth of its
Contract Rate, over (y) the interest actually
received by the Servicer with respect to such
Receivable from the Obligor or from payments
of the Repurchase Amount during or with
respect to such Collection Period. The
Servicer may elect not to make any Advance
with respect to a Receivable to the extent
that the Servicer, in its sole discretion,
determines that such Advance is not
recoverable from subsequent payments on such
Receivable or from demands under the Cash
Collateral Guaranty. See "Description of the
Certificates--Advances" herein.
Servicing Fee................. The Servicer shall receive a Servicing Fee,
payable on each Distribution Date, in an
amount equal to the sum of (i) the product of
the Servicing Fee Rate and the Pool Balance as
of the related Settlement Date and (ii) any
Late Fees paid by the Obligors during the
related Collection Period. A "Settlement Date"
with respect to a Distribution Date will be
the close of business on the last day of the
Collection Period immediately preceding the
related Collection Period. A "Collection
Period" with respect to a Distribution Date
will be the calendar month preceding the
calendar month in which such Distribution Date
occurs. In addition, the Servicing Fee will
include Investment Earnings on amounts on
deposit in the Collection Account; provided,
however, that from and after the Collection
Period in which the Servicer fails to deposit
an Advance with respect to a Receivable other
than because such Receivable has been declared
a Defaulted Receivable, such investment income
will not be paid to the Servicer, but will be
deposited in the Cash Collateral Account or
applied pursuant to the Loan Agreement. See
"The Certificates--Servicing Compensation"
herein and "Description of
</TABLE>
S-3
<PAGE>
<TABLE>
<S> <C>
the Transfer and Servicing
Agreements--Servicing Compensation and Payment
of Expenses" and "--Net Deposits" in the
Prospectus.
Cash Collateral Account....... The Trustee will have the right to demand
payments under the Cash Collateral Guaranty
issued pursuant to the Trust Agreement
described below, under certain circumstances
described below. The Cash Collateral Guaranty
will be secured by the Cash Collateral
Account, which will be held in the name of the
Cash Collateral Trustee. Pursuant to the Trust
Agreement among the Cash Collateral Depositor,
the Cash Collateral Trustee, the Trustee, the
Seller or the Servicer, the Cash Collateral
Account will be funded on the Closing Date in
the amount of the Initial Cash Collateral
Amount from the proceeds of a loan to be made
by the Cash Collateral Depositor pursuant to
the Loan Agreement. The Cash Collateral
Guaranty will not be a recourse obligation of
the Cash Collateral Depositor, the Cash
Collateral Trustee, the Trustee, the Seller or
the Servicer, and will be secured and funded
solely with amounts, if any, on deposit in the
Cash Collateral Account. The Cash Collateral
Account and any amounts therein will not be
property of the Trust, but will be held in
accordance with the Trust Agreement for the
benefit of the Trustee and the Cash Collateral
Depositor, as secured parties and as provided
in the Trust Agreement.
On each Deposit Date, the Trustee shall demand
payment under the Cash Collateral Guaranty to
the extent of Payment Deficiencies, but in no
event in an amount greater than the Available
Cash Collateral Amount with respect to such
Distribution Date. See "The Certificates--The
Cash Collateral Account" herein.
Demands under the Cash Collateral Guaranty
will be funded solely from amounts, if any, on
deposit in the Cash Collateral Account. If the
amount deposited in the Cash Collateral
Account is reduced to zero, and in the case of
the Class A Certificateholders, if the
subordination of the Class B Certificates is
insufficient, Certificateholders will bear
directly the credit and other risks associated
with ownership of the Receivables, including
the risk that the Trust may not have a
perfected security interest in the Financed
Vehicles. See "Certain Legal Aspects of the
Receivables" in the Prospectus.
On each Distribution Date, any amounts on
deposit in the Collection Account with respect
to the preceding Collection Period, after
payments to Certificateholders and the
Servicer have been made, will be paid to the
Cash Collateral Trustee for application in
accordance with the Trust Agreement. See "The
Certificates--The Cash Collateral Account"
herein and "Description of the Transfer and
Servicing Agreements--Credit and Cash Flow
Enhancement" in the Prospectus.
Repayment on each Distribution Date of
principal and interest on the loan made by the
Cash Collateral Depositor to the Cash
</TABLE>
S-4
<PAGE>
<TABLE>
<S> <C>
Collateral Trust 199_-_ will be made from
funds available in the Collection Account
after distributions of interest and principal
have been made to Certificateholders and the
Servicer, from amounts on deposit in the Cash
Collateral Account in excess of the Required
Cash Collateral Amount (after taking into
account any required deposits to, and
withdrawals from, the Cash Collateral
Account), and from earnings on permitted
investments in the Cash Collateral Account.
Repayment of the loan made by the Cash
Collateral Depositor will not be recourse to
the Trust, the Trustee, the Seller, the
Servicer, the Cash Collateral Trustee or a
Certificateholder.
Required Cash Collateral
Amount........................ The amount on deposit in the Cash Collateral
Account on the initial Distribution Date will
be $________. On each Distribution Date
thereafter, the Required Cash Collateral
Amount will equal ____% of the Pool Balance as
of the related Settlement Date, but in any
event not less than the lesser of (i) $_______
and (ii) the sum of the Pool Balance as of the
related Settlement Date, accrued interest
thereon and an amount equal to the product of
such Pool Balance and the Servicing Fee Rate
(except that under certain circumstances the
Required Cash Collateral Amount will be the
amount set forth above using a percentage of
___%). See "The Certificates--The Cash
Collateral Account" herein and "Description of
the Transfer and Servicing Agreements--Credit
and Cash Flow Enhancement" in the Prospectus.
Optional Purchase............. The Servicer may purchase all the Receivables
on any Distribution Date following the last
day of any Collection Period as of which the
Pool Balance has declined to 5% or less of the
Pool Balance as of the Cutoff Date. See "The
Certificates--Termination" herein and
"Description of the Transfer and Servicing
Agreements--Termination" in the Prospectus.
Trustee....................... _________________________ (the "Trustee"). The
Trustee's Corporate Trust Office is located at
_______________________, telephone
(___)___-____. The Bank and its respective
affiliates may have normal banking
relationships with the Trustee and its
affiliates.
Cash Collateral Trustee....... ___________________________.
Tax Status.................... In the opinion of Simpson Thacher & Bartlett,
special counsel to the Seller, the Trust will
be treated as a grantor trust for United
States federal income tax purposes and not as
an association taxable as a corporation.
Certificateholders must report their
respective allocable shares of income earned
on Trust assets and, subject to certain
limitations applicable to individuals, estates
and trusts, may deduct their respective
allocable shares of reasonable servicing and
other fees paid or incurred by the Trust. See
"Certain Federal Income Tax Consequences" and
"Certain State Tax Consequences" herein.
</TABLE>
S-5
<PAGE>
<TABLE>
<S> <C>
Rating........................ It is a condition of issuance of the Class A
Certificates that they be rated in the highest
investment rating category by at least two
nationally recognized statistical rating
organizations (each a "Rating Agency"), and it
is a condition to the issuance of the Class B
Certificates that they be rated at least
investment grade by at least one Rating
Agency.
There can be no assurance that these ratings
will not be lowered or withdrawn if, in the
sole judgment of any such rating agency,
circumstances in the future so warrant.
ERISA Considerations.......... The Class A Certificates may, in general, be
purchased by Plans that are subject to ERISA
or Section 4975 of the Code, and by persons
investing Plan Assets of any Plan, upon
satisfaction of certain conditions described
herein.
The Class B Certificates may not be acquired
by, on behalf of, or with, Plan Assets.
See "ERISA Considerations" herein and in the
Prospectus.
</TABLE>
S-6
<PAGE>
RISK FACTORS
Investors should consider, among other things, the matters discussed under
"Risk Factors" in the Prospectus and the following risk factors in connection
with the purchase of Certificates.
Limited Liquidity
There is currently no secondary market for the Certificates offered hereby. The
Underwriter currently intends to make a market in the Certificates offered
hereby, but it is under no obligation to do so. There can be no assurance that a
secondary market will develop or, if a secondary market does develop, that it
will provide the Certificateholders with liquidity of investment or that it will
continue for the life of the Certificates offered hereby.
Trust's Relationship to the Seller and the Servicer
Neither the Seller nor the Servicer is generally obligated to make any payments
in respect of the Certificates or the Receivables. In addition, if the Bank were
to cease acting as Servicer, delays in processing payments on the Receivables
and information in respect thereof could occur and result in delays in payments
to the Certificateholders. See "Description of the Transfer and Servicing
Agreements -- Sale and Assignment of the Receivables" in the Prospectus.
Subordination; Limited Assets
The rights of the Class B Certificateholders to receive payments of principal
will be subordinated to the rights of the Class A Certificateholders to receive
payments of interest and principal to the extent described herein. The Class B
Certificateholders will not receive any distributions of interest with respect
to a Collection Period until the full amount of interest on the Class A
Certificates relating to such Collection Period has been deposited in the Class
A Distribution Account. The Class B Certificateholders will not receive any
distributions of principal with respect to such Collection Period until the full
amount of interest on and principal of the Class A Certificates relating to such
Collection Period has been deposited in the Class A Distribution Account.
The Trust will not have, nor is it permitted or expected to have, any
significant assets or sources of funds other than the Receivables and the right
to receive payments under certain circumstances under the Cash Collateral
Guaranty. The Certificates represent interests solely in the Trust.
Certificateholders must rely for repayment upon payments on the Receivables and,
pursuant to the terms of the Cash Collateral Guaranty, the Available Cash
Collateral Amount, if any. However, the amounts deposited in the Cash Collateral
Account are limited. If the amount on deposit in the Cash Collateral Account is
exhausted, and in the case of the Class A Certificateholders, if the
subordination of the Class B Certificates is insufficient, the Trust will depend
solely on current distributions on the Receivables to make payments on the
Certificates. The Certificates will not be insured or guaranteed by any
Affiliate, the Bank, the Servicer, the Trustee or any other person or entity.
Ratings of the Certificates
It is a condition to the issuance of the Class A Certificates that they be rated
in the highest investment rating category, by at least two Rating Agencies, and
it is a condition to the issuance of the Class B Certificates that they be rated
at least [investment grade] by at least one Rating Agency. A rating is not a
recommendation to purchase, hold or sell Certificates, inasmuch as such rating
does not comment as to market price or suitability for a particular investor.
The ratings of the Certificates address the likelihood of the timely payment of
interest on and the ultimate payment of principal of the Certificates pursuant
to their terms. There can be no assurance that a rating will remain for any
given period of time or that a rating will not be lowered or withdrawn entirely
by a Rating Agency if in its judgment circumstances in the future so warrant.
S-7
<PAGE>
Federal Income Taxation; Effect of Subordination on Class B Certificateholders
It is expected that, for federal income tax purposes, amounts otherwise payable
to the Class B Certificateholders that are paid to the Class A
Certificateholders pursuant to the subordination provisions described above
under "--Subordination; Limited Assets" will be deemed to have been received by
the Class B Certificateholders and then paid by them to the Class A
Certificateholders pursuant to a guaranty. See generally "Certain Federal Income
Tax Consequences" herein.
If the Class B Certificateholders received distributions of less than their
share of the Trust's receipts of principal or interest (the "Shortfall Amount")
because of the subordination of the Class B Certificates, holders of Class B
Certificates would probably be treated for Federal income tax purposes as if
they had (1) received as distributions their full share of such receipts, (2)
paid over to the Class A Certificateholders an amount equal to such Shortfall
Amount, and (3) retained the right to reimbursement of such amounts to the
extent of future collections otherwise available for deposit in the Cash
Collateral Account.
Under this analysis, (1) Class B Certificateholders would be required to accrue
as current income any interest or OID income of the Trust that was a component
of the Shortfall Amount, even though such amount was in fact paid to the Class A
Certificateholders, (2) a loss would only be allowed to the Class B
Certificateholders when their right to receive reimbursement of such Shortfall
Amount became worthless (i.e., when it becomes clear that that amount will not
be available from any source to reimburse such loss), and (3) reimbursement of
such Shortfall Amount prior to such a claim of worthlessness would not be
taxable income to Class B Certificateholders because such amount was previously
included in income. Those results should not significantly affect the inclusion
of income for Class B Certificateholders on the accrual method of accounting,
but could accelerate inclusion of income to Class B Certificateholders on the
cash method of accounting by, in effect, placing them on the accrual method.
Moreover, character and timing of loss deductions is unclear.
THE TRUST
The Seller will establish the Trust by selling and assigning the Trust
property, as described below, to the Trustee in exchange for the Certificates.
Each Certificate will represent a fractional undivided interest in the Trust.
The Trust property will include a pool (the "Receivables Pool") comprised of the
Receivables and all payments due [or received] thereunder on or after the Cutoff
Date (other than the Retained Yield). The Trust property will also include (i)
such amounts as from time to time may be held in the Collection Account and the
Certificate Distribution Accounts established and maintained by the Servicer in
the name of the Trustee pursuant to the Agreement; (ii) security interests in
the vehicles securing the Receivables (the "Financed Vehicles"); (iii) the
benefit of the right to demand payments under the Cash Collateral Guaranty that
will be secured by the Cash Collateral Account; (iv) the rights to proceeds as a
result of the Seller's exercise of its recourse rights against Dealers (as
described in the Prospectus under "The Receivables Pools--Origination and
Servicing of Motor Vehicle Loans"); (v) an assignment of the rights of the
Seller to receive proceeds from claims on theft and physical damage, credit life
and credit disability insurance policies covering the Financed Vehicles or the
Obligors, as the case may be, to the extent that such insurance policies relate
to the Receivables; and (vi) the rights with respect to any Financed Vehicle
that has been repossessed by the Servicer, on behalf of the Trustee. The
Agreement sets forth criteria that must be satisfied by each Receivable. See
"Description of the Transfer and Servicing Agreements--Sale and Assignment of
Receivables" in the Prospectus. Each Receivable will be identified in a schedule
appearing as an exhibit to the Agreement.
The Trust will be formed for this transaction pursuant to the Agreement
and prior to formation will have had no assets or obligations. After formation,
the Trust will not engage in any activity other than acquiring and holding the
Receivables, issuing the Certificates, distributing payments thereon and as
otherwise described herein and as provided in the Agreement. The Trust will not
acquire any contracts or assets other than the Trust property described above
and will not have any need for additional capital resources. As the Trust does
not have any operating history and will not engage in any activity other than
issuing the Certificates and making distributions thereon, there has not been
included any historical or pro forma financial statements or ratio of earnings
to fixed
S-8
<PAGE>
charges with respect to the Trust. Inasmuch as the Trust has no operating
history, it is not possible to predict the operating performance of the Trust
while the Certificates are outstanding. While management of the Seller believes
that the loss and delinquency experience contained herein for recent periods are
representative of past performance of Motor Vehicle Loans in the Chase Auto
Finance Portfolio, there is no assurance that such performance is indicative of
the future performance of the Receivables, since future performance is
dependent, among other things, on general economic conditions and economic
conditions in the geographical areas in which the Obligors reside including, for
example, unemployment rates.
THE RECEIVABLES POOL
The Receivables represent Motor Vehicle Loans from the portfolio of the
Seller that, in addition to satisfying the criteria set forth in the Prospectus
under "The Receivables Pool-General":
(a) have a remaining maturity, as of the Cutoff Date, of at least
___ months and not more than ___ months;
(b) are secured by either new Financed Vehicles that had an original
maturity of at least ___ months and not more than ___ months, or used
Financed Vehicles that had an original maturity of at least ___ months and
not more than ___ months;
(c) are fully-amortizing fixed rate simple interest [actuarial]
contracts that provide for level scheduled monthly payments over their
respective remaining terms, have an annual contract rate of interest (a
"Contract Rate") of at least ____% and not more than ____%, and are not
secured by any interest in real estate;
(d) have not been paid more than three months in advance as of the
Cutoff Date;
(e) have remaining principal balances, as of the Cutoff Date, of at
least $__________ and not greater than $__________;
(f) have no payment that is delinquent for more than [____] days
past due as of the related Cutoff Date; and
(g) are not Chase Lincoln Loans, Chase Maryland Loans, Motor Vehicle
Loans originated by or through a Dealer located in the State of
___________ or the subject of a previous securitization.
The Receivables were selected from the Motor Vehicle Loans in the
portfolio of the Seller that met the above criteria. For administrative reasons,
the Seller first selected from the Motor Vehicle Loans in its portfolio all
otherwise eligible Motor Vehicle Loans originated since _________ __, 19__,
which were segregated and held for sale by the Seller. The Seller believes that
such selection procedures are not materially adverse to Certificateholders.
Approximately ____% of the aggregate principal balance of the Receivables, as of
the Cutoff Date, were secured by new Financed Vehicles and approximately ___% of
the aggregate principal balance of the Receivables, as of the Cutoff Date, were
secured by used Financed Vehicles. [Approximately __% and %__ of the aggregate
principal balance of the Receivables, as of the Cutoff Date, were Simple
Interest Receivables and Actuarial Receivables, respectively.] [Approximately
___% of the aggregate principal balance of the Receivables, as of the Cutoff
Date, were originated by Chase Auto Finance directly with Obligors.] Virtually
none of the Receivables provide for recourse to the Dealer in the event of
default by the Obligor except for breaches of the Dealer's representations and
warranties that do not relate to the creditworthiness of the Obligor. The Seller
may not substitute other Motor Vehicle Loans from its portfolio or any other
motor vehicle receivables, for the Receivables at any time during the term of
the Agreement. See "The Receivables Pool-General" in the Prospectus for a
description of how prepayments made under Simple Interest and Actuarial
Receivables are allocated.
S-9
<PAGE>
The composition of the Receivables, distribution of the Receivables by
Contract Rate distribution of the Receivables and the geographic distribution of
the Receivables, in each case as of the Cutoff Date, are set forth in the
following tables.
Composition of the Receivables
New Financed Vehicles Used Financed Vehicles Total
-----------------------------------------------------------
Aggregate Principal $ $ $
Balance
Number of Receivables
Average Principal $ $ $
Balance
Average Original $ $ $
Balance
Weighted Average % % %
Contract Rate
Contract Rate (Range) __ __ %
Weighted Average
Original Term months months months
Original Term (Range) months months months
Weighted Average
Remaining Term months months months
Remaining Term (Range) months months months
Distribution By Contract Rate Of The Receivables
Percent Of
Number of Aggregate
Contract Rate Range Receivables Principal Balance Pool Balance(1)
- ------------------- ----------- ----------------- ---------------
.................... $ %
....................
....................
....................
....................
....................
Total............... $ %
----------------- ------------------
- ------------------------
(1) Amounts shown do not total 100.00% due to rounding.
S-10
<PAGE>
Geographic Distribution Of The Receivables(1)
Percent Of
Number of Aggregate
State(3) Receivables Principal Balance Pool Balance(2)
-------- ----------- ----------------- ---------------
.................... $ %
....................
....................
....................
....................
....................
....................
....................
....................
Total............... $ 100.00%
- ------------------------
(1) Based on location of the Dealer from which the Motor Vehicle Loan
was acquired or through which it was made.
(2) Amounts shown do not total 100.00% due to rounding.
[(3) Alabama excluded for administrative reasons.]
Delinquency and Loan Loss Information
The following tables set forth information with respect to delinquencies,
loan losses and recoveries for the Chase Auto Financial Portfolio as of the
dates indicated and for each of the one year periods ended December 31, 199_,
199_, 199_, 199_ and 199_ and for each of the ____ month periods ended ________
__, 199_ and ________ __, 199_. [The portions of the Chase Auto Finance
Portfolio that provide for payments based upon variable rate simple interest
[and the actuarial method] are included in the following tables but Motor
Vehicle Loans of such type[s] are not included in the Trust.] [Chase Auto
Finance does not maintain separate records that distinguish among the
delinquency and loan loss experience for Motor Vehicle Loans that provide for
payments based upon [fixed rate simple interest], variable rate simple interest
and the actuarial method. The Seller believes, however, that the delinquency and
loan loss experience with respect to the fixed rate simple interest [and
actuarial method] Motor Vehicle Loans included in the Trust is not materially
different from the performance of the Chase Auto Finance Portfolio set forth
below.
See "The Receivables Pool--General" and "--Delinquency and Loan Loss
Information" for a description of the composition of the Chase Auto Finance
Portfolio.
The data presented in the following tables are for illustrative purposes
only. Delinquency and loan loss experience may be influenced by a variety of
economic, social and other factors. No assurance can be given that the
delinquency and loan loss information of the Bank, or of the Trust with respect
to the Receivables, in the future will be similar to that set forth above.
S-11
<PAGE>
<TABLE>
<CAPTION>
Delinquency Experience
Months Ended Months Ended Year Ended
----------------------------------------------------------------------------------------------------------------------
December 31, December 31, December 31, December 31, December 31,
, 199_ , 199_ 199_ 199_ 199_ 199_ 199_
----------------------------------------------------------------------------------------------------------------------
Dollars Number Dollars Number Dollars Number Dollars Number Dollars Number Dollars Number Dollars Number
(000's) of Loans (000's) of Loans (000's) of Loans (000's) of Loans (000's) of Loans (000's) of Loans (000's) of Loans
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding
Principal
Amount........
Delinquencies($)(1)(2)
30-59 Days....
60-89 Days....
90 Days or
More.........
TOTAL
Delinquencies.
Repossession
Inventory(3)...
TOTAL Delinquencies &
Repossession Inventory
Delinquencies(%)(1)(2)(4)
30-59 Days.....
60-89 Days.....
90 Days or
More..........
TOTAL
Delinquencies..
Repossession
Inventory......
TOTAL
Delinquencies &
Repossession
Inventory......
</TABLE>
- ------------------------
(1) Delinquencies include principal amounts only.
(2) The period of delinquency is based on the number of days payments are
contractually past due.
(3) For December 31, 1994 and earlier, amounts shown in repossession inventory
represent loans which have been written down to the fair market value of
the collateral, but where the related financed vehicles have not yet been
sold. For December 31, 1995, the amount shown in repossession inventory
represent the total outstanding principal balance of the loans at that
time.
(4) As a percent of outstanding principal in dollars.
(5) At ________, approximately __% of the aggregate principal balance of Motor
Vehicle Loans in the portfolio presented were Chase Maryland Loans.
S-12
<PAGE>
<TABLE>
<CAPTION>
Loan Loss Experience
(Dollars in 000's)
Months Ended Months Ended Year Ended
----------------------------------------------------------------------------------------------------------------------
December 31, December 31, December 31, December 31, December 31,
, 199_ , 199_ 199_ 199_ 199_ 199_ 199_
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of
Loans(1)......
Period End
Outstanding
Principal
Amount........
Average
Outstanding
Principal
Amount (2)....
Number of
Repossessions.
Number of Gross
Charge-Offs(3).
Gross
Charge-Offs as
a % of Period
End Outstanding
Principal
Amount.........
Gross Charge-Offs
as a % of Average
Outstanding
Principal
Amount.........
Recoveries(4)...
Net
Charge-Offs(5).
Net Charge-Offs
as a % of Period
End Outstanding
Principal
Amount.........
Net Charge-Offs
as a % of Average
Outstanding
Principal
Amount.........
</TABLE>
- ------------------------
(1) Number of loans as of period end.
(2) Averages for 1993, 1994 and 1995 were computed by taking a simple average
of monthly average outstanding principal amounts for each period presented
and averages for 1991 and 1992 were computed by taking a simple average of
month end outstanding principal amounts for each period presented.
(3) Amount charged off is remaining principal balance less proceeds from sale
of repossessed vehicles.
(4) Recoveries generally include amounts received with respect to loans
previously charged off, except for proceeds realized in connection with
the sale of the financed vehicles.
(5) Net charge-offs mean gross charge-offs minus recoveries of loans
previously charged off.
(6) As of _______, approximately ___% of the aggregate principal balance of
Motor Vehicle Loans in the portfolio presented were Chase Maryland Loans.
S-13
<PAGE>
CHASE USA
Information regarding the Seller and the Servicer is set forth under
"Chase USA (New York) and Chase USA (Delaware)" in the Prospectus. At
__________, 199__, Chase USA's total assets were approximately $____ billion,
total liabilities were approximately $____ billion, and total stockholders'
equity was approximately $____ billion.
USE OF PROCEEDS
The net proceeds to be received by the Seller from the sale of
Certificates, estimated to be approximately $___________, will be added to its
general funds.
WEIGHTED AVERAGE LIFE OF THE CERTIFICATES
Information regarding certain maturity and prepayment considerations with
respect to the Certificates is set forth under "Weighted Average Life of the
Securities" in the Prospectus.
YIELD CONSIDERATIONS
Interest on the Receivables will be passed through on each Distribution
Date to the Certificateholders of each Class in an amount equal to the
Pass-Through Rate applied to the Class A Certificate Balance or the Class B
Certificate Balance, in each case as of the prior Distribution Date. In the
event of principal prepayment on a Receivable, Certificateholders will generally
receive interest for the full month on such Receivable. See "The
Certificates--Distributions on Certificates" herein.
Chase Auto Finance maintains certain records of the historical prepayment
experience of the Chase Auto Finance Portfolio. The Seller believes that such
records are not adequate to provide meaningful information with respect to the
Receivables. In any event, no assurance can be given that prepayments on the
Receivables would conform to any historical experience, and no prediction can be
made as to the actual prepayment experience to be expected with respect to the
Receivables.
[Although the Receivables have different Contract Rates, each Receivable's
Contract Rate exceeds the sum of the Pass-Through Rate and the Servicing Fee
Rate. Therefore, disproportionate rates of prepayments between Receivables with
higher and lower Contract Rates will not affect the yield to
Certificateholders.]
THE CERTIFICATES
General
The Certificates offered hereby will be issued pursuant to the Agreement,
a form of which has been filed as an exhibit to the Registration Statement. A
copy of the Agreement will be filed with the Commission following the issuance
of the Certificates. The following, as well as other pertinent information
included elsewhere in this Prospectus Supplement and the Prospectus, summarizes
the material terms of the Certificates and the Agreement. The following summary
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the Agreement. The following summary supplements the
description of the general terms and provisions of the Certificates of any given
series and the related Pooling and Servicing Agreement set forth in the
Prospectus, to which description reference is hereby made.
The Certificates will constitute Fixed Rate Securities, as such term is
defined under "Certain Information Regarding the Securities-Fixed Rate
Securities" in the Prospectus. The Certificates will evidence undivided
S-14
<PAGE>
ownership interests in the Trust created pursuant to the Agreement. The Class A
Certificates will evidence in the aggregate an undivided ownership interest of
the Class A Percentage of the Trust and the Class B Certificates will evidence
in the aggregate an undivided ownership interest of the Class B Percentage of
the Trust. In general, it is intended that the Class A Certificateholders
receive, on each Distribution Date, the Class A Percentage of the amounts
allocable to the principal balance of the Receivables for the related Collection
Period plus one-month's interest at the Pass-Through Rate on the Class A
Certificate Balance. Subject to the prior rights of the Class A
Certificateholders, it is intended that the Class B Certificateholders receive,
on each Distribution Date, the Class B Percentage of the amounts allocable to
the principal balance of the Receivables for the related Collection Period plus
one-month's interest at the Pass-Through Rate on the Class B Certificate
Balance.
Interest to Certificateholders may be provided by payments made by or on
behalf of the Obligors, Advances or demands under the Cash Collateral Guaranty.
A prepayment of a Receivable may be made by or on behalf of an Obligor, by
application of insurance proceeds, as a result of a repurchase made by the
Seller or purchase made by the Servicer under the circumstances specified in the
Agreement, or, by foreclosure upon the related Financed Vehicle or other
enforcement measures taken with respect to a Receivable that is delinquent prior
to its being designated a Defaulted Receivable and the realization of
liquidation proceeds with respect thereto. See "The Certificates--The Cash
Collateral Account" herein and "Description of the Transfer and Servicing
Agreements--Sale and Assignment of Receivables" and "--Servicing Procedures" in
the Prospectus.
Distributions of principal of and interest on the Certificates with
respect to each Collection Period will made by, or on behalf of, the Trustee on
the Distribution Date immediately succeeding such Collection Period, commencing
_____ [15], 199_. Each Collection Period will be one calendar month.
Denominations and Registration of Certificates
The Certificates will be offered for purchase in denominations of $1,000
and integral multiples thereof and will initially be represented by Certificates
registered in the name of the nominee of DTC except as provided below. The
Seller has been informed by DTC that DTC's nominee will be Cede. See "Certain
Information Regarding the Securities--Book-Entry Registration" and "--Definitive
Certificates" in the Prospectus.
Trust Accounts
The Servicer will establish and maintain a segregated account (the
"Collection Account"), in the name of the Trustee on behalf of the
Certificateholders, into which all payments made on or with respect to the
Receivables will be deposited. The Servicer will also establish and maintain a
segregated distribution account for the Class A Certificates (the "Class A
Distribution Account") and a segregated distribution account for the Class B
Certificates (the "Class B Distribution Account," and together with the Class A
Distribution Account, each a "Certificate Distribution Account"). The Collection
Account and each Certificate Distribution Account will be a Trust Account as
described under "Description of the Transfer and Servicing Agreements--Accounts"
in the Prospectus. The Collection Account and each Certificate Distribution
Account will be established initially with the trust department of The Chase
Manhattan Bank ("Chase"). Chase, in its capacity as the initial paying agent
(the "Paying Agent"), will have the revocable right to withdraw funds from each
Certificate Distribution Account for the purpose of making distributions to
Certificateholders in the manner provided in the Agreement.
The Cash Collateral Account
On the Closing Date, a cash collateral guaranty (the "Cash Collateral
Guaranty") will be issued pursuant to a cash collateral trust agreement (the
"Trust Agreement") among a financial institution (the "Cash Collateral
Depositor"), selected by the Bank, __________, as cash collateral trustee (the
"Cash Collateral Trustee") the Seller and the Servicer. The Cash Collateral
Guaranty will be secured by an account (the "Cash Collateral Account"), which
will be established pursuant to the Trust Agreement, and the Cash Collateral
Account will be funded on the Closing Date in the amount of $_________ (the
"Initial Cash Collateral Amount") from the proceeds of a loan to be made by the
Cash Collateral Depositor pursuant to a loan agreement (the "Loan Agreement").
The Cash Collateral Guaranty will not be a recourse obligation of the Cash
Collateral Depositor,
S-15
<PAGE>
the Cash Collateral Trustee, the Trustee, the Seller or the Servicer, and will
be funded and secured solely with amounts, if any, on deposit in the Cash
Collateral Account. The Cash Collateral Account will be a Trust Account. Funds
on deposit in the Cash Collateral Account will be invested in Permitted
Investments. It is expected that such funds will be invested in the debt
obligations of the Cash Collateral Depositor or its affiliates so long as such
obligations qualify as Permitted Investments. The Cash Collateral Account and
any amounts therein will not be the property of the Trust, but will be held in
accordance with the Trust Agreement for the benefit of the Trustee and the Cash
Collateral Depositor as secured parties and as provided in the Trust Agreement.
On each Distribution Date, the amount available in the Cash Collateral
Account (the "Available Cash Collateral Amount") will equal the lesser of (i)
the amount on deposit in the Cash Collateral Account (exclusive of investment
earnings) and (ii) the Cash Collateral Amount.
On each Deposit Date, the Trustee shall demand payment under the Cash
Collateral Guaranty to the extent that the sum of the amounts required to be
distributed to Certificateholders and the Servicing Fee payable to the Servicer
on such Distribution Date exceeds the amount on deposit in the Collection
Account with respect to related Collection Period (net of investment income and
amounts to be applied in reimbursement of outstanding Advances) ("Payment
Deficiencies"). Such Payment Deficiencies may result from, among other things,
the failure by the Servicer to make any remittance required to be made under the
Agreement or the election of the Servicer not to make any Advance. The amount of
any demand under the Cash Collateral Guaranty shall be payable solely from funds
available in the Cash Collateral Account. The aggregate amount demanded under
the Cash Collateral Guaranty on any Deposit Date will not exceed the Available
Cash Collateral Amount with respect to the related Distribution Date. The
Trustee will deposit the proceeds of such demands into the Collection Account on
or before the Deposit Date related to the Distribution Date with respect to
which the demands were made. The Servicer will be obligated to follow its normal
practices and procedures to realize upon Defaulted Receivables and any net
proceeds so realized will be remitted to the Collection Account. The Cash
Collateral Guaranty will also be reinstated as a result of and to the extent of
receipt by the Cash Collateral Depositor of the other amounts described below.
The Required Cash Collateral Amount on the initial Distribution Date will
be $________. On each Distribution Date thereafter, the Required Cash Collateral
Amount will equal _____% of the Pool Balance as of the related Settlement Date,
but in any event will not be less than the lesser of (i) $_________ and (ii) the
Pool Balance; provided, however, that the Required Cash Collateral Amount will
be calculated as set forth above using a percentage of _____% on any
Distribution Date on which (a) the average of the Charge-Off Rates for the three
preceding Collection Periods exceeds ___% or (b) the average of the Delinquency
Percentages for the three preceding Collection Periods exceeds ___%, unless
thereafter the average of the Charge-off Rates and the average of the
Delinquency Percentages for a period of three consecutive Collection Periods are
less than or equal to the ___% and ___%, respectively, in which event the
Required Cash Collateral Amount for each succeeding Distribution Date shall be
computed using a percentage of ___%. "Charge-off Rate" means, for any Collection
Period, the Aggregate Net Losses with respect to the Receivables, expressed, on
an annualized basis, as a percentage of the average of (x) the Pool Balance on
the last day of the Collection Period preceding such Collection Period and (y)
the Pool Balance on the related Settlement Date. "Delinquency Percentage" means,
for any Collection Period, the sum of the outstanding principal balances of all
Receivables that are 60 days or more delinquent (including Receivables, which
are not Defaulted Receivables, relating to Financed Vehicles that have been
repossessed), as of the end of such Collection Period, determined in accordance
with the Servicer's normal practices, such sum expressed as a percentage of the
Pool Balance on the last day of such Collection Period. "Aggregate Net Losses"
means, with respect to a Collection Period, the amount equal to (i) the
principal balance of the Receivables that became Defaulted Receivables during
such Collection Period minus (ii) the Liquidation Proceeds allocable to
principal collected during such Collection Period with respect to any Defaulted
Receivables.
Repayment on each Distribution Date of principal and interest on the loan
made by the Cash Collateral Depositor to the trust established under the Trust
Agreement for the benefit of the Trustee and the Cash Collateral Depositor (the
"Cash Collateral Trust 199_-_") will be made from amounts on deposit in the Cash
Collateral Account in excess of the Required Cash Collateral Amount (after
taking into account any required deposits to, and withdrawals from, the Cash
Collateral Account), and from earnings on Permitted Investments in the Cash
Collateral
S-16
<PAGE>
Account. Repayment of the loan made by the Cash Collateral Depositor will not be
recourse to the Trust, the Trustee, the Seller, the Servicer, the Cash
Collateral Trustee or any Certificateholder.
Distributions On Certificates
On or before the __th day of each month (or, if such __th day is not a
Business Day, the preceding Business Day), the Servicer will inform the Trustee
and the Paying Agent of the following amounts with respect to the preceding
Collection Period: (i) the amount of aggregate collections on the Receivables;
(ii) the aggregate amount of Advances to be remitted by the Servicer; (iii) the
aggregate Purchase Amount of Receivables to be repurchased by the Seller or
purchased by the Servicer; (iv) the aggregate demands to be made on the Cash
Collateral Guaranty; (v) the aggregate amount to be distributed as principal and
interest on the Class A Certificates and Class B Certificates; (vi) the
Servicing Fee; and (vii) the amount to be paid to the Cash Collateral Trustee.
On each Distribution Date, after payment to the Servicer of amounts in
respect of Advances previously made by the Servicer (as described above under
"--Advances") with respect to the related Collection Period, the Servicer will
make the following deposits and distributions from the Collection Account, to
the extent of the sum of Available Interest and any Available Cash Collateral
Amount remaining after such payment in respect of Advances (and, in the case of
shortfalls occurring under clause (b) below in the Class A Interest
Distributable Amount, the Class B Percentage of Available Principal to the
extent of such shortfalls), in the following priority:
(a) to the Servicer, any unpaid Servicing Fee for the related
Collection Period and all unpaid Servicing Fees from prior Collection
Periods;
(b) to the Class A Distribution Account, the Class A Interest
Distributable Amount for such Distribution Date; and
(c) to the Class B Distribution Account, the Class B Interest
Distributable Amount for such Distribution Date.
On each Distribution Date, the Servicer will make the following deposits
and distributions, to the extent of the portion of Available Principal,
Available Interest and any Available Cash Collateral Amount remaining after the
application of clauses (a), (b) and (c) above, in the following priority:
(d) to the Class A Distribution Account, the Class A Principal
Distributable Amount for such Distribution Date;
(e) to the Class B Distribution Account, the Class B Principal
Distributable Amount for such Distribution Date; and
(f) to the Cash Collateral Trustee, any amounts remaining for
application in accordance with the Trust Agreement.
On each Distribution Date, the Trustee or the Paying Agent, as the case
may be, will distribute all amounts on deposit in the Class A Distribution
Account to the Class A Certificateholders as of the Record Date and all amounts
on deposit in the Class B Distribution Account to the Class B Certificateholders
as of the Record Date.
"Available Interest" means, for any Distribution Date, that portion of
Collections on the Receivables received during the related Collection Period
allocated to interest, all Advances made by the Servicer with respect to such
Distribution Date and, to the extent attributable to interest, the Purchase
Amount received with respect to each Receivable repurchased by the Seller or
purchased by the Servicer under an obligation that arose during the related
Collection Period.
"Available Principal" means, for any Distribution Date, that portion of
Collections on the Receivables received during the related Collection Period
allocated to the principal balance of the Receivables, and, to the extent
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attributable to principal, the Purchase Amount received with respect to each
Receivable repurchased by the Seller or purchased by the Servicer under an
obligation that arose during the related Collection Period.
"Class A Interest Carryover Shortfall" means, (a) for the initial
Distribution Date, zero, and (b) for any other Distribution Date, the excess of
Class A Monthly Interest for the preceding Distribution Date and any outstanding
Class A Interest Carryover Shortfall for such preceding Distribution Date over
the amount in respect of interest that is actually deposited in the Class A
Distribution Account on such preceding Distribution Date, plus 30 days of
interest on such excess, to the extent permitted by law, at the Pass-Through
Rate.
"Class A Interest Distributable Amount" means, for any Distribution Date,
the sum of Class A Monthly Interest for such Distribution Date and the Class A
Interest Carryover Shortfall for such Distribution Date.
"Class A Monthly Interest" means, for any Distribution Date, one-twelfth
of the Pass-Through Rate multiplied by the Class A Certificate Balance as of the
Distribution Date occurring in the preceding Collection Period (after giving
effect to any payments made on such Distribution Date) or, in the case of the
first Distribution Date, as of the Closing Date.
"Class A Monthly Principal" means, for any Distribution Date, the sum of
(a) the Class A Percentage of the Available Principal for such Distribution Date
and (b) the Class A Percentage of Realized Losses with respect to the related
Collection Period.
"Class A Principal Carryover Shortfall" means, for any Distribution Date,
the excess of Class A Monthly Principal for the preceding Distribution Date and
any outstanding Class A Principal Carryover Shortfall for such preceding
Distribution Date over the amount in respect of principal that is actually
deposited in the Class A Distribution Account on such preceding Distribution
Date.
"Class A Principal Distributable Amount" means, for any Distribution Date,
the sum of Class A Monthly Principal for such Distribution Date and, in the case
of any Distribution Date other than the initial Distribution Date, the Class A
Principal Carryover Shortfall for such Distribution Date. In addition, on the
Final Distribution Date, the Class A Principal Distributable Amount shall
include any additional amount required to reduce the outstanding aggregate
principal balance of the Class A Certificates to zero.
"Class B Interest Carryover Shortfall" means, (a) for the initial
Distribution Date, zero, and (b) for any other Distribution Date, the excess of
Class B Monthly Interest for the preceding Distribution Date and any outstanding
Class B Interest Carryover Shortfall for such preceding Distribution Date over
the amount in respect of interest that is actually deposited in the Class B
Distribution Account on such preceding Distribution Date, plus 30 days of
interest on such excess, to the extent permitted by law, at the Pass-Through
Rate.
"Class B Monthly Interest" means, for any Distribution Date, one-twelfth
of the Pass-Through Rate multiplied by the Class B Certificate Balance as of the
Distribution Date occurring in the preceding Collection Period (after giving
effect to any payments made on such Distribution Date) or, in the case of the
first Distribution Date, as of the Closing Date.
"Class B Monthly Principal" means, with respect to any Distribution Date,
the sum of (a) the Class B Percentage of the Available Principal for such
Distribution Date and (b) the Class B Percentage of Realized Losses with respect
to the related Collection Period.
"Class B Principal Carryover Shortfall" means, for any Distribution Date,
the excess of Class B Monthly Principal for the preceding Distribution Date and
any outstanding Class B Principal Carryover Shortfall for such preceding
Distribution Date over the amount in respect of principal that is actually
deposited in the Class B Distribution Account for such preceding Distribution
Date.
"Class B Principal Distributable Amount" means, for any Distribution Date,
the sum of Class B Monthly Principal for such Distribution Date and, in the case
of any Distribution Date other than the initial Distribution Date,
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the Class B Principal Carryover Shortfall for such Distribution Date. In
addition, on the Final Distribution Date, the Class B Principal Distributable
Amount will include any additional amount required to reduce the outstanding
aggregate principal balance of the Class B Certificates to zero.
"Liquidation Proceeds" means with respect to any Receivable (i) insurance
proceeds, (ii) the monies collected during a Collection Period from whatever
source on a Defaulted Receivable and (iii) proceeds of a Financed Vehicle sold
after repossession, in each case net of any liquidation expenses and payments
required by law to be remitted to the Obligor.
"Realized Losses" means, with respect to any Collection Period and for
each Receivable that became a Defaulted Receivable during such Collection
Period, the excess of the principal amount of such Receivable over Liquidation
Proceeds with respect to such Receivable, to the extent allocable to principal.
In the event that the Available Cash Collateral Amount has been reduced to
zero and, in the case of the Class A Certificateholders, the subordination of
the Class B Certificates is insufficient, the Certificateholders will bear
directly the credit and other risks associated with ownership of the
Receivables. In such a case, the amount available for distribution may be less
than that described above, and the Certificateholders may experience delay or
suffer losses as a result of, among other things, defaults or delinquencies by
the Obligors or previous extensions made by the Servicer. In addition, because
the market value of motor vehicles generally declines with age and because of
the difficulties in enforcing motor vehicle contracts described under "Certain
Legal Aspects of the Receivables" in the Prospectus, the Servicer may not
recover the entire amount owing under a Defaulted Receivable.
In such a case, the Certificateholders may suffer a corresponding loss.
As an administrative convenience, the Servicer will be permitted under
certain circumstances to make deposits of Advances and Purchase Amounts for, or
with respect to, a Collection Period net of distributions to be made to the
Servicer with respect to such Collection Period. The Servicer, however, will
account to the Trustee and to the Certificateholders as if all such deposits and
distributions were deposited and distributed separately. On each Distribution
Date the Servicer will also distribute to itself, to the extent not previously
netted, any reimbursements of Advances, the Servicing Fee, and the amount of any
Servicing Fee previously due but not paid, if any.
POOLING AND SERVICING AGREEMENT
Servicing Compensation and Payment of Expenses
The Servicer will be entitled to receive the Servicing Fee for each
Collection Period. The "Servicing Fee Rate" with respect to the Servicing Fee
for the Servicer will be 1% per annum and the Servicing Fee for any Distribution
Date shall equal an amount equal to the sum of (i) the product of the Servicing
Fee Rate divided by 12 and the Pool Balance as of the related Settlement Date
and (ii) Late Fees received for Obligors during such Collection Period and
Investment Earnings on amounts on deposit in the Collection Account; provided,
however, that from and after the Collection Period in which the Servicer fails
to deposit an Advance with respect to a Receivable (other than because such
Receivable has been declared a Defaulted Receivable), such investment income
will not be paid to the Servicer, but will be deposited in the Cash Collateral
Account or applied pursuant to the Loan Agreement.
The amount of the Servicing Fee (including the portion thereof
attributable to Late Fees) was determined in light of the duties of the Servicer
under the Agreements as well as with a view toward providing the Servicer with a
reasonable profit. The Servicing Fee (including such Late Fees) is comparable to
fees that would be paid to parties unaffiliated with the Bank. The Bank expects
that the Receivables will provide the Trust with funds in an amount sufficient
to pay the Servicing Fee to the Servicer and interest each month at the
Pass-Through Rate on the related Pool Balance to the Certificateholders. See
"Description of the Transfer and Servicing Agreements-Servicing Compensation and
Payment of Expenses" and "--Net Deposits" in the Prospectus.
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Servicing Procedures
The Servicer will service the Receivables and will make reasonable efforts
to collect all payments due with respect to the Receivables and, in a manner
consistent with the Agreement and with the terms of the Receivables, will follow
such collection and servicing procedures as it follows with respect to
comparable new or used automobile receivables that it services for itself or
others and that are consistent with prudent industry standards. Except as
otherwise specified in the Agreement, no extensions of, or other modifications
to, the Receivables will be made by the Servicer if such modifications would
have a material adverse effect on the interests of the Certificateholders. In
addition, among other things, the Agreement will provide that the Servicer may
not change the amount of (except with respect to a prepayment of a scheduled
payment that does not result in a deferral of any other scheduled payment), or
reschedule the Due Date of, any scheduled payment to a date more than 30 days
from the original Due Date, change the Contract Rate of, or extend any
Receivable or change any material term of a Receivable, except with respect to
certain unilateral changes provided by the terms of the Receivable or of the
Agreement or as required by law or court order; provided, however, that the
Servicer may grant extensions of the Due Date for a payment on any Receivable
that is in default, or if it determines that, absent such extension, a default
on the Receivables is reasonably foreseeable, and the Servicer would grant such
extension with respect to comparable new or used automobile receivables that it
services for itself, but only if (a) the Available Cash Collateral Amount is
greater than zero at the time of such extension, (b) the extension is for no
more than three months, (c) the total period of all credit-related extensions
granted on the Receivable will not exceed the number of months equal to the
number of whole years comprising the original term of the Receivable, (d) the
maturity of such Receivable would not be extended beyond the Collection Period
immediately preceding the Final Distribution Date and (e) the rescheduling or
extension would not modify the terms of such Receivable in such a manner as to
constitute a cancellation of such Receivable and the creation of a new
receivable for federal income tax purposes. In accordance with its normal and
customary servicing procedures, the Servicer also considers other criteria when
making credit-related extensions.
In the event that the Servicer fails to comply with the foregoing terms of
the Agreement, it will be required to purchase the affected Receivable for the
Purchase Amount as of the last day of the Collection Period on which it became
aware or receives written notice from the Trustee of such failure. The purchase
obligation will constitute the sole remedy available to the Certificateholders
or the Trustee for any such uncured breach.
The Bank will offer certain obligors or classes of obligors on an annual
basis a one month noncredit related extension of a regularly scheduled payment
otherwise due under a Receivable. The Agreement establishes criteria governing
such extensions.
See "Description of the Transfer and Servicing Agreements-Servicing
Procedures" in the Prospectus.
[Advances
With respect to any Distribution Date, the Servicer may, in its sole
discretion, make a payment (an "Advance") with respect to each Receivable (other
than a Defaulted Receivable) equal to the excess, if any, of (x) the product of
the principal balance of such Receivable as of the related Settlement Date and
one-twelfth of its Contract Rate, over (y) the interest actually received by the
Servicer with respect to such Receivable from the Obligor or from the payment of
the Repurchase Amount during or with respect to such Collection Period. The
Servicer may elect not to make any Advance with respect to a Receivable to the
extent that the Servicer, in its sole discretion, determines that such Advance
is not recoverable from subsequent payments on such Receivable or from demands
on the Cash Collateral Guaranty with respect to such Receivable. In the event
that the Servicer does not make an Advance, any Payment Deficiency resulting
therefrom will be funded by a demand under the Cash Collateral Guaranty and
application of amounts in the Cash Collateral Account.
To the extent that the amount set forth in clause (y) above plus amounts
demanded under the Cash Collateral Guaranty during or with respect to such
Collection Period and allocable to interest with respect to a Receivable is
greater than the amount set forth in clause (x) above with respect thereto, such
amount shall be distributed to the Servicer on the related Distribution Date to
reimburse the Servicer for previous unreimbursed
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Advances with respect to such Receivable. Any such reimbursement will only be
from accrued interest due from the Obligor under such Receivable.
The Servicer will deposit all Advances with respect to any Distribution
Date into the Collection Account on the related Deposit Date.]
The Cash Collateral Trustee
_____________________ is the Cash Collateral Trustee under the Trust
Agreement. Pursuant to the terms of the Trust Agreement, the Cash Collateral
Guaranty will be issued thereunder for the benefit of the Trustee, and the Cash
Collateral Account will be established and funded in order to secure the Cash
Collateral Guaranty. The Cash Collateral Guaranty will not be an obligation of
the Cash Collateral Trustee, but the Cash Collateral Trustee will honor demands
by the Trustee under the Cash Collateral Guaranty pursuant to the terms of the
Trust Agreement and the Cash Collateral Guaranty.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of certain United States ("U.S.")
federal income tax consequences relevant to the purchase, ownership and
disposition the Certificates. This summary is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), the Treasury regulations promulgated
thereunder, administrative rulings or pronouncements and judicial decisions, all
as in effect on the date hereof and all of which are subject to change, possibly
retroactively. The following discussion does not deal with all aspects of U.S.
income taxation, nor does it address U.S. federal income tax consequences that
may be relevant to certain types of investors, such as banks, insurance
companies, dealers in securities, tax-exempt organizations or persons whose
functional currency is not the U.S. dollar, who may be subject to special
treatment under the Code. In addition, the following discussion does not address
the tax consequences of an investment in the Certificates under state and local
tax laws or foreign tax laws. Accordingly, investors should consult their own
tax advisors to determine the federal, state, local, and other tax consequences
that may be relevant to their purchase, ownership and disposition of the
Certificates based upon their particular facts and circumstances. Prospective
investors should note that no rulings have been or will be sought from the
Internal Revenue Service ("IRS") with respect to any of the U.S. federal income
tax consequences discussed herein and opinions of counsel are not binding on the
IRS or the courts. Thus, no assurance can be given that the IRS will not take
positions contrary to those described below. The opinions of Simpson Thacher &
Bartlett, special counsel to the Seller ("Federal Tax Counsel"), described
herein will be based upon certain representations and assumptions, including,
but not limited to, the assumption that all relevant parties will comply with
the terms of the Agreement and related documents.
Because the Certificates have certain features characteristic of
debt, the Certificates might be considered debt of the Seller or Trust. Any such
characterization generally would not result in materially adverse tax
consequences as compared to the tax consequences described below. The following
discussion assumes that (i) the Trust will be classified as a grantor trust and
(ii) the Certificateholders will be treated as owning a undivided beneficial
ownership interest in each Receivable and the proceeds thereof.
This summary is intended as an explanatory discussion of the
possible effects of the classification of the Trust as a grantor trust and not
as an association taxable as a corporation for federal income tax purposes or
investors generally and related tax matters affecting investors generally, but
does not purport to furnish information in the level of detail or with the
attention to the investor's specific tax circumstances that would be provided by
an investor's own tax adviser. Accordingly, each investor is advised to consult
its own tax advisers with regard to the tax consequences to it of investing in
the Certificates. An opinion of Federal Tax Counsel will be filed as an exhibit
to a Form 8-K filed in connection with the establishment of the Trust and the
issuance of the Certificates.
For purposes of the following discussion, except as otherwise
provided herein, the term "Certificateholder" refers to the beneficial owner of
a Certificate. In addition, the discussion below assumes that
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Certificateholders will hold their Certificates as "capital assets" (generally
property held for investment) within the meaning of Section 1221 of the Code.
Trust Classified as Grantor Trust
Tax Characterization of the Trust as a Grantor Trust. In the opinion
of Federal Tax Counsel, the Trust will be classified as a grantor trust and not
as an association taxable as a corporation for such purposes. Accordingly, for
U.S. federal income tax purposes, each Certificateholder will be treated as the
owner of a fractional undivided interest in each asset of the Trust and will be
treated as though it paid directly its share of all reasonable expenses paid by
the Trust.
Tax Consequences to Certificateholders. For U.S. federal income tax
purposes, the Seller has retained a fixed portion of the interest due on each
Receivable (the "Retained Yield") equal to the difference between (x) the
Contract Rate of such Receivable and (y) the sum of the Pass-Through Rate and
the Servicing Fee Rate. The Seller and the Certificateholders (by accepting a
beneficial interest in a Certificate) will agree to treat the Certificates as
ownership interests in the Receivables (other than the Retained Yield). The
Servicer and the Seller have represented that the Servicing Fee Rate and all
other amounts paid to, or retained by, the Servicer represents a reasonable
servicing fee, and accordingly, the Trustee and the Servicer intend to treat the
Retained Yield as being equal to the excess of the Contract Rate of each
Receivable over the sum of the Pass-Through Rate and the Servicing Fee Rate. The
Retained Yield will be treated as "stripped coupons" within the meaning of
Section 1286 of the Code and the Receivables sold to the Trust will be treated
as "stripped bonds."
Accordingly, the Certificates will represent an ownership interest
in stripped bonds and each Certificateholder will be treated as owning its pro
rata share of such stripped bonds. These stripped bonds will be subject to the
OID rules of the Code. Consequently, the tax treatment of a Certificateholder
will depend upon whether the amount of OID on a Certificate is less than a
statutorily defined de minimis amount.
Under Treasury regulations issued under Section 1286 of the Code
(the "Regulations"), the amount of OID on a Receivable treated as a "stripped
bond" generally will be considered de minimis if it is less than 1/4 of one
percent for each full year of weighted average life remaining after the purchase
date until the maturity of the Receivable, although it is not clear whether
expected prepayments are taken into account. It is anticipated that the portion
of the interest on each Receivable payable to the Certificateholders will be
treated as "qualified stated interest". As a result, the amount of OID on a
Receivable should equal the amount by which the price at which a
Certificateholder is deemed to have acquired an interest in the Receivable (the
"Purchase Price") is less than the portion of the remaining principal balance of
the Receivable allocable to the interest acquired.
If the amount of OID is de minimis under the rule set forth above,
the Certificates would not be treated as having been issued with OID.
Accordingly, each Certificateholder would be required to report on its U.S.
federal income tax return its share of the gross income of the Trust, including
interest and certain other charges accrued on the Receivables and any gain
realized upon the collection or disposition of the Receivables (but not
including any portion of the Retained Yield). Such gross income attributable to
interest on the Receivables would exceed the Pass-Through Rate by an amount
equal to the Certificateholder's share of the expenses of the Trust for the
period during which it owns a Certificate. The Certificateholder would be
entitled to deduct its share of the expenses of the Trust to the extent
described below.
Assuming that OID on each Receivable is de minimis, a
Certificateholder would report its share of the Trust's income under its usual
method of accounting. Accordingly, interest would be includible in a
Certificateholder's gross income when it accrues on the Receivables, or, in the
case of Certificateholders who are cash method taxpayers, when received by the
Servicer on behalf of the Certificateholders. Because (i) interest accrues on
the Receivables over differing monthly periods and is paid in arrears and (ii)
interest collected on Receivables generally is paid to Certificateholders in the
following month, the amount of interest accruing to a Certificateholder during
any calendar month generally will not equal the interest distributed in that
month. The actual amount of any discount on a Receivable would be includible in
income as principal payments are received on the Receivables.
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If the OID on a Receivable is not treated as being de minimis, in
addition to the amounts described above, a Certificateholder will be required to
include in income any OID as it accrues on a daily basis, regardless of when
cash payments are received, using a method reflecting a constant yield on the
Receivable. It is possible that the IRS could require use of a prepayment
assumption in computing the yield of a Receivable. If a Receivable is deemed to
be acquired by a Certificateholder at a significant discount, such treatment
could accelerate the accrual of income by a Certificateholder.
The Trustee intends to account for OID, if any, reportable by
Certificateholders by reference to the price paid for a Certificate by an
initial purchaser, although the amount of OID will differ for subsequent
purchasers. Such subsequent purchasers should consult their tax advisers
regarding the proper calculation of OID on the interest in Receivables
represented by a Certificate. In addition, the Trustee intends to compute OID on
Certificates by aggregating all payments on the Receivables allocable to the
Certificateholders (not including the Retained Yield), and treating the portion
of all payments on the Receivables allocable to Certificateholders as a single
obligation. The IRS could require, instead, that the computation be performed on
a Receivable-by-Receivable basis. Any such recalculation could adversely affect
the timing and character of a Certificateholder's income.
In the event that a Receivable is treated as purchased at a premium
(i.e., its Purchase Price exceeds the portion of the remaining principal balance
of such Receivable allocable to the Certificateholder), such premium will be
amortizable by the Certificateholder as an offset to interest income (with a
corresponding reduction in the Certificateholder's basis) under a constant yield
method over the term of the Receivable if an election under Section 171 of the
Code is made with respect to the interests in the Receivables represented by the
Certificates or was previously in effect. Any such election also will apply to
all debt instruments held by the Certificateholder during the year in which the
election is made and all debt instruments thereafter acquired.
A Certificateholder will be entitled to deduct, consistent with its method
of accounting, its pro rata share of reasonable servicing fees and other fees
paid or incurred by the Trust as provided in Section 162 or 212 of the Code. If
a Certificateholder is an individual, estate or trust, the deduction for such
Certificateholder's share of such fees will be allowed only to the extent that
all such Certificateholder's miscellaneous itemized deductions, including such
Certificateholder's share of such fees, exceed 2% of such Certificateholder's
adjusted gross income. In addition, in the case of Certificateholder's who are
individuals, certain otherwise allowable itemized deduction will be reduced, but
not by more than 80%, by an amount equal to 3% of such Certificateholder's
adjusted gross income in excess of a statutorily defined threshold ($117,950 in
the case of a married couple filing jointly for the taxable year beginning
1996). Because the Servicer will not report to Certificateholders the amount of
servicing compensation that is attributable to the Servicer's right to receive
certain fees collected from Obligors and interest earned on Collections, a
Certificateholder subject to the foregoing limitations may effectively
underreport its net taxable income.
Effect of Subordination. If the Class B Certificateholders received
distributions of less than their share of the Trust's receipts of principal or
interest (the "Shortfall Amount") due to the subordination of the Class B
Certificates, holders of Class B Certificates would probably be treated for
Federal income tax purposes as if they had (1) received as distributions their
full share of such receipts and (2) paid over to the Class A Certificateholders
an amount equal to such Shortfall Amount, and (3) retained the right to
reimbursement of such amounts to the extent of future collections otherwise
available for deposit in the Cash Collateral Account.
Under this analysis, (1) Class B Certificateholders would be
required to accrue as current income any interest or OID income of the Trust
that was a component of the Shortfall Amount, even though such amount was in
fact paid to the Class A Certificateholders and (2) a loss would only be allowed
to the Class B Certificateholders when their right to receive reimbursement of
such Shortfall Amount became worthless (i.e., when it becomes clear that that
amount will not be available from any source to reimburse such loss), and (3)
reimbursement of such Shortfall Amount prior to such a claim of worthlessness
would not be taxable income to Class B Certificateholders because such amount
was previously included in income. This treatment should not significantly
affect the inclusion of income for Class B Certificateholders on the accrual
method of accounting, but could accelerate inclusion of income to Class B
Certificateholders on the cash method of accounting by, in effect, placing them
on the accrual method. Moreover, the character and timing of loss deductions is
unclear.
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Sale of a Certificate. If a Certificate is sold, gain or loss will
be recognized equal to the difference between the amount realized by the
Certificateholder on the sale and the Certificateholder's adjusted tax basis in
the Receivables and any other assets held by the Trust. A Certificateholder's
adjusted tax basis will equal the Certificateholder's cost for the Certificate,
increased by any discount previously included in income, and decreased by any
deduction previously allowed for accrued premium and by the amount of principal
payments previously received on the Receivables. Any gain or loss not
attributable to accrued interest will be treated as long-term capital gain or
loss if the Certificate was held as a capital asset for more than one year. The
deductibility of capital losses is subject to limitations.
Foreign Certificateholders. For purposes of this discussion, the
term "Foreign Investor" means any person other than (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity organized in
or under the laws of the United States or any political subdivision thereof or
(iii) an estate or trust the income of which is includible in gross income for
U.S. federal income tax purposes regardless of its source.
Interest on Receivables, including OID, paid to a Foreign Investor
will be subject to U.S. withholding tax at a rate of 30% unless (i) such
interest income is "effectively connected" with the conduct by such Foreign
Investor of a trade or business carried on in the United States and the investor
evidences this fact by delivering an IRS Form 4224, (ii) the interest income is
exempt from (or subject to a reduced rate of) U.S. withholding tax under an
applicable U.S. tax treaty and the Foreign Investor claims this exemption (or
reduced rate) by delivering an IRS Form 1001, or (iii) the Foreign Investor and
each securities clearing organization, bank, or other financial institution that
holds the Certificates on behalf of such Foreign Investor in the ordinary course
of its trade or business in the chain between the Foreign Investor and the U.S.
person otherwise required to withhold the U.S. tax, complies with the applicable
identification requirements described below (and the Foreign Investor does not
actually or constructively own 10% or more of the voting stock of the Seller or
any of its affiliates and is not a "controlled foreign corporation" with respect
to the Seller or any of its affiliates (or the Certificateholder of such an
interest)). The identification requirement described in (iii) above generally
will be satisfied if there is delivered to a securities clearing organization an
IRS Form W-8 signed under penalties of perjury by the Certificateholder, stating
that the Certificateholder is not a U.S. person and providing such
Certificateholder's name and address; provided that in any such case (x) the
applicable form is delivered pursuant to applicable procedures and is properly
transmitted to the United States entity otherwise required to withhold tax and
(y) none of the entities receiving the form has actual knowledge that the
Certificateholder is a U.S. person.
If a Foreign Investor is engaged in the conduct of a trade or
business in the United States and the interest income (including OID) allocable
to the Certificates held by such Foreign Investor is effectively connected with
the conduct of such trade or business, such interest income, although exempt
from the U.S. withholding tax described above, will be subject to U.S. federal
income tax on a net income basis in the same manner as if the Foreign Investor
were a U.S. person. In addition, if the Foreign Investor is a foreign
corporation, it also may be subject to a U.S. "branch profits tax" equal to 30%
of its effectively connected earnings and profits for the taxable year (subject
to adjustments).
A Foreign Investor generally will not be subject to U.S. federal
income tax on gain realized upon the sale, exchange or redemption of a
Certificate, provided that (i) such gain is not effectively connected with the
conduct of a trade or business in the United States, (ii) in the case of a
Foreign Investor that is an individual, such individual is not present in the
U.S. for 183 days or more during the taxable year in which such sale, exchange
or redemption occurs or certain other conditions are not met, and (iii) in the
case of gain representing accrued interest, the conditions described above are
satisfied.
Backup Withholding. Payments made on the Certificates and proceeds
from the sale of Certificates generally will not be subject to 31% U.S. backup
withholding tax unless the Certificateholder fails to comply with certain
reporting procedures and is not an exempt recipient under applicable provisions
of the Code.
CERTAIN STATE TAX CONSEQUENCES
S-24
<PAGE>
The above discussion does not address the tax treatment of the
Trust, the Certificates or Certificateholders under any state tax laws.
Prospective investors are urged to consult with their own tax advisors regarding
the state tax treatment of the Trust as well as any state tax consequences to
them of purchasing, holding and disposing of Certificates.
ERISA CONSIDERATIONS
General
ERISA and Section 4975 of the Code impose certain requirements on employee
benefit plans and certain other plans and arrangements, including individual
retirement accounts and annuities, Keogh plans and certain collective investment
funds or insurance company general or separate accounts in which such plans,
accounts or arrangements are invested, that are subject to the fiduciary
responsibility provisions of ERISA and/or Section 4975 of the Code
(collectively, "Plans"), and on persons who are fiduciaries with respect to
Plans, in connection with the investment of "plan assets" of any Plan ("Plan
Assets"). ERISA generally imposes on Plan fiduciaries certain general fiduciary
requirements, including those of investment prudence and diversification and the
requirement that a Plan's investments be made in accordance with the documents
governing the Plan. Generally, any person who has discretionary authority or
control respecting the management or disposition of Plan Assets, and any person
who provides investment advice with respect to such assets for a fee, is a
fiduciary with respect to such Plan Assets.
The U.S. Department of Labor ("DOL") has issued a final regulation (29
C.F.R. Section 2510.3-101) concerning the definition of what constitutes the
Plan Assets of a Plan (the "Plan Asset Regulation"). This regulation provides
that, as a general rule, the underlying assets and properties of corporations,
partnerships, grantor trusts and certain other entities in which a Plan makes an
"equity" investment will be deemed, for purposes of ERISA and Section 4975 of
the Code, to be assets of the investing Plan unless certain exceptions set forth
in the Plan Asset Regulation apply. Accordingly, if a Plan purchases the
Certificates, the Trust could be deemed to hold Plan Assets unless one of the
exceptions under the Plan Assets Regulation is applicable to the Trust.
Under the terms of the Plan Asset Regulation, if the Trust were deemed to
hold Plan Assets by reason of a Plan's investment in a Certificate, such Plan
Assets would include an undivided interest in the Trust and Receivables
underlying assets of the Trust, and the persons providing services with respect
to the assets of the Trust, including the Receivables, would be subject to the
fiduciary responsibility provisions of ERISA and the prohibited transaction
provisions of ERISA and Section 4975 of the Code with respect to transactions
involving such assets. Absent an applicable statutory, regulatory or
administrative exemption, such transactions could give rise to a violation of
the prohibited transaction rules, resulting in the imposition of an excise tax
and other liabilities under ERISA and Section 4975 of the Code.
Class A Certificates
The DOL has granted to _____________________, the managing underwriter, an
administrative exemption, Prohibited Transaction Exemption [____] (Federal
Register ____________ __, 19____) (the "Exemption"), from certain of the
prohibited transaction rules of ERISA and Section 4975 of the Code with respect
to the initial purchase, the holding and the subsequent resale by Plans of
certificates representing interests in asset-backed pass-through trusts that
consist of certain receivables, loans and other obligations that meet the
conditions and requirements of the Exemption. The receivables covered by the
Exemption include motor vehicle installment obligations and purchase money loans
such as the Receivables. The Exemption will apply to the acquisition, holding
and resale of the Class A Certificates by a Plan, provided that certain
conditions (some of which are described below) are met.
Among the conditions which must be satisfied for the Exemption to apply
are the following:
(1) The acquisition of the Class A Certificates by a Plan is on terms
(including the price for the Certificates) that are at least as
favorable to the Plan as they would be in an arm's-length
transaction with an unrelated party;
S-25
<PAGE>
(2) The rights and interests evidenced by the Class A Certificates
acquired by the Plan are not subordinated to the rights and
interests evidenced by other Certificates issued by the Trust;
(3) The Class A Certificates acquired by the Plan have received a rating
at the time of such acquisition that is in one of the three highest
generic rating categories from either S&P, Moody's, Duff & Phelps
Inc. or Fitch Investors Service L.P.
(4) The sum of all payments made to the Underwriters in connection with
the distribution of the Class A Certificates represents not more
than reasonable compensation for underwriting the Class A
Certificates; the sum of all payments made to and retained by the
Seller pursuant to the sale of the Receivables to the Trust
represents not more than the fair market value of such Receivables;
and the sum of all payments made to and retained by the Servicer
represents not more than reasonable compensation for the Servicer's
services under the Agreement and reimbursement of the Servicer's
reasonable expenses in connection therewith;
(5) The Trustee must not be an affiliate of any other member of the
Restricted Group (as defined below); and
(6) The Plan investing in the Class A Certificates is an "accredited
investor" as contained in Rule 501(a)(1) of Regulation D of the
Securities and Exchange Commission under the Securities Act of 1933,
as amended.
Moreover, the Exemption provides relief from certain self-dealing/conflict
of interest prohibited transaction that may occur when a Plan fiduciary that is
an obligor with respect to the Receivables held in the Trust (or affiliate of
such obligor) causes a Plan to acquire Class A Certificates issued by the Trust,
provided that, among other requirements (i) in the case of an acquisition in
connection with the initial issuance of Class A Certificates, at least 50% of
each class of Class A Certificates in which Plans have invested is acquired by
persons independent of the Restricted Group and at least 50% of the aggregate
interest in the Trust is acquired by persons independent of the Restricted
Group; (ii) such obligor is an obligor with respect to 5% or less of the fair
market value of the obligations contained in the Trust; (iii) the Plan's
investment in Class A Certificates does not exceed 25% of all of the Class A
Certificates outstanding at the time of the acquisition; and (iv) immediately
after the acquisition, no more than 25% of the assets of the Plan are invested
in certificates representing an interest in one or more trusts containing assets
sold or serviced by the same entity. The Exemption, however, does not apply to
the acquisition and holding of the Class A Certificates by Plans sponsored by
the Seller, the Underwriters, the Trustee, the Servicer, any obligor with
respect to Receivables included in the Trust constituting more than 5% of the
aggregate unamortized principal balance of the assets in the Trust, or any
affiliate of such parties (the "Restricted Group").
As of the date hereof, no obligor with respect to Receivables included in
the Trust is an obligor with respect to more than 5% of the aggregate
unamortized principal balance of the assets of the Trust.
Class B Certificates
Because the Class B Certificates are subordinated to the Class A
Certificates, the Exemption will not apply to the acquisition of the Class B
Certificates and accordingly, the Class B Certificates may not be purchased by,
on behalf of, or with, Plan Assets of any Plan. In addition, each purchaser of
the Class B Certificates will be deemed to have represented that it is neither a
Plan nor purchasing the Class B Certificates on behalf of, or with, Plan Assets
of a Plan.
The foregoing restrictions shall not apply to acquisitions of Certificates
with assets of the general account of an insurance company, to the extent
permitted under Section 401(c) of ERISA.
S-26
<PAGE>
Any fiduciary or other Plan investor considering whether to purchase any
Certificates on behalf of or with Plan Assets of any Plan should consult with
its counsel and refer to this Prospectus Supplement and the Prospectus for
guidance regarding the ERISA Considerations applicable to the Certificates
offered hereby.
For further information see "ERISA Considerations" in the Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
agreement, the Seller has agreed to sell to the Underwriter, and the Underwriter
has agreed to purchase, the Certificates. [The Underwriter has agreed to
reimburse the Seller for certain expenses in connection with the issuance and
distribution of the Securities.]
The Seller has been advised by the Underwriter that it proposes initially
to offer the Certificates to the public at the prices set forth on the cover
page hereof, and to certain dealers at such prices less an initial concession
not in excess of _____% of the principal amount of the Class A Certificates and
____% of the principal amount of the Class B Certificates. The Underwriter may
allow, and such dealers may reallow, concessions not in excess of ___% of the
principal amount of the Class A Certificates and ____% of the principal amount
of the Class B Certificates to certain brokers and dealers. After the initial
public offering, the public offering price and other selling terms may be
changed by the Underwriter.
This Prospectus Supplement and Prospectus may be used by Chase Securities
Inc., an affiliate of the Seller and a subsidiary of The Chase Manhattan
Corporation, in connection with offers and sales related to market-making
transactions in the Certificates. Chase Securities Inc. may act as principal or
agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale. Chase Securities Inc. has no
obligation to make a market in the Certificates, and it may discontinue any such
market-making activities at any time without notice, in its sole discretion.
[Chase Securities Inc. is among the Underwriters participating in the initial
distribution of the Certificates.]
[In the ordinary course of their respective businesses, each Underwriter
and its affiliates have engaged and may in the future engage in commercial
banking and investment banking transactions with the Seller.]
The Seller will indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or
contribute to payments the Underwriter may be required to make in respect
thereof.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates will be
passed upon for the Seller by Simpson Thacher & Bartlett (a partnership that
includes professional corporations), New York, New York and certain other legal
matters will be passed upon for the Seller by ___________________, Esq., a
____________ of the Bank, and for the Underwriter by Orrick, Herrington &
Sutcliffe, New York, New York. From time to time Simpson Thacher & Bartlett and
Orrick, Herrington & Sutcliffe will provide legal services to the Seller and its
affiliates.
S-27
<PAGE>
INDEX OF TERMS
Advance...................................................................S-20
Aggregate Net Losses......................................................S-16
Agreement..................................................................S-1
Available Cash Collateral Amount..........................................S-16
Available Interest........................................................S-17
Available Principal.......................................................S-17
Bank.......................................................................S-1
Business Day...............................................................S-2
Cash Collateral Account...................................................S-15
Cash Collateral Depositor.................................................S-15
Cash Collateral Guaranty..................................................S-15
Cash Collateral Trust 199_-_..............................................S-16
Cash Collateral Trustee...................................................S-15
Certificateholder.........................................................S-21
Certificates..............................................................Cover
Charge-off Rate...........................................................S-16
Chase.....................................................................S-15
Chase USA..................................................................S-1
Class A Certificate Balance................................................S-2
Class A Certificateholders.................................................S-2
Class A Certificates.........................................................i
Class A Distribution Account..............................................S-15
Class A Interest Carryover Shortfall......................................S-18
Class A Interest Distributable Amount.....................................S-18
Class A Monthly Interest..................................................S-18
Class A Monthly Principal.................................................S-18
Class A Percentage.........................................................S-1
Class A Principal Carryover Shortfall.....................................S-18
Class A Principal Distributable Amount....................................S-18
Class B Certificate Balance................................................S-2
Class B Certificateholders.................................................S-2
Class B Certificates.........................................................i
Class B Distribution Account..............................................S-15
Class B Interest Carryover Shortfall......................................S-18
Class B Monthly Interest..................................................S-18
Class B Monthly Principal.................................................S-18
Class B Percentage.........................................................S-1
Class B Principal Carryover Shortfall.....................................S-18
Class B Principal Distributable Amount....................................S-18
Closing Date................................................................ii
Code......................................................................S-21
Collection Account........................................................S-15
Collection Period..........................................................S-3
Contract Rate..............................................................S-9
Cutoff Date..................................................................i
Delinquency Percentage....................................................S-16
DOL.......................................................................S-25
DTC.........................................................................ii
Exemption.................................................................S-25
FDIC.........................................................................i
Federal Tax Counsel.......................................................S-21
Final Distribution Date......................................................i
Financed Vehicles..........................................................S-8
Initial Cash Collateral Amount............................................S-15
IRS.......................................................................S-21
Issuer.....................................................................S-1
Liquidation Proceeds......................................................S-19
Loan Agreement............................................................S-15
Paying Agent..............................................................S-15
Payment Deficiencies......................................................S-16
Plan Asset Regulation.....................................................S-25
Plan Assets...............................................................S-25
Plans.....................................................................S-25
Purchase Price............................................................S-22
Rating Agency..............................................................S-6
Realized Losses...........................................................S-19
Receivables Pool...........................................................S-8
Record Date................................................................S-2
Regulations...............................................................S-22
Restricted Group..........................................................S-26
Retained Yield............................................................S-22
S-28
<PAGE>
Seller.....................................................................S-1
Servicer...................................................................S-1
Servicing Fee Rate........................................................S-19
Settlement Date............................................................S-3
Shortfall Amount...........................................................S-8
Trust......................................................................S-1
Trust Agreement...........................................................S-15
Trustee....................................................................S-1
Underwriter..................................................................i
U.S. .....................................................................S-21
S-29
<PAGE>
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND
TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Chase Manhattan
Grantor Trust 199_-_ Automobile Pass-Through Certificates, Class A and Class B
(collectively, the "Global Securities") to be issued will be available only in
book-entry form. Investors in the Global Securities may hold such Global
Securities through any of the Depository Trust Company ("DTC"), CEDEL or
Euroclear. The Global Securities will be tradeable as home market instruments in
both the European and U.S. domestic markets. Initial settlement and all
secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through CEDEL and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-payment
basis through the respective Depositaries of CEDEL and Euroclear (in such
capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing corporation
organizations or their participants.
Initial Settlement
All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee or DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, CEDEL and Euroclear will
hold positions on behalf of their participants through their respective
Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practice applicable to U.S. corporate debt obligations. Investor
securities custody accounts will be credited with the holdings against payment
in same-day funds on the settlement date.
Investors electing to hold their Global Securities through CEDEL or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in same-day
funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to U.S. corporate
debt obligations in same-day funds.
<PAGE>
Trading between CEDEL and/or Euroclear Participants. Secondary market
trading between CEDEL Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and CEDEL or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a CEDEL Participant or a Euroclear Participant, the purchaser will
send instructions to CEDEL, or Euroclear through a CEDEL Participant or
Euroclear Participant at least one business day prior to settlement. CEDEL or
Euroclear will instruct the respective Depositary to receive the Global
Securities against payment. Payment will include interest accrued on the Global
Securities from and including the last coupon payment date to and excluding the
settlement date. Payment will then be made by the respective Depositary to the
DTC Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the CEDEL Participant's or Euroclear Participant's account.
The Global Securities credit will appear the next day (European time) and the
cash debit will be backed-valued to, and the interest on the Global Securities
will accrue from, the value date (which would be the preceding day when
settlement occurred in New York). If settlement is not completed on the intended
value date (i.e., the trade fails), the CEDEL or Euroclear cash debit will be
valued instead as of the actual settlement date.
CEDEL Participants and Euroclear Participants will need to make available
to the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to preposition funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within CEDEL or Euroclear. Under this approach,
they may take on credit exposure to CEDEL or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if CEDEL or Euroclear has extended a line of credit to
them, CEDEL Participants or Euroclear Participants can elect not to preposition
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, CEDEL Participants or Euroclear Participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts. However,
interest on the Global Securities would accrue from the value date. Therefore,
in many cases the investment income on the Global Securities earned during the
one-day period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each CEDEL Participant's or
Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of CEDEL Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between CEDEL or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, CEDEL Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through the
respective Depositary, to a DTC Participant. The seller will send instructions
to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at
least one business day prior to settlement. In these cases, CEDEL or Euroclear
will instruct the respective Depositary, as appropriate, to deliver the bonds to
the DTC Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date. The payment will then be reflected in the
account of the CEDEL Participant or Euroclear Participant the following day, and
receipt of the cash proceeds in the CEDEL Participant's or Euroclear
Participant's account would be back-valued to the value date (which would be the
preceding day, when settlement occurred in New York). Should the CEDEL
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debit in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on the
intended value date (i.e., the trade fails), receipt of the cash proceeds in the
CEDEL Participant's or Euroclear Participant's account would instead be valued
as of the actual settlement date.
S-A-2
<PAGE>
Finally, day traders that use CEDEL or Euroclear and that purchase Global
Securities from DTC Participants for delivery to CEDEL Participants or Euroclear
Participants should note that these trades would automatically fail on the sale
side unless affirmative action were taken. At least three techniques should be
readily available to eliminate this potential problem:
(a) borrowing through CEDEL or Euroclear for one day (until the
purchase side of the day trade is reflected in their CEDEL or Euroclear
accounts) in accordance with the clearing system's custom procedures;
(b) borrowing the Global Securities in the U.S. from a DTC
Participant no later than one day prior to settlement, which would give
the Global Securities sufficient time to be reflected in their CEDEL
Euroclear account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC Participant is
at least one day prior to the value date for the sale to the CEDEL
Participant or Euroclear Participant.
Certain U.S. Federal Income Tax Documentation Requirements
A beneficial owner of Global Securities holding securities through CEDEL
or Euroclear (or through DTC if the holder has an address outside the U.S.) will
be subject to the 30% U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (i) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(ii) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of
Certificates that are non-U.S. Persons can obtain a complete exemption from the
withholding tax by filing a signed Form W-8 (Certificate of Foreign Status). If
the information shown on Form W-8 changes, a new Form W-8 must be filed within
30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are Certificate Owners residing in
a country that has a tax treaty with the United States can obtain an exemption
or reduced tax rate (depending on the treaty terms) by filing Form 1001
(Ownership, Exemption of Reduced Rate Certificate). If the treaty provides only
for a reduced rate, withholding tax will be imposed at that rate unless the
filer alternatively files Form W-8. Form 1001 may be filed by the Certificate
Owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of the
United States or any political subdivision thereof or (iii) an estate
S-A-3
<PAGE>
or trust the income of which is includible in gross income for United States tax
purposes, regardless of its source. This summary does not deal with all aspects
of U.S. Federal income tax withholding that may be relevant to foreign holders
of the Global Securities. Investors are advised to consult their own tax
advisors for specific tax advice concerning their holding and disposing of the
Global Securities.
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with this offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Chase Manhattan Bank USA,
N.A.) or the Underwriter. Neither the delivery of this Prospectus nor any sale
made hereunder shall under any circumstance create an implication that there has
been no change in the affairs of Chase Manhattan Bank USA, N.A.) or the
Receivables since the date thereof. This Prospectus does not constitute an offer
or solicitation by anyone in any state in which such offer or solicitation is
not authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation.
S-A-4
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus Supplement and the accompanying Prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED AUGUST 28, 1996
PROSPECTUS SUPPLEMENT
(To Prospectus dated ________________, 199__)
[$------------]
CHASE MANHATTAN AUTO OWNER TRUST 199__-__
$___________ Class A-1 ___ % Asset Backed Notes
$___________ Class A-2 ___ % Asset Backed Notes
$___________ ___ % Asset Backed Certificates
Chase Manhattan Bank USA, N.A.
Seller and Servicer
The Chase Manhattan Auto Owner Trust 199_-_ (the "Trust") will be formed
pursuant to a Trust Agreement, to be dated as of ______________, 199___, among
Chase Manhattan Bank USA, N.A. (the "Seller"), [_____________] [the "General
Partner") and ___________________, as Owner Trustee. The Trust will issue
$________ aggregate principal amount of Class A-1 ___% Asset Backed Notes (the
"Class A-1 Notes"), and $_________ aggregate principal amount of Class A-2 ____%
Asset Backed Notes (the "Class A-2 Notes" and, together with the Class A-1
Notes, the "Notes") pursuant to an Indenture to be dated as of ______________,
199___, between the Trust and __________________, as Indenture Trustee. The
Trust will also issue $_____________ aggregate principal amount of ___% Asset
Backed Certificates (the "Certificates" and, together with the Notes,
(continued on following page)
There currently is no secondary market for the Securities and there is no
assurance that one will develop.
The Underwriter expects, but is not obligated, to make a market in the
Securities, and there is no assurance that any such market will develop or
continue.
THE NOTES REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES REPRESENT BENEFICIAL
INTERESTS IN, THE TRUST ONLY AND DO NOT REPRESENT OBLIGATIONS OF OR INTERESTS IN
CHASE MANHATTAN BANK USA, N.A., THE CHASE MANHATTAN BANK, OR ANY OF THEIR
AFFILIATES. NONE OF THE NOTES OR CERTIFICATES ARE DEPOSITS AND NONE OF THE NOTES
OR CERTIFICATES ARE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE
"FDIC"). THE RECEIVABLES ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER
GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospective investors should consider, among other things, the information set
forth under the heading "Risk Factors" in this Prospectus Supplement commencing
on page S-10 and in the accompanying Prospectus.
<TABLE>
<CAPTION>
=================================================================================================
Underwriting Discount
Price to Public(1) and Commissions Proceeds to the Seller(1)(2)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Class A-1 Note.... % % %
- -------------------------------------------------------------------------------------------------
Per Class A-2 Note.... % % %
- -------------------------------------------------------------------------------------------------
Per Certificate....... % % %
- -------------------------------------------------------------------------------------------------
Total $ $ $
=================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from __________, 199___.
(2) Before deducting expenses, estimated to be $_______.
[This Prospectus Supplement and the accompanying Prospectus may be used by
Chase Securities Inc., an affiliate of the Seller and a subsidiary of The Chase
Manhattan Corporation (the "Underwriter"), in connection with offers and sales
related to market-making transactions in the Notes and the Certificates. The
Underwriter may act as principal or agent in such transactions. Such sales will
be made at prices related to prevailing market prices at the time of sale.]
The Notes and Certificates are being offered by the Underwriter, subject
to prior sale, when, as and if issued to and accepted by the Underwriter,
subject to approval of certain legal matters by counsel to the Underwriter. The
Underwriter reserves the right to reject orders in whole or in part. It is
expected that delivery of the Notes and the Certificates will be made in
book-entry form on or about the Closing Date through the facilities of The
Depository Trust Company on or about ____________, 199_ (the "Closing Date").
[Underwriter]
The date of this Prospectus Supplement is _____________, 199___.
<PAGE>
(continued from preceding page)
the "Securities"). The assets of the Trust will include a pool of retail
installment sales contracts secured by new or used automobiles or light-duty
trucks (the "Receivables"), including certain monies due [or received]
thereunder on and after the Cutoff Date (as defined herein) and security
interests in the vehicles financed thereby, transferred to the Trust by the
Seller on or prior to the Closing Date (as defined herein). The Notes will be
secured by the assets of the Trust pursuant to the Indenture.
Interest on all classes of Notes will accrue at the fixed per annum
interest rates specified above. Interest on the Notes will generally be payable
on the __th day of each month (each, a "Payment Date"), commencing ________,
199___.
Principal of the Notes will be payable on each Payment Date to the extent
described herein, except that no principal will be paid on the Class A-2 Notes
until the Class A-1 Notes have been paid in full.
The Certificates will represent fractional undivided interests in the
Trust. Interest, to the extent of the Pass Though Rate (as defined herein), will
be generally distributed to the Certificateholders (as defined herein) on the
__th day of each month (each, a "Distribution Date"). Principal, to the extent
described herein, will be distributed to the Certificateholders on each
Distribution Date commencing with the Distribution Date on which the Notes were
paid in full. Distributions of [interest and] principal on the Certificates will
be subordinated in priority to payments due on the Notes as described herein.
As set forth herein, each class of the Notes will be payable in full on
its respective Final Scheduled Payment Date (as defined herein). The
Certificates are expected to be paid in full on the Final Scheduled Certificate
Distribution Date (as defined herein). Investors should be aware that payment in
full of a class of Notes or the Certificates could occur earlier than such dates
as described herein. In addition, the Class A-2 Notes and the Certificates will
be subject to prepayment in whole, but not in part, on any Distribution Date on
which Chase Manhattan Bank USA, N.A., in its capacity as servicer (in such
capacity, the "Servicer"), exercises its option to purchase the Receivables. The
Servicer may purchase all the Receivables on any Distribution Date on which the
Pool Balance (as defined herein) shall have declined to 5% or less of the
Initial Pool Balance (as defined herein).
The Issuer, a newly formed limited-purpose Delaware business trust, will
generally be prohibited from incurring any indebtedness other than the Notes,
and its assets will include the Receivables, the Collection Account, the Note
Distribution Account, the Certificate Distribution Account, and the Reserve
Account, as described herein.
No dealer, sales person or other person has been authorized to give any
information or to make any representations not contained in this Prospectus
Supplement and the Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the Seller,
the Servicer or by the Underwriter. This Prospectus Supplement and the
Prospectus do not constitute an offer to sell, or a solicitation of an offer to
buy, the securities offered to anyone in any jurisdiction in which the person
making such offer or solicitation is not qualified to do so or to anyone to whom
it is unlawful to make any such offer or solicitation. Neither the delivery of
this Prospectus Supplement and the Prospectus nor any sale made hereunder shall,
under any circumstances, create an implication that there has been no change in
the affairs of the Seller, the Servicer or the Receivables since the date hereof
or thereof or that the information contained or incorporated by reference herein
or therein is correct as of any time subsequent to its date.
Until ________, ____ (90 days after the date of this Prospectus
Supplement), all dealers effecting transactions in the Securities described in
this Prospectus Supplement, whether or not participating in this distribution,
may be required to deliver this Prospectus Supplement and the Prospectus. This
is in addition to the obligation of dealers to deliver this Prospectus
Supplement and the Prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT THE
OFFERING OF THE NOTES AND THE CERTIFICATES. ADDITIONAL INFORMATION IS CONTAINED
IN THE PROSPECTUS AND PROSPECTIVE INVESTORS ARE URGED TO READ BOTH
ii
<PAGE>
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE NOTES OR THE
CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE NOTES AND THE
CERTIFICATES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
There is currently no secondary market for the Notes or Certificates and
there is no assurance that one will develop. The Underwriter expects, but is not
obligated, to make a market in the Notes and Certificates. However, even if the
Underwriter does make such a market, there is no assurance that any such market
will continue.
Upon receipt of a request by an investor, or his or her representative,
within the period during which there is a prospectus delivery obligation, the
Underwriter will transmit or cause to be transmitted promptly, without charge
and in addition to any such delivery requirements, a paper copy of this
Prospectus Supplement and a Prospectus or this Prospectus Supplement and a
Prospectus encoded in an electronic format.
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT Page
----
<S> <C>
SUMMARY OF TERMS.......................................................... S-1
RISK FACTORS..............................................................S-10
THE TRUST.................................................................S-10
THE RECEIVABLES POOL......................................................S-12
CHASE USA.................................................................S-17
USE OF PROCEEDS...........................................................S-17
GENERAL PARTNER...........................................................S-17
WEIGHTED AVERAGE LIFE OF THE SECURITIES...................................S-17
DESCRIPTION OF THE NOTES..................................................S-19
DESCRIPTION OF THE CERTIFICATES...........................................S-20
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS......................S-22
LEGAL INVESTMENT..........................................................S-28
CERTAIN FEDERAL INCOME TAX CONSEQUENCES...................................S-28
CERTAIN STATE TAX CONSEQUENCES............................................S-35
ERISA CONSIDERATIONS......................................................S-35
UNDERWRITING..............................................................S-37
LEGAL MATTERS.............................................................S-38
ANNEX X...................................................................S-39
INDEX OF TERMS............................................................S-43
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
SUMMARY OF PROSPECTUS........................................................6
RISK FACTORS................................................................17
THE TRUSTS..................................................................21
THE RECEIVABLES POOLS.......................................................22
WEIGHTED AVERAGE LIFE OF THE SECURITIES.....................................29
POOL FACTORS AND TRADING INFORMATION........................................30
USE OF PROCEEDS.............................................................31
CHASE USA (NEW YORK) AND CHASE USA (DELAWARE)...............................31
DESCRIPTION OF THE NOTES....................................................32
DESCRIPTION OF THE CERTIFICATES.............................................37
CERTAIN INFORMATION REGARDING THE SECURITIES................................39
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS........................47
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES....................................61
ERISA CONSIDERATIONS........................................................65
PLAN OF DISTRIBUTION........................................................66
RATINGS.....................................................................67
LEGAL MATTERS...............................................................67
INDEX OF TERMS..............................................................68
</TABLE>
iv
<PAGE>
SUMMARY OF TERMS
This Summary of Terms is qualified in its entirety by reference to the detailed
information appearing elsewhere herein and in the Prospectus. Certain
capitalized terms used in this Summary are defined elsewhere in this Prospectus
Supplement on the pages indicated in the "Index of Terms" or, to the extent not
defined herein, have the meanings assigned to such terms in the Prospectus.
<TABLE>
<S> <C>
Issuer........................... The Chase Manhattan Auto Owner Trust 199_-_
(the "Trust" or the "Issuer"), a Delaware
business trust established pursuant to a trust
agreement (as amended and supplemented, the
"Trust Agreement"), dated as of
___________________, 199__ among the Seller,
the General Partner and the Owner Trustee.
Seller........................... Chase Manhattan Bank USA, N.A.("Chase USA"), a
national banking association and a
wholly-owned subsidiary of The Chase Manhattan
Bank ("Chase") (in such capacity, the
"Seller," or individually, the "Bank").
Servicer......................... Chase USA (in such capacity, the "Servicer").
Indenture Trustee................ ________________, as trustee under the
Indenture (the "Indenture Trustee").
Owner Trustee.................... ________________, as trustee under the Trust
Agreement (the "Owner Trustee").
The Notes........................ Class A-1 ____% [Money Market] Asset Backed
Notes (the "Class A-1 Notes") in the aggregate
principal amount of $----------.
Class A-2 ___% Asset Backed Notes (the "Class
A-2 Notes"; together with the Class A-1 Notes,
the "Notes") in the aggregate principal amount
of $________.
The Notes will be issued by the Trust pursuant
to an Indenture to be dated as of _______ __,
____ (the "Indenture"), between the Trust and
the Indenture Trustee. The Notes will be
secured by the assets of the Trust.
The Notes will be available for purchase in
book-entry form only in minimum denominations
of $1,000 and integral multiples thereof. The
Noteholders will not be entitled to receive
Notes in fully registered, certificated form
("Definitive Notes") except in the limited
circumstances described herein. See
"Description of the Notes-General" and
"Certain Matters Regarding the
Securities-Book-Entry Registration" in the
Prospectus.
The Certificates................. ___% Asset Backed Certificates (the
"Certificates"; together with the Notes, the
"Securities") with an initial Certificate
Balance of $_______. The Certificates will
represent fractional undivided interests in
the Trust and will be issued pursuant to the
Trust Agreement.
</TABLE>
S-1
<PAGE>
<TABLE>
<S> <C>
[_____________] (the "General Partner") will
purchase $______ principal amount of the
Certificates. The Certificates will be
available for purchase in minimum
denominations of $______ and integral
multiples of $1,000 in excess thereof. The
Certificateholders will not be entitled to
receive Certificates in fully registered,
certificated form ("Definitive Certificates")
except in the limited circumstances described
herein. See "Description of the
Certificates-General" and "Certain Matters
Regarding the Securities-Book-Entry
Registration" in the Prospectus. No beneficial
interest in a Certificate may be held directly
or indirectly by a Foreign Investor.
Purchasers of Certificates and their assignees
will be deemed to represent (i) that the
beneficial owners of such Certificates are not
Foreign Investors, and (ii) that they are not
a Plan and that no assets of a Plan were used
to acquire the Certificates.
The rights of Certificateholders to receive
distributions with respect to the Certificates
will be subordinated to the rights of the
Noteholders to receive interest on and
principal of the Notes.
General Partner.................. [_______________] has been formed for the
limited purpose of purchasing a portion of the
Certificates issued by the Trust and
asset-backed certificates issued by other
trusts, acting as the General Partner of the
Trust and such other trusts for federal income
tax purposes and engaging in incidental
activities. As described herein, the General
Partner will purchase approximately 1% of the
Certificates. Any Certificates purchased by
the General Partner are not transferable
except under the limited circumstances set
forth in the Trust Agreement.
The Trust........................ The Trust is a business trust established
under the laws of Delaware pursuant to the
Trust Agreement. The activities of the Trust
are limited by the terms of the Trust
Agreement to acquiring, owning and managing
the Receivables, issuing and making payments
on the Notes and Certificates and other
activities related thereto. The Trust Property
will include (i) the Receivables, (ii) with
respect to the Actuarial Receivables, all
monies due thereunder on or after ______,199__
(the "Cutoff Date"), and with respect to
Simple Interest Receivables, all monies due or
received thereunder on or after the Cutoff
Date, (iii) such amounts as from time to time
may be held in one or more Trust Accounts
established and maintained by the Servicer and
the Seller pursuant to the Sale and Servicing
Agreement, as described herein, (iv) the
security interests in the Financed Vehicles,
(v) the rights to proceeds as a result of the
Seller's exercise of its recourse rights
against Dealers, (vi) an assignment of the
rights of the Seller to receive proceeds from
claims on theft and physical damage, credit
life and credit disability insurance policies
covering the Receivables, (vii) the rights
with respect to any Financed Vehicle that has
been repossessed by the Servicer on behalf the
Trust, and (viii) any and all proceeds of the
foregoing.
</TABLE>
S-2
<PAGE>
<TABLE>
<S> <C>
The Receivables.................. The Receivables will consist of retail
installment sales contracts and purchase money
loans secured by new and used automobiles and
light-duty trucks (the "Financed Vehicles").
On the Closing Date, the Trust will purchase
Receivables having an aggregate principal
balance of approximately $____________ as of
the Cutoff Date from the Seller pursuant to a
Sale and Servicing Agreement to be dated as of
_______________, 199___ (as amended and
supplemented from time to time, the "Sale and
Servicing Agreement"), among the Trust, the
Seller and the Servicer. See "Description of
the Transfer and Servicing Agreements" herein
and in the Prospectus.
The Receivables have been selected from the
contracts owned by the Bank based on the
criteria specified in the Sale and Servicing
Agreement and described herein and in the
Prospectus. See "The Receivables Pool" herein
and "The Receivables Pools" in the Prospectus.
No Receivable will have a scheduled maturity
that, after giving prospective effect to any
permitted extensions or deferrals, would be
later than __________ (the "Final Scheduled
Maturity Date"). As of the Cutoff Date, the
weighted average remaining maturity of the
Receivables was approximately _____ months and
the weighted average original maturity of the
Receivables was approximately ____ months. As
of the Cutoff Date, approximately ___% of the
aggregate principal balance of the Receivables
represents financing of new vehicles and the
remainder represents financing of used
vehicles.
The "Pool Balance" at any time will represent
the aggregate principal balance of the
Receivables as of the close of business on the
last day of the preceding Collection Period,
after giving effect to all payments received
from Obligors and Purchase Amounts to be
remitted by the Servicer or the Seller, as the
case may be, for such Collection Period and
all losses realized on Receivables liquidated
during such Collection Period. The aggregate
principal balance of the Receivables as of the
Cutoff Date (the "Initial Pool Balance") was
$________.
Terms of the Notes............... The principal terms of the Notes are described
below:
Payment Dates. Payments of interest and
principal on the Notes will be made on the
[__th] day of each month or, if any such day
is not a Business Day, on the next succeeding
Business Day (each, a "Payment Date"),
commencing _________________, 199___. Unless
the context otherwise requires, each reference
to a "Distribution Date" herein and in the
Prospectus shall refer to a Payment Date
herein. Payments will be made to holders of
record of the Notes (the "Noteholders") as of
the day immediately preceding such
Distribution Date or, if Definitive Notes are
issued, as of the last day of the preceding
calendar month (a "Record Date"). A "Business
Day" is a day on which banks located in New
York, New York [and __________, ____________]
are open for the purpose of conducting a
commercial banking business.
</TABLE>
S-3
<PAGE>
<TABLE>
<S> <C>
Interest Rates. The Class A-1 Notes will bear
interest at the rate of ___% per annum and the
Class A-2 Notes will bear interest at the rate
of ___% per annum. The interest rates for both
classes of Notes are referred to herein
collectively as "Interest Rates".
Interest. Interest on the outstanding
principal amount of the Notes of each class
will accrue at the applicable Interest Rate
from and including the Closing Date (in the
case of the first Payment Date) or from and
including the most recent Payment Date on
which interest has been paid to but excluding
the following Payment Date (each an "Interest
Accrual Period"). On each Payment Date, the
Indenture Trustee will distribute pro rata to
the Noteholders of each class accrued interest
at the applicable Interest Rate on the
outstanding principal balance generally to the
extent of funds available following [payment
of the Servicing Fee and the Administration
Fee] from the Total Distribution Amount and
the Reserve Account. Interest on the Notes
will be calculated on the basis of a 360-day
year consisting of twelve 30-day months. See
"Description of the Notes--Payments of
Interest" herein.
Principal. Principal of the Notes will be
payable on each Payment Date in an amount
equal to the Noteholders' Principal
Distributable Amount for the calendar month
preceding such Payment Date (the "Collection
Period"), to the extent of funds available
therefor as described herein.
No principal payments will be made on the
Class A-2 Notes until the Class A-1 Notes have
been paid in full.
The outstanding principal amount of the Class
A-1 Notes, to the extent not previously paid,
will be payable on the ____________________
199___ Payment Date (the "Class A-1 Final
Scheduled Payment Date"), and the outstanding
principal amount of the Class A-2 Notes, to
the extent not previously paid, will be
payable on the ____________ 199_ Payment Date,
in each case from funds available therefor
(including amounts on deposit in the Reserve
Account) (the "Class A-2 Final Scheduled
Payment Date" and, together with the Class A-1
Final Scheduled Payment Date, each a "Final
Scheduled Payment Date").
Optional Redemption. After the Class A-1 Notes
have been paid in full, the Class A-2 Notes
will be redeemed in whole, but not in part, on
any Payment Date on which the Servicer
exercises its option to purchase the
Receivables, which can occur following the
last day of any Collection Period as of which
the Pool Balance declines to 5% or less of the
Initial Pool Balance, at a redemption price
equal to the unpaid principal amount of the
Class A-2 Notes plus accrued and unpaid
interest thereon. See "Description of the
Notes--Optional Redemption" herein.
</TABLE>
S-4
<PAGE>
<TABLE>
<S> <C>
Terms of the Certificates........ The principal terms of the Certificates are
described below:
Distribution Dates. Distributions with respect
to the Certificates will be made on each
Distribution Date, commencing _________,
199___. Distributions will be made to holders
of record of the Certificates (the
"Certificateholders" and, together with the
Noteholders, the "Securityholders") as of the
related Record Date (which will be the last
day of the preceding month).
Pass Through Rate. ___% per annum (the "Pass
Through Rate").
Interest. Interest in respect of a
Distribution Date will accrue during the
related Interest Accrual Period. On each
Distribution Date, the Owner Trustee will
distribute pro rata to Certificateholders
accrued interest at the Pass Through Rate on
the outstanding Certificate Balance generally
to the extent of funds available following
payment of the Servicing Fee, Administration
Fee and distributions in respect of interest
on the Notes from the Total Distribution
Amount and the Reserve Account. Interest will
be calculated on the basis of a 360-day year
consisting of twelve 30-day months. Payment of
interest on the Certificates is subordinated
to payment of interest on the Notes. If an
Event of Default shall occur and the Notes are
accelerated, or upon the occurrence of an
Insolvency Event with respect to the General
Partner, distribution of amounts on the
Certificates will be subordinated in priority
of payment to payment of principal on the
Notes. Interest on the Certificates for any
Distribution Date due but not paid on such
Distribution Date will be due on the next
Distribution Date together with interest on
such amount at the Certificate Rate.
Principal. [No distributions of principal on
the Certificates will be made until all of the
Notes have been paid in full.] On each
Distribution Date commencing on the
Distribution Date on which the Class A-2 Notes
are paid in full, principal of the
Certificates will be payable in an amount
generally equal to the Certificateholders'
Principal Distributable Amount for the
Collection Period preceding such Distribution
Date, to the extent of funds available
therefor following payment of the Servicing
Fee, Administration Fee, payments of interest
and principal, if any, due in respect of the
Notes and distribution of interest in respect
of the Certificates.
[On and after any Distribution Date on which
the Notes have been paid in full, funds in the
Reserve Account will be applied to reduce the
Certificate Balance to zero if, after giving
effect to all distributions to the Servicer,
the Administrator, the Noteholders and the
Certificateholders on such Distribution Date,
the amount on deposit in the Reserve Account
would be equal to or greater than the
Certificate Balance. See "Description of the
Certificates-Distributions of Principal
Payments."
</TABLE>
S-5
<PAGE>
<TABLE>
<S> <C>
The outstanding principal amount, if any, of
the Certificates will be payable in full on
the ______________ Distribution Date (the
"Final Scheduled Certificate Distribution
Date").
Optional Prepayment. If the Servicer exercises
its option to purchase the Receivables, which
can occur following the last day of any
Collection Period as of which the Pool Balance
declines to 5% or less of the Initial Pool
Balance, the Certificateholders will receive
an amount in respect of the Certificates equal
to the Certificate Balance together with
accrued interest at the Pass Through Rate, and
the Certificates will be retired. See
"Description of the Certificates--Optional
Prepayment" herein.
[Advances........................ On or prior to the Business Day preceding each
Distribution Date (the "Deposit Date"), the
Servicer may, in its sole discretion, make a
payment (an "Advance") with respect to each
Actuarial Receivable in the Receivables Pool
(other than a Defaulted Receivable) in an
amount generally equal to the excess, if any,
of (i) the payment due on such Actuarial
Receivable during the related Collection
Period, over (ii) the payment actually
received by the Servicer with respect to such
Actuarial Receivable from the Obligor or from
payments of the Purchase Amount during or with
respect to such Collection Period. The
Servicer may elect not to make any Advance
with respect to an Actuarial Receivable to the
extent that the Servicer, in its sole
discretion, determines that such Advance is
not recoverable from subsequent payments on
such Actuarial Receivable or funds in the
Reserve Account. See "Description of the
Transfer and Servicing Agreements--Advances"
herein.]
Reserve Account.................. A reserve account (the "Reserve Account") will
be created with an initial deposit by the
Seller of cash or certain investments having a
value of at least $______ (the "Reserve
Account Initial Deposit"). In addition, on
each Distribution Date, any amounts on deposit
in the Collection Account with respect to the
preceding Collection Period after payments to
the Noteholders, the Certificateholders, the
Servicer and the Administrator have been made
will be deposited into the Reserve Account
until the amount on deposit in the Reserve
Account is equal to the Specified Reserve
Account Balance (as defined herein).
On or prior to each Deposit Date, the Trustee
will withdraw funds from the Reserve Account,
to the extent of the funds therein (exclusive
of investment earnings), (i) to the extent
required to reimburse the Servicer for
outstanding Advances and (ii) to the extent
(x) the sum of the amounts required to be
distributed to Noteholders,
Certificateholders, the Servicer and the
Administrator on the related Distribution Date
exceeds (y) the amount on deposit in the
Collection Account with respect to the
preceding Collection Period (net of investment
income). If the amount in the Reserve Account
is reduced to zero, Noteholders and
Certificateholders will bear the credit and
other risks associated with ownership of the
Receivables, including the risk
</TABLE>
S-6
<PAGE>
<TABLE>
<S> <C>
that the Trust may not have a perfected
security interest in the Financed Vehicles.
See "Description of the Certificates--The
Reserve Account" herein and "Certain Legal
Aspects of the Receivables" in the Prospectus.
Collection Account;
Priority of Payments............. The Servicer will be required to remit
collections received with respect to the
Receivables to one or more accounts in the
name of the Indenture Trustee (collectively,
the "Collection Account") on each Deposit Date
(as defined herein), net of any amounts due
the Seller and the Servicer to the extent
described in "Description of the Transfer and
Servicing Agreement--Net Deposits" in the
Prospectus, except upon the occurrence of
certain conditions described in "Description
of the Transfer and Servicing
Agreement--Collections" in the Prospectus.
Pursuant to the Sale and Servicing Agreement,
the Servicer will have the revocable power to
instruct the Trustee or the Paying Agent to
withdraw funds on deposit in the Collection
Account and to apply such funds on each
Distribution Date to the following (in the
priority indicated): [(i) reimbursement of
Servicer Advances (if not deducted from the
Servicer's remittance as described above),
(ii) the Servicing Fee, together with any
unpaid Servicing Fees from prior Distribution
Dates (if not deducted from the Servicer's
remittance as described above), (iii) the
Administration Fee, together with any unpaid
Administration Fees from prior Distribution
Dates, (iv) the Noteholders' Interest
Distributable Amount into the Note
Distribution Account, (v) Certificateholder's
Interest Distributable Amount into the
Certificate Distribution Account, (vi) the
Noteholders' Principal Distributable Amount
into the Note Distribution Account, and (vii)
after the Notes have been paid in full, the
Certificateholders' Principal Distributable
Amount into the Certificate Distribution
Account.]
Notwithstanding the foregoing, if an Event of
Default has occurred and the maturity of the
Notes has been accelerated or upon the
occurrence of an Insolvency Event with respect
to the General Partner, the Certificateholders
will not be entitled to receive any
distributions of interest or principal until
the Notes have been paid in full.
[Funds will be withdrawn from amounts on
deposit in the Reserve Account to the extent
that the Total Distribution Amount (after [the
reimbursement of Servicer Advances and] the
payment of the Servicing Fee and the
Administration Fee) with respect to any
Collection Period is less than the
Noteholders' Distributable Amount and funds in
the amount of such deficiency will be
deposited in the Note Distribution Account. In
addition, funds will be withdrawn from amounts
on deposit in the Reserve Account to the
extent that the portion of the Total
Distribution Amount remaining after the
payment of the Servicing Fee and the
Administration Fee [, the reimbursement of
Servicer Advances] and the deposit of the
Noteholders' Distributable Amount in the
</TABLE>
S-7
<PAGE>
<TABLE>
<S> <C>
Note Distribution Account is less than the
Certificateholders' Distributable Amount, and
funds in the amount of such deficiency will be
deposited in the Certificate Distribution
Account.
Servicing Fee.................... The Servicer shall receive a Servicing Fee,
payable on each Distribution Date, in an
amount equal to the sum of (i) the product of
the Servicing Fee Rate and the Pool Balance as
of the close of business on the last day of
the second preceding Collection Period (the
"Settlement Date") and (ii) any Late Fees paid
by the Obligors during the related Collection
Period. In addition, [except under certain
circumstances] the Servicing Fee will include
Investment Earnings on amounts on deposit in
the Trust Accounts. See "Description of the
Transfer and Servicing Agreements--Servicing
Compensation and Payment of Expenses" herein
and "Description of the Transfer and Servicing
Agreements--Servicing Compensation and Payment
of Expenses" and "--Net Deposits" in the
Prospectus.
Administration Agreement......... Chase, in its capacity as administrator (the
"Administrator"), will enter into an agreement
(the "Administration Agreement") with the
Trust and the Indenture Trustee. As
compensation for the performance of the
Administrator's obligations under the
Administration Agreement and as reimbursement
for its expenses related thereto, the
Administrator will be entitled to a monthly
administration fee in an amount equal to
$[___] (the "Administration Fee"). See
"Description of the Transfer and Servicing
Agreements--Administration Agreement" in the
Prospectus.
Tax Status....................... Upon issuance of the Securities, Simpson
Thacher & Bartlett, special counsel to the
Seller, will deliver its opinion generally to
the effect that under current law the Notes
will be characterized as debt, and the Trust
will not be characterized as an association
(or a publicly traded partnership) taxable as
a corporation. Each Noteholder, by the
acceptance of a Note, will agree to treat the
Notes as indebtedness, and each
Certificateholder, by the acceptance of a
Certificate, will agree to treat the Trust as
a partnership in which the Certificateholders
are partners for federal, state and local
income tax purposes. Alternative
characterizations of the Trust and the
Certificates are possible, but would not
result in materially adverse tax consequences
to Certificateholders. See "Certain Federal
Income Tax Consequences" and "Certain State
Tax Consequences" herein.
[Legal Investment................ The Class A-1 Notes will be eligible
securities for purchase by money market funds
under paragraph (a)(5) of Rule 2(a)(7) under
the Investment Company Act of 1940, as
amended.]
ERISA Considerations............. Subject to the considerations described in
"ERISA Considerations" herein and in the
Prospectus, the Notes are eligible for
purchase with Plan Assets of any Plan. A
fiduciary or other person contemplating
purchasing the Notes on behalf of or with Plan
Assets of any Plan should carefully review
with its legal advisors
</TABLE>
S-8
<PAGE>
<TABLE>
<S> <C>
whether the purchase or holding of the Notes
could give rise to a transaction prohibited or
not otherwise permissible under ERISA or
Section 4975 of the Code.
The Certificates may not be acquired by, on
behalf of or with Plan Assets. See "ERISA
Considerations" herein and in the Prospectus.
Ratings of the Notes............. It is a condition to the issuance of the Notes
that each class of Notes be rated in the
highest investment rating category by at least
two nationally recognized statistical rating
organizations. There can be no assurance that
this rating will not be lowered or withdrawn
if, in the sole judgment of any such rating
agency, circumstances in the future so
warrant.
Rating of the Certificates....... It is a condition to the issuance of the
Certificates that they be rated at least
investment grade by at least two nationally
recognized statistical rating organizations.
There can be no assurance that a rating will
not be lowered or withdrawn if, in the sole
judgment of any such rating agency,
circumstances in the future so warrant.
</TABLE>
S-9
<PAGE>
RISK FACTORS
Investors should consider, among other things, the matters discussed under
"Risk Factors" in the Prospectus and the following risk factors in connection
with purchases of the Securities.
Limited Liquidity
There is currently no secondary market for the Securities offered hereby. The
Underwriter currently intends to make a market in the Securities offered hereby,
but it is under no obligation to do so. There can be no assurance that a
secondary market will develop or, if a secondary market does develop, that it
will provide the Securityholders with liquidity of investment or that it will
continue for the life of the Securities offered hereby.
Subordination; Limited Assets
Distributions of principal on the Certificates will be subordinated in priority
of payment to interest and principal due on the Notes. The Certificateholders
will not receive any distributions of interest with respect to a Collection
Period until the full amount of interest on the Notes due on such Distribution
Date has been deposited in the Note Distribution Account. The Certificateholders
will not receive any distributions of principal until the Distribution Date on
which all of the Notes have been paid in full.
The Trust will not have, nor is it permitted or expected to have, any
significant assets or sources of funds other than the Receivables and the
Reserve Account. Holders of the Notes and the Certificates must rely for
repayment upon payments on the Receivables and, if and to the extent available
on each Distribution Date to cover shortfalls in distributions of interest and
principal on the Notes and the Certificates, amounts to be deposited in the
Reserve Account. However, funds deposited in the Reserve Account. If the Reserve
Account is exhausted, the Trust will depend solely on current distributions on
the Receivables to make payments on the Notes and the Certificates. The
Securities will not be insured or guaranteed by the Bank, the Servicer, the
Trustee, the Indenture Trustee or any affiliate thereof.
Ratings of the Securities
It is a condition to the issuance of each class of the Notes and of the
Certificates that each class of the Notes be rated in the highest investment
rating category, and that the Certificates be rated at least investment grade,
by at least two nationally recognized statistical rating organizations (the
"Rating Agencies"). A rating is not a recommendation to purchase, hold or sell
Securities, inasmuch as such rating does not comment as to market price or
suitability for a particular investor. The ratings of the Securities address the
likelihood of the timely payment of interest on and ultimate payment of
principal of the Securities pursuant to their terms. There can be no assurance
that a rating will remain for any given period of time or that a rating will not
be lowered or withdrawn entirely by a Rating Agency if in its judgment
circumstances in the future so warrant.
THE TRUST
General
The Issuer, The Chase Manhattan Bank Auto Owner Trust 199_-__, is a
business trust formed under the laws of the State of Delaware pursuant to the
Trust Agreement for the transaction described in this Prospectus Supplement. The
activities of the Trust are limited by the terms of the Trust Agreement to (i)
acquiring, holding and managing the Receivables and the other assets of the
Trust and proceeds therefor, (ii) issuing the Notes and the Certificates to
finance such assets, (iii) making payments on the Notes and the Certificates
issued by it, and (iv) engaging in other activities that are necessary, suitable
or convenient to accomplish the foregoing or are incidental thereto or connected
therewith. The Trust will not acquire any contracts or assets other than the
Trust property described below and will not have any need for additional capital
resources. As the Trust does not have any operating history and will not engage
in any activity other than acquiring and holding the Receivables, issuing the
Notes and Certificates and making distributions thereon, there has not been
included any historical or pro forma
S-10
<PAGE>
financial statements or ratio of earnings to fixed charges with respect to the
Trust. Inasmuch as the Trust has no operating history, it is not possible to
predict the operating performance of the Trust while the Notes and Certificates
are outstanding. While management of the Seller believes that the loss and
delinquency experience contained herein for recent periods are representative of
past performance of Motor Vehicle Loans in the Chase Auto Finance Portfolio,
there is no assurance that such performance is indicative of the future
performance of the Receivables, since future performance is dependent, among
other things, on general economic conditions and economic conditions in the
geographical areas in which the Obligors reside including, for example,
unemployment rates.
The Certificate Balance represents the equity in the Trust. The Notes and
the Certificates will be transferred to the Seller by the Trust in exchange for
the Receivables pursuant to the Sale and Servicing Agreement. The Seller will
sell approximately 1% of the initial Certificate Balance to the General Partner.
The Trust property will include a pool (the "Receivables Pool") comprised
of the Receivables and with respect to the Actuarial Receivables, all monies due
thereunder on or after the Cutoff Date and with respect to Simple Interest
Receivables, all monies due or received thereunder on and after the Cutoff Date.
The Trust property will also include: (i) such amounts as from time to time may
be held in one or more Trust Accounts established and maintained by the Servicer
pursuant to the Sale and Servicing Agreement, as described herein; (ii) security
interests in the Financed Vehicles; (iii) the rights to proceeds as a result of
the Seller's exercise of its recourse rights against Dealers (as described in
the Prospectus under "The Bank's Portfolio of Motor Vehicle Loans--Origination
and Servicing of Motor Vehicle Loans"); (v) an assignment of the rights of the
Seller to receive proceeds from claims on theft and physical damage, credit life
and credit disability insurance policies covering the Financed Vehicles or the
Obligors, as the case may be, to the extent that such insurance policies relate
to the Receivables; and (vi) the rights with respect to any Financed Vehicle
that has been repossessed by the Servicer, on behalf of the Trustee. The Sale
and Servicing Agreement sets forth criteria that must be satisfied by each
Receivable. See "Receivables Pools--General" in the Prospectus. Each Receivable
will be identified in a schedule appearing as an exhibit to the Sale and
Servicing Agreement.
[If the protection provided to the investment of the Securityholders by
the Reserve Account is insufficient, the Trust will look only to the Obligors on
the Receivables and the proceeds from the repossession and sale of Financed
Vehicles that secure Defaulted Receivables. In such event, certain factors, such
as the Trust's not having first priority perfected security interest in some of
the Financed Vehicles, may affect the Trust's ability to realize on the
collateral securing the Receivables, and thus may reduce the proceeds to be
distributed to Securityholders with respect to the Securities. See "Description
of the Transfer and Servicing Agreements-Distributions" and "Subordination of
Certificateholders; Reserve Account" herein and "Certain Legal Aspects of the
Receivables" in the Prospectus.]
The Trust's principal offices are in Delaware at the address listed below
under "-The Owner Trustee".
Capitalization of the Trust
The following table illustrates the capitalization of the Trust as of the
Cutoff Date, as if the issuance and sale of the Notes and the Certificates have
taken place on such date:
Class A-1 Notes......................$____________
Class A-2 Notes...................... ____________
Certificates......................... ____________
Total......................$
============
The Owner Trustee
___________________ is the Owner Trustee under the Trust Agreement.
______________ is a ___________________ and its principal offices are located at
_______________. The Seller and its affiliates may maintain normal commercial
banking relations with the Owner Trustee and its affiliates.
S-11
<PAGE>
THE RECEIVABLES POOL
The Receivables represent Motor Vehicle Loans from the portfolio of the
Seller that, in addition to satisfying the criteria set forth in the Prospectus
under "The Receivables Pool-General":
(a) have a remaining maturity, as of the Cutoff Date, of at least
___ months and not more than ___ months;
(b) are secured by either new Financed Vehicles that had an original
maturity of at least ___ months and not more than ___ months, or used
Financed Vehicles that had an original maturity of at least ___ months and
not more than ___ months;
(c) are fully-amortizing fixed rate simple interest [or actuarial]
contracts that provide for level scheduled monthly payments over their
respective remaining terms, have an annual contract rate of interest (a
"Contract Rate") of at least ____% and not more than ____%, and are not
secured by any interest in real estate;
(d) have not been paid more than three months in advance as of the
Cutoff Date;
(e) have remaining principal balances, as of the Cutoff Date, of at
least $__________ and not greater than $__________; and
(f) have no payment that is delinquent for more than [__] days past
due as of the related Cutoff Date; and
(g) are not Chase Lincoln Loans, Chase Maryland Loans, Motor Vehicle
Loans originated by or through a Dealer located in the State of _________
or the subject of a previous securitization.
The Receivables were selected from the Motor Vehicle Loans in the
portfolio of the Seller that met the above criteria. For administrative reasons,
the Seller selected from the Motor Vehicle Loans in its portfolio all otherwise
eligible Motor Vehicle Loans originated since _________ __, 19__, which were
segregated and held for sale by the Seller. The Seller believes that such
selection procedures are not materially adverse to Securityholders.
Approximately ____% of the aggregate principal balance of the Receivables, as of
the Cutoff Date, were secured by new Financed Vehicles and approximately ___% of
the aggregate principal balance of the Receivables, as of the Cutoff Date, were
secured by used Financed Vehicles. [Approximately ___% and ___% of the aggregate
principal balance of the Receivables, as of the Cutoff Date, were Simple
Interest Receivables and Actuarial Receivables, respectively.] [Approximately
___% of the aggregate principal balance of the Receivables, as of the Cutoff
Date, were originated by Chase Auto Finance directly with Obligors.] Virtually
none of the Receivables provide for recourse to the Dealer in the event of
default by the Obligor except for breaches of the Dealer's representations and
warranties that do not relate to the creditworthiness of the Obligor. The Seller
may not substitute other Motor Vehicle Loans from its portfolio, or any other
motor vehicle receivables, for the Receivables at any time during the term of
the Sale and Servicing Agreement. See "The Receivables Pool-General" in the
Prospectus for a description of how prepayments made under Simple Interest and
Actuarial Receivables are allocated.
The composition of the Receivables, distribution of the Receivables by
Contract Rate and the geographic distribution of the Receivables, in each case
as of the Cutoff Date, are set forth in the following tables.
S-12
<PAGE>
Composition of the Receivables
New Financed Used Financed
Vehicles Vehicles Total
------------ ------------- -----
Aggregate Principal Balance.... $ $ $
Number of Receivables..........
Average Principal Balance...... $ $ $
Average Original Balance....... $ $ $
Weighted Average Contract Rate. % % %
Contract Rate (Range).......... __ __ %
Weighted Average Original Term. months months months
Original Term (Range).......... months months months
Weighted Average Remaining Term months months months
Remaining Term (Range)......... months months months
Distribution By Contract Rate Of The Receivables
Percent Of
Number of Aggregate
Contract Rate Range Receivables Principal Balance Pool Balance(1)
- ------------------- ----------- ----------------- ---------------
.................... $ %
.................... $ %
.................... $ %
.................... $ %
.................... $ %
.................... $ %
- ------------
(1) Amounts shown do not total 100.00% due to rounding.
S-13
<PAGE>
Geographic Distribution Of The Receivables(1)
Percent Of
Number of Aggregate
State(3) Receivables Principal Balance Pool Balance(2)
-------- ----------- ----------------- ---------------
................................ $ %
................................
................................
................................
................................
................................
................................
................................
------
Total........................... $ 100.00%
======
- ------------------------
(1) Based on location of the Dealer from which the Motor Vehicle Loan was
acquired or through which it was made.
(2) Amounts shown do not total 100.00% due to rounding.
[(3) Alabama excluded for administrative reasons.]
Delinquencies and Net Losses
The following tables set forth information with respect to delinquencies,
loan losses and recoveries for the Chase Auto Finance Portfolio as of the dates
indicated and for each of the one year periods ended December 31, 199_, 199_,
199_, 199_ and 199_ and for each of the ____ month periods ended ________ __,
199_ and ________ __, 199_. [The portions of the Chase Auto Finance Portfolio
that provide for payments based upon variable rate simple interest [and the
actuarial method] are included in the following tables but Motor Vehicle Loans
of such type are not included in the Trust.] [Chase Auto Finance does not
maintain separate records that distinguish among the delinquency and loan loss
experience for Motor Vehicle Loans that provide for payments based upon [fixed
rate simple interest], and the actuarial method. The Seller believes, however,
that the delinquency and loan loss experience with respect to the [fixed rate
simple interest] Motor Vehicle Loans included in the Trust is not materially
different from the performance of the Chase Auto Finance Portfolio set forth
below.]
See "The Receivables Pools-General" and "--Delinquency and Loan Loss
Information" for a description of the composition of the Chase Auto Finance
Portfolio.
The data presented in the following tables are for illustrative purposes
only. Delinquency and loan loss experience may be influenced by a variety of
economic, social and other factors. No assurance can be given that the
delinquency and loan loss information of the Bank, or of the Trust with respect
to the Receivables, in the future will be similar to that set forth above.
S-14
<PAGE>
<TABLE>
<CAPTION>
Delinquency Experience
Months Ended Months Ended Year Ended
----------------------------------------------------------------------------------------------------------------------
December 31, December 31, December 31, December 31, December 31,
, 199_ , 199_ 199_ 199_ 199_ 199_ 199_
----------------------------------------------------------------------------------------------------------------------
Dollars Number Dollars Number Dollars Number Dollars Number Dollars Number Dollars Number Dollars Number
(000's) of Loans (000's) of Loans (000's) of Loans (000's) of Loans (000's) of Loans (000's) of Loans (000's) of Loans
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding
Principal
Amount........
Delinquencies($)(1)(2)
30-59 Days....
60-89 Days....
90 Days or
More.........
TOTAL
Delinquencies.
Repossession
Inventory(3)...
TOTAL Delinquencies &
Repossession Inventory
Delinquencies(%)(1)(2)(4)
30-59 Days.....
60-89 Days.....
90 Days or
More..........
TOTAL
Delinquencies..
Repossession
Inventory......
TOTAL
Delinquencies &
Repossession
Inventory......
</TABLE>
- ------------------------
(1) Delinquencies include principal amounts only.
(2) The period of delinquency is based on the number of days payments are
contractually past due.
(3) For December 31, 1994 and earlier, amounts shown in repossession inventory
represent loans which have been written down to the fair market value of
the collateral, but where the related financed vehicles have not yet been
sold. For December 31, 1995, the amount shown in repossession inventory
represent the total outstanding principal balance of the loans at that
time.
(4) As a percent of outstanding principal in dollars.
(5) At ________, approximately __% of the aggregate principal balance of Motor
Vehicle Loans in the portfolio presented were Chase Maryland Loans.
S-15
<PAGE>
<TABLE>
<CAPTION>
Loan Loss Experience
(Dollars in 000's)
Months Ended Months Ended Year Ended
----------------------------------------------------------------------------------------------------------------------
December 31, December 31, December 31, December 31, December 31,
, 199_ , 199_ 199_ 199_ 199_ 199_ 199_
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of
Loans(1)......
Period End
Outstanding
Principal
Amount........
Average
Outstanding
Principal
Amount (2)....
Number of
Repossessions.
Number of Gross
Charge-Offs(3).
Gross
Charge-Offs as
a % of Period
End Outstanding
Principal
Amount.........
Gross Charge-Offs
as a % of Average
Outstanding
Principal
Amount.........
Recoveries(4)...
Net
Charge-Offs(5).
Net Charge-Offs
as a % of Period
End Outstanding
Principal
Amount.........
Net Charge-Offs
as a % of Average
Outstanding
Principal
Amount.........
</TABLE>
- ------------------------
(1) Number of loans as of period end.
(2) Averages for 1993, 1994 and 1995 were computed by taking a simple average
of monthly average outstanding principal amounts for each period presented
and averages for 1991 and 1992 were computed by taking a simple average of
month end outstanding principal amounts for each period presented.
(3) Amount charged off is remaining principal balance less proceeds from sale
of repossessed vehicles.
(4) Recoveries generally include amounts received with respect to loans
previously charged off, except for proceeds realized in connection with
the sale of the financed vehicles.
(5) Net charge-offs mean gross charge-offs minus recoveries of loans
previously charged off.
(6) As of _______, approximately ___% of the aggregate principal balance of
Motor Vehicle Loans in the portfolio presented were Chase Maryland Loans.
S-16
<PAGE>
CHASE USA
Information regarding the Seller and the Servicer is set forth under
"Chase USA (New York) and Chase USA (Delaware)" in the Prospectus. At
__________, _____, Chase USA's total assets were approximately $___ billion,
total liabilities were approximately $____ billion and total stockholders'
equity was approximately $____ billion.
USE OF PROCEEDS
The net proceeds to be received by the Seller from the sale of Securities,
estimated to be approximately $___________ after making the Reserve Account
Initial Deposit, will be added to its general funds.
GENERAL PARTNER
[_______________] is a wholly-owned subsidiary of the Seller formed for
the limited purpose of purchasing a portion of the Certificates issued by the
Trust and asset-backed certificates issued by other trusts formed by the Seller,
acting as the general partner of the Trust and such other trusts for federal
income tax purposes and engaging in incidental activities. The General Partner
is a limited purpose corporation whose certificate of incorporation contains
limitations on the nature of the General Partner's business and restrictions on
the General Partner's ability to commence a voluntary case or proceeding under
any insolvency or bankruptcy law without the prior unanimous vote of its
directors.
WEIGHTED AVERAGE LIFE OF THE SECURITIES
Information regarding certain maturity and prepayment considerations with
respect to the Securities is set forth under "Weighted Average Life of
Securities" in the Prospectus. No principal payments will be made on the Class
A-2 Notes until all Class A-1 Notes have been paid in full. In addition, no
principal payments on the Certificates will be made until all of the Notes have
been paid in full. See "Description of the Notes--Payments of Principal" and
"Description of the Certificates--Distributions of Principal Payments" herein.
As the rate of payment of principal of each class of Notes and the Certificates
depends primarily on the rate of payment (including prepayments) of the
principal balance of the Receivables, final payment of any class of the Notes
and the final distribution in respect of the Certificates could occur
significantly earlier than their respective Final Scheduled Payment Dates or the
Final Scheduled Certificate Distribution Date. Subject to the conditions set
forth herein under the heading "Description of the Transfer and Servicing
Agreements--Servicing Procedures," the Servicer may reschedule the Due Date of
any scheduled payment to a date more than 30 days from the original Due Date.
Any such deferrals will have the effect of increasing the weighted average life
of the Notes and Certificates. However, the Servicer will not be permitted to
grant any such deferral or extension if, as a result, the final scheduled
payment on a Receivable would fall after the [Final Scheduled Certificate
Distribution Date], unless the Servicer purchases such Receivable.
Securityholders will bear the risk of being able to reinvest principal payments
on the Securities at yields at least equal to the yields on their respective
Securities. If an Event of Default has occurred and the maturity of the Notes
has been accelerated the Certificateholders will not be entitled to receive any
distributions of interest or principal until the Notes have been paid in full.
Chase Auto Finance maintains certain records of the historical prepayment
experience of the Chase Auto Finance Portfolio. The Seller believes that such
records are not adequate to provide meaningful information with respect to the
Receivables. In any event, no assurance can be given that prepayments on the
Receivables would conform to any historical experience, and no prediction can be
made as to the actual prepayment experience to be expected with respect to the
Receivables.
[Prepayments on motor vehicle receivables can be measured relative to a
prepayment standard or model. The model used in this Prospectus Supplement, the
Absolute Prepayment Model ("ABS"), represents an assumed rate of prepayment each
month relative to the original number of receivables in a pool of receivables.
ABS further assumes that all the receivables are the same size and amortize at
the same rate and that each receivable in each
S-17
<PAGE>
month of its life will either be paid as scheduled or be prepaid in full. For
example, in a pool of receivables originally containing 10,000 receivables, a 1%
ABS rate means that 100 receivables prepay each month. ABS does not purport to
be an historical description of prepayment experience or a prediction of the
anticipated rate of prepayment of any pool of receivables, including the
Receivables.]
[The table captioned "Percent of Initial Note Principal Balance or Initial
Certificate Balance at Various ABS Percentages" (the "ABS Table") has been
prepared on the basis of the characteristics of the Receivables. The ABS Table
assumes that (i) the Receivables prepay in full at the specified constant
percentage of ABS monthly, with no defaults, losses or repurchases, (ii) each
scheduled monthly payment on the Receivables is made on the last day of each
month and each month has 30 days, (iii) payments on the Notes and distributions
on the Certificates are made on each Distribution Date (and each such date is
assumed to be the __th day of each applicable month), (iv) the balance in the
Reserve Account on each Distribution Date is equal to the Specified Reserve
Account Balance, and (v) the Servicer does not exercise its option to purchase
the Receivables. The pool has an assumed cutoff date of the Cutoff Date. The ABS
Table indicates the projected weighted average life of each class of Notes and
the Certificates and sets forth the percent of the initial principal amount of
each class of Notes and the percent of the initial Certificate Balance that is
projected to be outstanding after each of the Distribution Dates shown at
various constant ABS percentages.]
[The ABS Table also assumes that the Receivables have been aggregated into
four hypothetical pools with all of the Receivables within each such pool having
the following characteristics and that the level scheduled monthly payment for
each of the four pools (which is based on its aggregate principal balance, APR,
original term to maturity and remaining term to maturity as of the Cutoff Date)
will be such that each pool will be fully amortized by the end of its remaining
term to maturity.
Original Term Remaining Term
Aggregate to Maturity to Maturity
Principal Balance APR (in Months) (in Months)
----------------- --- ----------- -----------
Pool
- ----
1................. $
2.................
3.................
4................. __________
$ ]
==========
[The actual characteristics and performance of the Receivables will differ
from the assumptions used in constructing the ABS Table. The assumptions used
are hypothetical and have been provided only to give a general sense of how the
principal cash flows might behave under varying prepayment scenarios. For
example, it is very unlikely that the Receivables will prepay at a constant
level of ABS until maturity or that all of the Receivables will prepay at the
same level of ABS. Moreover, the diverse terms of Receivables within each of the
four hypothetical pools could produce slower or faster principal distributions
than indicated in the ABS Table at the various constant percentages of ABS
specified, even if the original and remaining terms to maturity of the
Receivables are as assumed. Any difference between such assumptions and the
actual characteristics and performance of the Receivables, or actual prepayment
experience, will affect the percentages of initial balances outstanding over
time and the weighted average lives of each class of Notes and the
Certificates.]
S-18
<PAGE>
[Percent of Initial Note Principal Balance or Initial Certificate Balance at
Various ABS Percentages
<TABLE>
<CAPTION>
Class A-1 Notes Class A-2 Notes Certificates
--------------------------- --------------------------- --------------------------
% % % % % % % % % % % %
----- ---- ---- ---- ---- ---- ---- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Closing Date.....
[Distribution Date]
Weighed Average Life
(years)(1).......
</TABLE>
- ---------------
(1) The weighted average life of a Class A-1 Note or Class A-2 Note is
determined by (i) multiplying the amount of each principal payment of such
Note by the number of years from the date of the issuance of such Note to
the related Distribution Date, (ii) adding the results and (iii) dividing
the sum by the related initial principal amount of such Note.
The ABS Table has been prepared based on the assumptions described above
(including the assumptions regarding the characteristics and performance of the
Receivables which will differ from the actual characteristics and performance
thereof) and should be read in conjunction therewith.]
DESCRIPTION OF THE NOTES
General
The Notes will be issued pursuant to the terms of the Indenture, a form of
which has been filed as an exhibit to the Registration Statement. A copy of the
Indenture will be filed with the Commission following the issuance of the
Securities. The following, as well as other pertinent information included
elsewhere in this Prospectus Supplement and in the Prospectus, summarizes the
material terms of the Notes and the Indenture. The summary does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Notes and the Indenture. The following summary
supplements the description of the general terms and provisions of the Notes of
any given series and the related Indenture set forth in the Prospectus, to which
description reference is hereby made. _________________, a ____________ banking
corporation with its corporate trust offices located at
_______________________________, will be the Indenture Trustee under the
Indenture. [In the ordinary course of its business, the Indenture Trustee and
its affiliates have engaged and may in the future engage in commercial banking
or financial advisory transactions with the Bank and its affiliates.]
Payments of Interest
Each class of the Notes will constitute Fixed Rate Securities as such term
is defined under "Certain Information Regarding the Securities--Fixed Rate
Securities" in the Prospectus. Interest on the principal balances of each class
of Notes will accrue at its respective per annum Interest Rates and will be
payable to the Noteholders monthly on each Payment Date, commencing ____, 199_.
Interest on the outstanding principal amount of the Notes will accrue at the
applicable Interest Rate for the applicable Interest Accrual Period and shall be
calculated on the basis of a 360-day year of twelve 30-day months. Interest
payments on the Notes will generally be derived from the Total Distribution
Amount remaining after the payment of the Servicing Fee and the Administration
Fee [and the reimbursement of Servicer Advances] and from the Reserve Account.
See "Description of the Transfer and Servicing Agreements--Distributions" and
"--Subordination of Certificateholders; Reserve Account" herein.
Interest payments to all classes of Noteholders will have the same
priority. Under certain circumstances, the amount available for interest
payments could be less than the amount of interest payable on the Notes on any
Payment Date, in which case each class of Noteholders will receive their ratable
share (based upon the aggregate
S-19
<PAGE>
amount of interest due to such class of Noteholders) of the aggregate amount
available to be distributed in respect of interest on the Notes.
Payments of Principal
Principal payments will be made to the Noteholders on each Payment Date in
an amount generally equal to the Principal Distribution Amount. Principal
payments on the Notes will generally be derived from the Total Distribution
Amount and the amount, if any, in the Reserve Account remaining after
[reimbursement of Servicer Advances and] the payment of the Servicing Fee, the
Administration Fee and the Noteholder's Interest Distributable Amount.
On each Deposit Date, the Indenture Trustee shall determine the amount in
the Collection Account allocable to interest and the amount allocable to
principal.
On each Payment Date, principal payments on the Notes will be applied in
the following order of priority: (i) to the principal balance of the Class A-1
Notes until the principal balance of the Class A-1 Notes is reduced to zero; and
(ii) to the principal balance of the Class A-2 Notes until the principal balance
of the Class A-2 Notes is reduced to zero. The principal balance of the Class
A-1 Notes, to the extent not previously paid, will be due on the Class A-1 Final
Scheduled Distribution Date and the principal balance of the Class A-2 Notes, to
the extent not previously paid, will be due on the Class A-2 Final Scheduled
Distribution Date. The actual date on which the aggregate outstanding principal
amount of either class of Notes is paid may be earlier than the respective Final
Scheduled Payment Dates set forth above based on a variety of factors, including
those described under "Weighted Average Life of the Securities" herein and in
the Prospectus.
Optional Redemption
On any Distribution Date after the Class A-1 Notes have been paid in full,
the Class A-2 Notes will be redeemed in whole, but not in part, if the Servicer
exercises its option to purchase the Receivables. The Servicer may purchase the
Receivables after the last day of a Collection Period as to which the Pool
Balance shall have declined to 5% or less of the Initial Pool Balance, as
described in the Prospectus under "Description of the Transfer and Servicing
Agreements--Termination." The redemption price will be equal to the unpaid
principal amount of the Class A-2 Notes plus accrued and unpaid interest
thereon.
DESCRIPTION OF THE CERTIFICATES
General
The Certificates will be issued pursuant to the terms of the Trust
Agreement, a form of which has been filed as an exhibit to the Registration
Statement. A copy of the Trust Agreement will be filed with the Commission
following the issuance of the Securities. The following, as well as other
pertinent information included elsewhere in this Prospectus Supplement and in
the Prospectus, summarizes the material terms of the Certificates and the Trust
Agreement. The summary does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all the provisions of the
Certificates and the Trust Agreement. The following summary supplements the
description of the general terms and provisions of the Certificates of any given
series and the related Trust Agreement set forth in the Prospectus, to which
description reference is hereby made.
Purchasers of Certificates and their assignees will be deemed to represent
that the beneficial owners of such Certificates are not Foreign Investors and
that no assets of a Plan were used to acquire the Certificates. See "Certain
Federal Income Tax Consequences" herein and "ERISA Considerations" herein and in
the Prospectus.
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Distribution of Interest Income
On each Distribution Date, commencing _________, 199__, the
Certificateholders will be entitled to distributions in an amount equal to the
amount of interest that would accrue on the Certificate Balance at the Pass
Through Rate. The Certificates will constitute Fixed Rate Securities, as such
term is defined under "Certain Information Regarding the Securities--Fixed Rate
Securities" in the Prospectus. Interest in respect of a Distribution Date will
accrue during the related Interest Accrual Period and shall be calculated on the
basis of a 360-day year of twelve 30-day months. Interest distributions due for
any Distribution Date but not distributed on such Distribution Date will be due
on the next Distribution Date increased by an amount equal to interest on such
amount at the Pass Through Rate (to the extent lawful). [Interest distributions
with respect to the Certificates will generally be funded from the portion of
the Total Distribution Amount and from the funds in the Reserve Account
remaining after [reimbursement of Servicer Advances and] the distribution of the
Servicing Fee, the Administration Fee and the Noteholders' Interest
Distributable Amount.] See "Description of the Transfer and Servicing
Agreement-Distributions" and "-Subordination of the Certificates; Reserve
Account" herein.
Payment of interest on the Certificates is subordinated to payment of
interest on the Notes. If an Event of Default shall occur and the Notes are
accelerated, or upon the occurrence of an Insolvency Event with respect to the
General Partner, distribution of all amounts on the Certificates will be
subordinated in priority of payment to payment of principal of the Notes.
Distributions of Principal Payments
Certificateholders will be entitled to distributions of principal on each
Distribution Date, commencing with the Distribution Date on which the Notes are
paid in full, in an amount generally equal to the Principal Distribution Amount
(less, on the Distribution Date on which the Notes are paid in full, the portion
thereof payable on the Notes). Distributions with respect to principal payments
will generally be funded from the portion of the Total Distribution Amount and
funds in the Reserve Account remaining after [reimbursement of Servicer Advances
and] the distribution of the Servicing Fee, the Administration Fee, the
Noteholders' Distributable Amount (on the Distribution Date on which the Notes
are paid in full) and the Certificateholders' Interest Distributable Amount.
Notwithstanding the foregoing, if an Event of Default has occurred and the Notes
have been accelerated, or upon the occurrence of an Insolvency Event with
respect to the General Partner, the Certificateholders will not be entitled to
receive any distributions of interest or principal until the Notes have been
paid in full. See "Description of the Transfer and Servicing
Agreements-Distributions" and "-Reserve Account" herein.
On and after any Distribution Date on which the Notes have been paid in
full, funds in the Reserve Account will be applied to reduce the Certificate
Balance to zero if, after giving effect to all distributions to the Servicer,
the Administrator, the Noteholders and the Certificateholders on such
Distribution Date, the amount on deposit in the Reserve Account would be equal
to or greater than the Certificate Balance. See "Description of the
Certificates--Distributions of Principal Payments."
Optional Prepayment
If the Servicer exercises its option to purchase the Receivables after the
last day of a Collection Period on which the Pool Balance declines to 5% or less
of the Initial Pool Balance, Certificateholders will receive an amount in
respect of the Certificates equal to the outstanding Certificate Balance
together with accrued interest at the Pass Through Rate, which distribution
shall effect early retirement of the Certificates. See "Description of the
Transfer and Servicing Agreements-Termination" in the Prospectus.
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DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following, as well as other information included elsewhere in this
Prospectus Supplement and in the Prospectus, summarizes the material terms of
the Sale and Servicing Agreement, the Trust Agreement and the Administration
Agreement (collectively, the "Transfer and Servicing Agreements"). Forms of the
Transfer and Servicing Agreements have been filed as exhibits to the
Registration Statement. A copy of the Sale and Servicing Agreement will be filed
with the Commission following the issuance of the Securities. The summary does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the Transfer and Servicing Agreements. The
following summary supplements the description of the general terms and
provisions of the Transfer and Servicing Agreements set forth in the Prospectus,
to which description reference is hereby made.
Accounts
The Servicer will establish: the Collection Account and the Reserve
Account in the name of the Indenture Trustee on behalf of the Noteholders and
the Certificateholders; the Note Distribution Account in the name of the
Indenture Trustee on behalf of the Noteholders; and the Certificate Distribution
Account in the name of the Owner Trustee on behalf of the Certificateholders.
Each of such accounts will be a "Trust Account" as described under "Description
of the Transfer and Servicing Agreements-Accounts" in the Prospectus. Each such
Trust Account will be established initially with the trust department of Chase.
Chase, in its capacity as the initial paying agent (the "Paying Agent"), will
have the revocable right to withdraw funds from each such Trust Account (other
than the Reserve Account) for the purpose of making distributions to
Securityholders in the manner provided in the Transfer and Servicing Agreements.
[Advances
The Servicer may, in its sole discretion, make an Advance with respect to
each Actuarial Receivable in the Receivables Pool (other than a Defaulted
Receivable) equal to the excess, if any, of (x) the payment due on such
Actuarial Receivable during the related Collection Period, over (y) the payment
actually received by the Servicer with respect to such Receivable from the
Obligor or from the payment of the Purchase Amount during or with respect to
such Collection Period. The Servicer may elect not to make any Advance with
respect to a Receivable to the extent that the Servicer, in its sole discretion,
determines that such Advance is not recoverable from subsequent payments on such
Receivable.
[To the extent that the Servicer makes an Advance with respect to any
prior Distribution Date which remains unreimbursed on any Distribution Date, the
Servicer shall be entitled to reimbursement from the Reserve Account to the
extent of funds therein.]
The Servicer will deposit all Advances with respect to any Distribution
Date into the Collection Account on the related Deposit Date.]
Servicing Compensation and Payment of Expenses
The Servicer will be entitled to receive the Servicing Fee for each
Collection Period. The "Servicing Fee Rate" with respect to the Servicing Fee
for the Servicer will be ___% per annum, and the Servicing Fee for any
Distribution Date shall equal an amount equal to the sum of (i) the product of
the Servicing Fee Rate divided by 12 and the Pool Balance as of the related
Settlement Date and (ii) any Late Fees paid by the Obligors during the related
Collection Period. In addition, [except under certain circumstances] the
Servicing Fee will include Investment Earnings on amounts on deposit in each
Trust Account. "Late Fees" include late charges, credit related extension fees
or other administrative fees or similar charges allowed by applicable law with
respect to the Receivables.
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The amount of the Servicing Fee (including the portion thereof
attributable to Late Fees) was determined in light of the duties of the Servicer
under the Transfer and Servicing Agreements as well as with a view toward
providing the Servicer with a reasonable profit. The Servicing Fee (including
such Late Fees) is comparable to fees that would be paid to parties unaffiliated
with the Bank. See "Description of the Transfer and Servicing
Agreements-Servicing Compensation and Payment of Expenses" and "--Net Deposits"
in the Prospectus.
Servicing Procedures
The Servicer will service the Receivables and will make reasonable efforts
to collect all payments due with respect to the Receivables and, in a manner
consistent with the Sale and Servicing Agreement and with the terms of the
Receivables, will follow such collection and servicing procedures as it follows
with respect to comparable new or used automobile receivables that it services
for itself or others and that are consistent with prudent industry standards.
Except as otherwise specified in the Sale and Servicing Agreement, no extensions
of, or other modifications to, the Receivables will be made by the Servicer if
such modifications would have a material adverse effect on the interests of the
Securityholders. In addition, among other things, the Agreement will provide
that the Servicer may not change the amount of (except with respect to a
prepayment of a scheduled payment that does not result in a deferral of any
other scheduled payment), or reschedule the Due Date of, any scheduled payment
to a date more than 30 days from the original Due Date, decrease the Contract
Rate of, or extend any Receivable beyond the Final Scheduled Certificate
Distribution Date.
In the event that the Servicer fails to comply with the foregoing terms of
the Sale and Servicing Agreement, it will be required to purchase the affected
Receivable for the Purchase Amount as of the last day of the Collection Period
on which it became aware or receives written notice from the Trustee of such
failure. The purchase obligation will constitute the sole remedy available to
the Securityholders or the Trustee for any such uncured breach.
The Bank will offer certain obligors or classes of obligors on an annual
basis a one month noncredit related extension of a regularly scheduled payment
otherwise due under a Receivable. The Sale and Servicing Agreement establishes
criteria governing such extensions.
See "Description of the Transfer and Servicing Agreements-Servicing
Procedures" in the Prospectus.
Distributions
Deposits to Collection Account. On or before each Distribution Date, the
Servicer will cause all collections and other amounts constituting the Total
Distribution Amount to be deposited in the Collection Account together with
amounts withdrawn by the Trustee from the Reserve Account and deposited in the
Collection Account [and the amount of any Advance to be deposited into the
Collection Account.]
The "Total Distribution Amount" for a Distribution Date shall be the sum
of the aggregate collections (including any Liquidation Proceeds, any Purchase
Amounts paid by the Seller and the Servicer and any amounts received from
Dealers with respect to Receivables) received in respect of the Receivables
during the related Collection Period [, all Advances made by the Servicer with
respect to such Distribution Date] and, under certain circumstances, Investment
Earnings on the Trust Accounts during such Collection Period. The Total
Distribution Amount on any Distribution Date shall exclude all payments and
proceeds (including any Liquidation Proceeds and any amounts received from
Dealers with respect to Receivables) of (i) any Receivables the Purchase Amount
of which has been included in the Total Distribution Amount in a prior
Collection Period, (ii) any Defaulted Receivable after and to the extent of the
reassignment of such Defaulted Receivable by the Trust to the Seller and (iii)
any Late Fees.
The "Principal Distribution Amount" for a Distribution Date shall be the
sum of the following amounts, without duplication, with respect to the preceding
Collection Period: (i) that portion of all collections received during such
Collection Period and (including any Liquidation Proceeds and any amounts
received from Dealers with respect
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to Receivables) allocable to principal; (ii) the principal balance of each
Receivable that became a Defaulted Receivable during the related Collection
Period (except to the extent included in (iii) below); and (iii) to the extent
attributable to principal, the Purchase Amount received with respect to each
Receivable repurchased by the Seller or purchased by the Servicer under an
obligation which arose during the related Collection Period (except to the
extent included in (i) above).
Deposits to the Distribution Accounts. On each Distribution Date, the
Servicer shall instruct the Trustee or the Paying Agent to make the following
deposits and distributions, to the extent of the amount then on deposit in the
Collection Account, in the following order of priority (except under the limited
circumstances provided herein):
[(i) to the Servicer, to the extent of the Total Distribution
Amount, the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods, to the extent such amounts are not deducted from the
Servicer's remittance to the Collection Account;
(ii) to the Administrator, to the extent of the Total Distribution
Amount (as so allocated), the Administration Fee and all unpaid
Administration Fees from prior Collection Periods, to the extent such
amounts are not deducted from the Servicer's remittance to the Collection
Account;
(iii) to the Note Distribution Account, the Noteholders' Interest
Distributable Amount;
(iv) to the Certificate Distribution Account, the
Certificateholders' Interest Distributable Amount (unless the Notes have
been accelerated as described herein);
(v) to the Note Distribution Account, the Noteholders' Principal
Distributable Amount;
(vi) to the Certificate Distribution Account, the
Certificateholders' Principal Distributable Amount; and
(vii) to the Reserve Account.
On each Deposit Date (other than the first Deposit Date), the Servicer
will provide the Trustee and the Indenture Trustee with certain information with
respect to the Collection Period related to the prior Distribution Date,
including the amount of aggregate collections on the Receivables, the aggregate
amount of Receivables which became Defaulted Receivables and the aggregate
Purchase Amount of Receivables to be repurchased by the Seller or to be
purchased by the Servicer.
For purposes hereof, the following terms shall have the following
meanings:
"Certificate Balance" of the Certificates shall be an amount equal
to $_________ (approximately ___% of the Initial Pool Balance) as of the
Closing Date and, thereafter, shall be an amount equal to such initial
Certificate Balance, reduced by all amounts allocable to principal
previously distributed to Certificateholders. The Certificate Balance
shall also be reduced on any Distribution Date by the excess, if any, of
(i) the sum of (A) the Certificate Balance and (B) the outstanding
principal amount of the Notes (in each case after giving effect to amounts
in respect of principal to be deposited in the Certificate Distribution
Account and the Note Distribution Account on such Distribution Date), over
(ii) the Pool Balance as of the close of business on the last day of the
preceding Collection Period. Thereafter, the Certificate Balance shall be
increased to the extent that any portion of the Total Distribution Amount
is available to pay the existing Certificateholders' Principal Carryover
Shortfall, but not by more than the aggregate reductions in the
Certificate Balance set forth in the preceding sentence.
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"Certificateholders' Distributable Amount" means, with respect to
any Distribution Date, the sum of the Certificateholders' Principal
Distributable Amount and the Certificateholders' Interest Distributable
Amount.
"Certificateholders' Interest Carryover Shortfall" means, with
respect to any Distribution Date, the excess of the Certificateholders'
Interest Distributable Amount for the preceding Distribution Date, over
the amount in respect of interest that is actually deposited in the
Certificate Distribution Account on such preceding Distribution Date, plus
interest on such excess, to the extent permitted by law, at the Pass
Through Rate for the related Interest Accrual Period.
"Certificateholders' Interest Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders'
Monthly Interest Distributable Amount for such Distribution Date and the
Certificateholders' Interest Carryover Shortfall for such Distributable
Date.
"Certificateholders' Monthly Interest Distributable Amount" means,
with respect to any Distribution Date, one month's interest (or, in the
case of the first Distribution Date, interest accrued from and including
the Closing Date to but excluding such Distribution Date) at the Pass
Through Rate on the Certificate Balance on the immediately preceding
Distribution Date, after giving effect to all payments of principal to the
Certificateholders allocable to the reduction of the Certificate Balance
made on or prior to such Distribution Date (or, in the case of the First
Distribution Date, on the Closing Date).
"Certificateholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date prior to the Distribution Date on
which the Notes are paid in full, zero; and with respect to any
Distribution Date commencing on the Distribution Date on which the Notes
are paid in full, the Principal Distribution Amount (less, on the
Distribution Date on which the Notes are paid in full, the portion thereof
payable on the Notes).
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Certificateholders'
Principal Distributable Amount over the amount in respect of principal
that is actually deposited in the Certificate Distribution Account.
"Certificateholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of the Certificateholders'
Monthly Principal Distributable Amount for such Distribution Date and the
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the
Certificateholders' Principal Distributable Amount shall not exceed the
Certificate Balance. In addition, on the Final Scheduled Certificate
Distribution Date, the principal required to be distributed to
Certificateholders will include the lesser of (a) any payments of
principal due and remaining unpaid on each Receivable in the Trust as of
the Final Scheduled Maturity Date, or (b) the amount that is necessary
(after giving effect to the other amounts to be deposited in the
Certificate Distribution Account on such Distribution Date and allocable
to principal) to reduce the Certificate Balance to zero. In addition, on
any Distribution Date which, after giving effect to all distributions to
the Servicer, the Noteholders and the Certificateholders on such
Distribution Date, (i) the outstanding principal balance of the Notes is
zero and (ii) the amount on deposit in the Reserve Account is equal to or
greater than the Certificate Balance, the Certificateholders' Principal
Distributable Amount shall include an amount equal to such Certificate
Balance.
"Liquidation Proceeds" means with respect to any Receivable (i)
insurance proceeds, (ii) the monies collected during a Collection Period
from whatever source on a Defaulted Receivable and (iii) proceeds of a
Financed Vehicle sold after repossession, in each case, net of any
liquidation expenses and payments required by law to be remitted to the
Obligor.
"Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Principal Distributable
Amount and the Noteholders' Interest Distributable Amount.
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"Noteholders' Interest Carryover Shortfall" means, with respect to
any Distribution Date, the excess of the Noteholders' Interest
Distributable Amount for the preceding Distribution Date, over the amount
in respect of interest that is actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount
of interest due but not paid to Noteholders on the preceding Distribution
Date, to the extent permitted by law, at the respective Interest Rates
borne by each class of the Notes for the related Interest Accrual Period.
"Noteholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and the Noteholders'
Interest Carryover Shortfall for such Distribution Date.
"Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, in the case of each class of Notes, one
month's interest (or, in the case of the first Distribution Date, interest
accrued from and including the Closing Date to but excluding such
Distribution Date) at the respective Interest Rate for such class on the
outstanding principal balance of the Notes of such class on such
Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date), after giving effect to all payments of principal to the
Noteholders of such class, if any, on or prior to such Distribution Date.
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the Principal Distribution Amount.
"Noteholders' Principal Carryover Shortfall" means, as of the close
of any Distribution Date, the excess of the Noteholders' Principal
Distributable Amount over the amount in respect of principal that is
actually deposited in the Note Distribution Account.
"Noteholders' Principal Distributable Amount" means, with respect to
any Distribution Date, the sum of the Noteholders' Monthly Principal
Distributable Amount with respect to such Distribution Date and the
Noteholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the Noteholders'
Principal Distributable Amount shall not exceed the outstanding principal
balance of the Notes; and provided, further, that (i) the Noteholders'
Principal Distributable Amount on the Class A-1 Final Scheduled
Distribution Date shall not be less than the amount that is necessary
(after giving effect to other amounts to be deposited in the Note
Distribution Account on such Distribution Date and allocable to principal)
to reduce the outstanding principal balance of the Class A-1 Notes to
zero; and (ii) the Noteholders' Principal Distributable Amount on the
Class A-2 Final Scheduled Distribution Date shall not be less than the
amount that is necessary (after giving effect to other amounts to be
deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the outstanding principal balance of the
Class A-2 Notes to zero.
Notwithstanding the foregoing, if an Event of Default has occurred and the
Notes have been accelerated or, upon the occurrence of an Insolvency Event with
respect to the General Partner, the Certificateholders will not be entitled to
receive any distributions of interest or principal until the Notes have been
paid in full.
Subordination of Certificateholders; Reserve Account
The rights of the Certificateholders to receive distributions with respect
to the Receivables generally will be subordinated to the rights of the
Noteholders in the event of defaults and delinquencies on the Receivables as
provided in the Sale and Servicing Agreement. The protection afforded to the
Noteholders through subordination will be effected both by the preferential
right of the Noteholders to receive current distributions with respect to the
Receivables and by the establishment of the Reserve Account. The Reserve Account
will be created with a deposit initially by the Seller on the Closing Date and
will be augmented on each Distribution Date by the deposit therein of the Total
Distribution Amount remaining after [reimbursement of any Servicer Advances and]
the payment of the Servicing Fee, the Administration Fee, the deposit of the
Noteholders' Interest Distributable Amount and the
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Noteholders' Principal Distributable Amount in the Note Distribution Account,
and the deposit of the Certificateholders' Distributable Amount in the
Certificate Distribution Account, in each case as described above under
"--Distributions." Excess amounts on deposit in the Reserve Account will be
released on each Distribution Date to the Seller and the General Partner in
accordance with their respective interests therein to the extent that the amount
on deposit in the Reserve Account (after giving effect to withdrawals made on
such Distribution Date) exceeds the Specified Reserve Account Balance on such
Distribution Date.
"Specified Reserve Account Balance," with respect to any Distribution
Date, will be equal to the greater of (a) ___% of the Pool Balance as of the
close of business on the last day of the preceding Collection Period and (b)
____% (or such greater percentage or amount as may be set forth in the Sale and
Servicing Agreement); provided, however, that the amount in clause (a) with
respect to a Distribution Date (referred to herein as the "Current Distribution
Date") shall be equal to the amount calculated for such clause (a) for the
Distribution Date immediately preceding such Current Distribution Date if any of
the following events occur: (i) the aggregate of the Losses realized from the
Cut-off Date through the end of the Collection Period preceding such Current
Distribution Date exceeds the amount equal to ____% of the Initial Pool Balance;
(ii) the sum of (x) 12 times the Aggregate Net Losses realized during the
Collection Period immediately preceding such Current Distribution Date plus (y)
the aggregate Principal Balance as of the last day of the Collection Period
immediately preceding such Current Distribution Date of all Receivables which
have not yet been liquidated as to which the Financed Vehicles securing such
Receivables has been repossessed exceeds the amount equal to ____% of the Pool
Balance at the beginning of such Collection Period; or (iii) the aggregate
amount of scheduled payments that are delinquent by more than 60 days as of the
end of the Collection Period immediately preceding such Current Distribution
Date exceeds an amount equal to ____% of the Pool Balance as of the end of such
Collection Period; provided, further, that the Specified Reserve Account Balance
shall not exceed the sum of the outstanding aggregate principal amount of the
Notes and the Certificate Balance, and that upon payment of all the interest and
principal due on the Notes and the Certificates, the Specified Reserve Account
Balance will be zero.
If the amount on deposit in the Reserve Account prior to the ________ 199_
Distribution Date (or following the payment of the Notes in full) is greater
than the Specified Reserve Account Balance for such Distribution Date, the
Servicer shall instruct the Indenture Trustee to distribute the amount of the
excess to the Seller and the General Partner in accordance with their respective
interests therein; provided, however, that if, after giving effect to all
payments made on the Notes and Certificates on such Distribution Date, the Pool
Balance as of the end of the preceding Collection Period is less than the sum of
the outstanding principal amount of the Notes and the Certificate Balance, such
excess amount shall not be distributed to the Seller and the General Partner and
shall be retained in the Reserve Account available for application in accordance
with the Sale and Servicing Agreement. Upon the Final Scheduled Certificate
Distribution Date or the date of the optional purchase of the Receivables by the
Servicer (but only after payment of all interest and principal of the Notes and
Certificates), the Servicer shall instruct the Indenture Trustee to distribute
the Reserve Account balance to the Seller and the General Partner in accordance
with their respective interests therein. Upon any distribution to the Seller and
the General Partner of amounts from the Reserve Account, neither the Noteholders
nor the Certificateholders will have any rights in, or claims to, such amounts.
Funds will be withdrawn from the amount on deposit in the Reserve Account
to the extent that the Total Distribution Amount (after [the reimbursement of
Servicer Advances and] the payment of the Servicing Fee and the Administration
Fee) with respect to any Collection Period is less than the Noteholders'
Distributable Amount, and funds in the amount of such deficiency will be
deposited in the Note Distribution Account. In addition, funds will be withdrawn
from amounts on deposit in the Reserve Account to the extent that the portion of
the Total Distribution Amount remaining after [the reimbursement of Servicer
Advances and] the payment of the Servicing Fee and the Administration Fee and
the deposit of the Noteholders' Distributable Amount in the Note Distribution
Account is less than the Certificateholders' Distributable Amount, and funds in
the amount of such deficiency will be deposited in the Certificate Distribution
Account.
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If on any Distribution Date the entire Noteholders' Distributable Amount
for such Distribution Date (after giving effect to any amounts withdrawn from
the Reserve Account) is not deposited in the Note Distribution Account, the
Certificateholders will not receive any distributions.
After the payment in full, or the provision for such payment, of (i) all
accrued and unpaid interest on the Securities and (ii) the outstanding principal
balance of the Securities, any funds remaining on deposit in the Reserve
Account, subject to certain limitations, will be paid to the Seller and the
General Partner in accordance with their respective interests therein.
The subordination of the Certificates and the Reserve Account are intended
to enhance the likelihood of receipt by Noteholders of the full amount of
principal and interest due them and to decrease the likelihood that the
Noteholders will experience losses. In addition, the Reserve Account is intended
to enhance the likelihood of receipt by Certificateholders of the full amount of
principal and interest due them and to decrease the likelihood that the
Certificateholders will experience losses. However, in certain circumstances,
the Reserve Account could be depleted. If the amount required to be withdrawn
from the Reserve Account to cover shortfalls in collections on the Receivables
exceeds the amount of available cash in the Reserve Account, Noteholders or
Certificateholders could incur losses or a temporary shortfall in the amounts
distributed to the Noteholders or the Certificateholders could result, which
could, in turn, increase the average life of the Notes or the Certificates.
[LEGAL INVESTMENT
The Class A-1 Notes will be eligible securities for purchase by money
market funds under paragraph (a)(5) of Rule 2a-7 under the Investment Company
Act of 1940, as amended.]
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of certain United States ("U.S.")
federal income tax consequences relevant to the purchase, ownership and
disposition of the Notes and the Certificates by an investor who purchases the
Notes or the Certificates pursuant to their original issuance. This summary is
based upon the Internal Revenue Code of 1986, as amended (the "Code"), the
Treasury regulations promulgated thereunder, administrative rulings or
pronouncements and judicial decisions, all as in effect on the date hereof and
all of which are subject to change, possibly retroactively. The following
discussion does not deal with all aspects of U.S. income taxation, nor does it
address U.S. federal income tax consequences that may be relevant to certain
types of investors, such as banks, insurance companies, dealers in securities,
tax-exempt organizations or persons whose functional currency is not the U.S.
dollar, who may be subject to special treatment under the under the Code. In
addition, the following discussion does not address the tax consequences of an
investment in the Notes or the Certificates under state and local tax laws or
foreign tax laws. Accordingly, investors should consult their own tax advisors
to determine the federal, state, local, and other tax consequences that may be
relevant to their purchase, ownership and disposition of the Notes or the
Certificates based upon their particular facts and circumstances. Prospective
investors should note that no rulings have been or will be sought from the
Internal Revenue Service ("IRS") with respect to any of the U.S. federal income
tax consequences discussed herein and opinions of counsel are not binding on the
IRS or the courts. Thus, no assurance can be given that the IRS will not take
positions contrary to those described below. The opinions of Simpson Thacher &
Bartlett, special counsel to the Seller ("Federal Tax Counsel"), described
herein will be based upon certain representations and assumptions, including,
but not limited to, the assumption that all relevant parties will comply with
the terms of the Trust Agreement and related documents.
This summary is intended as an explanatory discussion of the possible
effects of the classification of the Trust as a partnership for federal income
tax purposes or investors generally and related tax matters affecting investors
generally, but does not purport to furnish information in the level of detail or
with the attention to the investor's specific tax circumstances that would be
provided by an investors own tax adviser. Accordingly, each
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investor is advised to consult its own advisers with regard to the tax
consequences to it of investing in the Notes and the Certificates. An opinion of
Federal Tax Counsel will be filed as an Exhibit to a Form 8-K filed in
conjunction with the establishment of the Trust and the issuance of the
Securities.
For purposes of the following discussion, except as otherwise provided
herein, the terms "Noteholder" and "Certificateholder" refer, respectively, to
the beneficial owner of a Note or Certificate. In addition, the discussion below
assumes that Noteholders and Certificateholders will hold their Notes and
Certificates as "capital assets" (generally, property held for investment)
within the meaning of Section 1221 of the Code.
Trust Treated as Partnership
Tax Characterization of the Trust. In the opinion of Federal Tax Counsel,
the Trust will not be classified as an association (or publicly traded
partnership) taxable as a corporation. This opinion is based on, among other
things, Federal Tax Counsel's conclusions that (i) the Trust does not have
certain characteristics necessary for a business trust to be classified as an
association taxable as a corporation and (ii) the nature of the Trust's income
exempts it from the rule that certain publicly traded partnerships are taxable
as corporations.
The Seller and the Certificateholders, by their purchase of Certificates,
will agree to treat the Trust as a partnership for all U.S. tax purposes with
the assets of such partnership being the assets held by the Trust, the partners
of the partnership being the General Partner, the Certificateholders and the
Seller, and the Notes being debt of the partnership. However, the proper
characterization of the arrangement involving the Trust, the Certificateholders,
the Noteholders and the Seller is not clear.
A variety of alternative characterizations are possible. For example,
because the Certificates have certain features characteristic of debt, the
Certificates might be considered debt of the Seller or the Trust. Any such
characterization generally would not result in materially adverse tax
consequences as compared to the tax consequences that will result from treating
the Certificates as equity interests in a partnership which are described below
under the caption "Tax Consequences to Certificateholders". The following
discussion assumes that (i) the Trust will be classified as a partnership and
(ii) the Certificates will represent equity interests in such partnership, for
U.S. federal income tax purposes.
If the Trust were characterized as a corporation, however, the Trust would
be subject to corporate income tax on its taxable income. The Trust's taxable
income would include all its income on the Receivables, possibly reduced by its
interest expense on the Notes. Any such corporate income tax could materially
reduce the amount of cash available to the Trust to make payments of principal
and interest on the Notes and distributions with respect to the Certificates,
and Certificateholders could be liable for any such tax that is unpaid by the
Trust.
Tax Consequences to Noteholders
Treatment of the Notes as Indebtedness. The Trust and the Noteholders, by
their purchase of the Notes, agree to treat the Notes as debt for all U.S. tax
purposes. In the opinion of Federal Tax Counsel, the Notes will be characterized
as debt for U.S. federal income tax purposes. The discussion below assumes this
characterization of the Notes is correct.
Interest Income on the Notes. The Notes will not be considered to have
been issued with original issued discount ("OID") in excess of the statutorily
defined de minimis amount (i.e., 1/4% of the principal amount of a Note
multiplied by its weighted average to maturity). Consequently, the stated
interest thereon will be taxable to a Noteholder as ordinary interest income at
the time it is received or accrued in accordance with such Noteholder's method
of tax accounting. Under the applicable Treasury regulations, a holder of a Note
issued with a de minimis amount of OID must include such OID in income, on a pro
rata basis, as principal payments are made on the Note. A purchaser who buys a
Note for more or less than its principal amount generally will be subject,
respectively, to the premium amortization or market discount rules of the Code.
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Sale or Other Disposition. If a Noteholder sells or otherwise disposes of
a Note in a taxable transaction, the former Noteholder will recognize gain or
loss in an amount equal to the difference between the amount realized on such
sale or other disposition and the former Noteholder's adjusted tax basis in the
Note. The adjusted tax basis of a Note to a particular Noteholder generally will
equal the holder's cost therefor increased by any market discount previously
included in income by such Noteholder and decreased by the amount of bond
premium (if any) previously amortized and the amount of any payments, other than
payments of stated interest, previously received by such Noteholder with respect
to such Note. Any such gain or loss will be capital gain or loss if the Note was
held as a capital asset, except to the extent such gain represents accrued
interest or accrued market discount not previously included in income. Capital
losses generally may be used only to offset capital gains.
Foreign Noteholders. For purposes of this discussion, the term "Foreign
Investor" means any person other than (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity organized in or under
the laws of the United States or any political subdivision thereof or (iii) an
estate or trust the income of which is includible in gross income for U.S.
federal income tax purposes regardless of its source.
Under present U.S. federal income tax law, and subject to the discussion
below concerning backup withholding:
(a) no withholding of U.S. federal income tax will be required with
respect to the payment by the Trust of principal or interest on a Note
owned by a Foreign Investor, provided that the beneficial owner of the
Note (i) is not actually or constructively a "10 percent shareholder" of
the Trust (including a holder of 10% or more of such Trust's outstanding
Certificates) or the General Partner, (ii) is not a "controlled foreign
corporation" with respect to which the Trust or the General Partner is a
"related person" within the meaning of the Code and (iii) satisfies the
statement requirement (described generally below) set forth in Section
871(h) and Section 881(c) of the Code and the regulations thereunder; and
(b) no withholding of United States federal income tax will be
required with respect to any gain realized by a Foreign Investor upon the
sale, exchange or retirement of a Note provided that, in the case of any
gain representing accrued interest, the conditions described in (a) above
are satisfied.
To satisfy the requirement referred to in (a)(iii) above, the beneficial
owner of such Note, or a financial institution holding the Note on behalf of
such owner, must provide, in accordance with specified procedures, the U.S.
entity that would otherwise be required to withhold U.S. taxes with a statement
to the effect that the beneficial owner is not a U.S. person. Pursuant to
current temporary Treasury regulations, these requirements will be met if (i)
the beneficial owner provides his name and address, and certifies, under
penalties of perjury that he, she or it is not a "U.S. person" (which
certification may be made on an IRS Form W-8 or successor form), or (ii) a
financial institution or securities clearing organization holding the Note on
behalf of such beneficial owner certifies, under penalties of perjury, that such
statement has been received by it and furnishes the U.S. entity otherwise
required to withhold U.S. taxes with a copy thereof.
If a Foreign Investor cannot satisfy the requirements of the "portfolio
interest" exception described in (a) above, payments of premium, if any, and
interest (including OID) made to a Foreign Investor with respect to a Note will
be subject to a 30% U.S. withholding tax unless the beneficial owner of the Note
provides the U.S. entity otherwise required to withhold U.S. taxes with a
properly executed (i) IRS Form 1001 (or successor form) claiming an exemption
from withholding under the benefit of a tax treaty or (ii) IRS Form 4224 (or
successor form) stating that the interest paid on the Note is not subject to
U.S. withholding tax because such interest income is effectively connected with
the beneficial owner's conduct of a trade or business in the United States.
If a Foreign Investor is engaged in a trade or business in the United
States and premium, if any, or interest on the Note is effectively connected
with the conduct of such trade or business, the Foreign Investor, although
exempt from the U.S. withholding tax discussed above, will be subject to U.S.
federal income tax on such premium, if any, and interest on a net income basis
in the same manner as if it were a U.S. person. In addition,
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if such Foreign Investor is a foreign corporation, it may be subject to a branch
profits tax equal to 30% of its effectively connected earnings and profits for
the taxable year, subject to adjustments. For this purpose, such premium, if
any, and interest on Note will be included in such foreign corporation's
effectively connected earnings and profits.
Any gain or income realized by a Foreign Investor upon the sale, exchange
or retirement of a Note generally will not be subject to U.S. federal income tax
unless (i) such gain or income is effectively connected with a trade or business
conducted by the Foreign Investor in the United States and (ii) in the case of a
Foreign Investor who is an individual, such individual is present in the United
States for 183 days or more in the taxable year of such sale, exchange or
retirement, and certain other conditions are met.
Information Reporting and Backup Withholding. In general, information
reporting requirements will apply to certain payment of principal, interest and
premium, if any, paid on the Notes and to the proceeds from the sale of a Note
paid to U.S. persons, other than certain exempt recipients (such as
corporations). A 31% U.S. backup withholding tax will apply to such payments if
the U.S. person fails to provide a taxpayer identification number or
certification of foreign or other exempt status or fails to report in full
dividend and interest income.
No information reporting or backup withholding will be required with
respect to payments made by the Trust to a Foreign Investor if a statement
described in (a)(iii) above under the caption "Foreign Noteholders" has been
received by the U.S. entity otherwise required to withhold U.S. taxes and such
entity does not have actual knowledge that the beneficial owner is a U.S.
person.
In addition, backup withholding and information reporting will not apply
if payments of principal, interest and premium (if any) on a Note are paid or
collected by a foreign office of a custodian, nominee or other foreign agent on
behalf of the beneficial owner of such Note, or if a foreign office of a broker
(as defined in applicable Treasury regulations) pays the proceeds from the sale
of a Note to the owner thereof. If, however, such nominee, custodian, agent or
broker is, for U.S. federal income tax purposes, a U.S. person, a controlled
foreign corporation or a foreign person that derives 50% or more of its gross
income for certain periods from the conduct of a trade or business in the United
States, such payments will not be subject to backup withholding but will be
subject to information reporting, unless (i) such custodian, nominee, agent or
broker has documentary evidence in its records that the beneficial owner is not
a U.S. person and certain other conditions are met or (ii) the beneficial owner
otherwise establishes an exemption. Temporary Treasury regulations provide that
the Treasury is considering whether backup withholding will apply with respect
to such payments of principal, interest or the proceeds from a sale that are not
subject to backup withholding under the current regulations. Under proposed
Treasury regulations, not currently in effect, backup withholding will not apply
to such payments absent actual knowledge that the payee is a U.S. person.
Payments of principal, interest and premium (if any) on a Note paid to the
beneficial owner of a Note by a United States office of a custodian, nominee or
agent, or the payment by the United States office of a broker of the proceeds
from the sale of a Note, will be subject to both backup withholding and
information reporting unless the beneficial owner (i) provides the statement
referred to in (a)(iii) above and the payor does not have actual knowledge that
the beneficial owner is a U.S. person or (ii) otherwise establishes an
exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
Possible Alternative Classification of the Notes. If, contrary to the
opinion of Federal Tax Counsel, the IRS successfully asserted that one or more
of the Notes did not represent debt for U.S. federal income tax purposes, the
Notes might be treated as equity interests in the Trust. Treatment of the Notes
as equity interests in the Trust could have adverse tax consequences to certain
Noteholders. For example, income to Foreign Investors generally would be subject
to U.S. tax and U.S. tax return filing and withholding requirements and
Noteholders who are individuals might be subject to certain limitations on their
ability to deduct their allocable share of the Trust's expenses. See "Tax
Consequences to Certificateholders" below.
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Tax Consequences to Certificateholders
Treatment of the Trust as a Partnership. As discussed above under the
caption "Tax Characterization of the Trust", the following discussion assumes
that (i) the Trust will be treated as a partnership (other than a publicly
traded partnership) and (ii) the Certificates represent equity interests in such
partnership, for U.S. federal income tax purposes.
Partnership Taxation. As a partnership, the Trust will not be subject to
U.S. federal income tax. Rather, each Certificateholder will be required to
separately take into account such Certificateholder's allocable share of the
Trust's income, gains, losses, deductions and credits. The Trust's income will
consist primarily of interest and finance charges earned on the Receivables
(including appropriate adjustments for market discount, OID and bond premium)
and any gain realized upon the collection or disposition of Receivables. The
Trust's deductions will consist primarily of interest accruing with respect to
the Notes, servicing and other fees, and losses or deductions realized upon the
collection or disposition of Receivables.
The tax items of a partnership are allocable to the partners in accordance
with the Code, the relevant Treasury regulations promulgated thereunder and the
partnership agreement (here, the Trust Agreement and related documents).
However, inasmuch as the Trust's payment of the Pass-Through Rate on the
Certificates is payable to the Certificateholders without regard to the income
of the Trust, the Trust's payment of such amounts to Certificateholders should
be treated (and the Trust intends to so treat such payments) as "guaranteed
payments" within the meaning of Section 707(c) of the Code, and not as a
distributive share of the Trust's income. Such guaranteed payments will be
considered ordinary income to a Certificateholder but may not be considered
interest income for U.S. federal income tax purposes.
In the event that such tax treatment is not respected, the Trust Agreement
provides that the Certificateholders will be allocated gross income of the Trust
for each calendar month equal to the sum of (i) the amount of interest that
accrues on the Certificates for such calendar month, (ii) an amount equivalent
to interest that accrues during such period on amounts previously due on the
Certificates but not yet distributed, and (iii) any gross income of the Trust
attributable to discount on the Receivables that corresponds to any excess of
the principal amount of the Certificates over their initial issue price. All
remaining income of the Trust will be allocated to the General Partner and the
Seller. All deductions and losses also will be allocated to the General Partner
and the Seller.
Based on the economic arrangement of the parties, such allocations should
be respected for U.S. federal income tax purposes. However, no assurance can be
given that the IRS would not require the Trust to allocate a greater amount of
income to the Certificateholders. Moreover, even under the foregoing method of
allocation, Certificateholders may be allocated income equal to the entire Pass
Through Rate plus the other items described above, even though the Trust may not
have sufficient cash to make current cash distributions with respect to such
income. Thus, cash method Certificateholders will be required effectively to
report income from the Certificates on an accrual basis and all
Certificateholders will be liable for the U.S. federal income taxes due on their
allocable share of the Trust's income even if they have not received any cash
distributions from the Trust with respect to such income. In addition, because
tax allocations and tax reporting will be done on a uniform basis for all
Certificateholders, Certificateholders purchasing Certificates at different
times and at different prices may be required to recognize an amount of taxable
income that is greater or less than the amount reported to them by the Trust.
See "Allocations between Transferors and Transferees" below.
The Trust intends to make all tax calculations relating to income and
allocations to Certificateholders on an aggregate basis. If the IRS were to
require that such calculations be made separately for each Receivable, the Trust
might be required to incur additional expense but it is believed that there
would not be a material adverse effect on Certificateholders.
Discount and Premium. It is anticipated that the Receivables held by the
Trust will not have been issued with OID. Therefore, the Trust should not have
to accrue any OID income. However, the purchase price
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paid by the Trust for the Receivables may be greater or less than the remaining
principal balance of the Receivables at the time of purchase. If so, the
Receivables will have been acquired at a premium or discount, as the case may
be. (As indicated above, the Trust will make this calculation on an aggregate
basis, but might be required to recompute it on a Receivable-by-Receivable
basis.)
If the Trust acquires the Receivables at a market discount or premium, the
Trust will elect to include any such discount in income currently as it accrues
over the life of the Receivables or to offset any such premium against interest
income on the Receivables. As indicated above, a portion of such market discount
income or premium deduction may be allocated to Certificateholders.
Section 708 Termination. Under Section 708 of the Code, the Trust will be
deemed to terminate for U.S. federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a
12-month period. If such a termination occurs, the Trust will be considered to
distribute its assets to the partners, who would then be treated as
recontributing those assets to the Trust, as a new partnership. The Trust will
not comply with certain technical requirements that might apply when such a
constructive termination occurs. As a result, the Trust may be subject to
certain tax penalties and may incur additional expenses if it is required to
comply with those requirements. Furthermore, the Trust might not be able to
comply due to lack of data.
Under recently proposed regulations that are not yet effective, a
constructive termination of the Trust under Section 708 of the Code would no
longer result in a deemed distribution. Instead, upon such a constructive
termination, the Trust would be considered to have transferred all of its assets
and liabilities to a new Trust and then to immediately liquidate and distribute
the interests in the new Trust to the continuing Certificateholders.
Disposition of Certificates. Generally, a Certificateholder will recognize
capital gain or loss on a sale or other taxable disposition of Certificates in
an amount equal to the difference between the amount realized by the
Certificateholder on such sale or disposition and the Certificateholder's tax
basis in such Certificates. A Certificateholder's tax basis in a Certificate
generally will equal the Certificateholder's cost therefor increased by the
Certificateholder's allocable share of Trust income and decreased by any
distributions received with respect to such Certificate. In addition, both the
tax basis in the Certificates and the amount realized on a sale of a Certificate
would include the Certificateholder's allocable share of the Notes and other
liabilities of the Trust. A Certificateholder acquiring Certificates at
different prices may be required to maintain a single aggregate adjusted tax
basis in such Certificates, and, upon sale or other disposition of some of the
Certificates, allocate a portion of such aggregate tax basis to the Certificates
sold (rather than maintaining a separate tax basis in each Certificate for
purposes of computing gain or loss on a sale of that Certificate).
Any gain on the sale of a Certificate attributable to the
Certificateholder's share of unrecognized accrued market discount on the
Receivables generally would be treated as ordinary income to the
Certificateholder and would give rise to special tax reporting requirements. The
Trust does not expect to have any other assets that would give rise to such
special reporting requirements. Thus, to avoid those special reporting
requirements, the Trust will elect to include market discount in income as it
accrues.
If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Certificates that exceeds the aggregate
cash distributions with respect thereto, such excess generally will give rise to
a capital loss upon the retirement of the Certificates. The deductibility of
capital losses is subject to limitations.
Allocations Between Transferors and Transferees. In general, the Trust's
taxable income and losses will be determined monthly and the tax items for a
particular calendar month will be apportioned among the Certificateholders in
proportion to the principal amount of Certificates owned by them as of the close
of the last day of such month. As a result, an investor purchasing Certificates
may be allocated tax items (which will affect its tax liability and tax basis)
attributable to periods before the actual transaction.
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The use of such a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or losses
of the Trust might be reallocated among the Certificateholders. The Trustee is
authorized to revise the Trust's method of allocation between transferors and
transferees to conform to a method permitted by future regulations.
Section 754 Election. In the event that a Certificateholder sells its
Certificates at a profit (or loss), the purchasing Certificateholder will have a
higher (or lower) tax basis in the Certificates than the selling
Certificateholder had. The tax basis of the Trust's assets will not be adjusted
to reflect that higher (or lower) basis unless the Trust were to file an
election under Section 754 of the Code. In order to avoid the administrative
complexities that would be involved in keeping accurate accounting records, as
well as potentially onerous information reporting requirements, the Trust will
not make such an election. As a result, Certificateholders might be allocated a
greater or lesser amount of Trust income than would be appropriate based on
their own purchase price for Certificates.
Administrative Matters. The Trustee will be required to keep complete and
accurate books for the Trust. Such books will be maintained for financial
reporting and tax purposes on an accrual basis and the fiscal year of the Trust
will be the calendar year. The Trustee will file a partnership information
return (IRS Form 1065) with the IRS for each taxable year of the Trust and will
report each Certificateholder's allocable share of items of Trust income and
expense to holders and the IRS on Schedule K-1. The Trust will provide the
Schedule K-1 information to nominees that fail to provide the Trust with the
information statement described below and such nominees will be required to
forward such information to the beneficial owners of the Certificates.
Generally, Certificateholders must file tax returns that are consistent with the
information return filed by the Trust or be subject to penalties unless the
Certificateholder notifies the IRS of all such inconsistencies.
Under Section 6031 of the Code, any person that holds Certificates as a
nominee at any time during a calendar year is required to furnish the Trust with
a statement containing certain information on the nominee, the beneficial owners
and the Certificates so held. Such information includes (i) the name, address
and taxpayer identification number of the nominee and (ii) as to each beneficial
owner (x) the name, address and identification number of such person, (y)
whether such person is a United States person, a tax-exempt entity or a foreign
government, an international organization, or any wholly owned agency or
instrumentality of either of the foregoing, and (z) certain information on
Certificates that were held, bought or sold on behalf of such person throughout
the year. In addition, brokers and financial institutions that hold Certificates
through a nominee are required to furnish directly to the Trust information as
to themselves and their ownership of Certificates. A clearing agency registered
under Section 17A of the Exchange Act is not required to furnish any such
information statement to the Trust. The information referred to above for any
calendar year must be furnished to the Trust on or before the following January
31. Nominees, brokers and financial institutions that fail to provide the Trust
with the information described above may be subject to penalties.
The General Partner will be designated as the tax matters partner in the
related Trust Agreement and, as such, will be responsible for representing the
Certificateholders in any dispute with the IRS. The Code provides for
administrative examination of a partnership as if the partnership were a
separate and distinct taxpayer. Generally, the statute of limitations for
partnership items does not expire before three years after the date on which the
partnership information return is filed. Any adverse determination following an
audit of the return of the Trust by the appropriate taxing authorities could
result in an adjustment of the returns of the Certificateholders, and, under
certain circumstances, a Certificateholder may be precluded from separately
litigating a proposed adjustment to the items of the Trust. An adjustment could
result in an audit of a Certificateholder's U.S. federal income tax returns and,
consequently, to adjustments of items not related to the Certificateholder's
allocable share of the income and losses of the Trust.
Tax Consequences to Foreign Certificateholders. The Certificates may not
be acquired by or for the account of an individual or entity that is not a U.S.
person as defined in Section 7701(a)(30) of the Code, and any transfer of a
Certificate to a person that is not a U.S. person shall be void. In addition,
under Section 1446
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of the Code, a partnership that is engaged is a U.S. trade or business must
withhold U.S. federal income taxes on its income that is "effectively connected"
with the conduct of such trade or business to the extent such income is
allocable to a Foreign Investor. It is not clear whether the Trust would be
considered to be engaged in a U.S. trade or business for U.S. federal income tax
purposes. Accordingly, in order to protect the Trust from the potential adverse
consequences Foreign Investors will be subject to U.S. withholding tax on that
portion of the Trust's income that is allocable to such Foreign Investors, as if
such income were effectively connected to a U.S. trade or business, at a rate of
[35%] for Foreign Investors that are taxable as corporations and [39.6%] for all
other Foreign Investors. In determining a Certificateholder's withholding
status, the U.S. entity otherwise required to withhold U.S. taxes may rely on
IRS Form W-8, an IRS Form W-9 or a Certificateholder's certification of
nonforeign status signed under penalties of perjury.
Consequently, each Foreign Investor will be required to file a U.S. income
tax return on its share of the Trust's income. In addition, each Foreign
Investor must obtain a U.S. taxpayer identification number from the IRS and
submit that number to the U.S. entity otherwise required to withhold U.S. taxes
on Form W-8 in order to ensure appropriate crediting of taxes withheld. A
Foreign Investor generally would be entitled to file with the IRS a claim for
refund with respect to such withheld taxes, taking the position that no taxes
were due because the Trust was not engaged in a U.S. trade or business. However,
interest payments made (or accrued) to a Foreign Investor may not be considered
"portfolio interest" and, consequently, such payments may be subject to U.S.
withholding tax at a rate of 30 percent, unless reduced, or eliminated, pursuant
to an applicable U.S. tax treaty. In such case, a Foreign Investor would only be
entitled to claim a refund for that portion of the taxes in excess of the taxes
that should have been withheld with respect to such payments.
Backup Withholding. Distributions made on the Certificates and proceeds
from the sale of the Certificates generally will be subject to the 31% U.S.
backup withholding tax if the Certificateholder fails to comply with certain
identification procedures or otherwise fails to establish an exemption.
CERTAIN STATE TAX CONSEQUENCES
The above discussion does not address the tax treatment of the Trust, the
Notes, the Certificates, Noteholders or Certificateholders under any state tax
laws. Prospective investors are urged to consult with their own tax advisors
regarding the state tax treatment of the Trust as well as any state tax
consequences to them of purchasing, holding and disposing of Notes or
Certificates.
ERISA CONSIDERATIONS
The Notes
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and Section 4975 of the Code, impose certain requirements on employee benefit
plans and certain other plans and arrangements, including individual retirement
accounts and annuities, Keogh plans and certain collective investment funds or
insurance company general or separate accounts in which such plans, accounts or
arrangements are invested, that are subject to the fiduciary responsibility
provisions of ERISA and/or Section 4975 of the Code (collectively, "Plans"), and
on persons who are fiduciaries with respect to Plans, in connection with the
investment of "plan assets" of any Plan ("Plan Assets"). ERISA generally imposes
on Plan fiduciaries certain general fiduciary requirements, including those of
investment prudence and diversification and the requirement that a Plan's
investments be made in accordance with the documents governing the Plan.
Generally, any person who has discretionary authority or control respecting the
management or disposition of Plan Assets, and any person who provides investment
advice with respect to such assets for a fee, is a fiduciary with respect to
such Plan Assets.
Subject to the considerations described below, the Notes are eligible for
purchase with Plan Assets of any Plan.
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ERISA and Section 4975 of the Code prohibit a broad range of transactions
involving Plan Assets and persons ("Parties in Interest" under ERISA and
"Disqualified Persons" under the Code) who have certain specified relationships
to a Plan or its Plan Assets, unless a statutory or administrative exemption is
available. Parties in Interest or Disqualified Persons that participate in a
prohibited transaction may be subject to a penalty imposed under ERISA and/or an
excise tax imposed pursuant to Section 4975 of the Code, unless a statutory or
administrative exemption is available. These prohibited transactions generally
are set forth in Section 406 of ERISA and Section 4975 of the Code.
Any fiduciary or other Plan investor considering whether to purchase the
Notes with Plan Assets of any Plan should determine whether such purchase is
consistent with its fiduciary duties and whether such purchase would constitute
or result in a non-exempt prohibited transaction under ERISA and/or Section 4975
of the Code because any of the Seller, the Servicer, the Indenture Trustee, the
Owner Trustee, any Certificateholder or any other parties may be deemed to be
benefiting from the issuance of the Notes and are Parties in Interest or
Disqualified Persons with respect to the investing Plan. Any fiduciary or other
Plan investor considering whether to purchase the Notes should consult with its
counsel regarding the applicability of the fiduciary responsibility and
prohibited transaction provisions of ERISA and Section 4975 of the Code to such
investment and the availability of any prohibited transaction exemption, e.g.,
DOL Prohibited Transaction Exemptions 96-23 (relating to transactions determined
by "in-house asset managers"), 95-60 (relating to transactions involving
insurance company general accounts), 91-38 (relating to transactions involving
bank collective investment funds), 90-1 (relating to transactions involving
insurance company pooled separate accounts) and 84-14 (relating to transactions
determined by independent "qualified professional asset managers"). A purchaser
of the Notes should be aware, however, that even if the conditions specified in
one or more of those exemptions are met, the scope of the exemptive relief
provided by the exemption might not cover all acts which might be construed as
prohibited transactions.
In addition, under U.S. Department of Labor Regulation Section 2510.3-101
(the "Plan Asset Regulation"), the purchase with Plan Assets of equity interests
in the Trust could, in certain circumstances, cause the Receivables and other
assets of the Trust to be deemed Plan Assets of the investing Plan which, in
turn, would subject the Trust and its assets to the fiduciary responsibility
provisions of ERISA and the prohibited transaction provisions of ERISA and
Section 4975 of the Code. Nevertheless, because the Notes (a) should be treated
as indebtedness under local law and debt, rather than equity, for tax purposes
(see "Certain Federal Income Tax Considerations--Tax Consequences to Holders of
the Notes--Treatment of the Notes as Indebtedness" in the Prospectus), and (b)
should not be deemed to have any "substantial equity features," purchases of the
Notes with Plan Assets should not be treated as equity investments and,
therefore, the Receivables and other assets included as assets of the Trust
should not be deemed to be Plan Assets of the investing Plans. Those conclusions
are based, in part, upon the traditional debt features of the Notes, including
the reasonable expectation of purchasers of Notes that the Notes (which are
highly rated by the Rating Agencies) will be repaid when due, as well as the
absence of conversion rights, warrants and other typical equity features. Before
purchasing the Notes, a fiduciary or other Plan investor should itself confirm
that the Notes constitute indebtedness, and have no substantial equity features,
for purposes of the Plan Asset Regulation.
The Notes may not be purchased with Plan Assets of any Plan if any of the
Seller, the Servicer, the Indenture Trustee, the Owner Trustee or any of their
respective affiliates (a) has investment or administrative discretion with
respect to the Plan Assets used to effect such purchase; (b) has authority or
responsibility to give, or regularly gives, investment advice with respect to
such Plan Assets, for a fee and pursuant to an agreement or understanding that
such advice (1) will serve as a primary basis for investment decisions with
respect to such Plan Assets, and (2) will be based on the particular investment
needs of such Plan; or (c) is an employer maintaining or contributing to such
Plan. Each Purchaser shall be deemed to represent that its purchase of a Note or
any interest therein does not violate the foregoing limitation.
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<PAGE>
The Certificates
Because purchases of the Certificates are equity investments, the
Certificates may not be purchased by, on behalf of or with the Plan Assets of
any Plan. In addition, each purchaser of the Certificates will be deemed to have
represented that it is neither a Plan nor purchasing the Certificates on behalf
of or with Plan Assets of a Plan. The foregoing restrictions shall not apply to
acquisitions of Certificates with assets at the general account of an insurance
company, to the extent permitted under Section 401(c) of ERISA.
Any fiduciary or other Plan investor considering whether to purchase any
Securities on behalf of or with Plan Assets of any Plan should consult with its
counsel and refer to this Prospectus Supplement and the Prospectus for guidance
regarding the ERISA Considerations applicable to the Securities offered hereby.
For further information see "ERISA Considerations" in the Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
(the "Note Underwriting Agreement"), the Seller has agreed to sell to the
underwriters named below (the "Note Underwriters"), and each of the Note
Underwriters has severally agreed to purchase, the principal amount of Notes set
forth opposite its name below:
Principal Amount of Principal Amount of
Note Underwriters Class A-1 Notes Class A-2 Notes
- ----------------- ------------------- -------------------
[________________]............
[________________]............
------------------- -------------------
Total....................... $ $
=================== ===================
In the Note Underwriting Agreement, the several Note Underwriters have
agreed, subject to the terms and conditions therein, to purchase all the Notes
offered hereby if any of such Notes are purchased. The Seller has been advised
by the Note Underwriters that they propose initially to offer the Class A-1
Notes and the Class A-2 Notes to the public at the prices set forth herein, and
to certain dealers at such price less a concession not in excess of ____% of the
principal amount of the Class A-1 Notes and ____% of the principal amount of the
Class A-2 Notes. The Note Underwriters may allow and such dealers may reallow a
concession not in excess of ____% of the principal amount of the Class A-1 Notes
and ____% of the principal amount of the Class A-2 Notes to certain other
dealers. After the initial public offering, such prices and such concessions may
be changed.
Subject to the terms and conditions set forth in an underwriting agreement
(the "Certificate Underwriting Agreement" and, together with the Note
Underwriting Agreement, the "Underwriting Agreements"), the Seller has agreed to
sell to the underwriters named below (the "Certificate Underwriters" and,
together with the Note Underwriters, the "Underwriters"), and each of the
Certificate Underwriters has severally agreed to purchase, the principal amount
of the Certificates set forth opposite its name below.
Principal Amount of
Certificate Underwriters Certificates
- ------------------------ ------------------
[________________]........................................ $
[________________]........................................
---------------
Total................................................... $
===============
In the Certificate Underwriting Agreement, the several Certificate
Underwriters have agreed, subject to the terms and conditions therein, to
purchase all of the Certificates offered hereby if any of such Certificates are
purchased. The Seller has been advised by the Certificate Underwriters that they
propose initially to offer the Certificates to the public at the price set forth
herein, and to certain dealers at such price less a concession not in excess of
____% of the principal amount of the Certificates. The Certificate Underwriters
may allow and such
S-37
<PAGE>
dealers may reallow a concession not in excess of ____% of the principal amount
of the Certificates to certain other dealers. After the initial public offering,
such prices and such concessions may be changed.
The Indenture Trustee and the Owner Trustee (on behalf of the Trust) may,
from time to time, invest the funds in the Trust Accounts in Permitted
Investments acquired from the Underwriters.
The Seller will indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or
contribute to payments the Underwriters may be required to make in respect
thereof.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Securities will be
passed upon for the Seller by Simpson Thacher & Bartlett (a partnership that
includes professional corporations), New York, New York and certain other legal
matters will be passed upon for the Seller by ___________________, Esq., a
____________ of the Bank, and for the Underwriter by Orrick, Herrington &
Sutcliffe, New York, New York. From time to time Simpson Thacher & Bartlett and
Orrick, Herrington & Sutcliffe will provide legal services to the Seller and its
affiliates.
S-38
<PAGE>
ANNEX X
GLOBAL CLEARANCE, SETTLEMENT AND
TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Chase Manhattan
Auto Trust 199_-_ Class A-1 ___% Asset Backed Notes, Class A-2 ___% Asset Backed
Notes (the "Global Notes") and ___% Asset Backed Certificates (the "Global
Certificates," and together with the Global Notes, the "Global Securities") to
be issued will be available only in book-entry form. Investors in the Global
Securities may hold such Global Securities through any of the Depository Trust
Company ("DTC"), CEDEL or Euroclear. The Global Securities will be tradeable as
home market instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through CEDEL and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
Participants holding Global Securities will be effected on a
delivery-against-payment basis through the respective Depositaries of CEDEL and
Euroclear (in such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing corporation
organizations or their participants.
Initial Settlement
All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee or DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, CEDEL and Euroclear will
hold positions on behalf of their participants through their respective
Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practice applicable to U.S. corporate debt obligations. Investor
securities custody accounts will be credited with the holdings against payment
in same-day funds on the settlement date.
Investors electing to hold their Global Securities through CEDEL or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in same-day
funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to U.S. corporate
debt obligations in same-day funds.
S-39
<PAGE>
Trading between CEDEL and/or Euroclear Participants. Secondary market
trading between CEDEL Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and CEDEL or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a CEDEL Participant or a Euroclear Participant, the purchaser will
send instructions to CEDEL, or Euroclear through a CEDEL Participant or
Euroclear Participant at least one business day prior to settlement. CEDEL or
Euroclear will instruct the respective Depositary to receive the Global
Securities against payment. Payment will include interest accrued on the Global
Securities from and including the last coupon payment date to and excluding the
settlement date. Payment will then be made by the respective Depositary to the
DTC Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the CEDEL Participant's or Euroclear Participant's account.
The Global Securities credit will appear the next day (European time) and the
cash debit will be backed-valued to, and the interest on the Global Securities
will accrue from, the value date (which would be the preceding day when
settlement occurred in New York). If settlement is not completed on the intended
value date (i.e., the trade fails), the CEDEL or Euroclear cash debit will be
valued instead as of the actual settlement date.
CEDEL Participants and Euroclear Participants will need to make available
to the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to preposition funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within CEDEL or Euroclear. Under this approach,
they may take on credit exposure to CEDEL or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if CEDEL or Euroclear has extended a line of credit to
them, CEDEL Participants or Euroclear Participants can elect not to preposition
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, CEDEL Participants or Euroclear Participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts. However,
interest on the Global Securities would accrue from the value date. Therefore,
in many cases the investment income on the Global Securities earned during the
one-day period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each CEDEL Participant's or
Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of CEDEL Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between CEDEL or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, CEDEL Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through the
respective Depositary, to a DTC Participant. The seller will send instructions
to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at
least one business day prior to settlement. In these cases, CEDEL or Euroclear
will instruct the respective Depositary, as appropriate, to deliver the bonds to
the DTC Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date. The payment will then be reflected in the
account of the CEDEL Participant or Euroclear Participant the following day, and
receipt of the cash proceeds in the CEDEL Participant's or Euroclear
Participant's account would be back-valued to the value date (which would be the
preceding day, when settlement occurred in New York). Should the CEDEL
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debit in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on the
intended value date (i.e., the trade fails), receipt of the cash proceeds in the
CEDEL Participant's or Euroclear Participant's account would instead be valued
as of the actual settlement date.
S-40
<PAGE>
Finally, day traders that use CEDEL or Euroclear and that purchase Global
Securities from DTC Participants for delivery to CEDEL Participants or Euroclear
Participants should note that these trades would automatically fail on the sale
side unless affirmative action were taken. At least three techniques should be
readily available to eliminate this potential problem:
(a) borrowing through CEDEL or Euroclear for one day (until the
purchase side of the day trade is reflected in their CEDEL or Euroclear
accounts) in accordance with the clearing system's custom procedures;
(b) borrowing the Global Securities in the U.S. from a DTC
Participant no later than one day prior to settlement, which would give
the Global Securities sufficient time to be reflected in their CEDEL
Euroclear account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC Participant is
at least one day prior to the value date for the sale to the CEDEL
Participant or Euroclear Participant.
Certain U.S. Federal Income Tax Documentation Requirements
Global Notes
A beneficial owner of Global Notes holding securities through CEDEL or
Euroclear (or through DTC if the holder has an address outside the U.S.) will be
subject to the 30% U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (i) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(ii) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of the Notes
that are non-U.S. Persons can obtain a complete exemption from the withholding
tax by filing a signed Form W-8 (Certificate of Foreign Status). If the
information shown on Form W-8 changes, a new Form W-8 must be filed within 30
days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are beneficial owners of Notes and
who reside in a country that has a tax treaty with the United States can obtain
an exemption or reduced tax rate (depending on the treaty terms) by filing Form
1001 (Ownership, Exemption of Reduced Rate Certificate). If the treaty provides
only for a reduced rate, withholding tax will be imposed at that rate unless the
filer alternatively files Form W-8. Form 1001 may be filed by such beneficial
owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The beneficial owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through
S-41
<PAGE>
whom it holds (the clearing agency, in the case of persons holding directly on
the books of the clearing agency). Form W-8 and Form 1001 are effective for
three calendar years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of the
United States or any political subdivision thereof or (iii) an estate or trust
the income of which is includible in gross income for United States tax
purposes, regardless of its source. This summary does not deal with all aspects
of U.S. Federal income tax withholding that may be relevant to foreign holders
of the Global Notes. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the Global Notes.
Global Certificates
A beneficial owner of Global Certificates holding such Certificates
through [CEDEL or Euroclear (or] through DTC if such holder has an address
outside of the U.S. [)] will be subject to U.S. holding tax at a rate of 35% in
the case of corporations and at a rate of 39.6% in the case of all other
persons, unless (i) each clearing system, bank or other financial institutions
that hold customers' securities in the ordinary course of its business in the
chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(ii) such beneficial owner certifies that it is a U.S. Person on an IRS Form
W-8, IRS Form W-9 or other written certification of such beneficial owner's
non-foreign status signed under penalties of perjury.
Miscellaneous
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with this offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Seller, the Servicer or the
Underwriters. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstance create an implication that there has been
no change in the affairs of the Seller, the Servicer or the Receivables since
the date thereof. This Prospectus does not constitute an offer or solicitation
by anyone in any state in which such offer or solicitation is not authorized or
in which the person making such offer or solicitation is not qualified to do so
or to anyone to whom it is unlawful to make such offer or solicitation.
S-42
<PAGE>
INDEX OF TERMS
ABS.......................................................................S-17
ABS Table.................................................................S-18
Administration Agreement...................................................S-8
Administration Fee.........................................................S-8
Administrator..............................................................S-8
Advance..............................................................S-6, S-22
Business Day...............................................................S-3
Certificate Balance.......................................................S-24
Certificate Underwriters..................................................S-37
Certificate Underwriting Agreement........................................S-37
Certificateholders.........................................................S-5
Certificateholders' Distributable Amount..................................S-25
Certificateholders' Interest Carryover Shortfall..........................S-25
Certificateholders' Interest Distributable Amount.........................S-25
Certificateholders' Monthly Interest Distributable Amount.................S-25
Certificateholders' Monthly Principal Distributable Amount................S-25
Certificateholders' Principal Carryover Shortfall.........................S-25
Certificateholders' Principal Distributable Amount........................S-25
Certificates............................................................i, S-1
Chase......................................................................S-6
Chase Manhattan Bank USA, N.A. ............................................S-1
Chase USA (New York) ......................................................S-1
Class A-1 Final Scheduled Payment Date.....................................S-4
Class A-1 Notes.........................................................i, S-1
Class A-2 Final Scheduled Payment Date.....................................S-4
Class A-2 Notes.........................................................i, S-1
Closing Date.................................................................i
Collection Account.........................................................S-7
Collection Period..........................................................S-4
Contract Rate.............................................................S-12
Cutoff Date ...............................................................S-2
Definitive Certificates....................................................S-2
Definitive Notes...........................................................S-1
Deposit Date...............................................................S-6
Disqualified Persons......................................................S-36
Distribution Date......................................................ii, S-3
ERISA.....................................................................S-35
FDIC.........................................................................i
Final Scheduled Certificate Distribution Date..............................S-6
Final Scheduled Maturity Date..............................................S-3
Final Scheduled Payment Date...............................................S-4
Financed Vehicles..........................................................S-3
General Partner............................................................S-2
Indenture..................................................................S-1
Indenture Trustee..........................................................S-1
Initial Pool Balance.......................................................S-3
Interest Accrual Period....................................................S-4
Interest Rates.............................................................S-4
Issuer.....................................................................S-1
Liquidation Proceeds......................................................S-25
Note Underwriters.........................................................S-37
Note Underwriting Agreement...............................................S-37
S-43
<PAGE>
Noteholders ...............................................................S-3
Noteholders' Distributable Amount.........................................S-25
Noteholders' Interest Carryover Shortfall.................................S-26
Noteholders' Interest Distributable Amount................................S-26
Noteholders' Monthly Interest Distributable Amount........................S-26
Noteholders' Monthly Principal Distributable Amount.......................S-26
Noteholders' Principal Carryover Shortfall................................S-26
Noteholders' Principal Distributable Amount...............................S-26
Notes...................................................................i, S-1
Owner Trustee..............................................................S-1
Parties in Interest.......................................................S-36
Pass Through Rate..........................................................S-5
Paying Agent..............................................................S-22
Payment Date...........................................................ii, S-3
Plan Asset Regulation.....................................................S-36
Plan Assets...............................................................S-35
Plans.....................................................................S-35
Pool Balance...............................................................S-3
Principal Distribution Amount.............................................S-23
Rating Agencies...........................................................S-10
Receivables ................................................................ii
Receivables Pool..........................................................S-11
Record Date ...............................................................S-3
Reserve Account............................................................S-6
Reserve Account Initial Deposit............................................S-6
Sale and Servicing Agreement...............................................S-3
Securities.............................................................ii, S-1
Securityholders............................................................S-5
Seller.......................................................................i
Servicer...............................................................ii, S-1
Servicing Fee Rate........................................................S-22
Settlement Date............................................................S-8
Specified Reserve Account Balance.........................................S-27
Total Distribution Amount.................................................S-23
Transfer and Servicing Agreements.........................................S-22
Trust...................................................................i, S-1
Trust Account.............................................................S-22
Trust Agreement............................................................S-1
Underwriters..............................................................S-37
Underwriting Agreements...................................................S-37
S-44
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED AUGUST 28, 1996
PROSPECTUS
Chase Manhattan Auto Trusts
Asset Backed Notes
Asset Backed Certificates
CHASE MANHATTAN BANK USA, N.A.
Seller and Servicer
The Asset Backed Notes (the "Notes") and the Asset Backed Certificates (the
"Certificates" and, together with the Notes, the "Securities") described herein
may be sold from time to time in one or more series, in amounts, at prices and
on terms to be determined at the time of sale and to be set forth in a
supplement to this Prospectus (a "Prospectus Supplement"). Each series of
Securities, which may include one or more classes of Notes and/or one or more
classes of Certificates, will be issued by a trust to be formed on or before the
issuance date for that series (each, a "Trust"). Each Trust will be formed
pursuant to either a Trust Agreement to be entered into among Chase Manhattan
Bank USA, N.A. ("Chase USA (New York)"), a national banking association
headquartered in New York, or Chase Manhattan Bank USA, N.A. ("Chase USA
(Delaware)"), a national banking association headquartered in Delaware (each in
such capacity, the "Seller") and the general partner and the owner trustee
specified in the related Prospectus Supplement or a Pooling and Servicing
Agreement to be entered into among the trustee specified in the related
Prospectus Supplement, the Seller and Chase USA (New York) or Chase USA
(Delaware), as Servicer (each in such capacity, the "Servicer"). The Seller and
the Servicer with respect to any Trust will be Chase USA (New York) until the
Chase USA merger is consummated; following the Chase USA merger, Chase USA
(Delaware), the surviving bank, will be the Seller and the Servicer. If a series
of Securities includes Notes, such Notes of a series will be issued and secured
pursuant to an Indenture between the related Trust and the indenture trustee
specified in the related Prospectus Supplement and will represent indebtedness
of the related Trust. The Certificates of a series will represent fractional
undivided interests in the related Trust. The related Prospectus Supplement will
specify which class or classes of Notes, if any, and which class or classes of
Certificates, if any, of the related series are being offered thereby.
The property of each Trust will include a pool of retail installment sales
contracts and purchase money loans secured by new or used automobiles or
light-duty trucks, certain monies due or received thereunder on and after the
applicable Cutoff Date set forth in the related Prospectus Supplement, security
interests in the vehicles financed thereby, proceeds from claims on certain
insurance policies and certain other property, all as described herein and in
the related Prospectus Supplement. In addition, if so specified in the related
Prospectus Supplement, the property of a Trust will include monies on deposit in
a trust account (the "Pre-Funding Account") which will be used to purchase
additional retail installment sales contracts and purchase money loans and
related property from the Seller from time to time during the period (the
"Funding Period") specified in the related Prospectus Supplement.
(continued on the following page)
------------------------
ANY NOTES OF A SERIES REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES OF A SERIES
REPRESENT BENEFICIAL INTERESTS IN, THE RELATED TRUST ONLY AND DO NOT REPRESENT
OBLIGATIONS OF OR INTERESTS IN THE CHASE MANHATTAN BANK, CHASE MANHATTAN BANK
USA, N.A. OR ANY AFFILIATES THEREOF. NO NOTE OR CERTIFICATE OF ANY SERIES IS A
DEPOSIT AND NO SUCH NOTE OR CERTIFICATE IS INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE "FDIC"). THE RECEIVABLES ARE NOT INSURED OR
GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospective investors should consider, among other things, the information set
forth under the heading "Risk Factors" in this Prospectus commencing on page 16
herein and in the Prospectus Supplement.
Retain this Prospectus for future reference. This Prospectus may not be used to
consummate sales of securities offered hereby unless accompanied by a Prospectus
Supplement.
The date of this Prospectus is _________ __, 199_.
<PAGE>
(continued from previous page)
Except as otherwise provided in the related Prospectus Supplement, each class of
Securities of any series will represent the right to receive a specified amount
of payments of principal and interest on the related Receivables, at the rates,
on the dates and in the manner described herein and in the related Prospectus
Supplement. If a series includes multiple classes of securities, the rights of
one or more classes of Securities to receive payments may be senior or
subordinate to the rights of one or more of the other classes of such series.
Distributions on Certificates of a class or series may be subordinated in
priority to payments due on any Certificates of the same Series or any related
Notes to the extent described herein and in the related Prospectus Supplement. A
series may include one or more classes of Notes and/or Certificates which differ
as to the timing and priority of payment, interest rate or amount of
distributions in respect of principal or interest or both. A series may include
one or more classes of Notes or Certificates entitled to distributions in
respect of principal with disproportionate, nominal or no interest
distributions, or to interest distributions, with disproportionate, nominal or
no distribution in respect of principal. The rate of payment in respect of
principal of any class of Notes and distributions in respect of the Certificate
Balance (as defined herein) of the Certificates of any class will depend on the
priority of payment of such class and the rate and timing of payments (including
prepayments, defaults, liquidations and repurchases of Receivables) on the
related Receivables. A rate of payment lower than that anticipated may affect
the weighted average life of each class of Securities in the manner described
herein and in the related Prospectus Supplement.
Each series or classes of Securities offered hereby will be rated in one of the
four highest rating categories by at least one nationally recognized statistical
rating organization.
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AVAILABLE INFORMATION
The Sellers have filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (together with all amendments and
exhibits thereto, referred to herein as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Notes and the Certificates offered pursuant to this Prospectus. For further
information, reference is made to the Registration Statement, any amendments
thereof, and the exhibits thereto and any reports and other documents
incorporated herein by reference as described below under "Incorporation of
Certain Documents by Reference," which may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the Commission's regional offices at Northwestern
Atrium Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60661 and
Seven World Trade Center, New York, New York 10048. Copies of the Registration
Statement may be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Servicer, on behalf of each Trust, will also file or cause to be filed with the
Commission such periodic reports as are required under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations of
the Commission thereunder. In addition, the Commission maintains a public access
site on the Internet through the World Wide Web at which site reports,
information statements and other information, including all electronic filings,
regarding the Sellers may be viewed. The Internet address of such World Wide Web
site is http:/www.sec.gov.
REPORTS TO SECURITYHOLDERS
Unless otherwise provided in the related Prospectus Supplement, unless and until
Definitive Securities are issued, unaudited monthly and annual reports
containing information concerning each Trust and prepared by the Servicer will
be sent on behalf of each Trust only to Cede & Co. ("Cede"), as the nominee of
The Depository Trust Company ("DTC"), and registered holder of the Securities.
See "Certain Information Regarding the Securities--Book-Entry Registration,"
"--Definitive Securities" and "--Reports to Securityholders." Such reports will
not constitute financial statements prepared in accordance with United States
generally accepted accounting principles or that have been examined and reported
upon by, with an opinion expressed by, an independent public or certified public
accountant. Neither Seller intends to send any of its financial reports to
Securityholders or to the owners of beneficial interests in the Securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by the Servicer with the Commission, on behalf of each
Trust, pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Securities shall be deemed to be incorporated by reference in
this Prospectus and to be part hereof. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Chase Manhattan Bank, an affiliate of the Servicer, will provide without
charge to each person to whom a copy of this Prospectus is delivered, on the
written or oral request of any such person, a copy of any or all of the
documents incorporated herein or in any related Prospectus Supplement by
reference, except the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to the Servicer, Attention: Investor Relations.
Telephone requests for such copies should be directed to the Servicer at (212)
270-6000.
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TABLE OF CONTENTS
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SUMMARY OF PROSPECTUS...................................................... 6
RISK FACTORS............................................................... 17
Trust's Relationship to the Seller, the Servicer and their Affiliates 18
Subordination; Limited Assets........................................ 19
Maturity and Prepayment Considerations............................... 19
Risk of Commingling.................................................. 20
Risk Associated with Subsequent Receivables and Pre-Funding Account.. 21
Rights of Noteholders and Certificateholders......................... 21
THE TRUSTS................................................................. 21
THE RECEIVABLES POOLS...................................................... 22
General.............................................................. 22
Delinquency and Loan Loss Information................................ 24
Origination and Servicing of Motor Vehicle Loans..................... 25
Underwriting of Motor Vehicle Loans.................................. 26
Insurance and Collection Procedures.................................. 27
WEIGHTED AVERAGE LIFE OF THE SECURITIES.................................... 29
POOL FACTORS AND TRADING INFORMATION....................................... 30
USE OF PROCEEDS............................................................ 31
CHASE USA (NEW YORK) AND CHASE USA (DELAWARE).............................. 31
DESCRIPTION OF THE NOTES................................................... 32
General.............................................................. 32
Principal and Interest on the Notes.................................. 32
The Indenture........................................................ 34
Certain Covenants.................................................... 36
The Indenture Trustee................................................ 37
DESCRIPTION OF THE CERTIFICATES............................................ 37
General.............................................................. 37
Distributions of Principal and Interest.............................. 37
The Trustee.......................................................... 38
CERTAIN INFORMATION REGARDING THE SECURITIES............................... 39
Fixed Rate Securities................................................ 39
Floating Rate Securities............................................. 39
Indexed Securities................................................... 40
Book-Entry Registration.............................................. 40
Definitive Securities................................................ 44
List of Securityholders.............................................. 44
Reports to Securityholders........................................... 45
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS....................... 47
Sale and Assignment of Receivables................................... 47
Accounts............................................................. 49
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Servicing Procedures................................................. 51
Collections.......................................................... 51
Servicing Compensation and Payment of Expenses....................... 52
Advances............................................................. 52
Distributions........................................................ 52
Credit and Cash Flow Enhancement..................................... 53
Net Deposits......................................................... 54
Statements to Trustees and Trust..................................... 55
Evidence as to Compliance............................................ 55
Certain Matters Regarding the Servicer............................... 55
Events Of Servicing Termination...................................... 57
Rights Upon Event of Servicing Termination........................... 57
Waiver of Past Defaults.............................................. 58
Amendment............................................................ 58
Insolvency Event..................................................... 59
Payment of Notes..................................................... 60
General Partner Liability............................................ 60
Termination.......................................................... 60
Administration Agreement............................................. 61
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES................................... 61
General.............................................................. 61
Security Interests In The Financed Vehicles.......................... 62
Enforcement Of Security Interests In Vehicles........................ 63
Other Matters........................................................ 64
Repurchase Obligation................................................ 65
ERISA CONSIDERATIONS....................................................... 65
PLAN OF DISTRIBUTION....................................................... 66
RATINGS.................................................................... 67
LEGAL MATTERS.............................................................. 67
INDEX OF TERMS............................................................. 68
5
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SUMMARY OF PROSPECTUS
The following Summary of Prospectus is qualified in its entirety by
reference to the detailed information appearing elsewhere in this Prospectus and
by reference to the information with respect to the Securities of any series
contained in the related Prospectus Supplement to be prepared and delivered in
connection with the offering of such Securities. Certain capitalized terms used
in this summary are defined elsewhere in this Prospectus on the pages indicated
in the "Index of Terms."
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Issuer........................ The issuer (the "Issuer") with respect to
each series of Securities, shall be the
Trust to be formed pursuant to either a
Trust Agreement (as amended and supplemented
from time to time, a "Trust Agreement")
among the Owner Trustee for such Trust, the
General Partner and the Seller, or a Pooling
and Servicing Agreement (as amended and
supplemented from time to time, the "Pooling
and Servicing Agreement") among the Trustee
for such Trust, the Seller and the Servicer.
Chase Auto Finance............ Chase Manhattan Bank USA, N.A., a national
banking association headquartered in New
York which is a wholly-owned subsidiary of
The Chase Manhattan Corporation (the
"Corporation"), together with its
affiliates, is currently engaged in the
automotive financing and servicing business
and currently originates Motor Vehicle
Loans. In July 1996 The Chase Manhattan
Bank, N.A. ("Chase N.A.") and Chemical Bank,
both wholly-owned subsidiaries of the
Corporation, merged (the "Merger"), with
Chemical Bank continuing as the surviving
corporation under the name "The Chase
Manhattan Bank" ("Chase"). In connection
with the Merger, Chase N.A.'s existing
portfolio of Motor Vehicle Loans was
transferred to Chase USA (New York).
It is expected that Chase USA (New York) and
Chase Manhattan Bank USA, N.A., a national
banking association headquartered in
Delaware which is also a wholly-owned
subsidiary of the Corporation, will merge
with Chase USA (Delaware) continuing as the
surviving entity (the "Chase USA Merger").
The Chase USA Merger is expected to be
completed in December 1996. After the Chase
USA Merger, Chase USA (Delaware) will
originate the Motor Vehicle Loans.
As used in this Prospectus and in any
Prospectus Supplement, the term "Chase Auto
Finance" will be deemed to refer to the
automotive financing and servicing business
of Chase, its predecessors and its
affiliates, and such term will not include
(unless otherwise specified) the automotive
financing and servicing business of Chemical
Bank prior to the Merger, and the term
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"Originating Bank" shall be deemed to
refer to Chase N.A., Chase USA (New York)
or Chase USA (Delaware) in its capacity as
originator of the Motor Vehicle Loans.
Seller........................ Prior to the Chase USA Merger, Chase USA
(New York) and, upon and after the Chase USA
Merger, Chase USA (Delaware). When used
herein or in any Prospectus Supplement, the
terms "Seller" and "Bank" shall be deemed to
refer to Chase USA (New York), prior to the
Chase USA Merger, and Chase USA (Delaware)
upon and after the Chase USA Merger, in such
capacity or individually, respectively. See
"Chase USA (New York) and Chase USA
(Delaware)" herein.
Servicer...................... Prior to the Chase USA Merger, Chase USA
(New York), and upon and after the Chase USA
Merger, Chase USA (Delaware). When used
herein or in any Prospectus Supplement, the
term "Servicer" shall be deemed to refer to
Chase USA (New York), prior to the Chase USA
Merger, and Chase USA (Delaware) after the
Chase USA Merger, in such capacity.
Trustee....................... The entity named as "Trustee" in the related
Prospectus Supplement, which shall include
the "Owner Trustee" with respect to the
Certificates issued pursuant to a Trust
Agreement and the "Trustee" with respect to
Certificates issued pursuant to a Pooling
and Servicing Agreement.
Indenture Trustee............. With respect to Notes issued by a Trust
pursuant to an Indenture, the entity named
as Indenture Trustee in the related
Prospectus Supplement.
Denominations................. Each class of Securities of a series will be
issued in the minimum denominations set
forth in the related Prospectus Supplement.
Each Security will represent a percentage
interest (a "Percentage Interest") in the
Securities of the related class determined
by dividing the original dollar amount (or
Notional Principal Amount, in the case of
Securities entitled to interest only and
assigned a Notional Principal Amount)
represented by such Security by the original
aggregate principal balance of such class
(or original aggregate Notional Principal
Amount, if applicable).
Registration of Securities.... Each or any class of Securities of a series
may be issued in definitive form or may
initially be represented by one or more
certificates ("Book-Entry Securities")
registered in the name of Cede, the nominee
of DTC, and available only in the form of
book-entries on the records of DTC,
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participating members thereof
("Participants") and other entities, such as
banks, brokers, dealers and trust companies,
that clear through or maintain custodial
relationships with a Participant, either
directly or indirectly ("Indirect
Participants"). Securities representing
Book-Entry Securities will be issued in
definitive form only under the limited
circumstances described herein and in the
related Prospectus Supplement. With respect
to the Book-Entry Securities, all references
herein to "holders" or "Securityholders"
shall reflect the rights of owners of the
Book-Entry Securities as they may indirectly
exercise such rights through DTC and
Participants (including CEDEL and
Euroclear), except as otherwise specified
herein. See "Certain Information Regarding
the Securities-Book-Entry Registration" and
"--Definitive Securities" herein.
The Notes..................... A series of Securities may include one or
more classes of Notes, which will be issued
pursuant to an Indenture between the related
Trust and the Indenture Trustee (as amended
and supplemented from time to time, an
"Indenture"). The related Prospectus
Supplement will specify which class or
classes, if any, of Notes of the related
series are being offered thereby.
Unless otherwise specified in the related
Prospectus Supplement, each class of Notes
will have a stated principal amount and will
bear interest at a specified rate or rates
(with respect to each class of Notes, the
"Interest Rate"). Each class of Notes may
have a different Interest Rate, which may be
a fixed, variable or adjustable Interest
Rate, or any combination of the foregoing.
The related Prospectus Supplement will
specify the Interest Rate for each class of
Notes, or the method for determining the
Interest Rate.
With respect to a series that includes two
or more classes of Notes, each class may
differ as to the timing and priority of
payments, seniority, Interest Rate or amount
of payments of principal or interest, and
payments of principal or interest in respect
of any such class or classes may or may not
be made upon the occurrence of specified
events or on the basis of collections from
designated portions of the related
Receivables Pool.
In addition, a series may include one or
more classes of Notes ("Strip Notes")
entitled to (i) principal payments with
disproportionate, nominal or no interest
payments or (ii) interest payments with
disproportionate, nominal or no principal
payments.
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If the Servicer exercises its option to
purchase the Receivables of a Trust (or, if
not, and to the extent provided in the
related Prospectus Supplement, if
satisfactory bids for the purchase of such
Receivables are received), in the manner and
on the respective terms and conditions
described herein under "Description of the
Transfer and Servicing
Agreements--Termination," the outstanding
Notes will be redeemed as set forth in the
related Prospectus Supplement. In addition,
if the related Prospectus Supplement
provides that the property of a Trust will
include a Pre-Funding Account, one or more
classes of the outstanding Notes will be
subject to partial redemption on or
immediately following the end of the related
Funding Period in an amount and manner
specified in the related Prospectus
Supplement. In the event of such partial
redemption, the Noteholders may be entitled
to receive a prepayment premium from the
related Trust, in the amount and to the
extent provided in the related Prospectus
Supplement.
The Certificates.............. A series may include one or more classes of
Certificates and may or may not include any
Notes. The related Prospectus Supplement
will specify which class or classes, if any,
of the Certificates are being offered
thereby.
Unless otherwise specified in the related
Prospectus Supplement, each class of
Certificates will have a stated Certificate
Balance specified in the related Prospectus
Supplement (the "Certificate Balance") and
will accrue interest on such Certificate
Balance at a specified rate (with respect to
each class of Certificates, the "Pass
Through Rate"). Each class of Certificates
may have a different Pass Through Rate,
which may be a fixed, variable or adjustable
Pass Through Rate, or any combination of the
foregoing. The related Prospectus Supplement
will specify the Pass Through Rate for each
class of Certificates or the method for
determining the Pass Through Rate.
With respect to a series that includes two
or more classes of Certificates, each class
may differ as to timing and priority of
distributions, seniority, allocations or
losses, Pass Through Rate or amount of
distributions in respect of principal or
interest and distributions in respect of
principal or interest in respect of any such
class or classes may or may not be made upon
the occurrence of specified events or on the
basis of collections from designated
portions of the Receivables Pool.
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In addition, a series may include one or
more classes of Certificates ("Strip
Certificates") entitled to (i) distributions
in respect of principal with
disproportionate, nominal or no interest
distributions or (ii) interest distributions
with disproportionate, nominal or no
distributions in respect of principal.
If a series of Securities includes classes
of Notes, distributions in respect of the
Certificates may be subordinated in priority
of payment to payments on the Notes to the
extent specified in the related Prospectus
Supplement.
If the Servicer exercises its option to
purchase the Receivables of a Trust (or, if
not, and if and to the extent provided in
the related Prospectus Supplement,
satisfactory bids for the purchase of such
Receivables are received), in the manner and
on the respective terms and conditions
described herein under "Description of the
Transfer and Servicing
Agreements--Termination," Certificateholders
will receive as a prepayment an amount in
respect of the Certificates as specified in
the related Prospectus Supplement. In
addition, if the related Prospectus
Supplement provides that the property of a
Trust will include a Pre-Funding Account,
Certificateholders may receive a partial
prepayment of principal on or immediately
following the end of the related Funding
Period in an amount and manner specified in
the related Prospectus Supplement. In the
event of such partial prepayment, the
Certificateholders may be entitled to
receive a prepayment premium from the
related Trust, in the amount and to the
extent provided in the related Prospectus
Supplement.
The Securities of a series may include one
or more classes of Certificates and may or
may not include one or more classes of
Notes.
The Trust Property............ The property of each Trust will include a
pool of Motor Vehicle Loans, including
rights to receive certain monies due or
received thereunder on or after the related
Cutoff Date, security interests in the
vehicles financed thereby (the "Financed
Vehicles"), amounts on deposit in certain
accounts and the proceeds thereof and any
proceeds from claims on certain related
insurance policies, as described herein and
in the related Prospectus Supplement. On or
before the Closing Date specified in the
related Prospectus Supplement with respect
to a Trust, the Seller will, if so
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specified in such Prospectus Supplement,
sell or transfer Motor Vehicle Loans
(the "Initial Receivables") having
an aggregate principal balance specified
in the related Prospectus Supplement as
of the date specified therein to such
Trust pursuant to either a Sale and
Servicing Agreement among the Seller, the
Servicer and such Trust (as amended and
supplemented from time to time, the "Sale
and Servicing Agreement") or, if such Trust
is not issuing Notes, the related Pooling
and Servicing Agreement. The property of
each Trust will also include amounts on
deposit in certain trust accounts, including
any Collection Account, Cash Collateral
Account, Pre-Funding Account, Reserve
Account, Yield Supplement Account, Payahead
Account and any other account identified in
the related Prospectus Supplement.
To the extent provided in the related
Prospectus Supplement, from time to time
during the funding period specified in the
related Prospectus Supplement (the "Funding
Period"), the Seller will be obligated
(subject only to the availability thereof)
to sell, and the related Trust will be
obligated to purchase (subject to the
satisfaction of certain conditions described
in the applicable Sale and Servicing
Agreement or Pooling and Servicing
Agreement), additional Motor Vehicle Loans
(the "Subsequent Receivables") and the
related property having an aggregate
principal balance approximately equal to the
amount (the "Pre-Funding Amount") on deposit
in the related account (the "Pre-Funding
Account") on the related Closing Date.
The Motor Vehicle Loans are motor vehicle
retail installment sales contracts relating
to new or used automobiles and light-duty
trucks purchased from Dealers who regularly
originate and sell such contracts to the
Originating Banks pursuant to Assignments.
Motor Vehicle Loans also include purchase
money loans secured by financed vehicles
made by the Originating Banks directly or
pursuant to arrangements with Dealers in
accordance with approved Dealer agreements.
The Receivables in any given Receivables
Pool will be selected from the Motor Vehicle
Loans owned or to be owned by the Seller
based on the criteria set forth in the
related Sale and Servicing Agreement or
Pooling and Servicing Agreement, as
applicable, and described herein and in the
related Prospectus Supplement.
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Credit and Cash
Flow Enhancement.............. If and to the extent specified in the
related Prospectus Supplement, credit
enhancement with respect to a Trust or any
class or classes of Securities may include
any one or more of the following:
subordination of one or more other classes
of Securities, a Cash Collateral Guaranty
secured by a Cash Collateral Account, a
Reserve Account, Yield Supplement Agreements
or Accounts, over-collateralization, letters
of credit, credit or liquidity facilities,
surety bonds, guaranteed investment
contracts, swaps or other interest rate
protection agreements, repurchase
obligations, other agreements with respect
to third party payments or other support,
cash deposits or other arrangements. The
amount of any credit enhancement may be
limited or have exclusions from coverage and
may decline over time or under certain
circumstances, all as specified in the
related Prospectus Supplement. See
"Description of the Transfer and Servicing
Agreements--Credit and Cash Flow
Enhancement" herein.
Cash Collateral Guaranty. If specified in
the related Prospectus Supplement with
respect to any Trust classified as a grantor
trust, the related Trustee will have the
right to demand payments under a Cash
Collateral Guaranty under certain
circumstances as described herein and in the
related Prospectus Supplement. Each Cash
Collateral Guaranty will be secured by a
Cash Collateral Account, which will be held
in the name of a Cash Collateral Trustee, as
specified in the related Prospectus
Supplement. The related Prospectus
Supplement will specify whether the Cash
Collateral Account will be funded on the
date of issuance of the related series of
Securities solely from the proceeds of a
loan to be made by a cash collateral
depositor (the "Cash Collateral Depositor")
pursuant to a Loan Agreement, from a deposit
by the Seller, or by a combination thereof.
To the extent specified in the related
Prospectus Supplement, funds in the related
Cash Collateral Account will thereafter be
supplemented by the deposit of amounts
remaining on any Distribution Date after
making all other distributions required on
such date. Amounts drawn under the Cash
Collateral Guaranty will be available to
cover shortfalls in amounts due to the
holders of those classes of Securities
specified in the related Prospectus
Supplement in the manner and under the
circumstances specified therein. The related
Prospectus Supplement will also specify to
whom and the manner and circumstances under
which amounts on deposit in the Cash
Collateral Account (after giving effect to
all required distributions to be made by the
related Trust) in excess of
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the Required Cash Collateral Amount (as
defined in the related Prospectus
Supplement) will be distributed.
Reserve Account. If specified in the related
Prospectus Supplement with respect to any
Trust not classified as a grantor trust, a
Reserve Account will be funded on the date
of issuance of the related series of
Securities, and if the related series has a
Funding Period, will also be funded on each
Subsequent Transfer Date. The related
Prospectus Supplement will specify whether
the Reserve Account will be funded solely
from the proceeds of a loan or loans to be
made by a Cash Collateral Depositor pursuant
to a Loan Agreement, from a deposit or
deposits by the Seller, or by a combination
thereof. To the extent specified in the
related Prospectus Supplement, funds in the
related Reserve Account will thereafter be
supplemented by the deposit of amounts
remaining on any Distribution Date or
Payment Date after making all other
distributions required on such date. Amounts
in a Reserve Account will be available to
cover shortfalls in amounts due to the
holders of those classes of Securities
specified in the related Prospectus
Supplement in the manner and under the
circumstances specified therein. The related
Prospectus Supplement will also specify to
whom and the manner and circumstances under
which amounts on deposit in the related
Reserve Account (after giving effect to all
required distributions to be made by the
related Trust) in excess of the Specified
Reserve Account Balance (as defined in the
related Prospectus Supplement) will be
distributed.
Demands under a Cash Collateral Guaranty
will be funded solely from amounts, if any,
on deposit in the related Cash Collateral
Account. If the amount deposited in such
Cash Collateral Account or in any Reserve
Account is reduced to zero, the related
Securityholders will bear directly the
credit and other risks associated with
ownership of the related Receivables.
Yield Supplement Account; Yield Supplement
Agreement. If specified in the related
Prospectus Supplement, the Seller, the
General Partner or a third party will enter
into a yield supplement agreement (as
amended and supplemented from time to time,
a "Yield Supplement Agreement") and/or
establish a yield supplement account (a
"Yield Supplement Account") with the related
Indenture Trustee or related Trustee for the
benefit of the holders of the related
Securities. A Yield Supplement Agreement or
a Yield Supplement Account will be designed
to provide payments to the
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Securityholders in respect of Receivables
the Contract Rate of which is less
than the Required Rate (as such term
is defined in the related Prospectus
Supplement, the "Required Rate"). A
Yield Supplement Account may be an asset
of the obligor under the related Yield
Supplement Agreement holding funds to secure
the obligation of such obligor to make
payments under such Yield Supplement
Agreement or, in the case of a Trust that is
not classified as a grantor trust, may be an
asset of the Trust from which cash may
periodically be withdrawn to provide
payments to the Securityholders.
Transfer and
Servicing Agreements.......... With respect to each Trust, the Seller will
assign to such Trust, without recourse, the
Seller's entire interest in the related
Receivables pursuant to a Sale and Servicing
Agreement or a Pooling and Servicing
Agreement. The rights and benefits of any
Trust under a Sale and Servicing Agreement
will be assigned to the related Indenture
Trustee as collateral for the Notes of the
related series. The Servicer will agree with
respect to each Trust to be responsible for
servicing, managing, maintaining custody of
and making collections on the Receivables.
Unless otherwise provided in the related
Prospectus Supplement, the Seller will be
obligated to repurchase any Receivable if
(a) such Receivable does not meet any of the
criteria set forth in the related Sale and
Servicing Agreement or Pooling and Servicing
Agreement, as applicable, and (b) such
failure materially and adversely affects the
interests of the holders of the related
series of Securities in such Receivable,
unless the Seller has cured the failure to
meet the related criterion following the
discovery by or notice to the Seller of such
failure. See "Description of the Transfer
and Servicing Agreements--Sale and
Assignment of Receivables" herein.
Unless otherwise provided and to the extent
set forth in the related Prospectus
Supplement, the Servicer will be entitled to
receive a fee for servicing the Receivables
of each Trust equal to a specified
percentage of the aggregate principal
balance of the related Receivables Pool plus
any Late Fees collected from Obligors during
the related Collection Period. In addition,
to the extent set forth in the related
Prospectus Supplement, the Servicing Fee
will also include investment earnings on
amounts on deposit in the Trust Accounts.
See "Description of the Transfer and
Servicing Agreements--Servicing Compensation
and
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Payment of Expenses" herein and the
corresponding section in the related
Prospectus Supplement.
Advances...................... If the Pooling and Servicing Agreement or
Sale and Servicing Agreement, as applicable,
related to any series provides that the
Servicer may or is required to make advances
with respect to due and unpaid amounts with
respect to the Receivables, the related
Prospectus Supplement shall specify the
terms and conditions pursuant to which such
Advances may or are required to be made.
Tax Status.................... Unless the Prospectus Supplement specifies
that the related Trust will be classified as
a grantor trust and, except as otherwise
provided in such Prospectus Supplement, upon
the issuance of the related series of
Securities, Simpson Thacher & Bartlett,
special counsel to the Seller ("Federal Tax
Counsel"), will deliver an opinion to the
effect that, for federal income tax
purposes: (i) any Notes of such series will
be treated as debt and (ii) such Trust will
not be characterized as an association (or a
publicly traded partnership) taxable as a
corporation. Alternative characterizations
of such Trust and such Certificates are
possible, but would not result in materially
adverse tax consequences to
Certificateholders.
If the Prospectus Supplement specifies that
the related Trust will be classified as a
grantor trust and except as otherwise
provided in such Prospectus Supplement, upon
the issuance of the related series of
Certificates, Federal Tax Counsel will
deliver an opinion to the effect that such
Trust will be treated as a grantor trust for
federal income tax purposes and not as an
association (or other entity) taxable as a
corporation.
Each such opinion of Federal Tax Counsel
referred to in the preceding two paragraphs
will be filed with the Commission as an
Exhibit to a Current Report filed on Form
8-K.
Investors should consult their own tax
advisors to determine the federal, state,
local and other tax consequences of the
purchase, ownership and disposition of
Securities of any series. See "Certain
Federal Income Tax Consequences" and
"Certain State Tax Consequences" in the
related Prospectus Supplement.
ERISA Considerations.......... A fiduciary of any employee benefit plan or
other retirement arrangement subject to
ERISA or Section 4975
15
</TABLE>
<PAGE>
<TABLE>
<S> <C>
of the Code should carefully review
with its legal advisors whether
the purchase or holding of any class
of Securities could give rise to a
transaction prohibited or not otherwise
permissible under ERISA or the Code. Certain
classes of Securities may not be acquired
by any employee benefit plan or
other retirement arrangement subject
to ERISA, as specified in the related
Prospectus Supplement. See "ERISA
Considerations" herein and in the related
Prospectus Supplement.
Ratings of the Securities..... Each Prospectus Supplement will specify the
ratings upon which the issuance of each
series of Securities will be conditioned.
See "Ratings" herein.
</TABLE>
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RISK FACTORS
Certain Legal Aspects
In connection with each sale of Receivables to a Trust, the Seller will
assign its security interest in each individual Financed Vehicle to such Trust.
However, due to administrative burden and expense, neither the Seller nor the
related Trustee will amend the certificates of title to the Financed Vehicles to
identify the Trust or any related Indenture Trustee as the new secured party. In
addition, with respect to any security interests in Financed Vehicles acquired
by Chase N.A. from an affiliated entity, by Chase USA (New York) in connection
with the Merger or by Chase USA (Delaware) as successor-in-interest to Chase USA
(New York) or any related Indenture Trustee the related certificates of title to
such Financed Vehicles will not be amended to identify the Seller as new secured
party before assignment to any Trust. In most states, such assignment is an
effective conveyance of such security interest without amendment of any lien
noted on the related certificates of title, and the new secured party succeeds
to the Originating Bank's rights as the secured party as against creditors of
the Obligor. In certain states, in the absence of such amendment and delivery,
the Seller, the related Trust and/or any related Indenture Trustee may not have
a perfected security interest in the related Financed Vehicle. Unless otherwise
specified in the related Prospectus Supplement, the Seller will be obligated to
repurchase any Receivable sold to a Trust as to which the Seller has represented
that it has a first perfected security interest in the Financed Vehicle securing
such Receivable, if a breach of such representation shall materially adversely
affect the interest of the related Securityholders in such Receivable and if a
breach of such representation shall not have been cured. If such Trust does not
have a perfected security interest in a Financed Vehicle, the only recourse of
such Trust vis-a-vis third parties would be against the related Obligor on an
unsecured basis or against the Seller pursuant to its repurchase obligation.
If a Trust does not have a perfected security interest in a Financed
Vehicle, its ability to realize on such Financed Vehicle in the event of a
default may be adversely affected. To the extent the security interest is
perfected, such Trust will have a prior claim over subsequent purchasers of such
Financed Vehicles and holders of subsequently perfected security interests.
However, under the laws of many states, certain possessory liens for repairs and
storage, as well as certain rights in favor of federal and state governmental
authorities arising from the use of a motor vehicle in connection with illegal
activities, may take priority even over a perfected security interest. Certain
federal tax liens may have priority over the lien of a secured party. In
addition, through fraud or negligence, a Trust could lose the priority of its
security interest or its security interest in a Financed Vehicle. Neither the
Seller nor the Servicer will have an obligation to repurchase a Receivable as to
which any of the aforementioned occurrences result in such Trust's losing the
priority of its security interest or its security interest in such Financed
Vehicle after the date such security interest was conveyed to such Trust (other
than through fraud or negligence of the Seller or the Servicer).
The Seller intends that each transfer of Receivables by it to a Trust
under a Sale and Servicing Agreement or a Pooling and Servicing Agreement
constitutes a sale. In the event that the Seller were to become insolvent, the
Federal Deposit Insurance Act ("FDIA"), as amended by the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), sets forth certain
powers that the FDIC may exercise if it were appointed receiver of such Seller.
To the extent that the Seller has granted a security interest in the Receivables
to a Trust and that interest was validly perfected before the Seller's
insolvency and was not taken in contemplation of insolvency or with the intent
to hinder, delay or defraud the Seller or its creditors, that security interest
would not be subject to avoidance by the FDIC as receiver of the Seller.
Positions taken by the FDIC staff prior to the passage of FIRREA do not suggest
that the FDIC, if appointed receiver of the Seller, would interfere with the
timely transfer to the Trust of payments collected on the related Receivables.
If, however, the FDIC were to assert a contrary position, or were
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to require the Trustee to establish its rights to those payments by submitting
to and completing the administrative claims procedure established under the
FDIA, or the conservator or receiver were to request a stay of proceedings with
respect to the Seller as provided under the FDIA, delays in payments on the
related Securities and possible reductions in the amount of those payments could
occur.
With respect to any Trust issuing Notes, if an Insolvency Event occurs
with respect to the party identified as the general partner of such Trust in the
related Prospectus Supplement (the "General Partner"), the Owner Trustee for
such Trust will promptly sell the assets of such Trust (other than any Trust
Accounts) in a commercially reasonable manner and on commercially reasonable
terms, unless the holders of Notes of each class issued by such Trust
representing more than 50% of the aggregate principal balance of such Notes
(other than the General Partner), the holders of Certificates issued by such
Trust representing more than 50% of the aggregate Certificate Balance for such
Trust (other than the General Partner) and the holders of interests in any
Reserve Account or other enhancement account (other than the General Partner)
having interests with a value in excess of 50% of all interests in such
enhancement account held by such persons direct otherwise. In addition, if an
Event of Default occurs, the Indenture Trustee or the holders of not less than a
majority of the aggregate principal amount of all the Notes may declare the
principal of the Notes to be immediately due and payable, and, if the Notes have
been accelerated, the Indenture Trustee may institute or be required to
institute proceedings to collect amounts due or exercise its remedies as a
secured party (including foreclosure or sale of the Receivables).
The proceeds from any such sale will be treated as collections on the
Receivables and deposited in the Collection Account of such Trust. If the
proceeds from the sale of the trust assets and any amounts on deposit in any
related Trust Account and any amounts available from any credit enhancement are
not sufficient to pay any Notes and the Certificates of the related series in
full, the amount of principal returned to Noteholders and Certificateholders
will be reduced and some or all of such Noteholders and Certificateholders will
incur a loss. Because neither interest nor principal is distributed to
Certificateholders upon a sale of the Receivables following an Event of Default
and acceleration of the Notes under the Indenture or following an Insolvency
Event with respect to the General Partner until all the Notes have been paid in
full, the interests of Noteholders and the Certificateholders may conflict, and
the exercise by the Indenture Trustee of its right to sell the Receivables or
exercise other remedies under the Indenture and applicable law may cause the
Certificateholders to suffer a loss of all or part of their investment. See
"Description of the Notes--The Indenture--Events of Default; Rights upon Event
of Default" and "Description of the Transfer and Servicing
Agreements--Insolvency Event" herein.
Trust's Relationship to the Seller, the Servicer and their Affiliates
None of the Seller, the Servicer or their affiliates is generally
obligated to make any payments in respect of any Notes, the Certificates or the
Receivables of a given Trust.
However, in connection with the sale of Receivables by the Seller to a
given Trust, the Seller will make representations and warranties with respect to
the characteristics of such Receivables and, in certain circumstances, the
Seller may be required to repurchase Receivables with respect to which such
representations and warranties have been breached. See "Description of the
Transfer and Servicing Agreements--Sale and Assignment of Receivables" herein.
In addition, under certain circumstances, the Servicer may be required to
purchase Receivables. See "Description of the Transfer and Servicing
Agreements--Servicing Procedures" herein. Moreover, if the Bank were to cease
acting as the Servicer, delays in processing payments on the Receivables and
information in respect thereof could occur and result in delays in payments to
the Securityholders.
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Subordination; Limited Assets
To the extent specified in the related Prospectus Supplement,
distributions of interest and principal on one or more classes of Certificates
of a series may be subordinated in priority of payment to interest and principal
due on the Notes, if any, of such series or one or more other classes of
Certificates of such series. Moreover, each Trust will not have, nor is it
permitted or expected to have, any significant assets or sources of funds other
than the Receivables and, to the extent provided in the related Prospectus
Supplement, a Pre-Funding Account, a Reserve Account, a Cash Collateral
Guaranty, a Yield Supplement Agreement, a Yield Supplement Account and any other
credit enhancement. The Notes of any series will represent obligations solely
of, and the Certificates of any series will represent interests solely in, the
related Trust and neither the Notes nor the Certificates of any series will be
insured or guaranteed by the Seller, the Servicer, any Trustee, any Indenture
Trustee, any of their affiliates or any other person or entity. Consequently,
holders of the Securities of any series must rely for repayment upon payments on
the related Receivables and, if and to the extent available, amounts available
under the Cash Collateral Guaranty (if any), the Yield Supplement Agreement (if
any), amounts on deposit in the Pre-Funding Account (if any), the Yield
Supplement Account (if any) and the Reserve Account (if any) and any other
credit enhancement, all as specified in the related Prospect Supplement.
If the protection provided to any Noteholders of a given series by the
subordination of the related Certificates, if any, and by any Reserve Account,
Cash Collateral Guaranty, Yield Supplement Agreement, Yield Supplement Account
or other credit enhancement for such series or the protection provided to
Certificateholders by any such Reserve Account, Cash Collateral Guaranty, Yield
Supplement Agreement, Yield Supplement Account or other credit enhancement is
insufficient, such Securityholders would have to look principally to the
Obligors on the related Receivables and the proceeds from the repossession and
sale of Financed Vehicles that secure Defaulted Receivables. In such event,
certain factors, such as the applicable Trust not having perfected security
interests in the Financed Vehicles in all states, may affect the Servicer's
ability to repossess and sell the collateral securing the Receivables, and thus
may reduce the proceeds to be distributed to the holders of the Securities of
such series. See "Description of the Transfer and Servicing
Agreements--Distributions," "--Credit and Cash Flow Enhancement" and "Certain
Legal Aspects of the Receivables" herein.
Maturity and Prepayment Considerations
The weighted average life of the Notes, if any, and the Certificates of
any series will generally be influenced by the rate at which the principal
balances of the related Receivables are paid, which payment may be in the form
of scheduled amortization or prepayments. The Receivables are prepayable by the
Obligors at any time. If a Prospectus Supplement provides that the property of
the related Trust will include a Pre-Funding Account, the related Securities
will be subject to partial redemption on or immediately following the end of the
Funding Period in an amount and in the manner specified in the related
Prospectus Supplement. If provided in any Prospectus Supplement, prepayments may
also result from demands under any Cash Collateral Guaranty, Reserve Account or
other enhancement related to such series with respect to Defaulted Receivables.
See "Description of the Transfer and Servicing Agreements--Sale and Assignment
of Receivables." Any reinvestment risks resulting from a faster or slower
incidence of prepayment of Receivables held by a given Trust will be borne
entirely by the Securityholders of the related series of Securities. See also
"Description of the Transfer and Servicing Agreements--Termination" regarding
the Servicer's option to purchase the Receivables of a given Receivables Pool
and "--Insolvency Event" regarding the sale of the Receivables owned by a Trust
that issues Notes if an Insolvency Event with respect to the General Partner
occurs.
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In addition, Chase Auto Finance may, on a case-by-case basis, permit
extensions with respect to the Due Dates of payments on Motor Vehicle Loans in
accordance with its normal and customary servicing practices and procedures. See
"Pooling and Servicing Agreement--Servicing Procedures" or "Description of the
Transfer and Servicing Agreements--Servicing Procedures" in the related
Prospectus Supplement. Any such deferrals or extensions may increase the
weighted average life of the related Securities. However, the Servicer will not
be permitted to grant any such deferral or extension if as a result the final
scheduled payment on a Receivable would fall after the Final Scheduled
Distribution Date or Final Scheduled Maturity Date, as applicable , unless the
Servicer repurchases the affected Receivable.
Risk of Commingling
With respect to each Trust, the Servicer will deposit all payments on the
related Receivables (from whatever source) and all proceeds of such Receivables
collected during each Collection Period into the Collection Account of such
Trust. For so long as the Seller is the Servicer and the Seller satisfies
certain requirements for making deposits less frequently than daily, the
Servicer will not be required to deposit such amounts in the Collection Account
of such Trust until on or before the related Deposit Date. Pending deposit into
such Collection Account, collections may be invested by the Servicer at its own
risk and for its own benefit and will not be segregated from funds of the
Servicer. If the Servicer were unable to remit such funds, the applicable
Securityholders might incur a loss. To the extent set forth in the related
Prospectus Supplement, the Servicer may, in order to satisfy the requirements
referred to herein, obtain a letter of credit or other security for the benefit
of the related Trust to secure timely remittances of collections on the related
Receivables and payment of the aggregate Purchase Amount with respect to
Receivables purchased by the Servicer.
Risk Associated with Subsequent Receivables and the Pre-Funding Account
If so specified in the related Prospectus Supplement, the Seller will be
obligated to sell, and the related Trust will be obligated to purchase,
Subsequent Receivables from time to time during the Funding Period specified in
the related Prospectus Supplement. The ability of the Seller to generate
Subsequent Receivables to be conveyed to such Trust will affect the amount on
deposit in the related Pre-Funding Account which is not applied to the
conveyance of Subsequent Receivables during the Funding Period. Amounts on
deposit in any Pre-Funding Account may be invested only in Permitted
Investments. Subsequent Receivables may be originated by the Dealers at a later
date using credit criteria different from those which were applied to any
Initial Receivables and may be of a different credit quality and seasoning. In
addition, following the transfer of Subsequent Receivables to the applicable
Trust, the characteristics of the entire pool of Receivables included in such
Trust may vary from those of the Initial Receivables transferred to such Trust.
As a result, it is possible that the credit quality of the Receivables in a
Trust, as a whole, may decline as a result of the inclusion of Subsequent
Receivables and may result in a higher rate of payment to the applicable
Securityholders as a result of an increased level of defaults on such
Receivables. Securityholders will bear all reinvestment risk associated with a
higher than expected rate of payment on the Securities. In addition, a higher
than expected rate of payment may result in a reduction in the yield to maturity
of any class of Securities to which such payments are distributed. To the extent
that amounts on deposit in the Pre-Funding Account have not been fully applied
to the conveyance of Subsequent Receivables to a Trust by the end of the Funding
Period and such amount exceeds the applicable amount described in the related
Prospectus Supplement, the holders of Securities issued by the related Trust
will receive, on the Distribution Date or Payment Date on or immediately
following the last day of the applicable Funding Period, a prepayment of
principal in an amount equal to the amount remaining in the Pre-Funding Account
following the purchase of any Subsequent Receivables on or immediately preceding
such Distribution Date or Payment Date. It is anticipated that the principal
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balance of Subsequent Receivables sold to a Trust will not be exactly
equal to the amount on deposit in the Pre-Funding Account, and that
therefore there will be at least a nominal amount of principal prepaid
to the holders of the Securities issued by such Trust. Holders of Securities
issued by such Trust will bear the reinvestment risk associated with any such
distribution of amounts on deposit in the Pre-Funding Account after the
termination of the applicable Funding Period. Any such distribution will have
the effect of a prepayment on the related Receivables and may result in a
reduction in the yield to maturity of any class of Securities to which such
amounts are distributed.
Rights of Noteholders and Certificateholders
In general, with respect to any Trust issuing Notes, the holders of
Certificates issued by such Trust may direct the related Trustee in the
administration of the Trust. However, because the Trust will pledge the Trust
property to the Indenture Trustee to secure the payment of the Notes issued by
such Trust, including in such pledge the rights of the Trust under the related
Sale and Servicing Agreement, the related Indenture Trustee and not the
Certificateholders will have the power to direct the Trust to take certain
actions in connection with the administration of the Trust property until the
Notes have been paid in full and the lien of the Indenture has been released. In
addition, the Certificateholders will not be allowed to direct the related
Trustee to take any action which conflicts with the provisions of any of the
related Transfer and Servicing Agreements. Each Indenture will specifically
prohibit the related Trustee from taking any action which would impair the
related Indenture Trustee's security interest in the related Trust property and
will require the related Trustee to obtain the consent of the related Indenture
Trustee or the holders of not less than a majority of the aggregate principal
amount of the Notes issued by such Trust before modifying, amending,
supplementing, waiving or terminating any related Transfer and Servicing
Agreement or any provision of any related Transfer and Servicing Agreement.
Therefore, until a series of Notes have been paid in full, the ability to direct
the related Trust with respect to certain actions permitted to be taken under
the related Transfer and Servicing Agreements rests with the related Indenture
Trustee and the Noteholders instead of the Certificateholders.
THE TRUSTS
With respect to each series of Securities, the Seller will establish a
separate Trust pursuant to a Trust Agreement or a Pooling and Servicing
Agreement, as applicable, for the purpose of conducting the activities described
herein and in the related Prospectus Supplement. The property of each Trust will
include (i) a pool (a "Receivables Pool") of Motor Vehicle Loans and all
payments due or received thereunder (the "Receivables") from the related
obligors (the "Obligors") on and after the related Cutoff Date specified in the
related Prospectus Supplement (a "Cutoff Date"), (ii) such amounts as from time
to time may be held in separate trust accounts established and maintained
pursuant to the related Sale and Servicing Agreement or Pooling and Servicing
Agreement and the proceeds of such accounts, as described herein and in the
related Prospectus Supplement; (iii) security interests in the Financed
Vehicles; (iv) the rights to proceeds as a result of the Seller's exercise of
its recourse rights against Dealers (as described herein under "The Receivables
Pools--Origination and Servicing of the Motor Vehicle Loans"); (v) an assignment
of the rights of the Seller to receive proceeds from claims on theft and
physical damage, credit life and credit disability insurance policies covering
the Financed Vehicles or the Obligors, as the case may be, to the extent that
such insurance policies relate to the Receivables; (vi) the rights with respect
to any Financed Vehicle that has been repossessed by the Servicer on behalf of
the related Trust; and (vii) any and all proceeds of the foregoing. To the
extent specified in the related Prospectus Supplement, a Pre-Funding Account,
Cash Collateral Guaranty, Cash Collateral Account, Reserve Account, Yield
Supplement Agreement, Yield Supplement Account or other form of credit
enhancement may be a part
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of the property of any given Trust or may not be included in the property
of the Trust but be held by another trust or a trustee for the benefit of
holders of the related Securities.
On or before the related Closing Date, the Seller will sell the Initial
Receivables of the related Receivables Pool to the related Trust to the extent,
if any, specified in the related Prospectus Supplement. To the extent so
provided in the related Prospectus Supplement, Subsequent Receivables will be
conveyed to the related Trust as frequently as daily during the Funding Period.
Any Subsequent Receivables so conveyed will also be assets of the related Trust,
subject to the prior rights of the related Indenture Trustee and the
Noteholders, if any, therein.
The principal offices of each Trust and related Trustee will be specified
in the related Prospectus Supplement.
THE RECEIVABLES POOLS
General
As described herein, Chase USA (New York), together with its affiliates,
is currently engaged in the automotive financing and servicing business. In
connection with the Merger, Chase N.A.'s portfolio of Motor Vehicle Loans was
transferred to Chase USA (New York), and following the Chase USA Merger, Chase
USA (New York)'s portfolio of Motor Vehicle Loans will be owned by Chase USA
(Delaware). As used in this Prospectus and in any Prospectus Supplement, the
term "Chase Auto Finance" will be deemed to refer to the automotive financing
and servicing business of Chase, its predecessors and its affiliates, and such
term shall not include (unless otherwise specified) the automotive financing and
servicing business of Chemical Bank prior to the Merger, and the term
"Originating Bank" shall be deemed to refer to Chase N.A., Chase USA (New York)
and Chase USA (Delaware) in its capacity as originator of the Motor Vehicle
Loans.
The Receivables to be held by each Trust will be selected from the
portfolio of Motor Vehicle Loans owned by the Seller for inclusion in a
Receivables Pool. Selection will be based upon several criteria, including that,
unless otherwise provided in the related Prospectus Supplement, each Receivable
(i) was acquired from or made through a Dealer located in the United States,
(ii) is secured by a Financed Vehicle that, as of the related Cutoff Date, that
had not be repossessed without reinstatement, (iii) has not been identified on
the computer files of the Seller as relating to an Obligor who was in a
bankruptcy proceeding as of the related Cutoff Date, (iv) (if not a Final
Payment Receivable) provides for fully amortizing level scheduled monthly
payments (except for the last payment, which may be different from the level
payments) and for accrual of interest at a fixed rate (the "Contract Rate")
according to the simple interest or actuarial method, (v) is a Actuarial
Receivable or a Simple Interest Receivable (either of which may be a Final
Payment Receivable), (vi) had not been paid more than three months in advance as
of the related Cutoff Date, (vii) is secured by a Financed Vehicle that was not
insured by force placed insurance, nor on which Chase Auto Finance had purchased
coverage commonly known as vendor's single interest and non-filing insurance and
(viii) satisfies the other criteria, if any, set forth in the related Prospectus
Supplement. The Seller will not use any selection procedures that it believes to
be materially adverse to the Securityholders of any series in selecting the
related Receivables.
"Simple Interest Receivables" provide for the allocation of payments made
thereunder to principal and interest in accordance with the "simple interest"
method. As payments are received under a Simple Interest Receivable, the finance
charges accrued to date are paid first, the unpaid amount financed (to the
extent of the remaining monthly scheduled payment) is paid second and the
remaining payment is applied to the unpaid late charges. Accordingly, if an
Obligor pays the fixed monthly installment in advance of the date on which a
payment is due (the "Due Date"), the portion of the payment allocable to finance
charges for the period since the preceding payment will be less than it would be
if the payment were made
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on the Due Date, and the portion of the payment allocable to reduce the amount
financed will be correspondingly greater. Conversely, if the Obligor pays the
fixed monthly installment after its Due Date, the portion of the payment
allocable to finance charges for the period since the last payment will be
greater than it would be if the payment were made on the Due Date, and the
portion of the payment allocable to reduce the amount financed will be
correspondingly smaller. When necessary, an adjustment is made at the maturity
of the loan to the scheduled final payment to reflect the larger or smaller, as
the case may be, allocations of payments to the amount financed under a Simple
Interest Receivable as a result of early or late payments, as the case may be.
"Actuarial Receivables" provide for amortization of the loan over a series
of fixed level payment monthly installments. Each monthly installment, including
the monthly installment representing the final payment on the Receivable,
consists of an amount of interest equal to 1/12th of the annual contract rate of
interest on the loan multiplied by the unpaid principal balance of the loan, and
an amount of principal equal to the remainder of the monthly payment.
"Final Payment Receivables" are either Actuarial Receivables or Simple
Interest Receivables which provide for a final scheduled payment which is
greater than the scheduled monthly payments. A Final Payment Receivable provides
for amortization of the loan over a series of fixed level payment monthly
installments like an Actuarial Receivable or a Simple Interest Receivable, but
also requires a final scheduled payment due after payment of such monthly
installments which may be satisfied by (i) payment in full in cash of such
amount, (ii) transfer of the financed vehicle to the Seller provided certain
conditions are satisfied or (iii) refinancing the final scheduled payment in
accordance with certain conditions. With respect to any Final Payment
Receivables included in a Trust, only the principal and interest payments due
prior to the final scheduled payments and not the final scheduled payment will
be included in such Trust; the final scheduled payment will be retained by the
Seller. However, in the case of a Trust that is not classified as a grantor
trust, the Seller will have the option to transfer the final scheduled payments
with respect to the related Final Payment Receivables retained by the Seller to
such Trust and to cause such Trust to issue certificates representing interests
in such final scheduled payments or indebtedness secured by such final scheduled
payments.
All of the Receivables will be prepayable at any time without penalty to
the Obligor and will contain due on sale provisions. If a Simple Interest
Receivable is prepaid, the obligor is required to pay interest only to the date
of prepayment, rather than receive a rebate. If an Actuarial Receivable is
prepaid in full, with minor variations based upon state law, the Actuarial
Receivable requires that the rebate be calculated on the basis of a constant
interest rate.
In the case of the liquidation of a Receivable or repossession of a
Financed Vehicle, amounts recovered will be applied in accordance with Chase
Auto Finance's normal and customary servicing practices and procedures. Chase
Auto Finance reserves the right to change its policy with respect to the
application of amounts recovered from a liquidated Receivable or a repossessed
Financed Vehicle.
Information with respect to each Receivables Pool will be set forth in the
related Prospectus Supplement, including, to the extent appropriate, the
composition of the Receivables, the distribution by annual contract rate of
interest and by the states of origination of the Receivables, the portion of
such Receivables Pool consisting of Actuarial Receivables and of Simple Interest
Receivables (and the portion thereof consisting of Final Payment Receivables)
and the portion of such Receivables Pool secured by new vehicles and by used
vehicles.
If the related Prospectus Supplement provides for a Pre-Funding Account,
each Subsequent Receivable of the related Trust must satisfy the eligibility
criteria specified in the related Pooling and
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Servicing Agreement or Sale and Servicing Agreement at the time of its addition.
However, except for such criteria, there will be no required characteristics of
such Subsequent Receivables. Therefore, following the transfer of Subsequent
Receivables to the related Trust, the characteristics of the entire related
Receivables Pool included in such Trust may vary from those of the Initial
Receivables.
Subsequent Receivables may be originated by the Dealers at a later date
using credit criteria different from those which were applied to any Initial
Receivables and may be of a different credit quality and seasoning. In addition,
following the transfer of Subsequent Receivables to the applicable Trust, the
characteristics of the entire pool of Receivables included in such Trust may
vary from those of the Initial Receivables transferred to such Trust. See "Risk
Factors--Risks Associated with Subsequent Receivables and the Pre-Funding
Account." If the Prospectus Supplement provides for a Pre-Funding Account, the
Prospectus Supplement will also describe the effects including Subsequent
Receivables may have on the Receivables Pool included in the related Trust. If a
Trust includes Subsequent Receivables, regular periodic reports regarding the
Subsequent Receivables will be included under Item 5 in each Current Report
filed by or on behalf of such Trust on Form 8-K with the Commission pursuant to
the Exchange Act.
Delinquency and Loan Loss Information
Certain information concerning the delinquencies, loan losses and
recoveries for the portfolio of indirect motor vehicle retail installment sales
contracts and purchase money loans ("Motor Vehicle Loans") owned or serviced by
Chase Auto Finance (the "Chase Auto Finance Portfolio") as of the dates and for
the periods set forth in the related Prospectus Supplement will be set forth
therein. There can be no assurance that the delinquency and net loss experience
on any Receivables Pool will be comparable to prior experience or to such
information.
Pursuant to a merger, as of January 1, 1993, Chase N.A. commenced
servicing Motor Vehicle Loans originated by Chase N.A.'s affiliate, Chase
Lincoln First Bank, National Association ("Chase Lincoln Bank"). The Motor
Vehicle Loans included in a Trust will not include loans originated by Chase
Lincoln Bank (collectively, "Chase Lincoln Loans") but the delinquency and loan
loss experience with respect to the Chase Auto Finance Portfolio (the "Portfolio
Experience") presented in the related Prospectus Supplement will include data
with respect to Chase Lincoln Loans. The Seller believes, however, that the
delinquency and loan loss experience of the Chase Lincoln Loans will not be
materially different from the Portfolio Experience set forth in the related
Prospectus Supplement.
From February 1993 through April 1995, Chase N.A. or Chase N.A.'s
affiliates serviced Motor Vehicle Loans for The Chase Manhattan Bank of
Connecticut, National Association ("Chase Connecticut Bank"), which loans
(collectively, "Chase Connecticut Loans") were originated using materially the
same Dealer Agreements, underwriting criteria and servicing standards as those
for Chase Auto Finance's Motor Vehicle Loans. As of May 1, 1995, Chase
Connecticut Bank was merged into Chase N.A. The Motor Vehicle Loans included in
a Trust will not include Chase Connecticut Loans, but the Portfolio Experience
presented in the related Prospectus Supplement will include data with respect to
Chase Connecticut Loans for December 31, 1993 and thereafter. The Seller
believes, however, that the delinquency and loan loss experience for Chase
Connecticut Loans will not be materially different from the Portfolio Experience
set forth in the related Prospectus Supplement.
On December 1, 1995, Chase N.A. purchased substantially the entire Motor
Vehicle Loan portfolio originated by its affiliate, The Chase Manhattan Private
Bank (Florida), National Association ("Chase Florida Bank"). The purchase
involved approximately 41,000 loans originated principally through Dealers
located in Florida ("Chase Florida Loans"), with such loans having an aggregate
outstanding principal balance at the time of purchase of approximately $400
million. The Motor Vehicle Loans included in a
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Trust will not include Chase Florida Loans but the Portfolio Experience
presented in the related Prospectus Supplement will include data with respect to
Chase Florida Loans. Chase Florida Loans were originated using materially the
same Dealer Agreements, underwriting criteria and servicing standards as those
for Chase Auto Finance's Motor Vehicle Loans. The Seller believes that the
delinquency and loan loss experience for Chase Florida Loans will not be
materially different from the Portfolio Experience set forth in the related
Prospectus Supplement.
In September 1995, Chase N.A. purchased substantially all outstanding
Motor Vehicle Loans originated by The Chase Manhattan Bank of Maryland ("Chase
Maryland Loans"). Although the Motor Vehicle Loans included in a Trust will not
include Chase Maryland Loans, the Portfolio Experience presented in the related
Prospectus Supplement for the period commencing October 1, 1995 will include
data with respect to Chase Maryland Loans. The Seller believes that the
delinquency and loan loss experience for Chase Auto Finance's entire portfolio
of Motor Vehicle Loans for any period presented in a Prospectus Supplement
without inclusion of any Chase Maryland Loans would not be materially different
from the Portfolio Experience set forth in such Prospectus Supplement.
To the extent specified in the related Prospectus Supplement, the Motor
Vehicle Loans included in a Trust may include loans made directly by the
Originating Banks to Obligors without involvement of Dealers. However, the
Portfolio Experience will not include delinquency and loan loss experience for
such direct Motor Vehicle Loans. The Seller believes that the delinquency and
loan loss experience for such direct Motor Vehicle Loans will not be materially
different from the Portfolio Experience set forth in the related Prospectus
Supplement.
Origination and Servicing of Motor Vehicle Loans
The Originating Bank purchases motor vehicle retail installment sales
contracts relating to new or used automobiles from automobile dealers
("Dealers") who regularly originate and sell such contracts to the Originating
Bank pursuant to the terms of approved Dealer agreements and Assignments, and
the Originating Bank also makes purchase money loans secured by financed
vehicles directly or pursuant to arrangements with Dealers in accordance with
approved Dealer agreements. Dealer agreements and Assignments related to motor
vehicle retail installment sales contracts, and Dealer agreements related to
purchase money loans are collectively referred to herein as "Dealer Agreements."
The Originating Bank purchases such contracts from Dealers pursuant to
Assignments. Dealer Agreements are entered into with Dealers based upon a
financial review of each Dealer, and in some cases, the reputation and prior
experience of Chase Auto Finance with such Dealer and its key management.
Generally, Dealers who sell new financed vehicles are franchised by the
manufacturer of the financed vehicles.
The Originating Bank currently makes or purchases Motor Vehicle Loans
involving Dealers throughout the United States, except Alaska. Each Dealer makes
representations and warranties to the Originating Bank with respect to the Motor
Vehicle Loans, the obligors on the Motor Vehicle Loans and the security
interests in the financed vehicles relating thereto, which representations and
warranties typically include, among others, that (i) to the best of the Dealer's
knowledge, (a) no statements made or furnished to Chase Auto Finance by the
obligor, the Dealer or any other person are untrue or incomplete, (b) the
obligor has not financed any down payment for the financed vehicle, (c) the
obligor is a bona fide applicant having legal capacity to contract for a Motor
Vehicle Loan, (d) the signature of the obligor on all documents is genuine and
(e) the amount stated in the Motor Vehicle Loan to be due will in fact be due
and payable at the time or times provided therein free of any claims, defenses,
setoffs or counterclaims; (ii) the Dealer has verified the obligor's
identification; (iii) the Dealer had indefeasible title to the financed vehicle
immediately prior to the purchase by the obligor, and had the right and
authority to sell the vehicle to the obligor, free and clear of all liens and
encumbrances; (iv) the Dealer will secure and perfect for the
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Originating Bank a security interest in the financed vehicle free and clear of
any liens or encumbrances; and (v) the description of the financed vehicle in
the Motor Vehicle Loan is true and complete and the financed vehicle will be or
has been duly delivered to and accepted without revocation by the obligor.
Generally, these representations and warranties do not relate to the
creditworthiness of the obligors or the collectibility of the Motor Vehicle
Loans. Upon breach of any representation or warranty made by a Dealer, the
Originating Bank has a right of recourse against such Dealer to require it to
purchase or repurchase such Motor Vehicle Loan. Generally, in determining
whether to exercise any right of recourse, Chase Auto Finance considers the
prior performance of the Dealer and other business and commercial factors. The
Servicer will be obligated to enforce such rights with respect to Dealer
Agreements relating to the Motor Vehicle Loans in accordance with Chase Auto
Finance's customary practices, and the right to any proceeds received upon such
enforcement will be conveyed to the related Trust under the related Pooling and
Servicing Agreement or Sale and Servicing Agreement, as applicable. The Seller
will make no representations as to the financial condition of such Dealers to
which the Seller may have recourse, and there can be no assurance as to the
ability of any such Dealer to perform its obligations under a Dealer Agreement.
The Servicer will service all of the Motor Vehicle Loans consistent with
Chase Auto Finance's servicing policies and practices. The servicing functions
performed by the Servicer or any of its affiliates on a predominantly
centralized basis will include the payment of Motor Vehicle Loan proceeds to
Dealers, customer service, document file keeping, computerized account record
keeping, vehicle titles processing and automated collections. Some servicing
functions are regionalized and are and will be performed by support offices
called Dealer Service Centers ("DSCs") located in Garden City, New York
(Northeast Region), Syracuse, New York (North Central Region), Tampa, Florida
(Southeast Region), Dallas, Texas (Central Region) and San Diego, California
(Western Region). The servicing functions performed by the DSCs include certain
aspects of Dealer liaison, Dealer sales, credit underwriting, documentation
reviews and collections as well as other such services. The servicing policies
and practices of Chase Auto Finance may change over time in accordance with the
Bank's business judgment.
Underwriting of Motor Vehicle Loans
Each applicant for a Motor Vehicle Loan is evaluated individually by the
appropriate DSC based on uniform underwriting standards developed by Chase Auto
Finance. These underwriting standards are intended to assess the applicant's
ability to repay such Motor Vehicle Loan and the adequacy of the financed
vehicle as collateral, based upon a review of the information contained in a
loan application form that generally lists the applicant's income, deposit
accounts, liabilities, credit history, employment history and a description of
the financed vehicle intended to secure the Motor Vehicle Loan. Among the
criteria considered in evaluating the individual applications are (i) stability
of the obligor with specific regard to the obligor's length of residence in the
area, occupation, length of employment and whether the obligor rents or owns his
or her home; (ii) the obligor's payment history based on information known
directly by Chase Auto Finance or as provided by various credit reporting
agencies with respect to present and past debt; (iii) a debt service to gross
monthly income ratio test; (iv) a loan to value ratio test taking into account
the age, type and market value of the financed vehicle; and (v) a credit bureau
score.
The amount advanced under any Motor Vehicle Loan generally will not exceed
(i) for a new financed vehicle, the manufacturer's suggested retail price or
(ii) for a used financed vehicle, 110% of the "average trade" value stated in
the most recently published National Automobile Dealers Association Used Car
Price Guide plus taxes and title and license fees on the financed vehicle.
However, the maximum amount advanced for Motor Vehicle Loans is often less than
such amounts depending on a number of factors, including the length of the Motor
Vehicle Loan term and the model and year of the financed vehicle. These
adjustments are made to insure that the financed vehicle constitutes adequate
collateral to
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secure the Motor Vehicle Loan. In addition, whether a financed vehicle is new or
used, Chase Auto Finance will also finance credit life/accident/health insurance
and service warranties under a Motor Vehicle Loan. Chase Auto Finance's general
policy has been to reject applications for Motor Vehicle Loans whose applicants'
debt service to gross monthly income ratios exceed 40%.
Since July 1988, an empirically based credit scoring process has been used
by Chase Auto Finance to objectively index the applicant's creditworthiness.
This scoring process was created using historical information from the data base
of Motor Vehicle Loans owned and serviced by Chase Auto Finance. Through credit
scoring, Chase Auto Finance evaluates credit profiles in order to satisfactorily
quantify credit risk. The credit scoring process entails the use of statistics
to correlate common characteristics with credit risk. The credit scoring process
used by Chase Auto Finance will be periodically reviewed to ensure its validity.
In addition to Chase Auto Finance's scoring process, since July 1992, Chase Auto
Finance has used consumer reporting agency scores to assist in the underwriting
process. In February 1993, Chase Auto Finance implemented an automated approval
and declination process for certain applications based on selection criteria
that was statistically derived from the data base of Motor Vehicle Loans owned
and serviced by Chase Auto Finance. Except for the applications that are
automatically approved or denied, each application is reviewed by a credit
analyst. Except for the applications that are automatically approved or denied,
Chase Auto Finance's scoring process and consumer reporting agency scores are
intended to provide a basis for lending decisions, but are not meant to
supersede the judgment of the credit analyst. Motor Vehicle Loan approval at
variance with standard credit guidelines has occurred, both before and after
implementation of the credit scoring process, but generally has required
concurrent approval of a second, designated senior credit analyst or credit
manager. Motor Vehicle Loans that do not comply with all of Chase Auto Finance's
guidelines must have strong compensating factors that indicate a high ability of
the applicant to repay the loan. Generally, if a Motor Vehicle Loan is approved
it is because the obligor has made a down payment and the amount financed is
lower than the maximum amount permitted by Chase Auto Finance's guidelines.
Detailed analysis of Chase Auto Finance's portfolio is performed to
evaluate the effectiveness of the credit guidelines and scoring process. If
external economic factors, credit delinquencies or credit losses change, credit
guidelines are adjusted to maintain a level of asset quality deemed acceptable
by Chase Auto Finance's management. Each day, the credit manager and credit
supervisors of each DSC review a computer selected group of Motor Vehicle Loans
to ensure that credit analysts are following Chase Auto Finance's established
policies and procedures. Chase Auto Finance randomly reviews, on a quarterly
basis, the quality of the Motor Vehicle Loans and conducts quality audits to
ensure compliance with established policies and procedures. The credit
underwriting standards of Chase Auto Finance may change over time in accordance
with the Bank's business judgment.
Insurance and Collection Procedures
Each Motor Vehicle Loan requires the obligor to obtain fire, theft and
collision insurance or comprehensive and collision insurance with respect to the
financed vehicle. The Dealer Agreements include a representation and warranty
that each financed vehicle has such insurance at the time of origination of the
Motor Vehicle Loan. If an obligor fails to maintain the required insurance,
Chase Auto Finance may, but is not obligated to, purchase limited collision and
comprehensive insurance (force placed insurance) to protect the interests of
Chase Auto Finance and the obligor and to charge the obligor for the cost of
such insurance.
Chase Auto Finance previously purchased force placed insurance, but
stopped this practice in August 1993, and no force placed insurance coverage is
currently in effect on any of Chase Auto Finance's Motor Vehicle Loans. No Trust
will include any Motor Vehicle Loans on which force placed insurance
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was ever purchased for the related financed vehicle, nor will any such Trust
include any Motor Vehicle Loans with coverage commonly known as vendor's single
interest and non-filing insurance. Unless otherwise specified in the related
Prospectus Supplement, there will be no third party insurance of any kind
covering this risk for any of the Motor Vehicle Loans included in any Trust. In
addition, neither the Seller, the Originating Bank nor the Servicer, as
applicable, independently verifies or will verify whether obligors obtain or
maintain the required insurance either at or after the origination of a Motor
Vehicle Loan. Chase Auto Finance monitors its loss experience with respect to
financed vehicles that are not properly insured.
The Bank reserves the right to change its policies with respect to
insurance on financed vehicles in accordance with its business judgment.
As a result of a New York statutory change, for Motor Vehicle Loans
originated through New York dealers on and after approximately June 30, 1995,
Chase Auto Finance agreed not to obligate the related Obligor for the so-called
"GAP amount" in the event there is a total loss of the vehicle caused by its
theft, confiscation or physical damage. The "GAP amount" that the obligor will
not be obligated to pay is the difference between the amount owed on the Motor
Vehicle Loan as of the date of the total loss and the sum of (1) any unpaid
monthly payments, unpaid late fees and other unpaid amounts due prior to the
date of the total loss, plus (2) the vehicle's actual cash value as of the date
of the total loss. If the obligor has maintained the insurance required under
the Motor Vehicle Loan, the vehicle's actual cash value shall have the same
meaning as under the insurance policy (inclusive of the deductible, which the
Motor Vehicle Loan specifies may be no higher than $500). If the obligor has not
maintained the insurance required under the Motor Vehicle Loan, the vehicle's
actual cash value shall mean the trade-in value of the vehicle in the National
Automobile Dealer's Association Official Used Car Guide (Eastern Edition) as of
the date of the total loss. Chase Auto Finance will not maintain third party
insurance of any kind against this risk, and Chase Auto Finance does not yet
have any data on its historical loss experience on this risk.
Collection activities with respect to delinquent Motor Vehicle Loans will
be performed by the Servicer or its affiliates consistent with Chase Auto
Finance's servicing policies and practices. Collection activities include prompt
investigation and evaluation of the causes of any delinquency. An obligor is
deemed current if an amount equal to no more than 10% of a scheduled monthly
payment remains unpaid.
An automated collection system is utilized to assist in collection
efforts. The automated collection system provides relevant obligor information
(for example, current addresses, phone numbers and loan information), records of
all contacts with obligors and, in some cases, automated dialing. The system
also records an obligor's promise to pay and allows supervisor review of
collection personnel activity, permits supervisors to modify priorities as to
which obligors should be contacted and provides extensive reports concerning
Motor Vehicle Loan delinquencies. Under current practices, contact, by mail
and/or telephone, is initiated with an obligor whose Motor Vehicle Loan has
become 13 days delinquent. In the event that such contact fails to result in a
payment sufficient to bring scheduled payments current under the Motor Vehicle
Loan, personal telephone contact with the obligor is attempted on or after the
20th day of delinquency. Generally, after a Motor Vehicle Loan continues to be
delinquent for 90 days, repossession procedures will have been implemented.
However, if (i) a Motor Vehicle Loan is deemed uncollectible, (ii) the financed
vehicle is deemed by collection personnel to be in danger of being damaged,
destroyed or made unavailable for repossession, or (iii) the obligor voluntarily
surrenders the financed vehicle, a repossession may occur without regard to
length or existence of payment delinquency. Repossessions are generally
conducted by third parties who are engaged in the business of repossessing
vehicles for secured parties. After repossession, the obligor generally has an
additional 10 to 30 days to redeem the financed vehicle before the financed
vehicle is resold. Upon repossession and sale of the financed vehicle, any
deficiency remaining will be pursued to the extent deemed practical and to the
extent permitted by law.
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Losses may occur in connection with delinquent Motor Vehicle Loans and can
arise in several ways, including the inability to locate the financed vehicle or
the obligor, or because of a discharge of the obligor in a bankruptcy
proceeding. Generally, losses on Motor Vehicle Loans are recognized, as
applicable, (a) during the calendar month in which a financed vehicle was or is
liquidated by Chase Auto Finance, if the liquidation takes place at or before
the calendar month in which more than 10% of a scheduled payment of the related
Motor Vehicle Loan becomes 150 days delinquent, (b) during the calendar month in
which more than 10% of a scheduled payment of a Motor Vehicle Loan becomes 150
days delinquent if Chase Auto Finance was or is not in possession of the related
financed vehicle by the end of such calendar month, (c) during the calendar
month in which a financed motor vehicle was or is liquidated by Chase Auto
Finance, if Chase Auto Finance came or comes into possession of the related
financed vehicle by the end of the calendar month in which more than 10% of a
scheduled payment on the related Motor Vehicle Loan becomes 150 days delinquent,
(d) such earlier time as Chase Auto Finance deems a Motor Vehicle Loan
uncollectible, or (e) at such other times or in such a manner as Chase Auto
Finance believed or believes is appropriate in accordance with its normal and
customary servicing practices and procedures; provided that such loss
recognition cannot be later than the calendar month in which more than 10% of a
scheduled payment on a Motor Vehicle Loan becomes 240 days delinquent. The loss
recognition and collection policies and practices of Chase Auto Finance may
change over time in accordance with the Bank's business judgment.
Chase Auto Finance may, on a case-by-case basis, permit extensions with
respect to the Due Dates of payments on Motor Vehicle Loans in accordance with
its normal and customary servicing practices and procedures, as will be
described more fully in the related Prospectus Supplement.
WEIGHTED AVERAGE LIFE OF THE SECURITIES
The weighted average life of the Notes, if any, and the Certificates of
any series will generally be influenced by the rate at which the principal
balances of the related Receivables are paid, which payment may be in the form
of scheduled amortization or prepayments. (For this purpose, the term
"prepayments" includes prepayments in full, partial prepayments, liquidations
due to default, as well as receipts of proceeds from theft and physical damage,
credit life and credit disability insurance policies covering the Financed
Vehicles and amounts received in connection with certain other Receivables
repurchased by the Seller or purchased by the Servicer for administrative
reasons). The Receivables are prepayable by the Obligors at any time. If a
Prospectus Supplement provides that the property of the related Trust will
include a Pre-Funding Account, the related Securities will be subject to partial
redemption on or immediately following the end of the Funding Period in an
amount and in the manner specified in the related Prospectus Supplement. If
provided in any Prospectus Supplement, prepayments may also result from demands
under any Cash Collateral Guaranty or from any Reserve Account or other
enhancement related to such series with respect to Defaulted Receivables.
The rate of prepayments on the Receivables may be influenced by a variety
of economic, social and other factors, including the fact that an Obligor may
not sell or transfer the Financed Vehicle securing a Receivable without the
Seller's consent. The rate of prepayment of the Motor Vehicle Loans in any
Receivables Pool may also be influenced by programs offered by lenders
(including the Bank and its affiliates) that solicit or make available credit
that may be used by Obligors to prepay Motor Vehicle Loans. Such credit includes
but is not limited to home equity lines of credit, consumer installment credit
and credit cards offered by lenders (including the Bank and its affiliates). The
Bank and its affiliates may, in the ordinary course of business, offer general
or targeted solicitations for such extensions of credit, and such solicitations
may be sent, to Obligors. In addition, each Sale and Servicing Agreement and
Pooling and Servicing Agreement will provide a covenant that the Servicer may
refinance an existing Motor Vehicle Loan for an Obligor, so long as the proceeds
of such refinanced loan would be used to prepay such existing
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Motor Vehicle Loan in full and any such refinanced loan is evidenced by a new
promissory note. Any such loan thus created by a refinancing would not be the
property of the related Trust. See "Description of the Transfer and Servicing
Agreements--Termination" herein regarding the Servicer's option to purchase the
Receivables from a given Trust and "--Insolvency Event" herein regarding the
sale of Receivables owned by a Trust issuing Notes if an Insolvency Event with
respect to the General Partner occurs.
In light of the above considerations, there can be no assurance as to the
amount of principal payments to be made on the Securities of a given series on
each Payment Date or Distribution Date, as applicable, since such amount will
depend, in part, on the amount of principal collected on the related Receivables
Pool during the applicable Collection Period. Any reinvestment risks resulting
from a faster or slower incidence of prepayment of Receivables will be borne
entirely by the Securityholders of a given series. The related Prospectus
Supplement may set forth certain additional information with respect to the
maturity and prepayment considerations applicable to the particular Receivables
Pool and the related series of Securities.
Chase Auto Finance maintains certain records of the historical prepayment
experience of its portfolio of Motor Vehicle Loans. The Seller believes that
such records are not adequate to provide meaningful information with respect to
the Receivables. In any event, no assurance can be given that prepayments on the
Receivables would conform to any historical experience, and no prediction can be
made as to the actual prepayment experience to be expected with respect to the
Receivables.
In addition, under certain limited circumstances, extensions on a
Receivable may be granted. See the related Prospectus Supplement for a
description of the terms and conditions in accordance with which the Receivables
in a particular Trust may be modified. Any such deferrals or extensions may
increase the weighted average life of the related Securities.
POOL FACTORS AND TRADING INFORMATION
The "Note Pool Factor" for each class of Notes, if any, will be an
eight-digit decimal which the Servicer will compute prior to each distribution
with respect to such class of Notes expressing the remaining outstanding
principal balance of such class of Notes, as of the applicable Payment Date
(after giving effect to payments to be made on such Payment Date), as a fraction
of the initial outstanding principal balance of such class of Notes. The
"Certificate Pool Factor" for each class of Certificates will be an eight-digit
decimal which the Servicer will compute prior to each distribution with respect
to such class of Certificates expressing the remaining Certificate Balance of
such class of Certificates, as of the applicable Distribution Date or Payment
Date (after giving effect to distributions to be made on such Distribution Date
or Payment Date), as a fraction of the initial Certificate Balance of such class
of Certificates. Each Note Pool Factor and each Certificate Pool Factor will be
1.00000000 as of the related Cutoff Date for such series of Securities and
thereafter will decline to reflect reductions in the outstanding principal
balance of the applicable class of Notes, or the reduction of the Certificate
Balance of the applicable class of Certificates, as the case may be. A
Noteholder's portion of the aggregate outstanding principal balance of the
related class of Notes is the product of (i) the original denomination of such
Noteholder's Note and (ii) the applicable Note Pool Factor. A
Certificateholder's portion of the aggregate outstanding Certificate Balance for
the related class of Certificates is the product of (a) the original
denomination of such Certificateholder's Certificate and (b) the applicable
Certificate Pool Factor.
Securityholders will receive monthly reports concerning payments received
on the Receivables, the Pool Balance (as such term is defined in the related
Prospectus Supplement, the "Pool Balance"), each Certificate Pool Factor or Note
Pool Factor, as applicable, in each case related to such Trust, and various
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other items of information specified in the related Prospectus Supplement. In
addition, Securityholders of record during any calendar year will be furnished
information for tax reporting purposes not later than the latest date permitted
by law. See "Certain Information Regarding the Securities--Reports to
Securityholders" herein.
USE OF PROCEEDS
Unless the related Prospectus Supplement provides for other applications,
the net proceeds from the sale of the Securities of a given series (after making
the initial deposit into the related Reserve Account, Yield Supplement Account
or Cash Collateral Account, if any, or the deposit of the Pre-Funded Amount into
the related Pre-Funding Account, if any) will be added to the Seller's general
funds.
CHASE USA (NEW YORK) AND CHASE USA (DELAWARE)
On March 31, 1996, The Chase Manhattan Corporation merged with and into
Chemical Banking Corporation. Thereafter, Chemical Banking Corporation, as the
surviving corporation of the merger, changed its name to "The Chase Manhattan
Corporation." The Corporation is the largest banking institution in the United
States of America, with over $300 billion in assets and $20 billion in
stockholders' equity. In July 1996, Chemical Bank and Chase N.A. merged, with
Chemical Bank continuing as the surviving corporation under the name "The Chase
Manhattan Bank." Following the Merger, the principal banking subsidiary of the
Corporation is The Chase Manhattan Bank. In connection with the Merger, Chase
N.A.'s existing portfolio of Motor Vehicle Loans was transferred to Chase USA
(New York). Chase USA (New York) is currently the originator of the Motor
Vehicle Loans.
Chase USA (New York), a wholly-owned subsidiary of the Corporation, is a
national banking association and a member of the Federal Reserve System. It is
subject to the primary supervision of the Office of the Comptroller of the
Currency. Its deposits are insured by the FDIC. Chase USA (New York) is engaged
in a general consumer banking business. The principal executive office of Chase
USA (New York) is located at 200 Jericho Quadrangle, Jericho, New York 11759
(telephone (516) 935-9935.
Chase USA (Delaware), a wholly-owned subsidiary of the Corporation, is a
national banking association and a member of the Federal Reserve System. Chase
USA (Delaware) was formed in 1982 as a Delaware banking corporation and is
headquartered in Wilmington, Delaware. On August 19, 1996, Chase USA (Delaware)
was reconstituted as a national banking association and as such is subject to
the supervision of the Office of the Comptroller of the Currency. Its deposits
are insured by the FDIC. Chase USA (Delaware) acquired, effective June 1, 1996,
the credit card business of Chemical Bank, an affiliate of Chase USA (Delaware).
Chase USA (Delaware)'s activities are primarily related to credit card lending
and other forms of unsecured consumer lending. Chase USA (Delaware) also takes
deposits and offers associated financial services for consumers. The principal
executive office of Chase USA (Delaware) is located at 802 Delaware Avenue,
Wilmington, Delaware 19801 (telephone (302) 575-5000).
It is expected that Chase USA (New York) and Chase USA (Delaware) will
merge, with Chase USA (Delaware) continuing as the surviving entity. The Chase
USA Merger is expected to be completed in December 1996. After the Chase USA
Merger, Chase USA (Delaware) will originate the Motor Vehicle Loans.
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DESCRIPTION OF THE NOTES
General
With respect to each Trust that issues Notes, one or more classes of Notes
of the related series will be issued pursuant to the terms of an Indenture, a
form of which has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The following, as well as other pertinent
information included elsewhere in this Prospectus and in the related Prospectus
Supplement, describes the material terms of the Notes of any series, but does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, the provisions of such Notes and the related Indenture.
Unless otherwise specified in the related Prospectus Supplement, each
class of Notes will initially be represented by one or more Notes, in each case
registered in the name of a nominee of DTC (together with any successor
depository selected by the Trust (the "Depository"), except as set forth below.
Principal and Interest on the Notes
The timing and priority of payment, seniority, Interest Rate and amount of
or method of determining payments of principal and interest on each class of
Notes of a given series will be described in the related Prospectus Supplement.
The right of holders of any class of Notes to receive payments of principal and
interest may be senior or subordinate to the rights of holders of any other
class or classes of Notes of such series, as described in the related Prospectus
Supplement. Unless otherwise provided in the related Prospectus Supplement,
payments of interest on the Notes of such series will be made prior to payments
of principal thereon. To the extent provided in the related Prospectus
Supplement, a series may include one or more classes of Strip Notes entitled to
(i) principal payments with disproportionate, nominal or no interest payments or
(ii) interest payments with disproportionate, nominal or no principal payments.
Each class of Notes may have a different Interest Rate, which may be a fixed,
variable or adjustable Interest Rate (and which may be zero for certain classes
of Strip Notes), or any combination of the foregoing. The related Prospectus
Supplement will specify the Interest Rate for each class of Notes of a given
series or the method for determining such Interest Rate. See also "Certain
Information Regarding the Securities--Fixed Rate Securities" and "--Floating
Rate Securities" herein. One or more classes of Notes of a series may be
redeemable in whole or in part under the circumstances specified in the related
Prospectus Supplement, including at the end of any applicable Funding Period or
as a result of the Servicer's exercise of its option to purchase the related
Receivables Pool.
To the extent specified in the related Prospectus Supplement, one or more
classes of the related series of Notes may have fixed principal payment
schedules. Noteholders of such Notes would be entitled to receive as payments of
principal on any given Payment Date the applicable amounts set forth on such
schedule with respect to such Notes, in the manner and to the extent set forth
in the related Prospectus Supplement.
Unless the related Prospectus Supplement specifies that Notes of different
classes within a series will have different priorities, payments to Noteholders
of all classes within a series in respect of interest will have the same
priority. Under certain circumstances, the amount available for such payments
could be less than the amount of interest payable on the Notes on any of the
dates specified for payments in the related Prospectus Supplement (each, a
"Payment Date," which may be the same date as each Distribution Date with
respect to the Certificates of such series as specified in the related
Prospectus Supplement), in which case each class of Noteholders will receive its
ratable share (based upon the aggregate amount of interest due to each such
class of Noteholders) of the aggregate amount available to be distributed in
respect
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of interest on the Notes of such series. See "Description of the Transfer and
Servicing Agreements--Distributions" and "--Credit and Cash Flow Enhancement"
herein.
In the case of a series of Notes which includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal and
interest of each such class, and any schedule or formula or other provisions
applicable to the determination thereof, will be set forth in the related
Prospectus Supplement. Payments in respect of principal and interest of any
class of Notes will be made on a pro rata basis among all the Noteholders of
such class.
To the extent specified in the related Prospectus Supplement, one or more
classes of the related series of Notes may be entitled to receive principal
payments prior to the receipt of principal payments by other classes of the
related series. If so provided in the related Prospectus Supplement, such class
or classes of Notes may have a final scheduled Payment Date of less than 397
days from the date of the related Prospectus Supplement and such class or
classes may have received a short-term rating by a Rating Agency that is in one
of the two highest short-term rating categories. The failure to pay such a class
of Notes on or prior to the related final Payment Date would constitute an Event
of Default under the related Indenture.
To the extent specified in the related Prospectus Supplement, one or more
classes of the related series of Notes may be designed to receive principal
payments using a predetermined principal balance schedule (a "planned balance")
derived by assuming two constant prepayment rates for the related Receivables
Pool. The related Prospectus Supplement will set forth a schedule of the planned
balance of such a class of Notes for each Payment Date. Holders of such a class
of Notes will be entitled to receive principal payments in respect of a Payment
Date only to the extent necessary to reduce the principal balance of such Notes
to the amount set forth as the planned balance for such Payment Date.
To the extent specified in the related Prospectus Supplement, one or more
classes of the related series of Notes may be designed to receive principal
payments using a predetermined principal balance schedule (a "targeted balance")
derived by assuming one constant prepayment rate for the related Receivables
Pool. The related Prospectus Supplement will set forth a schedule of the
targeted balance of such a class of Notes for each Payment Date. Holders of such
a class of Notes will be entitled to receive principal payments in respect of a
Payment Date only to the extent necessary to reduce the principal balance of
such Notes to the amount set forth as the targeted balance for such Payment
Date.
To the extent specified in the related Prospectus Supplement, one or more
classes of the related series of Notes may be designed to receive principal
payments on a Payment Date only if principal payments have been made on a
specified planned amortization class of Notes or targeted amortization class of
Notes, and to receive any excess payments over the amount required to reduce the
principal amount of the planned amortization class or targeted amortization
class to the planned or targeted balance for such Payment Date.
If the Servicer exercises its option to purchase the Receivables of a
Trust in the manner and on the respective terms and conditions described under
"Description of the Transfer and Servicing Agreements--Termination" herein, the
related outstanding Notes will be prepaid as set forth in the related Prospectus
Supplement. In addition, if the related Prospectus Supplement provides that the
property of a Trust will include a Pre-Funding Account, the related outstanding
Notes may be subject to partial prepayment on or immediately following the end
of the related Funding Period in an amount and manner specified in the related
Prospectus Supplement. In the event of such partial prepayment, the Noteholders
of the related series may be entitled to receive a prepayment premium, in the
amount and to the extent provided in the related Prospectus Supplement.
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The Indenture
Modification of Indenture. With respect to each Trust that has issued
Notes pursuant to an Indenture, such Trust and the related Indenture Trust may,
with the consent of the holders of a majority of the outstanding Notes of the
related series, execute a supplemental indenture to add provisions to, change in
any manner or eliminate any provisions of, the related Indenture, or modify
(except as provided below) in any manner the rights of the related Noteholders.
Unless otherwise specified in the related Prospectus Supplement with
respect to a series of Notes, without the consent of the holder of each such
outstanding Note affected thereby, no supplemental indenture will: (i) change
the date of payment of any installment of principal of or interest on any such
Note or reduce the principal amount thereof, the Interest Rate specified thereon
or the redemption price with respect thereto or change any place of payment
where, or the coin or currency in which, any such Note or any interest thereon
is payable; (ii) impair the right to institute suit for the enforcement of
certain provisions of the related Indenture regarding payment; (iii) reduce the
percentage of the aggregate amount of the outstanding Notes of such series, the
consent of the holders of which is required (a) for any such supplemental
indenture or (b) for any waiver of compliance with certain provisions of the
related Indenture or of certain defaults thereunder and their consequences as
provided for in such Indenture; (iv) modify or alter the provisions of the
related Indenture regarding the voting of Notes held by the related Trust, any
other obligor on such Notes, the Seller or an affiliate of any of them; (v)
reduce the percentage of the aggregate outstanding amount of such Notes required
to direct the related Indenture Trustee to sell or liquidate the Receivables,
the consent of the holders of which is required if the proceeds of such sale or
liquidation would be insufficient to pay the principal amount and accrued but
unpaid interest on the outstanding Notes of such series; (vi) decrease the
percentage of the aggregate principal amount of such Notes required to amend the
sections of the related Indenture that specify the applicable percentage of
aggregate principal amount of the Notes of such series necessary to amend such
Indenture or certain other related agreements; (vii) modify any provisions of
the Indenture in such a manner as to affect the calculation of the amount of any
payment of interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such calculation); or
(viii) permit the creation of any lien ranking prior to or on a parity with the
lien of the related Indenture with respect to any of the collateral for such
Notes or, except as otherwise permitted or contemplated in such Indenture,
terminate the lien of such Indenture on any such collateral or deprive the
holder of any such Note of the security afforded by the lien of such Indenture.
Unless otherwise provided in the related Prospectus Supplement, the
related Trust and the related Indenture Trustee may also enter into supplemental
indentures, without obtaining the consent of the Noteholders of the related
series, for the purpose of, among other things, adding any provisions to or
changing in any manner or eliminating any of the provisions of the related
Indenture or of modifying in any manner the rights of such Noteholders; provided
that such action will not materially and adversely affect the interest of any
such Noteholder.
Events of Default; Rights Upon Event of Default. With respect to the Notes
of a given series, unless otherwise specified in the related Prospectus
Supplement, "Events of Default" under the related Indenture will consist of: (i)
a default in the payment of any interest on any such Note for a period of 5
days; (ii) a default in the payment of the principal of or any installment of
the principal of any such Note when the same becomes due and payable; (iii) a
default in the observance or performance of any covenant or agreement of the
related Trust made in the related Indenture which default materially and
adversely affects the rights of the related Noteholders, and which default
continues for a period of 30 days after written notice thereof is given to such
Trust by the related Indenture Trustee or to such Trust and such Indenture
Trustee by the holders of at least 25% in principal amount of such Notes then
outstanding (or
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for such longer period, not in excess of 90 days, as may be reasonably necessary
to remedy such default; provided that such default is capable of remedy within
90 days or less); or (iv) certain events of bankruptcy, insolvency, receivership
or liquidation of the related Trust. However, the amount of principal required
to be paid to Noteholders of such series under the related Indenture will
generally be limited to amounts available to be deposited in the related Note
Distribution Account. Therefore, unless otherwise specified in the related
Prospectus Supplement, the failure to pay principal on a class of Notes on any
Payment Date generally will not result in the occurrence of an Event of Default
until the final scheduled Payment Date for such class of Notes.
If an Event of Default should occur and be continuing with respect to the
Notes of any series, the related Indenture Trustee or holders of a majority in
principal amount of such Notes then outstanding may declare the principal of
such Notes to be immediately due and payable. Unless otherwise specified in the
related Prospectus Supplement, such declaration may, under certain
circumstances, be rescinded by the holders of a majority in principal amount of
such Notes then outstanding.
If the Notes of any series are due and payable following an Event of
Default with respect thereto, the related Indenture Trustee may institute
proceedings to collect amounts due or foreclose on the related Trust property,
exercise remedies as a secured party, sell the related Receivables or elect to
have the related Trust maintain possession of such Receivables and continue to
apply collections on such Receivables as if there had been no declaration of
acceleration. Unless otherwise specified in the related Prospectus Supplement,
however, the related Indenture Trustee is prohibited from selling the related
Receivables following an Event of Default, unless (i) the holders of all such
outstanding Notes consent to such sale, (ii) the proceeds of such sale are
sufficient to pay in full the principal and the accrued interest on such
outstanding Notes at the date of such sale, or (iii) there has been an Event of
Default arising from a failure to make a required payment of principal or
interest on any Notes, and such Indenture Trustee determines that the proceeds
of Receivables would not be sufficient on an ongoing basis to make all payments
on such Notes as such payments would have become due if such obligations had not
been declared due and payable, and such Indenture Trustee obtains the consent of
the holders of sixty-six and two-thirds percent of the aggregate outstanding
amount of such Notes.
If an Event of Default occurs and is continuing with respect to a series
of Notes, the related Indenture Trustee will be under no obligation to exercise
any of the rights or powers under the related Indenture at the request or
direction of any of the holders of such Notes, if such Indenture Trustee
reasonably believes it will not be adequately indemnified against the costs,
expenses and liabilities which might be incurred by it in complying with such
request. Subject to the provisions for indemnification and certain limitations
contained in the related Indenture, the holders of a majority in principal
amount of the outstanding Notes of a given series will have the right to direct
the time, method and place of conducting any proceeding or any remedy available
to the related Indenture Trustee, and the holders of a majority in principal
amount of such Notes then outstanding may, in certain cases, waive any default
with respect thereto, except a default in the payment of principal or interest
or a default in respect of a covenant or provision of such Indenture that cannot
be modified without the waiver or consent of all the holders of such outstanding
Notes.
Unless and to the extent the related Prospectus Supplement specifies other
circumstances in which a holder of a Note of a series will have the right to
institute the proceedings described below, no holder of such a Note will have
the right to institute any proceeding with respect to the related Indenture
unless (i) such holder has previously given written notice to the related
Indenture Trustee of a continuing Event of Default, (ii) the holders of not less
than 25% in principal amount of the outstanding Notes of such series have made
written request to such Indenture Trustee to institute such proceeding in its
own name as Indenture Trustee, (iii) such holder or holders have offered such
Indenture Trustee indemnity reasonably
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satisfactory to it against the costs, expenses and liabilities to be incurred in
complying with such request, (iv) such Indenture Trustee has for 60 days after
receipt of such notice, request and offer of indemnity failed to institute such
proceeding, and (v) no direction inconsistent with such written request has been
given to such Indenture Trustee during such 60-day period by the holders of a
majority in principal amount of such outstanding Notes.
In addition, each Indenture Trustee and the related Noteholders, by
accepting the related Notes, will covenant that they will not at any time
institute against the related Trust any bankruptcy, reorganization or other
proceeding under any federal or state bankruptcy or similar law.
With respect to any Trust, neither the related Indenture Trustee nor the
related Owner Trustee in its individual capacity, nor any holder of a
Certificate representing an ownership interest in such Trust nor any of their
respective owners, beneficiaries, agents, officers, directors, employees,
affiliates, successors or assigns will, in the absence of an express agreement
to the contrary, be personally liable for the payment of the principal of or
interest on the related Notes or for the agreements of such Trust contained in
the related Indenture.
Certain Covenants
Each Indenture will provide that the related Trust may not consolidate
with or merge into any other entity, unless (i) the entity formed by or
surviving such consolidation or merger is organized under the laws of the United
States, any state or the District of Columbia, (ii) such entity expressly
assumes such Trust's obligation to make due and punctual payments of principal
and interest on the Notes of the related series and the performance or
observance of every agreement and covenant of such Trust under the Indenture,
(iii) no Event of Default with respect to such series shall have occurred and be
continuing immediately after such merger or consolidation, (iv) such Trust has
been advised that the rating of the Notes or the Certificates of such series
then in effect would not be downgraded or withdrawn by the related Rating
Agencies as a result of such merger or consolidation, (v) such action as was
necessary to maintain the lien and security interest created by such Indenture
shall have been taken, and (vi) such Trust has received an opinion of counsel to
the effect that such consolidation or merger would have no material adverse tax
consequence to such Trust or to any related Noteholder or Certificateholder.
Each Trust will not, among other things, (i) except as expressly permitted
by the related Indenture, Transfer and Servicing Agreements or certain related
documents with respect to such Trust (collectively, the "Related Documents"),
sell, transfer, exchange or otherwise dispose of any of the properties or assets
of such Trust, (ii) claim any credit on or make any deduction from the principal
or interest payable in respect of the Notes of the related series (other than
amounts withheld under the Code or applicable state law) or assert any claim
against any present or former holder of such Notes because of the payment of
taxes levied or assessed upon such Trust, (iii) permit the validity or
effectiveness of the related Indenture to be impaired or permit any person to be
released from any covenants or obligations with respect to such Notes under such
Indenture except as may be expressly permitted thereby, (iv) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance to be
created on or extend to or otherwise arise upon or burden the assets of such
Trust or any party thereof, or any interest therein or the proceeds thereof, or
(v) permit any lien of such Indenture not to constitute a valid first priority
security interest in such Trust (other than with respect to any such tax,
mechanics' or other lien).
No Trust may engage in any activity other than as specified in the related
Prospectus Supplement. No Trust will incur, assume or guarantee any indebtedness
other than indebtedness incurred pursuant to the related Notes and the related
Indenture, pursuant to any Advances made to it by the Servicer or otherwise in
accordance with the Related Documents.
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Annual Compliance Statement. Each Trust will be required to file annually
with the related Indenture Trustee a written statement as to the fulfillment of
its obligations under the Indenture.
Indenture Trustee's Annual Report. The Indenture Trustee for each Trust
will be required to mail each year to all related Noteholders a brief report
relating to its eligibility and qualification to continue as Indenture Trustee
under the related Indenture, any amounts advanced by it under the related
Indenture, the amount, interest rate and maturity date of certain indebtedness
owing by such Trust to the related Indenture Trustee in its individual capacity,
the property and funds physically held by such Indenture Trustee as such and any
action taken by it that materially affects the related Notes and that has not
been previously reported.
Satisfaction and Discharge of Indenture. An Indenture will be discharged
with respect to the related Notes upon the delivery to the related Indenture
Trustee for cancellation of all such Notes or, with certain limitations, upon
deposit with such Indenture Trustee of funds sufficient for the payment in full
of all such Notes.
The Indenture Trustee
The Indenture Trustee for a series of Notes will be specified in the
related Prospectus Supplement. The Indenture Trustee for any series may resign
at any time, in which event the Administrator of the related Trust will be
obligated to appoint a successor indenture trustee for such series. The
Administrator of the related Trust may also remove any such Indenture Trustee if
such Indenture Trustee ceases to be eligible to continue as such under the
related Indenture or if such Indenture Trustee becomes insolvent. In such
circumstances, the Administrator of the related Trust will be obligated to
appoint a successor trustee for the related series of Notes. Any resignation or
removal of the Indenture Trustee and appointment of a successor indenture
trustee for any series of Notes will not become effective until acceptance of
the appointment by the successor indenture trustee for such series.
DESCRIPTION OF THE CERTIFICATES
General
With respect to each Trust, one or more classes of Certificates of the
related series will be issued pursuant to the terms of a Trust Agreement or a
Pooling and Servicing Agreement, a form of each of which has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part. The
following, as well as other pertinent information included elsewhere in this
Prospectus and in the related Prospectus Supplement, describes the material
terms of the Certificates of any series, but does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, the provisions
of such Certificates and the related Trust Agreement or Pooling and Servicing
Agreement, as applicable.
The related Prospectus Supplement will specify whether each class of
Certificates of the related series will initially be represented by one or more
Certificates, in each case registered in the name of Depository or its nominee
(except as set forth below) or will be issued in fully registered, certificated
form.
Distributions of Principal and Interest
The timing and priority of distributions, seniority, allocations of
losses, Pass Through Rate and amount of or method of determining distributions
with respect to principal and interest of each class of Certificates with
respect to any series will be described in the related Prospectus Supplement.
Distributions
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of interest on such Certificates will be made on the dates specified in the
related Prospectus Supplement (each, a "Distribution Date," which may be the
same date as each Payment Date with respect to the Notes of such series, if any,
specified in the related Prospectus Supplement) and will be made prior to
distributions with respect to principal of such Certificates. To the extent
provided in the related Prospectus Supplement, a series may include one or more
classes of Strip Certificates entitled to (i) distributions in respect of
principal with disproportionate, nominal or no interest distributions, or (ii)
interest distributions with disproportionate, nominal or no distributions in
respect of principal. Each class of Certificates may have a different Pass
Through Rate, which may be a fixed, variable or adjustable Pass Through Rate
(and which may be zero for certain classes of Strip Certificates) or any
combination of the foregoing. The related Prospectus Supplement will specify the
Pass Through Rate for each class of Certificates of a given series or the method
for determining such Pass Through Rate. See also "Certain Information Regarding
the Securities--Fixed Rate Securities" and "--Floating Rate Securities" herein.
Unless otherwise provided in the related Prospectus Supplement, distributions in
respect of the Certificates of a given series that are issued with Notes will be
subordinate to payments in respect of such Notes as more fully described in the
related Prospectus Supplement. Distributions in respect of interest on and
principal of any class of Certificates will be made on a pro rata basis among
all the Certificateholders of such class.
In the case of a series of Certificates that includes two or more classes
of Certificates, the timing, sequential order, priority of payment or amount of
distributions in respect of interest and principal on each such class, and any
schedule or formula or other provisions applicable to the determination thereof,
shall be as set forth in the related Prospectus Supplement.
If the Servicer exercises its option to purchase the Receivables of a
Trust in the manner and on the respective terms and conditions described under
"Description of the Transfer and Servicing Agreements--Termination" herein,
related Certificateholders will receive as prepayment an amount in respect of
such Certificates as specified in the related Prospectus Supplement. In
addition, if the related Prospectus Supplement provides that the property of a
Trust will include a Pre-Funding Account, related Certificateholders may receive
a partial prepayment of principal on or immediately following the end of the
Funding Period in an amount and manner specified in the related Prospectus
Supplement. In the event of such partial prepayment, the Certificateholders may
be entitled to receive a prepayment premium, in the amount and to the extent
provided in the related Prospectus Supplement.
The Trustee
The Trustee for each Trust will be specified in the related Prospectus
Supplement. The Trustee's liability in connection with the issuance and sale of
the related Securities is limited solely to the express obligations of such
Trustee set forth in the related Trust Agreement and the Sale and Servicing
Agreement or the related Pooling and Servicing Agreement, as applicable. The
Trustee under each Trust Agreement or Pooling and Servicing Agreement, as
applicable, will perform administrative functions, including, if specified in
the related Prospectus Supplement, making distributions from the related
Certificate Distribution Account. A Trustee may resign at any time by giving
written notice thereof to the Servicer under the related Pooling and Servicing
Agreement or the Administrator under the related Trust Agreement, in which event
the Servicer or the Administrator, as the case may be, or its successor, will be
obligated to appoint a successor trustee. The Servicer or the Administrator may
also remove the Trustee if such Trustee ceases to be eligible to continue as
Trustee under the related Pooling and Servicing Agreement or Trust Agreement, as
applicable, becomes legally unable to act or if such Trustee becomes insolvent.
In such circumstances, the Servicer or the Administrator will be obligated to
appoint a successor trustee. Any resignation or removal of a Trustee and
appointment of a successor trustee will not become effective until acceptance of
the appointment by the successor trustee.
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Each Trust Agreement and Administration Agreement will provide that the
Administrator will pay the related Trustee's fees. Each Pooling and Servicing
Agreement will provide that the Servicer will pay the related Trustee's fees.
Each Trust Agreement and Administration Agreement and Pooling and Servicing
Agreement will further provide that the related Trustee will be entitled to
indemnification by the Administrator and the Servicer, respectively, and will be
held harmless against, any loss, liability or expenses incurred by the Trustee
not resulting from such Trustee's over willful misfeasance, bad faith or
negligence and not incurred by reason of a breach of any of its representations
or warranties set forth in the related Trust Agreement or Pooling and Servicing
Agreement, as applicable. If the Administrator or Servicer shall not provide
such indemnification, the Servicer may be indemnified from the related Trust,
provided, that no indemnification shall be paid from the Trust on any
Distribution Date or Payment Date, as applicable,
until the Securityholders and the Servicer have been paid all amounts otherwise
due and the amount on deposit in any enhancement account shall equal its
required amount.
CERTAIN INFORMATION REGARDING THE SECURITIES
Fixed Rate Securities
Each class of Securities (other than certain classes of Strip Notes or
Strip Certificates) may bear interest at a fixed rate per annum ("Fixed Rate
Securities") or at a variable or adjustable rate per annum ("Floating Rate
Securities"), as more fully described below and in the related Prospectus
Supplement. Each class of Fixed Rate Securities will bear interest at the
applicable per annum Interest Rate or Pass Through Rate, as the case may be,
specified in the related Prospectus Supplement. Unless otherwise set forth in
the related Prospectus Supplement, interest on each class of Fixed Rate
Securities will be computed on the basis of a 360-day year of twelve 30-day
months. See "Description of the Notes--Principal and Interest on the Notes" and
"Description of the Certificates--Distributions of Principal and Interest"
herein.
Floating Rate Securities
Each class of Floating Rate Securities will bear interest for each related
Interest Reset Period (as such term is defined in the related Prospectus
Supplement with respect to a class of Floating Rate Securities, an "Interest
Reset Period") at a rate per annum determined by reference to an interest rate
basis (the "Base Rate"), plus or minus the Spread, if any, or multiplied by the
Spread Multiplier, if any, in each case as specified in the related Prospectus
Supplement. The "Spread" is the number of basis points (one basis point equals
one one-hundredth of a percentage point) that may be specified in the related
Prospectus Supplement as being applicable to such class, and the "Spread
Multiplier" is the percentage that may be specified in the related Prospectus
Supplement as being applicable to such class.
The related Prospectus Supplement will designate a Base Rate for a given
Floating Rate Security based on the London interbank offered rate ("LIBOR"),
commercial paper rates, Federal funds rates, U.S. Government treasury securities
rates, negotiable certificates of deposit rates or another rate as set forth in
such Prospectus Supplement.
As specified in the related Prospectus Supplement, Floating Rate
Securities of a given class may also have either or both of the following (in
each case expressed as a rate per annum): (i) a maximum limitation, or ceiling,
on the rate at which interest may accrue during any interest period and (ii) a
minimum limitation, or floor, on the rate at which interest may accrue during
any interest period. In addition to any maximum interest rate that may be
applicable to any class of Floating Rate Securities, the interest rate
applicable to any class of Floating Rate Securities will in no event be higher
than the maximum rate permitted by applicable law, as the same may be modified
by United States law of general application.
Each Trust with respect to which a class of Floating Rate Securities will
be issued will appoint, and enter into agreements with, a calculation agent
(each a "Calculation Agent") to calculate interest rates on each such class of
Floating Rate Securities issued with respect thereto. The related Prospectus
Supplement will set forth the identity of the Calculation Agent for each such
class of Floating Rate Securities of a given series, which may be either the
Trustee or any Indenture Trustee with respect to such series. All determinations
of interest by the Calculation Agent shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holders of Floating Rate
Securities of a given class. Unless otherwise specified in the related
Prospectus Supplement, all percentages resulting from any calculation of the
rate of interest on a Floating Rate Security will be rounded, if necessary, to
the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage
point rounded upward.
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Indexed Securities
To the extent so specified in any Prospectus Supplement, any class of
Securities of a given series may consist of Securities ("Indexed Securities") in
which the principal amount payable at the final scheduled Payment Date or
Distribution Date, as the case may be, for such class (the "Indexed Principal
Amount") is determined by reference to a measure (the "Index") which will be
related to (i) the difference in the rate of exchange between United States
dollars and a currency or composite currency (the "Indexed Currency") specified
in the related Prospectus Supplement (such Indexed Securities, "Currency Indexed
Securities"); (ii) the difference in the price of a specified commodity (the
"Indexed Commodity") on specified dates (such Indexed Securities, "Commodity
Indexed Securities"); or (iii) the difference in the level of a specified stock
index (the "Stock Index"), which may be based on U.S. or foreign stocks, on
specified dates (such Indexed Securities, "Stock Indexed Securities"); or (iv)
such other objective price or economic measures as are described in the related
Prospectus Supplement. The manner of determining the Indexed Principal Amount of
an Indexed Security and historical and other information concerning the Indexed
Currency, the Indexed Commodity, the Stock Index or other price or economic
measures used in such determination will be set forth in the related Prospectus
Supplement, together with information concerning tax consequences to the holders
of such Indexed Securities.
If the determination of the Indexed Principal Amount of an Indexed
Security is based on an Index calculated or announced by a third party and such
third party either suspends the calculation or announcement of such Index or
changes the basis upon which such Index is calculated (other than changes
consistent with policies in effect at the time such Indexed Security was issued
and permitted changes described in the related Prospectus Supplement), then such
Index shall be calculated for purposes of such Indexed Security by an
independent calculation agent named in the related Prospectus Supplement on the
same basis, and subject to the same conditions and controls, as applied to the
original third party. If for any reason such Index cannot be calculated on the
same basis and subject to the same conditions and controls as applied to the
original third party, then the Indexed Principal Amount of such Indexed Security
shall be calculated in the manner set forth in the related Prospectus
Supplement. Any determination of such independent calculation agent shall in the
absence of manifest error be binding on all parties.
Unless otherwise specified in the related Prospectus Supplement, interest
on an Indexed Security will be payable based on the amount designated in the
related Prospectus Supplement as the "Face Amount" of such Indexed Security. The
related Prospectus Supplement will describe whether principal amount of the
related Indexed Security, if any, that would be payable upon redemption or
repayment prior to the applicable final scheduled Payment Date or Distribution
Date, as the case may be, will be the Face Amount of such Indexed Security, the
Indexed Principal Amount of such Indexed Security at the time of redemption or
repayment or another amount described in such Prospectus Supplement.
Book-Entry Registration
Securityholders may hold their Securities through DTC (in the United
States) or CEDEL or Euroclear (in Europe), which in turn hold through DTC, if
they are participants of such systems, or indirectly through organizations that
are participants in such systems.
The Seller has been informed by DTC that DTC's nominee will be Cede,
unless another nominee is specified in the related Prospectus Supplement.
Accordingly, such nominee is expected to be the holder of record of any
Book-Entry Securities of any class or series. Unless and until Definitive
Securities are issued under the limited circumstances described herein or in the
related Prospectus Supplement, no Securityholder will be entitled to receive a
physical certificate representing its interest in such Security. All references
herein and in the related Prospectus Supplement to actions by Securityholders
refer to actions
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taken by DTC upon instructions from its Participants and all references herein
and in the related Prospectus Supplement to distributions, notices, reports and
statements to Securityholders of Book-Entry Securities refer to distributions,
notices, reports and statements to DTC or its nominee, as the registered holder
of the applicable Securities, for distribution to Securityholders in accordance
with DTC's procedures with respect thereto. See "--Definitive Securities"
herein.
CEDEL and Euroclear will hold omnibus positions on behalf of the CEDEL
Participants and the Euroclear Participants, respectively, through customers'
securities accounts in CEDEL's and Euroclear's names on the books of their
respective depositaries (collectively, the "Depositaries") which in turn will
hold such positions in customers' securities accounts in the Depositaries' names
on the books of DTC.
DTC is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its Participants and
facilitate the clearance and settlement of securities transactions between
Participants through electronic book-entry changes in accounts of its
Participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers (who may
include an underwriter with respect to any series), banks, trust companies and
clearing corporations and may include certain other organizations, including
CEDEL and Euroclear. Indirect access to the DTC system also is available to
Indirect Participants such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly.
Transfers between Participants will occur in accordance with DTC rules.
Transfers between CEDEL Participants and Euroclear Participants will occur in
the ordinary way in accordance with their applicable rules and operating
procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC in the United States, on the one hand, and directly or indirectly
through CEDEL Participants or Euroclear Participants (each as defined herein),
on the other, will be effected in DTC in accordance with DTC rules on behalf of
the relevant European international clearing system by its Depositary; however,
such cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in such
system in accordance with its rules and procedures and within its established
deadlines (European time). The relevant European international clearing system
will, if the transaction meets its settlement requirements, deliver instructions
to its Depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. CEDEL Participants and Euroclear Participants may not deliver instructions
directly to the Depositaries.
Because of time-zone differences, credits or securities in CEDEL or
Euroclear as a result of a transaction with a Participant will be made during
the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant CEDEL
Participant or Euroclear Participant on such business day. Cash received in
CEDEL or Euroclear as a result of sales of securities by or through a CEDEL
Participant or Euroclear Participant to a Participant will be received with
value on the DTC settlement date but will be available in the relevant CEDEL or
Euroclear cash account only as of the business day following settlement in DTC.
A "Securityholder," as used herein, shall mean a holder of a beneficial
interest in a Book-Entry Security. Unless otherwise provided in the related
Prospectus Supplement, Securityholders that are not
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Participants or Indirect Participants but desire to purchase, sell or otherwise
transfer ownership of, or other interest in, Securities may do so only through
Participants and Indirect Participants. In addition, Securityholders will
receive all distributions of principal of and interest on Securities from the
related Trustee or Indenture Trustee, as applicable (the "Applicable Trustee"),
through the Participants, who in turn will receive them from DTC. Under a
book-entry format, Securityholders may experience some delay in their receipt of
payments, since such payments will be forwarded by the Applicable Trustee to
Cede, as nominee for DTC. DTC will forward such payments to its Participants
which thereafter will forward them to Indirect Participants or Securityholders.
It is anticipated that the only "Noteholder" and "Certificateholder" will be
Cede, as nominee of DTC. Securityholders will not be recognized by the Trustee
as Noteholders ("Noteholders") or Certificateholders ("Certificateholders"), as
such term is used in the related Pooling and Servicing Agreement or Trust
Agreement and Indenture, as applicable, and Securityholders will only be
permitted to exercise the rights of Securityholders indirectly through DTC,
CEDEL or Euroclear and their respective participants or organizations.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Securities among Participants on whose behalf it acts with respect to the
Securities and to receive and transmit distributions of principal of, and
interest on, the Securities. Participants and Indirect Participants with which
Securityholders have accounts with respect to the Securities similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Securityholders. Accordingly, although
Securityholders will not physically possess Securities, the Rules provide a
mechanism by which Participants will receive payments and will be able to
transfer their interests.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a
Securityholder to pledge Securities to persons or entities that do not
participate in the DTC system, or to otherwise act with respect to such
Securities, may be limited due to the lack of physical certificates for such
Securities.
DTC has advised the Seller that it will take any action permitted to be
taken by a Noteholder under the related Indenture or a Certificateholder under
the related Trust Agreement or Pooling and Servicing Agreement, as applicable,
only at the direction of one or more Participants to whose accounts with DTC the
applicable Notes or Certificates are credited. DTC has advised the Seller that
it will take any actions permitted to be taken by a Noteholder under the related
Indenture or a Certificateholder under the related Trust Agreement or Pooling
and Servicing Agreement, as applicable, only at the direction of one or more
Participants to whose accounts with DTC the applicable Notes or Certificates are
credited. DTC may take conflicting actions with respect to other undivided
interests to the extent that such actions are taken on behalf of Participants
whose holdings include such undivided interests.
CEDEL Bank, societe anonyme ("CEDEL") is incorporated under the laws of
Luxembourg as a professional depository. CEDEL holds securities for its
participating organizations ("CEDEL Participants") and facilitates the clearance
and settlement of securities transactions between CEDEL Participants through
electronic book-entry changes in accounts of CEDEL Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled by CEDEL in any of 28 currencies, including United States dollars. CEDEL
provides to its CEDEL Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. CEDEL interfaces with domestic
markets in several countries. As a professional depository, CEDEL is subject to
regulations by the Luxembourg Monetary Institute. CEDEL Participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include an underwriter of any series.
Indirect access to CEDEL is also available to others, such as banks, brokers,
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dealers and trust companies that clear through or maintain a custodial
relationship with a CEDEL Participant, either directly or indirectly.
The Euroclear System (the "Euroclear System") was created in 1968 to hold
securities for participants of the Euroclear System ("Euroclear Participants")
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for physical movement of certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions may now be settled
in any of 27 currencies, including United States dollars. The Euroclear System
includes various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries generally similar to the
arrangement for cross-market transfers with DTC described above. The Euroclear
System is operated by Morgan Guaranty Trust Company of New York, Brussels,
Belgium office (the "Euroclear Operator" or "Euroclear"), under contract with
Euroclear Clearance System, S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for the Euroclear System on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include an
underwriter of any series. Indirect access to the Euroclear System is also
available to other firms that clear through or maintain a custodial relationship
with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear Participants and has no record
of or relationship with persons holding through Euroclear Participants.
Distributions with respect to Securities held through CEDEL or Euroclear
will be credited to the cash accounts of CEDEL Participants or Euroclear
Participants in accordance with the relevant system's rules and procedures, to
the extent received by its Depositary. Such distributions will be subject to tax
reporting in accordance with relevant United States tax laws and regulations.
CEDEL or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by a Securityholder under the related Indenture (if any),
Trust Agreement or Pooling and Servicing Agreement, as applicable, on behalf of
a CEDEL Participant or a Euroclear Participant only in accordance with its
relevant rules and procedures and subject to its Depositary's ability to effect
such actions on its behalf through DTC.
Although DTC, CEDEL and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of Certificates among participants of DTC,
CEDEL and Euroclear, they are under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued at any time.
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Except as required by law, no Trustee will have any liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Securities of any series held by DTC, CEDEL or
Euroclear or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Definitive Securities
Unless otherwise specified in the related Prospectus Supplement, the
Notes, if any, and the Certificates (other than any Certificates held by the
General Partner) of a given series issued in book-entry form will be issued in
fully registered, certificated form ("Definitive Notes" and "Definitive
Certificates," respectively, and collectively referred to herein as "Definitive
Securities") to Noteholders or Certificateholders or their respective nominees
rather than to the Depository or its nominee, only if (i) the Servicer advises
the applicable Trustee in writing that the Depository is no longer willing or
able to discharge properly its responsibilities as depository with respect to
such Securities and such Trustee is unable to locate a qualified successor, (ii)
the Servicer at its option, elects to terminate the book-entry system through
the Depository or (iii) after the occurrence of an Event of Default or an Event
of Servicing Termination with respect to such Securities, holders representing
at least a majority of the outstanding principal amount of the related Notes or
the Certificates, as applicable, of such series advise the Depositary through
Participants in writing (with instructions to notify the applicable Trustee in
writing) that the continuation of a book-entry system through the Depository (or
a successor thereto) with respect to such Notes or Certificates is no longer in
the best interest of the holders of such Securities.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Depository will be required to notify all applicable
Securityholders of a given series through Participants of the availability of
Definitive Securities. Upon surrender by the Depository of the definitive
certificates representing the corresponding Securities and receipt of
instructions for re-registration, the appropriate Trustee will reissue such
Securities as Definitive Securities to such Securityholders.
Distributions of principal with respect to, and interest on, such
Definitive Securities will thereafter be made in accordance with the procedures
set forth in the related Indenture, Trust Agreement or Pooling and Servicing
Agreement, as applicable, directly to holders of Definitive Securities in whose
names the Definitive Securities were registered at the close of business on the
applicable record date specified for such Securities in the related Prospectus
Supplement. Such distributions will be made by check mailed to the address of
such holder as it appears on the register maintained by the related Trustee or
Indenture Trustee, as applicable. The final payment on any such Definitive
Security (whether a Definitive Security or the Securities registered in the name
of Cede representing the Securities), however, will be made only upon
presentation and surrender of such Definitive Security at the office or agency
specified in the notice of final distribution to the applicable Securityholders.
Definitive Securities will be transferable and exchangeable at the offices
of the related transfer agent and registrar for such series, which, unless
otherwise specified in the related Prospectus Supplement, shall initially be
Chase (in such capacity, the "Transfer Agent and Registrar"). No service charge
will be imposed for any registration of transfer or exchange, but the Applicable
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith.
List of Securityholders
Three or more holders of the Notes of any series (each of whom has owned a
Note for at least six months) may, by written request to the related Indenture
Trustee, obtain access to the list of all Noteholders of such series maintained
by such Indenture Trustee for the purpose of communicating with other
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Noteholders of such series with respect to their rights under such Indenture or
such Notes. Such Indenture Trustee may elect not to afford the requesting
Noteholders access to the list of such Noteholders if it agrees to mail the
desired communication or proxy, on behalf and at the expense of the requesting
Noteholders, to all Noteholders of record. Unless Definitive Notes have been
issued, the only "Noteholder" appearing on the list maintained by the related
Indenture Trustee will be Cede, as nominee for DTC. In such circumstances, any
beneficial owner of a Note wishing to communicate with other beneficial owners
of Notes will not be able to identify those beneficial owners through the
Indenture Trustee and instead will have to attempt to identify them through DTC
and its Participants or such other means as such beneficial owner may find
available.
Three or more Certificateholders of any series or one or more
Certificateholders evidencing not less than 25% of the Certificate Balance of
such series may, by written request to the applicable related Trustee or
Certificate Registrar, obtain access to the list of all Certificateholders of
such series for the purpose of communicating with such Certificateholders with
respect to their rights under the related Trust Agreement or Pooling and
Servicing Agreement, as applicable, or under such Certificates. Unless
Definitive Certificates have been issued, the only "Certificateholder" appearing
on the list maintained by the related Trustee will be Cede, as nominee for DTC.
In such circumstances, any beneficial owner of a Certificate wishing to
communicate with other beneficial owners of Certificates will not be able to
identify those beneficial owners through the related Trustee and instead will
have to attempt to identify them through DTC and its Participants or such other
means as such beneficial owner may find available.
Reports to Securityholders
With respect to each series of Securities, on each Payment Date or
Distribution Date, as applicable, the Paying Agent will include with each
distribution to each Noteholder (if any) and Certificateholder a statement
prepared by the Servicer. With respect to each series of Securities, each such
statement to be delivered to Noteholders will include (to the extent
applicable), among other things, the following information (and any other
information so specified in the related Prospectus Supplement) as to the Notes
of such series with respect to such Payment Date or the period since the
previous Payment Date, as applicable, and each such statement to be delivered to
Certificateholders will include (to the extent applicable) the following
information (and any other information so specified in the related Prospectus
Supplement) as to the Certificates of such series with respect to such
Distribution Date or the period since the previous Distribution Date, as
applicable:
(i) the amount of the distribution allocable to principal with
respect to each class of such Notes and to the Certificate Balance of each
class of such Certificates and the derivation of such amounts;
(ii) the amount of the distribution allocable to interest on or with
respect to each class of Notes and Certificates of such series;
(iii) amount of the Servicing Fee paid to the Servicer in respect of
the related Collection Period;
(iv) the amount of the Administration Fee paid to the Administrator
in respect of the related Collection Period;
(v) the aggregate unreimbursed Advances as of the last day of the
preceding Collection Period and the change in such amount from the
previous Collection Period;
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(vi) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(vii) the aggregate outstanding principal balance and the Note Pool
Factor for each class of such Notes, and the Certificate Balance and the
Certificate Pool Factor for each class of such Certificates, in each case
after giving effect to all payments reported under clause (i) above on
such date;
(viii) the Interest Rate or Pass Through Rate for the next period
with respect to any class of Notes or Certificates of such series with
variable or adjustable rates;
(ix) the amount of the aggregate realized losses, if any, for the
preceding Collection Period;
(x) the Noteholders' Interest Carryover Shortfall, the Noteholders'
Principal Carryover Shortfall, the Certificateholders' Interest Carryover
Shortfall and the Certificateholders' Principal Carryover Shortfall (each
as defined in the related Prospectus Supplement), if any, in each case as
applicable to each class of Securities and the change in such amounts from
the preceding statement;
(xi) the aggregate Purchase Amounts with respect to the Receivables,
if any, that were repurchased by the Seller or purchased by the Servicer
in such Collection Period;
(xii) the balance of the Reserve Account (if any) or any other
enhancement account, as of such date, after giving effect to changes
therein on such date, the Specified Reserve Account Balance on such date
(as defined in the related Prospectus Supplement) or any other required
enhancement account balance on such date, and the components of
calculating any such required balance;
(xiii) the balance of the Cash Collateral Account, if any, the
Available Cash Collateral Amount (and such amount expressed as a
percentage of the related Pool Balance) and the related Required Cash
Collateral Amount (each as defined in the related Prospectus Supplement);
(xiv) for each such date during the Funding Period, if any, the
remaining Pre-Funded Amount;
(xv) for the first such date that is on or immediately following the
end of the Funding Period, if any, the amount of any remaining Pre-Funded
Amount that has not been used to fund the purchase of Subsequent
Receivables and is being passed through as payments of principal on the
Securities of such series.
Each amount set forth pursuant to subclauses (i), (ii), (iii) and (iv)
with respect to the Notes or the Certificates of any series will be expressed as
a dollar amount per $1,000 of the initial principal balance of such Notes or the
initial Certificate Balance of such Certificates, as applicable.
Unless otherwise specified in the related Prospectus Supplement, the
statements for each Collection Period will be delivered to DTC for further
distribution to Securityholders in accordance with DTC procedures. See "Certain
Information Regarding the Securities--Book-Entry Registration" herein. The
Servicer, on behalf of each Trust, will file with the Commission such periodic
reports with respect to each Trust as required under the Exchange Act and the
rules and regulations of the Commission thereunder.
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Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of each Trust, the Trustee or the
Paying Agent will furnish to each person who at any time during such calendar
year has been a Noteholder or Certificateholder with respect to such Trust and
received any payment thereon a statement containing certain information for the
purposes of such Securityholder's preparation of federal income tax returns. See
"Certain Federal Income Tax Consequences" in the related Prospectus Supplement.
DESCRIPTION OF THE TRANSFER AND SERVICING AGREEMENTS
The following summary describes certain terms of (i) each Sale and
Servicing Agreement (or in the case of a Trust not issuing Notes, each Pooling
and Servicing Agreement) pursuant to which each Trust will acquire Receivables
from the Seller and the Servicer will agree to service such Receivables; (ii)
each Trust Agreement (or, in the case of a trust not issuing Notes, each Pooling
and Servicing Agreement) pursuant to which each Trust will be created and the
related series of Certificates will be issued and (iii) each Administration
Agreement pursuant to which Chase will undertake certain administrative duties
with respect to each Trust that issues Notes (collectively, the "Transfer and
Servicing Agreements"). Forms of the Transfer and Servicing Agreements have been
filed as exhibits to the Registration Statement of which this Prospectus forms a
part. The following summary, as well as other pertinent information included
elsewhere in this Prospectus and in the related Prospectus Supplement, describes
the material terms of the Transfer and Servicing Agreements related to any
series. This summary does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the provisions of such Transfer and
Servicing Agreements.
Sale and Assignment of Receivables
On or before the closing date specified with respect to any given Trust in
the related Prospectus Supplement (the "Closing Date"), the Seller will transfer
and assign in consideration of the receipt of the related Securities, without
recourse, to the related Trust pursuant to a Sale and Servicing Agreement or to
the related Trustee pursuant to a Pooling and Servicing Agreement, as
applicable, its entire interest in the Initial Receivables, if any, certain
related property and the proceeds thereof of the related Receivables Pool,
including, among other things, its security interests in the related Financed
Vehicles. Each such Receivable will be identified in a schedule appearing as an
exhibit to such Sale and Servicing Agreement or Pooling and Servicing Agreement
(a "Schedule of Receivables"). The Seller will sell the Certificates (other than
those Certificates it is selling to the General Partner) and (if applicable) the
Notes to the respective underwriters set forth in the Prospectus Supplement. See
"Plan of Distribution." To the extent specified in the related Prospectus
Supplement, a portion of the net proceeds received from the sale of the
Securities of a given series will be applied to the deposit of the Pre-Funded
Amount into the Pre-Funding Account and/or to the initial deposit into a Reserve
Account, the Cash Collateral Account or the Yield Supplement Account, if any.
The related Prospectus Supplement for each Trust will specify whether, and the
terms, conditions and manner under which, Subsequent Receivables will be sold by
the Seller to the related Trust from time to time during any Funding Period on
each date specified as a transfer date in the related Prospectus Supplement
(each, a "Subsequent Transfer Date").
Each Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, will set forth criteria that must be satisfied by each Receivable.
Unless the related Prospectus Supplement specifies that certain of the criteria
set forth below are not required to be satisfied, the criteria will include,
among others, the following: (a) each Receivable (i) has been originated in the
form of a credit sales transaction by a Dealer, or a purchase money loan
transaction through a Dealer, located in one of the states of the United States
(including the District of Columbia), for the retail financing of a Financed
Vehicle and, if
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a retail installment sales contract, was purchased by the Seller or an affiliate
of the Seller from a Dealer and it has been validly assigned by such Dealer to
the Seller or such affiliate in accordance with its terms, (ii) contains
customary and enforceable provisions such that the rights and remedies of the
holder thereof shall be adequate for realization against the collateral or the
benefits of the security and (iii) (if not a Final Payment Receivable) provides
for fully amortizing level scheduled monthly payments (provided that the last
payment may be different from the level scheduled payment) and for accrual of
interest at a fixed rate according to the simple interest or actuarial method;
(b) each Receivable and each sale of the related Financed Vehicle complies in
all material respects with all requirements of applicable federal, state and
local laws and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act,
Federal Reserve Board Regulations B and Z, state adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code and any other consumer
credit, equal opportunity and disclosure laws applicable to such Receivable and
the sale thereof; (c) each Receivable constitutes the legal, valid and binding
payment obligation in writing of the Obligor, enforceable by the holder thereof
in all material respects in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization, liquidation
and other similar laws and equitable principles relating to or affecting the
enforcement of creditors' rights; (d) subject to certain limited exceptions
specified in the Sale and Servicing Agreement or Pooling and Servicing
Agreement, as applicable, immediately prior to the sale and assignment thereof
to the Trustee, each Receivable was secured by a validly perfected first
priority security interest in the Financed Vehicle in favor of the Seller as
secured party, which security interest is assignable and has been so assigned by
the Seller to the related Trust; (e) as of the related Cutoff Date, the Seller
had no knowledge either of any facts which would give rise to any right of
rescission, setoff, counterclaim, or defense, or of the same being asserted or
threatened, with respect to any Receivable; (f) as of the related Cutoff Date,
the Seller had no knowledge of any liens or claims that have been filed,
including liens for work, labor, materials or unpaid taxes relating to a
Financed Vehicle, that would be liens prior to, or equal or coordinate with, the
lien granted by the Receivable; (g) except for payment defaults continuing for a
period of not more than 30 days as of the related Cutoff Date, (i) the Seller
has no knowledge that a default, breach, violation, or event permitting
acceleration under the terms of any Receivable exists, (ii) the Seller has no
knowledge that a continuing condition that with notice or lapse of time would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Receivable exists and (iii) the Seller has not waived any of
the foregoing; (h) each Receivable requires that the Obligor thereunder obtain
theft and physical damage insurance covering the Financed Vehicle; and (i) each
Receivable satisfies the other criteria specified above under "The Receivables
Pool" and each other criterion set forth in the related Prospectus Supplement.
Unless otherwise provided in the related Prospectus Supplement, as of the
last day of the month following the date (or, if the Seller elects, the last day
of the month including such date) on which the Seller discovers or receives
written notice from the related Trustee or any Indenture Trustee that a
Receivable does not meet any of the criteria set forth in the related Sale and
Servicing Agreement or Pooling and Servicing Agreement, as applicable, and such
failure materially and adversely affects the interests of the related
Securityholders in such Receivable, the Seller, unless it has cured the failed
criterion, will repurchase such Receivable from the related Trust at a price
equal to the unpaid principal balance owed by the Obligor thereof plus interest
thereon at the respective contract rate of interest through the last day of the
month of repurchase (the "Purchase Amount"). The repurchase obligation will
constitute the sole remedy available to the Certificateholders or the Trustee
and any Noteholders or Indenture Trustee in respect of such Trust for the
failure of a Receivable to meet any of the criteria set forth in the related
Sale and Servicing Agreement or Pooling and Servicing Agreement, as applicable.
Pursuant to each Sale and Servicing Agreement or Pooling and Servicing
Agreement, as applicable, to assure uniform quality in servicing the Receivables
and to reduce administrative costs, the related Trustee
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or any Indenture Trustee will appoint the Servicer as initial custodian.
Receivables will not be stamped or otherwise marked to reflect the transfer of
the Receivables to a Trust and will not be segregated from the other Motor
Vehicle Loans owned or serviced by the Servicer. The Obligors under the
Receivables will not be notified of the transfer of the Receivables to a Trust,
but the Seller's accounting records and computer systems will reflect the sale
and assignment of the Receivables to such Trust. See "Certain Legal Aspects of
the Receivables" herein.
Accounts
With respect to each Trust that issues Notes, the Servicer will establish
and maintain one or more accounts, in the name of the Indenture Trustee on
behalf of the related Noteholders and Certificateholders, into which all
payments made on or with respect to the related Receivables will be deposited
(the "Collection Account"). The Servicer will also establish and maintain with
such Indenture Trustee an account, in the name of such Indenture Trustee on
behalf of such Noteholders, into which, to the extent and in the manner
described in the related Prospectus Supplement, amounts released from the
Collection Account and any Pre-Funding Account, Cash Collateral Account, Yield
Supplement Account, Reserve Account or other credit or cash flow enhancement for
payment to such Noteholders will be deposited and from which all distributions
to such Noteholders will be made (the "Note Distribution Account"). The Servicer
will establish and maintain with the related Trustee an account, in the name of
such Trustee on behalf of such Certificateholders, into which amounts released
from the Collection Account and any Pre-Funding Account, Cash Collateral
Account, Yield Supplement Account, Reserve Account or other credit or cash flow
enhancement for distribution to such Certificateholders will be deposited and
from which all distributions to such Certificateholders will be made (the
"Certificate Distribution Account"). With respect to each Trust that does not
issue Notes, the Servicer will also establish and maintain the Collection
Account and any other Trust Account in the name of the related Trustee on behalf
of the related Certificateholders.
If so provided in the related Prospectus Supplement, the Servicer will
establish and maintain for the related Trust an additional account (the
"Payahead Account"), in the name of the related Indenture Trustee or Trustee,
into which, to the extent required by the related Sale and Servicing Agreement
or Pooling and Servicing Agreement, early payments by or on behalf of Obligors
on Actuarial Receivables which do not constitute scheduled payments, full
prepayments, nor certain partial prepayments that result in a reduction of the
Obligor's periodic payment below the scheduled payment as of the applicable
Cutoff Date ("Payaheads") will be deposited until such time as the payment falls
due. Until such time as payments are transferred from the Payahead Account to
the Collection Account, they will not constitute collected interest or collected
principal and will not be available for distribution to the related Noteholders
or Certificateholders. The Payahead Account will initially be maintained with
the related Indenture Trustee or Trustee. So long as the Seller is the Servicer
and provided that (i) there exists no Event of Servicing Termination and (ii)
each other condition to holding Payaheads as may be required by the related Sale
and Servicing Agreement or Pooling and Servicing Agreement is satisfied,
Payaheads may be retained by the Servicer until the applicable Payment Date or
Distribution Date.
Any other accounts to be established with respect to a Trust, including
any Pre-Funding Account, Cash Collateral Account, Yield Supplement Account or
Reserve Account will be described in the related Prospectus Supplement.
For any series of Securities, the Collection Account, the Note
Distribution Account, the Certificate Distribution Account and any Pre-Funding
Account, Cash Collateral Account, Reserve Account, Yield Supplement Account,
Payahead Account and other accounts identified as such in the related Prospectus
Supplement are collectively referred to herein as the "Trust Accounts."
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The Trust Accounts will be maintained as Eligible Deposit Accounts. An
"Eligible Deposit Account" for any series shall be either (a) a separately
identifiable deposit account established in the deposit taking department of a
Qualified Institution or (b) a segregated identifiable trust account established
in the trust department of a Qualified Trust Institution. A "Qualified
Institution" shall be a depository institution (including Chase USA (New York),
Chase USA (Delaware) or Chase) organized under the laws of the United States or
any state thereof or incorporated under the laws of a foreign jurisdiction with
a branch or agency located in the United States or any state thereof and subject
to supervision and examination by federal or state banking authorities, having a
short-term certificate of deposit rating and a long-term unsecured debt rating
confirmed by each Rating Agency as being consistent with the ratings of the
related Securities and, in the case of any such institution (including Chase USA
(New York), Chase USA (Delaware) or Chase) organized under the laws of the
United States, the deposits of which are insured by the FDIC. A "Qualified Trust
Institution" shall be an institution organized under the laws of the United
States or any state thereof or incorporated under the laws of a foreign
jurisdiction with a branch or agency located in the United States and subject to
supervision and examination by federal or state banking authorities with the
authority to act under such laws as a trustee or in any other fiduciary
capacity, having not less than $1 billion in assets under fiduciary management
and a long-term deposit rating confirmed by each Rating Agency as being
consistent with the ratings of the related Securities. Unless the related
Prospectus Supplement specifies that a Trust Account will be established with
another institution, each Trust Account will be established initially with the
trust department of Chase. Should Chase or any depositary of a Trust Account
cease to be a Qualified Institution or Qualified Trust Institution, such Trust
Account shall be moved to a Qualified Institution or Qualified Trust
Institution, provided that such Trust Account may remain at such depositary if
each Trustee receives written confirmation from each related Rating Agency to
the effect that the ratings of the related Securities will not be adversely
affected.
If so provided in the related Prospectus Supplement, funds in the Trust
Accounts will be invested as provided in the related Sale and Servicing
Agreement or Pooling and Servicing Agreement, as applicable, in Permitted
Investments. "Permitted Investments" are generally limited to investments
confirmed by the related Rating Agencies as being consistent with the rating of
the related Securities. Permitted Investments may include Securities issued by
the Seller or its affiliates or trusts originated by the Seller or its
affiliates, and may also include certain money market mutual funds for which
Chase or any of its affiliates serves as an investment advisor, administrator,
shareholder servicing agent and/or custodian or subcustodian (for which it
collects fees and expenses). Except as described below or in the related
Prospectus Supplement, Permitted Investments are limited to obligations or
securities that mature on or before the "Business Day" (as defined in the
related Prospectus Supplement) preceding the next Distribution Date or Payment
Date for such series (each such preceding day, a "Deposit Date"). However, to
the extent set forth in the related Prospectus Supplement and consistent with
the ratings of the related Securities, funds in any Cash Collateral Account,
Reserve Account or Yield Supplement Account may be invested in securities that
will not mature prior to the next Deposit Date with respect to such Certificates
or Notes and will not be sold to meet any shortfalls. Thus, the amount of cash
in any Cash Collateral Account, Reserve Account or Yield Supplement Account at
any time, for example, may be less than the balance of the Cash Collateral
Account, Reserve Account or Yield Supplement Account. If the amount required to
be withdrawn from any Cash Collateral Account, Reserve Account or Yield
Supplement Account to cover shortfalls in collections on the related Receivables
(as provided in the related Prospectus Supplement) exceeds the amount of cash in
such Cash Collateral Account, Reserve Account or Yield Supplement Account, a
temporary shortfall in the amounts distributed to the related Noteholders of
Certificateholders could result, which could, in turn, increase the average life
of the Notes or the Certificates of such series. Except as otherwise specified
in the related Prospectus Supplement, investment earnings on funds deposited in
the Trust Accounts, net of losses and investment expenses (collectively,
"Investment Earnings"), shall be paid to the Servicer as additional servicing
compensation.
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Chase, in its capacity as the initial paying agent (the "Paying Agent")
under each related Sale and Servicing Agreement and Indenture or Pooling and
Servicing Agreement, as applicable, will have the revocable right to withdraw
funds from a Trust Account for the purpose of making distributions to
Noteholders and Certificateholders in the manner provided therein.
Servicing Procedures
The Servicer will service the Receivables in each Receivables Pool and
will make reasonable efforts to collect all payments due with respect to such
Receivables and, in a manner consistent with the related Sale and Servicing
Agreement or Pooling and Servicing Agreement, as applicable, and with the terms
of the Receivables, will follow such collection and servicing procedures as it
follows with respect to comparable new or used automobile receivables that it
services for itself or others and that are consistent with prudent industry
standards. The related Prospectus Supplement, Pooling and Servicing Agreement
and Sale and Servicing Agreement, as applicable, will set forth the terms and
conditions in accordance with which any Receivable may be modified, which terms
will be set forth in the related Prospectus Supplement. Some of such
arrangements may result in the Servicer purchasing the Receivable for the
Purchase Amount, while others may result in the Servicer making Advances. Any
such required purchase or extension will constitute the sole remedy available to
the Noteholders, Certificateholders or any related Trustee for any such uncured
breach.
Each Sale and Servicing Agreement and Pooling and Servicing Agreement, as
applicable, will provide that the Servicer, on behalf of the related Trust,
shall use reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise take possession of the Financed Vehicle
securing any Receivable with respect to which the Servicer shall have
determined, during any Collection Period, that eventual payment in full of the
amount financed (including accrued interest thereon) is unlikely (each such
Receivable, a "Defaulted Receivable"); provided that no Receivable will become a
Defaulted Receivable any later than the calendar month in which more than 10% of
a scheduled payment of the Motor Vehicle Loan becomes 240 days delinquent. See
"The Receivables Pools--Insurance and Collection Procedures" herein. The
Servicer shall follow such customary and usual practices and procedures as it
shall deem necessary or advisable in its servicing of new or used automobile
receivables, which may include reasonable efforts to realize upon any recourse
to Dealers, consigning the Financed Vehicle to a Dealer for resale and selling
the Financed Vehicle at public or private sale. See "Certain Legal Aspects of
the Receivables" herein. The proceeds of any such realization will be deposited
in the related Collection Account.
Collections
With respect to each Trust, the Servicer will deposit all payments on the
related Receivables (from whatever source) and all proceeds of such Receivables
collected during each collection period specified in the related Prospectus
Supplement (each, a "Collection Period") into the related Collection Account on
a daily basis within forty-eight hours of receipt. However, at any time that and
for so long as (i) the Seller is also the Servicer, and (ii) each other
condition to making deposits less frequently than daily as may be confirmed by
the related Rating Agencies or any enhancement provider or as set forth in the
related Prospectus Supplement is satisfied, the Servicer will not be required to
deposit such amounts into the Collection Account until on or before the Deposit
Date preceding the related Distribution Date or Payment Date. Pending deposit
into the Collection Account, collections may be invested by the Servicer at its
own risk and for its own benefit and will not be segregated from its own funds.
If the Servicer were unable to remit such funds, Securityholders might incur a
loss. To the extent set forth in the related Prospectus Supplement, the Servicer
may, in order to satisfy the requirements described above, obtain letters of
credit or other security for the benefit of the related Trust to secure timely
remittances of collections on the
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related Receivables and payment of the aggregate Purchase Amount with respect to
Receivables purchased by the Servicer.
Servicing Compensation and Payment of Expenses
Unless otherwise specified in the related Prospectus Supplement with
respect to any Trust, the Servicer will be entitled to receive the Servicing Fee
for each Collection Period in an amount equal to the sum of (i) the product of
the specified percentage per annum (as set forth in the related Prospectus
Supplement, the "Servicing Fee Rate") divided by 12 and the Pool Balance as of
the last day of the Collection Period immediately preceding the related
Collection Period and (ii) unless otherwise specified in the related Prospectus
Supplement with respect to any Trust, any Late Fees collected during the related
Collection Period (collectively, the "Servicing Fee"). The Servicing Fee will
also include Investment Earnings to the extent set forth in the related
Prospectus Supplement. The Servicing Fee (together with any portion of the
Servicing Fee that remains unpaid from prior Distribution Dates or Payments
Dates) will be paid solely to the extent of amounts allocable thereto as
specified in the related Prospectus Supplement. The Servicer will be entitled to
reimbursement from each Trust for certain liabilities.
"Late Fees" shall mean, collectively, any late charges, credit-related
extension fees, non-credit related extension fees or other administrative fees
or similar charges allowed by applicable law with respect to the related
Receivables.
The Servicing Fee will compensate the Servicer for performing the
functions of a third party servicer of motor vehicle receivables as an agent for
the Noteholders and Certificateholders, including collecting and posting all
payments and responding to inquiries of Obligors, investigating delinquencies,
reporting tax information to Obligors, advancing costs of disposition of
defaults. The Servicing Fee also will compensate the Servicer for administering
the particular Receivables Pool, accounting for collections and furnishing
monthly and annual statements to the related Trustee with respect to
distributions. The Servicing Fee also will also compensate the Servicer for
certain taxes, accounting fees, outside auditor fees, the fees of the Paying
Agent, the Transfer Agent, the Registrar and the Trustee and its counsel, data
processing costs and other costs incurred in connection with administering the
applicable Receivables Pool.
Advances
The Prospectus Supplement may provide that the Servicer may, in its sole
discretion, make a payment (an "Advance") with respect to each delinquent
Receivable in the related Receivables Pool in an amount described in such
Prospectus Supplement. The Servicer may elect not to make any Advance with
respect to a Receivable under the circumstances described in the related
Prospectus Supplement. The Servicer will be entitled to be reimbursed for
outstanding Advances in the manner described in the related Prospectus
Supplement. The Servicer will deposit all Advances with respect to any Payment
Date or Distribution Date, as applicable, on the related Deposit Date.
Distributions
With respect to each series of Securities, beginning on the Payment Date
or Distribution Date, as applicable, specified in the related Prospectus
Supplement, distributions of principal and interest (or, where applicable, of
principal or interest only) on each class of such Securities entitled thereto
will be made by the applicable related Trustee or Paying Agent to the
Noteholders and the Certificateholders of such series. The timing, calculation,
allocation, order, source, priorities of and requirements for all payments to
each class of Noteholders and all distributions to each class of
Certificateholders of such series will be set forth in the related Prospectus
Supplement.
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With respect to each Trust, on each Payment Date and Distribution Date, as
applicable, collections on the related Receivables will be transferred from the
Collection Account directly to the Note Distribution Account, if any, and the
Certificate Distribution Account, if any, for distribution to Noteholders, if
any, and Certificateholders to the extent provided in the related Prospectus
Supplement. Credit enhancement, such as a Cash Collateral Account, Reserve
Account or Yield Supplement Account, will be available to cover any shortfalls
in the amount available for distribution on such date to the extent specified in
the related Prospectus Supplement. As more fully described in the related
Prospectus Supplement, and unless otherwise specified therein, distributions in
respect of principal of a class of Securities of a given series will be
subordinate to distributions in respect of interest on such class, and
distributions in respect of one or more classes of Certificates of such series
may be subordinate to payments in respect of Notes, if any, of such series or
other classes of Certificates of such series.
Credit and Cash Flow Enhancement
The amounts and types of credit and cash flow enhancement arrangements, if
any, and the provider thereof, if applicable, with respect to each class of
Securities of a given series will be set forth in the related Prospectus
Supplement. If and to the extent provided in the related Prospectus Supplement,
credit and cash flow enhancement may be in the form of subordination of one or
more classes of Securities, a Cash Collateral Guaranty supported by a Cash
Collateral Account, a Reserve Account, a Yield Supplement Agreement, a Yield
Supplement Account, over-collateralization, letters of credit, credit or
liquidity facilities, surety bonds, guaranteed investment contracts, swaps or
other interest rate protection agreements, repurchase obligations, other
agreements with respect to third party payments or other support, cash deposits
or such other arrangements as may be described in the related Prospectus
Supplement or any combination of two or more of the foregoing. If specified in
the related Prospectus Supplement, credit or cash flow enhancement for a class
of Securities may cover one or more other classes of Securities of the same
series, and credit or cash flow enhancement for a series of Securities may cover
one or more other series of Securities.
The presence of a Cash Collateral Guaranty, a Yield Supplement Agreement,
a Reserve Account, a Yield Supplement Account and other forms of credit
enhancement for the benefit of any class or series of Securities is intended to
enhance the likelihood of receipt by the Securityholders of such class or series
of the full amount of principal and interest due thereon and to decrease the
likelihood that such Securityholders will experience losses. Unless otherwise
specified in the related Prospectus Supplement, the credit enhancement for a
class or series of Securities will not provide protection against all risks of
loss and will not guarantee repayment of the entire principal balance and
interest thereon. If losses occur that exceed the amount covered by any credit
enhancement or that are not covered by any form of credit enhancement,
Securityholders of any class or series will bear their allocable share of
deficiencies, as described in the related Prospectus Supplement. In addition, if
a form of credit enhancement covers more than one series of Securities,
Securityholders of any such series will be subject to the risk that such credit
enhancement will be exhausted by the claims of Securityholders of other series.
The Seller may replace or reduce the credit enhancement for any class of
Securities with another form of credit enhancement without the consent of the
related Securityholders, provided the related Rating Agencies confirm in writing
that such substitution or reduction will not result in the reduction,
qualification or withdrawal of the rating of such class of Securities or any
class of Securities of the related Series.
Reserve Account. If provided in the related Prospectus Supplement,
pursuant to the related Sale and Servicing Agreement, the Seller will establish
for a series or class of Securities an account, as specified in the related
Prospectus Supplement (the "Reserve Account"), which will be maintained in the
name of the related Indenture Trustee. Unless otherwise provided in the related
Prospectus Supplement, the Reserve
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Account will be included in the property of the related Trust. The Reserve
Account will be funded by an initial deposit on the Closing Date, and if the
related Series has a Funding Period, will also be funded on each Subsequent
Transfer Date. The related Prospectus Supplement will specify whether the
Reserve Account will be funded solely from the proceeds of a loan or loans to be
made by a cash collateral depositor (a "Cash Collateral Depositor") pursuant to
a loan agreement (each a "Loan Agreement"), from a deposit or deposits by the
Seller, or by a combination thereof. As described in the related Prospectus
Supplement, the amount on deposit in the Reserve Account will be increased on
each Payment Date up to the Specified Reserve Account Balance (as defined in the
related Prospectus Supplement) by the deposit therein of the amount of
collections on the related Receivables remaining on each such Payment Date after
the payment of all other required payments and distributions on such date. The
related Prospectus Supplement will describe the circumstances and manner under
which distributions may be made out of the related Reserve Account, either to
holders of the Securities covered thereby, to the Seller or to a third-party
specified therein.
Cash Collateral Guaranty. If provided in the related Prospectus Supplement
with respect to a Trust classified as a grantor trust, the related Trustee will
have the right to demand payments under a Cash Collateral Guaranty (the "Cash
Collateral Guaranty") under the circumstances described therein. Each Cash
Collateral Guaranty will be secured by an account (each, a "Cash Collateral
Account"), which will be held in the name of a cash collateral trustee (the
"Cash Collateral Trustee"), as specified in the related Prospectus Supplement.
The related Prospectus Supplement will specify whether the Cash Collateral
Account will be funded on the date of the issuance of the related series of
Securities from the proceeds of a loan to be made by a Cash Collateral Depositor
pursuant to a Loan Agreement, from a deposit by the Seller or by a combination
thereof. To the extent specified in the related Prospectus Supplement, funds in
the related Cash Collateral Account will thereafter be supplemented by the
deposit of amounts remaining on any Distribution Date after making all other
distributions required on such date. Each Cash Collateral Guaranty will not be a
recourse obligation of the related Cash Collateral Depositor, any Cash
Collateral Trustee, any related Trustee, the Bank, as Seller or as Servicer, and
will be secured solely with amounts, if any, on deposit in the related Cash
Collateral Account. Unless otherwise specified in the related Prospectus
Supplement, such Cash Collateral Account and any amounts therein will not be the
property of any Trust, but will be held in accordance with the related Cash
Collateral Trust Agreement as further described therein. The related Prospectus
Supplement will describe the circumstances and manner under which distributions
may be made out of any Cash Collateral Account, either to the holders of the
Securities covered thereby, to the Seller, to the Cash Collateral Depositor or
to a third party specified therein.
Yield Supplement Account; Yield Supplement Agreement. If so provided in
the related Prospectus Supplement, the Seller, the General Partner or a third
party will enter into a Yield Supplement Agreement and/or establish a Yield
Supplement Account with the related Indenture Trustee or related Trustee for the
benefit of the holders of the related Securities. A Yield Supplement Agreement
or a Yield Supplement Account will be designed to provide payments to the
Securityholders in respect of Receivables the Contract Rate of which is less
than the Required Rate. A Yield Supplement Account may be an asset of the
obligor under the Yield Supplement Agreement holding funds to secure the
obligation of such obligor to make payments under such Yield Supplement
Agreement or, in the case of a Trust that is not classified as a grantor trust,
may be an asset of the Trust from which cash may periodically be withdrawn to
provide payments to the Securityholders.
Net Deposits
As an administrative convenience, the Seller, so long as it is Servicer
and is permitted to make deposits to the Collection Account on a monthly basis,
will be permitted to deposit the collections, aggregate Advances and Purchase
Amounts for any Trust for or with respect to the related Collection
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Period net of distributions to be made to the Servicer or the Seller for such
Trust with respect to such Collection Period (remitting amounts to the Seller
directly). With respect to any Trust that issues both Certificates and Notes, if
the related Payment Dates do not coincide with Distribution Dates, all
distributions, deposits or other remittances made on a Payment Date will be
treated as having been distributed, deposited or remitted on the Distribution
Date for the applicable Collection Period for purposes of determining other
amounts required to be distributed, deposited or otherwise remitted on such
Distribution Date.
Statements to Trustees and Trust
Prior to each Distribution Date with respect to each series of Securities,
the Servicer will provide to the related Trustee and any Indenture Trustee a
statement setting forth substantially the same information for such date and the
related Collection Period as is required to be provided in the periodic reports
provided to Noteholders and Certificateholders of such series described herein
under "Certain Information Regarding the Securities--Reports to
Securityholders."
Evidence as to Compliance
Each Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, will provide that a firm of independent public accountants will
annually furnish to the related Trustee and any Indenture Trustee a statement as
to compliance by the Servicer during the preceding twelve months (or, in the
case of the first such certificate, from the applicable Closing Date) with
certain standards relating to the servicing of the applicable Receivables, or as
to the effectiveness of its processing and reporting procedures and certain
other matters.
Each Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, will also provide for delivery to the related firm of independent
public accountants referred to in the immediately preceding paragraph,
substantially simultaneously with the delivery or such accountants' statement
referred to above, of a certificate signed by an officer of the Servicer stating
that the Servicer has fulfilled its obligations in all material respects under
such Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, throughout the preceding twelve months (or, in the case of the first
such certificate, from the Closing Date) or, if there has been a default in the
fulfillment of any such obligation, describing each such default.
Copies of such statements and certificates may be obtained by
Securityholders by a request in writing addressed to the Servicer.
Certain Matters Regarding the Servicer
Each Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, will provide that the Servicer may not resign from its obligations
and duties as Servicer thereunder, except (i) upon determination that the
Servicer's performance of such duties is no longer permissible under applicable
law or (ii) in the event of the appointment of a successor servicer, upon
notification by each Rating Agency then rating any of the related Securities
that the rating then assigned to any such Securities will not be reduced or
withdrawn. Such resignation will not become effective until the related Trustee
(which shall not be obligated to act as successor servicer if the Servicer has
resigned for a reason other than that the performance of its duties are no
longer permissible under applicable laws), Indenture Trustee (if any) or a
successor servicer has assumed the Servicer's servicing responsibilities and
obligations under such Sale and Servicing Agreement or Pooling and Servicing
Agreement, as applicable.
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Each Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, will also provide that, except in connection with a merger or
consolidation (including the Chase USA Merger), neither the Seller nor the
Servicer may transfer or assign all, or a portion of, its rights, obligations
and duties under any Sale and Servicing Agreement or Pooling and Servicing
Agreement, unless (i) (A) such transfer or assignment will not result in a
reduction or withdrawal by each Rating Agency then rating any of the related
Securities of the rating then assigned to any such Securities and (B) the
Indenture Trustee (if any) and the related Trustee have consented to such
transfer or assignment or (ii) the Indenture Trustee (if any), the related
Trustee and holders of Securities evidencing not less than 51% of the voting
interests thereof consent thereto. Any transfer of assignment with respect to
the Servicer of all of its rights, obligations and duties will not become
effective until a successor servicer has assumed the Servicer's rights,
obligations and duties under the related Sale and Servicing Agreement and
Pooling and Servicing Agreement, as applicable.
Each Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, will also provide that so long as the Bank (or its successor or
assign) or the Trustee is the Servicer, in the ordinary course of its business,
the Servicer will have the right to delegate any of its duties under the related
Sale and Servicing Agreement and Pooling and Servicing Agreement to a third
party. Any compensation payable to such third party will be paid by the Servicer
from its own funds, and none of the related Trust, Trustee (if not the
Servicer), Indenture Trustee (if any) or Securityholders will be liable for such
compensation. Notwithstanding any delegation of duties by the Servicer, the
Servicer will not be relieved of its liability and responsibility with respect
to such duties.
Each Sale and Servicing Agreement or Pooling and Servicing Agreement, as
applicable, will further provide that neither the Servicer nor any of its
directors, officers, employees, and agents shall be under any liability to the
related Trust, Trustee, Indenture Trustee (if any) or Securityholders for taking
any action or for refraining from taking any action pursuant to the related Sale
and Servicing Agreement or Pooling and Servicing Agreement; provided, however,
that neither the Servicer nor any such person will be protected against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties thereunder. Each Sale and Servicing
Agreement or Pooling and Servicing Agreement, as applicable, will further
provide that the Servicer, and its directors, officers, employees and agents are
entitled to indemnification by the related Trust for, and will be held harmless
against, any loss, liability or expense incurred in connection with any legal
action relating to their performance of servicing duties under the related Sale
and Servicing Agreement or Pooling and Servicing Agreement that is not otherwise
indemnified, other than (i) any loss or liability otherwise reimbursable
thereunder and (ii) any loss, liability, or expense incurred by reason of
willful misconduct, negligence or bad faith in performance of their duties
thereunder or by reason of their reckless disregard of obligations and duties
thereunder; provided, however, that such indemnification will be paid on a
Payment Date or Distribution Date only from amounts in excess of the amount
required to be maintained on deposit in the related enhancement account, or if
there is no such enhancement account, only after all payments or deposits
required under the related Sale and Servicing Agreement and Pooling and
Servicing Agreement for the benefit of Holders of Securities and the Servicer
have been made. In addition, each Sale and Servicing Agreement or Pooling and
Servicing Agreement, as applicable, will provide that the Servicer is under no
obligation to appear in, prosecute or defend any legal action that is not
incidental to the Servicer's servicing responsibilities under the related Sale
and Servicing Agreement or Pooling and Servicing Agreement and that, in its
opinion, may cause it to incur any expense or liability. The Servicer may,
however, undertake any reasonable action that it may deem necessary or desirable
in respect of such Sale and Servicing Agreement or Pooling and Servicing
Agreement and the rights and duties of the parties thereto and the interests of
the related Securityholders thereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom will be expenses,
costs and liabilities of the related Trust and the Servicer will be entitled to
be reimbursed
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therefor out of the related enhancement account Collection Account; provided,
however, that such reimbursement will be paid on a Payment Date or Distribution
Date only from amounts in excess of the amount required to be maintained on
deposit in the related enhancement account, or if there is no such enhancement
account, only after all payments required under the related Sale and Servicing
Agreement (for the benefit of Holders of Securities or the Servicer) and Pooling
and Servicing Agreement have been made.
Events Of Servicing Termination
Except as otherwise provided in the related Prospectus Supplement, "Events
of Servicing Termination" under each Sale and Servicing Agreement or Pooling and
Servicing Agreement, as applicable, will consist of (i) any failure by the
Servicer to deliver to the related Trustee or any Indenture Trustee the
Servicer's certificate for the related Collection Period or any failure by the
Servicer to deliver to the related Trustee or any Indenture Trustee for deposit
in any Trust Account or the Certificate Distribution Account any proceeds or
payments required to be delivered under the terms of such Securities or the
related Sale and Servicing Agreement or Pooling and Servicing Agreement (or, in
the case of a payment or deposit to be made not later than the Deposit Date, the
failure to make such payment or deposit on such Deposit Date), which failure
continues unremedied for five Business Days after discovery by the Servicer or
upon receipt of written notice to the Servicer by the related Trustee or any
Indenture Trustee or to the related Trustee or any Indenture Trustee and the
Servicer by holders of the related Notes evidencing not less than 25% of the
voting interests thereof (so long as Notes are outstanding) or, if no Notes are
outstanding, Certificates of the related series evidencing not less than 25% of
the voting interests thereof; (ii) any failure by the Servicer to duly observe
or perform in any material respect any other covenant or agreement of the
Servicer set forth in the related Sale and Servicing Agreement or Pooling and
Servicing Agreement or Indenture, which failure materially and adversely affects
the rights of the related Trust or the Securityholders (which determination
shall be made without regard to whether funds are available to the
Securityholders pursuant to any related enhancement) and which continues
unremedied for 60 days after the date of written notice of such failure to the
Servicer by the related Trustee or any Indenture Trustee or to the related
Trustee or any Indenture Trustee and the Servicer by holders of the related
Notes (so long as Notes are outstanding) evidencing not less than 25% of the
voting interests thereof or, if Notes are outstanding, Certificates of the
related series evidencing not less than a majority of the voting interests
thereof; (iii) the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a conservator, receiver or liquidator for the Servicer in any insolvency,
readjustment of debt, marshalling of assets and liabilities, or similar
proceedings, or for the winding up or liquidation of its affairs, and the
continuance of any such decree or order is unstayed and effective for 60
consecutive days; or (iv) the consent by the Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings of or relating to
the Servicer or of or relating to substantially all of its property, or the
Servicer admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors, or
voluntarily suspends payment of its obligations. The holders of Securities
evidencing not less than a majority of the voting interests thereof may, with
the written consent of any provider of enhancement specified in the related
Prospectus Supplement, waive certain defaults by the Servicer in the performance
of its obligations.
Rights Upon Event of Servicing Termination
In the case of any Trust that has issued Notes, unless otherwise provided
in the related Prospectus Supplement, as long as an Event of Servicing
Termination under a Sale and Servicing Agreement remains unremedied, the related
Indenture Trustee or holders of Notes of the related series evidencing not less
than 50% of the principal amount of such Notes then outstanding (or, if the
Notes have been paid in full and
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the Indenture has been discharged in accordance with its terms, by the related
Trustee or holders of Certificates evidencing not less than 50% of the voting
interests thereof) may terminate all the rights and obligations of the Servicer
under such Sale and Servicing Agreement, whereupon such Indenture Trustee or a
successor servicer appointed by such Indenture Trustee will succeed to all the
responsibilities, duties and liabilities of the Servicer under such Sale and
Servicing Agreement and will be entitled to similar compensation arrangements.
In the case of any Trust that has not issued Notes, unless otherwise provided in
the related Prospectus Supplement, as long as an Event of Servicing Termination
under the related Sale and Servicing Agreement or Pooling and Servicing
Agreement, as applicable, remains unremedied, the related Trustee or holders of
Certificates of the related series evidencing not less than 50% of the voting
interests thereof, by notice given in writing to the Servicer (and to the
related Trustee if given by Certificateholders), may terminate all the rights
and obligations of the Servicer under such Sale and Servicing Agreement or
Pooling and Servicing Agreement, whereupon such Trustee or a successor servicer
appointed by such Trustee will succeed to all the rights, duties and liabilities
of the Servicer under such Sale and Servicing Agreement or Pooling and Servicing
Agreement and will be entitled to similar compensation arrangements. In the
event that such Indenture Trustee or Trustee is unwilling or unable to so act,
it may appoint, or petition a court of competent jurisdiction for the
appointment of, a successor Servicer to act as successor to the outgoing
Servicer. Such Indenture Trustee or Trustee may make such arrangements for
compensation to be paid, which in no event may be greater than the Servicing Fee
paid to the Servicer under such Sale and Servicing Agreement or Pooling and
Servicing Agreement.
Waiver of Past Defaults
With respect to each Trust that has issued Notes, unless otherwise
provided in the related Prospectus Supplement, the holders of Notes evidencing
at least a majority in principal amount of the then outstanding Notes of the
related series (or the holders of the Certificates of such series evidencing not
less than a majority of the outstanding Certificate Balance, in the case of any
Event of Servicing Termination that does not adversely affect the related
Indenture Trustee or such Noteholders) may, on behalf of all such Noteholders
and Certificateholders, waive any default by the Servicer in the performance of
its obligations under the related Sale and Servicing Agreement and its
consequences, except an Event of Servicing Termination in making any required
deposits to or payments from any of the Trust Accounts in accordance with such
Sale and Servicing Agreement. Therefore, the Noteholders of any series have the
ability, as limited above, to waive defaults by the Servicer which could
materially and adversely affect the related Certificateholders. With respect to
each Trust that has not issued Notes, holders of Certificates of such series
evidencing not less than a majority of the outstanding Certificate Balance may,
on behalf of all such Certificateholders, with the consent of the provider of
any enhancement, waive any default by the Servicer in the performance of its
obligations under the related Sale and Servicing Agreement or Pooling and
Servicing Agreement, except an Event of Servicing Termination in making any
required deposits to or payments from the related Trust Accounts in accordance
with such Sale and Servicing Agreement or Pooling and Servicing Agreement. No
such waiver will impair such Noteholders' or Certificateholders' rights with
respect to subsequent defaults.
Amendment
Unless otherwise provided in the related Prospectus Supplement, each of
the Transfer and Servicing Agreements may be amended by the parties thereto,
without prior notice to the related Noteholders (if any) or Certificateholders
but with prior consent of the related Trustee and notice to any related Rating
Agencies (i) to cure any ambiguity, to correct or supplement any provision
therein or in the related Securities which may be inconsistent with any other
provision therein, to evidence a succession to the Servicer or the Seller
pursuant to the related Transfer and Servicing Agreement, or add any other
provisions with respect to matters or questions arising under such Transfer and
Servicing Agreement that are not inconsistent with
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the provisions of such Transfer and Servicing Agreement; provided, however, that
such action will not, on the basis of an officer's certificate reasonably
acceptable to the related Trustee and any Indenture Trustee, materially and
adversely affect the interests of the related Trust or any related
Securityholders or (ii) to effect a transfer or assignment of the Trust's or the
Servicer's rights, obligations and duties under such Transfer and Servicing
Agreement. Unless otherwise specified in the related Prospectus Supplement, the
Transfer and Servicing Agreements may also be amended by the Seller, the
Servicer, the related Trustee and any related Indenture Trustee with the consent
of the holders of Notes evidencing at least a majority in principal amount of
then outstanding Notes, if any, of the related series and the holders of the
Certificates of such series evidencing at least a majority of the Certificate
Balance of such Certificates then outstanding, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
such Transfer and Servicing Agreements or of modifying in any manner the rights
of such Noteholders or Certificateholders; provided, however, that no such
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on the related Receivables or
distributions that are required to be made for the benefit of such Noteholders
or Certificateholders or (ii) reduce the aforesaid percentage of the Notes or
Certificates of such series which are required to consent to any such amendment,
without the consent of the holders of all the outstanding Notes or Certificates,
as the case may be, of such series.
Insolvency Event
With respect to any Trust that issues Notes, under the related Trust
Agreement, if the General Partner indicates its insolvency pursuant to
bankruptcy, readjustment, receivership, conservatorship, insolvency, marshalling
of assets and liabilities or similar proceedings, if the General Partner is
unable to pay its obligations as they become due, or if certain events of
bankruptcy, receivership, insolvency or similar proceedings occur with respect
to the General Partner (each an "Insolvency Event"), to the extent permitted by
applicable law, the related Receivables shall be liquidated and the related
Trust will be terminated 90 days after the date of such Insolvency Event,
unless, before the end of such 90-day period, the related Owner Trustee shall
have received written instructions from (i) the Certificateholders (other than
the General Partner) of Certificates of such series representing not less than a
majority of the Certificate Balance of such Certificates, (ii) the Noteholders
(other than the General Partner) of each class of such series representing not
less than a majority of the principal amount of such class of Notes, and (iii)
holders of interests in any Reserve Account, Cash Collateral Account or other
enhancement account (other than the General Partner) having interests with a
value in excess of 50% of all interests in such enhancement account held by such
persons, in each case to the effect that each such party disapproves of the
liquidation of such Receivables and the termination of such Trust. Promptly
after the occurrence of any Insolvency Event with respect to the General
Partner, notice thereof is required to be given to all Noteholders and
Certificateholders of the related series; provided, however, that any failure to
give such required notice will not prevent or delay termination of the related
Trust. Upon termination of any Trust (which shall constitute an Event of Default
under the related Indenture), the related Owner Trustee shall promptly sell the
assets of the related Trust (other than the Trust Accounts) in a commercially
reasonably manner and on commercially reasonable terms. The net proceeds from
any such sale, disposition or liquidation of the Receivables of such Trust will
be applied by the related Indenture Trustee first to pay the related Notes in
full and second to pay the related Certificates in full. With respect to any
Trust, if the proceeds from the liquidation of the related Receivables and
amounts on deposit in any enhancement account, the Note Distribution Account and
the Certificate Distribution Account are not sufficient to pay the Notes and the
Certificates of the related series in full, the amount of principal returned to
Noteholders and Certificateholders thereof will be reduced and some or all of
such Noteholders and Certificateholders will incur a loss.
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Each Trust Agreement will provide that the related Owner Trustee does not
have the power to commence a voluntary proceeding in bankruptcy relating to the
related Trust without the unanimous prior approval of all Certificateholders
unless such Owner Trustee reasonably believes that such Trust is insolvent.
Payment of Notes
Upon the payment in full of all outstanding Notes of a given series and
the satisfaction and discharge of the related Indenture, the related Owner
Trustee will succeed to all the rights of the Indenture Trustee, and the
Certificateholders of such series will succeed to all the rights of the
Noteholders of such series under the related Sale and Servicing Agreement,
except as otherwise provided therein.
General Partner Liability
With respect to any Trust that issues Notes, under the related Trust
Agreement, the General Partner will agree to be liable directly to an injured
party for the entire amount of losses, claims, damages or liabilities (other
than those incurred by a Noteholder or a Certificateholder in the capacity of an
investor with respect to such Trust) arising out of or based on the arrangement
created by such Trust Agreement as though such arrangement created a partnership
under the Delaware Revised Uniform Limited Partnership Act in which the General
Partner were a general partner.
Termination
With respect to each Trust, the obligations of the Servicer, the Seller,
the related Trustee and any related Indenture Trustee, if any, pursuant to the
Transfer and Servicing Agreements will terminate upon the earlier of (i) the
Distribution Date or Payment Date next succeeding the month that is six months
after the maturity or other liquidation of the last related Receivable and the
disposition of any amounts received upon liquidation of any property remaining
in the related Trust and (ii) the payment to Noteholders, if any, and
Certificateholders of the related series of all amounts required to be paid to
them pursuant to the Transfer and Servicing Agreements.
Unless otherwise provided in the related Prospectus Supplement, in order
to avoid excessive administrative expense, the Servicer will be permitted at its
option to purchase from each Trust, as of the last day of any applicable
Collection Period, if the then outstanding Pool Balance with respect to the
Receivables held by such Trust is 5% or less of the initial Pool Balance (as
defined in the related Prospectus Supplement, the "Initial Pool Balance"), all
the remaining related Receivables at a price equal to the aggregate of the
Purchase Amounts thereof as the end of such Collection Period.
As more fully described in the related Prospectus Supplement, any
outstanding Notes of the related series will be redeemed concurrently with
either of the purchase events specified above and the subsequent distribution to
the related Certificateholders of all amounts required to be distributed to them
pursuant to the applicable Trust Agreement or Pooling and Servicing Agreement
will effect early retirement of the Certificates of such series.
The related Trustee and any related Indenture Trustee will give written
notice of termination to each Securityholder of the related series of record,
which notice will specify the Distribution Date and/or Payment Date upon which
such Securityholders may surrender their Securities to the related Trustee or
the Transfer Agent and Registrar, as the case may be, for final payment. The
final distribution to any Securityholder will be made only upon surrender and
cancellation of such holder's Security (whether a Definitive Security or the
Securities registered in the name of Cede representing the Securities) at the
office
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or agency of the related Trustee or the Transfer Agent and Registrar, as the
case may be, specified in the notice of termination.
With respect to any Trust issuing Notes, subject to applicable law and
after the Indenture Trustee has taken certain measures to notify Noteholders,
any money held by the Indenture Trustee or any Paying Agent in trust for payment
on the Notes which remain unclaimed for two years shall, upon request of such
Trust, be paid to such Trust. Following any such payment, the Trustee and any
Paying Agent shall no longer be liable to any Noteholder with respect to such
unclaimed amount, and any claim with respect to such amount shall be an
unsecured claim against such Trust. If, within 18 months after the first notice
of final payment on the Certificates, there remain Certificates which have not
been surrendered for cancellation, the related Trustee may take appropriate
steps to notify the applicable Certificateholders (the cost thereof paid out of
the unclaimed amounts). Subject to applicable law, any funds that then remain
shall be paid to the Seller.
Any amounts remaining in a Trust not issuing Notes, after the related
Trustee has taken certain measures to locate a Certificateholder and such
measures have failed, will, under certain circumstances, be distributed to the
United Way or a similar charitable organization located or operating in the New
York metropolitan area as specified by the Servicer; provided, however, that
such funds will, under certain circumstances, be distributed by the Paying Agent
to the United Way no later than three years after the final Distribution Date
specified in such Trustee's written notice of termination to the
Certificateholders.
Administration Agreement
With respect to any Trust that issues Notes, Chase, in its capacity as
administrator (the "Administrator"), will enter into an agreement (as amended
and supplemented from time to time, the "Administration Agreement") with each
Trust and the related Indenture Trustee pursuant to which the Administrator will
agree, to the extent provided in such Administration Agreement, to provide the
notices and to perform on behalf of the related Trust certain other
administrative obligations required by the related Indenture. As compensation
for the performance of the Administrator's obligations under the Administration
Agreement and as reimbursement for its expenses related thereto, the
Administrator will be entitled to a monthly administration fee in an amount to
be set forth in the related Prospectus Supplement (the "Administration Fee").
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
General
The Receivables are "chattel paper" as defined in the Uniform Commercial
Code in effect in the State of New York (the "UCC"). Pursuant to the UCC, the
sale of chattel paper is treated in a manner similar to a security interest in
chattel paper. In order to protect each Trust's ownership or security interest
in its Receivables, the Seller will file UCC-1 financing statements with the
appropriate governmental authorities in the States of New York and/or Delaware
to give notice of such Trust's and any related Indenture Trustee's ownership of
and security interest in the Receivables and their proceeds. Under each Sale and
Servicing Agreement and Pooling and Servicing Agreement, the Seller will be
obligated to maintain the perfection of each Trust's and any related Indenture
Trustee's interest in the Receivables. It should be noted, however, that a
purchaser of chattel paper who gives new value and takes possession of it in the
ordinary course of such purchaser's business has priority over a security
interest, including an ownership interest, in the chattel paper that is
perfected by filing UCC-1 financing statements, and not by
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possession of such chattel paper by the original secured party, if such
purchaser acts in good faith without knowledge that the related chattel paper is
subject to a security interest, including an ownership interest. Any such
purchaser would not be deemed to have such knowledge because there are UCC
filings and would not learn of the sale of or security interest in the
Receivables from a review of the Receivables since they would not be marked to
show such sale, although Chase Auto Finance's master computer records will
indicate such sale.
Security Interests In The Financed Vehicles
Security interests in vehicles registered in most states may be perfected
by a notation of the secured party's lien on, or possession of, the certificate
of title for such vehicle, depending on state law. Since around December 1994,
Chase Auto Finance has participated in California's electronic titles program,
and since that time California liens have been noted electronically rather than
on paper certificates. Chase Auto Finance's practice is to obtain a
representation and warranty from each Dealer to the effect that the Originating
Bank has been designated as the sole lien holder on the certificate of title. In
the event the Dealer fails, due to clerical errors or for any other reason, to
effect such notation of the Originating Bank's interest in a Financed Vehicle,
the Originating Bank would not have a perfected first priority security interest
in such Financed Vehicle. In this event the only recourse of the Originating
Bank, the Seller or the Servicer vis-a-vis third parties would be against the
Obligor on an unsecured basis or against a Dealer pursuant to its repurchase
obligation. However, the Seller believes that the Originating Bank has obtained
a perfected first priority security interest by notation or possession with
respect to virtually all of the Financed Vehicles. For Motor Vehicle Loans
originated prior to the Merger, such liens will remain noted in name of "The
Chase Manhattan Bank (National Association)" for administrative convenience.
However, because all of the existing Motor Vehicle Loans were transferred to
Chase USA (New York) in connection with the Merger (and upon and after the Chase
USA Merger, Chase USA (Delaware) will succeed to all of the rights and
obligations of Chase USA (New York)) with respect to such Motor Vehicle Loans
and any Motor Vehicle Loans originated by Chase USA (New York)), the Seller
believes that not amending such liens in the name of the Seller will not
materially adversely affect the security interest of the Seller in the related
Financed Vehicles.
Pursuant to the terms of each Sale and Servicing Agreement or Pooling and
Servicing Agreement, as applicable, the Seller will assign its security interest
in the individual Financed Vehicles to each Trust, and if applicable, such Trust
will assign each such security interest to the related Indenture Trustee.
However, because of the administrative burden and expense, neither the Seller
nor the related Trustee will amend the certificates of title to identify the
related Trust or any related Indenture Trustee as the new secured party and,
accordingly, the Originating Banks will continue to be named as the secured
party on the certificates of title relating to the Financed Vehicles. In most
states, such assignment (and the assignment by Chase N.A. of its security
interest in the Financed Vehicles to Chase USA (New York) in connection with the
Merger) is an effective conveyance of such security interest without amendment
of any lien noted on the related certificates of title and the new secured party
succeeds to the Originating Bank's rights as the secured party as against
creditors of the Obligor. In certain states, in the absence of such amendment
and delivery, the Seller, the related Trust and/or any related Indenture Trustee
may not have a perfected security interest in the Financed Vehicle. In such
event or in the event that the Originating Bank did not have a perfected first
priority security interest in the Financed Vehicle, the only recourse of such
Trust vis-a-vis third parties would be against an Obligor on an unsecured basis
or against the Seller pursuant to its repurchase obligation. See "--Repurchase
Obligation" herein.
Except as described above, in the absence of fraud or forgery by a vehicle
owner or administrative error by state recording officials, the notation of the
lien of the Originating Bank on the certificate of title will be sufficient to
protect each Trust against the rights of subsequent purchasers of a Financed
Vehicle
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or subsequent lenders who take a security interest in the Financed Vehicle. If
there are any Financed Vehicles as to which the Originating Bank has failed to
perfect the security interest assigned to a Trust (i) such security interest
would be subordinate to, among others, holders of perfected security interests
and (ii) subsequent purchasers of such Financed Vehicles would take possession
free and clear of such security interest. There also exists a risk in not
identifying each Trust or any related Indenture Trustee as the new secured party
on the certificate of title that, through fraud or negligence, the security
interest of such Trust or Indenture Trustee could be released.
In the event that the owner of a Financed Vehicle moves to a state other
than the state in which such Financed Vehicle initially is registered, under the
laws of most states the perfected security interest in the Financed Vehicle will
continue for four months after such relocation and thereafter until the owner
re-registers the Financed Vehicle in such state. A majority of states generally
require surrender of a certificate of title to re-register a vehicle.
Accordingly, Chase Auto Finance must surrender possession if it holds the
certificate of title to such Financed Vehicle or, in the case of Financed
Vehicles originally registered in a state which provides for notation of lien
but not possession of the certificate of title by the holder of the security
interest in the related motor vehicle, Chase Auto Finance would receive notice
of surrender if the security interest in the Financed Vehicle is noted on the
certificate of title. Accordingly, Chase Auto Finance would have the opportunity
to re-perfect the security interest in the Financed Vehicle in the state of
relocation. In states that do not require a certificate of title for
registration of a motor vehicle, re-registration could defeat perfection. In the
ordinary course of servicing its portfolio of Motor Vehicle Loans, Chase Auto
Finance takes steps to effect such re-perfection upon receipt of notice of
re-registration or information from the Obligor as to relocation. Similarly,
when an Obligor under a Receivable sells a Financed Vehicle, Chase Auto Finance
must surrender possession of the certificate of title or will receive notice as
a result of its lien noted thereon and accordingly will have an opportunity to
require satisfaction of the related Receivable before release of the lien. Under
each Sale and Servicing Agreement and Pooling and Servicing Agreement, the
Servicer is obligated to take such steps, at the Servicer's expense, as are
necessary to maintain perfection of security interests in the Financed Vehicles.
Under the laws of many states, certain possessory liens for repairs
performed on a motor vehicle and storage, as well as certain rights in favor of
Federal and state governmental authorities arising from the use of a motor
vehicle in connection with illegal activities, may take priority even over a
perfected security interest. Certain U.S. federal tax liens may have priority
over the lien of a secured party. The Seller will represent in each Sale and
Servicing Agreement and Pooling and Servicing Agreement that it has no knowledge
of any such liens with respect to any Financed Vehicle. However, such liens
could arise at any time during the term of a Receivable. No notice will be given
to the Trustee in the event such a lien arises.
Enforcement Of Security Interests In Vehicles
The Servicer on behalf of each Trust and any Indenture Trustee may take
action to enforce its security interest by repossession and resale of the
Financed Vehicles securing the Receivables. The actual repossession may be
contracted out to third party contractors. Under the UCC and laws applicable in
most states, a creditor can repossess a motor vehicle securing a loan by
voluntary surrender, "self-help" repossession that is "peaceful" (i.e., without
breach of the peace) and, in the absence of voluntary surrender and the ability
to repossess without breach of the peace, by judicial process. The UCC and
consumer protection laws in most states place restrictions on repossession
sales, including requiring prior notice to the debtor and commercial
reasonableness in effecting such a sale. In the event of such repossession and
resale of a Financed Vehicle, the Trust would be entitled to be paid out of the
sale proceeds before such proceeds could be applied to the payment of the claims
of unsecured creditors or the holders of subsequently perfected security
interests or, thereafter, to the debtor.
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Under the UCC and laws applicable in most states, a creditor is entitled
to obtain a deficiency judgment from a debtor for any deficiency on repossession
and resale of the motor vehicle securing such debtor's loan. However, some
states impose prohibitions or limitations on deficiency judgments. In general, a
defaulting Obligor may not have sufficient assets to make the pursuit of a
deficiency worthwhile.
Certain other statutory provisions, including federal and state bankruptcy
and insolvency laws, and general equitable principles may limit or delay the
ability of a lender to repossess and resell collateral or enforce a deficiency
judgment.
Other Matters
The Seller intends that each transfer of Receivables by it to a Trust
under a Sale and Servicing Agreement or a Pooling and Servicing Agreement
constitutes a sale. In the event that the Seller were to become insolvent, the
FDIA, as amended by FIRREA, sets forth certain powers that the FDIC may exercise
if it were appointed receiver of the Seller. To the extent that the Seller has
granted a security interest in the Receivables to a Trust and that interest was
validly perfected before the Seller's insolvency and was not taken in
contemplation of insolvency or with the intent to hinder, delay or defraud the
Seller or its creditors, that security interest would not be subject to
avoidance by the FDIC as receiver of the Seller. Positions taken by the FDIC
staff prior to the passage of FIRREA do not suggest that the FDIC, if appointed
receiver of the Seller, would interfere with the timely transfer to such Trust
of payments collected on the related Receivables. If, however, the FDIC were to
assert a contrary position, or were to require the Trustee to establish its
rights to those payments by submitting to and completing the administrative
claims procedure established under the FDIA, or the conservator or receiver were
to request a stay of proceedings with respect to the Seller as provided under
the FDIA, delays in payments on the related Securities and possible reductions
in the amount of those payments could occur.
With respect to any Trust issuing Notes, if an Insolvency Event occurs
with respect to the General Partner, the Owner Trustee for such Trust will
promptly sell the assets of such Trust (other than any Trust Accounts) in a
commercially reasonable manner and on commercially reasonable terms, unless the
holders of Notes of each class issued by such Trust representing more than 50%
of the aggregate principal balance of such Notes (other than the General
Partner), the holders of Certificates issued by such Trust representing more
than 50% of the aggregate Certificate Balance for such Trust (other than the
General Partner) and the holders of interests in any Reserve Account or other
enhancement account (other than the General Partner) having interests with a
value in excess of 50% of all interests in such enhancement account held by such
persons direct otherwise. The proceeds from any such sale will be treated as
collections on the Receivables and deposited in the Collection Account of such
Trust. If the proceeds from the sale of the trust assets and any amounts on
deposit in any related Trust Account and any amounts available from any credit
enhancement are not sufficient to pay any Notes and the Certificates of the
related series in full, the amount of principal returned to Noteholders and
Certificateholders will be reduced and some or all of such Noteholders and
Certificateholders will incur a loss. See "Description of the Transfer and
Servicing Agreements--Insolvency Event" herein.
Numerous federal and state consumer protection laws may impose
requirements applicable to the origination and lending pursuant to the
contracts, including the Truth in Lending Act, the Fair Credit Reporting Act,
the Equal Credit Opportunity Act, the Magnuson-Moss Warranty Act and the Federal
Trade Commission Act.
The so-called "Holder-in-Due-Course" Rule of the Federal Trade Commission
(the "FTC Rule"), other state statutes or the common law in certain states have
the effect of subjecting a seller (and certain related lenders and their
assignees) in a consumer credit transaction and any assignee of the seller
(which
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would include each Trust) to all claims and defenses that the obligor in the
transaction could assert against the seller of the goods. Liability of a
subsequent holder under the FTC Rule is limited to the amounts paid by the
obligor under the contract, and a subsequent holder of the contract may also be
unable to collect any balance remaining due thereunder from the obligor. The
Uniform Consumer Credit Code applicable in certain states contains provisions
which generally duplicate this rule.
Each Sale and Servicing Agreement and Pooling and Servicing Agreement will
set forth criteria that must be satisfied by each Receivable, and such criteria
will provide, among other things, that each Receivable complies with all
requirements of law in all material respects. Accordingly, if an Obligor has a
claim against a Trust for violation of any law and such claim materially and
adversely affects the related Securityholders' interest in a Receivable, such
violation would result in the failure to satisfy criterion in the related Sale
and Servicing Agreement or Pooling and Servicing Agreement and would create an
obligation of the Seller to repurchase the Receivable unless such failure is
cured.
Repurchase Obligation
Under each Sale and Servicing Agreement and Pooling and Servicing
Agreement, each Receivable must satisfy certain criteria, and such criteria
relate to, among other things, the validity, subsistence, perfection, and
priority of the security interest in each Financed Vehicle. Accordingly, if any
defect exists in the perfection of the security interest in any Financed Vehicle
and such defect materially and adversely affects the related Securityholders'
interest in the related Receivable, such defect would result in the failure to
satisfy a criterion in the related Sale and Servicing Agreement or Pooling and
Servicing Agreement and would create an obligation of the Seller to repurchase
such Receivable unless such failure criterion is cured.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"),
impose certain requirements on employee benefit plans and certain other plans
and arrangements, including individual retirement accounts and annuities, Keogh
plans and certain collective investment funds or insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to the fiduciary responsibility provisions of ERISA and/or
Section 4975 of the Code (collectively, "Plans"), and on persons who are
fiduciaries with respect to Plans, in connection with the investment of "plan
assets" of any Plan ("Plan Assets"). ERISA generally imposes on Plan fiduciaries
certain general fiduciary requirements, including those of investment prudence
and diversification and the requirement that a Plan's investments be made in
accordance with the documents governing the Plan. Generally, any person who has
discretionary authority or control respecting the management or disposition of
Plan Assets, and any person who provides investment advice with respect to Plan
Assets for a fee, is a fiduciary with respect to such Plan Assets.
ERISA and Section 4975 of the Code prohibit a broad range of transactions
involving Plan Assets and persons ("Parties in Interest" under ERISA and
"Disqualified Persons" under the Code) who have certain specified relationships
to a Plan or its Plan Assets, unless a statutory or administrative exemption is
available. Parties in Interest or Disqualified Persons that participate in a
prohibited transaction may be subject to a penalty imposed under ERISA and/or an
excise tax imposed pursuant to Section 4975 of the Code, unless a statutory or
administrative exemption is available. These prohibited transactions generally
are set forth in Section 406 of ERISA and Section 4975 of the Code.
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Any fiduciary or other Plan investor considering whether to purchase any
Securities on behalf of or with Plan Assets of any Plan should consult with its
counsel and refer to the related Prospectus Supplement for guidance regarding
the ERISA Considerations applicable to the Securities offered thereby.
Certain employee benefit plans, such as governmental plans (as defined in
Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of
ERISA), are not subject to the requirements of ERISA or Section 4975 of the
Code. Accordingly, assets of such plans may be invested in the Securities of any
series without regard to the ERISA considerations described herein, subject to
the provisions of other applicable federal and state law. However, any such plan
that is qualified and exempt from taxation under Sections 401(a) and 501(a) of
the Code is subject to the prohibited transaction rules set forth in Section 503
of the Code.
PLAN OF DISTRIBUTION
The Securities of each series may be sold to or through underwriters (the
"Underwriters") by a negotiated firm commitment underwriting and public
reoffering by the Underwriters or such other underwriting arrangement as may be
specified in the related Prospectus Supplement or may be placed either directly
or through agents. The Seller intends that the Securities will be offered
through such various methods from time to time and that offerings may be made
concurrently through more than one of such methods or that an offering of a
particular series of Securities may be made through a combination of such
methods.
Each Prospectus Supplement will either (i) set forth the price at which
each class of Securities being offered thereby will be offered to the public and
any concessions that may be offered to certain dealers participating in the
offering of such Securities, or (ii) specify that the related Securities are to
be resold by the Underwriters in negotiated transactions at varying prices to be
determined at the time of such sale. After the initial public offering of any
such Securities, such public offering prices and such concessions may be
changed.
Each Underwriting Agreement (as defined in the related Prospectus
Supplement) will provide that the Seller will indemnify the underwriters against
certain civil liabilities, including liabilities under the Securities Act, or
contribute to payments the several Underwriters may be required to make in
respect thereof.
Each Trust may, from time to time, invest funds in its Trust Accounts in
Eligible Investments acquired from such Underwriters or from the Seller or any
of its Affiliates.
Pursuant to each of the Underwriting Agreements with respect to a given
series of Securities, the closing of the sale of any class of Securities subject
to such Underwriting Agreement will be conditioned on the closing of the sale of
all other such classes of Securities of that series.
The place and time of delivery for the Securities of any series in respect
of which this Prospectus is delivered will be set forth in the related
Prospectus Supplement.
66
<PAGE>
RATINGS
Each Class of Securities of a series offered pursuant to this Prospectus
and a related Prospectus Supplement will be rated at its initial issuance in one
of the four highest categories by at least one nationally recognized statistical
rating organization (each, a "Rating Agency").
A securities rating addresses the likelihood of the receipt by the
Securityholders of scheduled interest and principal payments. The rating takes
into consideration the characteristics of the Receivables and the structural,
legal and tax aspects associated with the Securities. The ratings on the
Securities do not, however, constitute statements regarding the likelihood or
frequency of prepayments on the Receivables or the possibility that the
Securityholders might realize a lower than anticipated yield or that if there is
a rapid rate of principal payments, including prepayments, on the Receivables,
investors in Strip Notes or Strip Certificates could fail to recover their
initial investments.
A security rating is not a recommendation to buy, sell or hold Securities
and may be subject to revision or withdrawal at any time by the assigning Rating
Agency. No person is obligated to maintain the rating on any Security, and,
accordingly, there can be no assurance that the ratings assigned to a Security
upon initial issuance will not be lowered or withdrawn by a Rating Agency at any
time thereafter.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Securities of any
series will be passed upon for the Seller by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York, and
such other counsel specified in the related Prospectus Supplement. Certain legal
matters will be passed upon for the Underwriters by Orrick, Herrington &
Sutcliffe, New York, New York. From time to time Simpson Thacher & Bartlett and
Orrick, Herrington & Sutcliffe may provide legal services to the Seller and its
affiliates.
67
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
INDEX OF TERMS
Actuarial Receivables.......................................................23
Administration Agreement....................................................61
Administration Fee..........................................................61
Administrator...............................................................61
Applicable Trustee..........................................................42
Advance.....................................................................52
Base Rate ..................................................................39
Book-Entry Securities........................................................7
Business Day................................................................50
Calculation Agent...........................................................39
Cash Collateral Account.....................................................54
Chase Collateral Depositor..................................................54
Cash Collateral Guaranty....................................................54
Cash Collateral Trustee.....................................................54
Cede ........................................................................7
CEDEL ......................................................................42
CEDEL Participants..........................................................42
Certificate Balance..........................................................9
Certificate Distribution Account............................................49
Certificate Pool Factor.....................................................30
Certificateholders..........................................................42
Certificates.................................................................1
Chase........................................................................6
Chase Auto Finance...........................................................6
Chase Connecticut Bank......................................................24
Chase Connecticut Loans.....................................................24
Chase Florida Bank..........................................................24
Chase Florida Loans.........................................................24
Chase Lincoln Bank..........................................................24
Chase Lincoln Loans.........................................................24
Chase Maryland Loans........................................................25
Chase N.A. ..................................................................6
Chase USA Merger.............................................................6
Chase USA (Delaware).........................................................1
Chase USA (New York).........................................................1
Closing Date................................................................47
Code........................................................................65
Collection Account..........................................................49
Collection Period...........................................................51
Commission .................................................................3
Commodity Indexed Securities................................................40
Contract Rate...............................................................22
Cooperative ................................................................43
Corporation .................................................................6
Currency Indexed Securities.................................................40
Cutoff Date ................................................................21
Dealer Agreements...........................................................25
Dealers ....................................................................25
Defaulted Receivable........................................................51
Definitive Certificates.....................................................44
Definitive Notes............................................................44
Definitive Securities.......................................................44
Deposit Date................................................................50
Depositaries................................................................41
</TABLE>
68
<TABLE>
<S> <C>
<PAGE>
Depository ................................................................32
Disqualified Persons........................................................65
Distribution Date...........................................................38
DSCs .......................................................................26
DTC .........................................................................7
Due Date ...................................................................22
Eligible Deposit Account....................................................50
ERISA ......................................................................65
Euroclear ..................................................................43
Euroclear Operator..........................................................43
Euroclear Participants......................................................43
Euroclear System............................................................43
Events of Default...........................................................34
Events of Servicing Termination.............................................57
Exchange Act.................................................................3
Face Amount ................................................................40
FDIA .......................................................................17
FDIC ........................................................................1
Federal Tax Counsel.........................................................15
Final Payment Receivables...................................................23
Financed Vehicles...........................................................10
FIRREA .....................................................................17
Fixed Rate Securities.......................................................39
Floating Rate Securities....................................................39
FTC Rule ...................................................................64
Funding Period...............................................................i
General Partner.............................................................18
Indenture ...................................................................8
Index ......................................................................40
Indexed Commodity...........................................................40
Indexed Currency............................................................40
Indexed Principal Amount....................................................40
Indexed Securities..........................................................40
Initial Pool Balance........................................................60
Initial Receivables.........................................................11
Insolvency Event............................................................59
Interest Rate................................................................8
Interest Reset Period.......................................................39
Investment Earnings.........................................................50
Issuer ......................................................................6
Late Fees...................................................................52
LIBOR ......................................................................39
Loan Agreement..............................................................54
Merger ......................................................................6
Motor Vehicle Loans.........................................................24
Note Distribution Account...................................................49
Note Pool Factor............................................................30
Noteholders ................................................................42
Notes .......................................................................1
Obligors ...................................................................21
Originating Bank.............................................................6
Owner Trustee................................................................7
Participants................................................................41
Parties in Interest.........................................................65
Pass Through Rate............................................................9
</TABLE>
69
<PAGE>
<TABLE>
<S> <C>
Payahead Account............................................................49
Payaheads ..................................................................49
Paying Agent................................................................51
Payment Date................................................................32
Percentage Interest..........................................................7
Permitted Investments.......................................................50
Plan Assets ................................................................65
Plans ......................................................................65
Pool Balance................................................................30
Pooling and Servicing Agreement..............................................6
Portfolio Experience........................................................24
Pre-Funding Account.........................................................11
Pre-Funding Amount..........................................................11
Precomputed Receivables.....................................................23
Prospectus Supplement........................................................1
Purchase Amount.............................................................48
Qualified Institution.......................................................50
Qualified Trust Institution.................................................50
Rating Agency...............................................................67
Receivables ................................................................21
Receivables Pool............................................................21
Registration Statement.......................................................3
Related Documents...........................................................36
Required Rate...............................................................14
Reserve Account.............................................................53
Rules ......................................................................42
Sale and Servicing Agreement................................................11
Schedule of Receivables.....................................................47
Securities ..................................................................1
Securities Act...............................................................3
Securityholder..............................................................41
Securityholders.............................................................42
Seller ......................................................................1
Servicer ....................................................................1
Servicing Fee...............................................................52
Servicing Fee Rate......................................................14, 52
Simple Interest Receivables.................................................22
Spread .....................................................................39
Spread Multiplier...........................................................39
Stock Index ................................................................40
Stock Indexed Securities....................................................40
Strip Certificates..........................................................10
Strip Notes .................................................................8
Subsequent Receivables......................................................11
Subsequent Transfer Date....................................................47
Terms and Conditions........................................................43
The Chase Manhattan Bank....................................................31
The Chase Manhattan Corporation.............................................31
Transfer Agent and Registrar................................................44
Transfer and Servicing Agreements...........................................47
Trust .......................................................................1
Trust Accounts..............................................................49
</TABLE>
70
<PAGE>
<TABLE>
<S> <C>
Trust Agreement..............................................................6
Trustee .....................................................................7
UCC ........................................................................61
Underwriters................................................................66
Yield Supplement Account....................................................13
Yield Supplement Agreement..................................................13
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses in connection with the offering of the Securities
being registered hereunder (other than underwriting discounts and commissions)
are estimated as follows:
<TABLE>
<S> <C>
Registration Fee.............................................. $ 1,724,138
Legal Fees and Expenses....................................... 135,000
Accounting Fees and Expenses.................................. 120,000
Blue Sky Fees and Expenses.................................... 30,000
Rating Agency Fees............................................ 510,000
Trustee's Fees and Expenses................................... 45,000
Printing...................................................... 90,000
Miscellaneous................................................. 45,862
-------------
Total ..................................................... $ 2,800,000
=============
</TABLE>
Item 15. Indemnification of Directors and Officers.
In addition to the indemnification provisions set forth below,
directors and officers liability insurance policies presently exist that insure
directors and officers of Chase Manhattan Bank USA, N.A., a national banking
association having its principal executive offices in Jericho, New York ("Chase
USA (New York)") and Chase Manhattan Bank USA, N.A., a national banking
association having its principal executive offices in Wilmington, Delaware
("Chase USA (Delaware)"), their parent and certain of their subsidiaries. The
policies cover losses for which Chase USA (New York), Chase USA (Delaware),
their parent and certain of their subsidiaries shall be required or permitted
by law to indemnify directors and officers and which result from claims made
against such directors or officers based upon the commission of wrongful acts
in the performance of their duties. The policies also cover losses that the
directors or officers must pay as the result of claims brought against them
based upon the commission of wrongful acts in the performance of their duties
and for which they are not indemnified by Chase USA (New York), Chase USA
(Delaware), their parent or any of those subsidiaries. The losses covered by
the policies are subject to certain exclusions and do not include fines or
penalties imposed by law or other matters deemed uninsurable under the law.
The policies contain self-insured retention provisions.
Chase USA (New York).: Article Tenth of the Articles of Association
of Chase USA (New York) provides that any person (including the heirs,
executors and administrators of such person) may be indemnified or reimbursed
by Chase USA (New York) for reasonable expenses actually incurred in connection
with any action, suit or proceeding, civil or criminal, to which such person
shall be made a party by his/her being or having been a director, officer, or
employee of Chase USA (New York) or any firm, corporation or organization which
such person served in any such capacity at the request of Chase USA (New York);
provided, however, that no person shall be so indemnified or reimbursed
relative to any matter in such action, suit, or proceeding as to which such
person shall be finally adjudicated to have been guilty of or liable for gross
negligence, willful misconduct or criminal acts in the performance of his/her
duties to Chase USA (New York); and, provided, further, that no person shall be
so indemnified or reimbursed relative to any matter in such action, suit, or
proceeding which has been made the subject of a compromise settlement except
with the approval of a court of competent jurisdiction, or the holders
<PAGE>
of record of a majority of the outstanding shares of Chase USA (New York), or
its Board of Directors, acting by vote of directors not parties to the same or
substantially the same action, suit, or proceeding, constituting a majority of
the whole number of directors. Article Tenth also provides that the foregoing
right of indemnification or reimbursement shall not be exclusive of other
rights to which such person, his/her heirs, executor, or administrators may be
entitled as a matter of law.
Article VII of the By-Laws of Chase USA (New York) provides that Chase
USA (New York) shall, to the fullest extent permitted by applicable law,
indemnify any person (including the heirs and legal representatives of any such
person) who was or is involved in any manner, or is threatened to be made so
involved, in any threatened, pending or completed investigation, claim, action,
suit or proceeding, whether civil, administrative or investigative (including,
without limitation, any action, suit or proceeding by or in the right of Chase
USA (New York) to procure a judgment in its favor)(a "proceeding") by reason of
the fact that such person is or was a director, officer, employee or agent of
Chase USA (New York), or is or was serving at the request of Chase USA (New
York) as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against all expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
proceeding. Article VII provides that the foregoing indemnification shall be a
contract right and shall include the right to receive payment in advance of any
expenses incurred by such indemnified person in connection with such
proceeding, consistent with the provisions of applicable law as then in effect.
Article VII further provides that Chase USA (New York) may enter into
contracts with any director, officer, employee or agent of Chase USA (New York)
in furtherance of the provisions thereof and may create a trust fund, grant a
security interest or use other means (including, without limitation, a letter
of credit) to ensure the payment of such amounts as may be necessary to effect
indemnification under Article VII.
Article VII expressly provides that the right of indemnification and
advancement of expenses thereunder is not exclusive of any other rights to
which a person seeking indemnification may otherwise be entitled under any
statute, by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to actions in such person's official capacity and as to
action in another capacity while holding such office.
Chase USA (Delaware): Article TENTH of the Articles of Association of
Chase USA ("Chase USA (Delaware)") provide that any person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he or she is or was
a director or officer of Chase USA (Delaware) or is or was serving at the
request of Chase USA (Delaware) as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan (an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by Chase USA (Delaware) to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits Chase USA (Delaware) to provide broader
indemnification rights than permitted prior thereto), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith and such indemnification
shall continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the indemnitee's heirs,
executors and administrators; provided, however, that, except as
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<PAGE>
provided in the second following paragraph with respect to proceedings to
enforce rights to indemnification, Chase USA (Delaware) shall indemnify any
such indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by the
board of directors of Chase USA (Delaware).
The rights to indemnification described in the immediately preceding
paragraph shall include the right to be paid by Chase USA (Delaware) the
expenses incurred in defending any proceeding for which such right to
indemnification is applicable in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to Chase USA (Delaware) of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
such Article TENTH or otherwise.
The rights to indemnification and to the advancement of expenses
described in the two preceding paragraphs are contract rights. If a claim
under either of such paragraphs is not paid in full by Chase USA (Delaware)
within sixty days after a written claim has been received by Chase USA
(Delaware) (except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days), the indemnitee may at
any time thereafter bring suit against Chase USA (Delaware) to recover the
unpaid amount of the claim. If successful in whole or in part in any such
suit, or in a suit brought by Chase USA (Delaware) to recover an advancement of
expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
any suit brought by the indemnitee to enforce a right to indemnification under
such Article TENTH (but not in a suit brought by the indemnitee to enforce a
right to an advancement of expenses) it shall be a defense that, and in any
suit by Chase USA (Delaware) to recover an advancement of expenses pursuant to
the terms of an undertaking, Chase USA (Delaware) shall be entitled to recover
such expense upon a final adjudication that, the indemnitee has not met any
applicable standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of Chase USA (Delaware) (including its
board of directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such suit that
indemnification of the indemnitee is proper in the circumstances because the
indemnitee has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by Chase USA (Delaware)
(including its board of directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met such
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses under such
Article TENTH, or by Chase USA (Delaware) to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under such Article TENTH or otherwise shall be on Chase USA
(Delaware).
Article TENTH of Chase USA (Delaware)'s Articles of Association also
provides that the foregoing right of indemnification or reimbursement shall not
be exclusive of other rights to which any person may be entitled under any
statute, Articles of Association, by-law, agreement, or vote of stockholders or
disinterested stockholders or otherwise. Section 145 of the Delaware General
Corporation Law provides that a Delaware corporation must indemnify a director
or officer who has defended
II-3
<PAGE>
successfully, on the merits or otherwise, any proceeding against him or any
claim, matter or issue therein, for reasonable expenses actually incurred in
such defense.
Article 7 of the Business Corporation Law of the State of New York,
Sections 721 through 726, provides, under certain circumstances, for
indemnification of directors and officers of a corporation who are made or
threatened to be made, a party to an action or proceeding (other than one by or
in the right of a corporation to procure a judgment in its favor), whether
civil or criminal, by reason of their service as an officer or director of a
corporation against judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys' fees actually and necessarily incurred as a
result of such action or proceeding or any appeal therein. Article 7 of the
New York Business Corporation Law also provides that the statutory
indemnification provisions are nonexclusive, but prohibits indemnification if a
judgment or other final adjudication adverse to the director or officer of a
corporation establishes that the officer's or director's acts were committed in
bad faith or were the result of active and deliberate dishonesty and were
material to the cause of action so adjudicated, or that such director or
officer personally gained in fact a financial profit or other advantage to
which the officer or director was not legally entitled, or that would be
inconsistent with the laws of the jurisdiction of incorporation (in the case of
corporations formed under the laws of any jurisdiction other than New York),
the corporation's certificate of incorporation, by-laws, resolutions or other
proper corporate action or any court settlement.
Item 16. Exhibits.
(a) Exhibits:
<TABLE>
<S> <C>
1.1(A) -- Form of Underwriting Agreement (Certificates only).*
1.1(B) -- Form of Underwriting Agreement (Notes).*
1.1(C) -- Form of Underwriting Agreement (Certificates).*
3.1(A) -- Articles of Association of Chase USA (New York).*
3.1(B) -- Articles of Association of Chase USA (Delaware).*
3.2(A) -- By-laws of Chase USA (New York).*
3.2(B) -- By-laws of Chase USA (Delaware).*
4.1(A) -- Form of Pooling and Servicing Agreement (Certificates only).*
4.1(B) -- Form of Sale and Servicing Agreement (Notes and Certificates).*
4.2 -- Form of Indenture (Notes and Certificates).*
4.3(A) -- Form of Certificate of Trust (Notes and Certificates).*
4.3(B) -- Form of Trust Agreement (Notes and Certificates).*
4.3(C) -- Form of Amended and Restated Trust Agreement (Notes and Certificates).*
4.4 -- Form of Administration Agreeement (Notes and Certificates).*
5.1 -- Opinion of Simpson Thacher & Bartlett with respect to legality.*
8.1 -- Opinion of Simpson Thacher & Bartlett with respect to tax matters (included
as part of Exhibit 5.1).*
23.1 -- Consent of Simpson Thacher & Bartlett (included as part of Exhibit 5.1).*
23.2 -- Consent of Simpson Thacher & Bartlett (included as part of Exhibit 5.1).*
24.1 -- Powers of Attorney of directors and officers of the Registrant.***
</TABLE>
----------
* Filed herewith.
** Previously filed.
*** Previously filed and filed herewith.
(b) Financial Statements:
** Previously filed.
Not applicable.
II-4
<PAGE>
Item 17. Undertakings.
Each of the undersigned Registrants hereby undertakes:
(a) (1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement;
(i) to include any prospectus required by
Section 10(a)(3) of the Securities
Act of 1933, as amended (the "Act");
(ii) to reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not
exceed that which was registered) and any
deviation from the low or high and of the
estimated maximum offering range may be
reflected in the form of Prospectus filed
with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume
and price represent no more than 20 percent
change in the maximum aggregate offering
price set forth in the "Calculation of
Registration Fee" table in the effective
Registration Statement.
(iii) to include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that (a)(1)(i) and (a)(1)(ii) will not
apply if the information required to be included in a
post-effective amendment thereby is contained in periodic
reports filed with or furnished to the Securities and
Exchange Commission (the "Commission") by the Registrants
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that
are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Act, each such post-effective amendment
shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering hereof.
(3) To remove from the registration by means of a
post-effective amendment any of the securities being
registered that remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the
Act, each filing of a Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of a employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) with
respect to any Trust that is incorporated by reference in the
Registration Statement shall be deemed to be a new
registration statement relating
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<PAGE>
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To provide to the Underwriters at the closing specified in
the Underwriting Agreement certificates in such denominations
and registered in such names as required by the Underwriters
to permit prompt delivery to each purchaser.
(d) That, insofar as indemnification for liabilities arising
under the Act may be permitted to directors, offices and
controlling persons of a Registrant pursuant to the foregoing
provisions, or otherwise, the Registrants have been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in
the Act and is therefore unenforceable. In the event that a
claim for indemnification against such liabilities (other
than payment by a Registrant of expenses incurred or paid by
a director, officer or controlling person of such Registrant
in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person
in connection with the securities being registered, such
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
(e) (1) That, for purposes of determining any liability
under the Act, the information omitted from the form
of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained
in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Act shall be deemed to be part of the
registration statement as of the time it was
declared effective.
(2) That, for the purpose of determining any liability
under the Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be
a new registration statement relating to the
securities offered therein, and the offering of such
securities at the time shall be deemed to be the
initial bona fide offering thereof.
(f) That the undersigned Registrants hereby undertake to file an
application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the
Trust Indenture Act.
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<PAGE>
SIGNATURES FOR CHASE USA (NEW YORK)
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York, New York on
August 23, 1996.
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
By: /s/ Anthony Langan
------------------------------------------
Anthony Langan
Vice President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 1 to Registration Statement has been signed on
June 28, 1996 by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
<S> <C>
Signature Title
* Chairman and President (Chief
- ----------------------------------- Executive Officer)
Thomas Jacob
* Director
- -----------------------------------
Patricia Alberto
* Director
- -----------------------------------
Lois Deming
* Director
- -----------------------------------
Luke S. Hayden
* Director and Vice President
- ----------------------------------- (Chief Financial Officer
John J. Hehir, Jr. and Chief Accounting Officer)
Director
- -----------------------------------
William Hoefling
* Director
- -----------------------------------
Glenn Mouridy
* Director
- -----------------------------------
Kenneth Wohst
* Director
- -----------------------------------
Leonard Zych
</TABLE>
* The undersigned, by signing his name hereto, does hereby sign this
Amendment No. 1 to Registration Statement on behalf of each of the
above-indicated directors and officers of the Registrant pursuant to powers of
attorney signed by such directors and officers.
/s/ Anthony Langan
-----------------------------------
Anthony Langan
Attorney-in-Fact
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Wilmington, State of Delaware, on August 23, 1996.
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
as originator of the Trust Registrant
By: *
--------------------------------------------
Keith Schuck
Controller
* The undersigned, by signing his name hereto, does hereby sign this
Amendment No. 1 to Registration Statement on behalf of Keith Schuck as
Controller of the Registrant pursuant to a power of attorney signed by him.
By: /s/ Richard L. Craig
--------------------------------------------
Richard L. Craig
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on June 28, 1996 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
* Chairman of the Board of Director
- -----------------------------------
Donald L. Boudreau
* President and Director
- -----------------------------------
Michael Barrett
* Director
- -----------------------------------
Charles Walsh
* Director
- -----------------------------------
Luke Hayden
* Director
- -----------------------------------
William Hoefling
* Director
- -----------------------------------
Micheal Urkowitz
Director
- -----------------------------------
John Hehir
Director
- -----------------------------------
Kevin Hurley
Director
- -----------------------------------
Thomas Jacob
* Chief Financial Officer
- ----------------------------------- Controller (Principal Accounting
Keith Schuck Officer)
</TABLE>
* The undersigned, by signing his name hereto, does hereby sign this
Amendment No. 1 to Registration Statement on behalf of the
above-indicated directors and officers of the Registrant pursuant to
powers of attorney signed by such officers and directors.
By: /s/ Richard L. Craig
----------------------------------
Richard L. Craig
Attorney-in-Fact
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Numbered Page
<S> <C> <C>
1.1(A) Form of Underwriting Agreement (Certificates only).*
1.1(B) Form of Underwriting Agreement (Notes).*
1.1(C) Form of Underwriting Agreement (Certificates).*
3.1(A) Articles of Association of Chase USA (New York).*
3.1(B) Articles of Association of Chase USA (Delaware).*
3.2(A) By-laws of Chase USA (New York).*
3.2(B) By-laws of Chase USA (Delaware).*
4.1(A) Form of Pooling and Servicing Agreement (Certificates only).*
4.1(B) Form of Sale and Servicing Agreement (Notes and Certificates).*
4.2 Form of Indenture (Notes and Certificates).*
4.3(A) Form of Certificate of Trust (Notes and Certificates).*
4.3(B) Form of Trust Agreement (Notes and Certificates).*
4.3(C) Form of Amended and Restated Trust Agreement (Notes and Certificates).*
4.4 Form of Administration Agreement (Notes and Certificates).*
5.1 Opinion of Simpson Thacher & Bartlett with respect to legality.*
8.1 Opinion of Simpson Thacher & Bartlett with respect to tax matters
(included as part of Exhibit 5.1).*
23.1 Consent of Simpson Thacher & Bartlett (included as part of Exhibit 5.1).*
23.2 Consent of Simpson Thacher & Bartlett (included as part of Exhibit 5.1).*
24.1 Powers of Attorney of directors and officers of the Registrant.***
__________
* Filed herewith.
** Previously Filed.
*** Prevously filed and filed herewith.
</TABLE>
<PAGE>
FORM OF
UNDERWRITING AGREEMENT
(CERTIFICATES ONLY)
OH&S Draft
8/26/96
Chase Manhattan Auto Grantor Trust 199_-_
Asset Backed Certificates
CHASE MANHATTAN BANK USA, N.A.
Seller and Servicer
UNDERWRITING AGREEMENT
___________, 199_
Chase Securities Inc.
as Representative of the
several Underwriters
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
1. Introductory. Chase Manhattan Bank USA, N.A., a national banking
association (the "Bank"), proposes to form Chase Manhattan Auto Grantor Trust
1996-_ (the "Trust") pursuant to a Pooling and Servicing Agreement between the
Bank, as Seller and Servicer, and ___________________, as Trustee (the
"Trustee"), dated as of __________, 199_ (the "Pooling and Servicing
Agreement"), which will issue its ____% Asset Backed Certificates (the
"Certificates").
[In addition, the Bank, as Seller and Servicer, the Cash Collateral
Trustee (as defined below) on behalf of the Cash Collateral Trust 199_-_ (as
defined below) and the cash collateral depositor named therein (the "Cash
Collateral Depositor") will enter into a Loan Agreement, to be dated as of
___________, 199_ (the "Loan Agreement"), pursuant to which the Cash Collateral
Depositor will deposit $_____________ (the "Initial Cash Collateral Amount")
into the Cash Collateral Account. The Bank, as Seller and Servicer,
____________, as Cash Collateral Trustee (the "Cash Collateral Trustee"), and
the Cash Collateral Depositor shall enter into a trust agreement, dated as of
___________, 199_ (the "Trust Agreement") pursuant to which the Cash Collateral
Trust 199_-_ (the "Cash Collateral Trust 199_-_") shall be formed.] The assets
of the Cash Collateral Trust 199_-_ shall consist of the Cash Collateral
Account. The Cash Collateral Trustee shall cause the Cash Collateral Trust
<PAGE>
199_-_ to issue a guaranty in favor of the Trustee for the benefit of the
Certificateholders (the "Cash Collateral Guaranty"). Each Certificate will
represent a fractional undivided interest in the Trust. The assets of the Trust
will include, among other things, a pool of simple interest [and actuarial
method] retail installment sales contracts and purchase money loans (the
"Receivables") secured by new and used automobiles (the "Financed Vehicles") and
certain monies due or to become due [or received] thereunder on or after the
Cutoff Date (as hereinafter defined), such Receivables to be sold to the Trust
and serviced by the Bank, as Servicer, or by a successor Servicer. The
Certificates will be issued in an aggregate principal amount of
$________________, which is equal to the Original Pool Balance of the
Receivables as of the opening of business on __________, 199_ (the "Cutoff
Date"). Capitalized terms used herein and not otherwise herein defined shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
This is to confirm the agreement concerning the purchase of the
Certificates from the Bank by the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom Chase Securities Inc. is acting as
representative (the "Representative").
2. Representations and Warranties of the Bank. The Bank represents
and warrants to, and agrees with, the Underwriters, that:
(a) A registration statement on Form S-3 (No. 333-_____) has
been filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities
Act of 1933, as amended (the "Act") and the Rules and Regulations
under the Act (the "Rules and Regulations"). Such registration
statement, as amended on the date that such registration statement
or the most recent post-effective amendment thereto became effective
under the Act, including the exhibits thereto, is hereinafter
referred to as the "Registration Statement." The Registration
Statement has become effective, and no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceeding for that purpose has been instituted or, to the knowledge
of the Bank, threatened by the Commission. The conditions to the use
of a registration statement on Form S-3 under the Act, as set forth
in the General Instructions to Form S-3, and the conditions of Rule
415 under the Act, have been satisfied with respect to the
Registration Statement. The Bank proposes to file with the
Commission pursuant to Rule 424(b) of the Rules and Regulations a
prospectus supplement to the Base Prospectus (as defined herein)
relating to the sale of the
2
<PAGE>
Certificates (the "Prospectus Supplement"). The base prospectus
filed as part of the Registration Statement, in the form it appears
in the Registration Statement, or in the form most recently revised
and filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations, is hereinafter referred to as the "Base
Prospectus." The Base Prospectus as supplemented by the Prospectus
Supplement is hereinafter referred to as the "Prospectus."
(b) Except to the extent that the Representative shall have
agreed to a modification, the Prospectus shall be in all substantive
respects in the form furnished to the Representative prior to the
execution of this Agreement or, to the extent not completed at such
time, shall contain only such material changes as the Bank has
advised the Representative, prior to such time, will be included or
made therein;
(c) The Registration Statement, at the time it became
effective, and the Prospectus, as of the date of the Prospectus
Supplement, complied in all material respects with the applicable
requirements of the Act and the Rules and Regulations and
did not include any untrue statement of a material fact and, in the
case of the Registration Statement, did not omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and, in the case of the
Prospectus, did not omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading; on the Closing Date (as
defined herein), the Registration Statement and the Prospectus, as
amended or supplemented as of the Closing Date, will comply in all
material respects with the applicable requirements of the Act and
the Rules and Regulations and neither the Prospectus nor any
amendment or supplement thereto will include any untrue statement of
a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, the
Bank makes no representation and warranty as to information
contained in or omitted from the Registration Statement or the
Prospectus in reliance upon, or in conformity with, information
furnished in writing to the Bank by or on behalf of any Underwriter
through the Representative specifically for use in connection with
the preparation of the Registration Statement or the Prospectus;
(d) The Bank is a national banking association organized under
the laws of the United States, with full power and authority to own
its properties and conduct its business as described in the
Prospectus,
3
<PAGE>
and had at all relevant times and has power, authority and legal
right to acquire, own, sell and service the Receivables.
(e) On the Closing Date, the Certificates will have been duly
and validly authorized and, when such Certificates are duly and
validly executed by or on behalf of the Bank, authenticated by the
Trustee and delivered in accordance with the Pooling and Servicing
Agreement and delivered and paid for as provided herein, will be
validly issued and outstanding and entitled to the benefits and
security afforded by the Pooling and Servicing Agreement.
(f) The execution, delivery and performance by the Bank of
this Agreement, the Pooling and Servicing Agreement, [the Loan
Agreement and the Trust Agreement,] and the consummation by the Bank
of the transactions provided for herein and therein have been, or
will have been, duly authorized by the Bank by all necessary action
on the part of the Bank; and neither the execution and delivery by
the Bank of such instruments, nor the performance by the Bank of the
transactions herein or therein contemplated, nor the compliance by
the Bank with the provisions hereof or thereof, will (i) conflict
with or result in a breach or violation of any of the material terms
and provisions of, or constitute a material default under, any of
the provisions of the articles of association or by-laws of the
Bank, or (ii) conflict with any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on
the Bank or its properties, or (iii) conflict with any of the
material provisions of any material indenture, mortgage, contract or
other instrument to which the Bank is a party or by which it is
bound, or (iv) result in the creation or imposition of any lien,
charge or encumbrance upon any of its property pursuant to the terms
of any such indenture, mortgage, contract or other instruments,
except, in the case of clauses (ii) and (iii) for any such breaches
or conflicts as would not individually or in the aggregate have a
material adverse effect on the transactions contemplated thereby.
(g) When executed and delivered by the parties thereto, each
of the Pooling and Servicing Agreement, [the Loan Agreement and the
Trust Agreement] will constitute a legal, valid and binding
obligation of the Bank, enforceable against the Bank in accordance
with its terms, except to the extent that the enforceability thereof
may be subject to bankruptcy, insolvency, reorganization,
conservatorship, moratorium or other similar laws now or hereafter
in effect relating to
4
<PAGE>
creditors' rights as such laws would apply in the event of the
insolvency, liquidation or reorganization or other similar
occurrence with respect to the Bank or in the event of any
moratorium or similar occurrence affecting the Bank and to general
principles of equity.
(h) All approvals, authorizations, consents, orders or other
actions of any person, corporation or other organization, or of any
court, governmental agency or body or official (except with respect
to the state securities or "blue sky" laws of various
jurisdictions), required in connection with the execution, delivery
and performance of this Agreement and the Pooling and Servicing
Agreement has been or will be taken or obtained on or prior to the
Closing Date.
(i) As of the Closing Date, the representations and warranties
of the Bank, as Seller and Servicer, in the Pooling and Servicing
Agreement will be true and correct.
(j) This Agreement has been duly executed and delivered by the
Bank.
3. Purchase, Sale, Payment and Delivery of Certificates. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Bank agrees to sell to
the Underwriters, and the Underwriters, severally and not jointly, agree to
purchase from the Bank the respective aggregate principal amount of the
Certificates set forth opposite the names of the Underwriters in Schedule I. The
Certificates are to be purchased at a purchase price of _________% of the
aggregate principal amount thereof plus accrued interest, if any, from
___________, 199_.
The Bank will deliver the Certificates to the Representative for
the respective accounts of the Underwriters against payment of the
purchase price in immediately available funds drawn to the order of the Bank at
the offices of ____________________________________ in New York, New York _____
at 10 a.m., New York City time, on ___________, 199_ or at such other time not
later than seven full business days thereafter as the Representative and the
Bank determine, such time being herein referred to as the "Closing Date." The
Certificates so to be delivered shall be initially represented by definitive
certificates registered in the name of Cede & Co., as nominee for The Depository
Trust Company [and definitive certificate(s) registered in the name(s) provided
by the Representative, each in such numbers as the Representative shall
request]. The Bank shall make such definitive certificates representing the
Certificates available for inspection by the Representative at the office at
which the Certificates are to be delivered no later
5
<PAGE>
than 12:00 noon, New York City time, on the business day prior to the Closing
Date.
4. Offering by the Underwriters. It is understood that the
Underwriters propose to offer the Certificates for sale to the public (which may
include selected brokers and dealers) as set forth in the Prospectus.
5. Certain Agreements of the Bank. The Bank covenants and agrees
with the Underwriters that:
(a) The Bank will file the Prospectus with the Commission
pursuant to Rule 424(b) of the Rules and Regulations within the time
prescribed therein and will provide evidence satisfactory to the
Representative of such timely filing. During any period (a
"prospectus delivery period") that a prospectus relating to the
Certificates is required to be delivered under the Act, the Bank
will not file any amendments to the Registration Statement, or any
amendments or supplements to the Prospectus, unless it shall first
have delivered copies of such amendments or supplements to the
Representative, or if the Representative shall have reasonably
objected thereto promptly after receipt thereof; the Bank will
promptly advise the Representative or its counsel (i) when notice is
received from the Commission that any post-effective amendment to
the Registration Statement has become or will become effective, (ii)
of any request by the Commission for any amendment or supplement to
the Registration Statement or the Prospectus or for any additional
information and (iii) of any order or communication suspending or
preventing, or threatening to suspend or prevent, the offer and sale
of the Certificates or of any proceedings or examinations that may
lead to such an order or communication, whether by or of the
Commission or any authority administering any state securities or
"blue sky" law, as soon as the Bank is advised thereof, and will use
its reasonable efforts to prevent the issuance of any such order or
communication and to obtain as soon as possible its lifting, if
issued.
(b) If, at any time during the prospectus delivery period
(without regard to any market making prospectus required by the
Underwriters pursuant to the Act), any event occurs as a result of
which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend the Prospectus in order to
comply with the Act or the
6
<PAGE>
Rules and Regulations, the Bank promptly will prepare and file with
the Commission (subject to the Representative's prior review
pursuant to paragraph (a) of this Section 5) an amendment or
supplement which will correct such statement or omission or an
amendment or supplement which will effect such compliance.
(c) The Bank will furnish to the Representative copies of the
Registration Statement, each preliminary prospectus supplement
relating to the Certificates, the Prospectus, and all amendments and
supplements to such documents, in each case as soon as available and
in such quantities as the Representative may reasonably request.
(d) The Bank will cooperate with the Representative in
arranging for the qualification of the Certificates for sale and the
determination of their eligibility for investment under the laws of
such jurisdictions as the Representative designates and will
continue such qualifications in effect so long as required for the
distribution of the Certificates; provided, however, that neither
the Bank nor the Trust shall be obligated to qualify to do business
in any jurisdiction in which it is not currently so qualified or to
take any action which would subject it to general or unlimited
service of process in any jurisdiction where it is not now so
subject.
(e) For a period from the date of this Agreement until the
retirement of the Certificates, the Bank, as Servicer, will furnish
to the Representative copies of each certificate and the annual
statements of compliance delivered to independent certified public
accountants pursuant to Article IV of the Pooling and Servicing
Agreement and the annual independent public accountant's reports
furnished to the Trustee pursuant to Article IV of the Pooling and
Servicing Agreement, as soon as practicable after such statements
and reports are furnished to such certified public accountants or
the Trustee, as the case may be.
(f) So long as any of the Certificates are outstanding, the
Bank will furnish to the Representative as soon as practicable, (A)
all documents distributed, or caused to be distributed by the Bank
to the Certificateholders, (B) all documents filed, or caused to be
filed, by the Bank with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any order
of the Commission thereunder or pursuant to a "no-action" letter
from the staff of the Commission and (C) from time to time, such
other information in the possession of the Bank concerning the Trust
and any other
7
<PAGE>
information concerning the Bank filed with any governmental or
regulatory authority which is otherwise publicly available, as the
Representative may reasonably request.
(g) On or before the Closing Date, the Bank shall cause its
computer records relating to the Receivables to be marked to show
the Trust's absolute ownership of the Receivables, and from and
after the Closing Date the Bank shall not, as Seller or Servicer,
take any action inconsistent with the Trust's ownership of such
Receivables, other than as permitted by the Pooling and Servicing
Agreement.
(h) To the extent, if any, that the rating provided with
respect to the Certificates by [Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Ratings Services ("Standard &
Poor's") and/or __________________ ("______________")] is
conditional upon the furnishing of documents or the taking of any
other action by the Bank agreed upon on or prior to the Closing
Date, the Bank shall furnish such documents and take any such
action.
(i) For the period beginning on the date hereof and ending on
the Closing Date, unless waived by the Representative, neither the
Bank nor any trust originated, directly or indirectly, by the Bank
will offer to sell or sell notes collateralized by, or certificates
(other than the Certificates) evidencing an ownership interest in,
receivables generated pursuant to retail automobile or light duty
truck installment sale contracts.
6. Payment of Expenses. The Bank will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the Trustee's acceptance fee and the fees and
disbursements of the counsel to the Trustee [, counsel to the Cash Collateral
Depositor and counsel to the Cash Collateral Trustee], (iii) the fees and
disbursements of the accountants, (iv) the fees of the rating agencies, [(v)
fees of counsel to the Underwriters, to the extent that such fees exceed
$[__________]] and (vi) blue sky expenses; provided, however, that the
Underwriters may reimburse the Bank for certain expenses incurred by the Bank as
agreed to by the Underwriters and the Bank.
7. Conditions to the Obligations of the Underwriters. The obligation
of the several Underwriters to purchase and pay for the Certificates will be
subject to the accuracy of the representations and warranties on the part of the
Bank herein, on the date hereof and as of the Closing Date, to the accuracy of
the statements of officers of the Bank made pursuant to the
8
<PAGE>
provisions hereof, to the performance by the Bank of its obligations hereunder
and to the following additional conditions precedent:
(a) On or prior to the date hereof, the Representative shall
have received a letter (a "Procedures Letter"), dated the date of
this Agreement of [_______________________] verifying the accuracy
of such financial and statistical data contained in the Prospectus
as the Representative shall deem advisable. In addition, if any
amendment or supplement to the Prospectus made after the date hereof
contains financial or statistical data, the Representative shall
have received a letter dated the Closing Date confirming the
Procedures Letter and providing additional comfort on such new data.
(b) The Prospectus Supplement shall have been filed in the
manner and within the time period required by Rule 424(b) of the
Rules and Regulations; and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred [(i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Bank, The Chase
Manhattan Bank or The Chase Manhattan Corporation which, in the
reasonable judgment of the Representative, materially impairs the
investment quality of the Certificates or makes it impractical
to market the Certificates;] (ii) any suspension or material
limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Bank, The Chase Manhattan Bank or of The Chase Manhattan
Corporation on any exchange or in the over-the-counter market by
such exchange or over-the-counter market or by the Commission; (iii)
any banking moratorium declared by Federal or New York authorities;
or (iv) any outbreak or material escalation of major hostilities or
any other substantial national or international calamity or
emergency if, in the reasonable judgment of the Representative, the
effect of any such outbreak, escalation, calamity or emergency on
the United States financial markets makes it impracticable or
inadvisable to proceed with completion of the sale of and any
payment for the Certificates.
9
<PAGE>
(d) The Representative shall have received opinions, of
Simpson Thacher & Bartlett, special counsel to the Bank and/or such
other counsel otherwise reasonably acceptable to the Representative,
when taken together with respect to such matters as are customary
for the type of transaction contemplated by this Agreement, in form
agreed upon prior to the execution of this Agreement.
(e) The Representative shall have received an opinion or
opinions of Simpson Thacher & Bartlett, special counsel to the Bank,
dated the Closing Date and satisfactory in form and substance to the
Representative, with respect to certain matters relating to the
transfers of the Receivables from the Bank to the Trust, with
respect to the perfection of the Trust's interests in the
Receivables and with respect to certain other matters as are
customary for the type of transaction contemplated by this
Agreement, in form agreed upon prior to the execution of this
Agreement.
(f) The Representative shall have received from Orrick,
Herrington & Sutcliffe, counsel to the Underwriters, such opinion or
opinions, dated the Closing Date and satisfactory in form and
substance to the Representative, with respect to the validity of the
Certificates, the Registration Statement, the Prospectus and other
related matters as the Representative may require, and the Bank
shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon
such matters.
(g) The Representative shall have received an opinion of
Simpson Thacher & Bartlett, special tax counsel to the Bank, dated
the Closing Date and reasonably satisfactory in form and substance
to the Representative, with respect to such matters as are customary
for the type of transaction contemplated by this Agreement, in the
form agreed upon prior to the execution of this Agreement.
(h) The Representative shall have received an opinion of
counsel to the Trustee, dated the Closing Date and reasonably
satisfactory in form and substance to the Representative, with
respect to such matters as are customary for the type of transaction
contemplated by this Agreement, in the form agreed upon prior to the
execution of this Agreement.
[(i) The Representative shall have received an opinion from
foreign counsel to the Cash Collateral Depositor, dated the Closing
Date and reasonably satisfactory in form and substance to the
Representative, with respect to such matters as are
10
<PAGE>
customary for the type of transaction contemplated by this
Agreement, in form agreed upon prior to the execution of this
Agreement.]
(j) The Representative shall have received an opinion of
counsel to the Cash Collateral Depositor, dated the Closing Date and
reasonably satisfactory in form and substance to the Representative,
with respect to such matters as are customary for the type of
transaction contemplated by this Agreement, in form agreed upon
prior to the execution of this Agreement.
(k) The Representative shall have received an opinion of
counsel to the Cash Collateral Trustee, dated the Closing Date and
reasonably satisfactory in form and substance to the Representative,
with respect to such matters as are customary for the type of
transaction contemplated by this Agreement, in form agreed upon
prior to the execution of this Agreement.
(l) The Representative shall have received evidence
satisfactory to the Representative that the Certificates have been
rated [in the highest] rating category by each of Moody's and
Standard & Poor's [ and
[____________________]].
(m) The Representative shall have received a certificate,
dated the Closing Date, of a Vice President or more senior officer
of the Bank in which such officer, to the best of his or her
knowledge after reasonable investigation, shall state that (i) the
representations and warranties of the Bank in this Agreement are
true and correct in all material respects on and as of the Closing
Date, (ii) that the Bank has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, (iii) the representations
and warranties of the Bank, as Seller and Servicer, in the Pooling
and Servicing Agreement are true and correct as of the dates
specified in the Pooling and Servicing Agreement, (iv) that no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted
or are threatened by the Commission, (v) that, subsequent to the
date of the Prospectus, there has been no material adverse change in
the financial position or results of operation of the Bank's
automotive business except as set forth in or contemplated by the
Prospectus or as described in such certificate and (vi) the
Prospectus does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein,
11
<PAGE>
in light of the circumstances in which they were made, not
misleading.
The Bank will furnish the Representative, or cause the
Representative to be furnished, with such number of conformed copies of such
opinions, certificates, letters and documents as the Representative reasonably
requests.
8. Indemnification.
(a) The Bank will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities to which such
Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of any material fact contained
in any preliminary prospectus supplement, the Registration Statement
(other than any market making prospectus), the Prospectus, or any
amendment or supplement thereto (other than any market making
prospectus or any amendment or supplement thereto), or arise out of,
or are based upon, the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by
such Underwriter in connection with investigating or defending any
such action or claim; provided, however, that (i) the Bank shall not
be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus supplement, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written
information furnished to the Bank by any Underwriter through the
Representative expressly for use therein, and (ii) such indemnity
with respect to any preliminary prospectus supplement shall not
inure to the benefit of the Underwriter (or any person controlling
any of the Underwriters) from whom the person asserting any such
loss, claim, damage or liability purchased the Certificates which
are the subject thereof if such person did not receive a copy of the
Prospectus (or the Prospectus as supplemented) at or prior to the
confirmation of the sale of such Certificates to such person in any
case where such delivery is required by the Act and the untrue
statement or omission of a material fact contained in such
preliminary prospectus supplement was corrected in the Prospectus
(or the Prospectus as supplemented).
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(b) Each Underwriter severally agrees to indemnify and hold
harmless the Bank, its directors, each of its officers or agents who
signed the Registration Statement, and each person, if any, who
controls the Bank within the meaning of Section 15 of the Act
against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this
Section 8, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in any
preliminary prospectus supplement, the Registration Statement or the
Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Bank by
such Underwriter through the Representative expressly for use in
such preliminary prospectus supplement, the Registration Statement
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to the
indemnifying party of any action commenced against the indemnified
party in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have hereunder or
otherwise than on account of this indemnity agreement. In case any
such action shall be brought against an indemnified party and it
shall have notified the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party with respect to such
action), and it being understood that the indemnifying party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one
separate firm of attorneys, and, after notice from the indemnifying
party to the indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to the
indemnified party under subsections (a) or (b) of this Section 8 for
any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by the indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation.
(d) The obligations of the Bank under this Section 8 shall be
in addition to any liability which
13
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the Bank may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and each Underwriter's obligations
under this Section 8 shall be in addition to any liability which
such Underwriter may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Bank and
to each person, if any, who controls the Bank within the meaning of
Section 15 of the Act.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 is for any reason held to be unavailable other than in accordance with
its terms, the Bank and the Underwriters shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Bank or the Underwriters, as incurred,
in such proportions so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount and commissions
bear to the initial public offering price appearing thereon and the Bank is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act shall
have the same rights to contribution as such Underwriter, and each director of
the Bank, each officer or agent of the Bank who signed the Registration
Statement, and each person, if any, who controls the Bank within the meaning of
Section 15 of the Act shall have the same rights to contribution as the Bank.
10. Default of Underwriters. If any Underwriter defaults in its
obligations to purchase Certificates hereunder and the aggregate principal
amount of the Certificates that such defaulting Underwriter agreed but failed to
purchase does not exceed 10% of the total principal amount of such Certificates,
the Representative may make arrangements satisfactory to the Bank for the
purchase of such Certificates by other persons, including the non-defaulting
Underwriters, but if no such arrangements are made by the Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Certificates that such
defaulting Underwriter agreed but failed to purchase. If any Underwriter so
defaults and the aggregate principal amount of the Certificates with respect to
which such default or defaults occur exceeds 10% of the total principal amount
of such Certificates and arrangements satisfactory to the Representative and the
Bank for the purchase of such Certificates by other persons are not made within
36 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting
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Underwriter or the Bank, except as provided in Section 11. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
11. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Bank or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of the Underwriters, the Bank or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Certificates. If for any reason the purchase of the
Certificates by the Underwriters is not consummated, the Bank shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
6 and the respective obligations of the Bank and the Underwriters pursuant to
Sections 5, 6, 8 and 9 shall remain in effect. If the purchase of the
Certificates by the Underwriters is not consummated for any reason other than
solely because of the occurrence of any event specified in clauses (ii), (iii)
or (iv) of Section 7(c), the Bank will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by it in connection with the offering of the Certificates.
12. Notices. All communications hereunder will be in writing and, if
sent to the Representative or the Underwriters, will be mailed, delivered or
telegraphed and confirmed to the Representative at Chase Securities Inc., 270
Park Avenue, 7th Floor, New York, New York 10017, Attention: Asset Backed
Finance Division, or, if sent to the Bank, will be mailed, delivered or
telegraphed and confirmed to [________________________________], Attention:
[_________________].
13. Successors. This Agreement will inure to the benefit of, and be
binding upon, the parties hereto and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Certificates
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
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14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to us the enclosed
duplicate hereof, whereupon it will become a binding agreement among the Bank
and the Underwriters in accordance with its terms.
Very truly yours,
CHASE MANHATTAN BANK USA, N.A.
By: _____________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first written above.
CHASE SECURITIES INC.
on behalf of itself and as Representative of
the Several Underwriters named in Schedule I
By: _____________________________
Name:
Title:
17
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SCHEDULE I
Aggregate
Principal
Amount of
Underwriters Certificates
- ------------ ------------
Chase Securities Inc. $
Total $
18
<PAGE>
FORM OF
UNDERWRITING AGREEMENT
(NOTES)
OH&S DRAFT
8/26/96
CHASE MANHATTAN AUTO OWNER TRUST 199_-_
ASSET BACKED NOTES
CHASE MANHATTAN BANK USA, N.A.
Seller And Servicer
NOTE UNDERWRITING AGREEMENT
_______________, 1996
Chase Securities Inc.,
As Representative of the
Several Underwriters,
270 Park Avenue
New York, NY 10017
Ladies and Gentlemen:
1. Introductory. Chase Manhattan Bank USA, N.A., a national banking
association (the "Bank"), proposes to form Chase Manhattan Auto Owner Trust
199_-_ (the "Trust") to sell $_____________ aggregate principal amount of Class
A-1 ___% Asset Backed Notes (the "Class A-1 Notes) and $_____________ aggregate
principal amount of Class A-2 ___% Asset Backed Notes (the "Class A-2 Notes";
and together with the Class A-1 Notes, the "Notes").
The assets of the Trust will include, among other things, a pool of
simple interest [and actuarial method] retail installment sales contracts and
purchase money loans (the "Receivables") secured by new and used automobiles
(the "Financed Vehicles") and certain monies due or to become due [or received]
thereunder on or after the Cutoff Date (as hereinafter defined), such
Receivables to be sold to the Trust and serviced by the Bank, as Servicer, or by
a successor Servicer. The Original Pool Balance of the Receivables as of the
opening of business on ____________, 199_ (the "Cut-off Date") shall be equal
$____________. The Notes will be issued pursuant to the Indenture to be dated as
of ____________, 199_ (as amended and supplemented from time to time, the
"Indenture"), between the Trust and ____________________, as indenture trustee
(the "Indenture Trustee").
Simultaneously with the issuance and sale of the Notes as
contemplated herein, the Trust will issue $_____________ aggregate principal
amount of ___% Asset Backed Certificates (the "Certificates") pursuant to the
Amended and Restated Trust Agreement to be dated as of ___________, 1996 (as
amended and supplemented from time to time, the "Trust Agreement"), among the
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Bank, _______________________, as General Partner (the "General Partner") and
_______________________, as owner trustee (the "Owner Trustee"), each
representing a fractional undivided ownership interest in the Trust, which will
be sold pursuant to an underwriting agreement dated the date hereof (the
"Certificate Underwriting Agreement"; together with this Note Underwriting
Agreement, the "Underwriting Agreements") among the Bank and the Underwriters
named in Schedule I hereto. The Notes and the Certificates are sometimes
referred to collectively herein as the "Securities".
Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to such terms in the Sale and Servicing Agreement to be
dated as of ____________, 199_ (as amended and supplemented from time to time,
the "Sale and Servicing Agreement"), between the Trust and the Bank, as Seller
and Servicer.
This is to confirm the agreement concerning the purchase of the
Notes from the Bank by the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom, Chase Securities Inc. is acting as representative
(the "Representative").
2. Representations and Warranties of the Bank. The Bank represents
and warrants to, and agrees with, the Underwriters, that:
(a) A registration statement on Form S-3 (No. 333- _____) has been
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended (the
"Act") and the Rules and Regulations under the Act (the "Rules and
Regulations"). Such registration statement, as amended on the date that such
registration statement or the most recent post-effective amendment thereto
became effective under the Act, including the exhibits thereto, is hereinafter
referred to as the "Registration Statement." The Registration Statement has
become effective, and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that purpose has
been instituted or, to the knowledge of the Bank, threatened by the Commission.
The conditions to the use of a registration statement on Form S-3 under the Act,
as set forth in the General Instructions to Form S-3, and the conditions of Rule
415 under the Act, have been satisfied with respect to the Registration
Statement. The Bank proposes to file with the Commission pursuant to Rule 424(b)
of the Rules and Regulations a prospectus supplement to the Base Prospectus (as
defined herein) relating to the sale of the Securities (the "Prospectus
Supplement"). The base prospectus filed as part of the Registration Statement,
in the form it appears in the Registration Statement, or in the form most
recently revised and filed with the Commission pursuant to Rule 424(b), is
hereinafter referred to as the "Base Prospectus."
2
<PAGE>
The Base Prospectus as supplemented by the Prospectus Supplement is hereinafter
referred to as the "Prospectus".
(b) Except to the extent that the Representative shall have agreed
to a modification, the Prospectus shall be in all substantive respects in the
form furnished to the Representative prior to the execution of this Agreement
or, to the extent not completed at such time, shall contain only such material
changes as the Bank has advised the Representative, prior to such time, will be
included or made therein.
(c) The Registration Statement, at the time it becomes effective,
and the Prospectus, as of the date of the Prospectus Supplement, complied in all
material respects with the applicable requirements of the Act and the Trust
Indenture Act of 1939 and the Rules and Regulations and did not include any
untrue statement of a material fact and, in the case of the Registration
Statement, did not omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and, in the case of
the Prospectus, did not omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading; on the Closing Date (as defined herein), the Registration
Statement and the Prospectus, as amended or supplemented as of the Closing Date,
will comply in all material respects with the applicable requirements of the Act
and the Rules and Regulations, and neither the Prospectus nor any amendment or
supplement thereto will include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the Bank makes no representation and warranty to information
contained in or omitted from the Registration Statement or the Prospectus in
reliance upon, or in conformity with, information furnished in writing to the
Bank by or on behalf of any Underwriter through the Representative specifically
for use in connection with the preparation of the Registration Statement or the
Prospectus.
(d) The Bank is a national banking association organized under the
laws of the United States, with full power and authority to own its properties
and conduct its business as described in the Prospectus, and had at all relevant
times and has power, authority and legal right to acquire, own, sell and service
the Receivables.
(e) When the Notes have been duly executed and delivered by the
Owner Trustee and, when authenticated by the Indenture Trustee in accordance
with the Indenture and delivered and paid for pursuant
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<PAGE>
to the Note Underwriting Agreement, the Notes will be validly issued and will
constitute legal, valid and binding obligations of the Trust enforceable against
the Trust in accordance with their terms, except to the extent that the
enforceability thereof may be subject to bankruptcy, insolvency, reorganization,
conservatorship, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights as such laws would apply in the event of the
insolvency, liquidation or reorganization or other similar occurrence with
respect to the Bank or in the event of any moratorium or similar occurrence with
respect to the Bank or in the event of any moratorium or similar occurrence
affecting the Bank and to general principles of equity.
(f) When the Certificates have been duly executed, authenticated and
delivered by the Owner Trustee in accordance with the Trust Agreement and
delivered and paid for pursuant to this Agreement, will be validly issued and
entitled to the benefits and security afforded by the Trust Agreement.
(g) The execution, delivery and performance by the Bank of this
Agreement, Certificate Underwriting Agreement, and Basic Documents, and the
consummation by the Bank of the transactions provided for herein and therein
have been, or will have been, duly authorized by the Bank by all necessary
action on the part of the Bank; and neither the execution and delivery by the
Bank of such instruments, nor the performance by the Bank of the transactions
herein or therein contemplated, nor the compliance by the Bank with the
provisions hereof or thereof, will (i) conflict with or result in a breach or
violation of any of the material terms and provisions of, or constitute a
material default under, any of the provisions of the articles of association or
by-laws of the Bank, or (ii) conflict with any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Bank or
its properties, or (iii) , conflict with any of the material provisions of any
material indenture, mortgage, contract or other instrument to which the Bank is
a party or by which it is bound, or (iv) result in the creation or imposition of
any lien, charge or encumbrance upon any of its property pursuant to the terms
of any such indenture, mortgage, contract or other instruments, except, in the
case of clauses (ii) and (iii) , for any such breaches or conflicts as would not
individually or in the aggregate have a material adverse effect on the
transactions contemplated hereby.
(h) When executed and delivered by the parties thereto, each of the
Sale and Servicing Agreement, the Trust Agreement and the Administration
Agreement will constitute a legal, valid and binding obligation of the Bank,
enforceable against the Bank in accordance with its terms, except to the extent
that the enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, conservatorship, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights as such laws would apply in
the event of the insolvency, liquidation or reorganization or other similar
occurrence with respect to the Bank or in the event of any moratorium or similar
occurrence affecting the Bank and to general principles of equity.
4
<PAGE>
(i) All approvals, authorizations, consents, orders or other actions
of any person, corporation or other organization, or of any court, governmental
agency or body or official (except with respect to the state securities or "blue
sky" laws of various jurisdictions), required in connection with the execution,
delivery and performance of this Agreement, the Certificate Underwriting
Agreement and the Basic Documents has been or will be taken or obtained on or
prior to the Closing Date.
(j) As of the Closing Date, the representation and warranties of the
Bank, as Seller and Servicer, and of the General Partner in the Basic Documents
will be true and correct.
(k) This Agreement has been duly executed and delivered by the Bank.
3. Purchase, Sale, Payment and Delivery of the Notes. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Bank agrees to cause the Trust
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Trust, (a) at a purchase price of [_____]% of the
principal amount thereof, the respective principal amount of the Class A-1 Notes
set forth opposite the name of such Underwriter in Schedule I hereto and (b) at
a purchase price of [_____]% of the principal amount thereof, the respective
principal amount of the Class A-2 Notes set forth opposite the name of such
Underwriter in Schedule I hereto [, plus accrued interest, if any, from
_____________, 199_].
The Bank will deliver the Notes to the Representative for the
respective accounts of the Underwriters against payment of the purchase price in
immediately available funds drawn to the order of the Bank at the offices of
__________________________ in New York, New York ________ at 10:00 a.m., New
York City time, on ____________, 199_ or at such other time not later than seven
full business days thereafter as the Representative and the Bank determine, such
time being herein referred to as the "Closing Date." The Notes to be so
delivered will be initially represented by one or more definitive Notes
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC") and will be made available for inspection by the Representative
at the office where delivery and payment for such Notes is to take place no
later than 1:00 p.m., New York City time on the Business Day prior to the
Closing Date.
4. Offering by the Underwriters. It is understood that the
Underwriters propose to offer the Notes for sale to the public (which may
include selected brokers and dealers) as set forth in the Prospectus.
5
<PAGE>
5. Covenants of the Bank. The Bank covenants and agrees with the
Underwriters that:
(a) The Bank will file the Prospectus with the Commission pursuant
to Rule 424(b) of the Rules and Regulations within the time prescribed therein
and will provide evidence satisfactory to the Representative of such timely
filing. During any period (a "prospectus delivery period") that a prospectus
relating to the Notes is required to be declared under the Act, the Bank will
not file any amendments to the Registration Statement, or any amendments or
supplements to the Prospectus, unless it shall first have delivered copies of
such amendments or supplements to the Representative, or if the Representative
shall have reasonably objected thereto promptly after receipt thereof; the Bank
will promptly advise the Representative or its counsel (i) when notice is
received from the Commission that any post-effective amendment to the
Registration Statement has become or will become effective, (ii) of any request
by the Commission for any amendment or supplement to the Registration Statement
or the Prospectus or for any additional information and (iii) of any order or
communication suspending or preventing, or threatening to suspend or prevent,
the offer and sale of the Notes or of any proceedings or examinations that may
lead to such an order or communication, whether by or of the Commission or any
authority administering any state securities or "blue sky" law, as soon as the
Bank is advised thereof, and will use its reasonable efforts to prevent the
issuance of any such order or communication and to obtain as soon as possible
its lifting, if issued.
(b) If, at any time during the prospectus delivery period (without
regard to any market making prospectus required by the Underwriters pursuant to
the Act), any event occurs as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend the Prospectus in order to comply with the
Act or the Rules and Regulations, the Bank promptly will prepare and file with
the Commission (subject to the Representative's prior review pursuant to
paragraph (a) of this Section 5), an amendment or supplement which will correct
such statement or omission or an amendment or supplement which will effect such
compliance.
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<PAGE>
(c) The Bank will furnish to the Representative copies of the
Registration Statement, each preliminary prospectus supplement relating to the
Notes, the Prospectus, and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as the Representative may
reasonably request.
(d) The Bank will cooperate with the Representative in arranging for
the qualification of the Notes for sale and the determination of their
eligibility for investment under the laws of such jurisdictions, [or as
necessary to qualify for the Euroclear System or Cedel Bank, Societe anoyme,] as
the Representative designates and will continue such qualifications in effect so
long as required for the distribution of the Notes; provided, however, that
neither the Bank nor the Trust shall be obligated to qualify to do business in
any jurisdiction in which it is not currently so qualified or to take any action
which would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject.
(e) For a period from the date of this Agreement until the
retirement of the Notes, the Bank, as Servicer, will furnish to the
Representative copies of each certificate and the annual statements of
compliance delivered to independent certified public accountants' reports
furnished to the Indenture Trustee or the Owner Trustee pursuant to the Sale and
Servicing Agreement, as soon as practicable after such statements and reports
are furnished to the Indenture Trustee or the Owner Trustee.
(f) So long as any of the Notes is outstanding, the Bank will
furnish to the Representative as soon as practicable, (A) all documents
distributed, or caused to be distributed, by the Bank to the Noteholders, (B)
all documents filed, or caused to be filed, by the Bank with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and any order of the Commission thereunder or pursuant to a "no-action"
letter from the staff of the Commission and (C) from time to time, such other
information in the possession of the Bank concerning the Trust and any other
information concerning the Bank filed with any governmental or regulatory
authority which is otherwise publicly available, as the Representative may
reasonably request.
(g) On or before the Closing Date, the Bank shall cause its computer
records relating to the Receivables to be marked to show the Trust's absolute
ownership of the Receivables, and from and after the Closing Date neither the
Bank nor the Servicer shall take any action inconsistent with the Trust's
ownership of such Receivables [and the security interest of the Indenture
Trustee therein], other than as permitted by the Sale and Servicing Agreement.
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<PAGE>
(h) To the extent, if any, that the rating provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes is
conditional upon the furnishing documents or the taking of any other actions by
the Bank, the Bank shall furnish such documents and take any such other actions.
(i) For the period beginning on the date of the date hereof and
ending the Closing Date, unless waived by the Representative, neither the Bank
nor any trust originated, directly or indirectly, by the Bank will offer to sell
or sell notes (other than the Notes) collateralized by, or certificates (other
than the Certificates) evidencing an ownership interest in, ownership interest
in, receivables generated pursuant to retail automobile or light duty truck
installment sale contracts or purchase money loans.
6. Payment of Expenses. The Bank will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the Indenture Trustee's and Owner Trustee's
acceptance fee and the fees and disbursements of the counsel to the Indenture
Trustee and counsel to the Owner Trustee, (iii) the fees and disbursements of
the accountants, (iv) the fees of the rating agencies, (v) [fees of counsel to
the Underwriters, to the extent that such fees exceed $[___________]] and (vi)
blue sky expenses; provided, however, that the Underwriters may reimburse the
Bank for certain expenses incurred by the Bank as agreed to by the Underwriters
and the Bank.
7. Conditions to the Obligations of the Underwriters. The obligation
of the several Underwriters to purchase and pay for the Notes will be subject to
the accuracy of the representations and warranties on the part of the Bank
herein, on the date hereof and as of the Closing Date, to the accuracy of the
statements of officers of the Bank made pursuant to the provisions hereof, to
the performance by the Bank of its obligations hereunder and to the following
additional conditions precedent:
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(a) On or prior to the date hereof Representative shall have
received a letter (a "Procedures Letter"), dated the date of this
Agreement of [___________________] verifying the accuracy of such
financial and statistical data contained in the Prospectus as the
Representative shall deem advisable. In addition, if any amendment
or supplement to the Prospectus made after the date hereof contains
financial or statistical data, the Representative shall have
received a letter dated the Closing Date confirming the Procedures
Letter and providing additional comfort on such new data.
(b) The Prospectus Supplement shall have been filed in the
manner and within the time period required by Rule 424(b) of the
Rules and Regulations; and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Bank[, The Chase
Manhattan Bank] or The Chase Manhattan Corporation which, in the
reasonable judgment of the Representative, materially impairs the
investment quality of the Notes or makes it impractical to market
the Notes; (ii) any suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Bank[, The Chase Manhattan Bank] or
of The Chase Manhattan Corporation on any exchange or in the
over-the-counter market by such exchange or over-the-counter market
or by the Commission; (iii) any banking moratorium declared by
Federal or New York authorities; or (iv) any outbreak or material
escalation of major hostilities or any other substantial national or
international calamity or emergency if, in the reasonable judgment
of the Representative, the effect of any such outbreak, escalation,
calamity or emergency on the United States financial markets makes
it impracticable or inadvisable to proceed with completion of the
sale of and any payment for the Notes.
(d) The Representative shall have received opinions, dated the
Closing Date, of Simpson Thacher & Bartlett, special counsel to the
Bank and/or such other
12
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counsel otherwise reasonably acceptable to the Representative when
taken together with respect to such matters as are customary for the
type of transaction contemplated by this Agreement, in form agreed
upon prior to the execution of this Agreement.
(e) The Representative shall have received an opinion or
opinions of Simpson Thacher & Bartlett, special counsel to the Bank,
dated the Closing Date and satisfactory in form and substance to the
Representative, with respect to certain matters relating to the
transfers of the Receivables from the Bank to the Trust, with
respect to a grant of a security interest in the Receivables to the
Indenture Trustee, and with respect to the perfection of the Trust's
and the Indenture Trustee's interests in the Receivables.
(f) The Representative shall have received from Orrick,
Herrington & Sutcliffe, counsel to the Underwriters, such opinion or
opinions, dated the Closing Date and satisfactory in form and
substance to the Representative, with respect to the validity of the
Notes, each Registration Statement, the Prospectus and other related
matters as the Representative may require, and the Bank shall have
furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(g) The Representative shall have received an opinion of
Simpson Thacher & Bartlett, special tax counsel to the Bank, dated
the Closing Date and reasonably satisfactory in form and substance
to the Representative, with respect to such matters some customary
for the type of transaction contemplated by this Agreement in the
form agreed upon prior to the execution of this Agreement.
(h) The Representative shall have received an opinion of
____________________, counsel to the Indenture Trustee, dated the
Closing Date and satisfactory in form and substance to the
Representative, substantially to the effect that:
(i) The Indenture Trustee is a
[___________________] and validly existing in good
standing under the laws of [____________________];
(ii) The Indenture Trustee has full corporate
trust power and authority to enter into and perform its
obligations under the Indenture,
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the Sale and Servicing Agreement and the Administration
Agreement;
(iii) Each of the Indenture, the Sale and Servicing
Agreement and the Administration Agreement has been duly
authorized, executed and delivered by the Indenture Trustee
and constitutes a valid and legally binding agreement of the
Indenture Trustee, enforceable against the Indenture Trustee
in accordance with its terms, subject, as to enforcement of
remedies, (a) to applicable bankruptcy, insolvency,
reorganization, and other similar laws affecting the rights of
creditors generally, and (b) to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iv) Each of the Notes have been duly executed,
authenticated and delivered by the Indenture Trustee;
(v) No consent, approval or authorization of, or
registration, declaration or filing with, or giving of notice
to or the taking of any other act with respect to any court or
governmental authority, agency or body of the United States of
America or of any state governing the trust powers of the
Indenture Trustee is required under any existing laws or
regulation for the consummation on the part of the Indenture
Trustee of the Indenture, the Sale and Servicing Agreement and
the Administration Agreement or the performance by the
Indenture Trustee thereunder, except such as have been
obtained or the filing of Form T-1 under the Trust Indenture
Act;
(vi) The execution and delivery of the Sale and
Servicing Agreement and the Administration Agreement and the
performance by the Indenture Trustee of their respective terms
do not conflict with or result in a violation of (1) any laws
or regulations of the United States of America or of any state
governing the trust powers of the Indenture Trustee, (2) the
Articles of Incorporation or By-Laws of the Indenture Trustee
or (3) any material agreement, instrument, order, writ,
judgment or decree known to such counsel to which the
Indenture Trustee is a party or is subject; and
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<PAGE>
(vii) To the best of such counsel's knowledge and
belief, there is no action, suit or proceeding pending or
threatened against the Indenture Trustee (as trustee under the
Indenture or in its individual capacity) before or by any
governmental authority that if adversely decided, would
materially adversely affect the ability of the Indenture
Trustee to perform its obligations under the Indenture, the
Sale and Servicing Agreement or the Administration Agreement.
In rendering such opinions, counsel to the Indenture Trustee may
rely on the opinion of the office of the general counsel to the Indenture
Trustee.
(i) The Representative shall have received an opinion of
[____________________], counsel to the Owner Trustee, and such other
counsel reasonably satisfactory to the Representative and its
counsel, dated the Closing Date and satisfactory in form and
substance to the Representative, with respect to such matters as are
customary for the type of transaction contemplated by this
Agreement, in form agreed upon prior to the execution of this
Agreement.
(j) The Class A-1 Notes shall have been rated "[____]" by
Standard & Poor's, "[____]" by Moody's and "_________" by
[________________] and the Class A-2 Notes shall have been rated
"[____]" by Standard & Poor's, "[____]" by Moody's and "_________"
by [_____________];
(k) The Representative shall have received a certificate,
dated the Closing Date, of a Vice President or more senior officer
of the Bank in which such officer, to the best of his or her
knowledge after reasonable investigation, shall state that (i) the
representations and warranties of the Bank in this Agreement are
true and correct in all material respects on and as of the Closing
Date, (ii) that the Bank has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, (iii) the representations
and warranties of the Bank, as Seller and Servicer, in the Sale and
Servicing Agreement and the Trust Agreement, and the conditions set
forth in Section 3.1(b) of the Sale and Servicing Agreement, are
true and correct as of the dates specified in the Sale and Servicing
Agreement and the Trust Agreement, (iv) that no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are
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<PAGE>
threatened by the Commission, (v) that, subsequent to the date of
the Prospectus, there has been no material adverse change in the
financial position or results of operation of the Bank's automotive
business except as set forth in or contemplated by the Prospectus or
as described in such certificate and (vi) the Prospectus does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances in which
they were made, not misleading; and
(l) On the Closing Date, $[____________] aggregate amount of
Certificates shall have been issued and sold.
The Bank will furnish the Representative, or cause the
Representative to be furnished, with such number of conformed copies of such
opinions, certificates, letters and documents as the Representative reasonably
requests.
8. Indemnification. (a) The Bank will indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of, or are based upon, any untrue statement or alleged untrue statement of any
material fact contained in any preliminary prospectus supplement, the
Registration Statement), the Prospectus (other than any market making prospectus
or any amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim; provided, however, that (i) the Bank shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of, or is based upon, an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary prospectus supplement,
the Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Bank by any Underwriter through the Representative expressly for use therein and
(ii) such indemnity with respect to any preliminary prospectus supplement shall
not inure to the benefit of the Underwriter (or any person controlling any of
the Underwriters) from whom the person asserting any such loss, claim, damage or
liability
16
<PAGE>
purchased the Notes which are the subject thereof if such person did not receive
a copy of the Prospectus (or the Prospectus as supplemented) at or prior to the
confirmation of the sale of such Notes to such person in any case where such
delivery is required by the Act and the untrue statement or omission of a
material fact contained in such preliminary prospectus supplement was corrected
in the Prospectus (or the Prospectus as supplemented).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Bank, its directors, each of its officers or agents who signed the
Registration Statement, and each person, if any, who controls the Bank within
the meaning of Section 15 of the Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section 8, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in any preliminary
prospectus supplement, the Registration Statement or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Bank by any Underwriter through the Representative
expressly for use in such preliminary prospectus supplement, the Registration
Statement or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to the
indemnifying party of any action commenced against the indemnified party in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have hereunder or otherwise than on account of this indemnity
agreement. In case any such action shall be brought against an indemnified party
and it shall have notified the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party with
respect to such action), and it being understood that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys, and, after notice from the
indemnifying party to the indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to the indemnified
party under subsections (a) or (b) of this Section 8 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by the
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
17
<PAGE>
(d) The obligations of the Bank under this Section 8 shall be in
addition to any liability which the Bank may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and each Underwriter's obligations
under this Section 8 shall be in addition to any liability which such
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Bank and to each person, if any,
who controls the Bank within the meaning of Section 15 of the Act.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 is for any reason held to be unavailable other than in accordance with
its terms, the Bank and the Underwriters shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Bank or the Underwriters, as incurred,
in such proportions so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount and commissions
bear to the initial public offering price appearing thereon and the Bank is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act shall
have the same rights to contribution as such Underwriter, and each director of
the Bank, each officer or agent of the Bank who signed the Registration
Statement, and each person, if any, who controls the Bank within the meaning of
Section 15 of the Act shall have the same rights to contribution as the Bank.
10. Default of Underwriters. If any Underwriter defaults in its
obligations to purchase Notes hereunder and the aggregate principal amount of
the Notes that such defaulting Underwriter agreed but failed to purchase does
not exceed 10% of the total principal amount of Notes, the Representative may
make arrangements satisfactory to the Bank for the purchase of such Notes by
other persons, including the non-defaulting Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Notes that such defaulting Underwriter agreed but failed to
purchase. If any Underwriter so defaults and the aggregate principal amount of
the Notes with respect to which such default or defaults occur exceeds 10% of
the total principal amount of the Notes and arrangements satisfactory to the
Representative and the Bank for the purchase of such Notes by other persons are
not made within 36 hours after such default,
18
<PAGE>
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Bank, except as provided in Section 11.
Nothing herein will relieve a defaulting Underwriter from liability for its
default.
11. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Bank or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation or statement as to the results thereof, made by or on
behalf of the Underwriters, the Bank or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Notes. If for any reason the purchase of the Notes by the
Underwriters is not consummated, the Bank shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 6 and the respective
obligations of the Bank and the Underwriters pursuant to Section 5, 6, 8 and 9
shall remain in effect. If the purchase of the Notes by the Underwriters is not
consummated for any reason other than solely because of the occurrence of any
event specified in clauses (ii), (iii) or (iv) of Section 7(c), the Bank will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by it in connection with the
offering of the Notes.
12. Notices. All communications hereunder will be in writing and, if
sent to the Representative or the Underwriters, will be mailed, delivered or
telegraphed and confirmed to the Representative at Chase Securities Inc., 270
Park Avenue, 7th Floor, New York, New York 10017, Attention: Asset Backed
Finance Division, or, if sent to the Bank, will be mailed, delivered or
telegraphed, and confirmed to it at [__________________________], Attention:
[___________________].
13. Successors. This Agreement will inure to the benefit of, and be
binding upon, the parties hereto and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Notes from any
Un-
19
<PAGE>
derwriter shall be deemed to be a successor by reason merely of such purchase.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. No Bankruptcy Petition. Each Underwriter covenants and agrees
that, prior to the date which is one year and one day after the payment in full
of all securities issued by the Trust, it will not institute against, or join
any other person in instituting against, the Trust any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any Federal or state bankruptcy or similar law.
16. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
20
<PAGE>
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to us the enclosed
duplicate hereof, whereupon it will become a binding agreement among the Bank
and the several Underwriters in accordance with its terms.
Very truly yours,
CHASE MANHATTAN BANK USA, N.A.
By________________________________
Name:
Title:
The foregoing Note Underwriting Agreement is hereby confirmed and accepted as of
the date first written above:
CHASE SECURITIES INC.
on behalf of itself and
as Representative
of the several Underwriters,
named in Schedule I
By_________________________________
Name:
Title:
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<PAGE>
SCHEDULE I
Principal Amount of Principal Amount of
Underwriter Class A-1 Notes Class A-2 Notes
----------- --------------- ---------------
$ $
---------------- ----------------
$ $
================ ================
22
<PAGE>
EXHIBIT A
THIS TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION WITH
RESPECT TO THE NOTES AND THE CERTIFICATES; HOWEVER, THIS TERM SHEET DOES NOT
CONTAIN COMPLETE INFORMATION WITH RESPECT TO THE OFFERING OF THE NOTES AND THE
CERTIFICATES. THE INFORMATION HEREIN IS PRELIMINARY AND WILL BE SUPERSEDED BY
THE INFORMATION CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE BASE PROSPECTUS.
ADDITIONAL INFORMATION WILL BE CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE
BASE PROSPECTUS. PURCHASERS ARE URGED TO READ BOTH THE PROSPECTUS SUPPLEMENT AND
THE BASE PROSPECTUS.
THIS TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SALES
OF THE NOTES AND THE CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER
HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE BASE PROSPECTUS.
23
<PAGE>
FORM OF
UNDERWRITING AGREEMENT
(CERTIFICATES)
OH&S DRAFT
8/26/96
CHASE MANHATTAN AUTO OWNER TRUST 199_-_
ASSET BACKED CERTIFICATES
CHASE MANHATTAN BANK USA, N.A.
Seller and Servicer
CERTIFICATE UNDERWRITING AGREEMENT
_______________, 1996
Chase Securities Inc.,
As Representative of the
Several Underwriters,
270 Park Avenue
New York, NY 10017
Ladies and Gentlemen:
1. Introductory. Chase Manhattan Bank USA, N.A., a national banking
association (the "Bank"), proposes to form Chase Manhattan Auto Owner Trust
199_-_ (the "Trust") to sell $_____________ aggregate principal amount of ____%
Asset Backed Certificates (the "Certificates"), each representing a fractional
undivided interest in the Trust.
The assets of the Trust will include, among other things, a pool of
simple interest [and actuarial method] retail installment sales contracts and
purchase money loans (the "Receivables") secured by new and used automobiles
(the "Financed Vehicles") and certain monies due or to become due [or received]
thereunder on or after the Cutoff Date (as hereinafter defined), such
Receivables to be sold to the Trust and serviced by the Bank, as Servicer, or by
a successor Servicer. The Original Pool Balance of the Receivables as of the
opening of business on ____________, 199_ (the "Cut-off Date") shall be equal
$____________. The Certificates will be issued pursuant to the Amended and
Restated Trust Agreement to be dated as of ________________, 1996 (as amended
and supplemented from time to time, the "Trust Agreement"), among the Bank,
_________________________, as general partner (the "General Partner") and
__________________________, as owner trustee (the "Owner Trustee").
Simultaneously with the issuance and sale of the Certificates as
contemplated herein, the Trust will issue $_____________ aggregate principal
amount of Class A-1 ___% Asset Backed Notes (the "Class A-1 Notes) and
$_____________ aggregate principal amount of Class A-2 ___% Asset Backed Notes
(the "Class
1
<PAGE>
A-2 Notes"; and together with the Class A-1 Notes, the "Notes"), pursuant to the
Indenture to be dated as of _______________, 199_ (as amended and supplemented
from time to time, the "Indenture"), between the Trust and
_______________________, as indenture trustee (the "Indenture Trustee"), which
will be sold pursuant to an underwriting agreement dated the date hereof (the
"Note Underwriting Agreement"; together with this Certificate Underwriting
Agreement, the "Underwriting Agreements") among the Bank and the underwriters
named therein. The Notes and the Certificates are sometimes referred to
collectively herein as the "Securities".
Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to such terms in the Sale and Servicing Agreement to be
dated as of ____________, 199_ (as amended and supplemented from time to time,
the "Sale and Servicing Agreement"), between the Trust and the Bank, as Seller
and Servicer.
This is to confirm the agreement concerning the purchase of the
Notes from the Bank by the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom, Chase Securities Inc. is acting as representative
(the "Representative").
2. Representations and Warranties of the Bank. The Bank represents
and warrants to, and agrees with, the Underwriters, that:
(a) A registration statement on Form S-3 (No. 333- _____) has been
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended (the
"Act") and the Rules and Regulations under the Act (the "Rules and
Regulations"). Such registration statement, as amended on the date that such
registration statement or the most recent post-effective amendment thereto
became effective under the Act, including the exhibits thereto, is hereinafter
referred to as the "Registration Statement." The Registration Statement has
become effective, and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that purpose has
been instituted or, to the knowledge of the Bank, threatened by the Commission.
The conditions to the use of a registration statement on Form S-3 under the Act,
as set forth in the General Instructions to Form S-3, and the conditions of Rule
415 under the Act, have been satisfied with respect to the Registration
Statement. The Bank proposes to file with the Commission pursuant to Rule 424(b)
of the Rules and Regulations a prospectus supplement to the Base Prospectus (as
defined herein) relating to the sale of the Securities (the "Prospectus
Supplement"). The base prospectus filed as part of the Registration Statement,
in the form it appears in the Registration Statement, or in the form most
recently revised and filed with the Commission pursuant to Rule 424(b), is
hereinafter referred to as the "Base Prospectus."
2
<PAGE>
The Base Prospectus as supplemented by the Prospectus Supplement is hereinafter
referred to as the "Prospectus".
(b) Except to the extent that the Representative shall have agreed
to a modification, the Prospectus shall be in all substantive respects in the
form furnished to the Representative prior to the execution of this Agreement
or, to the extent not completed at such time, shall contain only such material
changes as the Bank has advised the Representative, prior to such time, will be
included or made therein.
(c) The Registration Statement, at the time it becomes effective,
and the Prospectus, as of the date of the Prospectus Supplement, complied in all
material respects with the applicable requirements of the Act and the Trust
Indenture Act of 1939 and the Rules and Regulations and did not include any
untrue statement of a material fact and, in the case of the Registration
Statement, did not omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and, in the case of
the Prospectus, did not omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading; on the Closing Date (as defined herein), the Registration
Statement and the Prospectus, as amended or supplemented as of the Closing Date,
will comply in all material respects with the applicable requirements of the Act
and the Rules and Regulations, and neither the Prospectus nor any amendment or
supplement thereto will include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the Bank makes no representation and warranty to information
contained in or omitted from the Registration Statement or the Prospectus in
reliance upon, or in conformity with, information furnished in writing to the
Bank by or on behalf of any Underwriter through the Representative specifically
for use in connection with the preparation of the Registration Statement or the
Prospectus.
(d) The Bank is a national banking association organized under the
laws of the United States, with full power and authority to own its properties
and conduct its business as described in the Prospectus, and had at all relevant
times and has power, authority and legal right to acquire, own, sell and service
the Receivables.
(e) When the Notes have been duly executed and delivered by the
Owner Trustee and, when authenticated by the Indenture Trustee in accordance
with the Indenture and delivered and paid for pursuant
3
<PAGE>
to the Note Underwriting Agreement, the Notes will be validly issued and will
constitute legal, valid and binding obligations of the Trust enforceable against
the Trust in accordance with their terms, except to the extent that the
enforceability thereof may be subject to bankruptcy, insolvency, reorganization,
conservatorship, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights as such laws would apply in the event of the
insolvency, liquidation or reorganization or other similar occurrence with
respect to the Bank or in the event of any moratorium or similar occurance
affecting the Bank and to general principles of equity.
(f) When the Certificates have been duly executed, authenticated
and delivered by the Owner Trustee in accordance with the Trust Agreement and
delivered and paid for pursuant to this Agreement, will be validly issued and
entitled to the benefits and security afforded by the Trust Agreement.
(g) The execution, delivery and performance by the Bank of this
Agreement, Note Underwriting Agreement, and Basic Documents, and the
consummation by the Bank of the transactions provided for herein and therein
have been, or will have been, duly authorized by the Bank by all necessary
action on the part of the Bank; and neither the execution and delivery by the
Bank of such instruments, nor the performance by the Bank of the transactions
herein or therein contemplated, nor the compliance by the Bank with the
provisions hereof or thereof, will (i) conflict with or result in a breach or
violation of any of the material terms and provisions of, or constitute a
material default under, any of the provisions of the articles of association or
by-laws of the Bank, or (ii) conflict with any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Bank or
its properties, or (iii) , conflict with any of the material provisions of any
material indenture, mortgage, contract or other instrument to which the Bank is
a party or by which it is bound, or (iv) result in the creation or imposition of
any lien, charge or encumbrance upon any of its property pursuant to the terms
of any such indenture, mortgage, contract or other instruments, except, in the
case of clauses (ii) and (iii) , for any such breaches or conflicts as would not
individually or in the aggregate have a material adverse effect on the
transactions contemplated hereby.
(h) When executed and delivered by the parties thereto, each of the
Sale and Servicing Agreement, the Trust Agreement and the Administration
Agreement will constitute a legal, valid and binding obligation of the Bank,
enforceable against the Bank in accordance with its terms, except to the extent
that the enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, conservatorship, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights as such laws would apply in
the event of the insolvency, liquidation or reorganization or other similar
occurrence with respect to the Bank or in the event of any moratorium or similar
occurrence affecting the Bank and to general principles of equity.
4
<PAGE>
(i) All approvals, authorizations, consents, orders or other actions
of any person, corporation or other organization, or of any court, governmental
agency or body or official (except with respect to the state securities or "blue
sky" laws of various jurisdictions), required in connection with the execution,
delivery and performance of this Agreement, the Note Underwriting Agreement and
the Basic Documents has been or will be taken or obtained on or prior to the
Closing Date.
(j) As of the Closing Date, the representation and warranties of the
Bank, as Seller and Servicer, and of the General Partner in the Basic Documents
will be true and correct.
(k) This Agreement has been duly executed and delivered by the Bank.
3. Purchase, Sale, Payment and Delivery of the Notes. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Bank agrees to cause the Trust
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Trust, (a) at a purchase price of [_____]% of the
principal amount thereof, the respective principal amount for the Certificates
set forth opposite the name of such Underwriter in Schedule I hereto [, plus
accrued interest, if any, from _____________, 199_].
The Bank will deliver the Certificates to the Representative for the
respective accounts of the Underwriters against payment of the purchase price in
immediately available funds drawn to the order of the Bank at the offices of
__________________________ in New York, New York ________ at 10:00 a.m., New
York City time, on ____________, 199_ or at such other time not later than seven
full business days thereafter as the Representative and the Bank determine, such
time being herein referred to as the "Closing Date." The Certificates to be so
delivered will be initially represented by one or more definitive Certificates
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC") and will be made available for inspection by the Representative
at the office where delivery and payment for such Certificates is to take place
no later than 1:00 p.m., New York City time on the Business Day prior to the
Closing Date.
4. Offering by the Underwriters. It is understood that the
Underwriters propose to offer the Certificates for sale to the public (which may
include selected brokers and dealers) as set forth in the Prospectus.
5. Covenants of the Bank. The Bank covenants and agrees with the
Underwriters that:
(a) The Bank will file the Prospectus with the Commission pursuant
to Rule 424(b) of the Rules and Regulations within the time prescribed therein
and will provide evidence satisfactory to the Representative of such timely
filing. During any period (a "prospectus delivery period") that a prospectus
relating to the Certificates is required to be declared under the Act, the Bank
will not file any amendments to the Registration Statement, or any amendments or
supplements to the Prospectus, unless it shall first have delivered copies of
such amendments or supplements to the Representative, or if the Representative
shall have reasonably objected thereto promptly after receipt thereof; the Bank
will promptly advise the Representative or its counsel (i) when notice is
received from the Commission that any post-effective amendment to the
Registration Statement has become or will become effective, (ii) of any request
by the Commission for any amendment or supplement to the Registration Statement
or the Prospectus or for any additional information and (iii) of any order or
communication suspending or preventing, or threatening to suspend or prevent,
the offer and sale of the Certificates or of any proceedings or examinations
that may lead to such an order or communication, whether by or of the Commission
or any authority administering any state securities or "blue sky" law, as soon
as the Bank is advised thereof, and will use its reasonable efforts to prevent
the issuance of any such order or communication and to obtain as soon as
possible its lifting, if issued.
(b) If, at any time during the prospectus delivery period (without
regard to any market making prospectus required by the Underwriters pursuant to
the Act), any event occurs as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend the Prospectus in order to comply with the
Act or the Rules and Regulations, the Bank promptly will prepare and file with
the Commission (subject to the Representative's prior review pursuant to
paragraph (a) of this Section 5), an amendment or supplement which will correct
such statement or omission or an amendment or supplement which will effect such
compliance.
5
<PAGE>
(c) The Bank will furnish to the Representative copies of the
Registration Statement, each preliminary prospectus supplement relating to the
Certificates, the Prospectus, and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Representative may reasonably request.
(d) The Bank will cooperate with the Representative in arranging for
the qualification of the Certificates for sale and the determination of their
eligibility for investment under the laws of such jurisdictions, or as necessary
to qualify for the Euroclear System or Cedel Bank, Societe anoyme, as the
Representative designates and will continue such qualifications in effect so
long as required for the distribution of the Certificates; provided, however,
that neither the Bank nor the Trust shall be obligated to qualify to do business
in any jurisdiction in which it is not currently so qualified or to take any
action which would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject.
(e) For a period from the date of this Agreement until the
retirement of the Certificates, the Bank, as Servicer, will furnish to the
Representative copies of each certificate and the annual statements of
compliance delivered to independent certified public accountants' reports
furnished to the Indenture Trustee or the Owner Trustee pursuant to the Sale and
Servicing Agreement, as soon as practicable after such statements and reports
are furnished to the Indenture Trustee or the Owner Trustee.
(f) So long as any of the Certificates is outstanding, the Bank will
furnish to the Representative as soon as practicable, (A) all documents
distributed, or caused to be distributed, by the Bank to the Certificateholders,
(B) all documents filed, or caused to be filed, by the Bank with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and any order of the Commission thereunder or pursuant to a "no-action"
letter from the staff of the Commission and (C) from time to time, such other
information in the possession of the Bank concerning the Trust and any other
information concerning the Bank filed with any governmental or regulatory
authority which is otherwise publicly available, as the Representative may
reasonably request.
(g) On or before the Closing Date, the Bank shall cause its computer
records relating to the Receivables to be marked to show the Trust's absolute
ownership of the Receivables, and from and after the Closing Date neither the
Bank nor the Servicer shall take any action inconsistent with the Trust's
ownership of such Receivables [and the security interest of the Indenture
Trustee therein], other than as permitted by the Sale and Servicing Agreement.
6
<PAGE>
(h) To the extent, if any, that the rating provided with respect to
the Certificates by the rating agency or agencies that initially rate the
Certificates is conditional upon the furnishing documents or the taking of any
other actions by the Bank, the Bank shall furnish such documents and take any
such other actions.
(i) For the period beginning on the date of the date hereof and
ending the Closing Date, unless waived by the Representative, neither the Bank
nor any trust originated, directly or indirectly, by the Bank will offer to sell
or sell notes (other than the Notes) collateralized by, or certificates (other
than the Certificates) evidencing an ownership interest in, ownership interest
in, receivables generated pursuant to retail automobile or light duty truck
installment sale contracts or purchase money loans.
6. Payment of Expenses. The Bank will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the Indenture Trustee's and Owner Trustee's
acceptance fee and the fees and disbursements of the counsel to the Indenture
Trustee and counsel to the Owner Trustee, (iii) the fees and disbursements of
the accountants, (iv) the fees of the rating agencies, (v) [fees of counsel to
the Underwriters, to the extent that such fees exceed $[___________]] and (vi)
blue sky expenses; provided, however, that the Underwriters may reimburse the
Bank for certain expenses incurred by the Bank as agreed to by the Underwriters
and the Bank.
7. Conditions to the Obligations of the Underwriters. The obligation
of the several Underwriters to purchase and pay for the Certificates will be
subject to the accuracy of the representations and warranties on the part of the
Bank herein, on the date hereof and as of the Closing Date, to the accuracy of
the statements of officers of the Bank made pursuant to the provisions hereof,
to the performance by the Bank of its obligations hereunder and to the following
additional conditions precedent:
7
<PAGE>
(a) On or prior to the date hereof Representative shall have
received a letter (a "Procedures Letter"), dated the date of this
Agreement of [___________________] verifying the accuracy of such
financial and statistical data contained in the Prospectus as the
Representative shall deem advisable. In addition, if any amendment
or supplement to the Prospectus made after the date hereof contains
financial or statistical data, the Representative shall have
received a letter dated the Closing Date confirming the Procedures
Letter and providing additional comfort on such new data.
(b) The Prospectus Supplement shall have been filed in the
manner and within the time period required by Rule 424(b) of the
Rules and Regulations; and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Bank[, The Chase
Manhattan Bank] or The Chase Manhattan Corporation which, in the
reasonable judgment of the Representative, materially impairs the
investment quality of the Certificates or makes it impractical
to market the Certificates; (ii) any suspension or material
limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Bank[, The Chase Manhattan Bank] or of The Chase Manhattan
Corporation on any exchange or in the over-the-counter market by
such exchange or over-the-counter market or by the Commission; (iii)
any banking moratorium declared by Federal or New York authorities;
or (iv) any outbreak or material escalation of major hostilities or
any other substantial national or international calamity or
emergency if, in the reasonable judgment of the Representative, the
effect of any such outbreak, escalation, calamity or emergency on
the United States financial markets makes it impracticable or
inadvisable to proceed with completion of the sale of and any
payment for the Certificates.
(d) The Representative shall have received opinions, dated the
Closing Date, of Simpson Thacher & Bartlett, special counsel to the
Bank and/or such other
8
<PAGE>
counsel otherwise reasonably acceptable to the Representative when
taken together with respect to such matters as are customary for the
type of transaction contemplated by this Agreement, in form agreed
upon prior to the execution of this Agreement.
(e) The Representative shall have received an opinion or
opinions of Simpson Thacher & Bartlett, special counsel to the Bank,
dated the Closing Date and satisfactory in form and substance to the
Representative, with respect to certain matters relating to the
transfers of the Receivables from the Bank to the Trust, with
respect to a grant of a security interest in the Receivables to the
Indenture Trustee, and with respect to the perfection of the Trust's
and the Indenture Trustee's interests in the Receivables.
(f) The Representative shall have received from Orrick,
Herrington & Sutcliffe, counsel to the Underwriters, such opinion or
opinions, dated the Closing Date and satisfactory in form and
substance to the Representative, with respect to the validity of the
Certificates, each Registration Statement, the Prospectus and other
related matters as the Representative may require, and the Bank
shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon
such matters.
(g) The Representative shall have received an opinion of
Simpson Thacher & Bartlett, special tax counsel to the Bank, dated
the Closing Date and reasonably satisfactory in form and substance
to the Representative, with respect to such matters some customary
for the type of transaction contemplated by this Agreement in the
form agreed upon prior to the execution of this Agreement.
(h) The Representative shall have received an opinion of
____________________, counsel to the Indenture Trustee, dated the
Closing Date and satisfactory in form and substance to the
Representative, substantially to the effect that:
(i) The Indenture Trustee is a
[___________________] and validly existing in good standing
under the laws of [____________________];
(ii) The Indenture Trustee has full corporate
trust power and authority to enter into and perform its
obligations under the Indenture,
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the Sale and Servicing Agreement and the Administration
Agreement;
(iii) Each of the Indenture, the Sale and Servicing
Agreement and the Administration Agreement has been duly
authorized, executed and delivered by the Indenture Trustee
and constitutes a valid and legally binding agreement of the
Indenture Trustee, enforceable against the Indenture Trustee
in accordance with its terms, subject, as to enforcement of
remedies, (a) to applicable bankruptcy, insolvency,
reorganization, and other similar laws affecting the rights of
creditors generally, and (b) to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iv) Each of the Notes have been duly executed,
authenticated and delivered by the Indenture Trustee;
(v) No consent, approval or authorization of, or
registration, declaration or filing with, or giving of notice
to or the taking of any other act with respect to any court or
governmental authority, agency or body of the United States of
America or of any state governing the trust powers of the
Indenture Trustee is required under any existing laws or
regulation for the consummation on the part of the Indenture
Trustee of the Indenture, the Sale and Servicing Agreement and
the Administration Agreement or the performance by the
Indenture Trustee thereunder, except such as have been
obtained or the filing of Form T-1 under the Trust Indenture
Act;
(vi) The execution and delivery of the Sale and
Servicing Agreement and the Administration Agreement and the
performance by the Indenture Trustee of their respective terms
do not conflict with or result in a violation of (1) any laws
or regulations of the United States of America or of any state
governing the trust powers of the Indenture Trustee, (2) the
Articles of Incorporation or By-Laws of the Indenture Trustee
or (3) any material agreement, instrument, order, writ,
judgment or decree known to such counsel to which the
Indenture Trustee is a party or is subject; and
10
<PAGE>
(vii) To the best of such counsel's knowledge and
belief, there is no action, suit or proceeding pending or
threatened against the Indenture Trustee (as trustee under the
Indenture or in its individual capacity) before or by any
governmental authority that if adversely decided, would
materially adversely affect the ability of the Indenture
Trustee to perform its obligations under the Indenture, the
Sale and Servicing Agreement or the Administration Agreement.
In rendering such opinions, counsel to the Indenture Trustee may
rely on the opinion of the office of the general counsel to the Indenture
Trustee.
(i) The Representative shall have received an opinion of
[____________________], counsel to the Owner Trustee, and such other
counsel reasonably satisfactory to the Representative and its
counsel, dated the Closing Date and satisfactory in form and
substance to the Representative, with respect to such matters as are
customary for the type of transaction contemplated by this
Agreement, in form agreed upon prior to the execution of this
Agreement.
(j) The Certificates shall have been rated "[____]" by
Standard & Poor's, "[____]" by Moody's and "_________" by
[________________];
(k) The Representative shall have received a certificate,
dated the Closing Date, of a Vice President or more senior officer
of the Bank in which such officer, to the best of his or her
knowledge after reasonable investigation, shall state that (i) the
representations and warranties of the Bank in this Agreement are
true and correct in all material respects on and as of the Closing
Date, (ii) that the Bank has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, (iii) the representations
and warranties of the Bank, as Seller and Servicer, in the Sale and
Servicing Agreement and the Trust Agreement, and the conditions set
forth in Section 3.1(b) of the Sale and Servicing Agreement, are
true and correct as of the dates specified in the Sale and Servicing
Agreement and the Trust Agreement, (iv) that no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are threatened by the Commission, (v) that, subsequent to the date
of the Prospectus, there has been no material adverse change in the
financial position or results of
11
<PAGE>
operation of the Bank's automotive business except as set forth in
or contemplated by the Prospectus or as described in such
certificate and (vi) the Prospectus does not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were
made, not misleading; and
(l) On the Closing Date, $[____________] aggregate amount of
Notes shall have been issued and sold.
The Bank will furnish the Representative, or cause the
Representative to be furnished, with such number of conformed copies of such
opinions, certificates, letters and documents as the Representative reasonably
requests.
8. Indemnification. (a) The Bank will indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of, or are based upon, any untrue statement or alleged untrue statement of any
material fact contained in any preliminary prospectus supplement, the
Registration Statement), the Prospectus (other than any market making prospectus
or any amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim; provided, however, that (i) the Bank shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of, or is based upon, an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary prospectus supplement,
the Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Bank by any Underwriter through the Representative expressly for use therein and
(ii) such indemnity with respect to any preliminary prospectus supplement shall
not inure to the benefit of the Underwriter (or any person controlling any of
the Underwriters) from whom the person asserting any such loss, claim, damage or
liability purchased the Certificates which are the subject thereof if such
person did not receive a copy of the Prospectus (or the Prospectus as
supplemented) at or prior to the confirmation of
12
<PAGE>
the sale of such Certificates to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in such preliminary prospectus supplement was corrected in the
Prospectus (or the Prospectus as supplemented).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Bank, its directors, each of its officers or agents who signed the
Registration Statement, and each person, if any, who controls the Bank within
the meaning of Section 15 of the Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section 8, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in any preliminary
prospectus supplement, the Registration Statement or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Bank by any Underwriter through the Representative
expressly for use in such preliminary prospectus supplement, the Registration
Statement or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to the
indemnifying party of any action commenced against the indemnified party in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have hereunder or otherwise than on account of this indemnity
agreement. In case any such action shall be brought against an indemnified party
and it shall have notified the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party with
respect to such action), and it being understood that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys, and, after notice from the
indemnifying party to the indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to the indemnified
party under subsections (a) or (b) of this Section 8 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by the
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) The obligations of the Bank under this Section 8 shall be in
addition to any liability which the Bank may
13
<PAGE>
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
each Underwriter's obligations under this Section 8 shall be in addition to any
liability which such Underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Bank and to each
person, if any, who controls the Bank within the meaning of Section 15 of the
Act.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 is for any reason held to be unavailable other than in accordance with
its terms, the Bank and the Underwriters shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Bank or the Underwriters, as incurred,
in such proportions so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount and commissions
bear to the initial public offering price appearing thereon and the Bank is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act shall
have the same rights to contribution as such Underwriter, and each director of
the Bank, each officer or agent of the Bank who signed the Registration
Statement, and each person, if any, who controls the Bank within the meaning of
Section 15 of the Act shall have the same rights to contribution as the Bank.
10. Default of Underwriters. If any Underwriter defaults in its
obligations to purchase Certificates hereunder and the aggregate principal
amount of the Certificates that such defaulting Underwriter agreed but failed to
purchase does not exceed 10% of the total principal amount of Certificates, the
Representative may make arrangements satisfactory to the Bank for the purchase
of such Certificates by other persons, including the non-defaulting
Underwriters, but if no such arrangements are made by the Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Certificates that such
defaulting Underwriter agreed but failed to purchase. If any Underwriter so
defaults and the aggregate principal amount of the Certificates with respect to
which such default or defaults occur exceeds 10% of the total principal amount
of the Certificates and arrangements satisfactory to the Representative and the
Bank for the purchase of such Notes by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter
14
<PAGE>
or the Bank, except as provided in Section 11. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
11. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Bank or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation or statement as to the results thereof, made by or on
behalf of the Underwriters, the Bank or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Certificates. If for any reason the purchase of the
Certificates by the Underwriters is not consummated, the Bank shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
6 and the respective obligations of the Bank and the Underwriters pursuant to
Section 5, 6, 8 and 9 shall remain in effect. If the purchase of the
Certificates by the Underwriters is not consummated for any reason other than
solely because of the occurrence of any event specified in clauses (ii), (iii)
or (iv) of Section 7(c), the Bank will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by it in connection with the offering of the Certificates.
12. Notices. All communications hereunder will be in writing and, if
sent to the Representative or the Underwriters, will be mailed, delivered or
telegraphed and confirmed to the Representative at Chase Securities Inc., 270
Park Avenue, 7th Floor, New York, New York 10017, Attention: Asset Backed
Finance Division, or, if sent to the Bank, will be mailed, delivered or
telegraphed, and confirmed to it at [__________________________], Attention:
[___________________].
13. Successors. This Agreement will inure to the benefit of, and be
binding upon, the parties hereto and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Certificates
from
15
<PAGE>
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. No Bankruptcy Petition. Each Underwriter covenants and agrees
that, prior to the date which is one year and one day after the payment in full
of all securities issued by the Trust, it will not institute against, or join
any other person in instituting against, the Trust any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any Federal or state bankruptcy or similar law.
16. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
16
<PAGE>
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to us the enclosed
duplicate hereof, whereupon it will become a binding agreement among the Bank
and the several Underwriters in accordance with its terms.
Very truly yours,
CHASE MANHATTAN BANK USA, N.A.
By___________________________________
Name:
Title:
The foregoing Certificate Underwriting Agreement is hereby confirmed and
accepted as of the date first written above:
CHASE SECURITIES INC.
on behalf of itself and
as Representative
of the several Underwriters,
named in Schedule I
By______________________________________
Name:
Title:
17
<PAGE>
SCHEDULE I
Underwriter Principal Amount of
Certificates
$
$
18
<PAGE>
EXHIBIT A
THIS TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION WITH
RESPECT TO THE NOTES AND THE CERTIFICATES; HOWEVER, THIS TERM SHEET DOES NOT
CONTAIN COMPLETE INFORMATION WITH RESPECT TO THE OFFERING OF THE NOTES AND THE
CERTIFICATES. THE INFORMATION HEREIN IS PRELIMINARY AND WILL BE SUPERSEDED BY
THE INFORMATION CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE BASE PROSPECTUS.
ADDITIONAL INFORMATION WILL BE CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE
BASE PROSPECTUS. PURCHASERS ARE URGED TO READ BOTH THE PROSPECTUS SUPPLEMENT AND
THE BASE PROSPECTUS.
THIS TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SALES
OF THE NOTES AND THE CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER
HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE BASE PROSPECTUS.
19
<PAGE>
Filed
Comptroller of The Currency
Northeastern District
ARTICLES OF ASSOCIATION
Date APR 24 1985
For the purpose of organizing an Association to carry on the business of banking
under the laws of the United States, the undersigned do enter into the following
Articles of Association:
FIRST. The title of the Association shall be CHEMICAL NATIONAL BANK.
SECOND. The main office of the Association shall be in Jericho, County of
Nassau, State of New York. The general business of the Association shall be
conducted at its main office and its branches.
THIRD. The Board of Directors of the Association shall consist of not less than
five nor more than twenty-five shareholders, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of the shareholders at any annual or special meeting
thereof. Each director during the full term of his or her directorship, shall
own a minimum of $1,000 aggregate par value of stock of the Association. Any
vacancy in the Board of Directors may be filled by action of the Board of
Directors.
FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the Board of Directors
may designate, on the day of each year specified therefor in the bylaws, but if
no election is held on that day, it may be held on any subsequent day according
to such lawful rules as may be prescribed by the Board of Directors.
Nominations for election to the Board of Directors may be made by the Board of
Directors or by any shareholder of any outstanding class of capital stock of the
Association entitled to vote for election of directors. Nominations other than
those made by or on behalf of the existing bank management shall be made in
writing and be delivered or mailed to the President of the Association and to
the Comptroller of the Currency, Washington, D.C., not less than 14 days nor
more than 50 days prior to any meeting of shareholders called for the election
of directors, provided, however, that if less than 21 days notice of the meeting
is given to shareholders, such nominations shall be mailed or delivered to the
President of the Association and to the Comptroller of the Currency not later
than the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notifications shall contain the following
information to the extent known to the notifying shareholder:
o The name and address of each proposed nominee.
o The principal occupation of each proposed nominee.
o The total number of shares of capital stock of the Association that
will be voted for each proposed nominee.
<PAGE>
o The name and residence address of the notifying shareholder.
o The number of shares of capital stock of the Association owned by
the notifying shareholder.
Nominations not made in accordance herewith may, in his/her discretion, be
disregarded by the Chairperson of the meeting, and upon his/her instructions,
the vote tellers may disregard all votes cast for each such nominee.
FIFTH. The authorized amount of capital stock of the Association shall be 20,000
shares of common stock of the par value of one hundred dollars ($100.00) each;
but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any pre-emptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion may from time to time determine and at such
price as the Board of Directors may from time to time fix.
SIXTH. The Board of Directors shall appoint one of its members President of the
Association, who shall be Chairperson of the board, unless the board appoints
another director to be the Chairperson. The Board of Directors shall have the
power to appoint one or more Vice Presidents; and to appoint a Cashier and such
other officers and employees as may be required to transact the business of the
Association.
The Board of Directors shall have the power to:
o Define the duties of the officers and employees of the Association.
o Fix the salaries to be paid to the officers and employees.
o Dismiss officers and employees.
o Require bonds from officers and employees and to fix the penalty
thereof.
o Regulate the manner in which any increase of the capital of the
Association shall be made.
o Manage and administer the business and affairs of the Association.
o Make all bylaws that it may be lawful for the Board to make.
o Generally to perform all acts that are legal for a Board of Directors
to do and perform.
2
<PAGE>
SEVENTH. The Board of Directors shall have the power to change the location of
the main office to any other place within the limits of Jericho, New York
without the approval of the shareholders but subject to the approval of the
Comptroller of the Currency, and shall have the power to establish or change the
location of any branch or branches of the Association to any other location,
without the approval of the shareholders but subject to the approval of the
Comptroller of the Currency.
EIGHTH. The corporate existence of the Association shall continue until
terminated according to the laws of the United States.
NINTH. The Board of Directors of the Association, or any one or more
shareholders owning, in the aggregate, not less than 50% of the stock of the
Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of the time,
place, and purpose of every annual and special meeting of the shareholders shall
be given by first-class mail, postage prepaid, mailed at least 10 days prior to
the date of the meeting to each shareholder of record at his/her/its address as
shown upon the books of the Association.
TENTH. Any person, his/her heirs, executors, or administrators may be
indemnified or reimbursed by the Association for reasonable expenses actually
incurred in connection with any action, suit or proceeding, civil or criminal,
to which he/she or they shall be made a party by reason of his/her being or
having been a director, officer, or employee of the Association or of any firm,
corporation, or organization which he/she served in any such capacity at the
request of the Association; provided, however, that no person shall be so
indemnified or reimbursed relative to any matter in such action, suit, or
proceeding as to which he/she shall finally be adjudged to have been guilty of
or liable for gross negligence, willful misconduct or criminal acts in the
performance of his/her duties to the Association; and, provided further, that no
person shall be so indemnified or reimbursed relative to any matter in such
action, suit, or proceeding which has been made the subject of a compromise
settlement except with the approval of a court of competent jurisdiction, or the
holders of record of a majority of the outstanding shares of the Association, or
the Board of Directors, acting by vote of directors not parties to the same or
substantially the same action, suit, or proceeding, constituting a majority of
the whole number of directors. The foregoing right of indemnification or
reimbursement shall not be exclusive of other rights to which such person,
his/her heirs, executors, or administrators, may be entitled as a matter of law.
The Association may, upon the affirmative vote of a majority of its Board of
Directors, purchase insurance to indemnify its directors, officers and other
employees to the extent that such indemnification is allowed in the preceding
paragraph. Such insurance may, but need not, be for the benefit of all
directors, officers or employees.
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ELEVENTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of the Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount.
IN WITNESS WHEREOF we have hereunto set our hands this 19th day of April, 1985.
/s/ Jay N. Soloway
----------------------------------
Jay N. Soloway
/s/ Hal W. Taylor
----------------------------------
Hal W. Taylor
/s/ John B. Sullivan
----------------------------------
John B. Sullivan
/s/ Ruth L. Finch
----------------------------------
Ruth L. Finch
/s/ Michael G. Capatides
----------------------------------
Michael G. Capatides
4
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CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION
Charter No. 23160
ARTICLES OF ASSOCIATION
For the purpose of organizing an Association to perform any lawful activities of
national banks, the undersigned do enter into the following Articles of
Association:
FIRST. The title of this Association shall be Chase Manhattan Bank USA, National
Association (the "Association").
SECOND. The main office of the Association shall be in the City of Wilmington,
County of New Castle, State of Delaware. The general business of the Association
shall be conducted at its main office and its branches.
THIRD. The board of directors of this Association shall consist of not less than
five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full board of
directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director, during the full term of his
directorship, shall own common or preferred stock of the Association or of a
holding company owning the Association, with an aggregate par, fair market or
equity value of not less than $1,000. Any vacancy in the board of directors may
be filled by action of the shareholders or a majority of the remaining directors
Terms of directors, including directors selected to fill vacancies, shall expire
at the next regular meeting of shareholders at which directors are elected,
unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the board of directors, without voting power or
power of final decision in matters concerning the business of the Association,
may be appointed by resolution of a majority of the full board of directors, or
by resolution of shareholders at any annual or special meeting. Honorary or
advisory directors shall not be counted to determine the number of directors of
the Association or the presence of a quorum in connection with any board action,
and shall not be required to own qualifying shares.
FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the board of directors
may designate, on the day of each year specified therefore in the bylaws, or if
that day falls on a legal holiday in the state in which the Association is
located, on the next following banking day. If no election is held on the day
fixed or in event of a legal holiday, on the following banking day, an election
may be held on any subsequent day within 60 days of the day fixed, to be
designated by the board of directors, or, if the directors fail to fix the day,
by shareholders representing two-thirds of the shares issued and outstanding. In
all cases at least 10 days advance notice of the meeting shall be given to the
shareholders by first class mail.
In all elections of directors, the number of votes each common shareholder may
cast will be determined by multiplying the number of shares he or she owns by
the number of directors to be elected. Those votes may be cumulated and cast for
a single candidate or may be distributed among two or more candidates in the
manner selected by the shareholder. On all other questions, each common
shareholder shall be entitled to one vote for each share of stock held by him or
her.
<PAGE>
A director may resign at any time by delivering written notice to the board of
directors, its Chairperson, or to the Association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.
A director may be removed by shareholders at a meeting called to remove him or
her, when notice of the meeting stating that the purpose or one of the purposes
is to remove him or her is provided, if there is a failure to fulfill one of the
affirmative requirements for qualification, or for cause, provided, however,
that a director may not be removed if the number of votes sufficient to elect
him or her under cumulative voting is voted against his or her removal.
FIFTH. The authorized amount of capital stock of this Association shall be
417,000 shares of common stock of the par value of One Hundred dollars ($100.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued, or sold, nor
any right of subscription to any thereof other than such, if any, as the board
of directors, in its discretion may from time to time determine and at such
price as the board of directors may from time to time fix.
Unless otherwise specified in the Articles of Association or required by law,
(1) all matters requiring shareholder action, including amendments to the
Articles of Association, must be approved by shareholders owning a majority
voting interest in the outstanding voting stock, and (2) each shareholder shall
be entitled to one vote per share.
The Association, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders.
SIXTH. The board of directors shall appoint one of its members President of this
Association, and one of its members Chairperson of the board and shall have the
power to appoint one or more Vice Presidents, a Secretary who shall keep minutes
of the directors' and shareholders' meetings and be responsible for
authenticating the records of the Association, and such other officers and
employees as may be required to transact the business of this Association. A
duly appointed officer may appoint one or more officers or assistant officers if
authorized by the board of directors in accordance with the bylaws.
The board of directors shall have the power to:
(1 ) Define the duties of the officers, employees, and agents of the
Association.
(2) Delegate the performance of its duties, but not the responsibility for its
duties, to the officers, employees, and agents of the Association.
(3) Fix the compensation and enter into employment contracts with its officers
and employees upon reasonable terms and conditions consistent with applicable
law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the penalty thereof.
(6) Ratify written policies authorized by the Association's management or
committees of the board.
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(7) Regulate the manner in which any increase or decrease of the capital of the
Association shall be made, provided that nothing herein shall restrict the power
of shareholders to increase or decrease the capital of the Association in
accordance with law.
(8) Manage and administer the business and affairs of the Association.
(9) Adopt initial bylaws, not inconsistent with law or the Articles of
Association, for managing the business and regulating the affairs of the
Association.
(10) Amend or repeal bylaws, except to the extent that the Articles of
Association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally perform all acts that are legal for a board of directors to
perform.
SEVENTH. The board of directors shall have the power to change the location of
the main office to any other place within the limits of the City of Wilmington,
without the approval of the shareholders, and shall have the power to
establish or change the location of any branch or branches of the Association to
any other location permitted under applicable law, without the approval of the
shareholders subject to approval by the Office of the Comptroller of the
Currency.
EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.
NINTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount. The Association's board of directors may propose one or
more amendments to the Articles of Association for submission to the
shareholders.
In witness whereof, we have hereunto set our hands as of this 8th of August,
1996.
/s/ Donald L. Boudreau /s/ Michael Urkowitz
- ----------------------------------- -----------------------------------
/s/ Michael Barrett /s/ Luke S. Hayden
- ----------------------------------- -----------------------------------
/s/ William Hoefling /s/ Thomas Jacob
- ----------------------------------- -----------------------------------
/s/ Kevin Hurley
- ----------------------------------- -----------------------------------
/s/ John J. Hehir
- -----------------------------------
<PAGE>
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
BYLAWS
ARTICLE I
Meetings of Shareholders
Section 1.1. Annual Meeting. The regular annual meeting of the
shareholders for the election of directors and the transaction of whatever other
business may properly come before the meeting, shall be held at the Main Office
of the Association, 200 Jericho Quadrangle, Jericho, New York, or such other
places as the Board of Directors may designate, at 10 o'clock a.m., on the third
Monday of December of each year. Notice of such meeting shall be mailed, postage
prepaid, at least ten days prior to the date thereof, addressed to each
shareholder at his address appearing on the books of the Association. If, for
any cause, an election of directors is not made on said day, or in the event of
a legal holiday, the Board of Directors shall order the election to be held on
some subsequent day, as soon thereafter as practicable, but within sixty days of
the date fixed, or if the directors fail to fix the date, by shareholders
representing two thirds of the shares; and notice thereof shall be given in the
manner herein provided for the annual meeting.
Section 1.2. Special Meetings. Except as otherwise specifically provided
by statute, special meetings of the shareholders may be called for any purpose
at any time by the Board of Directors or by any one or more shareholders owning,
in the aggregate, not less than 50 percent of the stock of the Association. Each
such special meeting, unless otherwise provided by law,
<PAGE>
shall be called by mailing, postage prepaid, not less than ten days nor more
than sixty days prior to the date fixed for such meeting, to each shareholder at
his address appearing on the books of the Association a notice stating the
purpose of the meeting.
Section 1.3. Nominations for Director. Nominations for election to the
Board of Directors may be made by the Board of Directors or any shareholder of
any outstanding class of capital stock of the Association entitled to vote for
the election of directors. Nominations, other than those made by or on behalf of
the existing management of the Association, shall be made in writing and shall
be delivered or mailed to the president of the bank and to the Comptroller of
the Currency, Washington, D.C. not less than 14 days nor more than 30 days prior
to any meeting of shareholders called for the election of directors, provided,
however, that if less than 21 days' notice of meeting is given to shareholders,
such nomination shall be mailed or delivered to the President of the Association
and to the Comptroller of the Currency no later than the close of business on
the seventh day following the day on which the notice of the meeting was mailed.
Such notification shall contain the following information to the extent known to
the notifying shareholders: (a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the Association that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholders(s);
and (e) the number of shares of capital stock of the Association owned by the
notifying shareholders(s). Nominations not made in accordance herewith may, in
his discretion, be disregarded by the chairman of the meeting, and upon his
instructions, the vote tellers may disregard all votes cast for each such
nominee.
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<PAGE>
Section 1.4. Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of the Association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and shall be filed with the records of the meeting.
Section 1.5. Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law, or by the shareholders or
directors pursuant to Section 8.2; but less than a quorum may adjourn any
meeting, from time to time, and the meeting may be held, as adjourned, without
further notice. A majority of the votes cast shall decide every question or
matter submitted to the shareholders at any meeting, unless otherwise provided
by law or by the Articles of Association or by the shareholders or directors
pursuant to Section 8.2.
ARTICLE II
Directors
Section 2.1. Board of Directors. The Board of Directors (hereinafter
referred to as the "Board"), shall have power to manage and administer the
business and affairs of the Association. Except as expressly limited by law, all
corporate powers of the Association shall be vested in and may be exercised by
said Board.
3
<PAGE>
Section 2.2. Number. The Board shall consist of not less than five nor more
than twenty-five shareholders, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full Board or by resolution of the shareholders at any meeting thereof;
provided, however, that a majority of the full Board may not increase the number
of directors to a number which (i) exceeds by more than two the number of
directors last elected by shareholders where such number was fifteen or less, or
(ii) to a number which exceeds by more than four the number of directors last
elected by shareholders where such number was sixteen or more, but in no event
shall the number of directors exceed twenty-five.
Section 2.3. Organization Meeting. The directors elected shall be notified
of their election and of the time at which they are required to meet at the Main
Office of the Association for the purpose of organizing the new Board and
electing and appointing officers of the Association for the succeeding year.
Such meeting shall be held on the day of the election or as soon thereafter as
practicable, and, in any event, within thirty days thereafter. If, at the time
fixed for such meeting, there shall not be a quorum present, the directors
present may adjourn the meeting, from time to time, until a quorum is obtained.
Section 2.4. Regular Meetings. The regular meetings of the Board shall be
held, from time to time, but at least quarterly, upon notice and on such date
and at such location as is provided in the notice of the meeting. When any
regular meeting of the Board falls upon a
4
<PAGE>
holiday, the meeting shall be held on the next banking business day unless the
Board shall designate some other day.
Section 2.5. Special Meetings. Special meetings of the Board may be called
by the chairman of the Board, or at the request of two or more directors. Each
member of the Board shall be given notice by telegram, letter, or in person,
stating the time and place, of each such special meeting.
Section 2.6. Quorum. A majority of the directors shall constitute a quorum
at any meeting, unless otherwise provided by law or the bylaws; but less than a
quorum may adjourn any meeting, from time to time, and the meeting may be held,
as adjourned, without further notice. If the number of directors is reduced
below the number that would constitute a quorum, no business may be transacted,
except selecting directors to fill vacancies in conformance with Section 2.7. If
a quorum is present, the Board may take action through the vote of a majority of
the directors who are in attendance.
Section 2.7. Vacancies. When any vacancy occurs among the directors, a
majority of the remaining members of the Board, in accordance with the laws of
the United States, may appoint a director to fill such vacancy at any regular
meeting of the Board, or at a special meeting called for that purpose, or if the
directors remaining in office constitute fewer than a quorum of the Board, by
the affirmative vote of a majority of all the directors remaining in office, or
by shareholders at a special meeting called for that purpose, in accordance with
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<PAGE>
Section 2.2. A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date) may be filled before the vacancy occurs
but the new director may not take office until the vacancy occurs.
ARTICLE III
Committees
The Board may appoint, from time to time, from its own members, such
committees of one or more persons, for such purposes and with such powers as the
Board may determine.
ARTICLE IV
Officers and Employees
Section 4.1. Chairman of the Board. The Board shall appoint one of its
members to be Chairman of the Board to serve at the pleasure of the Board. Such
person shall preside at all meetings of the Board. The Chairman of the Board
shall supervise the carrying out of the policies adopted or approved by the
Board; shall have general executive powers, as well as the specific powers
conferred by these Bylaws; shall also have and may exercise further powers and
duties as from time to time may be conferred upon, or assigned by, the Board.
Section 4.2. President. The Board shall appoint one of its members to be
President of the Association. In the absence of the Chairman, the President
shall preside at any meeting of
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<PAGE>
the Board. The President shall have general executive powers, and shall have and
may exercise any and all other powers and duties pertaining by law, regulation,
or practice, to the office of President, or imposed by these Bylaws. The
President shall and may exercise such further powers and duties as from time to
time may be conferred, or assigned by the Board of Directors.
Section 4.3. Executive Vice Presidents, Senior Vice Presidents, Vice
Presidents. The Board may appoint one or more Executive Vice Presidents, Senior
Vice Presidents, and Vice Presidents. Each Executive Vice President, Senior Vice
President, and Vice President shall have powers and duties as may be assigned by
the Board of Directors. One Executive Vice President, Senior Vice President, or
Vice President shall be designated by the Board of Directors, in the absence of
the President, to perform all the duties of the President.
Section 4.4. Cashier. The Board shall appoint a Cashier, or other
designated officer, who shall be secretary of the Board and of the Association,
and shall keep accurate minutes of all meetings. The Cashier shall attend to the
giving of all notices required by these Bylaws to be given; shall be custodian
of the corporate seal, records, documents and papers of the Association; shall
provide for the keeping of proper records of all transactions of the
Association; shall have and may exercise any and all other powers and duties
pertaining by law, regulation or practice, to the office of Cashier, or imposed
by these Bylaws; and shall also perform such other duties as may be assigned
from time to time, by the Board.
7
<PAGE>
Section 4.5. Treasurer. The Board may appoint a Treasurer of the
Association who shall have such responsibilities as the Board may from time to
time specify.
Section 4.6. Other Officers. The Board may appoint one or more Assistant
Vice Presidents, one or more Assistant Cashiers, one or more Managers and
Assistant Managers and such other officers and attorneys-in-fact as from time to
time may appear to the Board to be required or desirable to transact the
business of the Association. Such officers shall respectively exercise such
powers and perform such duties as pertain to their several offices, or as may be
conferred upon, or assigned to, them by the Board, the Chairman of the Board, or
the President. The Board of Directors may authorize an officer to appoint one or
more officers or assistant officers.
Section 4.7. Tenure of Office. The President and all other officers
shall hold office for the current year for which the Board was elected, unless
they shall resign, become disqualified, or be removed; and any vacancy occurring
in the office of President shall be filled promptly by the Board.
Section 4.8. Resignation. An officer may resign at any time by delivering
notice to the Association. A resignation is effective when the notice is given
unless the notice specifies a later effective date.
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<PAGE>
ARTICLE V
Stock and Stock Certificates
Section 5.1. Transfers. Shares of stock shall be transferable on the books
of the Association, and a transfer book shall be kept in which all transfer of
stock shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to his shares, succeed to all rights of the prior holder of
such shares. The Board of Directors may impose conditions upon the transfer of
the stock reasonably calculated to simplify the work of the Association with
respect to stock transfers, voting at shareholder meetings, and related matters,
and to protect it against fraudulent transfers.
Section 5.2. Stock Certificates. Certificates of stock shall bear the
signature of the President (which may be engraved, printed or impressed), and
shall be signed manually or by facsimile process by the Cashier, Assistant
Cashier, or any other officer appointed by the Board for that purpose, to be
known as an Authorized Officer, and the seal of the Association shall be placed
thereon. Each certificate shall recite on its face that the stock represented
thereby is transferable only upon the books of the Association properly
endorsed. The Board of Directors may adopt or use procedures for replacing lost,
stolen, or destroyed stock certificates as permitted by law.
9
<PAGE>
ARTICLE VI
Corporate Seal
The President, the Cashier, any Assistant Cashier or any other officer
thereunto designated by the Board, shall have authority to affix the corporate
seal to any document requiring such seal, and to attest the same. Such seal
shall be substantially in the following form:
ARTICLE VII
Indemnification
Section 7.1. Right to Indemnification. The Bank shall to the fullest
extent permitted by applicable law as then in effect indemnify any person (the
"Indemnitee") who was or is involved in any manner (including, without
limitation, as a party or a witness), or is threatened to be made so involved,
in any threatened, pending or completed investigation, claim, action, suit or
proceeding, whether civil, administrative or investigative (including, without
limitation, any action, suit or proceeding by or in the right of the Bank to
procure a judgment in its favor) (a "Proceeding") by reason of the fact that he
is or was a director, officer, employee or agent of the Bank, or is or was
serving at the request of the Bank as a director, officer or employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
against all expenses (including attorney's fees), judgements, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such Proceeding. Such indemnification shall
10
<PAGE>
be a contract right and shall include the right to receive payment in advance of
any expenses incurred by the Indemnitee in connection with such Proceeding,
consistent with the provisions of applicable law as then in effect.
Section 7.2. Contracts and Funding. The Bank may enter into contracts with
any director, officer, employee or agent of the Bank in furtherance of the
provisions of this Article VII and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this Article VII.
Section 7.3. Employee Benefit Plans. For purposes of this Article VII,
references to "other enterprises" shall include employee benefits plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the request
of the Bank" shall include any service as a director, officer, employee, or
agent of the Bank which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit plan,
its participants, or beneficiaries; and a person who acted in good faith and in
a manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner not opposed to the best interest of a corporation.
Section 7.4. Indemnification Not Exclusive Right. The right of
indemnification and advancement of expenses provided in this Article VII shall
not be exclusive of any other rights
11
<PAGE>
to which a person seeking indemnification may otherwise be entitled, under any
statute, by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. The provisions of this Article VII
shall inure to the benefit of the heirs and legal representatives of any person
entitled to indemnity under this Article VII and shall be applicable to
Proceedings commenced or continuing after the adoption of this Article VII
whether arising from acts or omissions occurring before or after such adoption.
Section 7.5. Advancement of Expenses; Procedures. In furtherance, but not
in limitation, of the foregoing provisions, the following procedures and
remedies shall apply with respect to advancement of expenses and the right to
indemnification under this Article VII:
(a) Advancement of Expenses. All reasonable expenses incurred by or on
behalf of the Indemnitee in connection with any Proceeding shall be advanced to
the Indemnitee by the Bank within twenty (20) days after the receipt by the Bank
of a statement or statements from the Indemnitee requesting such advance or
advances from time to time, whether prior to or after disposition of such
Proceeding. Such statement or statements shall reasonably evidence the expenses
incurred by the Indemnitee and, if required by law at the time of such advance,
shall include or be accompanied by an undertaking by or on behalf of the
Indemnitee to repay the amounts advanced if, and to the extent, it should
ultimately be determined that the Indemnitee is not entitled to be indemnified
against such expenses.
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<PAGE>
(b) Written Request for Indemnification. To obtain indemnification under
this Article VII, an Indemnitee shall submit to the Cashier (Secretary) of the
Bank a written request, including such documentation and information as is
reasonably available to the Indemnitee and reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to indemnification (the
"Supporting Documentation"). The determination of the Indemnitee's entitlement
to indemnification shall be made within a reasonable time after receipt by the
Bank of the written request for indemnification together with the Supporting
Documentation. The Secretary of the Bank shall, promptly upon receipt of such a
request for indemnification, advise the Board in writing that the Indemnitee
has requested indemnification.
(c) Procedure for Determination. The Indemnitee's entitlement to
indemnification under this Article VII shall be determined (i) by the Board by
a majority vote of a quorum (as defined in Article II of these By-laws)
consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent legal counsel
in a written opinion, or (iii) by the stockholders, but only if a majority of
the disinterested directors, if they constitute a quorum of the Board,
presents the issue of entitlement to indemnification to the stockholders for
their determination.
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ARTICLE VIII
Miscellaneous Provisions
Section 8.1. Fiscal Year. The fiscal year of the Association shall be a
calendar year.
Section 8.2. Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, schedules,
accounts, affidavits, bonds, undertakings, proxies and other instruments or
documents may be signed, executed, acknowledged, verified, delivered, or
accepted on the behalf of the Association by the Chairman of the Board, or the
President, or any Executive Vice President, Senior Vice President, or any Vice
President, or the Cashier. Any such instrument may also be executed,
acknowledged, verified, delivered or accepted on the behalf of the Association
in such other manner and by such other officers as the Board of Directors may
from time to time direct. The provisions of this Section 7.2 are supplementary
to any other provision of these Bylaws.
Section 8.3. Records. The Articles of Association, the Bylaws and the
proceedings of all meetings of the shareholders, the Board, and the standing
committees of the Board, shall be recorded in appropriate minute books provided
for such purpose. The minutes of each meeting shall be signed by the Cashier or
other officer appointed to act as secretary of the meeting.
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ARCTICLE IX
BYLAWS
Section 9.1. Inspection. A copy of the Bylaws, with all amendments thereto,
shall at all times be kept in a convenient place at the main office of the
Association, and shall be open for inspection to all shareholders during banking
hours.
Section 9.2. Amendments. The Bylaws may be amended, altered or repealed at
any regular meeting of the Board by a vote of a majority of the total number of
the directors. The Association's shareholders may amend or repeal the bylaws
even though the bylaws also may be amended or repealed by its Board of
Directors.
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CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION
BY-LAWS
Article I
Meetings of Shareholders
Section 1.1. Annual Meeting. The regular annual meeting of the shareholders to
elect directors and transact whatever other business may properly come before
the meeting, shall be held at the main office of the Association, or such other
place as the board may designate, at noon, on April 1st of each year, or if that
date falls on a legal holiday in the State in which the Association is located,
on the next following banking day. Notice of the meeting shall be mailed,
postage prepaid, at least 10 days and no more than 60 days prior to the date
thereof, addressed to each shareholder at his/her address appearing on the books
of the Association. If, for any cause, an election of directors is not made on
that date, or in the event of a legal holiday, on the next following banking
day, an election may be held on any subsequent day within 60 days of the date
fixed, to be designated by the board, or, if the directors fail to fix the date,
by shareholders representing two thirds of the shares issued and outstanding.
Section 1.2. Special Meetings. Except as otherwise specifically provided by
statute, special meetings of the shareholders may be called for any purpose at
any time by a majority of the board of directors or by any one or more
shareholders owning, in the aggregate, not less than twenty-five percent of the
stock of the Association or by the Chairperson of the board of directors or the
President. Every such special meeting, unless otherwise provided by law, shall
be called by mailing, postage prepaid, not less than 10 days nor more than 60
days prior to the date fixed for the meeting, to each shareholder at the address
appearing on the books of the Association a notice stating the purpose of the
meeting.
Section 1.3. Nominations of Directors. Nominations for election to the board of
directors may be made by the board of directors or by any stockholder of any
outstanding class of capital stock of the Association entitled to vote for the
election of directors. Nominations, other than those made by or on behalf of the
existing management of the Association, shall be made in writing and shall be
delivered or mailed to the President of the Association and to the Comptroller
of the Currency, Washington, D.C., not less than 14 days nor more than 50 days
prior to any meeting of shareholders called for the election of directors,
provided, however, that if less than 21 days' notice of the meeting is given to
shareholders, such nomination shall be mailed or delivered to the President of
the Association and to the Comptroller of the Currency not later than the close
of business on the seventh day following the day on which the notice of meeting
was mailed. Such notification shall contain the following information to the
extent known to the notifying shareholder:
(1) The name and address of each proposed nominee.
(2) The principal occupation of each proposed nominee.
(3) The total number of shares of capital stock of the Association that will be
voted for each proposed nominee.
(4) The name and residence address of the notifying shareholder.
(5) The number of shares of capital stock of the Association owned by the
notifying shareholder.
Nominations not made in accordance herewith may, in his/her discretion, be
disregarded by the Chairperson of the meeting, and upon his/her instructions,
the vote tellers may disregard all votes cast for each such nominee.
Section 1.4. Proxies. Shareholders may vote at any meeting of the shareholders
by proxies duly authorized in writing, but no officer or employee of this
Association shall act as proxy. Proxies shall be valid only for one
<PAGE>
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and filed with the records of the meeting. Proxies with rubber
stamped facsimile signatures may be used and unexecuted proxies may be counted
upon receipt of a confirming telegram from the shareholder. Proxies meeting the
above requirements submitted at any time during a meeting shall be accepted.
Section 1.5. Quorum. A majority of the outstanding capital stock, represented in
person or by proxy, shall constitute a quorum at any meeting of shareholders,
unless otherwise provided by law, or by the shareholders or directors pursuant
to Section 10.2, but less than a quorum may adjourn any meeting, from time to
time, and the meeting may be held, as adjourned, without further notice. A
majority of the votes cast shall decide every question or matter submitted to
the shareholders at any meeting, unless otherwise provided by law or by the
Articles of Association, or by the shareholders or directors pursuant to Section
10.2. Any action required or permitted to be taken by the shareholders may be
taken without a meeting by unanimous written consent of the shareholders to a
resolution authorizing the action. The resolution and the written consent shall
be filed with the minutes of the proceedings of the shareholders.
Article II
Directors
Section 2.1. Board of Directors. The board of directors ("board") shall have the
power to manage and administer the business and affairs of the Association.
Except as expressly limited by law, all corporate powers of the Association
shall be vested in and may be exercised by the board.
Section 2.2. Number. The board shall consist of not less than five nor more than
twenty-five persons, the exact number within such minimum and maximum limits to
be fixed and determined from time to time by resolution of a majority of the
full board or by resolution of a majority of the shareholders at any meeting
thereof; provided, however, that a majority of the full board may not increase
the number of directors to a number which: (1) exceeds by more than two the
number of directors last elected by shareholders where such number was 15 or
less; and (2) exceeds by more than four the number of directors last elected by
shareholders where such number was 16 or more, but in no event shall the number
of directors exceed 25.
Section 2.3. Organization Meeting. The Secretary shall notify the
directors-elect of their election and of the time at which they are required to
meet at the main office of the Association to organize the new board and elect
and appoint officers of the Association for the succeeding year. Such meeting
shall be held on the day of the election or as soon thereafter as practicable,
and, in any event, within 30 days thereof. If, at the time fixed for such
meeting, there shall not be a quorum, the directors present may adjourn the
meeting, from time to time, until a quorum is obtained.
Section 2.4. Regular Meetings. The time and location of regular meetings of the
board shall be set by the board. Such meetings may be held without notice. Any
business may be transacted at any regular meeting. The board may adopt any
procedures for the notice and conduct of any meetings as are not prohibited by
law.
Section 2.5. Special Meetings. Special meetings of the board may be called at
the request of the Chairperson of the board, the President, or three or more
directors. Each member of the board shall be given notice stating the time and
place, by telegram, telephone, letter or in person, of each such special meeting
at least one day prior to such meeting. Any business may be transacted at any
special meeting.
Section 2.6. Action by the Board. Except as otherwise provided by law, corporate
action to be taken by the board shall mean such action at a meeting of the
board. Any action required or permitted to be taken by the board or any
committee of the board may be taken without a meeting if all members of the
board or the
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committee consent in writing to a resolution authorizing the action. The
resolution and the written consents thereto shall be filed with the minutes of
the proceedings of the board or committee. Any one or more members of the board
or any committee may participate in a meeting of the board or committee by means
of a conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at such meeting.
Section 2.7. Waiver of Notice. Notice of a special meeting need not be given to
any director who submits a signed waiver of notice, whether before or after the
meeting, or who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to him or her.
Section 2.8. Quorum and Manner of Acting. Except as otherwise required by law,
the Articles of Association or these by-laws, a majority of the directors shall
constitute a quorum for the transaction of any business at any meeting of the
board and the act of a majority of the directors present and voting at a meeting
at which a quorum is present shall be the act of the board. In the absence of a
quorum, a majority of the directors present may adjourn any meeting, from time
to time, until a quorum is present and no notice of any adjourned meeting need
be given. At any such adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the meeting as
originally called.
Section 2.9. Vacancies. In the event a majority of the full board increases the
number of directors to a number which exceeds the number of directors last
elected by shareholders, as permitted by Section 2.2, directors may be appointed
to fill the resulting vacancies by vote of such majority of the full board. In
the event of a vacancy in the board for any other cause, a director may be
appointed to fill such vacancy by vote of majority of the remaining directors
then in office.
Section 2.10. Removal of Directors. The vacancy created by the removal of a
director pursuant to this Section may be filled by the board in accordance with
Section 2.9 of these by-laws or by the shareholders.
Article III
Committees
Section 3.1. Executive Committee. There may be an executive committee consisting
of the Chairperson of the board and not less than two other directors appointed
by the board annually or more often. Subject to the limitations in Section
3.5 (g) of these by-laws, the executive committee shall have the maximum
authority permitted by law.
Section 3.2. Audit Committee. There may be an audit committee composed of not
less than two directors, exclusive of any active officers, appointed by the
board annually or more often, whose duty it shall be to make an examination at
least once during each calendar year and within fifteen months of the last
examination into the affairs of the Association, or cause continuous suitable
examinations to be made, by auditors responsible only to the board, and to
report the results of any such examinations in writing to the board from time to
time. Such examinations shall include audits of the fiduciary business of the
Association as may be required by law or regulation.
Section 3.3. Trust Committee. There may be a trust committee consisting of at
least two directors, as appointed by the board, who shall serve on the trust
committee at the pleasure of the board. The trust committee shall have power to
review the general conduct of the fiduciary business of the Association and to
pass upon all such matters relating to the conduct of the fiduciary business of
the Association as may be submitted to the trust committee and shall, from time
to time, exercise such other powers as may be assigned to it by the board.
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Section 3.4. Other Committees. The board may appoint, from time to time, other
committees of one or more persons, for such purposes and with such powers as the
board may determine.
Section 3.5. General.
(a) Each committee shall elect a Chairperson from among the members
thereof and shall also designate a Secretary of the committee, who shall keep a
record of its proceedings.
(b) Vacancies occurring from time to time in the membership of any
committee shall be filled by the board for the unexpired term of the member
whose departure causes such vacancy. The board may designate one or more
alternate members of any committee, who may replace any absent member or members
at any meeting of such committee.
(c) Each committee shall adopt its own rules of procedure and shall
meet at such stated times as it may, by resolution, appoint. It shall also meet
whenever called together by its Chairperson or the Chairperson of the board.
(d) No notice of regular meetings of any committee need be given.
Notice of every special meeting shall be given either by mailing such notice to
each member of such committee at his or her address, as the same appears in the
records of the Association, at least two days before the day of such meeting, or
by notifying each member on or before the day of such meeting by telephone or by
personal notice, or by leaving a written notice at his or her residence or place
of business on or before the day of such meeting. Waiver of notice in writing of
any meeting, whether prior or subsequent to such meeting, or attendance at such
meeting, shall be equivalent to notice of such meeting. Unless otherwise
indicated in the notice thereof, any and all business may be transacted at any
special meeting.
(e) All committees shall, with respect to all matters, be subject to
the authority and direction of the board and shall report to it when required.
(f) Unless otherwise required by law, the Articles of Association or
these by-laws, a quorum at any meeting of any committee shall be one-third of
the full membership and the act of a majority of members present and voting at a
meeting at which a quorum is present shall be the act of the committee.
(g) No committee shall have authority to take any action which is
expressly required by law or regulation to be taken at a meeting of the board or
by a specified proportion of directors.
Article IV
Officers and Employees
Section 4.1. Chairperson of the Board. The board shall appoint one of its
members to be the Chairperson of the board to serve at its pleasure. Such person
shall preside at all meetings of the board. The Chairperson of the board shall
supervise the carrying out of the policies adopted or approved by the board;
shall have general executive powers, as well as the special powers conferred by
these by-laws; and shall also have and may exercise such further powers and
duties as from time to time may be conferred upon, or assigned by the board.
Section 4.2. President. The board shall appoint one of its members to be the
President of the Association. In the absence of the Chairperson, the President
shall preside at any meeting of the board. The President shall have general
executive powers, and shall have and may exercise any and all other powers and
duties pertaining by law, regulation, or practice to the office of President, or
imposed by these by-laws. The
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President shall also have and may exercise such further powers and duties as
from time to time may be conferred, or assigned by the board.
Section 4.3. Vice President. The board may appoint one or more Vice Presidents.
Each Vice President shall have such powers and duties as may be assigned by the
board.
Section 4.4. Secretary. The board shall appoint a Secretary, Cashier, or other
designated officer who shall be Secretary of the board and of the Association,
and shall keep accurate minutes of all meetings. The Secretary shall attend to
the giving of all notices required by these by-laws; shall be custodian of the
corporate seal, records, documents and papers of the Association; shall provide
for the keeping of proper records of all transactions of the Association; shall
have and may exercise any and all other powers and duties pertaining by law,
regulation or practice, to the office of Cashier, or imposed by these by-laws;
and shall also perform such other duties as may be assigned from time to time,
by the board.
Section 4.5. Other Officers. The board may appoint one or more Assistant Vice
Presidents, one or more Trust Officers, one or more Assistant Secretaries, one
or more Assistant Cashiers, one or more Managers and Assistant Managers of
branches and such other officers and attorneys in fact as from time to time may
appear to the board to be required or desirable to transact the business of the
Association. Such officers shall respectively exercise such powers and perform
such duties as pertain to their several offices, or as may be conferred upon, or
assigned to, them by the board, the Chairperson of the board, or the President.
The board may authorize an officer to appoint one or more officers or assistant
officers.
Section 4.6. Tenure and Compensation. The Chairperson of the board and the
President shall be appointed by the board to hold office until the next annual
organization meeting of the board and until their successors are appointed and
qualified. The term of office of all other officers shall be at the pleasure of
the board. The compensation of all officers shall be fixed by resolution of the
board, except that the board may authorize the Chairperson of the board and the
President each to fix and to delegate to such other officers as the board may
designate authority to fix any compensation of any person in any official
position level not above a level specified by the board. Any officer may be
dismissed at the pleasure of the board.
Section 4.7. Resignation. An officer may resign at any time by delivering notice
to the Association. A resignation is effective when the notice is given unless
the notice specifies a later effective date.
Article V
Fiduciary Activities
Section 5.1. Trust Investments. Funds held in a fiduciary capacity shall be
invested according to the instrument establishing the fiduciary relationship and
local law. Where such instrument does not specify the character and class of
investments to be made and does not vest in the Association a discretion in the
matter, funds held pursuant to such instrument shall be invested in investments
in which corporate fiduciaries may invest under applicable law.
Article VI
Stock and Stock Certificates
Section 6.1. Transfers. Shares of stock shall be transferable on the books of
the Association, and a transfer book shall be kept in which all transfers of
stock shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to his or her shares, succeed to all rights of the prior
holder of such shares.
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The board may impose conditions upon the transfer of the stock reasonably
calculated to simplify the work of the Association with respect to stock
transfers, voting at shareholder meetings, and related matters and to protect it
against fraudulent transfers.
Section 6.2. Stock Certificates. Certificates of stock shall bear the signature
of the President (which may be engraved, printed or impressed), and shall be
signed manually or by facsimile process by the Secretary, Assistant Secretary,
Cashier, Assistant Cashier, or any other officer appointed by the board for that
purpose, to be known as an authorized officer, and the seal of the Association
shall be engraved thereon. Each certificate shall recite on its face that the
stock represented thereby is transferable only upon the books of the Association
properly endorsed. In case any such officer who has signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be such
before such certificate is issued, it may be issued by the Association with the
same effect as if such officer had not ceased to be such at the time of its
issue. The corporate seal may be a facsimile, engraved or printed.
Article VII
Corporate Seal
The President, the Cashier, the Secretary or any Assistant Cashier or Assistant
Secretary, or other officer thereunto designated by the board, shall have
authority to affix the corporate seal to any document requiring such seal, and
to attest the same. Such seal shall be substantially in the following form: A
circle, with the words "Chase Manhattan Bank USA, National Association" within
such circle.
Article VIII
Miscellaneous Provisions
Section 8.1. Fiscal Year. The fiscal year of the Association shall be the
calendar year.
Section 8.2. Execution of Instruments. All agreements, indentures, mortgages,
deeds, conveyances, transfers, certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions, schedules, accounts,
affidavits, bonds, undertakings, proxies and other instruments or documents may
be signed, executed, acknowledged, verified, delivered or accepted on behalf of
the Association by the Chairperson of the board, or the President, or any Vice
President, or the Secretary, or the Cashier, or, if in connection with exercise
of fiduciary powers of the Association, by any of those officers or by any Trust
Officer. Any such instruments may also be executed, acknowledged, verified,
delivered or accepted on behalf of the Association in such other manner and by
such other officers as the board may from time to time direct. The provisions of
this Section 8.2 are supplementary to any other provision of these by-laws.
Section 8.3. Records. The Articles of Association, the by-laws and the
proceedings of all meetings of the shareholders, the board, and standing
committees of the board, shall be recorded in appropriate minute books provided
for that purpose. The minutes of each meeting shall be signed by the Secretary,
Cashier or other officer appointed to act as Secretary of the meeting.
Section 8.4. Corporate Governance Procedures. To the extent not inconsistent
with applicable Federal banking law, bank safety and soundness or these by-laws,
the corporate governance procedures found in the Delaware General Corporation
Law shall be followed by the Association.
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Article IX
Indemnification
Section 9.1. Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director or an officer of the Association or is or was serving at the request of
the Association as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Association to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Association to provide broader indemnification rights than such law permitted
the Association to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section 9.3 of these by-laws with respect to proceedings
to enforce rights to indemnification, the Association shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the
board.
Section 9.2. Right to Advancement of Expenses. The right to indemnification
conferred in Section 9.1 of these by-laws shall include the right to be paid by
the Association the expenses (including attorney's fees) incurred in defending
any such proceeding in advance of its final disposition (hereinafter an
"advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Association of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section 9.2 or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Sections 9.1 and 9.2 of these by-laws shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
Section 9.3. Right of Indemnitee to Bring Suit. If a claim under Section 9.1 or
9.2 of these by-laws is not paid in full by the Association within sixty (60)
days after a written claim has been received by the Association, except in the
case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the indemnitee may at any time thereafter
bring suit against the Association to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by the
Association to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (1) any suit brought by the indemnitee
to enforce a right to indemnification hereunder (but not in a suit brought by
the indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (2) in any suit brought by the Association to recover an
advancement of expenses pursuant to the terms of an undertaking, the Association
shall be entitled to recover such expenses upon a final adjudication that, the
indemnitee has not met any applicable standard for indemnification set forth in
the Delaware General Corporation Law. Neither the failure of the Association
(including the board, the Association's independent legal counsel, or its
shareholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Association (including the board,
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the Association's independent legal counsel, or its shareholders) that the
indemnitee has not met such applicable standard of conduct, shall create a
presumption that the indemnitee has not met the applicable standard of conduct
or, in the case of such a suit brought by the indemnitee, be a defense to such
suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or brought by the
Association to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this Article IX or
otherwise shall be on the Association.
Section 9.4. Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses conferred in this Article IX shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, the Association's Articles of Association, by-laws, agreement, vote of
shareholders or disinterested directors or otherwise.
Section 9.5. Insurance. The Association may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
Association or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Association would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
Section 9.6. Indemnification of Employees and Agents of the Association. The
Association may, to the extent authorized from time to time by the board, grant
rights to indemnification and to the advancement of expenses to any employee or
agent of the Association to the fullest extent of the provisions of this Article
IX with respect to the indemnification and advancement of expenses of directors
and officers of the Association.
Article X
By-laws
Section 10.1. Inspection. A copy of the by-laws, with all amendments, shall at
all times be kept in a convenient place at the main office of the Association,
and shall be open for inspection to all shareholders during banking hours.
Section 10.2. Amendments. The by-laws may be amended, altered or repealed, at
any regular meeting of the board, by a vote of a majority of the total number of
the directors except as provided below. The Association's shareholders may amend
or repeal the by-laws even though the by-laws also may be amended or repealed by
its board.
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I, Andrew T. Semmelman, certify that: (1) I am the duly constituted Secretary of
The Chase Manhattan Bank (USA) and Secretary of its board, and as such officer
am the official custodian of its records; (2) the foregoing by-laws will be the
by-laws of The Chase Manhattan Bank (USA) upon its conversion to a national
banking association charter under the name "Chase Manhattan Bank USA, National
Association", and all of them thereafter will be lawfully in force and effect.
I have hereunto affixed my official signature and the seal of The Chase
Manhattan Bank (USA), in the city of Wilmington, State of Delaware, on this 7th
day of August, 1996.
/s/ Andrew T. Semmelman
-------------------------------
Secretary
LGL2\28446
<PAGE>
FORM OF POOLING AND
SERVICING AGREEMENT
OHS DRAFT
8/26/96
================================================================================
CHASE MANHATTAN BANK USA, N.A.,
as Seller and Servicer
and
[ ]
as Trustee
on behalf of the Certificateholders
===============================
POOLING AND SERVICING AGREEMENT
Dated as of _______ __,199_
===============================
$________________
Chase Manhattan Auto Grantor Trust 199__-__
____% Asset Backed Certificates, Class A
____% Asset Backed Certificates, Class B
================================================================================
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
DEFINITIONS
1.1. Definitions.................................................... 1
1.2. Usage of Terms................................................. 16
1.3. Simple Interest Method; Allocations............................ 16
ARTICLE II
THE TRUST CONVEYANCE OF THE RECEIVABLES
2.1. Creation of the Trust.......................................... 17
2.2. Conveyance of Receivables...................................... 17
ARTICLE III
THE RECEIVABLES
3.1. Representations and Warranties of Seller;
Conditions Relating to Receivables......................... 19
3.2. Repurchase Upon Breach or Failure of a Condition............... 23
3.3. Custody of Receivable Files.................................... 24
3.4. Duties of Servicer as Custodian................................ 25
3.5. Instructions; Authority to Act................................. 26
3.6. Custodian's Indemnification.................................... 26
3.7. Effective Period and Termination............................... 26
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
4.1. Duties of Servicer............................................. 27
4.2. Collection of Receivable Payments.............................. 27
4.3. Realization Upon Receivables................................... 29
4.4. Non-Credit Related Extensions to Obligors...................... 29
4.5. Maintenance of Security Interests in Financed
Vehicles................................................... 30
4.6. Covenants of Servicer.......................................... 31
4.7. Purchase of Receivables Upon Breach............................ 32
4.8. Servicing Fee.................................................. 32
4.9. Servicer's Certificate......................................... 33
4.10. Annual Statement as to Compliance............................. 33
4.11. Annual Audit Report........................................... 34
4.12. Access by Certificateholders and the Cash
Collateral Depositor to Certain Documentation and
Information Regarding Receivables.......................... 35
4.13. Reports to Certificateholders and the Rating
Agencies................................................... 35
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ARTICLE V
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
5.1. Collection Account............................................. 36
5.2. Collections.................................................... 37
5.3. Advances....................................................... 37
5.4. Additional Deposits............................................ 38
5.5. Distributions.................................................. 38
5.6. Net Deposits................................................... 40
5.7. Statements to Certificateholders............................... 40
ARTICLE VI
CASH COLLATERAL GUARANTY
6.1. Cash Collateral Guaranty Drawings.............................. 41
6.2. Cash Collateral Account........................................ 42
ARTICLE VII
THE CERTIFICATES
7.1. The Certificates............................................... 42
7.2. Execution, Authentication and Delivery of
Certificates............................................... 43
7.3. Registration of Transfer and Exchange of
Certificates............................................... 43
7.4. Mutilated, Destroyed, Lost, or Stolen Certificates............. 45
7.5. Persons Deemed Owners.......................................... 45
7.6. Access to List of Certificateholders' Names and
Addresses.................................................. 46
7.7. Maintenance of Office or Agency................................ 46
7.8. Book-Entry Certificates........................................ 46
7.9. Notices to Clearing Agency..................................... 47
7.10. Definitive Certificates........................................ 48
7.11. No Transfer.................................................... 48
7.12. Appointment of Paying Agent.................................... 49
7.13. Authenticating Agent........................................... 50
7.14. Actions of Certificateholders.................................. 51
ARTICLE VIII
THE SELLER
8.1. Representations of Seller....................................... 52
8.2. Liability of Seller; Indemnities................................ 53
8.3. Merger or Consolidation of Seller............................... 54
8.4. Limitation on Liability of Seller and Others.................... 54
8.5. Seller May Own Certificates..................................... 54
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ARTICLE IX
THE SERVICER
9.1. Representations of Servicer.................................... 55
9.2. Liability of Servicer; Indemnities............................. 56
9.3. Merger or Consolidation of Servicer............................ 57
9.4. Limitation on Liability of Servicer and Others................. 57
9.5. Servicer Not To Resign......................................... 59
9.6. Delegation of Duties........................................... 59
ARTICLE X
DEFAULT
10.1. Events of Default............................................. 60
10.2. Trustee to Act; Appointment of Successor...................... 61
10.3. Notification to Certificateholders............................ 62
10.4. Waiver of Past Defaults....................................... 62
ARTICLE XI
THE TRUSTEE
11.1. Duties of Trustee............................................. 64
11.2. Trustee's Assignment of Repurchased Receivables
and Trustee's Certificate.................................. 66
11.3. Certain Matters Affecting the Trustee......................... 66
11.4. Trustee Not Liable for Certificates or
Receivables................................................ 67
11.5. Trustee May Own Certificates.................................. 69
11.6. Trustee's Fees and Expenses................................... 69
11.7. Indemnity of Trustee.......................................... 69
11.8. Eligibility Requirements for Trustee.......................... 70
11.9. Resignation or Removal of Trustee............................. 70
11.10. Successor Trustee............................................ 71
11.11. Merger or Consolidation of Trustee........................... 72
11.12. Appointment of Co-Trustee or Separate Trustee................ 72
11.13. Representations and Warranties of Trustee.................... 74
11.14. Tax Returns.................................................. 74
11.15. Trustee May Enforce Claims Without Possession of
Certificates............................................... 75
11.16. Suits for Enforcement........................................ 75
11.17. Maintenance of Office or Agency.............................. 75
ARTICLE XII
TERMINATION
12.1. Termination of the Trust...................................... 76
12.2. Optional Purchase of All Receivables.......................... 77
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1. Amendment..................................................... 79
13.2. Protection of Title to Trust.................................. 80
13.3. Limitation on Rights of Certificateholders.................... 82
13.4. Governing Law................................................. 83
13.5. Notices....................................................... 83
13.6. Severability of Provisions.................................... 84
13.7. Assignment[; References to Chase USA]......................... 84
13.8. Certificates Nonassessable and Fully Paid..................... 85
13.9. Third-Party Beneficiaries..................................... 85
13.10. Counterparts............................................... 85
13.11. Tax Matters................................................ 85
SCHEDULES
Schedule A - List of Receivables
Schedule B - Location of Receivables
EXHIBITS
Exhibit A-1 - Form of Certificate, Class A
Exhibit A-2 - Form of Certificate, Class B
Exhibit B - Form of Depositary Receipt Agreement
Exhibit C-1 - Trustee's Certificate pursuant to Section
11.2 (assignment to Seller)
Exhibit C-2 - Trustee's Certificate pursuant to Section
11.2 (assignment to Servicer)
Exhibit D - Form of Servicer's Certificate
Exhibit E - Form of Certificateholder Report
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This Pooling and Servicing Agreement, dated as of ______ __, 199_
(as amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement") is made with respect to the formation of the Chase Manhattan
Auto Trust 199_-_ (the "Trust"), between CHASE MANHATTAN BANK USA, N.A., a
national banking association ("Chase USA)" and the "Seller" and the "Servicer"
in its respective capacities as such), and ________________________, a national
banking association, as trustee (the "Trustee").
W I T N E S S E T H :
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Accrued Interest" on a Receivable, as of a Record Date, means that
amount of interest accrued on the Principal Balance at the APR but not paid by
or on behalf of the Obligor.
"Advance" as of a Record Date means any payment made by the Servicer
pursuant to Section 5.3.
"Aggregate Net Losses" means, with respect to a Collection Period,
the amount equal to (i) the principal balance of the Receivables that became
Defaulted Receivables during such Collection Period minus (ii) the Liquidation
Proceeds allocable to principal collected during such Collection Period with
respect to any Defaulted Receivables.
"Amount Financed" in respect of a Receivable means the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of interest stated in the Receivable.
"Assertion" has the meaning specified in Section 4.11.
"Authenticating Agent" has the meaning specified in Section 7.13 and
shall initially be the corporate trust office of __________________________, and
its successors and assigns in such capacity.
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"Authorized Officer" means any officer of the Trustee who is
authorized to act on behalf of the Trustee and who is identified as such on the
list of authorized officers delivered by the Trustee to the Seller and the
Servicer.
"Available Cash Collateral Amount" means, as of any Distribution
Date, the lesser of (i) the amount on deposit in the Cash Collateral Account
(exclusive of earnings and income from the investment of funds therein) as of
such date and (ii) the Required Cash Collateral Amount as of such date.
"Available Interest" means, for any Distribution Date, that portion
of Collections on the Receivables received during the related Collection Period
allocated to interest, all Advances made by the Servicer with respect to such
Distribution Date and, to the extent attributable to interest, the Purchase
Amount received with respect to each Receivable repurchased by the Seller or
purchased by the Servicer under an obligation that arose during the related
Collection Period.
"Available Principal" means, for any Distribution Date, that portion
of Collections on the Receivables received during the related Collection Period
allocated to the principal balance of the Receivables, and, to the extent
attributable to principal, the Purchase Amount received with respect to each
Receivable repurchased by the Seller or purchased by the Seller under an
obligation that arose during the related Collection Period.
"Book-Entry Certificates" means beneficial interests in the
Certificates described in Section 7.8, the ownership and transfers of which
shall be made through book entries by a Clearing Agency or Foreign Clearing
Agency as described in Section 7.8.
"Business Day" means a day, other than a Saturday or a Sunday, on
which the Trustee and banks located in New York, New York and
[___________________________________] are open for the purpose of conducting a
commercial banking business.
"Cash Collateral Account" means the Cash Collateral
Account established pursuant to the Cash Collateral Trust
Agreement.
"Cash Collateral Depositor" means, at any time, the Person named as
cash collateral depositor in the Loan Agreement.
"Cash Collateral Floor Amount" means, with respect to any
Distribution Date, the lesser of (x) $_____________ and (y) the sum of (i) the
Pool Balance as of the related Settlement Date, (ii) accrued interest thereon at
the Pass-Through Rate from such date through the Collection Period immediately
preceding the Final Distribution Date, and (iii) an amount equal to the product
of such Pool Balance as of such Settlement Date and the Servicing
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Fee Rate from such date through the Collection Period immediately preceding the
Final Distribution Date.
"Cash Collateral Guaranty" means the Cash Collateral Guaranty issued
to the Trustee pursuant to the Cash Collateral Trust Agreement, as the same may
be amended, supplemented or otherwise modified and in effect from time to time.
"Cash Collateral Percentage" equals _____%.
"Cash Collateral Trust Agreement" means the Cash Collateral Trust
Agreement dated as of _______ ___, 199_ among Chase USA, as Seller and Servicer,
the Cash Collateral Depositor and the Cash Collateral Trustee, as the same may
be amended, supplemented or otherwise modified and in effect from time to time.
"Cash Collateral Trustee" means __________________
___________________, a [____________________________], or any successor trustee
under the Trust Agreement.
"CEDEL" means Centrale de Livraison de Valeurs
Mobilieres, S.A.
"Certificate Owner" means, with respect to a Book-Entry Certificate,
the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency or Foreign Clearing Agency, or on the books of a
direct or indirect Clearing Agency Participant.
"Certificate Register" means the register maintained
pursuant to Section 7.3.
"Certificateholder" or "Holder" means the Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent, request, waiver or demand pursuant to this
Agreement, the interest evidenced by any Certificate registered in the name of
the Seller, the Servicer or any Person controlling, controlled by, or under
common control with, the Seller or the Servicer shall not be taken into account
in determining whether the requisite percentage necessary to effect any such
consent, request or waiver shall have been obtained; provided, however, that in
determining whether the Trustee shall be protected in relying upon any such
consent, request, waiver or demand, only Certificates that an Authorized Officer
of the Trustee knows to be so owned shall be so disregarded.
"Certificates" means, collectively, the Class A
Certificates and the Class B Certificates.
"Charge-off Rate" means for any Collection Period, the Aggregate Net
Losses with respect to such Collection Period, expressed, on an annualized
basis, as a percentage of the average
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of (x) the Pool Balance on the related Settlement Date and (y) the Pool Balance
on the last day of such Collection Period.
"Charge-off Rate Trigger" equals _____%.
"Chase Connecticut Loan" means a motor vehicle retail installment
sales contract or purchase money loan serviced by Chase USA and either
originated by The Chase Manhattan Bank of Connecticut, National Association or
originated pursuant to the agreements with automobile dealers who regularly
originated and sold such contracts and loans to The Chase Manhattan Bank of
Connecticut, National Association.
"Chase Florida Loan" means a motor vehicle retail installment sales
contract or purchase money loan serviced by Chase USA and either originated by
The Chase Manhattan Private Bank of Florida, National Association or originated
pursuant to the agreements with automobile dealers who regularly originated and
sold such contracts and loans to The Chase Manhattan Private Bank of Florida,
National Association.
"Chase Lincoln Loan" means a motor vehicle retail installment sales
contract or purchase money loan serviced by Chase USA and either originated by
Chase Lincoln First Bank, National Association or originated pursuant to the
agreements with automobile dealers who regularly originated and sold such
contracts and loans to Chase Lincoln First Bank, National Association.
"Chase Maryland Loan" means a motor vehicle retail installment sales
contract or purchase money loan serviced by Chase USA and either originated by
The Chase Manhattan Bank of Maryland or originated pursuant to the agreements
with automobile dealers who regularly originated and sold such contracts and
loans to The Chase Manhattan Bank of Maryland.
"Chase USA Delaware" means Chase Manhattan Bank USA, N.A., a
national banking association having its principal executive offices located at
802 Delaware Avenue, Wilmington, Delaware 19801 and shall not mean the Seller or
the Servicer unless Chase USA Delaware succeeds to the interests of Chase USA in
connection with the Proposed Merger or otherwise.
"Class A Certificate" means a certificate executed on behalf of the
Trust and authenticated by the Trustee substantially in the form of Exhibit A-1
attached hereto.
"Class A Interest Carryover Shortfall" means, (a) for the initial
Distribution Date, zero, and (b) for any other Distribution Date, the excess of
Class A Monthly Interest for the preceding Distribution Date and any outstanding
Class A Interest Carryover Shortfall for such preceding Distribution Date over
the amount in respect of interest that is actually deposited in the Class A
Distribution Account on such preceding Distribution Date,
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plus 30 days of interest on such excess, to the extent permitted by law, at the
Pass-Through Rate.
"Class A Interest Distributable Amount" means, for any Distribution
Date, the sum of Class A Monthly Interest for such Distribution Date and the
Class A Interest Carryover Shortfall for such Distribution Date.
"Class A Monthly Interest" means, for any Distribution Date,
one-twelfth of the Pass-Through Rate multiplied by the Class A Certificate
Balance as of the Distribution Date occurring in the preceding Collection Period
(after giving effect to any payments made on such Distribution Date) or, in the
case of the first Distribution Date, as of the Closing Date.
"Class A Monthly Principal" means, for any Distribution Date, the
sum of (a) the Class A Percentage of the Available Principal for such
Distribution Date and (b) the Class A Percentage of Realized Losses with respect
to the related Collection Period.
"Class A Percentage" _______%.
"Class A Principal Carryover Shortfall" means, for any Distribution
Date, the excess of Class A Monthly Principal for the preceding Distribution
Date and any outstanding Class A Principal Carryover Shortfall for such
preceding Distribution Date over the amount in respect of principal that is
actually deposited in the Class A Distribution Account on such preceding
Distribution Date.
"Class A Principal Distributable Amount" means, for any Distribution
Date, the sum of Class A Monthly Principal for such Distribution Date and, in
the case of any Distribution Date other than the initial Distribution Date, the
Class A Principal Carryover Shortfall for such Distribution Date. In addition,
on the Final Distribution Date, the Class A Principal Distributable Amount shall
include any additional amount required to reduce the outstanding aggregate
principal balance of the Class A Certificates to zero.
"Class A Certificate" means a certificate executed on behalf of the
Trust and authenticated by the Trustee substantially in the form of Exhibit A-2
attached hereto.
"Class B Certificate" means a certificate executed on behalf of the
Trust and authenticated by the Trustee substantially in the form of Exhibit A-2
hereto.
"Class B Interest Carryover Shortfall" means, (a) for the initial
Distribution Date, zero, and (b) for any other Distribution Date, the excess of
Class B Monthly Interest for the preceding Distribution Date and any outstanding
Class B Interest Carryover Shortfall for such preceding Distribution Date over
the
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amount in respect of interest that is actually deposited in the Class B
Distribution Account on such preceding Distribution Date, plus 30 days of
interest on such excess, to the extent permitted by law, at the Pass-Through
Rate.
"Class B Monthly Interest" means, for any Distribution Date,
one-twelfth of the Pass-Through Rate multiplied by the Class B Certificate
Balance as of the Distribution Date occurring in the preceding Collection Period
(after giving effect to any payments made on such Distribution Date) or, in the
case of the first Distribution Date, as of the Closing Date.
"Class B Monthly Principal" means, with respect to any Distribution
Date, the sum of (a) the Class B Percentage of the Available Principal for such
Distribution Date and (b) the Class B Percentage of Realized Losses with respect
to the related Collection Period.
"Class B Percentage" _______%.
"Class B Principal Carryover Shortfall" means, for any Distribution
Date, the excess of Class B Monthly Principal for the preceding Distribution
Date and any outstanding Class B Principal Carryover Shortfall for such
preceding Distribution Date over the amount in respect of principal that is
actually deposited in the Class B Distribution Account for such preceding
Distribution Date.
"Class B Principal Distributable Amount" means, for any Distribution
Date, the sum of Class B Monthly Principal for such Distribution Date and, in
the case of any Distribution Date other than the initial Distribution Date, the
Class B Principal Carryover Shortfall for such Distribution Date. In addition,
on the Final Distribution Date, the Class B Principal Distributable Amount will
include any additional amount required to reduce the outstanding aggregate
principal balance of the Class B Certificates to zero.
"Closing Date" means ________ __, 199_.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The initial Clearing Agency
shall be The Depository Trust Company.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other person for whom from time to time a Clearing
Agency effects book-entry transfers of securities deposited with the Clearing
Agency (including a Foreign Clearing Agency).
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collected Interest" means, with respect to a Collection Period, the
portion of all payments by or on behalf of Obligors received by the Servicer
during such Collection Period allocable to interest (other than with respect to
Repurchased Receivables or Defaulted Receivables), including any proceeds of the
sale or other disposition by the Servicer of a Financed Vehicle prior to the
related Receivable becoming a Defaulted Receivable.
"Collected Principal" means, with respect to a Collection Period,
the portion of all payments by or on behalf of Obligors received by the Servicer
during such Collection Period allocable to principal (other than with respect to
Repurchased Receivables or Defaulted Receivables), including any proceeds of the
sale or other disposition by the Servicer of a Financed Vehicle prior to the
related Receivable becoming a Defaulted Receivable.
"Collection Account" means the account established and maintained
pursuant to Section 5.1.
"Collection Period" means each calendar month beginning _________
___, 199_ until the Trust shall terminate pursuant to Article XII.
"Collections" means all collections in respect of Receivables.
"Cutoff Date" means ________ __, 199_.
"Dealer" means the dealer which sold a Financed Vehicle and which
originated or assisted in the origination of the Receivable relating to such
Financed Vehicle under a Dealer Agreement.
"Dealer Agreement" means any agreement and, if applicable,
assignment under which the Receivables were originated by or through a Dealer
and sold to the Seller or an affiliate of the Seller.
"Defaulted Receivable" means a Receivable (other than a Repurchased
Receivable) as to which the Servicer has determined based on its usual
collection practices and procedures, during any Collection Period, that eventual
payment in full of the Amount Financed (including accrued interest thereon) is
unlikely; provided that such loss recognition cannot be later than the calendar
month in which more than 10% of the scheduled payment becomes 240 days
delinquent.
"Definitive Certificates" has the meaning specified in Section 7.8.
"Delinquency Percentage" means, with respect to a Collection Period,
the sum of the outstanding principal balances
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of all Receivables which are 60 days or more delinquent (including Receivables,
which are not Defaulted Receivables, relating to Financed Vehicles that have
been repossessed), as of the end of such Collection Period, determined in
accordance with the Servicer's normal practices, such sum expressed as a
percentage of the Pool Balance on the last day of such Collection Period.
"Delinquency Percentage Trigger" means _____%.
"Demand Certificate" means a certificate from the Trustee or the
Servicer acting on behalf of the Trustee to the Cash Collateral Trustee pursuant
to the Cash Collateral Guaranty.
"Deposit Date" means the Business Day immediately preceding each
Distribution Date.
"Depository Agreement" means the agreement among the Seller, the
Trustee and the initial Clearing Agency, in the form attached hereto as Exhibit
B, as the same may be amended, supplemented or otherwise modified and in effect
from time to time.
"Determination Date" means the 10th calendar day of the month (or,
if such 10th calendar day is not a Business Day, the Business Day preceding the
10th calendar day of the month) immediately succeeding the related Collection
Period.
"Distribution Date" means, in the case of the first Collection
Period, ________ __, 199_, and in the case of every Collection Period
thereafter, the 15th day of the following month, or if the 15th day is not a
Business Day, the next following Business Day, commencing with the first
Distribution Date.
"Euroclear Operator" means Morgan Guaranty Trust Company of New
York, Brussels, Belgium office, in its capacity as the operator of the Euroclear
system.
"Event of Default" means an event specified in Section 10.1.
"Excess Collections" means, with respect to any Collection Period,
the excess, if any, of (A) the sum of (i) an amount equal to Excess Spread
deposited in the Collection Account with respect to such Collection Period, plus
(ii) Liquidation Proceeds deposited into the Collection Account with respect to
such Collection Period, over (B) the aggregate, for each Receivable which became
a Defaulted Receivable during such Collection Period, of the principal balance
of, and accrued and unpaid interest on (such accrued interest for the Collection
Period in which such Receivable became a Defaulted Receivable to be calculated
at a rate equal to one-twelfth of the sum of the Pass-Through Rate and the
Servicing Fee Rate to the extent not
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otherwise collected), such Receivable and any Principal Carryover Shortfall for
any prior Collection Periods.
"Excess Funds" has the meaning specified in Section 5.5(d).
"Excess Spread" means, with respect to any Collection Period, the
sum for all Receivables determined on a Receivable by Receivable basis, of the
excess, if any, of (A) the sum of (i) interest on each Receivable deposited into
the Collection Account with respect to such Collection Period (whether received
from the Obligor as Collected Interest or paid by the Seller or Servicer in
respect of Repurchased Receivables) net of any amounts due to the Servicer in
reimbursement of Advances previously made with respect to such Receivable and
(ii) any Advance made by the Servicer with respect to such Receivable, with
respect to such Collection Period, over (B) the product of the Principal Balance
of such Receivable as of the related Settlement Date times a rate equal to
one-twelfth of the sum of the Pass-Through Rate and the Servicing Fee Rate.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation or any
successor thereto.
"Final Distribution Date" shall be ________ __, ____, or, if such
day is not a Business Day, the next succeeding Business Day.
"Financed Vehicle" means, with respect to a Receivable, the new or
used automobile or light-duty truck, together with all accessions thereto,
securing an Obligor's indebtedness under such Receivable.
"FNMA" means the Federal National Mortgage Association or any
successor thereto.
"Foreign Clearing Agency" means CEDEL and the Euroclear Operator.
"Initial Cash Collateral Amount" shall be $_____________.
"Late Fees" means any late charges, credit related extension fees,
non-credit related extension fees or other administrative fees or similar
charges allowed by applicable law with respect to the Receivables.
"Lien" means a security interest, lien, charge, pledge or
encumbrance of any kind other than tax liens, mechanics' liens or any other
liens that attach to a Receivable by operation of law.
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"Liquidation Proceeds" means, with respect to any Receivable, (i)
insurance proceeds, (ii) the monies collected during a Collection Period from
whatever source on a Defaulted Receivable and (iii) proceeds of a Financed
Vehicle sold after repossession, in each case net of any liquidation expenses
and payments required by law to be remitted to the Obligor.
"Loan Agreement" means the agreement, dated as of __________, 199_,
among the Cash Collateral Depositor, the Cash Collateral Trust and Chase USA, as
Seller and Servicer, as the same may be amended, supplemented or otherwise
modified and in
effect from time to time.
"Moody's" means Moody's Investors Service, Inc., and its successors
and assigns.
"Obligor" on a Receivable means the purchaser or the co-purchasers
of the Financed Vehicle purchased in part or in whole by the execution and
delivery of such Receivable or any other Person who owes or may be liable for
payments under such Receivable.
"Officer's Certificate" means a certificate signed by the chairman
of the board, the president, the treasurer, the controller, any executive or
senior vice president or any vice president of the Seller or Servicer, as
appropriate.
"Opinion of Counsel" means a written opinion of counsel (who may be
counsel to the Seller or the Servicer) reasonably acceptable in form and
substance to the Trustee.
"Optional Purchase Percentage" shall be 5%.
"Original Pool Balance" shall be $________________.
"Outstanding Receivable" means, as of the time of reference thereto,
a Receivable that (i) has not been fully paid, (ii) has not become a Defaulted
Receivable, and (iii) has not become a Repurchased Receivable.
"Pass-Through Rate" shall be ____% per annum.
"Paying Agent" has the meaning specified in Section 7.12 and shall
initially be the corporate trust office of The Chase Manhattan Bank.
"Payment Deficiencies" has the meaning specified in Section 6.1.
"Permitted Investments" means, at any time, any one or more of the
following obligations and securities:
(i) obligations of the United States of America or any
agency thereof, provided such obligations are
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backed by the full faith and credit of the United States of America;
(ii) general obligations of or obligations guaranteed as
to the timely payment of interest and principal by any state of the United
States of America or the District of Columbia then rated A-l+ or AAA by
Standard & Poor's and P-1 or Aaa by Moody's or, in either case, such lower
rating (as confirmed in writing by a Rating Agency) as will not result in
the qualification, downgrading or withdrawal of the rating then assigned
to any class of the Certificates by such Rating Agency;
(iii) commercial paper which is then rated P-1 by
Moody's and A-l+ by Standard & Poor's or, in either case, such lower
rating (as confirmed in writing by a Rating Agency) as will not result in
the qualification, downgrading or withdrawal of the rating then assigned
to any class of the Certificates by such Rating Agency;
(iv) certificates of deposit, demand or time deposits,
federal funds or banker's acceptances issued by any depository institution
or trust company (including the Trustee acting in its commercial banking
capacity) incorporated under the laws of the United States or of any state
thereof or incorporated under the laws of a foreign jurisdiction with a
branch or agency located in the United States of America and subject to
supervision and examination by federal or state banking authorities which
short term unsecured deposit obligations of such depository institution or
trust company are then rated P-1 by Moody's and A-l+ by Standard & Poor's
or, in either case, such lower rating (as confirmed in writing by a Rating
Agency) as will not result in the qualification, downgrading or withdrawal
of the rating then assigned to any class of the Certificates by such
Rating Agency;
(v) demand or time deposits of, or certificates of
deposit issued by, any bank, trust company, savings bank or other savings
institution and such deposits or certificates of deposit are fully insured
by the FDIC;
(vi) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation (A) the short term unsecured
debt or deposits of which are rated P-1 by Moody's and A-l+ by Standard &
Poor's or the long-term unsecured debt of which are rated Aaa by Moody's
and AAA by Standard & Poor's or (B) , in the case of either Rating Agency,
are otherwise confirmed in writing by such Rating Agency as investments as
will not result in the qualification, downgrading or withdrawal of the
rating then assigned to any class of the Certificates by such Rating
Agency;
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(vii) repurchase obligations with respect to any
security described in clauses (i) or (ii) herein or any other security
issued or guaranteed by the FHLMC, FNMA or any other agency or
instrumentality of the United States of America which is backed by the
full faith and credit of the United States of America, in either case
entered into with a federal agency or a depository institution or trust
company (acting as principal) described in (iv) above;
(viii) investments in money market funds, which funds
(A) are not subject to any sales, load or other similar charge; and (B)
are rated at least AAAM or AAAM-G by Standard & Poor's and Aaa by Moody's;
and
(ix) such other investments where, in the case of either
Rating Agency, either (A) the short-term unsecured debt or deposits of the
obligor on such investments are rated A-l+ by Standard & Poor's and P-1 by
Moody's or (B) such investments are confirmed by a Rating Agency (in
writing) as investments as will not result in the qualification,
downgrading or withdrawal of the rating then assigned to any class of the
Certificates by such Rating Agency.
Permitted Investments include money market mutual funds (so long as
such fund has the ratings specified in clause (viii) hereof), including, without
limitation, the VISTA U.S. Government Money Market Fund or any other fund for
which The Chase Manhattan Bank, the Trustee or an affiliate thereof serves as an
investment advisor, administrator, shareholder servicing agent, and/or custodian
or subcustodian, notwithstanding that (i) The Chase Manhattan Bank, [Trustee] or
an affiliate thereof charges and collects fees and expenses from such funds for
services rendered, (ii) The Chase Manhattan Bank, [Trustee] or an affiliate
thereof charges and collects fees and expenses for services rendered pursuant to
this Agreement, and (iii) services performed for such funds and pursuant to this
Agreement may converge at any time. The Trustee specifically authorizes The
Chase Manhattan Bank, [Trustee] or an affiliate thereof to charge and collect
all fees and expenses from such funds for services rendered to such funds (but
not to exceed investment earnings), in addition to any fees and expenses Chase
USA or [Trustee], as applicable, may charge and collect for services rendered
pursuant to this Agreement.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, trust, unincorporated organization, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Pool Balance" as of any date of determination means the aggregate
Principal Balance of the Receivables, calculated as of the close of business on
such date.
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"Pool Factor" as of any date of determination means the Pool Balance
as of such date divided by the Original Pool Balance, expressed as a 8-digit
decimal.
"Principal Balance" of a Receivable, as of any date of
determination, means the Amount Financed minus that portion of all payments
received on or prior to such date allocable to principal. The Principal Balance
of a Defaulted Receivable or a Repurchased Receivable shall be deemed to be
zero, in each case, as of such date.
"Principal Carryover Shortfall" means for any Collection Period, the
excess, if any, of (A) the principal balance of all Receivables which became
Defaulted Receivables prior to or during such Collection Period over (B) the
aggregate amount of Cash Collateral Guaranty drawings and amounts described in
clause (A) of "Excess Collections" applied thereto and allocated to principal
from and including the Collection Period in which such Receivable became a
Defaulted Receivable.
["Proposed Merger" means, as of the Closing Date, the proposed
merger of Chase USA into Chase USA Delaware.]
"Qualified Institution" means a depository institution organized
under the laws of the United States of America or any one of the states thereof
or incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the States thereof and subject
to supervision and examination by federal or state banking authorities which at
all times has the Required Deposit Rating and, in the case of any such
institution organized under the laws of the United States of America, whose
deposits are insured by the FDIC.
"Qualified Trust Institution" means an institution organized under
the laws of the United States of America or any one of the states thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the States thereof and subject
to supervision and examination by federal or state banking authorities which at
all times (i) is authorized under such laws to act as a trustee or in any other
fiduciary capacity, (ii) has not less than one billion dollars in assets under
fiduciary management, and (iii) has a long term deposits rating of not less than
BBB- by Standard & Poor's and "Baa3" by Moody's.
"Rating Agency" means either Standard & Poor's [or] Moody's [or
________].
"Receivable" means a retail installment sale contract or purchase
money promissory note and security agreement executed by an Obligor in respect
of a Financed Vehicle, and all proceeds thereof and payments thereunder (other
than interest accrued and
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unpaid as of the Cutoff Date), which Receivable shall be identified on Schedule
A to this Agreement.
"Receivable Files" means the documents specified in Section 3.3.
"Receivables Pool" means the pool of Receivables included in the
Trust.
"Record Date" means, with respect to any Distribution Date, the
Business Day prior to such Distribution Date unless Definitive Certificates are
issued, in which case Record Date shall mean the last day of the immediately
preceding calendar month.
"Relevant UCC" means the Uniform Commercial Code as in effect in the
applicable jurisdiction.
"Repurchase Amount" of a Repurchased Receivable or any Receivable
purchased by the Servicer pursuant to Sections 3.2, 4.7 or 12.2 means the sum,
as of the Settlement Date on which such Receivable becomes such, of the
Principal Balance thereof plus the Accrued Interest thereon; of a Defaulted
Receivable means the sum, as of the Settlement Date on which such Receivable is
to be purchased, of the Principal Balance thereof plus the Accrued Interest
thereon (the accrued interest for the Collection Period in which such Receivable
became a Defaulted Receivable to be calculated at a rate equal to one-twelfth of
the sum of the Pass-Through Rate and the Servicing Fee Rate.
"Repurchased Receivable" as of any Settlement Date, means a
Receivable repurchased as of such day by the Seller pursuant to Section 3.2 or
purchased as of such day by the Servicer pursuant to Section 4.7.
"Required Cash Collateral Amount" means, (i) on the initial
Distribution Date, the Initial Cash Collateral Amount, and (ii) on each
Distribution Date thereafter, the product of the Cash Collateral Percentage and
the Pool Balance as of the related Settlement Date, but in any event not less
than the Cash Collateral Floor Amount with respect to such Distribution Date;
provided, however, that if with respect to any Distribution Date, (a) the
average of the Charge-Off Rates for the three preceding Collection Periods
exceeds the Charge-off Rate Trigger or (b) the average of the Delinquency
Percentages for the three preceding Collection Periods exceeds the Delinquency
Percentage Trigger, then the Required Cash Collateral Amount with respect to
such Distribution Date and each succeeding Distribution Date shall be computed
after substituting the Substitute Cash Collateral Percentage for the Cash
Collateral Percentage in clause (ii) above, unless thereafter the average of the
Charge-off Rates and the average of the Delinquency Percentages for a period of
three consecutive Collection Periods are less than or equal to the Charge-off
Rate Trigger and the Delinquency Percentage Trigger,
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respectively, in which event the Required Cash Collateral Amount for each
succeeding Distribution Date shall be computed using the Cash Collateral
Percentage in clause (ii) above.
"Required Deposit Rating" shall be a short-term certificate of
deposit rating from Moody's of P-1 and from S&P of A-l+, and a long-term
unsecured debt rating of not less than "AA" by Standard & Poor's and "Aa3" by
Moody's.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Chase Manhattan Bank USA, N.A. in its capacity as the
seller of the Receivables under this Agreement, and each successor to Chase
Manhattan Bank USA, N.A. (in the same capacity) pursuant to Section 8.3.
"Servicer" means Chase Manhattan Bank USA, N.A. in its capacity as
the servicer of the Receivables under this Agreement, each successor to Chase
Manhattan Bank USA, N.A. (in the same capacity) pursuant to Section 9.3, and
each successor Servicer pursuant to Section 10.2.
"Servicer's Certificate" means a certificate, substantially in the
form of Exhibit D attached hereto, completed and executed by the Servicer by its
chairman of the board, the president, treasurer, controller or any executive,
senior vice president or vice president pursuant to Section 4.9.
"Servicing Fee" with regard to a Collection Period means the fee
payable to the Servicer for services rendered during such Collection Period,
determined pursuant to Section 4.8.
"Servicing Fee Rate" means [____]% per annum.
"Settlement Date" means, with respect to any Collection Period, the
last day of the Collection Period immediately preceding such Collection Period,
and with respect to any Distribution Date, the last day of the second Collection
Period preceding such Distribution Date.
"Substitute Cash Collateral Percentage" means __%.
"Standard & Poor's" means Standard & Poor's Ratings Services, and
its successors and assigns.
"Transfer Agent and Certificate Registrar" has the meaning specified
in Section 7.3 and shall initially be the corporate trust office of The Chase
Manhattan Bank.
"Trust" means the Chase Manhattan Auto Grantor Trust 199_-_, the
estate of which shall consist of the property transferred thereto pursuant to
this Agreement; funds deposited
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in the Collection Account and proceeds thereof; and the benefits, to the extent
contemplated thereby, of the related Cash Collateral Guaranty and Cash
Collateral Account.
"Trust Agreement" means a cash collateral trust agreement entered
into by the Cash Collateral Trustee with a Cash Collateral Depositor and Chase
USA, as Seller and Servicer, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"Trustee" means, initially, _______________________, its successor
in interest pursuant to Section 11.11, and any successor Trustee pursuant to
Section 11.10.
"Trustee's Certificate" means a certificate completed and executed
by an Authorized Officer pursuant to Section 11.2 and substantially in the forms
attached hereto as Exhibits C-1 or C-2.
"Unpaid Interest" has the meaning set forth in Section 5.5(b).
"Unpaid Servicing Fees" has the meaning set forth in Section 5.5(c).
SECTION 1.2. Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
[SECTION 1.3. Simple Interest Method; Allocations. All allocations
of payments to principal and interest and determinations of periodic charges and
the like on the Receivables shall be based on a year with the actual number of
days in such year and twelve months with the actual number of days in each such
month. Each payment on a Receivable shall be applied first to the amount of
interest accrued on such Receivable to the date of receipt, then to reduce the
scheduled principal amount outstanding on the Receivable to the extent of the
remaining scheduled payment and then to any outstanding fees and Late Fees under
the terms of the Receivable. Excess Spread, drawings under the Cash Collateral
Guaranty and amounts paid by the Seller or the Servicer in respect of
Repurchased Receivables shall be allocated first to any Accrued Interest and
then to the Principal Balance of the related Receivable.]
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ARTICLE II
THE TRUST CONVEYANCE OF THE RECEIVABLES
SECTION 2.1. Creation of the Trust. Upon the execution of this
Agreement by the parties hereto, there is hereby created the Chase Manhattan
Auto Grantor Trust 199_-_.
SECTION 2.2. Conveyance of Receivables. In consideration of the
Trustee's delivery to, or upon the order of, the Seller of authenticated
Certificates, in authorized denominations, in an aggregate amount equal to the
Original Pool Balance, the Seller does hereby sell, transfer, assign, and
otherwise convey to the Trustee on behalf of the Trust, without recourse
(subject to the Seller's obligations herein):
(i) all right, title, and interest of the Seller in, to
and under the Receivables listed in Schedule A hereto, all proceeds
thereof and all amounts and monies paid thereon on and after the Cutoff
Date (including proceeds of the repurchase of Receivables by the Seller
pursuant to Section 3.2 or the purchase of Receivables by the Servicer
pursuant to Section 4.7 or 12.2), together with the interest of the Seller
in the security interests in the Financed Vehicles granted by the Obligors
pursuant to the Receivables and in any repossessed Financed Vehicles;
(ii) all right, title and interest of the Seller in any
Liquidation Proceeds and in any proceeds of any extended warranties, theft
and physical damage, credit life or credit disability policies relating to
the Financed Vehicles or the Obligors;
(iii) all right, title and interest of the Seller in any
proceeds from Dealer repurchase obligations relating to the Receivables;
(iv) all right, title and interest of the Seller in the
Collection Account;
(v) all right, title and interest of the Seller with
respect to the Cash Collateral Guaranty; and
(vi) all proceeds (as defined in the Relevant UCC) of
the foregoing.
In connection with such sale, the Seller agrees to record and file,
at its own expense, financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the
Receivables for the sale of accounts and chattel paper meeting the requirements
of applicable state law in such manner and in such jurisdictions as are
necessary to perfect the sale and assignment of the Receivables to the Trust.
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It is the intention of the Seller and the Trustee that the
assignment and transfer herein contemplated constitute a sale of the
Receivables, conveying good title thereto free and clear of any liens and
encumbrances, from the Seller to the Trust and the Receivables not be part of
the Seller's estate in the event of an insolvency. In the event that such
conveyance is deemed to be a pledge to secure a loan, the Seller hereby grants
to the Trustee on behalf of the Trust for the benefit of the Certificateholders
a first priority perfected security interest in all of the Seller's right, title
and interest in, to and under the items of property listed in clauses (i)
through (v) above, and in all proceeds (as defined in the Relevant UCC) of the
foregoing, to secure the loan deemed to be made in connection with such pledge
and, in such event, this Agreement shall constitute a security agreement under
applicable law.
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ARTICLE III
THE RECEIVABLES
SECTION 3.1. Representations and Warranties of Seller; Conditions
Relating to Receivables.
(a) The Seller makes the following representations and
warranties as to the Receivables on which the Trustee shall rely in accepting
the Receivables in trust and authenticating the Certificates. Such
representations and warranties shall speak as of the Cutoff Date unless
otherwise specified and shall survive the sale, transfer, and assignment of the
Receivables to the Trustee.
(i) Schedule of Receivables. The information set forth
in Schedule A hereto with respect to each Receivable is true and correct
in all material respects, and no selection procedures adverse to the
Certificateholders has been utilized in selecting the Receivables from all
receivables owned by the Seller which meet the selection criteria
specified herein.
(ii) No Sale or Transfer. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other than
the Trustee.
(iii) Good Title. Immediately prior to the transfer and
assignment of the Receivables to the Trust herein contemplated, the Seller
has good and marketable title to each Receivable free and clear of all
Liens and rights of others; and, immediately upon the transfer thereof,
the Trustee, for the benefit of the Certificateholders, has either (i)
good and marketable title to each Receivable, free and clear of all Liens
and rights of others, and the transfer has been perfected under applicable
law or (ii) a first priority perfected security interest in each
Receivable.
(b) Each Receivable satisfies the following conditions as of
the Cutoff Date unless otherwise specified and shall survive the sale, transfer
and assignment of the Receivables to the Trustee.
(i) Acquisition. Each Receivable has been acquired
directly or indirectly from or made through a Dealer located in the United
States (including the District of Columbia);
(ii) Security. Each Receivable is secured by a new or
used automobile;
(iii) Maturity of Receivables. Each Receivable
conveyed hereby has a remaining maturity, as of the
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Cutoff Date, of not less than __ months nor greater than __ months, and
(i) with respect to Receivables secured by new Financed Vehicles, an
original maturity of at least __ months and not more than __ months and
(ii) with respect to Receivables secured by used Financed Vehicles, an
original maturity of at least __ months and not more than __ months;
(iv) Annual Percentage Rate. Each Receivable is a
fully-amortizing fixed rate simple interest [or actuarial method] contract
that provides for level scheduled monthly payments over its remaining
term, and has an Annual Percentage Rate equal to or greater than __% and
equal to or less than __% and is not secured by any interest in real
estate;
(v) No Repossessions. Each Receivable is secured by a
Financed Vehicle that, as of the Cutoff Date, has not been repossessed
without reinstatement of such Receivable;
(vi) Obligor Not Subject to Bankruptcy Proceedings. Each
Receivable has been entered into by an Obligor who has not been identified
on the computer files of the Seller as in bankruptcy proceedings as of the
Cutoff Date;
(vii) No Overdue Payments. Each Receivable has no
payment that is more than 30 days past due as of the Cutoff Date;
(viii) Advance Payments. Each Receivable has not been
paid more than three months in advance as of the Cutoff Date;
(ix) Remaining Principal Balance. Each Receivable had a
remaining principal balance, as of the Cutoff Date, of at least $________
and not greater than $________;
(x) No Force Placed Insurance. As of the Cutoff Date,
each Receivable is secured by a Financed Vehicle that was not insured by a
force placed insurance policy or any vendor's single interest and
non-filing insurance policy.
(xi) Receivable Files. The Receivable Files shall be
kept at one or more of the locations specified in Schedule B hereto.
(xii) Characteristics of Receivables. Each Receivable
(a) has been originated in the form of a credit sales transaction by a
Dealer or a purchase money loan through a Dealer located in one of the
States of the United States (including the District of Columbia) for the
retail
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financing of a Financed Vehicle, has been fully and properly executed by
the parties thereto and, if a retail installment sales contract, has been
purchased by the Seller from such Dealer or an affiliate of the Seller,
and has been validly assigned by such Dealer or an affiliate of the Seller
to the Seller in accordance with its terms; (b) contains customary and
enforceable provisions such that the rights and remedies of the holder
thereof are adequate for realization against the collateral of the
benefits of the security; and (c) provides for fully amortizing level
scheduled monthly payments (provided that the payment in the last month in
the life of the Receivable may be different from the level scheduled
payment) and for accrual of interest at a fixed rate according to the
[simple interest] [actuarial] method.
(xiii) Compliance with Laws. Each Receivable and each
sale of the related Financed Vehicle complied at the time it was
originated or made, and complies on and after the Cutoff Date, in all
material respects with all requirements of applicable federal, state, and
local laws, and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Federal Trade Commission Act, the Magnuson-Moss
Warranty Act, Federal Reserve Board Regulations B and Z, state adaptations
of the National Consumer Act and of the Uniform Consumer Credit Code, and
any other consumer credit, equal opportunity, and disclosure laws
applicable to such Receivable and sale thereof.
(xiv) Binding Obligation. Each Receivable constitutes
the legal, valid, and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in all material respects in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, liquidation and other similar laws
and equitable principles relating to or affecting the enforcement of
creditors' rights.
(xv) No Government Obligor. Each Receivable is not due
from the United States of America or any state or from any agency,
department, instrumentality or political subdivision of the United States
of America or any state or local municipality, and each Receivable is not
due from a business except to the extent that such Receivable has a
personal guaranty.
(xvi) Security Interest in Financed Vehicle. Immediately
prior to the sale and assignment thereof to the Trustee as herein
contemplated, each Receivable was secured by a validly perfected first
priority security interest in the Financed Vehicle in favor of or for the
benefit of the Seller as secured party (subject to administrative delays
and clerical errors on the part of the applicable
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governmental agency and to any statutory or other lien arising by
operation of law after the Closing Date which is prior to such security
interest), the Seller's security interest (or beneficial interest therein)
is assignable to and has been so assigned by the Seller to the Trust, and
at such time as enforcement of such security interest is sought, each
Receivable shall be secured by a validly perfected first priority security
interest in the Financed Vehicle for the benefit of the Trust (subject to
administrative delays and clerical errors on the part of the applicable
governmental agency and to any statutory or other lien arising by
operation of law after the Closing Date which is prior to such security
interest).
(xvii) Receivables in Force. No Receivable has been
satisfied, subordinated, or rescinded, nor has any Financed Vehicle been
released from the Lien granted by the related Receivable, in whole or in
part.
(xviii) No Waiver. No provision of a Receivable has been
waived in such a manner that such Receivable fails either to meet all of
the representations and warranties made by the Seller herein with respect
thereto or to meet all of the conditions with respect thereto pursuant to
this Section 3.1(b).
(xix) No Amendments. No Receivable has been amended
except pursuant to either instruments included in the Receivable Files or
instruments to be included in the Receivables Files pursuant to Sections
4.2 and 4.4 (or otherwise maintained by the Seller in the ordinary course
of its business), and no such amendment has caused such Receivable either
to fail to meet all of the representations and warranties made by the
Seller herein with respect thereto or to fail to meet all of the
conditions with respect thereto pursuant to this Section 3.1(b).
(xx) No Defenses. As of the Cutoff Date, the Seller has
no knowledge either of any facts which would give rise to any right of
rescission, setoff, counterclaim, or defense, or of the same being
asserted or threatened, with respect to any Receivable.
(xxi) No Liens. As of the Cutoff Date, the Seller has no
knowledge of any Liens or claims that have been filed, including liens for
work, labor, materials or unpaid taxes relating to a Financed Vehicle,
that would be liens prior to, or equal or coordinate with, the lien
granted by the Receivable.
(xxii) No Default. Except for payment defaults
continuing for a period of not more than 30 days as of the Cutoff Date,
the Seller has no knowledge that a default, breach, violation, or event
permitting acceleration
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under the terms of any Receivable exists; the Seller has no knowledge that
a continuing condition that with notice or lapse of time would constitute
a default, breach, violation, or event permitting acceleration under the
terms of any Receivable exists; and the Seller has not waived any of the
foregoing.
(xxiii) Insurance. Each Receivable requires that the
Obligor thereunder obtain theft and physical damage insurance covering the
Financed Vehicle.
(xxiv) Lawful Assignment. No Receivable has been
originated in, or is subject to the laws of, any jurisdiction under which
the sale, transfer, and assignment of such Receivable under this Agreement
or pursuant to transfers of the Certificates is unlawful, void or
voidable.
(xxv) All Filings Made. No filings (other than filings
under the Relevant UCC which have been made) or other actions are
necessary in any jurisdiction to give the Trustee a first perfected
security interest in the Receivables.
(xxvi) One Original. There is no more than one original
executed copy of each Receivable which, immediately prior to the delivery
thereof to the Servicer, (as custodian for the Trustee) was in the
possession of the Seller.
(xxvii) Excluded Loans. Each Receivable is not a Chase
Connecticut Loan, Chase Florida Loan, Chase Lincoln Loan, Chase Maryland
Loan [or a Receivable originated by or through a Dealer located in the
State of [________]], and has not been the subject of a previous
securitization.
(xxviii) Account Number. Each Receivable has been
assigned an account number that corresponds to the number assigned to the
Dealer from or through whom such Receivable was acquired.
SECTION 3.2. Repurchase Upon Breach or Failure of a Condition. The
Seller, the Servicer, or the Trustee, as the case may be, shall inform the other
parties promptly, in writing, upon the discovery by the Seller, the Servicer or
an Authorized Officer of the Trustee of either any breach of the Seller's
representations and warranties set forth in Section 3.1(a) or the failure of any
Receivable to satisfy any of the conditions set forth in Section 3.1(b) which
materially and adversely affects the Holders' interest in any Receivable. Unless
the breach or failed condition shall have been cured by the last day of the
Collection Period following the Collection Period in which such discovery
occurred (or, at the Seller's option, the last day of the Collection Period in
which such discovery occurred), the
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Seller shall repurchase any Receivable the Holder's interest in which was
materially and adversely affected by the breach or failed condition, as of such
last day. [Notwithstanding anything herein to the contrary, with respect to the
breach of a representation or warranty in Section 3.1(b)(xxviii), the Seller
shall repurchase such Receivable regardless of its effect on the interest of the
Holders or whether notice thereof has been delivered by any of the parties
thereto, and repurchase of any such Receivable shall take place at any time as
is administratively convenient for the Seller and the Servicer.] In
consideration of the repurchase of a Receivable, the Seller shall remit the
Repurchase Amount of such Receivable as of such last day (less any Liquidation
Proceeds deposited, or to be deposited, by the Servicer in the Collection
Account with respect to such Receivable pursuant to Section 4.3) in the manner
specified in Section 5.4. In the event that, as of the Cutoff Date, any
Receivable shall have an APR which is lower than the sum of the Pass-Through
Rate and the Servicing Fee Rate, the Seller shall repurchase such Receivable on
the terms and in the manner specified above; provided, however, that
notwithstanding anything to the contrary contained herein, the Seller shall
repurchase such Receivable as of the last day of the Collection Period
immediately succeeding the discovery thereof by the Seller or the Servicer or
the receipt by the Seller of notice thereof from the Trustee. The sole remedy of
the Trust, the Trustee or the Certificateholders with respect either to a breach
of the Seller's representations and warranties set forth in Section 3.1(a) or to
a failure of any of the conditions set forth in Section 3.1(b) shall be to
require the Seller to repurchase Receivables pursuant to this Section 3.2. The
obligation of the Seller to repurchase under this Section 3.2 shall not be
solely dependent upon the actual knowledge of the Seller of any breached
representation or warranty. The Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 3.2 or the eligibility of
any Receivable for purposes of this Agreement.
SECTION 3.3. Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Trustee,
upon the execution and delivery of this Agreement, agrees to have the Servicer
act as custodian of the following documents or instruments (the "Receivable
Files") which are hereby constructively delivered to the Trustee with respect to
each Receivable:
(i) The original executed Receivable;
(ii) The original credit application or, if no such
original exists, a copy thereof; and
(iii) Any and all other documents or records that the
Seller or Servicer, as the case may be, shall keep
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on file, in accordance with its customary procedures, relating to a
Receivable, an Obligor, or a Financed Vehicle.
The Servicer hereby agrees to act as custodian and as agent for the
Trustee hereunder. The Servicer acknowledges that it holds the documents and
instruments relating to the Receivables for the benefit of the Trustee and the
Certificateholders. The Trustee shall have no responsibility to monitor the
Servicer's performance as custodian and shall have no liability in connection
with the Servicer's performance of such duties hereunder.
SECTION 3.4. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian,
shall hold the Receivable Files on behalf of the Trustee for the use and benefit
of all present and future Certificateholders, the Cash Collateral Depositor and
the Cash Collateral Trustee, as their respective interests may appear, and
maintain such accurate and complete accounts, records (either original execution
documents or copies of such originally executed documents shall be sufficient),
and computer systems pertaining to the Receivables as shall enable the Trustee
to comply with its obligations pursuant to this Agreement. In performing its
duties as custodian, the Servicer shall act with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to the
receivable files of comparable new or used automobile receivables that the
Servicer services for itself or others. The Servicer shall conduct, or cause to
be conducted, periodic audits of the files of all receivables owned or serviced
by the Servicer which shall include the Receivable Files held by it under this
Agreement and the related accounts, records, and computer systems, in such a
manner as shall enable the Trustee to identify all Receivable Files and such
related accounts, records and computer systems and to verify, if the Trustee so
elects, the accuracy of the Servicer's recordkeeping. The Servicer shall
promptly report to the Trustee any failure on its part to hold the Receivable
Files and maintain its accounts, records, and computer systems as herein
provided, and promptly take appropriate action to remedy any such failure.
(b) Maintenance of and Access to Records. The Servicer shall
maintain each Receivable File at one of the locations specified in Schedule B to
this Agreement, or at such other location as shall be specified to the Trustee
by 30 days' prior written notice. The Servicer shall make available to the
Trustee and the Cash Collateral Depositor or either of their duly authorized
representatives, attorneys, or auditors the Receivable Files and the related
accounts, records, and computer systems maintained by the Servicer at such times
during normal operating hours as the Trustee and the Cash Collateral Depositor
shall reasonably instruct which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations.
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(c) Release of Documents. Upon instruction from the Trustee,
the Servicer shall release any document in the Receivable Files to the Trustee,
the Trustee's agent, or the Trustee's designee, as the case may be, at such
place or places as the Trustee may reasonably designate as soon as reasonably
practicable to the extent it does not unreasonably interfere with the Servicer's
normal operations or customer or employee relations. The Servicer shall not be
responsible for any loss occasioned by the failure of the Trustee, its agent or
its designee to return any document or any delay in doing so.
SECTION 3.5. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by an Authorized Officer. A
certified copy of a by-law or of a resolution of the Board of Directors of the
Trustee shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect until
receipt by the Servicer of written notice to the contrary given by the Trustee.
SECTION 3.6. Custodian's Indemnification. The Servicer, as
custodian, shall indemnify the Trustee for any and all liabilities, obligations,
losses, damages, payments, costs, or expenses of any kind whatsoever that may be
imposed on, incurred, or asserted against the Trustee as the result of any act
or omission in any way relating to the maintenance and custody by the Servicer,
as custodian, of the Receivable Files; provided, however, that the Servicer
shall not be liable for any portion of any such amount resulting from the wilful
misfeasance, bad faith, or negligence of the Trustee.
SECTION 3.7. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section 3.7
or until this Agreement shall be terminated. If the Servicer shall resign as
Servicer under Section 9.5 or if all of the rights and obligations of the
Servicer shall have been terminated under Section 10.1, the appointment of the
Servicer as custodian may be terminated by the Trustee or by the Holders of
Certificates evidencing not less than 25% of the Pool Balance, in the same
manner as the Trustee or such Holders may terminate the rights and obligations
of the Servicer under Section 10.1. As soon as practicable after any termination
of such appointment, the Servicer shall, at its expense, deliver the Receivable
Files to the Trustee or the Trustee's agent at such place or places as the
Trustee may reasonably designate. Notwithstanding the termination of the
Servicer as custodian, the Trustee agrees that upon any such termination, the
Trustee shall provide, or cause its agent to provide, access to the Receivables
Files to the Servicer for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. Duties of Servicer. The Servicer shall manage, service,
administer and make collections on the Receivables (other than Repurchased
Receivables) with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to comparable new or used automobile
receivables that it services for itself or others. The Servicer's duties shall
include collection and posting of all payments, responding to inquiries by
Obligors or by federal, state, or local governmental authorities with respect to
the Receivables, investigating delinquencies, reporting tax information to
Obligors in accordance with its customary practices, advancing costs of
disposition of defaults, monitoring the Collateral in cases of Obligor defaults,
accounting for collections, furnishing monthly and annual statements to the
Trustee with respect to distributions, and, if it elects to do so, making
Advances pursuant to Section 5.3. The Servicer shall follow its customary
standards, policies, and procedures in performing its duties as Servicer
hereunder; provided that the Servicer shall be permitted to take or to refrain
from taking any action not specified in this Agreement with respect to servicing
the Receivables if such action or inaction would not contravene any material
term of this Agreement or materially adversely affect the interests of
Certificateholders. Without limiting the generality of the foregoing, the
Servicer shall be authorized and empowered by the Trustee to execute and
deliver, on behalf of itself, the Trust, the Trustee, the Certificateholders, or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments,
without recourse to the Trustee, with respect to the Receivables or with respect
to the Financed Vehicles. If the Servicer shall commence a legal proceeding to
enforce a Receivable or a Defaulted Receivable, the Trustee shall thereupon be
deemed to have automatically assigned such Receivable and the related property
conveyed to the Trust pursuant to Section 2.1 with respect to such Receivable:
(i) to the Servicer, as agent for and for the benefit of the Cash Collateral
Depositor, if such Receivable is a Defaulted Receivable; or (ii) to the
Servicer, solely for the purpose of collection. The Trustee shall furnish the
Servicer with such documents as have been prepared by the Servicer for execution
by the Trustee and as are necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
SECTION 4.2. Collection of Receivable Payments; Refinancing. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables and of this Agreement as and when
the same shall become due, and shall follow such collection procedures as it
follows with respect to comparable new or used automobile receivables that it
services for itself or others and that are
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consistent with prudent industry standards. No extensions of, or other
modifications to, the Receivables shall be made by the Servicer if such
modifications would have a material adverse effect on the interests of
Certificateholders. The Servicer shall not change the amount of (except with
respect to a prepayment of a scheduled payment that does not result in a
deferral of any other scheduled payment) or reschedule the due date of any
scheduled payment to a date more than 30 days from the original due date of such
scheduled payment, change the Annual Percentage Rate of, or extend any
Receivable (except as provided in Section 4.4) or change any material term of a
Receivable, except with respect to certain unilateral changes as provided by the
terms of the Receivable or of this Agreement or as required by law or court
order; provided, however, that the Servicer may grant extensions of the due date
for a payment on a Receivable that is in default or with respect to which,
absent such extension, default is reasonably foreseeable, and the Servicer would
grant such extension with respect to comparable new or used automobile
receivables that it services for itself, but such extension would be granted
only if (i) the Available Cash Collateral Amount is greater than zero at the
time of such extension, (ii) the extension is for no more than three months,
(iii) the total period of all credit related extensions granted on the
Receivable will not exceed the number of months equal to the number of whole
years comprising the original term of the Receivable and (iv) the maturity of
such Receivable would not be extended beyond the Collection Period immediately
preceding the Final Distribution Date and the rescheduling or extension would
not modify the terms of such Receivable in such a manner as to constitute a
cancellation of such Receivable and the creation of a new receivable for federal
income tax purposes. If, as a result of inadvertently rescheduling or extending
of payments, such rescheduling or extension breaches any of the terms of the
proviso to the preceding sentence, then the Servicer shall be obligated to
purchase such Receivable pursuant to Section 4.7. For the purpose of such
purchases pursuant to Section 4.7, notice shall be deemed to have been received
by the Servicer at such time as shall make purchase mandatory as of the last day
of the Collection Period during which the discovery of such breach shall have
occurred. The Servicer may, in its discretion, in accordance with its customary
standards, policies and procedures, waive any Late Fees that may be collected in
the ordinary course of servicing a Receivable.
(b) Notwithstanding anything in this Agreement to the
contrary, the Servicer may refinance any Receivable by accepting a new
promissory note from the related Obligor and applying the proceeds of such
refinancing to pay all obligations in full of such Obligor under such
Receivable; provided, however, that the Servicer shall not refinance a
Receivable unless at least one material term of the Receivable is substantively
changed. The receivable created by the refinancing shall not be property of the
Trust.
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SECTION 4.3. Realization Upon Receivables. On behalf of the Trust,
the Servicer shall use reasonable efforts, consistent with its customary
servicing procedures, to repossess or otherwise take possession of the Financed
Vehicle securing any Receivable which the Servicer shall have determined to be a
Defaulted Receivable or otherwise. The Servicer shall follow such customary and
usual practices and procedures as it shall deem necessary or advisable in its
servicing of new or used automobile receivables, which may include reasonable
efforts to realize upon any recourse to Dealers, consigning the Financed Vehicle
to a Dealer for resale and selling the Financed Vehicle at public or private
sale. The Servicer shall be entitled to recover from proceeds all reasonable
expenses incurred by it in the course of converting the Financed Vehicle into
cash proceeds. The Liquidation Proceeds realized in connection with any such
action with respect to a Receivable shall be deposited by the Servicer in the
Collection Account in the manner specified in Section 5.2 and shall be applied
to reduce (or to satisfy, as the case may be) the Repurchase Amount of the
Receivable, if such Receivable is to be repurchased by the Seller pursuant to
Section 3.2, or is to be purchased by the Servicer pursuant to Section 4.7. The
foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its sole discretion that such repair and/or
repossession will increase the Liquidation Proceeds of the related Receivable by
an amount equal to or greater than the amount of such expenses.
SECTION 4.4. Non-Credit Related Extensions to Obligors. Prior to the
Closing Date, the Servicer shall notify each Obligor in writing that if such
Obligor satisfies certain conditions, as fully set forth in clauses (i) through
(vii) below, as of a date selected by the Servicer within five (5) months prior
to the proposed extension, such Obligor shall be entitled to a non-credit
related extension of any regularly scheduled payment due under a Receivable that
satisfies clauses (w) through (z) below;
(i) either (A) if the original term to maturity of the
Receivable is less than or equal to 48 months, at least eight (8), or (B)
if the original term to maturity of the Receivable exceeds 48 months but
is not greater than 60 months, at least ten, regular monthly payments
shall have been made on the related Receivable, and the remaining
outstanding Principal Balance of the related Receivable shall be greater
than $500;
(ii) the payment status is current;
(iii) such Obligor shall not within the previous six
months have been delinquent for thirty days or more in making a payment
under the related Receivable;
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(iv) no information has been furnished to the Servicer
which indicates that, based upon its current underwriting guidelines and
credit standards relating to advancing funds under comparable retail
installment sales contracts and purchase money loans for new or used
automobiles, the Obligor is not a Person to whom the Servicer would
advance funds;
(v) at least four (4) monthly payments are scheduled to
be made by the Obligor prior to final maturity of the related Receivables;
(vi) the Receivable related to such optional extension
shall not have previously been the subject of more than two credit-related
extensions or the subject of any collection or bankruptcy-related
rewrites; and
(vii) after giving effect to such extension and the
Obligor's projected payments given the Obligor's payment history, the
final payment with respect to such Receivable would not exceed two (2)
times the original scheduled final payment amount of such Receivable.
In addition, any such extensions selected by an Obligor shall
satisfy the following criteria:
(w) a Receivable shall be extended for only the calendar
month of December;
(x) during the term of a Receivable, it shall be
extended only for the number of months equal to the number of whole years
comprising the initial term of such Receivable;
(y) no Receivable shall be extended such that its
maturity will be later than the Collection Period immediately preceding
the Final Distribution Date; and
(z) the Obligor (or the related Receivable) shall have
satisfied conditions (i) through (vii) above.
If, as an inadvertent result of any extension granted pursuant to
this Section 4.4, such extension breaches any of the terms of the preceding
criteria (w) through (z), then the Servicer shall be obligated to purchase such
Receivable pursuant to Section 4.7. For the purpose of such purchases pursuant
to Section 4.7, notice shall be deemed to have been received by the Servicer at
such time as shall make purchase mandatory as of the last day of the Collection
Period during which the discovery of such breach shall have occurred.
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.
The Servicer, in accordance with its customary servicing procedures, shall take
such steps as are
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necessary to maintain (i) perfection of the first priority security interest
created in any Financed Vehicle which secures a Receivable and (ii) perfection
of the Trust's first priority security interest in the Receivables including,
without limitation, the filing of financing statements and continuation
statements. On behalf of the Trust, the Servicer hereby agrees to take such
steps as are necessary to reperfect such security interest in the event of the
relocation of a Financed Vehicle or for any other reason, in either case, when
the Servicer has knowledge of the need for such re-perfection. In the event that
the assignment of a Receivable to the Trust is insufficient without a notation
on the related Financed Vehicle's certificate of title, or without fulfilling
any additional administrative requirements under the laws of the state in which
the Financed Vehicle is located, to grant to the Trust a perfected security
interest in the related Financed Vehicle, the Servicer hereby agrees that the
Seller's listing as the secured party on the certificate of title is deemed in
its capacity as agent of the Trust and further agrees to hold such certificate
of title as the Trustee's agent and custodian; provided, however, that the
Servicer shall not, nor shall the Trustee or Certificateholders have the right
to require that the Servicer, make any such notation on the related Financed
Vehicles' certificate of title or fulfill any such additional administrative
requirement of the laws of the state in which a Financed Vehicle is located.
SECTION 4.6. Covenants of Servicer. The Servicer hereby makes the
following covenants on which the Trustee will rely in accepting the Receivables
in trust and authenticating the Certificates:
(i) Security Interest to Remain in Force. The Financed
Vehicle securing each Receivable shall not be released from the security
interest granted by the Receivable in whole or in part except if such
Financed Vehicle is substituted in whole by the manufacturer, dealer or
seller as a result of mechanical defects or a total loss of the Financed
Vehicle because of accident or theft or as otherwise contemplated herein;
(ii) No Impairment. The Servicer shall not impair the
rights of the Trust in the Receivables; and
(iii) Extensions, Defaulted Receivables. The Servicer
shall not increase the number of payments under a Receivable, nor increase
the Amount Financed under a Receivable, nor extend or forgive payments on
a Receivable, except as provided in Sections 4.2 and 4.4. In the event
that at the end of the scheduled term of any Receivable, the outstanding
principal amount thereof is such that the final payment to be made by the
related Obligor is larger than the regularly scheduled payment of
principal and interest made by such Obligor, the Servicer may permit such
Obligor to pay such remaining principal amount in more than one payment of
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principal and interest; provided, however, that the last such payment
shall be due on or prior to the Collection Period immediately preceding
the Final Distribution Date.
SECTION 4.7. Purchase of Receivables Upon Breach.
The Servicer or the Trustee, as the case may be, shall inform the
other party promptly, in writing, upon the discovery by the Servicer or an
Authorized Officer of the Trustee, as the case may be, of any breach by the
Servicer of its covenants under Section 4.6 which materially and adversely
affects the interest of the Trust in any Receivable (for this purpose, any
breach of the covenant set forth in Section 4.6(iii) shall be deemed to
materially and adversely affect the interest of the Trust in a Receivable).
Except as otherwise specified in Sections 4.2 or 4.4, unless the breach shall
have been cured by the last day of the Collection Period following the
Collection Period in which such discovery occurred (or, at the Servicer's
election, the last day of the Collection Period in which such discovery
occurred), the Servicer shall purchase any Receivable materially and adversely
affected by such breach, as of such last day. In consideration of the purchase
of such Receivable, the Servicer shall remit the Repurchase Amount (less any
Liquidation Proceeds deposited, or to be deposited, by the Servicer in the
Collection Account with respect to such Receivable pursuant to Section 4.3) in
the manner specified in Section 5.4. The sole remedy of the Trust, the Trustee,
or the Certificateholders against the Servicer with respect to a breach pursuant
to Section 4.2 or 4.6 shall be to require the Servicer to purchase Receivables
pursuant to this Section 4.7. The Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 4.7 or the eligibility of
any Receivable for purposes of this Agreement.
SECTION 4.8. Servicing Fee. The Servicing Fee for a Collection
Period shall equal the sum of (i) the product of one-twelfth of the Servicing
Fee Rate and the Pool Balance as of the related Settlement Date and (ii) Late
Fees received from Obligors during such Collection Period, and, in addition, as
part of the Servicing Fee the Servicer shall be entitled to receive investment
earnings on amounts on deposit in the Collection Account or earned on
collections pending deposit in the Collection Account; provided, however, that,
beginning with the Collection Period for which the Trustee is notified in
writing that the Servicer has failed to deposit an Advance with respect to a
Receivable (other than because such Receivable has been designated a Defaulted
Receivable) and continuing until the Final Distribution Date, such investment
earnings shall not be paid to the Servicer, but shall be distributed by the
Paying Agent pursuant to Section 5.5(d). The Servicer shall be required to pay
from its own account all expenses incurred by it in connection with its
activities hereunder (including fees and disbursements of the Trustee, Trustee's
counsel, the Paying
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Agent, the Transfer Agent and Certificate Registrar and independent accountants
and auditors, taxes imposed on the Servicer, and other costs incurred in
connection with administering and servicing the Receivables) except federal,
state and local income and franchise taxes, if any, of the Trust or any
Certificateholder or any expenses in connection with realizing upon Receivables
under Section 4.3.
SECTION 4.9. Servicer's Certificate. On or before each Determination
Date, the Servicer shall deliver to the Trustee, the Paying Agent, the Rating
Agencies, the Cash Collateral Depositor and the Cash Collateral Trustee a
Servicer's Certificate substantially in the form of Exhibit D hereto, for the
Collection Period preceding such Determination Date, containing all information
necessary to make the distributions pursuant to Section 5.5, and all information
necessary for the Paying Agent to send statements to Certificateholders pursuant
to Section 5.7. The Servicer shall deliver to the Rating Agencies any
information, to the extent it is available to the Servicer, that the Rating
Agencies reasonably request in order to monitor the Trust. The Servicer shall
also specify each Receivable which the Seller or the Servicer is required to
repurchase or purchase, as the case may be, as of the last day of the preceding
Collection Period or as of the related Settlement Date, as applicable, each
Receivable which the Servicer shall have determined to be a Defaulted Receivable
during the preceding Collection Period, and each Receivable for which the
Servicer has failed to deposit an Advance pursuant to Section 5.3 other than
because such Receivable has been designated a Defaulted Receivable. Subsequent
to the Closing Date, the form of Servicer's Certificate may be revised or
modified to cure any ambiguities or inconsistencies with this Agreement;
provided, however, that no material information shall be deleted from the form
of Servicer's Certificate. In the event that the form of Servicer's Certificate
is revised or modified in accordance with the preceding sentence, a form
thereof, as so revised or modified, shall be provided to the Trustee, the Cash
Collateral Depositor and each Rating Agency.
SECTION 4.10. Annual Statement as to Compliance. (a) The Servicer
shall deliver to a firm of independent certified public accountants, on or
before March 31 of each year commencing March 31, 199_, a certificate signed by
the chairman of the board, president, the treasurer, the controller, any
executive or senior vice president or any vice president of the Servicer,
stating that (a) a review of the activities of the Servicer during the year
ended the preceding December 31 (or shorter period in the case of the first such
certificate) and of its performance under this Agreement has been made under
such officer's supervision and (b) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations in all
material respects under this Agreement throughout such year (or shorter period
in the case of the first such certificate), or, if there has been a default in
the
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fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustee, the Cash
Collateral Trustee, the Cash Collateral Depositor and each Rating Agency
promptly after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, an Officer's Certificate specifying any event
which with the giving of notice or lapse of time, or both, would become an Event
of Default under Section 10.1. The Seller shall deliver to the Trustee, the Cash
Collateral Depositor and the Cash Collateral Trustee, promptly after having
obtained knowledge thereof, but in no event later than five Business Days
thereafter, an Officer's Certificate specifying any event which with the giving
of notice or lapse of time, or both, would become an Event of Default under
Section 10.1.
SECTION 4.11. Annual Audit Report. The Servicer shall cause a firm
of independent public accountants (which may provide other services to the
Servicer or the Seller) to prepare a report (with a copy of the certificate
described in Section 4.10(a) attached) addressed to the Board of Directors of
the Servicer, for the information and use of the Trustee, the Cash Collateral
Trustee, and the Rating Agencies on or before March 31 of each year, beginning
March 31, 199_, to the effect that, with respect to the twelve months (or
shorter period in the case of the first such report) ended the preceding
December 31, such firm has either (A) examined a written assertion by the
Servicer about the effectiveness of the Servicer's internal control structure
over the processing and reporting of transactions relating to securitized
automobile loans with respect to the criteria set forth by the Servicer (the
"Assertion") and that, on the basis of such examination, such firm is of the
opinion that the Servicer's Assertion is fairly stated in all material respects
except for (i) such exceptions as such firm believes to be immaterial and (ii)
such other exceptions as shall be set forth in such firm's report, or (B) such
firm has performed the following Procedures:
1. For a sample of daily cash receipts during the preceding
calendar year, perform the following:
a. Trace total cash receipts to deposits on bank
statements.
b. Agree cash receipts for securitized loans to computer
reports.
c. Trace cash receipts for securitized loans to
disbursements to the Trustee.
2. For a sample of monthly cash receipt reports, perform the
following:
a. Agree total cash receipts per the cash receipt reports to "Total
Payments From Obligors Applied to Collection Period" per monthly
Servicer Certificates.
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b. Agree total principal payments per the cash receipt
report to "Principal Payments" per monthly Servicer
Certificates.
3. For a sample of loans delinquent 30 days or more, selected from the loan
delinquency report at a point in time, trace loan number to inclusion in
the loan collection system.
The determination of which of the two alternative reports to be prepared and
delivered, and the size of each sample to be tested, shall be decided in the
sole discretion of the Servicer. The report of the independent certified public
accountants shall also indicate that such accounting firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.12. Access by Certificateholders and the Cash Collateral
Depositor to Certain Documentation and Information Regarding Receivables. The
Servicer shall provide to the Certificateholders access to the Receivable Files
in such cases where the Certificateholder shall be required by applicable
statutes or regulations to have access to such documentation. The Servicer shall
also provide reasonable access to the Receivables Files to the Cash Collateral
Depositor. Access by the Certificateholders and the Cash Collateral Depositor
shall be afforded without charge, but only upon reasonable request and during
normal business hours which does not unreasonably interfere with the Servicer's
normal operations or customer or employee relations. Nothing in this Section
4.12 shall affect the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors, and the failure of
the Servicer to provide access to information as a result of such obligation
shall not constitute a breach of this Section 4.12.
SECTION 4.13. Reports to Certificateholders and the Rating Agencies.
(a) The Trustee shall provide to any Certificateholder who so requests in
writing (addressed to the Corporate Trust Office) a copy of any Servicer's
Certificate described in Section 4.9, of the annual statement described in
Section 4.10, or the annual report described in Section 4.11. The Trustee may
require the Certificateholder to pay a reasonable sum to cover the cost of the
Trustee's complying with such request.
(b) The Trustee shall forward to the Rating Agencies and the
Cash Collateral Depositor the statement to Certificateholders described in
Section 5.7 and any other reports it may receive pursuant to this Agreement (i)
to Standard & Poor's Ratings Services, Asset-Backed Surveillance Group, 25
Broadway, New York, New York 10004, (ii) to Moody's Investors Service, Inc., ABS
Monitoring Dept., 99 Church Street, 4th Floor, New York, New York 10007 and
(iii) to the address of the Cash Collateral Depositor set forth in the Loan
Agreement.
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ARTICLE V
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
SECTION 5.1. Collection Account. The Servicer shall establish the
Collection Account in the name of the Trustee for the benefit of the
Certificateholders. The Collection Account shall be either:
(a) a segregated identifiable trust account established in the
trust department of a Qualified Trust Institution, which shall initially be the
Seller, and may be maintained with the Seller so long as the Seller is a
Qualified Trust Institution; or
(b) a separately identifiable deposit account established in
the deposit taking department of a Qualified Institution, which may be the
Seller so long as the Seller is a Qualified Institution.
Should any depositary of the Collection Account (including the
Seller) cease to be either a Qualified Institution or a Qualified Trust
Institution, then the Servicer shall, with the Seller's assistance as necessary,
cause the Collection Account to be moved to a Qualified Institution or a
Qualified Trust Institution, unless the Servicer provides the Trustee with a
letter from the Rating Agencies to the effect that the current ratings assigned
to the Certificates by the Rating Agencies will not be adversely affected by
such depositary's ceasing to be a Qualified Institution or a Qualified Trust
Institution, as the case may be, and a letter from the Cash Collateral Depositor
consenting to maintenance of the Collection Account with such depositary. Notice
of any such movement shall be furnished by the Servicer to the Cash Collateral
Depositor.
All amounts held in the Collection Account shall be invested by the
bank or trust company then maintaining the account (at the written direction of
the Servicer (or, if investment earnings on amounts on deposit in the Collection
Account are not being paid to the Servicer, the Seller) if such account is not
maintained with the Seller) in Permitted Investments that mature not later than
the Deposit Date next succeeding the date of investment except, if the
Collection Account is maintained with the Trustee, for investments on which the
Trustee is the obligor (including repurchase agreements on which the Trustee in
its commercial capacity is liable as principal), which investments may mature on
such Distribution Date; provided, however, that once such amounts have been
invested by such bank or trust company, as applicable, in Permitted Investments,
such Permitted Investments must be held or maintained until they mature on or
before the dates described above.
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SECTION 5.2. Collections. The Servicer shall remit daily within
forty-eight hours of receipt to the Collection Account all payments by or on
behalf of the Obligors on the Receivables and all Liquidation Proceeds, both as
collected during the Collection Period. Chase USA has requested that, so long as
it is acting as the Servicer, the Servicer be permitted to make remittances of
collections on a less frequent basis than that specified in the immediately
preceding sentence. It is understood that such less frequent remittances may be
made only on the specific terms and conditions set forth below in this Section
5.2 and only for so long as such terms and conditions are fulfilled.
Accordingly, notwithstanding the provisions of the first sentence of this
Section 5.2, the Servicer shall remit such collections to the Collection Account
in Automated Clearinghouse Corporation next-day funds or immediately available
funds no later than 11:00 a.m., New York City time, on the Deposit Date but only
for so long as (i) either (a) the short-term certificate of deposit ratings of
the Servicer are at least "P-1" by Moody's and "A-l" by Standard & Poor's or (b)
the Servicer provides the Trustee with a letter from the Rating Agencies to the
effect that the current ratings assigned to the Certificates by the Rating
Agencies will not be adversely affected by, and, in the event the rating is
below "A-1" and "P-1" by Standard & Poor's and Moody's, respectively, a letter
from the Cash Collateral Depositor consenting to, the remittance of Collections
on a monthly, rather than a daily, basis and (ii) the Servicer shall be Chase
USA. Upon remittance by the Servicer of Collections to the Collection Account
pursuant to the preceding sentence, the Paying Agent shall provide written
notice to the Trustee and the Cash Collateral Depositor no later than 11 a.m.,
New York City time, on each Deposit Date setting forth the amounts remitted by
the Servicer on such date and, if the Paying Agent fails to provide the Trustee
with such written notice by 12 noon, New York City time, on such Deposit Date,
then the Trustee shall assume that no deposits were made to the Collection
Account pursuant to this Section 5.2 and shall make a demand under the Cash
Collateral Guaranty pursuant to Section 6.1. For purposes of this Section 5.2
the phrase "payments made on behalf of the Obligors" shall mean payments made by
Persons other than the Seller, the Servicer or the Cash Collateral Depositor.
SECTION 5.3. Advances. As of the Business Day preceding the related
Distribution Date, the Servicer may, in its sole discretion, make a payment with
respect to each Receivable (other than a Defaulted Receivable) equal to the
excess, if any, of (x) the product of the Principal Balance of such Receivable
as of the related Settlement Date and one-twelfth of the Annual Percentage Rate
of interest on such Receivable, over (y) the interest actually received by the
Servicer with respect to such Receivable from the Obligor or from payments of
the Repurchase Amount during or with respect to such Collection Period. The
Servicer shall deposit all such Advances into the Collection Account in
Automated Clearinghouse Corporation next-day funds or immediately available
funds no later than 11 a.m., New York City
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time, on the Deposit Date. The Servicer may elect not to make any Advance with
respect to a Receivable to the extent that the Servicer, in its sole discretion,
shall determine that such Advance is not recoverable from subsequent payments on
such Receivable or from draws on the Cash Collateral Guaranty with respect to
such Receivable. To the extent that the amount set forth in clause (y) above
with respect to a Receivable plus any amounts drawn under the Cash Collateral
Guaranty with respect thereto and allocable to interest is greater than the
amount set forth in clause (x) above with respect thereto, such excess amount
shall be distributed to the Servicer pursuant to Section 5.5(a); provided,
however, that, notwithstanding anything else herein, the Servicer shall be
reimbursed for any Advance made with respect to a Receivable only from accrued
interest paid from the Obligor under such Receivable.
On each Deposit Date, the Paying Agent shall provide written notice
to the Trustee and the Cash Collateral Depositor setting forth the amount, if
any, of Advances deposited by the Servicer in the Collection Account no later
than 11 a.m., New York City time, on such Deposit Date and, if the Paying Agent
fails to provide the Trustee with such written notice by 12 noon, New York City
time, on such Deposit Date, then the Trustee shall assume that no Advances were
deposited to the Collection Account pursuant to this Section 5.3 and shall make
a demand under the Cash Collateral Guaranty pursuant to Section 6.1 to the
extent necessary.
SECTION 5.4. Additional Deposits. The Servicer, or the Seller, as
the case may be, shall deposit into the Collection Account the aggregate
Purchase or Repurchase Amount pursuant to Sections 3.2, 4.7 and 12.2, as
applicable. All remittances shall be made to the Collection Account, in
Automated Clearinghouse Corporation next-day funds or immediately available
funds, no later than 11 a.m., New York City time, on the Deposit Date. The
Trustee shall deposit or cause to be deposited in the Collection Account the
aggregate of any amounts received from the Cash Collateral Guaranty pursuant to
Article VI on the date of receipt thereof.
SECTION 5.5. Distributions. Not later than 12 noon, New York City
time, on each Distribution Date, the Trustee, or the Paying Agent on behalf of
the Trustee, shall cause to be made the following distributions, to the extent
funds are available in the Collection Account, in the following order of
priority and in the amounts set forth in the Servicer's Certificate for such
Distribution Date:
(a) to the Servicer, by wire transfer of immediately available
funds, in reimbursement of Advances, from amounts on deposit in the Collection
Account allocable to interest under the Receivables or from any other source
(including an amount equal to the accrued interest on Defaulted Receiv-
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ables and Repurchased Receivables to the extent available in the Collection
Account), the amount payable pursuant to Section 5.3;
(b) to the extent of the sum of Available Interest and any
Available Cash Collateral Amount remaining after such payment in respect of
Advances (and, in the case of shortfalls occurring under clause (ii) below in
the Class A Interest Distributable Amount, the Class B Percentage of Available
Principal to the extent of such shortfalls), in the following priority:
(i) to the Servicer, any unpaid Servicing Fee for the related
Collection Period and all unpaid Servicing Fees from prior
Collection Periods;
(ii) to the Class A Distribution Account, the Class A Interest
Distributable Amount for such Distribution Date; and
(iii) to the Class B Distribution Account, the Class B
Interest Distributable Amount for such Distribution Date.
(c) to the extent of the portion of Available Principal,
Available Interest and any Available Cash Collateral Amount remaining after the
application of clause (b) above, in
the following priority:
(i) to the Class A Distribution Account, the Class A Principal
Distributable Amount for such Distribution Date;
(ii) to the Class B Distribution Account, the Class B
Principal Distributable Amount for such Distribution Date; and
(iii) to the Cash Collateral Trustee, any amounts remaining
for application in accordance with the Trust Agreement.
(d) on each Distribution Date, the Trustee or the Paying
Agent, as the case may be, will distribute all amounts on deposit in the Class A
Distribution Account to the Class A Certificateholders as of the Record Date and
all amounts on deposit in the Class B Distribution Account to the Class B
Certificateholders as of the Record Date.
(e) the balance of funds remaining in the Collection Account,
if any, including Excess Collections, and, if applicable pursuant to Section
4.8, investment earnings on deposit in the Collection Account during the
preceding Collection Period (such remaining funds and investment earnings, the
"Excess Funds") shall be distributed on such Distribution Date by wire transfer
of immediately available funds as follows:
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(i) to the Cash Collateral Trustee for deposit in the
Cash Collateral Account, an amount of Excess Funds equal to the lesser of
(A) the amount of Excess Funds and (B) the excess of the Required Cash
Collateral Amount for such Distribution Date over the amount of funds then
on deposit in the Cash Collateral Account (exclusive of all earnings and
income from the investment of funds therein and after giving effect to any
withdrawal made on such date); and
(ii) subject to amounts required to be paid pursuant to
Section 11.7, to the Cash Collateral Depositor for the account of the Cash
Collateral Trust 199_-_ for application pursuant to the Loan Agreement,
the excess, if any, of the Excess Funds over the amount deposited to the
Cash Collateral Account pursuant to clause (i) above.
Amounts distributed from the Certificate Distribution Accounts shall
be paid to the Certificateholders of record, as of the related Record Date, by
check mailed by the Paying Agent (or, if directed by the Seller in the case of
the Certificates registered in the name of the Clearing Agency, by wire transfer
of immediately available funds. To the extent that the Paying Agent wires funds
to a Clearing Agency or the Cash Collateral Trustee from the Collection Account,
the Paying Agent will request the Seller, the Qualified Institution or the
Qualified Trust Institution then maintaining the Collection Account to make such
wire distribution and the Seller, the Qualified Institution or the Qualified
Trust Institution then maintaining the Collection Account shall promptly deliver
to the Paying Agent a confirmation of such wire distribution. The Paying Agent
shall have no liability in connection with any failure by the Seller, the
Qualified Institution or the Qualified Trust Institution to make such
distribution.
SECTION 5.6. Net Deposits. Chase USA (in whatever capacity) may make
the remittances pursuant to Section 5.2 and Section 5.4 above, net of amounts to
be retained by it or distributed to it (also in whatever capacity) pursuant to
Section 4.8 (if applicable) and Section 5.5, if (a) it shall be the Servicer and
(b) it is entitled, pursuant to Section 5.2, to make deposits on a monthly
basis, rather than a daily basis. Nonetheless, the Servicer shall account for
all of the above described amounts as if such amounts were deposited and
distributed separately.
SECTION 5.7. Statements to Certificateholders. On each Distribution
Date, the Servicer shall prepare and furnish to the Trustee and the Paying
Agent, and the Paying Agent shall include with the distribution to each
Certificateholder a statement substantially in the form of Exhibit E, based on
information in the certificate furnished pursuant to Section 4.9 (and a copy of
which shall be furnished to the Cash Collateral Depositor), setting forth for
the Collection Period the following
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information (which in the case of items (i), (ii) and (iii) shall be expressed
in the aggregate and as a dollar amount per $1,000 of the original principal
balance of a Certificate):
(i) the amount of the Certificateholder's distribution
allocable to principal;
(ii) the amount of the Certificateholder's distribution
allocable to interest;
(iii) the Certificateholder's pro rata portion of
expenses allocable to the Servicing Fee paid to the Servicer pursuant to
Section 5.5(c);
(iv) the amount, if any, deposited into the Cash
Collateral Account pursuant to Section 5.5(d) on such date;
(v) the aggregate unreimbursed Advances as of such
Determination Date and the change in such amount from the previous
Determination Date;
(vi) the Pool Balance and the Pool Factor as of the last
day of the related Collection Period;
(vii) the Available Cash Collateral Amount as of such
Distribution Date and such amount as a percentage of the Pool Balance as
of the last day of the preceding Collection Period; and
(viii) the Required Cash Collateral Amount for such
Distribution Date.
Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the Servicer shall
prepare and furnish to the Trustee and the Paying Agent, and the Paying Agent
shall furnish, to each Person who at any time during such calendar year shall
have been a Certificateholder for the purposes of such Certificateholder's
preparation of federal income tax returns, a statement setting forth the sum of
the amounts determined in clauses (i) through (iii) for such calendar year.
ARTICLE VI
CASH COLLATERAL GUARANTY
SECTION 6.1. Cash Collateral Guaranty Drawings. No later than 2:00
p.m., New York City time, on each Deposit Date, the Trustee, or the Servicer on
behalf of the Trustee, shall make a demand under the Cash Collateral Guaranty to
the extent that (1) the sum of (a) the aggregate principal balance of, and
accrued and unpaid interest (such accrued interest for the
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Collection Period in which such Receivable became a Defaulted Receivable to be
calculated at a rate equal to one-twelfth of the sum of the Pass-Through Rate
and the Servicing Fee Rate to the extent not otherwise collected) on Receivables
that the Servicer has determined to be Defaulted Receivables during the
preceding Collection Period, to the extent not covered by the amount described
in clause (A) of the definition of "Excess Collections," (b) Unpaid Interest and
Unpaid Servicing Fees, and (c) any additional amount necessary to make
distributions to Certificateholders and the Servicer on such Distribution Date
pursuant to Section 5.5(a) through (c) exceeds (2) the amount on deposit in the
Collection Account with respect to the preceding Collection Period (net of
investment income and Excess Collections) ("Payment Deficiencies"), but in no
event in an amount greater than the Available Cash Collateral Amount with
respect to such Distribution Date; provided, however, that the Trustee shall
have no obligation to make a demand under the Cash Collateral Guaranty unless it
has received the Servicer's Certificate required to be delivered pursuant to
Section 4.9; provided, further that in the event the Trustee fails to receive
such Servicer's Certificate on the Determination Date, it shall notify the
Servicer of such failure and the Servicer shall deliver such Certificate to the
Trustee. Such Payment Deficiency may result from, among other things, the
failure by the Servicer to remit any amount required pursuant to Section 5.2 on
or prior to 11 a.m. (New York City time) on the related Deposit Date or the
election by the Servicer not to remit any Advance pursuant to Section 5.3 on or
prior to 11 a.m. (New York City time) on the related Deposit Date. The Trustee
shall deposit or cause to be deposited the proceeds of any demand under the Cash
Collateral Guaranty into the Collection Account pursuant to Section 5.4.
SECTION 6.2. Cash Collateral Account. The amount on deposit in the
Cash Collateral Account on the Closing Date shall be equal to the Initial Cash
Collateral Amount. The Trustee hereby acknowledges the grant of a first priority
security interest by the Cash Collateral Trustee, pursuant to Section 5 of the
Cash Collateral Trust Agreement, in the Cash Collateral Account, the Initial
Cash Collateral Amount and all amounts from time to time deposited therein, and
all proceeds of the foregoing, and the release to the Cash Collateral Depositor
of its security interest in investment earnings of amounts on deposit therein,
pursuant to Section 4 of the Cash Collateral Trust Agreement.
ARTICLE VII
THE CERTIFICATES
SECTION 7.1. The Certificates. Unless otherwise specified in this
Agreement, the Certificates of each class shall be issued in denominations of
$1,000 and integral multiples thereof; provided, however, that one Certificate
of either class
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may be issued that includes any residual portion of the Original Pool Balance in
a denomination other than an integral multiple of $1,000. The Certificates shall
be executed on behalf of the Trust by manual or facsimile signature of an
Authorized Officer or other authorized signatory of the Trustee. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be valid and binding obligations of the Trust, notwithstanding
that such individuals shall have ceased to be so authorized prior to the
execution, authentication and delivery of such Certificates or did not hold such
offices or positions at the date of such Certificates. No Certificate shall
entitle the Holder to any benefit under this Agreement, or shall be valid for
any purpose, unless there shall appear on such Certificate an authentication
substantially in the form set forth in Exhibit A-1 or A-2 hereto as applicable,
executed by the Trustee by manual or facsimile signature; such authentication
shall constitute conclusive evidence that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. A transferee of a Certificate shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder, upon due presentment of such
Certificate in such transferee's name pursuant to Section 7.5.
SECTION 7.2. Execution, Authentication and Delivery of Certificates.
The Trustee shall deliver to, or upon the order of, the Seller, in exchange for
the Receivables and the other assets of the Trust, simultaneously with the sale,
assignment and transfer to the Trustee of the Receivables, the constructive
delivery to the Trustee of the Receivable Files and the delivery to the Trustee
of the other components of the Trust, Certificates duly executed by the Trustee,
on behalf of the Trust, and authenticated by the Trustee in authorized
denominations equaling in the aggregate the Original Pool Balance, and
evidencing the entire ownership of the Trust.
SECTION 7.3. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency
to be maintained by a transfer agent and certificate registrar (the "Transfer
Agent and Certificate Registrar"), in accordance with the provisions of Section
7.7, a register (the "Certificate Register") in which, subject to such
reasonable regulations as it may prescribe, the Transfer Agent and Certificate
Registrar shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Chase Manhattan Bank is
hereby initially appointed Transfer Agent and Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as herein provided. In the event that, subsequent to the date of issuance of the
Certificates, The Chase
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Manhattan Bank notifies the Trustee that it is unable to act as Transfer Agent
and Certificate Registrar, the Trustee shall act, or the Trustee shall, with the
consent of the Seller, appoint another bank or trust company, having an office
or agency located in The City of New York and which agrees to act in accordance
with the provisions of this Agreement applicable to it, to act, as successor
Transfer Agent and Certificate Registrar under this Agreement.
The Trustee may revoke such appointment and remove The Chase
Manhattan Bank as Transfer Agent and Certificate Registrar if the Trustee
determines in its sole discretion that The Chase Manhattan Bank failed to
perform its obligations under this Agreement in any material respect. The Chase
Manhattan Bank shall be permitted to resign as Transfer Agent and Certificate
Registrar upon 30 days' written notice to the Trustee, the Seller and the
Servicer; provided, however, that such resignation shall not be effective and
The Chase Manhattan Bank shall continue to perform its duties as Transfer Agent
and Certificate Registrar until the Trustee has appointed a successor Transfer
Agent and Certificate Registrar with the consent of the Seller.
Upon surrender for registration of transfer of any Certificate at
the office or agency of the Transfer Agent and Certificate Registrar maintained
pursuant to Section 7.7, the Trustee shall execute, authenticate and (if the
Transfer Agent and Certificate Registrar is different than the Trustee, then the
Transfer Agent and Certificate Registrar shall) deliver [(or shall cause The
Chase Manhattan Bank as its authenticating agent to authenticate and deliver)],
in the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Trustee or any authenticating agent. At the option
of a Certificateholder, Certificates may be exchanged for other Certificates of
authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 7.7.
Whenever any Certificate is surrendered for exchange, the Trustee
shall execute, authenticate and (if the Transfer Agent and Certificate Registrar
is different than the Trustee, then the Transfer Agent and Certificate Registrar
shall) deliver the Certificates which the Certificateholder making the exchange
is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Transfer
Agent and Certificate Registrar duly executed by the Holder, which signature on
such assignment must be guaranteed by a member of the New York Stock Exchange or
a commercial bank or trust company.
Each Certificate surrendered for registration of transfer or
exchange shall be cancelled by the Transfer Agent and
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Certificate Registrar and disposed of by the Trustee in accordance with its
customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Transfer Agent and Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
An institution succeeding to the corporate agency business of the
Transfer Agent and Certificate Registrar shall continue to be the Transfer Agent
and Certificate Registrar without the execution or filing of any paper or any
further act on the part of the Trustee or such Transfer Agent and Certificate
Registrar.
SECTION 7.4. Mutilated, Destroyed, Lost, or Stolen Certificates. If
(a) any mutilated Certificate shall be surrendered to the Transfer Agent and
Certificate Registrar, or if the Transfer Agent and Certificate Registrar shall
receive evidence to its satisfaction of the destruction, loss, or theft of any
Certificate and (b) there shall be delivered to the Trustee and the Transfer
Agent and Certificate Registrar such security or indemnity as may be required to
save each of them harmless then, in the absence of notice to the Trustee that
such Certificate shall have been acquired by a bona fide purchaser, the Trustee
on behalf of the Trust shall execute, authenticate and (if the Transfer Agent
and Certificate Registrar is different from the Trustee, the Transfer Agent and
Certificate Registrar shall) deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination but bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this Section 7.4,
the Trustee or the Transfer Agent and Certificate Registrar, as the case may be,
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section 7.4 shall constitute conclusive
evidence of ownership in the Trust, as if originally issued, whether or not a
lost, stolen, or destroyed Certificate shall be found at any time.
SECTION 7.5. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Certificate Registrar or any agent of any of them may treat
the Person in whose name any Certificate shall be registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
5.5(b) and for all other purposes whatsoever, and none of the Trustee, the
Paying Agent, the Transfer Agent and Certificate Registrar or any agent of any
of them shall be bound by any notice to the contrary.
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SECTION 7.6. Access to List of Certificateholders' Names and
Addresses. The Transfer Agent and Certificate Registrar shall furnish or cause
to be furnished to the Servicer or the Paying Agent (or to the Trustee if the
Trustee is not the Transfer Agent and Certificate Registrar), within 15 days
after receipt by the Transfer Agent and Certificate Registrar of a request
therefor from the Servicer, the Trustee or the Paying Agent in writing, in such
form as the Servicer, the Trustee or the Paying Agent may reasonably require, a
list of the names and addresses of the Certificateholders as of the most recent
Record Date. If, at such time, if any, as Definitive Certificates have been
issued, three or more Certificateholders, or one or more Holders of Certificates
aggregating not less than 25% of the Pool Balance apply in writing to the
Transfer Agent and Certificate Registrar (or the Trustee if the Trustee is
acting as the Transfer Agent and Certificate Registrar), and such application
states that the applicants desire to communicate with other Certificateholders
with respect to their rights under this Agreement or under the Certificates, and
such application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Transfer Agent and Certificate
Registrar shall, within five (5) Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Certificateholder, by receiving and
holding a Certificate, shall be deemed to have agreed to hold neither the
Servicer, the Trustee, the Transfer Agent and Certificate Registrar nor any of
their respective agents accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 7.7. Maintenance of Office or Agency. The Transfer Agent and
Certificate Registrar shall maintain in The City of New York an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange. [The Transfer Agent and Certificate
Registrar initially designates its corporate trust office located at
[_______________________________] as its office for such purposes.] The Transfer
Agent and Certificate Registrar shall give prompt written notice to the Trustee,
the Servicer and to Certificateholders of any change in the location of such
office or agency.
SECTION 7.8. Book-Entry Certificates. The Certificates (other than a
Certificate representing any residual portion of the Pool Balance), upon
original issuance, shall be issued in the form of typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The Depository
Trust Company, the initial Clearing Agency, by or on behalf of the Seller. The
Certificates shall initially be registered on the Certificate Register in the
name of Cede & Co., the nominee of the initial Clearing Agency, and no
Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Certificates, except as provided in
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Section 7.10. Unless and until definitive, fully registered Certificates
("Definitive Certificates") have been issued to Certificateholders pursuant to
Section 7.10:
(i) the provisions of this Section 7.8 shall be in full
force and effect;
(ii) the Seller, the Servicer, the Paying Agent, the
Transfer Agent and Certificate Registrar and the Trustee may deal with the
Clearing Agency, and the Clearing Agency Participants for all purposes of
this Agreement (including the making of distributions on the Certificates
and the taking of actions by the Certificateholders) as the authorized
representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section
7.8 conflict with any other provisions of this Agreement, the provisions
of this Section 7.8 shall control;
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency (or to the extent Certificate Owners are
not Clearing Agency Participants through the Clearing Agency Participants
through which such Certificate Owners own Book-Entry Certificates), and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants and all references in this Agreement to actions by
Certificateholders shall refer to actions taken by the Clearing Agency
upon instructions from the Clearing Agency Participants, and all
references in this Agreement to distributions, notices, reports and
statements to Certificateholders shall refer to distributions, notices,
reports and statements to the Clearing Agency, as registered holder of the
Certificates, as the case may be, for distribution to Certificate Owners
in accordance with the procedures of the Clearing Agency; and
(v) pursuant to the Depository Agreement, and unless
Definitive Certificates are issued pursuant to Section 7.10, the initial
Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Certificates to the Clearing Agency Participants, for
distribution by such Clearing Agency Participants to the Certificate
Owners or their nominees.
SECTION 7.9. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 7.10, the Trustee and the Paying Agent shall give all such
notices and communications specified herein to be given by it to
Certificateholders to the Clearing Agency.
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SECTION 7.10. Definitive Certificates. If (i) the Servicer advises
the Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities under the Depository Agreement, and the
Servicer is unable to locate a qualified successor, (ii) the Servicer, at its
option, elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of an Event of Default, Certificate Owners
representing beneficial interests aggregating a majority of the Pool Balance
advise the Clearing Agency (with instructions to notify the Trustee in writing
thereof) through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners, the Trustee shall notify the
Clearing Agency of the occurrence of any event described above and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Transfer Agent and Certificate Registrar by the
Clearing Agency of Certificates registered in the name of such Clearing Agency,
or its nominee, accompanied by re-registration instructions from the Clearing
Agency for registration of the Definitive Certificates, the Trustee shall
execute, authenticate and (if the Transfer Agent and Certificate Registrar is
different than the Trustee, then the Transfer Agent and Certificate Registrar
shall) deliver Definitive Certificates in accordance with the instructions of
the Clearing Agency. The Servicer shall arrange for, and will bear all costs of,
the printing and issuance of such Definitive Certificates. None of the Seller,
the Servicer, the Transfer Agent and Certificate Registrar or the Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying upon such instruction. Upon the
issuance of Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Clearing Agency shall be deemed to be
imposed upon and performed by the Transfer Agent and Certificate Registrar, to
the extent applicable with respect to such Definitive Certificates and the
Trustee, the Paying Agent and the Transfer Agent and Certificate Registrar shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
[SECTION 7.11. No Transfer. Except pursuant to Section 8.3, the
Seller hereby covenants that it will not transfer to any Person any part of its
right to receive amounts on deposit in the Cash Collateral Account established
pursuant to the Cash Collateral Trust Agreement (or available for deposit
therein pursuant to Section 5.5(d) hereof) unless it has first delivered to the
Trustee an Opinion of Counsel (which, for this purpose, shall be independent
outside counsel) in form and substance satisfactory to the Trustee stating that
such transfer will not adversely affect the status of the Trust as a grantor
trust pursuant to subpart E, part I of subchapter J of the Code. A copy of such
opinion shall be delivered by the Seller to the Cash Collateral Depositor. Upon
any such transfer, the
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transferee shall agree to comply with Section 17 of the Cash
Collateral Trust Agreement.]
SECTION 7.12. Appointment of Paying Agent.
(a) The Paying Agent shall have the revocable power to
withdraw funds from the Collection Account and make distributions to the
Certificateholders, the Cash Collateral Trustee and the Cash Collateral
Depositor pursuant to Section 5.5 hereof. The Trustee may revoke such power and
remove the Paying Agent, if the Trustee determines in its sole discretion that
the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect or for other good cause. The Paying Agent
shall initially be The Chase Manhattan Bank shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Servicer, the Trustee and the
Cash Collateral Depositor. In the event that The Chase Manhattan Bank shall no
longer be the Paying Agent, the Trustee shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company and may be the Trustee)
with the consent of the Seller and the Cash Collateral Depositor, which consent
shall not be unreasonably withheld. If at any time the Trustee shall be acting
as the Paying Agent, the provisions of Sections 11.1, 11.3 and 11.4 shall apply
to the Trustee in its role as Paying Agent.
(b) The Trustee shall cause the Paying Agent (other than
itself and The Chase Manhattan Bank to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders and shall
agree, and if the Trustee is the Paying Agent it hereby agrees, that it shall
comply with all requirements of the Code regarding the withholding by the
Trustee of payments in respect of federal income taxes due from Certificate
Owners.
(c) The Chase Manhattan Bank in its capacity as initial Paying
Agent hereunder agrees that it (i) will hold all sums held by it hereunder for
payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and (ii) shall comply with all requirements of the Code
regarding the withholding by the Trustee of payments in respect of federal
income taxes due from Certificate Owners.
(d) An institution succeeding to the corporate agency business
of the Paying Agent shall continue to be the Paying Agent without the execution
or filing of any paper or may further act on the part of the Trustee or such
Paying Agent.
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SECTION 7.13. Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents
with respect to the Certificates which shall be authorized to act on behalf of
the Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
The Trustee hereby appoints The Chase Manhattan Bank as Authenticating Agent for
the authentication of Certificates upon any registration of transfer or exchange
of such Certificates. Whenever reference is made in this Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent, other than The Chase Manhattan Bank shall be
acceptable to the Seller.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and the Seller. The Trustee may at
any time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Seller. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time an
authenticating agent shall cease to be acceptable to the Trustee or the Seller,
the Trustee promptly may appoint a successor authenticating agent with the
consent of the Seller. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be appointed
unless acceptable to the Seller.
(d) The Servicer shall pay the Authenticating Agent from time
to time reasonable compensation for its services under this Section 7.13.
(e) The provisions of Sections 11.1, 11.3 and 11.4 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 7.13,
the Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:
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This is one of the certificates referred to in the within mentioned
Agreement.
_______________________,
as Trustee
By:_______________________________
Authorized Officer
or
__________________________________
as Authenticating Agent
for the Trustee,
__________________________________
Authorized Officer
SECTION 7.14. Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by an agent duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, when required, to the Seller, the
Servicer or the Cash Collateral Depositor. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee, the Seller and
the Servicer, if made in the manner provided in this Section 7.14.
(b) The fact and date of the execution by any
Certificateholder of any such instrument or writing may be proved in any
reasonable manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind every Holder of
every Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, or omitted to
be done, by the Trustee, the Seller or the Servicer in reliance thereon, whether
or not notation of such action is made upon such Certificate.
(d) The Trustee may require such additional proof of any
matter referred to in this Section 7.14 as it shall deem necessary.
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ARTICLE VIII
THE SELLER
SECTION 8.1. Representations of Seller. The Seller makes the
following representations on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. The representations
shall speak as of the execution and delivery of this Agreement, and shall
survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Seller has been
duly organized and is validly existing as a national banking association
in good standing under the laws of the United States of America, with
power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, power, authority, and
legal right to acquire and own the Receivables.
(ii) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and to carry out its
terms, the Seller has full power and authority to sell and assign the
property to be sold and assigned to the Trustee as part of the Trust and
has duly authorized such sale and assignment to this Trustee by all
necessary corporate action; and the execution, delivery, and performance
of this Agreement has been duly authorized by the Seller by all necessary
corporate action.
(iii) Valid Sale; Binding Obligations. This Agreement
effects a valid sale, transfer, and assignment of the Receivables,
enforceable against creditors of and purchasers from the Seller; and
constitutes a legal, valid, and binding obligation of the Seller
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do
not conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time) a default
under, the articles of association or bylaws of the Seller, or conflict
with or breach any of the material terms or provisions of, or constitute
(with or without notice or lapse of time) a default under, any indenture,
agreement, or other instrument to which the Seller is a party or by which
it is bound; nor result in the creation or imposition of any Lien
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upon any of its properties pursuant to the terms of any such indenture,
agreement, or other instrument; nor violate any law or, to the best of the
Seller's knowledge, any order, rule, or regulation applicable to the
Seller of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or, to the Seller's best knowledge, threatened,
before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or its
properties: (a) asserting the invalidity of this Agreement or the
Certificates, (b) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this
Agreement, (c) seeking any determination or ruling that might materially
and adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, this Agreement or the
Certificates, or (d) relating to the Seller and which might adversely
affect the federal income tax attributes of the Certificates.
SECTION 8.2. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller in such capacity under this Agreement and shall have no
other obligations or liabilities hereunder.
The Seller shall indemnify, defend and hold harmless the Trustee and
the Trust from and against any taxes that may at any time be asserted against
the Trust with respect to, and as of the date of, the sale of the Receivables to
the Trust or the issuance and original sale of the Certificates, including any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes asserted with
respect to ownership of the Receivables or federal or other income taxes,
including franchise taxes measured by net income), arising out of the
transactions contemplated by this Agreement, and costs and expenses in defending
against the same.
The Seller shall indemnify, defend, and hold harmless the Trustee or
the Trust from and against any loss, liability or expense incurred by reason of
(i) the Seller's wilful misfeasance, bad faith, or negligence in the performance
of its duties hereunder, or by reason of reckless disregard of the obligations
and duties hereunder and (ii) the Seller's violation of federal or state
securities laws in connection with the registration of the sale of the
Certificates.
Indemnification under this Section 8.2 shall include reasonable fees
and expenses of counsel and expenses of
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litigation. If the Seller shall have made any indemnity payments to the Trust
pursuant to this Section 8.2 and the Trust thereafter shall collect any of such
amounts from others, the Trust shall repay such amounts to the Seller, without
interest.
SECTION 8.3. Merger or Consolidation of Seller. Any corporation or
other entity (i) into which the Seller may be merged or consolidated, (ii) which
may result from any merger, conversion, or consolidation to which the Seller
shall be a party, or (iii) which may succeed to all or substantially all of the
business of the Seller, which corporation or other entity shall be bound to
perform every obligation of the Seller under this Agreement, shall be the
successor to the Seller hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement. The Seller
shall give prompt written notice of any merger or consolidation to the Trustee,
the Servicer, the Cash Collateral Trustee, the Cash Collateral Depositor and the
Rating Agencies.
SECTION 8.4. Limitation on Liability of Seller and Others. The
Seller and any director, officer, employee or agent of the Seller may rely in
good faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation under this Agreement to
appear in, prosecute, or defend any legal action that shall be unrelated to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 8.5. Seller May Own Certificates. The Seller and any Person
controlling, controlled by, or under common control with the Seller may in its
individual or any other capacity become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Seller or an affiliate
thereof, except as otherwise provided in the definition of "Certificateholder"
specified in Section 1.1. Certificates so owned by or pledged to the Seller or
such controlling or commonly controlled Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Certificates.
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ARTICLE IX
THE SERVICER
SECTION 9.1. Representations of Servicer. The Servicer makes the
following representations on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. The representations
shall speak as of the execution and delivery of this Agreement, and shall
survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Servicer has
been duly organized and is validly existing as a national banking
association or corporation and is in good standing under the laws of the
United States of America or the jurisdiction of its incorporation, with
power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted, and had at all relevant times, and has, power, authority, and
legal right to acquire, own, sell, and service the Receivables and to hold
the Receivable Files as custodian on behalf of the Trustee.
(ii) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery, and performance of this Agreement has
been duly authorized by the Servicer by all necessary corporate action.
(iii) Binding Obligations. This Agreement constitutes a
legal, valid, and binding obligation of the Servicer enforceable in
accordance with its terms subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, liquidation or other similar laws
and equitable principles relating to or affecting the enforcement of
creditors' rights, whether considered in a proceeding at law or in equity.
(iv) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do
not conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time) a default
under, the articles of association or bylaws of the Servicer, or conflict
with or breach any of the material terms or provisions of, or constitute
(with or without notice or lapse of time) a default under, any indenture,
agreement, or other instrument to which the Servicer is a party or by
which it is bound; nor result in the creation or imposition of any lien
upon any of its properties pursuant to the terms of any such indenture,
agreement, or other instrument; nor violate any law or, to the best of the
Servicer's knowledge, any order, rule, or regulation applicable to the
Servicer of
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any court or of any federal or state regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction over the
Servicer or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or to the Servicer's best knowledge, threatened,
before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Servicer or its
properties: (a) asserting the invalidity of this Agreement or the
Certificates, (b) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this
Agreement, (c) seeking any determination or ruling that might materially
and adversely affect the performance by the Servicer of its obligations
under, or the validity or enforceability of, this Agreement or the
Certificates, or (d) relating to the Servicer and which might adversely
affect the federal income tax attributes of the Certificates.
(vi) Fidelity Bond. The Servicer maintains a fidelity
bond in such form and amount as is customary for banks acting as custodian
of funds and documents in respect of retail automotive installment sales
contracts.
SECTION 9.2. Liability of Servicer; Indemnities. The Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement and shall have no
other obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold
harmless the Trustee, the Trust, the Cash Collateral Trustee, the Cash
Collateral Depositor, and the Certificateholders from and against any and
all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from the use, ownership, or operation by the Servicer or
any affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend, and hold
harmless the Trustee and the Trust from and against any taxes that may at
any time be asserted against the Trust with respect to the transactions
contemplated in this Agreement, including, without limitation, any sales,
gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes
asserted with respect to, and as of the date of, the sale of the
Receivables to the Trust or the issuance and original sale of the
Certificates, or asserted with respect to ownership of the Receivables or
federal or other income taxes, including franchise taxes measured by net
income) arising out of distributions on the Certificates and costs and
expenses in defending against the same.
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(iii) The Servicer shall indemnify, defend, and hold
harmless the Trustee and the Trust and the Certificateholders from and
against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon the Trustee and the Trust or
the Certificateholders through the wilful misfeasance, gross negligence,
or bad faith of the Servicer in the performance of its duties under this
Agreement or by reason of reckless disregard of its obligations and duties
under this Agreement (and such indemnity shall extend for the benefit of
the Cash Collateral Trustee and the Cash Collateral Depositor to the
performance of the Servicer's duties and the satisfaction of its
obligations with respect to any Receivables that become Defaulted
Receivables, as provided in this Agreement).
Indemnification under this Section 9.2 shall include reasonable fees
and expenses of counsel and expenses of litigation. If the Servicer shall have
made any indemnity payments pursuant to this Section 9.2 and the recipient
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts to the Servicer, without interest. The
indemnification obligations of the Servicer set forth in this Section 9.2 shall
survive the termination of such Servicer with respect to any act or failure to
act which occurs prior to such Servicer's termination.
SECTION 9.3. Merger or Consolidation of Servicer. Any corporation or
other entity (i) into which the Servicer may be merged or consolidated, (ii)
which may result from any merger, conversion, or consolidation to which the
Servicer shall be a party, or (iii) which may succeed to all or substantially
all of the business of the Servicer, which corporation or other entity shall be
bound to perform every obligation of the Servicer hereunder, shall be the
successor to the Servicer under this Agreement without the execution or filing
of any document or any further act on the part of any of the parties to this
Agreement. The Servicer shall promptly inform the Trustee, the Seller, the Cash
Collateral Trustee, the Cash Collateral Depositor and the Rating Agencies in
writing of any such merger or consolidation.
SECTION 9.4. Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor any of the directors, officers,
or employees or agents of the Servicer shall be under any liability to the
Trust, the Trustee, or the Certificateholders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement; provided, however, that this provision shall not
protect the Servicer or any such person against any liability that would
otherwise be imposed by reason of wilful misfeasance, gross negligence, or bad
faith in the performance of duties or by reason of reckless disregard of
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obligations and duties under this Agreement. The Servicer and any director,
officer, or employee or agent of the Servicer may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement.
(b) The Servicer, and any director, officer, employee or agent
of the Servicer, shall be indemnified by the Trust and held harmless against any
loss, liability, or expense (including reasonable attorneys' fees and expenses)
incurred in connection with any legal action relating to the performance of the
Servicer's duties under this Agreement, other than (i) any loss or liability
otherwise reimbursable pursuant to this Agreement or the Cash Collateral Trust
Agreement; (ii) any loss, liability, or expense incurred solely by reason of the
Servicer's wilful misfeasance, negligence, or bad faith in the performance of
its duties hereunder or by reason of reckless disregard of its obligations and
duties under this Agreement or the Trust Agreement; and (iii) any loss,
liability, or expense for which the Trust is to be indemnified by the Servicer
under this Agreement. Any amounts due the Servicer pursuant to this Section
shall be payable on a Distribution Date from the Collection Account only after
all payments required to be made on such date to the Certificateholders and the
Servicer, amounts, if any, due the Trustee from the Trust pursuant to Section
11.7, and any amounts required to be retained on deposit in the Cash Collateral
Account pursuant to Section 5.5(d)(i) to maintain the amount on deposit therein
(exclusive of investment income and earnings on amounts on deposit therein) at
the Required Cash Collateral Amount on such date shall have been made.
(c) Except as provided in this Agreement, the Servicer shall
not be under any obligation to appear in, prosecute, or defend any legal action
that shall not be incidental to its obligations under this Agreement, and that
in its opinion may involve it in any expense or liability; provided, however,
that the Servicer may undertake any reasonable action that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties to this Agreement and the interests of the Certificateholders under this
Agreement. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs, and liabilities of the
Trust, and the Servicer shall be entitled to be reimbursed therefor. Any amounts
due the Servicer pursuant to this Section shall be payable on a Distribution
Date from the Collection Account only after all payments required to be made on
such date to the Certificateholders and the Servicer, amounts, if any, due the
Trustee from the Trust pursuant to Section 11.7, and any amounts required to be
deposited into the Cash Collateral Account pursuant to Section 5.5(d)(i) to
maintain the amount on deposit therein (exclusive of investment income and
earnings on amounts on deposit therein) at the Required Cash Collateral Amount
on such date shall have been made.
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The Person to be indemnified shall provide the Trustee with a
certificate and accompanying Opinion of Counsel requesting indemnification and
setting forth the basis for such request.
SECTION 9.5. Servicer Not To Resign. Except as permitted by Section
9.3, the Servicer shall not resign from its obligations and duties under this
Agreement except (i) upon determination that the performance of its duties shall
no longer be permissible under applicable law or (ii) in the event of the
appointment of a successor Servicer, upon receipt by the Seller of notice from
each of Standard & Poor's and Moody's to the effect that the rating then
assigned to the Certificates by each respective Rating Agency will not be
withdrawn or reduced as a result of such resignation and such appointment.
Notice of any such determination set forth in clause (i) above permitting the
resignation of Chase USA shall be communicated to the Trustee, the Cash
Collateral Depositor and the Rating Agencies at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing at
the earliest practicable time) and any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee concurrently with such notice. No such
resignation shall become effective until the Trustee (which shall not be
obligated to act as successor Servicer if the Servicer has resigned for a reason
other than that the performance of its duties are no longer permissible under
applicable law) or a successor Servicer shall have assumed the responsibilities
and obligations of the Servicer hereunder in accordance with Section 10.2.
SECTION 9.6. Delegation of Duties. So long as Chase USA (or any
successor thereto in accordance with Section 9.3) or the Trustee acts as
Servicer, the Servicer shall have the right, in the ordinary course of its
business, to delegate any of its duties under this Agreement to any Person. Any
compensation payable to such Person shall be paid by the Servicer from its own
funds and none of the Trust, the Trustee (if not the Servicer) or the
Certificateholders shall have any liability to such Person with respect thereto.
Notwithstanding any delegation of duties by the Servicer pursuant to this
Section 9.6, the Servicer shall not be relieved of its liability and
responsibility with respect to such duties, and any such delegation shall not
constitute a resignation within the meaning of Section 9.5 hereof. Any agreement
that may be entered into by the Servicer and a Person that provides for any
delegation of the Servicer's duties hereunder shall be deemed to be between the
Servicer and such Person alone, and the Trustee and Certificateholders shall not
be deemed parties thereto and shall have no claims, rights, obligations, duties
or liabilities with respect thereto.
ARTICLE X
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DEFAULT
SECTION 10.1. Events of Default. Any one of the following events
which shall occur and be continuing shall constitute an event of default
hereunder (each, an "Event of Default"):
(i) Any failure by the Servicer to deliver to the
Trustee the Servicer's Certificate for the related Collection Period, or
any failure by the Servicer to deliver to the Trustee, for distribution to
Certificateholders, any proceeds or payment required to be so delivered
under the terms of the Certificates and this Agreement (or, in the case of
a payment or deposit to be made not later than the Deposit Date, the
failure to make such payment or deposit on such Deposit Date), which
failure continues unremedied for a period of five Business Days after (A)
discovery by an officer of the Servicer or (B) written notice (1) to the
Servicer by the Trustee or (2) to the Trustee and the Servicer by the
Holders of Certificates evidencing not less than 25% of the Pool Balance;
(ii) Failure on the part of the Servicer, duly to
observe or to perform in any material respect any other covenants or
agreements of the Servicer set forth in the Certificates or in this
Agreement, which failure shall (a) materially and adversely affect the
rights of the Trust or the Certificateholders (which determination shall
be made without regard to whether funds are available to the
Certificateholders pursuant to the Cash Collateral Guaranty) and (b)
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given (1) to the Servicer by the Trustee or (2) to the Trustee
and the Servicer by the Holders of Certificates evidencing not less than
25% of the Pool Balance;
(iii) The entry of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, or liquidator for the Servicer
in any insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings, or for the winding up or liquidation
of its affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(iv) The consent by the Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings of or
relating to the Servicer or of or relating to substantially all of its
property; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due,
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file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations.
Upon the occurrence of an Event of Default described above, and in each and
every case and for so long as such Event of Default shall not have been
remedied, either the Trustee, or the Holders of Certificates evidencing not less
than 50% of the Pool Balance, by notice given in writing to the Servicer (and to
the Trustee if given by the Certificateholders) may terminate all of the rights
and obligations of the Servicer under this Agreement. On or after the receipt by
the Servicer of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Certificates or the
Receivables or otherwise, shall pass to and be vested in the Trustee pursuant to
this Section 10.1; and, without limitation, the Trustee shall be hereby
authorized and empowered to execute and deliver, on behalf of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivable Files, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer and the Trustee
in effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, shall have been
deposited by the Servicer in the Collection Account, or shall thereafter be
received with respect to a Receivable. All reasonable costs and expenses
(including attorneys' fees and disbursements) incurred in connection with
transferring the Receivable Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section 10.1
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. The Cash Collateral Depositor may
notify the Trustee in writing of the occurrence of an Event of Default. The
Trustee shall give written notice of any termination of the Servicer to the
Certificateholders, the Cash Collateral Depositor and the Rating Agencies.
SECTION 10.2. Trustee to Act; Appointment of Successor. Upon the
Servicer's receipt of notice of termination pursuant to Section 10.1 or
resignation pursuant to Section 9.5, the Trustee shall be the successor in all
respects to the Servicer in its capacity as Servicer under this Agreement, and
shall be subject to all the responsibilities, duties and liabilities arising
thereafter relating thereto placed on the Servicer by the terms and provisions
of this Agreement. As compensation therefor, the Trustee shall be entitled to
such compensation (whether payable out of the Collection Account or otherwise)
as the Servicer would have been entitled to under this
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Agreement if no such notice of termination or resignation had been given.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it shall be legally unable so to act, appoint, or petition a court
of competent jurisdiction to appoint, any established financial institution (x)
having a net worth of not less than $100,000,000 as of the last day of the most
recent fiscal quarter for such institution and (y) whose regular business shall
include the servicing of automobile receivables, as successor Servicer under
this Agreement; provided, that any such successor Servicer shall be acceptable
to the Cash Collateral Depositor which acceptance shall not be unreasonably
withheld (as confirmed in writing); provided, further that the appointment of
any such successor Servicer will not result in the withdrawal or reduction of
the outstanding rating assigned to the Certificates by any Rating Agency (as
confirmed in writing). In connection with such appointment, the Trustee may make
such arrangements for the compensation of such successor Servicer out of
payments on Receivables as it and such successor Servicer shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer under this Agreement. The Trustee and such successor Servicer shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Unless the Trustee shall be prohibited by law
from so acting, the Trustee shall not be relieved of its duties as successor
Servicer under this Section 10.2 until the newly appointed successor Servicer
shall have assumed the responsibilities and obligations of the Servicer under
this Agreement.
SECTION 10.3. Notification to Certificateholders. Upon delivery of
written notice by the Trustee to the Servicer or receipt by the Trustee of
written notice from Holders of Certificates evidencing not less than 25% of the
Pool Balance of an Event of Default or upon any Servicer termination, or
appointment of a successor Servicer pursuant to this Article X, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses of record, to the Seller, to the Cash Collateral Depositor
and to the Rating Agencies.
SECTION 10.4. Waiver of Past Defaults. The Holders of Certificates
evidencing not less than a majority of the Pool Balance, with the written
consent of the Cash Collateral Depositor, may, on behalf of all Holders of
Certificates, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits to or payments from the Collection Account in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived. The Servicer
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shall give prompt written notice of any waiver to the Rating Agencies.
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ARTICLE XI
THE TRUSTEE
SECTION 11.1. Duties of Trustee. The Trustee, both prior to and
after the occurrence of an Event of Default, shall undertake to perform such
duties and only such duties as are specifically set forth in this Agreement. If
an Event of Default known to the Trustee shall have occurred and shall not have
been cured, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs; provided, however, that if the Trustee shall assume
the duties of the Servicer pursuant to Sections 9.5 and 10.2, the Trustee in
performing such duties shall use the degree of skill and attention customarily
exercised by a servicer with respect to automobile receivables that it services
for itself.
The Trustee, upon receipt of any resolutions, certificates,
statements, opinions, reports, documents, orders, or other instruments furnished
to the Trustee that shall be specifically required to be furnished pursuant to
any provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any such
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Servicer to the Trustee pursuant to this Agreement.
The Trustee shall give prompt notice to the Cash Collateral Depositor of any
material lack of conformity, discovered by the Trustee of any such instrument
referred to above, to the applicable requirements of this Agreement which would
entitle a specified percentage of the Certificateholders to take any action
pursuant to this Agreement.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own bad faith or wilful misfeasance; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and
after the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as shall be
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee, the
permissible right of the Trustee to do things enumerated in this Agreement
shall not be construed as a duty and, in the absence of bad faith on the
part of the Trustee, or manifest error, the Trustee may conclusively rely
upon any certificates or opinions fur-
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nished to the Trustee and conforming to the requirements of this Agreement
as to the truth of the statements made and the correctness of the opinions
expressed therein;
(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by an Authorized Officer of the
Trustee, unless it shall be proved that the Trustee shall have been
negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered, or omitted to be taken in good
faith in accordance with this Agreement or at the direction of the Holders
of Certificates evidencing not less than 25% of the Pool Balance relating
to the time, method, and place of conducting any proceeding or any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability shall not be reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer (including its obligations as
custodian) under this Agreement except during such time, if any, as the Trustee
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.
The Trustee shall not be charged with knowledge of an Event of
Default until such time as an Authorized Officer shall have actual knowledge or
have received written notice thereof.
Except for actions expressly authorized by this Agreement or, based
upon an Opinion of Counsel, in the best interests of Certificateholders, the
Trustee shall take no action reasonably likely to impair the security interests
created or existing under any Receivable or to impair the value of any
Receivable.
All information obtained by the Trustee regarding the Obligors and
the Receivables, whether upon the exercise of its rights under this Agreement or
otherwise, shall be maintained by the Trustee in confidence and shall not be
disclosed to any other Person, other than its counsel, unless such disclosure is
pursuant to the terms of this Agreement or required by any applicable law or
regulation.
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In the event that the Paying Agent or the Transfer Agent and
Certificate Registrar shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the Paying Agent or the
Transfer Agent and Certificate Registrar, as the case may be, under this
Agreement, the Trustee shall be obligated promptly upon an Authorized Officer
obtaining knowledge thereof to perform such obligation, duty or agreement in the
manner so required to the extent the information necessary to such performance
is reasonably available to the Trustee after the Trustee has made a reasonable
effort to obtain such information. The Trustee shall not be liable for the acts
or omissions of any Paying Agent, any Authenticating Agent or the Transfer Agent
and Certificate Registrar appointed hereunder with due care by the Trustee
hereunder.
SECTION 11.2. Trustee's Assignment of Repurchased Receivables and
Trustee's Certificate. With respect to all Receivables repurchased by the Seller
pursuant to Section 3.2 or purchased by the Servicer pursuant to Section 4.7 or
12.2, the Trustee shall (i) assign, without recourse, representation, or
warranty, to the Seller or the Servicer, as the case may be, all the Trust's
right, title, and interest in and to such Receivable and the other property
conveyed to the Trust pursuant to Section 2.1 with respect to such Receivable,
and all security and documents relating thereto, such assignment being an
assignment outright and not for security and (ii) as soon as practicable after
each date as of which a Receivable shall be assigned to the Seller or the
Servicer, as the case may be, execute a Trustee's Certificate, including the
date of execution of such Trustee's Certificate and the date of the related
Agreement, and accompanied by a copy of the Servicer's Certificate specified for
the related Collection Period, a copy of each of which will be provided to the
Cash Collateral Depositor. If, in any enforcement suit or legal proceeding, it
shall be held that the Servicer may not enforce a Receivable on the ground that
it shall not be a real party in interest or a holder entitled to enforce the
Receivable, the Trustee shall, at the Servicer's expense, take such steps as the
Trustee or the Servicer deems necessary to enforce the Receivable, including
bringing suit in the Trustee's name or the names of the Trust or the
Certificateholders.
SECTION 11.3. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.1:
(i) The Trustee may request, and may rely and shall be
protected in acting or refraining from acting upon any resolution,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond, or
other paper or document (including the annual auditor's report and the
letter of independent certified public accountants described in Section
4.11, the Servicer's Certificate described in Section 4.9, and the annual
compliance statement described
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in Section 4.10) believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(ii) The Trustee may consult with counsel and any
written advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it under this Agreement in good faith and in accordance with
such written advice or Opinion of Counsel. A copy of such written advice
or Opinion of Counsel shall be provided to the Seller, the Servicer, the
Rating Agencies and the Cash Collateral Depositor.
(iii) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or in
relation to this Agreement, at the request, order or direction of any of
the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses, and
liabilities that may be incurred therein or thereby; provided, however,
that the Trustee shall have the right to decline to follow any such
request, order or direction if the Trustee, in accordance with an Opinion
of Counsel, determines that the action or proceeding may not lawfully be
taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability or be
unjustly prejudicial to the non-assenting Certificateholders; provided,
further, that nothing contained in this Agreement shall relieve the
Trustee of the obligations, upon the occurrence of an Event of Default
(that shall not have been cured), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree of care
and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(iv) The Trustee 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 by this Agreement.
(v) The Trustee may execute any of the trusts or powers
hereunder or perform any duties under this Agreement either directly or by
or through agents or attorneys or a custodian, which agents or attorneys
shall have any or all of the rights, powers, duties and obligations of the
Trustee conferred on them by such appointment.
SECTION 11.4. Trustee Not Liable for Certificates or Receivables.
The recitals contained in this Agreement, the Cash
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Collateral Trust Agreement and the Loan Agreement and in the Certificates shall
be taken as the statements of the Seller or the Servicer, as the case may be,
and the Trustee assumes no responsibility for the correctness thereof. The
Trustee shall make no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than execution by the Trustee on behalf
of the Trust of, or the authentication on, the Certificates), or of any
Receivable or related document. The Trustee shall have no obligation to perform
any of the duties of the Seller or Servicer unless explicitly set forth in this
Agreement. The Trustee shall at no time have any responsibility or liability for
or with respect to the legality, validity, and enforceability of any security
interest in any Financed Vehicle or any Receivable, or the perfection and
priority of such a security interest or the maintenance of any such perfection
and priority; the filing of any financing or continuation statement in any
public office; the preparation or filing of any report or statement with The
Securities and Exchange Commission; the efficacy of the Trust or its ability to
generate the payments to be distributed to Certificateholders under this
Agreement; the existence, condition, location, and ownership of any Financed
Vehicle; the existence and enforceability of any theft and physical damage
insurance or credit life or credit disability insurance; the existence and
contents of any Receivable or any computer or other record thereof; the validity
of the assignment of any Receivable to the Trust or of any intervening
assignment; the completeness of any Receivable; any claim or default asserted
against a Receivable; the performance or enforcement of any Receivable; the
compliance by the Seller with any warranty or representation made under this
Agreement or in any related document and the accuracy of any such warranty or
representation (except after the Trustee's receipt of notice or other discovery
of any noncompliance therewith or any breach thereof or as otherwise provided
herein); the satisfaction of any conditions relating to the Receivables; any
investment of monies by the Servicer or any loss resulting therefrom (it being
understood that the Trustee shall remain responsible for any Trust property that
it may hold); the acts or omissions of the Seller, the Servicer (including in
its capacity as custodian hereunder), or any Obligor; an action of the Servicer
taken in the name of the Trustee; or any action by the Trustee taken at the
instruction of the Servicer; provided, however, that the foregoing shall not
relieve the Trustee of its obligation to perform its duties under this
Agreement. Except with respect to a claim based on the failure of the Trustee to
perform its duties under this Agreement or based on the Trustee's wilful
misconduct, negligence, or bad faith, or based on the Trustee's breach of a
representation and warranty specified in Section 11.13, no recourse shall be had
for any claim or defense based on any provision of this Agreement, the
Certificates, or any Receivable or assignment thereof against the Trustee in its
individual capacity. The Trustee shall not have any personal obligation,
liability, or duty whatsoever to any Certificateholder or any other Person with
respect to any such claim or defense, and any such claim or defense shall be
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asserted solely against the Trust or any indemnitor who shall furnish indemnity
as provided in this Agreement. The Trustee shall not be accountable for the use
or application by the Seller of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Servicer in respect of the Receivables.
SECTION 11.5. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
and may deal with the Seller and the Servicer in banking transactions with the
same rights as it would have if it were not Trustee.
SECTION 11.6. Trustee's Fees and Expenses. The Servicer shall
covenant and agree to pay to the Trustee, and the Trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts created by this Agreement and in
the exercise and performance of any of the powers and duties under this
Agreement of the Trustee, and the Servicer shall pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements, and advances
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) incurred or made by the
Trustee under this Agreement (including expenses, disbursements, and advances
incurred in defense of any action brought against it in connection with this
Agreement) except any such expense, disbursement, or advance as may arise from
its negligence, wilful misfeasance, or bad faith or that is the responsibility
of Certificateholders under this Agreement. The Servicer's obligation to pay
such compensation and expenses shall survive the termination of such Servicer to
the extent that such obligation is a result of services rendered prior to such
Servicer's termination. Additionally, the Servicer, pursuant to Section 11.7,
shall indemnify the Trustee with respect to certain matters, and
Certificateholders, pursuant to Section 13.3, shall upon the circumstances
therein set forth, indemnify the Trustee under certain circumstances. The
provisions of this Section 11.6 shall survive the termination of this Agreement
and the resignation or removal of the Trustee.
SECTION 11.7. Indemnity of Trustee. The Trustee and it agents and
employees shall be indemnified by the Servicer and held harmless against any
loss, liability, or expense (including reasonable attorneys' fees and expenses
and expenses of litigation) arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained in this Agreement
to the extent that (i) such loss, liability, or expense shall not have been
incurred by reason of the Trustee's wilful misfeasance, bad faith, or
negligence, and (ii) such loss, liability, or expense shall not have been
incurred by reason of the Trustee's breach of its representations and warranties
pursuant to Section 11.13; provided, however, that the
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obligations of the Servicer in this Section 11.7 shall survive such Servicer's
termination with respect to the performance of such Servicer prior to such
Servicer's termination; provided, further, that if the Servicer fails to
indemnify the Trustee and its agents and employees pursuant to this Section
11.7, then such indemnity shall be provided by the Trust, but any amounts so
payable to the Trustee by the Trust pursuant to this Section 11.7 shall be
payable on a Distribution Date only after all payments required to be made on
such date to the Certificateholders and any amounts required to be deposited
into the Cash Collateral Account pursuant to Section 5.5(d)(i) to maintain the
amount on deposit therein (exclusive of investment income and earnings on
amounts on deposit therein) at the Required Cash Collateral Amount on such date
shall have been made and, with respect to a successor Servicer, if any, the
Servicing Fee shall have been paid. The provisions of this Section 11.7 shall
survive the termination of this Agreement and the resignation or removal of the
Trustee.
SECTION 11.8. Eligibility Requirements for Trustee. The Trustee
under this Agreement shall at all times be a state banking corporation or
national banking association organized and doing business under the laws of such
state or the United States of America; authorized under such laws to exercise
corporate trust powers; and having a combined capital and surplus of at least
$100,000,000 as of the last day of the most recent fiscal quarter for such
institution and subject to supervision or examination by federal or state
authorities. If such corporation or national banking association shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section 11.8, 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. The long-term unsecured debt of the Trustee
shall at all times be rated not lower than BBB- by Standard & Poor's and Baa3 by
Moody's or such other ratings as are acceptable to the Rating Agencies and the
Cash Collateral Depositor. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.8, the Trustee
shall resign immediately in the manner and with the effect specified in Section
11.9.
SECTION 11.9. Resignation or Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall with the consent of the Cash Collateral
Depositor, which consent shall not be unreasonably withheld, promptly appoint a
successor Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the
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resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee. The Servicer shall provide notice to the
Rating Agencies of any resignation of the Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.8 and shall fail to resign after written
request therefor by the Servicer, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation, or liquidation, then the Servicer may
remove the Trustee. If it shall remove the Trustee under the authority of the
immediately preceding sentence, the Servicer shall promptly appoint a successor
Trustee, which Trustee shall be reasonably acceptable to the Cash Collateral
Depositor, by written instrument, in duplicate, one copy of which instrument
shall be delivered to the Trustee so removed and one copy to the successor
Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 11.9 shall
not become effective until acceptance of appointment by the successor Trustee
pursuant to Section 11.10.
SECTION 11.10. Successor Trustee. Any successor Trustee appointed
pursuant to Section 11.9 shall execute, acknowledge, and deliver to the Servicer
and to its predecessor Trustee an instrument accepting such appointment under
this Agreement, and thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties, and obligations of its predecessor under this Agreement, the Loan
Agreement and the Cash Collateral Trust Agreement, with like effect as if
originally named as Trustee. The predecessor Trustee shall deliver to the
successor Trustee all documents and statements held by it under this Agreement,
the Loan Agreement and the Cash Collateral Trust Agreement, and the Servicer and
the predecessor Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties, and
obligations.
No successor Trustee shall accept appointment as provided in this
Section 11.10 unless at the time of such acceptance such successor Trustee shall
be eligible pursuant to Section 11.8.
Upon acceptance of appointment by a successor Trustee pursuant to
this Section 11.10, the Servicer shall mail notice of the successor of such
Trustee under this Agreement to all
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Certificateholders at their respective addresses of record, to the Rating
Agencies and to the Cash Collateral Depositor. If the Servicer shall fail to
mail such notice within 10 days after acceptance of appointment by successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of the Servicer.
SECTION 11.11. Merger or Consolidation of Trustee. Any corporation
or other entity (i) into which the Trustee may be merged or consolidated, (ii)
which may result from any merger, conversion, or consolidation to which the
Trustee shall be a party, or (iii) which may succeed to all or substantially all
of the corporate trust business of the Trustee, which corporation or other
entity executes an agreement of assumption to perform every obligation of the
Trustee under this Agreement, shall be the successor of the Trustee hereunder,
provided such corporation or other entity shall be eligible pursuant to Section
11.8, without the execution or filing of any instrument or any further act on
the part of any of the parties hereto. The Trustee shall provide prompt written
notice of any merger or consolidation to the Seller, the Servicer, the Rating
Agencies, the Cash Collateral Depositor and the Cash Collateral Trustee.
SECTION 11.12. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 11.12,
such powers, duties, obligations, rights, and trusts as the Servicer and the
Trustee may consider necessary or desirable. The Servicer will pay all
reasonable fees and expenses of any co-trustee or separate trustee or separate
trustees. The appointment of any separate trustee or co-trustee shall not
absolve the Trustee of its obligations under this Agreement. If the Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in the case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee or separate trustees under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 11.8, and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee or separate trustees shall be
required pursuant to Section 11.10.
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Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations
conferred or imposed upon the Trustee shall be conferred upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee joining
in such act), except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as
Trustee under this Agreement or as successor to the Servicer under this
Agreement), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of the
Trustee.
(ii) No trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement.
(iii) The Servicer and the Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee, except that, following the occurrence of an Event of Default
which has not been cured, the Trustee acting alone may accept the
resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or properties specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Each
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
Any separate trustee or co-trustee may at any time appoint the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall
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vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor Trustee.
Section 11.13. Representations and Warranties of Trustee. The
Trustee makes the following representations and warranties on which the Seller,
the Servicer, the Cash Collateral Depositor and the Certificateholders may rely:
(i) Organization and Good Standing. The Trustee is a
banking association duly organized, validly existing, and in good standing
under the laws of the United States of America.
(ii) Power and Authority. The Trustee has full power,
authority and legal right to execute, deliver, and perform this Agreement,
and has taken all necessary action to authorize the execution, delivery,
and performance by it of this Agreement.
(iii) No Violation. The execution, delivery and
performance by the Trustee of this Agreement (a) does not violate any
provision of any law governing the trust powers of the Trustee or, to the
best of the Trustee's knowledge, any order, writ, judgment, or decree of
any court, arbitrator, or governmental authority applicable to the Trustee
or any of its assets, (b) does not violate any provision of the articles
of association or bylaws of the Trustee and (c) does not conflict with,
result in any breach of any of the terms or provisions of, or constitute
(with or without notice or lapse of time) a default under, any indenture,
agreement or other instrument to which the Trustee is a party or by which
it is bound to the extent such conflict, breach or default would impair
the Trustee's obligation or ability to perform under this Agreement.
(iv) No Governmental Authorization Required. The
execution, delivery and performance by the Trustee of this Agreement does
not require the authorization, consent, or approval of, the giving of
notice to, the filing or registration with, or the taking of any other
action in respect of, any governmental authority or agency regulating the
corporate trust activities of the Trustee.
(v) Due Authorization, Execution and Delivery. This
Agreement has been duly authorized, executed and delivered by the Trustee
and shall constitute the legal, valid, and binding agreement of the
Trustee, enforceable in accordance with its terms.
SECTION 11.14. Tax Returns. The Servicer shall pre- pare or shall
cause to be prepared any tax returns required to be filed by the Trust and
furnish to Certificateholders any information required by the Code or the
regulations thereunder and shall remit such returns to the Trustee for signature
at
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least five days before such returns are due to be filed. The Trustee, upon
request, will furnish the Servicer with all such information known to the
Trustee as may be reasonably required in connection with the preparation of all
tax returns of the Trust, and shall, upon request, execute such returns.
SECTION 11.15. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
SECTION 11.16. Suits for Enforcement. In case an Event of Default or
other default by the Servicer or the Seller hereunder shall occur and be
continuing, the Trustee, in its discretion, may proceed to protect and enforce
its rights and the rights of the Certificateholders under this Agreement by a
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 the
enforcement of any other legal, equitable or other remedy, as the Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of the
rights of the Trustee or the Certificateholders.
SECTION 11.17. Maintenance of Office or Agency. The Trustee shall
maintain at its expense in The City of New York an office or offices or agency
or agencies where notices and demands to or upon the Trustee in respect of the
Certificates and this Agreement may be served. The Trustee initially designates
______________________________ as its office for such purposes. The Trustee will
give prompt written notice to the Servicer, the Paying Agent, the Transfer Agent
and Certificate Registrar, the Cash Collateral Depositor and to
Certificateholders of any change in the location of such office or agency.
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ARTICLE XII
TERMINATION
SECTION 12.1. Termination of the Trust. The Trust, and the
respective obligations and responsibilities of the Seller, the Servicer and the
Trustee shall terminate with respect to the Certificateholders upon the first to
occur of (i) the Distribution Date next succeeding the Collection Period which
is six months after the maturity or other liquidation of the last Receivable and
the disposition of any amounts received upon liquidation of any property
remaining in the Trust and (ii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement; provided, however, that
in no event shall the Trust created by this Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late ambassador to the Court of St. James's, living on
the date of this Agreement. The Servicer shall promptly (but in any event not
later than the first day of the month of the specified Distribution Date) notify
the Trustee, the Paying Agent, the Transfer Agent and Certificate Registrar, the
Cash Collateral Depositor, the Cash Collateral Trustee and the Rating Agencies
in writing of any prospective termination pursuant to this Section 12.1.
Notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender their Certificates to the Transfer
Agent and Certificate Registrar for payment of the final distribution and
cancellation, shall be given promptly by the Trustee by letter to
Certificateholders mailed not earlier than the 15th day and not later than the
25th day of the Collection Period related to the specified Distribution Date
stating the amount of any such final payment, and that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the
Transfer Agent and Certificate Registrar therein specified. The Trustee shall
give such notice to the Transfer Agent and Certificate Registrar, the Paying
Agent, the Cash Collateral Depositor and the Rating Agencies at the time such
notice is given to Certificateholders. Upon presentation and surrender of the
Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.5. Upon notification by the Cash Collateral Depositor and the Seller,
any funds in the Collection Account after the payment of all amounts owing to
the Certificateholders shall be paid first to the Cash Collateral Depositor to
the extent that any amounts are owing to the Cash Collateral Depositor by the
Seller or the Servicer pursuant to the Loan Agreement and then, to the extent of
funds remaining after application thereto, such amounts shall be paid to the
Seller.
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In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders upon receipt of the appropriate
records from the Transfer Agent and Certificate Registrar to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement. Any funds remaining in the Trust after exhaustion of
such remedies and after the payment of all amounts owing to the Cash Collateral
Depositor by the Seller, the Servicer or the Cash Collateral Trust 199_-_
pursuant to the Loan Agreement shall be distributed by the Trustee or the
Trustee shall cause to be distributed to the United Way or a similar charitable
organization located or operating in the New York metropolitan area, as
specified by the Servicer; provided, however, that such funds shall be
distributed by the Trustee or the Trustee shall cause to be distributed no later
than three years after the final Distribution Date specified in the notice
referred to in the preceding paragraph.
All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be cancelled by the
Transfer Agent and Certificate Registrar and shall be disposed of in a manner
satisfactory to the Trustee and the Seller.
SECTION 12.2. Optional Purchase of All Receivables. As of the last
day of any Collection Period on which the Pool Factor (expressed as a
percentage) shall be equal to or less than the Optional Purchase Percentage, the
Servicer shall have the option to purchase the corpus of the Trust. To exercise
such option, the Servicer shall notify the Trustee, the Paying Agent, the
Transfer Agent and Certificate Registrar and the Cash Collateral Depositor in
writing, no later than the 20th day of such Collection Period, shall pay the
aggregate Repurchase Amount for the Receivables (including Defaulted
Receivables) as of such last day and shall succeed to all interests in, to and
under the Trust property. The payment shall be made in the manner specified in
Section 5.4, and shall be distributed pursuant to Section 5.5. The Trustee shall
not permit the purchase of the corpus of the Trust pursuant to this Section
unless either (i) the Servicer's long-term unsecured debt is rated at the time
of such purchase at least BBB- by Standard & Poor's and Baa3 by Moody's by the
Rating Agencies or (ii) the Servicer provides to the Trustee an Opinion of
Counsel in form reasonably satisfactory to the Trustee and in form and substance
satisfactory to the Rating Agencies to the effect that such purchase will not
constitute a
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fraudulent transfer under applicable state and federal law; provided, further
that no such optional purchase shall be effective without the prior written
consent of the Cash Collateral Depositor unless the Cash Collateral Depositor
shall, as of such date of purchase, have been paid in full or will be paid in
full all amounts due and owing to it under the Loan Agreement after giving
effect to such purchase and all required distributions to Certificateholders and
the Cash Collateral Depositor.
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1. Amendment. This Agreement may be amended by the
Seller, the Servicer and the Trustee, with prior notice to the Rating Agencies
but without prior notice to or the consent of any of the Certificateholders, (i)
to cure any ambiguity, to correct or supplement any provisions in this Agreement
or the Certificates which may be inconsistent with any other provisions herein
or therein, to evidence a succession to the Servicer or the Seller pursuant to
this Agreement or to add any other provisions with respect to matters or
questions arising under this Agreement that shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not, as
evidenced by an Officer's Certificate and/or an Opinion of Counsel delivered to
the Trustee, adversely and materially affect the interests of the Trust or any
of the Certificateholders and provided, further, that the Servicer shall deliver
written notice of such changes to each Rating Agency prior to the execution of
any such amendment, or (ii) to effect a transfer or assignment in compliance
with Section 13.7(a)(i). Notwithstanding the foregoing, no amendment modifying
the provisions of Section 5.5 or Article VI shall become effective without the
Cash Collateral Depositor's consent and without the prior written confirmation
of each of the Rating Agencies that such amendment will not result in a
downgrade or withdrawal of the then current ratings assigned by each of them to
the Certificates.
This Agreement may also be amended from time to time by the Seller,
the Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing not less than 51% of the Pool Balance, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the
Certificateholders (including effecting a transfer or assignment in compliance
with Section 13.7(a)(ii) of this Agreement); provided, however, that no such
amendment, except with the consent of the Holders of all Certificates then
outstanding, shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments of Receivables, or
distributions that shall be required to be made on any Certificate, (b) reduce
the aforesaid percentage of the Pool Balance required to consent to any such
amendment or (c) reduce in any way the shortfalls for which the Trustee may draw
under the Cash Collateral Guaranty pursuant to Section 6.1 or change the formula
for determining the Required Cash Collateral Amount; provided, further, that no
such amendment shall, as evidenced by an Opinion of Counsel, adversely affect
the Trust's status as a grantor trust for federal income tax purposes; provided,
further, that no such amendment shall materially and adversely affect the
interests of the Cash Collateral Depositor without the consent of the Cash
Collateral Depositor. Notwithstanding the foregoing, no amendment modifying the
definition of
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"Servicing Fee Rate" or the provisions of Section 5.5 or Article VI shall be
entered into without the Cash Collateral Depositor's consent.
The Trustee shall not agree to any amendment of this Agreement that
would adversely affect the interests of the Cash Collateral Trust 199_-_ without
the consent of the Cash Collateral Trustee and the Cash Collateral Depositor.
Promptly after the execution of any amendment or consent referred to
in this Section 13.1, the Trustee shall furnish a copy of such amendment or
consent to each Certificateholder, to the Cash Collateral Depositor and to the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders
pursuant to this Section 13.1 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee shall not be obligated to enter into any such amendment
which affects the Trustee's own rights, duties or immunities under this
Agreement.
Prior to the execution of any amendment to this Agreement, other
than an amendment permitted pursuant to clause (i) of the first paragraph of
this Section 13.1, the Servicer shall have received written notice from each of
the Rating Agencies that the rating of the Certificates will not be reduced or
withdrawn as a result of such amendment.
SECTION 13.2. Protection of Title to Trust.
(a) The Seller shall execute and file such financing
statements and cause to be executed and filed such continuation statements, all
in such manner and in such places as may be required by law fully to preserve,
maintain, and protect the interests of the Trustee under this Agreement in the
Receivables and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Trustee file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might make
any financing statement or
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continuation statement filed by the Servicer in accordance with paragraph (a)
above seriously misleading within the meaning of ss. 9-402(7) (or any comparable
section) of the Relevant UCC, unless it shall have given the Trustee at least 30
days prior written notice thereof.
(c) The Seller and the Servicer shall give the Trustee and the
Cash Collateral Depositor at least 60 days prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the Relevant UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement. The Servicer shall at all times maintain each office
from which it shall service Receivables, and its principal executive office,
within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables to the
Trustee, the Servicer's master computer records (including archives) that shall
refer to a Receivable indicate clearly, by numerical code or otherwise, that
such Receivable is owned by the Trust. Indication of the Trust's ownership of a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Receivable shall have been paid in full, repurchased or
assigned pursuant hereto.
(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in a new
or used automobile to any prospective purchaser, creditor, or other transferee,
the Seller or the Servicer, as the case may be, shall give to such prospective
purchaser, creditor, or other transferee computer tapes, records, or print-outs
(including any restored from archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly that such Receivable has
been sold and is owned by the Trust.
(g) The Servicer shall permit the Trustee and the Cash
Collateral Depositor and its agents upon reasonable notice at any time during
normal business hours which does not unreasonably interfere with the Servicer's
normal operations or customer or employee relations to inspect, audit, and make
copies
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of and abstracts from the Servicer's records regarding the Receivables.
(h) Upon request, the Servicer shall furnish to the Trustee,
within five Business Days, a list of all Receivables by contract number and name
of Obligor then held as part of the Trust, together with a reconciliation of
such list to the Schedule of Receivables attached as Schedule A to this
Agreement and to each of the Servicer Certificates indicating removal of
Receivables from the Trust.
(i) The Servicer shall deliver to the Trustee and the Cash
Collateral Depositor:
(1) upon the execution and delivery of this Agreement, an Opinion of
Counsel either (a) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Trust in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest; and
(2) on or before March 31 of each year, commencing with March 31,
199_, an Opinion of Counsel, dated as of such date, either (a) stating that, in
the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to preserve and
protect the interest of the Trustee in the Receivables, and reciting the details
of such filings or referring to prior opinions of Counsel in which such details
are given, or (b) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest. Notwithstanding the
provisions of Section 13.5, such Opinion of Counsel may be sent by regular
non-certified mail, and such mailed opinion shall be deemed delivered when so
mailed.
(j) The Servicer shall, to the extent required by applicable
law, cause the Certificates to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities Exchange
Act of 1934 within the time periods specified in such sections.
(k) For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 13.3. Limitation on Rights of Certificate- holders. The
death or incapacity of any Certificateholder shall
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not operate to terminate this Agreement or the Trust, nor entitle the
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations, and
liabilities of the parties to this Agreement or any of them.
No Certificateholder shall have any right to vote (except as
provided in Section 10.1, Section 10.4, Section 13.1 and this Section 13.3) or
in any manner otherwise control the operation and management of the Trust, or
the obligations of the parties to this Agreement, nor shall anything set forth
in this Agreement or contained in the terms of the Certificates, be construed so
as to constitute the Holders as partners or members of an association; nor shall
any Certificateholder be under any liability to any third person by reason of
any action taken pursuant to any provision of this Agreement.
No Certificateholder shall have any right by virtue or by availing
itself 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,
unless such Holder previously shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less than 25% of the Pool
Balance shall have made written request upon the Trustee to institute such
action, suit, or proceeding in its own name as Trustee under this Agreement and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses, and liabilities to be incurred therein or thereby,
and the Trustee, for 30 days after its receipt of such notice, request, and
offer of indemnity, shall have either neglected or refused to institute any such
action, suit or proceeding; no one or more Holders of Certificates 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 Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right,
under this Agreement, except in the manner provided in this Agreement and for
the equal, ratable, and common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 13.3, each
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 13.4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS, REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.5. Notices. All demands, notices, and communications
under this Agreement shall be in writing,
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personally delivered or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Seller, c/o Chase Automotive Finance Corporation, 900 Stewart Avenue, Garden
City, New York 11530 Attention: Financial Controller, or at such other address
as shall be designated by the Seller in a written notice to the Trustee, (b) in
the case of the Servicer, c/o Chase Automotive Finance Corporation, 900 Stewart
Avenue, Garden City, New York 11530, Attention: Financial Controller, or at such
other address as shall be designated by the Servicer in a written notice to the
Trustee, (c) in the case of the Trustee, at _____________________________
Attention: _____________ (d) in the case of the Cash Collateral Depositor, at
the address set forth in the Loan Agreement, and (e) in the case of the Cash
Collateral Trustee, at ___________ ____________________ Attention: _____________
or at such other address as shall be designated by the Cash Collateral Trustee
in a written notice to the Trustee. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of record of such Holder. Any notice to a
Certificateholder so mailed within the time prescribed in this Agreement shall
be conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice. Notices to Obligors pursuant to
Section 4.4 herein may be given by first class mail or by third-class mail,
postage prepaid, at the address of record of such Obligor and shall be deemed
received when mailed by the Servicer.
SECTION 13.6. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
SECTION 13.7. Assignment[; References to Chase USA]. (a)
Notwithstanding anything to the contrary contained herein, except as provided in
Sections 7.2, 7.12, 8.3, and 9.3, neither the Seller nor the Servicer may assign
all, or a portion of, its rights, obligations and duties under this Agreement
[(except as contemplated in connection with the Proposed Merger)] unless (i) (A)
such transfer or assignment will not result in a reduction or withdrawal by
Standard & Poor's and Moody's of the rating then assigned to the Certificates
and (B) the Cash Collateral Depositor and the Trustee have consented to such
transfer or assignment, which consents shall not be unreasonably withheld or
(ii) the Cash Collateral Depositor, the Trustee and Holders of Certificates
evidencing not less than 51% of the Pool Balance consent thereto. Any transfer
or assignment with respect to the Servicer of all of its rights, obligations and
duties will not become effective until a successor Servicer has assumed the
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Servicer's rights, duties and obligations under this Agreement. In the event of
a transfer or assignment pursuant to clause (ii) above, the Rating Agencies
shall be provided with notice of such transfer or assignment.
[(b) References in this Agreement to Chase USA as Seller and/or
Servicer hereunder shall refer to a national banking association having its
principal executive offices located at 200 Jericho Quadrangle, Jericho, New York
11759 and shall be deemed to include any successor or assign of Chase USA in
connection with the Proposed Merger.]
SECTION 13.8. Certificates Nonassessable and Fully Paid. The
interests represented by the Certificates shall be nonassessable for any losses
or expenses of the Trust or for any reason whatsoever, and, upon authentication
thereof by the Trustee pursuant to Section 7.2, each Certificate shall be deemed
fully paid.
SECTION 13.9. Third-Party Beneficiaries. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the Certificateholders
and the Certificate Owners and their respective successors and permitted
assigns. This Agreement will also inure to the benefit of the Cash Collateral
Depositor and the Cash Collateral Trustee. Without limiting the generality of
the foregoing, all covenants and agreements in this Agreement which expressly
confer rights upon the Cash Collateral Depositor shall be for the benefit of and
run directly to the Cash Collateral Depositor, and the Cash Collateral Depositor
shall be entitled to rely on and enforce such covenants to the same extent as if
it were a party to this Agreement. Except as otherwise provided in this
Agreement, no other person will have any right or obligation hereunder.
SECTION 13.10. Counterparts. This Agreement may be executed in one
or more counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed to be an
original; such counterparts, together, shall constitute one and the same
agreement.
SECTION 13.11. Tax Matters. It is intended that the Trust shall be a
grantor trust for federal income tax purposes. All provisions hereof shall be
construed so as to effectuate such intent.
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IN WITNESS WHEREOF, the parties have caused this Pooling and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
CHASE MANHATTAN BANK USA, N.A,
as Seller and Servicer
By__________________________________
Name:
Title:
[___________________________________]
as Trustee
By__________________________________
Name:
Title:
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SCHEDULE A
[LIST OF RECEIVABLES]
Delivered to the Trustee on
the Closing Date.
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SCHEDULE B
Location of Receivable Files
[The Chase Manhattan Bank]
20 Clinton Avenue South
5th Floor
SENECA Building
Rochester, New York 14604
Iron Mountain
Route 9-W South
P.O. Box 477
Pt. Ewen, NY 12466
[The Chase Manhattan Bank]
900 Stewart Avenue
Garden City, NY 11530
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EXHIBIT A-1
[FORM OF CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CHASE MANHATTAN AUTO GRANTOR TRUST 199_-_
____% ASSET BACKED CERTIFICATE, CLASS A
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of [simple interest] retail
installment sales contracts and purchase money loans, secured by new and
used automobiles financed thereby and sold to the Trustee, as defined
below, on behalf of the Trust by Chase Manhattan Bank USA, N.A.
(This Certificate does not represent an interest in or obligation of Chase
Manhattan Bank USA, N.A. or any affiliate thereof.)
NUMBER CUSIP
A-1
$_________
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
nonassessable, fully paid, fractional undivided interest, in the amount set
forth above, in the Chase Manhattan Auto Grantor Trust 199_-_ (the "Trust")
formed by Chase Manhattan Bank USA, N.A. (the "Seller"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of ________, 199_ (as
amended, supplemented or otherwise modified and in effect from time to time, the
"Agreement") between the Seller, acting as Seller and Servicer, and
___________________________, as trustee (the trustee and any successor in
interest under the Agreement, the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. This Certificate is one of the
duly authorized Certificates designated as "____% Asset Backed Certificates,
Class A" (herein called, together with the Class B
A-1-1
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Certificates issued concurrently herewith, the "Certificates"). This Certificate
is issued under and is subject to the terms, provisions, and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound. The property of the
Trust includes a pool of [simple interest] retail installment sales contracts
and purchase money loans (the "Receivables") for the purchase of new and used
automobiles financed thereby, all monies due thereunder on or after the Cutoff
Date, security interests in the vehicles securing the Receivables (the "Financed
Vehicles"), such amounts as from time to time may be held in the Collection
Account established and maintained by the Servicer in the name of the Trustee,
benefits under the Cash Collateral Guaranty and the Cash Collateral Account
(described below), the rights to proceeds as a result of the Seller's exercise
of its recourse rights against Dealers with respect to the Receivables, and
assignment of the rights of the Seller to receive proceeds from any Liquidation
Proceeds and from any extended warranties, theft and physical damage, credit
life and credit disability insurance policies relating to the Financed Vehicles
or the Obligors, as the case may be, and the rights with respect to any Financed
Vehicle that has been repossessed by the Servicer, on behalf of the Trustee.
Under the Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (the "Distribution Date"), commencing on ___________, 199_, to the
Person in whose name this Certificate is registered at the close of business on
the related Record Date, such Certificateholder's fractional undivided interest
in all amounts allocable to interest from any source with respect to each
Receivable in an amount equal to the Pass-Through Rate of ____% per annum on or
with respect to the outstanding Pool Balance as of the related Settlement Date,
and the aggregate amount allocable to principal from any source, all as more
fully described in the Agreement.
Distributions on this Certificate will be made by the Paying Agent
by check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that if directed by the Seller in the case of
Certificates registered in the name of a Clearing Agency or Foreign Clearing
Agency, as applicable, distributions will be made in the form of immediately
available funds. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained for that purpose by the Transfer Agent and Certificate Registrar in
The City of New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further
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provisions shall for all purposes have the same effect as if set forth at this
place.
All capitalized terms used herein not otherwise defined shall have
the meaning assigned thereto in the Agreement.
Unless the authentication hereon shall have been executed by an
authorized officer of the Trustee or an authenticating agent acting on behalf of
the Trustee, by manual signature, this Certificate shall not entitle the holder
hereof to any benefit under the Agreement or be valid for any purpose.
A-1-3
<PAGE>
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in
its individual capacity, has caused this Certificate to be duly executed.
CHASE MANHATTAN AUTO
GRANTOR TRUST 199_-_
By:___________________________________
__________________________________
as Trustee
By:___________________________________
Authorized Officer
This is one of the Certificates referred to in the
within-mentioned Agreement.
______________________________________
__________________________________
as Trustee
By:___________________________________
Authorized Officer
[or
______________________________________
as Authenticating Agent
for the Trustee
By:___________________________________
Authorized Officer]
A-1-4
<PAGE>
CHASE MANHATTAN AUTO GRANTOR TRUST 199_-_
____% AUTOMOBILE ASSET BACKED CERTIFICATES, CLASS A
The Certificates do not represent an obligation of, or an interest
in, the Seller, the Servicer, the Trustee or any affiliate of any of them. The
Certificates are limited in right of payment to certain collections and
recoveries in respect of the Receivables, all as more specifically set forth in
the Agreement. The Trust will have the benefit of a Cash Collateral Guaranty
that is secured by a Cash Collateral Account (exclusive of investment earnings
on amounts therein), which guaranty is limited in amount. On the Business Day
preceding each Distribution Date (the "Deposit Date"), the Trustee, or the
Servicer on behalf of the Trustee, shall make a demand under the Cash Collateral
Guaranty to the extent of the excess, if any, of (1) the sum of (a) the
aggregate principal balance of, and accrued and unpaid interest on (such accrued
interest for the Collection Period in which such Receivable became a Defaulted
Receivable to be calculated at a rate equal to one-twelfth of the sum of the
Pass-Through Rate and the Servicing Rate to the extent not otherwise collected),
Receivables that the Servicer has determined to be Defaulted Receivables during
the preceding Collection Period to the extent not covered by certain amounts
described in the Agreement and (b) any additional amount necessary to make
distributions to Certificateholders and pay the Servicing Fee to the Servicer on
such Distribution Date over (2) the amount on deposit in the Collection Account
with respect to the preceding Collection Period (net of investment income and
Excess Collections), but in no event in an amount greater than the Available
Cash Collateral Amount with respect to such Distribution Date. A copy of the
Agreement may be examined during normal business hours at the Corporate Trust
Office of the Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Seller, the Servicer and the Trustee with
the consent of the Holders
A-1-5
<PAGE>
of Certificates evidencing not less than 51% of the Pool Balance and in certain
circumstances with the consent of the Cash Collateral Depositor. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and on all future Holders of this Certificate and of any Certificate
issued upon registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances and with certain exceptions provided therein, without prior notice
to or the consent of the Holders of any of the Certificates or the Cash
Collateral Depositor.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Transfer Agent and
Certificate Registrar, in The City of New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Transfer
Agent and Certificate Registrar duly executed by the Holder hereof, which
signature to such assignment has been guaranteed by a member of the New York
Stock Exchange or a commercial bank or trust company, and thereupon one or more
new Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof
(except for a single Certificate in a smaller minimum denomination representing
any residual portion of the Pool Balance on the Cutoff Date). As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of authorized denominations evidencing the
same aggregate denomination, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Transfer Agent and Certificate Agent may require payment of a
sum sufficient to cover any tax or governmental charges payable in connection
therewith.
A-1-6
<PAGE>
In the event that the Holder of this Certificate does not surrender
this Certificate for cancellation within six months after the date specified in
the notice regarding the pendency of the final distribution described on the
face hereof, the Trustee shall give a second notice with respect thereto. If
within one year after such second notice this Certificate shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the Holder hereof. As provided in the Agreement, any funds remaining in the
Trust after exhaustion of such steps shall be distributed to a charitable
organization, such distribution to occur not later than three years from the
date of the final Distribution Date.
The Trustee, the Paying Agent and the Transfer Agent and Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Trustee, the Paying Agent or
the Transfer Agent and Certificate Registrar shall be affected by any notice to
the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby with respect to the Certificateholders shall terminate
upon the payment to Certificateholders of all amounts required to be paid to
them pursuant to the Agreement on the Distribution Date next succeeding the
month which is six months after the maturity or liquidation of the last
Receivable and the disposition of all property held as part of the Trust. The
Servicer may, at its option, purchase the corpus of the Trust at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Certificates; however,
such right of purchase is exercisable only as of the last day of a Settlement
Period immediately preceding any Distribution Date as of which the Pool Balance
is equal to or less than 5% of the Original Pool Balance.
A-1-7
<PAGE>
EXHIBIT A-2
[FORM OF CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CHASE MANHATTAN AUTO GRANTOR TRUST 199_-_
____% ASSET BACKED CERTIFICATE, CLASS B
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of [simple interest] retail
installment sales contracts and purchase money loans, secured by new and
used automobiles financed thereby and sold to the Trustee, as defined
below, on behalf of the Trust by Chase Manhattan Bank USA, N.A.
(This Certificate does not represent an interest in or obligation of Chase
Manhattan Bank USA, N.A. or any affiliate thereof.)
NUMBER CUSIP
B-1
$_________
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
nonassessable, fully paid, fractional
A-2-1
<PAGE>
undivided interest, in the amount set forth above, in the Chase Manhattan Auto
Grantor Trust 199_-_ (the "Trust") formed by Chase Manhattan Bank USA, N.A. (the
"Seller"). The Trust was created pursuant to a Pooling and Servicing Agreement
dated as of ________, 199_ (as amended, supplemented or otherwise modified and
in effect from time to time, the "Agreement") between the Seller, acting as
Seller and Servicer, and ___________________________, as trustee (the trustee
and any successor in interest under the Agreement, the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. This
Certificate is one of the duly authorized Certificates designated as "____%
Asset Backed Certificates, Class B" (herein called, together with the Class A
Certificates issued concurrently herewith, the "Certificates"). This Certificate
is issued under and is subject to the terms, provisions, and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound. The property of the
Trust includes a pool of [simple interest] retail installment sales contracts
and purchase money loans (the "Receivables") for the purchase of new and used
automobiles financed thereby, all monies due thereunder on or after the Cutoff
Date, security interests in the vehicles securing the Receivables (the "Financed
Vehicles"), such amounts as from time to time may be held in the Collection
Account established and maintained by the Servicer in the name of the Trustee,
benefits under the Cash Collateral Guaranty and the Cash Collateral Account
(described below), the rights to proceeds as a result of the Seller's exercise
of its recourse rights against Dealers with respect to the Receivables, and
assignment of the rights of the Seller to receive proceeds from any Liquidation
Proceeds and from any extended warranties, theft and physical damage, credit
life and credit disability insurance policies relating to the Financed Vehicles
or the Obligors, as the case may be, and the rights with respect to any Financed
Vehicle that has been repossessed by the Servicer, on behalf of the Trustee.
Under the Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (the "Distribution Date"), commencing on ___________, 199_, to the
Person in whose name this Certificate is registered
A-2-2
<PAGE>
at the close of business on the related Record Date, such Certificateholder's
fractional undivided interest in all amounts allocable to interest from any
source with respect to each Receivable in an amount equal to the Pass-Through
Rate of ____% per annum on or with respect to the outstanding Pool Balance as of
the related Settlement Date, and the aggregate amount allocable to principal
from any source, all as more fully described in the Agreement.
Distributions on this Certificate will be made by the Paying Agent
by check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that if directed by the Seller in the case of
Certificates registered in the name of a Clearing Agency or Foreign Clearing
Agency, as applicable, distributions will be made in the form of immediately
available funds. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained for that purpose by the Transfer Agent and Certificate Registrar in
The City of New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
All capitalized terms used herein not otherwise defined shall have
the meaning assigned thereto in the Agreement.
Unless the authentication hereon shall have been executed by an
authorized officer of the Trustee or an authenticating agent acting on behalf of
the Trustee, by manual signature, this Certificate shall not entitle the holder
hereof to any benefit under the Agreement or be valid for any purpose.
A-2-3
<PAGE>
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in
its individual capacity, has caused this Certificate to be duly executed.
CHASE MANHATTAN AUTO
GRANTOR TRUST 199_-_
By:___________________________________
__________________________________
as Trustee
By:___________________________________
Authorized Officer
This is one of the Certificates referred to in the
within-mentioned Agreement.
______________________________________
__________________________________
as Trustee
By:___________________________________
Authorized Officer
[or
______________________________________
as Authenticating Agent
for the Trustee
By:___________________________________
Authorized Officer]
A-2-4
<PAGE>
CHASE MANHATTAN AUTO GRANTOR TRUST 199_-_
____% AUTOMOBILE ASSET BACKED CERTIFICATES, CLASS B
The Certificates do not represent an obligation of, or an interest
in, the Seller, the Servicer, the Trustee or any affiliate of any of them. The
Certificates are limited in right of payment to certain collections and
recoveries in respect of the Receivables, all as more specifically set forth in
the Agreement. The Trust will have the benefit of a Cash Collateral Guaranty
that is secured by a Cash Collateral Account (exclusive of investment earnings
on amounts therein), which guaranty is limited in amount. On the Business Day
preceding each Distribution Date (the "Deposit Date"), the Trustee, or the
Servicer on behalf of the Trustee, shall make a demand under the Cash Collateral
Guaranty to the extent of the excess, if any, of (1) the sum of (a) the
aggregate principal balance of, and accrued and unpaid interest on (such accrued
interest for the Collection Period in which such Receivable became a Defaulted
Receivable to be calculated at a rate equal to one-twelfth of the sum of the
Pass-Through Rate and the Servicing Rate to the extent not otherwise collected),
Receivables that the Servicer has determined to be Defaulted Receivables during
the preceding Collection Period to the extent not covered by certain amounts
described in the Agreement and (b) any additional amount necessary to make
distributions to Certificateholders and pay the Servicing Fee to the Servicer on
such Distribution Date over (2) the amount on deposit in the Collection Account
with respect to the preceding Collection Period (net of investment income and
Excess Collections), but in no event in an amount greater than the Available
Cash Collateral Amount with respect to such Distribution Date. A copy of the
Agreement may be examined during normal business hours at the Corporate Trust
Office of the Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement at any time by the Seller, the Servicer and the Trustee with
the consent of the Holders of Certificates
A-2-5
<PAGE>
evidencing not less than 51% of the Pool Balance and in certain circumstances
with the consent of the Cash Collateral Depositor. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and on
all future Holders of this Certificate and of any Certificate issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon this Certificate. The Agreement
also permits the amendment thereof, in certain limited circumstances and with
certain exceptions provided therein, without prior notice to or the consent of
the Holders of any of the Certificates or the Cash Collateral Depositor.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Transfer Agent and
Certificate Registrar, in The City of New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Transfer
Agent and Certificate Registrar duly executed by the Holder hereof, which
signature to such assignment has been guaranteed by a member of the New York
Stock Exchange or a commercial bank or trust company, and thereupon one or more
new Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof
(except for a single Certificate in a smaller minimum denomination representing
any residual portion of the Pool Balance on the Cutoff Date). As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of authorized denominations evidencing the
same aggregate denomination, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Transfer Agent and Certificate Agent may require payment of a
sum sufficient to cover any tax or governmental charges payable in connection
therewith.
A-2-6
<PAGE>
In the event that the Holder of this Certificate does not surrender
this Certificate for cancellation within six months after the date specified in
the notice regarding the pendency of the final distribution described on the
face hereof, the Trustee shall give a second notice with respect thereto. If
within one year after such second notice this Certificate shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the Holder hereof. As provided in the Agreement, any funds remaining in the
Trust after exhaustion of such steps shall be distributed to a charitable
organization, such distribution to occur not later than three years from the
date of the final Distribution Date.
The Trustee, the Paying Agent and the Transfer Agent and Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Trustee, the Paying Agent or
the Transfer Agent and Certificate Registrar shall be affected by any notice to
the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby with respect to the Certificateholders shall terminate
upon the payment to Certificateholders of all amounts required to be paid to
them pursuant to the Agreement on the Distribution Date next succeeding the
month which is six months after the maturity or liquidation of the last
Receivable and the disposition of all property held as part of the Trust. The
Servicer may, at its option, purchase the corpus of the Trust at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Certificates; however,
such right of purchase is exercisable only as of the last day of a Settlement
Period immediately preceding any Distribution Date as of which the Pool Balance
is equal to or less than 5% of the Original Pool Balance.
A-2-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or typewrite name and address, including postal zip code, of
assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
________________________________________________________________________Attorney
to transfer said Certificate on the books of the Transfer Agent and Certificate
Registrar, with full power of substitution in the premises.
Dated:
____________________________________*
Signature Guaranteed:
____________________________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company.
A-2-8
<PAGE>
EXHIBIT B
{FORM OF DEPOSITORY RECEIPT AGREEMENT]
B-1
<PAGE>
EXHIBIT C-1
Trustee's Certificate
pursuant to Section 11.2
of the Pooling and Servicing
Agreement
_______________________, as trustee (the "Trustee") of the Chase
Manhattan Auto Grantor Trust 199_-_ created pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
___________, 199_, between Chase Manhattan Bank USA, N.A., as Seller (the
"Seller") and Servicer, and the Trustee, does hereby sell, transfer, assign, and
otherwise convey to the Seller, without recourse, representation, or warranty,
all of the Trustee's right, title, and interest in and to all of the Receivables
(as defined in the Pooling and Servicing Agreement) identified in the attached
Servicer's Certificate as "Repurchased Receivables," which are to be repurchased
by the Seller pursuant to Section 3.2 of the Pooling and Servicing Agreement and
all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
______, 19__.
_______________________________
Authorized Signatory
C-1
<PAGE>
EXHIBIT C-2
Trustee's Certificate
pursuant to Section 11.2
of the Pooling and Servicing
Agreement
_____________________________, as trustee (the "Trustee") of the
Chase Manhattan Auto Grantor Trust 199_-_ created pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
___________, 199_, between Chase Manhattan Bank USA, N.A., as Seller and
Servicer (the "Servicer"), and the Trustee, does hereby sell, transfer, assign,
and otherwise convey to the Servicer, without recourse, representation, or
warranty, all of the Trustee's right, title, and interest in and to all of the
Receivables (as defined in the Pooling and Servicing Agreement) identified in
the attached Servicer's Certificate as "Repurchased Receivables," which are to
be purchased by the Servicer pursuant to Section 4.7 or 12.2 of the Pooling and
Servicing Agreement, and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
______, 19__.
_______________________________
Authorized Signatory
C-2
<PAGE>
EXHIBIT D
[FORM OF SERVICER'S CERTIFICATE]
D-1
<PAGE>
EXHIBIT E
[FORM OF CERTIFICATEHOLDER REPORT]
E-1
<PAGE>
FORM OF SALE AND
SERVICING AGREEMENT
OHS DRAFT
8/26/96
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CHASE MANHATTAN BANK USA, N.A.,
a National Banking Association
as Seller and Servicer
and
CHASE MANHATTAN AUTO OWNER TRUST 199_-_,
as Issuer
----------------------------
----------------------------
SALE AND SERVICING AGREEMENT
Dated as of __________, 199_
----------------------------
----------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions..................................... 1
SECTION 1.2. Usage of Terms.................................. 24
[SECTION 1.3. Simple Interest Method; Allocations............. 24]
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables....................... 25
SECTION 2.2. Closing......................................... 26
ARTICLE III
THE RECEIVABLES
SECTION 3.1. Representations and Warranties of Seller;
Conditions Relating to Receivables.............. 26
SECTION 3.2. Repurchase Upon Breach or Failure of a
Condition....................................... 31
SECTION 3.3. Custody of Receivable Files..................... 31
SECTION 3.4. Duties of Servicer as Custodian................. 32
SECTION 3.5. Instructions; Authority to Act.................. 33
SECTION 3.6. Custodian's Indemnification..................... 33
SECTION 3.7. Effective Period and Termination................ 33
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. Duties of Servicer.............................. 34
SECTION 4.2. Collection of Receivable Payments;
Refinancing..................................... 35
i
<PAGE>
Section Page
SECTION 4.3. Realization Upon Receivables.................... 35
SECTION 4.4. [Reserved]...................................... 36
SECTION 4.5. Maintenance of Security Interests in
Financed Vehicles............................... 36
SECTION 4.6. Covenants of Servicer........................... 36
SECTION 4.7. Purchase of Receivables Upon Breach............. 37
SECTION 4.8. Servicing Fee................................... 38
SECTION 4.9. Servicer's Certificate.......................... 38
SECTION 4.10. Annual Statement as to Compliance............... 38
SECTION 4.11. Annual Audit Report............................. 39
SECTION 4.12. Access by Holders to Certain Documentation
and Information Regarding Receivables........... 40
SECTION 4.13. Reports to Holders and the Rating
Agencies........................................ 40
ARTICLE V
TRUST ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1. Establishment of Trust Accounts................. 41
SECTION 5.2. Collections..................................... 43
SECTION 5.3. [Reserved]...................................... 44
SECTION 5.4. Additional Deposits............................. 44
SECTION 5.5. Distributions................................... 44
SECTION 5.6. Net Deposits.................................... 46
SECTION 5.7. Statements to Certificateholders and
Noteholders..................................... 46
ii
<PAGE>
Section Page
ARTICLE VI
THE SELLER
SECTION 6.1. Representations of Seller....................... 48
SECTION 6.2. Liability of Seller; Indemnities................ 50
SECTION 6.3. Merger or Consolidation of Seller............... 51
SECTION 6.4. Limitation on Liability of Seller and
Others.......................................... 51
SECTION 6.5. Seller May Own Notes and Certificates........... 51
ARTICLE VII
THE SERVICER
SECTION 7.1. Representations of Servicer..................... 51
SECTION 7.2. Liability of Servicer; Indemnities.............. 53
SECTION 7.3. Merger or Consolidation of Servicer............. 54
SECTION 7.4. Limitation on Liability of Servicer and
Others.......................................... 54
SECTION 7.5. Servicer Not To Resign.......................... 56
SECTION 7.6. Delegation of Duties............................ 56
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
SECTION 8.1. Events of Servicing Termination................. 56
SECTION 8.2. Trustee to Act; Appointment of Successor........ 58
SECTION 8.3. Notification to Noteholders and
Certificateholders.............................. 59
SECTION 8.4. Waiver of Past Defaults......................... 59
iii
<PAGE>
ARTICLE IX
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables;
Trust Termination............................... 60
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment....................................... 61
SECTION 10.2. Protection of Title to Owner Trust Estate....... 63
SECTION 10.3. [Reserved]...................................... 65
SECTION 10.4. Governing Law................................... 65
SECTION 10.5. Notices......................................... 65
SECTION 10.6. Severability of Provisions...................... 66
SECTION 10.7. Assignment[; References to Chase USA]........... 66
SECTION 10.8. Certificates and Notes Nonassessable and
Fully Paid...................................... 66
SECTION 10.9. Third-Party Beneficiaries....................... 67
SECTION 10.10. Assignment to Trustee........................... 67
SECTION 10.11. Limitation of Liability of Owner Trustee
and Trustee..................................... 67
SCHEDULES
Schedule A - List of Receivables
Schedule B - Location of Receivable Files
EXHIBITS
Exhibit A - Form of Servicer's Certificate
Exhibit B - Form of Certificateholder Report
iv
<PAGE>
This Sale and Servicing Agreement, dated as of
__________, 199_ (as amended, supplemented or otherwise modified
and in effect from time to time, this "Agreement") is made
between CHASE MANHATTAN BANK USA, N.A., a National Banking
Association ("Chase USA" or the "Seller" and the "Servicer" in
its respective capacities as such), and CHASE MANHATTAN AUTO
OWNER TRUST, 199_-_, as issuer (the "Issuer").
W I T N E S S E T H :
In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Whenever used in this
Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
"Accrued Interest" on a Receivable, as of any date of
determination, means that amount of interest accrued on the
Principal Balance at the APR but not paid by or on behalf of the
Obligor.
"Administration Agreement" means the Administration
Agreement dated as of _______, 199___, among the Issuer, the
Administrator, the Trustee and the Seller, as the same may be
amended and supplemented from time to time.
"Administrator" means _______________, a _____________,
as administrator.
"Administration Fee" with regard to a _________ means
the fee payable to the Administrator for services rendered
pursuant to the Administration Agreement.
"Affiliate" means, with respect to any specified
Person, any other Person controlling or controlled by or under
common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any
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; and
the terms "controlling" and "controlled" have meanings
correlative to the foregoing. A Person shall not be deemed to be
an Affiliate of any person solely because such other Person has
the contractual right or obligation to manage such Person unless
such other Person controls such Person through equity ownership
or otherwise.
<PAGE>
"Aggregate Net Losses" means, with respect to a
Collection Period, the amount equal to (i) the principal balance
of the Receivables that became Defaulted Receivables during such
Collection Period minus (ii) the Liquidation Proceeds allocable
to principal collected during such Collection Period with respect
to any Defaulted Receivables.
"Amount Financed" in respect of a Receivable means the
amount advanced under the Receivable toward the purchase price of
the Financed Vehicle and related costs.
"Annual Percentage Rate" or "APR" of a Receivable means
the annual rate of interest stated in the Receivable.
"Assertion" has the meaning specified in Section 4.11.
"Authenticating Agent" has the meaning specified in
Section 2.13 of the Indenture and shall initially be the
corporate trust office of The Chase Manhattan Bank, and its
successors and assigns in such capacity.
"Authorized Officer" means any officer of the Owner
Trustee, Trustee or Servicer who is authorized to act on behalf
of the Owner Trustee, Trustee or Servicer, as applicable, and who
is identified as such on the list of authorized officers
delivered by each such party.
"Basic Documents" means the Certificate of Trust, the
Indenture, the Depository Agreements, the Sale and Servicing
Agreement, the Trust Agreement, the Administration Agreement and
other documents and certificates delivered in connection
therewith.
"Benefit Plan" has the meaning specified in Section
11.12 of the Trust Agreement.
"Book-Entry Certificates" means beneficial interests in
the Certificates, the ownership and transfers of which shall be
made through book entries by a Clearing Agency or Foreign
Clearing Agency as described in Section 3.10 of the Trust
Agreement.
"Book-Entry Notes" means beneficial interests in the
Notes, ownership and transfers of which shall be made through
book entries by a Clearing Agency or Foreign Clearing Agency as
described in Section 2.10 of the Indenture.
"Business Day" means a day, other than a Saturday or a
Sunday, on which the Trustee and banks located in New York, New
York and [________________________] are open for the purpose of
conducting a commercial banking business.
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"Business Trust Statute" means Chapter 38 of Title 12
of the Delaware Code, 12 Del. Code 3801 et seq., as amended
from time to time.
"Capital Accounts" has the meaning specified in
Section 5.7 of the Trust Agreement.
"CEDEL" means Centrale de Livraison de Valeurs
Mobilieres, S.A.
"Certificate" means a certificate evidencing the
beneficial interest of a Certificateholder in the Owner Trust
Estate, substantially in the form of Exhibit A to the Trust
Agreement.
"Certificate Balance" $________ as of the Closing Date
and, thereafter, shall be an amount equal to such initial
Certificate Balance, reduced by all amounts allocable to
principal previously distributed to Certificateholders. The
Certificate Balance shall also be reduced on any Distribution
Date by the excess, if any, of (i) the sum of (A) the Certificate
Balance and (B) the outstanding principal amount of the Notes (in
each case after giving effect to amounts in respect of principal
to be deposited in the Certificate Distribution Account and the
Note Distribution Account on such Distribution Date), over
(ii) the Pool Balance as of the close of business on the last day
of the preceding the Collection Period. Thereafter, the Certificate
Balance shall be increased to the extent that any portion of the
Total Distribution Amount is available to pay the existing
Certificateholders' Principal Carryover Shortfall, but not by
more then the aggregate reductions in the Certificate Balance set
forth in the preceding sentence.
"Certificate Depository Agreement" means the agreement
among the Issuer, the Owner Trustee, the Servicer and The
Depository Trust Company, as the initial Clearing Agency, dated
as of the Closing Date, relating to the Certificates,
substantially in the form attached as Exhibit C to the Trust
Agreement, as the same may be amended and supplemented from time
to time.
"Certificate Distribution Account" has the meaning
specified in Section 5.1 of the Trust Agreement.
"Certificate Final Scheduled Distribution Date" means
the ______________ Distribution Date.
"Certificate of Trust" means the Certificate of Trust
in the form of Exhibit B to the Trust Agreement to be filed for
the Issuer pursuant to Section 3810(a) of the Business Trust
Statute.
"Certificate Owner" means, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry
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Certificate, as reflected on the books of the Clearing Agency or
Foreign Clearing Agency or on the books of a direct or indirect
Clearing Agency Participant.
"Certificate Pool Factor" as of the close of business
on a Distribution Date means a eight-digit decimal figure equal
to the Certificate Balance (after giving effect to distributions
made on such date) divided by the initial Certificate Balance.
The Certificate Pool Factor will be 1.00000000 as of the Cutoff
Date; thereafter, the Certificate Pool Factor will decline to
reflect reductions in the Certificate Balance.
"Certificate Rate" means ___% per annum.
"Certificate Register" and "Certificate Registrar"
means the register maintained and the registrar appointed
pursuant to Section 3.4 of the Trust Agreement.
"Certificateholder" means the Person in whose name a
Certificate is registered in the Certificate Register, except
that, solely for the purpose of giving any consent, request,
waiver or demand pursuant to any of the Basic Documents, the
interest evidenced by any Certificate registered in the name of
the Seller, the Servicer or any Person controlling, controlled
by, or under common control with, the Seller or the Servicer
shall not be taken into account in determining whether the
requisite percentage necessary to effect any such consent,
request or waiver shall have been obtained; provided, however,
that in determining whether the Owner Trustee shall be protected
in relying upon any such consent, request, waiver or demand, only
Certificates that an Authorized Officer of the Owner Trustee
knows to be so owned shall be so disregarded.
"Certificateholders' Distributable Amount" means with
respect to any Distribution Date, the sum of the
Certificateholders' Principal Distributable Amount and the
Certificateholders' Interest Distributable Amount.
"Certificateholders' Interest Carryover Shortfall"
means, for any Distribution Date, the excess of the
Certificateholders' Interest Distributable Amount for the
preceding Distribution Date, over the amount in respect of the
interest at the Certificate Rate that is actually deposited in
the Certificate Distribution Account on such preceding
Distribution Date, plus interest on such excess, to the extent
permitted by law, at the Certificate Rate from and including such
preceding Distribution Date to but excluding the current
Distribution Date.
"Certificateholders' Interest Distributable Amount"
means, for any Distribution Date, the sum of the
Certificateholders' Monthly Interest Distributable Amount for
such Distribution Date and the Certificateholders' Interest
Carryover Shortfall for such Distribution Date.
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Certificateholders' Monthly Interest Distributable
Amount" means, for any Distribution Date, one month's interest
(or, in the case of the first Distribution Date, interest accrued
from and including the Closing Date to but exceeding such
Distribution Date) at the Certificate Rate on the Certificate
Balance on the immediately preceding Distribution Date, after
giving effect to all payments of principal to the
Certificateholders on or prior to such Distribution Date (or, in
the case of the first Distribution Date, the Certificate Balance
on the Closing Date.) Interest shall be computed on the basis of
a 360-year of twelve 30-day months for purposes of this
definition.
"Certificateholders' Monthly Principal Distributable
Amount" means, for any Distribution Date prior to the
Distribution Date on which the Outstanding Amount of the Notes is
reduced to zero, zero; and for any Distribution Date commencing on or
after the Distribution Date on which the Outstanding Amount of
the Notes is reduced to zero, 100% of the Principal Distribution
Amount (less any amount required on the first such Distribution
Date to reduce the outstanding principal balance of the Class A-2
Notes to zero, which shall be deposited into the Note
Distribution Account).
"Certificateholders' Principal Carryover Shortfall"
means, as of the close of any Distribution Date, the excess of
(i) the Certificateholders' Principal Distributable Amount, over
(ii) the amount in respect of principal that is actually
deposited in the Certificate Distribution Account on such current
Distribution Date.
"Certificateholders' Principal Distributable Amount"
means, for any Distribution Date, the sum of (i) the
Certificateholder's Monthly Principal Distributable Amount for
such Distribution Date and the Certificateholders' Principal
Carryover Shortfall as of the close of the preceding Distribution
Date; provided that the Certificateholders' Principal
Distributable Amount shall not exceed the Certificate Balance.
In addition, on the Certificate Final Scheduled Distribution
Date, the principal required to be distributed to
Certificateholders will include the lesser of (a) any payments of
principal due and remaining unpaid on each Receivable owned by
Issuer as of the last day of the immediately preceding the Collection
Period and (b) the amount that is necessary (after giving effect
to the other amounts to be deposited in the Certificate
Distribution Account on such Distribution Date and allocable to
principal) to reduce the Certificate Balance to zero, in either
case after giving effect to any required distribution of the
Noteholders' Principal Distributable Amount to the Note
Distribution Account. [In addition, on any Distribution Date on
which, after giving effect to all distributions to [Servicer,
Administrator,] the Noteholders and the Certificateholders on
such Distribution Date, (i) the outstanding principal balance of
the Notes is zero and (ii) the amount on deposit in the Reserve
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Account is equal to or greater than the Certificate Balance, the
Certificateholders' Principal Distributable Amount shall include
an amount equal to such Certificate Balance.]
"Chase Connecticut Loan" means a motor vehicle retail
installment sales contract or purchase money loan serviced by
Chase USA and either originated by The Chase Manhattan Bank of
Connecticut, National Association or originated pursuant to the
agreements with automobile dealers who regularly originated and
sold such contracts and loans to The Chase Manhattan Bank of
Connecticut, National Association.
"Chase Florida Loan" means a motor vehicle retail
installment sales contract or purchase money loan serviced by
Chase USA and either originated by The Chase Manhattan Private
Bank of Florida, National Association or originated pursuant to
the agreements with automobile dealers who regularly originated
and sold such contracts and loans to The Chase Manhattan Private
Bank of Florida, National Association.
"Chase Lincoln Loan" means a motor vehicle retail
installment sales contract or purchase money loan serviced by
Chase USA and either originated by Chase Lincoln First Bank,
National Association or originated pursuant to the agreements
with automobile dealers who regularly originated and sold such
contracts and loans to Chase Lincoln First Bank, National
Association.
"Chase Maryland Loan" means a motor vehicle retail
installment sales contract or purchase money loan serviced by
Chase USA and either originated by The Chase Manhattan Bank of
Maryland or originated pursuant to the agreements with automobile
dealers who regularly originated and sold such contracts and
loans to The Chase Manhattan Bank of Maryland.
"Chase USA Delaware" means Chase Manhattan Bank USA,
N.A., a national banking association having its principal
executive offices located at 802 Delaware Avenue, Wilmington,
Delaware 19801 and shall not mean the Seller or the Servicer
unless Chase USA Delaware succeeds to the interests of Chase USA
hereunder in connection with the Proposed Merger or otherwise.
"Class A-1 Interest Rate" means ___% per annum.
"Class A-1 Notes" means the Class A-1 ___% Asset Backed
Notes, substantially in the form of Exhibit D to the Indenture.
"Class A-2 Interest Rate" means ___% per annum.
"Class A-2 Notes" means the Class A-2 ___% Asset Backed
Notes, substantially in the form of Exhibit E to the Indenture.
"Closing Date" means ___________, 199__.
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"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The initial Clearing Agency
shall be The Depository Trust Company.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other person for whom from
time to time a Clearing Agency effects book-entry transfers of
securities deposited with the Clearing Agency (including a
Foreign Clearing Agency).
"Code" means the Internal Revenue Code of 1986, as
amended.
"Collected Interest" means, with respect to a
Collection Period, the portion of all payments by or on behalf of
Obligors received by the Servicer during such Collection Period
allocable to interest (other than with respect to Repurchased
Receivables or Defaulted Receivables), including any proceeds of
the sale or other disposition by the Servicer of a Financed
Vehicle prior to the related Receivable becoming a Defaulted
Receivable.
"Collected Principal" means, with respect to a
Collection Period, the portion of all payments by or on behalf of
Obligors received by the Servicer during such Collection Period
allocable to principal (other than with respect to Repurchased
Receivables or Defaulted Receivables), including any proceeds of
the sale or other disposition by the Servicer of a Financed
Vehicle prior to the related Receivable becoming a Defaulted
Receivable.
"Collection Account" has the meaning specified in
Section 5.1(a)(i).
"Collection Period" means each calendar month beginning
__________, 199_ until the Trust shall terminate pursuant to
Article IX of the Trust Account.
"Collections" means all collections in respect of
Receivables.
"Corporate Trust Office" shall mean the [New York
office] of the Trustee or Owner Trustee, as applicable.
"Cutoff Date" means __________, 199__.
"Dealer" means the dealer which sold a Financed Vehicle
and which originated or assisted in the origination of the
Receivable relating to such Financed Vehicle under a Dealer
Agreement.
"Dealer Agreement" means any agreement and, if
applicable, assignment under which the Receivables were
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originated by or through a Dealer and sold to the Seller or an
affiliate of the Seller.
"Default" means any occurrence that is, or with notice
or the lapse of time or both would become, an Event of Default.
"Defaulted Receivable" means a Receivable (other than a
Repurchased Receivable) as to which the Servicer has determined
based on its usual collection practices and procedures, during
any Collection Period, that eventual payment in full of the
Amount Financed (including accrued interest thereon) is unlikely;
provided that such loss recognition cannot be later than the
calendar month in which more than 10% of the scheduled payment
becomes 240 days delinquent.
"Definitive Notes" means Notes issued in certificated,
fully registered form as provided in Section 2.12 of the
Indenture.
"Definitive Certificates" means Certificates issued in
certificated, fully registered form as provided in Section 3.12
of the Trust Agreement.
"Delaware Trustee" has the meaning specified in
Section 10.1 of the Trust Agreement.
"Delinquency Percentage" means, for any Distribution
Date, the sum of the outstanding principal balances of all
Receivables which were 60 days or more delinquent (including
Receivables, which are not Defaulted Receivables, relating to
Financed Vehicles that have been repossessed), as of the end of
the Collection Period immediately preceding such Distribution
Date, determined in accordance with the Servicer's normal
practices, such sum expressed as a percentage of the Pool Balance
as of the close of business on the last day of such Collection
Period.
"Delivery" when used with respect to Trust Account
Property means:
(a) with respect to bankers' acceptances,
commercial paper, negotiable certificates of deposit
and other obligations that constitute "instruments"
within the meaning of Section 9-105(l)(i) of the
Relevant UCC and which are susceptible of physical
delivery, transfer thereof to the Trustee or its
nominee or custodian endorsed to, or registered in the
name of, the Trustee or its nominee or custodian or
endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC)
transfer thereof (i) by delivery of such certificated
security endorsed to, or registered in the name of, the
Trustee or its nominee or custodian or endorsed in
blank to a financial intermediary (as defined in
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Section 8-313 of the UCC) and the making by such
financial intermediary of entries on its books and
records identifying such certificated securities as
belonging to the Trustee or its nominee or custodian
and the sending by such financial intermediary of a
confirmation of the purchase of such certificated
security by the Trustee or its nominee or custodian, or
(ii) by delivery thereof to a "clearing corporation"
(as defined in Section 8-102(3) of the UCC) and the
making by such clearing corporation of appropriate
entries on its books reducing the appropriate
securities account of the transferor and increasing the
appropriate securities account of a financial
intermediary by the amount of such certificate
security, the identification by the clearing
corporation of the certificated securities for the sole
and exclusive account of the financial intermediary,
the maintenance of such certificated securities by such
clearing corporation or a "custodian bank" (as defined
in Section 8-102(4) of the UCC) or the nominee of
either subject to the clearing corporation's exclusive
control, the sending of a confirmation by the financial
intermediary of the purchase by the Trustee or its
nominee or custodian of such securities and the making
by such financial intermediary of entries on its books
and records identifying such certificated securities as
belonging to the Trustee or its nominee or custodian
(all of the foregoing, "Physical Property"), and, in
any event, any such Physical Property in registered
form shall be in the name of the Trustee or its nominee
or custodian; and such additional or alternative
procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such
Trust Account Property to the Trustee or its nominee or
custodian, consistent with changes in applicable law or
regulations or the interpretation thereof;
(b) with respect to any securities issued by the
U.S. Treasury, the Federal Home Loan Mortgage
Corporation or by the Federal National Mortgage
Association that is a book-entry security held through
the Federal Reserve System pursuant to Federal book-
entry regulations, the following procedures, all in
accordance with applicable law, including applicable
Federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such Trust Account Property
to an appropriate book entry account maintained with a
Federal Reserve Bank by a financial intermediary which
is also a "depository" pursuant to applicable Federal
regulations and issuance by such financial intermediary
of a deposit advice or other written confirmation of
such book-entry registration to the Trustee or its
nominee or custodian of the purchase by the Trustee or
its nominee or custodian of such book-entry securities;
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the making by such financial intermediary of entries in
its books and records identifying such book-entry
security held through the Federal Reserve System
pursuant to Federal book-entry regulations as belonging
to the Trustee or its nominee or custodian and
indicating that such custodian holds such Trust Account
Property solely as agent for the Trustee or its nominee
or custodian; and such additional or alternative
procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Trust
Account Property to the Trustee or its nominee or
custodian, consistent with changes in applicable law or
regulations or the interpretation thereof; and
(c) with respect to any item of Trust Account
Property that is an uncertificated security under
Article 8 of the UCC and that is not governed by clause
(b) above, registration on the books and records of the
issuer thereof in the name of the financial
intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Trustee
or its nominee or custodian of such uncertificated
security, the making by such financial intermediary of
entries on its books and records identifying such
uncertificated certificates as belonging to the Trustee
or its nominee or custodian.
"Deposit Date" means the Business Day immediately
preceding each Distribution Date.
"Depositor" means the Seller in its capacity as
Depositor under the Trust Agreement.
"Depository Agreements" mean, collectively, the
Certificate Depository Agreement and the Note Depository
Agreement.
"Determination Date" means the 10th calendar day of the
month (or, if such 10th calendar day is not a Business Day, the
Business Day preceding the 10th calendar day of the month)
immediately succeeding the related Collection Period.
"Distribution Date" means, in the case of the first
Collection Period, ________, 199_, and in the case of every
Collection Period thereafter, the 15th day of the following
month, or if the 15th day is not a Business Day, the next
following Business Day, commencing with the first Distribution
Date.
"Eligible Deposit Account" means (a) a segregated
identifiable trust account established in the trust department of
a Qualified Trust Institution, which shall initially be The Chase
Manhattan Bank, and may be maintained with The Chase Manhattan
Bank so long as the Seller is a Qualified Trust Institution; or
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(b) a separately identifiable deposit account established in the
deposit taking department of a Qualified Institution, which may
be the Seller so long as The Chase Manhattan Bank is a Qualified
Institution.
"ERISA" has the meaning specified in Section 11.12
of the Trust Agreement.
"Executive Officer" means, with respect to any
corporation or bank, the Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, President, Executive Vice
President, any Vice President, the Secretary or the Treasurer of
such corporation or bank, and with respect to any partnership,
any general partner thereof.
"Euroclear Operator" means Morgan Guaranty Trust
Company of New York, Brussels, Belgium office, in its capacity as
the operator of the Euroclear system.
"Event of Default" means an event specified in Section
5.1 of the Indenture.
"Events of Servicing Termination" means an event
specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Expenses" has the meaning specified in Section 8.2 of
the Trust Agreement.
"FDIC" means the Federal Deposit Insurance Corporation
or any successor thereto.
"FHLMC" means the Federal Home Loan Mortgage
Corporation or any successor thereto.
"Final Scheduled Distribution Date" means for (a) the
Class A-1 Notes, the ____________ Distribution Date, and (b) the
Class A-2 Notes, the ____________ Distribution Date.
"Final Scheduled Maturity Date" means the last day of
the Collection Period immediately preceding the Certificate Final
Scheduled Distribution Date.
"Financed Vehicle" means, with respect to a Receivable,
the new or used automobile or light-duty truck, together with all
accessions thereto, securing an Obligor's indebtedness under such
Receivable.
"FNMA" means the Federal National Mortgage Association
or any successor thereto.
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"Foreign Clearing Agency" means CEDEL and the Euroclear
Operator.
"General Partner" means _____________________ as
general partner under the Trust Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and
grant a lien upon and a security interest in and right of set-off
against, deposit, set over and confirm pursuant to the Indenture.
A Grant of the Trust Estate or of any other agreement or
instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including
the immediate and continuing right to claim for, collect, receive
and give receipt for principal and interest payments and all
other moneys payable thereunder, to give and receive notices and
other communications, to make waivers or other agreements, to
exercise all rights and options, to bring Proceedings in the name
of the Granting party or otherwise and generally to do and
receive anything that the Granting party is or may be entitled to
do or receive thereunder or with respect thereto.
"Holder" or "Holders" means, unless the context
otherwise requires, both Certificateholders and Noteholders.
"Indemnified Parties" has the meaning specified in
Section 8.2 of the Trust Agreement.
"Indenture" means the Indenture dated as of _________,
199_, between the Issuer and the Trustee, as the same may be
amended and supplemented from time to time.
"Independent" means, when used with respect to any
specified Person, that the person (a) is in fact independent of
the Issuer, any other obligor upon the Notes, the Seller and any
Affiliate of any of the foregoing persons, (b) does not have any
direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any
Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
"Independent Certificate" means a certificate or
opinion to be delivered to the Trustee under the circumstances
described in, and otherwise complying with, the applicable
requirements of Section 11.1 of the Indenture, made by an
Independent engineer, appraiser or other expert appointed by the
Issuer and approved by the Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in the Indenture and
that the signer is Independent within the meaning thereof.
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"Insolvency Event" means, for 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
(including any receiver appointed under the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as
amended), 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 of 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.
"Investment Earnings" means, with respect to any
Distribution Date, the investment earnings (net of losses and
investment expenses) on amounts on deposit in the Trust Account.
"Issuer" means Chase Manhattan Auto Trust 199_-_ until
a successor replaces it and, thereafter, means such successor
and, for purposes of any provision contained in the Indenture and
required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written
order or request signed in the name of the Issuer by any of its
authorized officers and delivered to the Trustee.
"Late Fees" means any late charges, credit related
extension fees, non-credit related extension fees or other
administrative fees or similar charges allowed by applicable law
with respect to the Receivables.
"Lien" means a security interest, lien, charge, pledge
or encumbrance of any kind other than tax liens, mechanics' liens
or any other liens that attach to a Receivable by operation of
law.
"Liquidation Proceeds" means, with respect to any
Receivable, (i) insurance proceeds, (ii) the monies collected
during a Collection Period from whatever source on a Defaulted
Receivable and (iii) proceeds of a Financed Vehicle sold after
repossession, in each case net of any liquidation expenses and
payments required by law to be remitted to the Obligor.
"Moody's" means Moody's Investors Service, Inc., and
its successors and assigns.
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"Note" means a Class A-1 Note or a Class A-2 Note.
"Note Depository Agreement" means the agreement among
the Issuer, the Servicer, the Trustee and The Depository Trust
Company, as the initial Clearing Agency, dated as of the Closing
Date, relating to the Notes, as the same may be amended or
supplemented from time to time.
"Note Distribution Account" means the account
designated as such, established and maintained pursuant to
Section 5.1.
"Note Owner" means, with respect to a Book-Entry Note,
the person who is the owner of such Book-Entry Note, as reflected
on the books of the Clearing Agency or Foreign Clearing Agency,
or on the books of a direct or indirect Clearing Agency
Participant.
"Note Pool Factor" for each class of Notes as of the
close of business on a Distribution Date means an eight-digit
decimal figure equal to the outstanding principal balance of such
class of Notes divided by the original outstanding principal
balance of such class of Notes. The Note Pool Factor for each
class of Notes will be 1.00000000 as of the Cutoff Date;
thereafter, the Note Pool Factor for each class of Notes will
decline to reflect reductions in the outstanding principal
balance of such class of Notes.
"Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Noteholders' Distributable Amount" means, for any
Distribution Date, the sum of the Noteholders' Principal
Distributable Amount and the Noteholders' Interest Distributable
Amount.
"Noteholders' Interest Carryover Shortfall" means, for
any Distribution Date, the excess of (x) the Noteholders'
Interest Distributable Amount for the preceding Distribution
Date, over (y) the amount in respect of interest that is actually
deposited in the Note Distribution Account on such preceding
Distribution Date, plus interest on the amount of interest due
but not paid to Noteholders of each class on the preceding
Distribution Date, to the extent permitted by law, at the
applicable Interest Rate from such preceding Distribution Date
through the current Distribution Date.
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"Noteholders' Interest Distributable Amount" means, for
any Distribution Date, the sum of (x) the Noteholders' Monthly
Interest Distributable Amount for such Distribution Date and
(y) the Noteholders' Interest Carryover Shortfall for such
Distribution Date.
"Noteholders' Monthly Interest Distributable Amount"
means, for any Distribution Date, in the case of each class of
Notes, one month's interest (or, in the case of the first
Distribution Date, interest accrued from and including the
Closing Date to but excluding such Distribution Date) at the
applicable Interest Rate on the outstanding principal balance of
the Notes of such class on such Distribution Date (or, in the
case of the first Distribution Date, on the Closing Date).
Interest for purposes of this definition shall be computed on the
basis of a 360-day year of twelve 30-day months.
"Noteholders' Monthly Principal Distributable Amount"
means, for any Distribution Date, the Principal Distribution
Amount.
"Noteholders' Principal Carryover Shortfall" means, as
of the close of business on any Distribution Date, the excess of
(x) the Noteholders' Principal Distributable Amount over (y) the
amount in respect of principal that is actually deposited in the
Note Distribution Account.
"Noteholders' Principal Distributable Amount" means,
for any Distribution Date, the sum of (i) the Noteholder's
Monthly Principal Distributable Amount for such Distribution Date
and (ii) the Noteholders' Principal Carryover Shortfall as of the
close of business on the preceding Distribution Date; provided
that the Noteholders' Principal Distributable Amount shall not
exceed the outstanding principal balance of the Notes. In
addition, on the Final Scheduled Distribution Date of each class
of Notes, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after
giving effect to the other amounts to be deposited in the Note
Distribution Account on such Distribution Date and allocable to
principal) to reduce the Outstanding Amount of such class of
Notes to zero.
"Note Register" and "Note Registrar" have the meanings
specified in Section 2.4 of the Indenture.
"Obligor" on a Receivable means the purchaser or the
co-purchasers of the Financed Vehicle purchased in part or in
whole by the execution and delivery of such Receivable or any
other Person who owes or may be liable for payments under such
Receivable.
"Officer's Certificate" means a certificate signed by
the chairman of the board, the president, the treasurer, the
controller, any executive or senior vice president or any vice
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president of the Seller or Servicer, as appropriate, meeting the
requirements of Section 11.1 of the Indenture.
"Opinion of Counsel" means a written opinion of counsel
(who may be counsel to the Seller or the Servicer) reasonably
acceptable in form and substance to the Trustee, meeting the
requirements of Section 11.1 of the Indenture.
"Optional Purchase Percentage" shall be 5%.
"Original Pool Balance" shall be $________________.
"Outstanding" means, as of the date of determination,
all Notes theretofore authenticated and delivered under the
Indenture except:
(a) Notes therefore canceled by the Note
Registrar or delivered to the Note Registrar for
cancellation;
(b) Notes or portions thereof the payment for
which money in the necessary amount has been
theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Notes (provided
that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the
Indenture or provision therefor, satisfactory to the
Trustee, has been made); and
(c) Notes in exchange for or in lieu of other
Notes which have been authenticated and delivered
pursuant to the Indenture unless proof satisfactory to
the Trustee is presented that any such Notes are held
by a bona fide purchaser;
provided that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or
under any Basic Document, Notes owned by the Issuer, any other
obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes
that an Authorized Officer of the Trustee either actually knows
to be so owned or has received written notice thereof shall be so
disregarded. Notes so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, any
other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons.
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"Outstanding Amount" means, as of any date of
determination, the aggregate principal amount of all Notes, or
class of Notes, as applicable, Outstanding as of such date.
"Owner Trust Estate" means all right, title and
interest of the Issuer in and to the property and rights assigned
to the Issuer pursuant to Article II, all funds on deposit from
time to time in the Trust Accounts (other than the Note
Distribution Account) and the Certificate Distribution Account
and all other property of Issuer from time to time, including any
rights of the Owner Trustee and the Issuer pursuant to this
Agreement.
"Owner Trustee" means __________, a Delaware banking
corporation, not in its individual capacity but solely as owner
trustee under the Trust Agreement, and any successor Owner
Trustee thereunder.
"Paying Agent" means: (a) when used in the Indenture
or otherwise with respect to the Notes, the Trustee or any other
Person that meets the eligibility standards for the Trustee
specified in Section 6.11 of the Indenture and is authorized by
the Issuer to make the payments to and distributions from the
Collection Account and the Note Distribution Account, including
payment of principal of or interest on the Notes on behalf of the
Issuer; and (b) when used in the Trust Agreement or otherwise
with respect to the Certificates, the Owner Trustee or any other
paying agent or co-paying agent appointed pursuant to Section 3.9
of the Trust Agreement.
"Permitted Investments" means, at any time, any one or
more of the following obligations and securities:
(i) obligations of the United States of America
or any agency thereof, provided such obligations are
backed by the full faith and credit of the United
States of America;
(ii) general obligations of or obligations
guaranteed as to the timely payment of interest and
principal by any state of the United States of America
or the District of Columbia then rated A-l+ or AAA by
Standard & Poor's and P-1 or Aaa by Moody's or, in
either case, such lower rating (as confirmed in writing
by a Rating Agency) as will not result in the
qualification, downgrading or withdrawal of the rating
then assigned to the Notes and the Certificates by such
Rating Agency;
(iii) commercial paper which is then rated P-1 by
Moody's and A-l+ by Standard & Poor's or, in either
case, such lower rating (as confirmed in writing by a
Rating Agency) as will not result in the qualification,
downgrading or withdrawal of the ratings then assigned
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to the Notes and the Certificates by such Rating
Agency;
(iv) certificates of deposit, demand or time
deposits, federal funds or banker's acceptances issued
by any depository institution or trust company
(including the Trustee acting in its commercial banking
capacity) incorporated under the laws of the United
States or of any state thereof or incorporated under
the laws of a foreign jurisdiction with a branch or
agency located in the United States of America and
subject to supervision and examination by federal or
state banking authorities which short term unsecured
deposit obligations of such depository institution or
trust company are then rated P-1 by Moody's and A-l+ by
Standard & Poor's or, in either case, such lower rating
(as confirmed in writing by a Rating Agency) as will
not result in the qualification, downgrading or
withdrawal of the rating then assigned to the Notes and
the Certificates by such Rating Agency;
(v) demand or time deposits of, or certificates
of deposit issued by, any bank, trust company, savings
bank or other savings institution and such deposits or
certificates of deposit are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by
any bank, insurance company or other corporation (A)
the short term unsecured debt or deposits of which are
rated P-1 by Moody's and A-l+ by Standard & Poor's or
the long-term unsecured debt of which are rated Aaa by
Moody's and AAA by Standard & Poor's or (B) in the case
of either Rating Agency, are otherwise confirmed in
writing by such Rating Agency as investments as will
not result in the qualification, downgrading or
withdrawal of the rating then assigned to the Notes and
the Certificates by such Rating Agency;
(vii) repurchase obligations with respect to any
security described in clauses (i) or (ii) herein or any
other security issued or guaranteed by the FHLMC, FNMA
or any other agency or instrumentality of the United
States of America which is backed by the full faith and
credit of the United States of America, in either case
entered into with a federal agency or a depository
institution or trust company (acting as principal)
described in (iv) above;
(viii) investments in money market funds, which
funds (A) are not subject to any sales, load or other
similar charge; and (B) are rated at least AAAM or
AAAM-G by Standard & Poor's and Aaa by Moody's; and
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(ix) such other investments where either (A) the
short-term unsecured debt or deposits of the obligor on
such investments are rated A-l+ by Standard & Poor's
and P-1 by Moody's or (B) such investments are
confirmed by a Rating Agency (in writing) or
investments as will not result in the qualification,
downgrading or withdrawal of the rating then assigned
to the Notes and the Certificates by such Rating
Agency.
Permitted Investments include money market mutual funds
(so long as such fund has the ratings specified in clause (viii)
hereof), including, without limitation, the VISTA U.S. Government
Money Market Fund or any other fund for which The Chase Manhattan
Bank, an affiliate of the Seller, [Trustee], [Owner Trustee] or
an affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent, and/or custodian or
subcustodian, notwithstanding that (i) The Chase Manhattan Bank,
[Trustee], [Owner Trustee] or an affiliate thereof charges and
collects fees and expenses from such funds for services rendered,
(ii) The Chase Manhattan Bank, [Trustee], [Owner Trustee] or an
affiliate thereof charges and collects fees and expenses for
services rendered pursuant to this Agreement, and (iii) services
performed for such funds and pursuant to this Agreement may
converge at any time. The Trust, the Owner Trustee and the
Trustee specifically authorize The Chase Manhattan Bank,
[Trustee], [Owner Trustee] or an affiliate thereof to charge and
collect all fees and expenses from such funds for services
rendered to such funds (but not to exceed investment earnings),
in addition to any fees and expenses The Chase Manhattan Bank,
[Trustee] or [Owner Trustee], as applicable, may charge and
collect for services rendered pursuant to this Agreement and the
Basic Documents.
"Person" means a legal person, including any
individual, corporation, estate, partnership, joint venture,
association, joint stock company, trust, unincorporated
organization, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"Physical Property" has the meaning specified in the
definition of "Delivery" above.
"Pool Balance" as of any date of determination means
the aggregate Principal Balance of the Receivables, calculated as
of the close of business on such date.
"Predecessor Note" means, with respect to any
particular Note, every previous Note evidencing all or a portion
of the same debt as that evidenced by such particular Note; and,
for the purpose of this definition, any Note authenticated and
delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to
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evidence the same debt as the mutilated, lost, destroyed or
stolen Note.
"Principal Balance" of a Receivable, as of any date of
determination, means the Amount Financed minus that portion of
all payments received on or prior to such date allocable to
principal. The Principal Balance of a Defaulted Receivable or a
Repurchased Receivable shall be deemed to be zero, in each case,
as of such date.
"Principal Distribution Amount" means, for any
Distribution Date, the sum of the following amounts with respect
to the preceding Collection Period: (a) that portion of all
Collections received during such Collection Period and allocable
to principal in accordance with Servicer's customary servicing
procedures; (b) to the extent attributable to principal, the
Purchase Amount received with respect to each Receivable
repurchased by Seller or purchased by Servicer under an
obligation which arose during the related Collection Period; and
(c) the Principal Balance of each Receivable that became a
Defaulted Receivable during such Collection Period.
"Proceeding" means any suit in equity, action or law or
other judicial or administrative proceeding.
"Proposed Merger" means, as of the Closing Date, the
proposed merger of Chase USA into Chase USA Delaware, a Delaware banking
corporation.
"Qualified Institution" means a depository institution
organized under the laws of the United States of America or any
one of the states thereof or incorporated under the laws of a
foreign jurisdiction with a branch or agency located in the
United States of America or one of the States thereof and subject
to supervision and examination by federal or state banking
authorities which at all times has the Required Deposit Rating
and, in the case of any such institution organized under the laws
of the United States of America, whose deposits are insured by
the FDIC.
"Qualified Trust Institution" means an institution
organized under the laws of the United States of America or any
one of the states thereof or incorporated under the laws of a
foreign jurisdiction with a branch or agency located in the
United States of America or one of the States thereof and subject
to supervision and examination by federal or state banking
authorities which at all times (i) is authorized under such laws
to act as a trustee or in any other fiduciary capacity, (ii) has
not less than one billion dollars in assets under fiduciary
management, and (iii) has a long term deposits rating of not less
than BBB- by Standard & Poor's and "Baa3" by Moody's.
"Rating Agency" means any of Standard & Poor's [and]
Moody's or [___________________].
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"Rating Agency Condition" means, with respect to any
action, that each Rating Agency shall have notified the Seller,
the Servicer, the Trustee and the Owner Trustee in writing, that
such action will not result in reduction or withdrawal of rating
of any outstanding Note or Certificate with respect to which it
is the Rating Agency.
"Receivable" means a retail installment sale contract
or purchase money promissory note and security agreement executed
by an Obligor in respect of a Financed Vehicle, and all proceeds
thereof and payments thereunder (other than interest accrued and
unpaid as of the Cutoff Date), which Receivable shall be
identified on Schedule A to this Agreement.
"Receivable Files" means the documents specified in
Section 3.3.
"Receivables Pool" means the pool of Receivables
included in the Trust.
"Record Date" means, with respect to any Distribution
Date, the Business Day prior to such Distribution Date unless
Definitive Notes or Definitive Certificates are issued, in which
case Record Date shall mean the last day of the immediately
preceding calendar month.
"Redemption Date" means in the case of a redemption of
the Notes pursuant to Section 10.1(a) of the Indenture or a
payment to Noteholders pursuant to Section 10.1(b) of the
Indenture, the Distribution Date specified by the Servicer or the
Issuer pursuant to such Section 10.1(a) or (b), as applicable.
"Redemption Price" means (a) in the case of a
redemption of the Notes pursuant to Section 10.1(a) of the
Indenture, an amount equal to the Outstanding Amount of the Notes
plus accrued and unpaid interest thereon to but excluding the
Redemption Date, or (b) in the case of payment made to
Noteholders pursuant to Section 10.1(b) of the Indenture, the
amount on deposit in the Note Distribution Account, but not in
excess of the amount set forth in clause (a).
"Relevant UCC" means the Uniform Commercial Code as in
effect in the applicable jurisdiction.
"Repurchase Amount" of a Repurchased Receivable or any
Receivable purchased by the Servicer pursuant to Section 9.1
means the sum, as of the last day of the Collection Period on
which such Receivable becomes such, of the Principal Balance
thereof plus the Accrued Interest thereon; of a Defaulted
Receivable means the sum, as of the last day of the Collection
Period on which such Receivable is to be purchased, of the
principal balance thereof plus the Accrued Interest thereon (the
accrued interest for the Collection Period in which such
Receivable became a Defaulted Receivable to be calculated at a
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rate equal to one-twelfth of the sum of the Certificate Rate and
the Servicing Fee Rate.
"Repurchased Receivable" means a Receivable repurchased
by the Seller pursuant to Section 3.2 or purchased by the
Servicer pursuant to Section 4.7.
"Required Deposit Rating" shall be a short-term
certificate of deposit rating from Moody's of P-1 and from S&P of
A-l+, and a long-term unsecured debt rating of not less than AA
by Standard & Poor's and Aa3 by Moody's.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 5.1.
"Reserve Account Deposit" means an amount equal to
$__________.
"Reserve Account Transfer Amount" means, for any
Distribution Date, an amount equal to the lesser of (a) the
amount of cash or other immediately available funds on deposit in
the Reserve Account on such Distribution Date (before giving
effect to any withdrawals therefrom relating to such Distribution
Date) or (b) the amount, if any, by which (i) the sum of the
amounts set forth in clauses (i) through (vi) of Section 5.5(c),
inclusive, exceeds (ii) the amount on deposit in the Collection
Account on such Distribution Date.
"Responsible Officer" means, with respect to the
Trustee, any officer within the Corporate Trust Office of the
Trustee, including any Vice President, Assistant Vice President,
Assistant Treasurer, Assistant Secretary, or any other officer of
the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with
respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Sale Proceeds" has the meaning specified in
Section 9.1(b).
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller" means Chase Manhattan Bank USA, N.A. in its
capacity as the seller of the Receivables under this Agreement,
and each successor to Chase Manhattan Bank USA, N.A. (in the same
capacity) pursuant to Section 6.3.
"Servicer" means Chase Manhattan Bank USA, N.A. in its
capacity as the servicer of the Receivables under this Agreement,
and each successor to Chase Manhattan Bank USA, N.A. (in the same
capacity) pursuant to Section 7.3.
"Servicer's Certificate" means a certificate,
substantially in the form of Exhibit A attached hereto, completed
and executed by the Servicer by its chairman of the board, the
president, treasurer, controller or any executive, senior vice
president or vice president pursuant to Section 4.9.
"Servicing Fee" with regard to a Collection Period
means the fee payable to the Servicer for services rendered
during such Collection Period, determined pursuant to Section
4.8.
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"Servicing Fee Rate" means [ ]% per annum.
"Specified Reserve Account Balance" means, with respect
to any Distribution Date, the greater of (a) ___% of the Pool
Balance as of the close of business on the last day of the
preceding Collection Period and (b) ____%; provided, however,
that the amount in clause (a) with respect to a Distribution Date
shall be equal to the amount calculated for such clause (a) for
the Distribution Date immediately preceding such Distribution
Date if any of the following events occur: (i) the Aggregate
Net Losses realized from the Cut-off Date through the end of the
Collection Period preceding such Distribution Date exceeds the
amount equal to ____% of the Initial Pool Balance; (ii) the sum
of (x) 12 times the Aggregate Net Losses realized during the
Collection Period immediately preceding such Distribution Date
plus (y) the aggregate Principal Balance as of the last day of
the Collection Period immediately preceding such Distribution
Date of all Receivables which have not yet been liquidated as to
which the Financed Vehicles securing such Receivables has been
repossessed exceeds the amount equal to ____% of the Pool Balance
at the beginning of such Collection Period; or (iii) the
aggregate amount of scheduled payments that are delinquent by
more than 60 days as of the end of the Collection Period
immediately preceding such Distribution Date exceeds an amount
equal to ____% of the Pool Balance as of the end of such
Collection Period; provided, further, that the Specified Reserve
Account Balance shall not exceed the sum of the outstanding
aggregate principal amount of the Notes and the Certificate
Balance, and that upon payment of all the interest and principal
due on the Notes and the Certificates, the Specified Reserve
Account Balance will be zero.
"Standard & Poor's" means Standard & Poor's Ratings
Services, and its successors and assigns.
"Total Distribution Amount" means, for any Distribution
Date, the sum of the aggregate collections (including any
Liquidation Proceeds, any Purchase Amounts paid by the Seller and
the Servicer and any amounts received from Dealers with respect
to Receivables) received in respect of the Receivables during the
related Collection Period and, under certain circumstances,
Investment Earnings on the Trust Accounts during such Collection
Period. The Total Distribution Amount on any Distribution Date
shall exclude all payments and proceeds (including any
Liquidation Proceeds and any amounts received from Dealers with
respect to Receivables) of (i) any Receivables the Purchase
Amount of which has been included in the Total Distribution
Amount in a prior Collection Period, (ii) any Defaulted
Receivable after and to the extent of the reassignment of such
Defaulted Receivable by the Trust to the Seller and (iii) any
Late Fees.
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"Trust Account Property" means the Trust Accounts and
all amounts and investments held from time to time in any Trust
Account (whether in the form of deposit accounts, Physical
Property, book-entry securities, uncertificated securities or
otherwise), including the Reserve Account Deposit and all
proceeds of the foregoing.
"Trust Accounts" has the meaning specified in
Section 5.1.
"Trust Agreement" means the Trust Agreement dated as of
______________, 199_, between Seller and Owner Trustee, as the
same may be amended and supplemented from time to time.
"Trust Estate" means all money, instruments, rights and
other property that are subject or intended to be subject to the
lien and security interest of the Indenture for the benefit of
the Noteholders (including all property and interests Granted to
Trustee), including all proceeds thereof and the Reserve Account.
"Trust Indenture Act" or "TIA" means the Trust
Indenture Act of 1939 as in force on the date hereof, unless
otherwise specifically provided.
"Trustee" means, initially, [__________], as Trustee
under the Indenture, or any successor Trustee under the
Indenture.
SECTION 1.2. Usage of Terms. With respect to all
terms in this Agreement, the singular includes the plural and the
plural the singular; words importing any gender include the other
gender; references to "writing" include printing, typing,
lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein
entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their
permitted successors and assigns; and the term "including" means
"including without limitation."
[SECTION 1.3. Simple Interest Method; Allocations.
All allocations of payments to principal and interest and
determinations of periodic charges and the like on the
Receivables shall be based on a year with the actual number of
days in such year and twelve months with the actual number of
days in each such month. Each payment on a Receivable shall be
applied first to the amount of interest accrued on such
Receivable to the date of receipt, then to reduce the scheduled
principal amount outstanding on the Receivable to the extent of
the remaining scheduled payment and then to any outstanding fees
and Late Fees under the terms of the Receivable. Amounts paid by
the Seller or the Servicer in respect of Repurchased Receivables
shall be allocated first to any Accrued Interest and then to the
Principal Balance of the related Receivable.]
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ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables. In
consideration of the Issuer's delivery to and upon the order of
the Seller of the Notes and the Certificates, the Seller does
hereby sell, transfer, assign, and otherwise convey to the Issuer,
without recourse (subject to the Seller's obligations herein):
(i) all right, title, and interest of the Seller
in, to and under the Receivables listed in Schedule A
hereto, all proceeds thereof and all amounts and monies
due [or received] thereon on and after the Cutoff Date
(including proceeds of the repurchase of Receivables by
the Seller pursuant to Section 3.2 or the purchase of
Receivables by the Servicer pursuant to Section 4.7),
together with the interest of the Seller in the
security interests in the Financed Vehicles granted by
the Obligors pursuant to the Receivables and in any
repossessed Financed Vehicles;
(ii) all right, title and interest of the Seller
in any Liquidation Proceeds and in any proceeds of any
extended warranties, theft and physical damage, credit
life or credit disability policies relating to the
Financed Vehicles or the Obligors;
(iii) all right, title and interest of the Seller
in any proceeds from Dealer repurchase obligations
relating to the Receivables; and
(iv) all proceeds (as defined in the Relevant
UCC) of the foregoing.
In connection with such sale, the Seller agrees to
record and file, at its own expense, financing statements (and
continuation statements with respect to such financing statements
when applicable) with respect to the Receivables for the sale of
accounts and chattel paper meeting the requirements of applicable
state law in such manner and in such jurisdictions as are
necessary to perfect the sale and assignment of the Receivables
to the Trust.
It is the intention of the Seller and the Issuer that
the assignment and transfer herein contemplated constitute a sale
of the Receivables, conveying good title thereto free and clear
of any liens and encumbrances, from the Seller to the Trust and
the Receivables not be part of the Seller's estate in the event
of an insolvency. In the event that such conveyance is deemed to
be a pledge to secure a loan, the Seller hereby grants to the
Issuer a first priority perfected security interest in all of the
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Seller's right, title and interest in, to and under the items of
property listed in clauses (i) through (iii) above, and in all
proceeds (as defined in the Relevant UCC) of the foregoing, to
secure the loan deemed to be made in connection with such pledge
and, in such event, this Agreement shall constitute a security
agreement under applicable law.
SECTION 2.2. Closing.
The conveyance of the Receivables shall take place at
the offices of [_______________] on the Closing Date,
simultaneously with the closing of the transactions contemplated
by the underwriting agreements related to the Notes and the
Certificates and the other Basic Documents. Upon the acceptance
by the Seller of the Notes and the Certificates, the ownership of
each Receivable and the contents of the related Receivable File is
vested in the Issuer, subject only to the lien of the Indenture.
ARTICLE III
THE RECEIVABLES
SECTION 3.1. Representations and Warranties of
Seller; Conditions Relating to Receivables.
(a) The Seller makes the following representations and
warranties as to the Receivables on which the Issuer shall rely
in acquiring the Receivables. Such representations and
warranties shall speak as of the Cutoff Date unless otherwise
specified, but shall survive the sale, transfer, and assignment
of the Receivables to the Issuer and the pledge thereof to the
Trustee pursuant to the Indenture.
(i) Schedule of Receivables. The information
set forth in Schedule A hereto with respect to each
Receivable is true and correct in all material
respects, and no selection procedures materially
adverse to the Holders has been utilized in selecting
the Receivables from all receivables owned by the
Seller which meet the selection criteria specified
herein.
(ii) No Sale or Transfer. No Receivable has been
sold, transferred, assigned or pledged by the Seller to
any Person other than the Issuer.
(iii) Good Title. Immediately prior to the
transfer and assignment of the Receivables to the
Issuer herein contemplated, the Seller has good and
marketable title to each Receivable free and clear of
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all Liens and rights of others; and, immediately upon
the transfer thereof, the Issuer has either (i) good
and marketable title to each Receivable, free and clear
of all Liens and rights of others, other than the Lien
of the Trustee under the Indenture, and the transfer
has been perfected under applicable law or (ii) a first
priority perfected security interest in each Receivable
and the proceeds thereof.
(b) Each Receivable satisfies the following conditions
as of the Cutoff Date unless otherwise specified and such
conditions shall survive the sale, transfer and assignment of the
Receivables to the Issuer and the pledge thereof to the Trustee
pursuant to the Indenture.
(i) Acquisition. Each Receivable has been
acquired directly or indirectly from or made through a
Dealer located in the United States (including the District
of Columbia);
(ii) Security. Each Receivable is secured by a
new or used automobile or light-duty truck;
(iii) Maturity of Receivables. Each Receivable
conveyed hereby has a remaining maturity, as of the Cutoff
Date, of not less than __ months nor greater than __ months,
and (i) with respect to Receivables secured by new Financed
Vehicles, an original maturity of at least __ months and not
more than __ months and (ii) with respect to Receivables
secured by used Financed Vehicles, an original maturity of
at least __ months and not more than __ months;
(iv) Annual Percentage Rate. Each Receivable is
a fully-amortizing fixed rate simple interest [or actuarial
method] contract that provides for level scheduled monthly
payments over its remaining term, and has an Annual
Percentage Rate equal to or greater than __% and equal to or
less than __% and is not secured by any interest in real
estate;
(v) No Repossessions. Each Receivable is
secured by a Financed Vehicle that, as of the Cutoff Date, has not
been repossessed without reinstatement of such Receivable;
(vi) Obligor Not Subject to Bankruptcy
Proceedings. Each Receivable has been entered into by an
Obligor who has not been identified on the computer files of
the Seller as in bankruptcy proceedings as of the Cutoff
Date;
(vii) No Overdue Payments. Each Receivable has no
payment that is more than 30 days past due as of the Cutoff
Date;
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(viii) Advance Payments. Each Receivable has not
been paid more than three months in advance as of the Cutoff
Date;
(ix) Remaining Principal Balance. Each
Receivable had a remaining principal balance, as of the Cutoff Date, of
at least $________ and not greater than $________;
(x) No Force Placed Insurance. As of the Cutoff
Date, each Receivable is secured by a Financed Vehicle that
was not insured by a force placed insurance policy or any
vendor's single interest and non-filing insurance policy.
(xi) Receivable Files. The Receivable Files
shall be kept at one or more of the locations specified in
Schedule B hereto.
(xii) Characteristics of Receivables. Each
Receivable (a) has been originated in the form of a credit
sales transaction by a Dealer or a purchase money loan
through a Dealer located in one of the States of the United
States (including the District of Columbia) for the retail
financing of a Financed Vehicle, has been fully and properly
executed by the parties thereto and, if a retail installment
sales contract, has been purchased by the Seller from such
Dealer or an affiliate of the Seller, and has been validly
assigned by such Dealer or an affiliate of the Seller to the
Seller in accordance with its terms; (b) contains customary
and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for realization against
the collateral of the benefits of the security; and (c)
provides for fully amortizing level scheduled monthly
payments (provided that the payment in the last month in the
life of the Receivable may be different from the level
scheduled payment) and for accrual of interest at a fixed
rate according to the [simple interest] [actuarial] method.
(xiii) Compliance with Laws. Each Receivable and
each sale of the related Financed Vehicle complied at the
time it was originated or made, and complies on and after
the Cutoff Date, in all material respects with all
requirements of applicable federal, state, and local laws,
and regulations thereunder, including usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity
Act, the Fair Credit Reporting Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, Federal
Reserve Board Regulations B and Z, state adaptations of the
National Consumer Act and of the Uniform Consumer Credit
Code, and any other consumer credit, equal opportunity, and
disclosure laws applicable to such Receivable and sale
thereof.
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(xiv) Binding Obligation. Each Receivable
constitutes the legal, valid, and binding payment obligation
in writing of the Obligor, enforceable by the holder thereof
in all material respects in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation and other similar
laws and equitable principles relating to or affecting the
enforcement of creditors' rights.
(xv) No Government Obligor. Each Receivable is
not due from the United States of America or any state or
from any agency, department, instrumentality or political
subdivision of the United States of America or any state or
local municipality, and each Receivable is not due from a
business except to the extent that such Receivable has a
personal guaranty.
(xvi) Security Interest in Financed Vehicle.
Immediately prior to the sale and assignment thereof to the
Issuer as herein contemplated, each Receivable was secured
by a validly perfected first priority security interest in
the Financed Vehicle in favor of or for the benefit of the
Seller as secured party (subject to administrative delays
and clerical errors on the part of the applicable
governmental agency and to any statutory or other lien
arising by operation of law after the Closing Date which is
prior to such security interest), the Seller's security
interest (or beneficial interest therein) is assignable to
and has been so assigned by the Seller to the Issuer, and at
such time as enforcement of such security interest is
sought, each Receivable shall be secured by a validly
perfected first priority security interest in the Financed
Vehicle for the benefit of the Issuer (subject to
administrative delays and clerical errors on the part of the
applicable governmental agency and to any statutory or other
lien arising by operation of law after the Closing Date
which is prior to such security interest).
(xvii) Receivables in Force. No Receivable has
been satisfied, subordinated, or rescinded, nor has any Financed
Vehicle been released from the Lien granted by the related
Receivable, in whole or in part.
(xviii) No Waiver. No provision of a Receivable has
been waived in such a manner that such Receivable fails
either to meet all of the representations and warranties
made by the Seller herein with respect thereto or to meet
all of the conditions with respect thereto pursuant to this
Section 3.1(b).
(xix) No Amendments. No Receivable has been
amended except pursuant to either instruments included in
the Receivable Files or instruments to be included in the
Receivables Files pursuant to Section 4.2 (or otherwise
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maintained by the Seller in the ordinary course of its
business), and no such amendment has caused such Receivable
either to fail to meet all of the representations and
warranties made by the Seller herein with respect thereto or
to fail to meet all of the conditions with respect thereto
pursuant to this Section 3.1(b).
(xx) No Defenses. As of the Cutoff Date, the
Seller has no knowledge either of any facts which would give
rise to any right of rescission, setoff, counterclaim, or
defense, or of the same being asserted or threatened, with
respect to any Receivable.
(xxi) No Liens. As of the Cutoff Date, the Seller
has no knowledge of any Liens or claims that have been
filed, including liens for work, labor, materials or unpaid
taxes relating to a Financed Vehicle, that would be liens
prior to, or equal or coordinate with, the lien granted by
the Receivable.
(xxii) No Default. Except for payment defaults
continuing for a period of not more than 30 days as of the
Cutoff Date, the Seller has no knowledge that a default,
breach, violation, or event permitting acceleration under
the terms of any Receivable exists; the Seller has no
knowledge that a continuing condition that with notice or
lapse of time would constitute a default, breach, violation,
or event permitting acceleration under the terms of any
Receivable exists; and the Seller has not waived any of the
foregoing.
(xxiii) Insurance. Each Receivable requires that
the Obligor thereunder obtain theft and physical damage
insurance covering the Financed Vehicle.
(xxiv) Lawful Assignment. No Receivable has been
originated in, or is subject to the laws of, any
jurisdiction under which the sale, transfer, and assignment
of such Receivable under this Agreement or pursuant to
transfers of the Certificates or the Notes is unlawful, void
or voidable.
(xxv) All Filings Made. No filings (other than
filings under the Relevant UCC which have been made) or
other actions are necessary in any jurisdiction to give the
Issuer a first perfected security interest in the
Receivables.
(xxvi) One Original. There is no more than one
original executed copy of each Receivable which, immediately
prior to the delivery thereof to the Servicer, (as custodian
for the Issuer) was in the possession of the Seller.
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(xxvii) Excluded Loans. Each Receivable is not a
Chase Connecticut Loan, Chase Florida Loan, Chase Lincoln
Loan, Chase Maryland Loan [or a Receivable originated by or
through a Dealer located in the State of [ ]], and
has not been the subject of a previous securitization.
(xxviii) Account Number. Each Receivable has
been assigned an account number that corresponds to the number
assigned to the Dealer from or through whom such Receivable
was acquired.
SECTION 3.2. Repurchase Upon Breach or Failure of a
Condition. The Seller, the Servicer, the Trustee or the Owner
Trustee, as the case may be, shall inform the other parties in
writing, upon the discovery by the Seller, the Servicer or an
Authorized Officer of the Trustee or the Owner Trustee of either
any breach of the Seller's representations and warranties set
forth in Section 3.1(a) or the failure of any Receivable to
satisfy any of the conditions set forth in Section 3.1(b) which
materially and adversely affects the Holders' interest in any
Receivable. Unless the breach or failed condition shall have
been cured by the last day of the Collection Period following the
Collection Period in which such discovery occurred (or, at the
Seller's option, the last day of the Collection Period in which
such discovery occurred), the Seller shall repurchase any
Receivable the Holders' interest in which was materially and
adversely affected by the breach or failed condition, as of such
last day. [Notwithstanding anything herein to the contrary, with
respect to the breach of a representation or warranty in
Section 3.1(b)(xxviii), the Seller shall repurchase such Receivable
regardless of its effect on the interest of the Holders or whether
notice thereof has been delivered by any of the parties thereto,
and repurchase of any such Receivable shall take place at any time
as is administratively convenient for the Seller and the Servicer.]
In consideration of the repurchase of a Receivable, the
Seller shall remit the Repurchase Amount of such Receivable
as of such last day (less any Liquidation Proceeds deposited, or
to be deposited, by the Servicer in the Collection Account with
respect to such Receivable pursuant to Section 4.3) in the manner
specified in Section 5.4. The sole remedy of the Issuer, the
Trustee or the Holders with respect either to a breach of the
Seller's representations and warranties set forth in Section
3.1(a) or to a failure of any of the conditions set forth in
Section 3.1(b) shall be to require the Seller to repurchase
Receivables pursuant to this Section 3.2. The obligation of the
Seller to repurchase under this Section 3.2 shall not be solely
dependent upon the actual knowledge of the Seller of any breached
representation or warranty. The Owner Trustee shall have no duty
to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Receivable pursuant
to this Section 3.2 or the eligibility of any Receivable for
purposes of this Agreement.
SECTION 3.3. Custody of Receivable Files. To assure
uniform quality in servicing the Receivables and to reduce
administrative costs, the Issuer, upon the execution and delivery
of this Agreement, agrees to have the Servicer act as custodian
of the following documents or instruments (the "Receivables
Files") which are hereby constructively delivered to the Issuer
with respect to each Receivable:
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(i) The original executed Receivable;
(ii) The original credit application or, if no
such original exists, a copy thereof; and
(iii) Any and all other documents or records that
the Seller or Servicer, as the case may be, shall keep
on file, in accordance with its customary procedures,
relating to a Receivable, an Obligor, or a Financed
Vehicle.
The Servicer hereby agrees to act as custodian and as
agent for the Issuer hereunder. The Servicer acknowledges that
it holds the documents and instruments relating to the
Receivables for the benefit of the Issuer. The Issuer shall have
no responsibility to monitor the Servicer's performance as
custodian and shall have no liability in connection with the
Servicer's performance of such duties hereunder.
SECTION 3.4. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as
custodian, shall hold the Receivable Files on behalf of the
Issuer, and maintain such accurate and complete accounts, records
(either original execution documents or copies of such originally
executed documents shall be sufficient), and computer systems
pertaining to the Receivables as shall enable the Issuer to
comply with its obligations pursuant to this Agreement. In
performing its duties as custodian, the Servicer shall act with
reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to the receivable files of
comparable new or used automobile receivables that the Servicer
services for itself or others. The Servicer shall conduct, or
cause to be conducted, periodic audits of the files of all
receivables owned or serviced by the Servicer which shall include
the Receivable Files held by it under this Agreement and the
related accounts, records, and computer systems, in such a manner
as shall enable the Owner Trustee or the Trustee to identify all
Receivable Files and such related accounts, records and computer
systems and to verify, if the Owner Trustee or the Trustee so
elects, the accuracy of the Servicer's recordkeeping. The
Servicer shall promptly report to the Owner Trustee or the
Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records, and computer systems as herein
provided, and promptly take appropriate action to remedy any such
failure.
(b) Maintenance of and Access to Records. The
Servicer shall maintain each Receivable File at one of the
locations specified in Schedule B to this Agreement, or at such
other location as shall be specified to the Owner Trustee and the
Trustee by 30 days' prior written notice. The Servicer shall
make available to the Owner Trustee, the Trustee or their
respective duly authorized representatives, attorneys, or
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auditors, the Receivable Files and the related accounts, records,
and computer systems maintained by the Servicer at such times
during normal operating hours as the Owner Trustee or Trustee
shall reasonably instruct which does not unreasonably interfere
with the Servicer's normal operations or customer or employee
relations.
(c) Release of Documents. Upon instruction from the
Trustee (or, if the Notes have been paid in full, by the Owner
Trustee), the Servicer shall release any document in the
Receivable Files to the Trustee or Owner Trustee, its agent or
its designee, as the case may be, at such place or places as such
Person may reasonably designate as soon as reasonably practicable
to the extent it does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations.
The Servicer shall not be responsible for any loss occasioned by
the failure of the Owner Trustee or Trustee, its agent or its
designee to return any document or any delay in doing so.
SECTION 3.5. Instructions; Authority to Act. The
Servicer shall be deemed to have received proper instructions
with respect to the Receivable Files upon its receipt of written
instructions signed by an Authorized Officer of the Trustee (or,
if the Notes have been paid in full, the Owner Trustee). A
certified copy of a by-law or of a resolution of the Board of
Directors of the Owner Trustee or the Trustee shall constitute
conclusive evidence of the authority of any such Authorized
Officer to act and shall be considered in full force and effect
until receipt by the Servicer of written notice to the contrary
given by the Owner Trustee or Trustee.
SECTION 3.6. Custodian's Indemnification. The
Servicer, as custodian, shall indemnify the Issuer, the Owner
Trustee and Trustee for any and all liabilities, obligations,
losses, damages, payments, costs, or expenses of any kind
whatsoever that may be imposed on, incurred, or asserted against
the Issuer, the Owner Trustee and the Trustee as the result of
any act or omission in any way relating to the maintenance and
custody by the Servicer, as custodian, of the Receivable Files;
provided, however, that the Servicer shall not be liable for any
portion of any such amount resulting from the wilful misfeasance,
bad faith, or negligence of the Issuer, the Owner Trustee or
Trustee.
SECTION 3.7. Effective Period and Termination.
The Servicer's appointment as custodian shall become effective as of
the Cutoff Date and shall continue in full force and effect until
terminated pursuant to this Section 3.7 or until this Agreement
shall be terminated. If the Servicer shall resign as Servicer
under Section 7.5 or if all of the rights and obligations of the
Servicer shall have been terminated under Section 8.1, the
appointment of the Servicer as custodian may be terminated by the
Trustee or by the Holders of Notes evidencing not less than 50%
of the aggregate Outstanding Amount of the Notes (or, if there
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are no Notes outstanding, the Holders of Certificates
representing not less than 50% of the Certificate Balance), in
the same manner as the Trustee or such Holders may terminate the
rights and obligations of the Servicer under Section 8.1. As
soon as practicable after any termination of such appointment,
the Servicer shall, at its expense, deliver the Receivable Files
to the Issuer or the Issuer's agent at such place or places as
the Issuer may reasonably designate. Notwithstanding the
termination of the Servicer as custodian, the Owner Trustee
agrees that upon any such termination, the Issuer shall provide,
or cause its agent to provide, access to the Receivables Files to
the Servicer for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables
hereunder.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. Duties of Servicer. The Servicer is
hereby authorized to act as agent for the Issuer and in such
capacity shall manage, service, administer and make collections
on the Receivables (other than Repurchased Receivables) with
reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to comparable new or used
automobile receivables that it services for itself or others.
The Servicer's duties shall include collection and posting of all
payments, responding to inquiries by Obligors or by federal,
state, or local governmental authorities with respect to the
Receivables, investigating delinquencies, reporting tax
information to Obligors in accordance with its customary
practices, advancing costs of disposition of defaults, accounting
for collections, furnishing monthly and annual statements to the
Trustee with respect to distributions. The Servicer shall follow
its customary standards, policies, and procedures in performing
its duties as Servicer hereunder; provided that the Servicer
shall be permitted to take or to refrain from taking any action
not specified in this Agreement with respect to servicing the
Receivables if such action or inaction would not contravene any
material term of this Agreement or materially adversely affect
the interests of Holders. Without limiting the generality of the
foregoing, the Servicer shall be authorized and empowered by the
Issuer to execute and deliver, on behalf of itself, the Owner
Trustee, the Trustee and the Holders, or any of them, any and all
instruments of satisfaction or cancellation, or of partial or
full release or discharge, and all other comparable instruments,
without recourse to the Issuer, with respect to the Receivables
or with respect to the Financed Vehicles. If the Servicer shall
commence a legal proceeding to enforce a Receivable or a
Defaulted Receivable, the Issuer shall thereupon be deemed to
have automatically assigned such Receivable and the related
property conveyed to the Issuer with respect to such Receivable
to the Servicer, solely for the purpose of collection. The Owner
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Trustee shall furnish the Servicer with such documents as have
been prepared by the Servicer for execution by the Owner Trustee
and as are necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
SECTION 4.2. Collection of Receivable Payments;
Refinancing. (a) The Servicer shall make reasonable efforts to
collect all payments called for under the terms and provisions of
the Receivables and of this Agreement as and when the same shall
become due, and shall follow such collection procedures as it
follows with respect to comparable new or used automobile
receivables that it services for itself or others and that are
consistent with prudent industry standards. In connection
therewith, the Servicer may grant extensions, rebates or
adjustments on a Receivable without the consent of the Issuer;
provided, however, that if the Servicer extends the date for
final payment by the Obligor of any Receivable beyond the date
one month prior to the Certificate Final Scheduled Maturity Date,
it shall promptly repurchase such Receivable pursuant to
Section 4.7. The Servicer is authorized in its discretion to
waive any Late Fees that may be due in the ordinary course of
collecting a Receivable; however, the Servicer shall not agree to
any reduction of the underlying APR on any Receivable, to any
reduction of the Principal Balance thereof, or to any reduction
of the total number of payments due thereunder or, subject to
the foregoing, to any reduction of the amount of any scheduled
payment on a Receivable.
(b) Notwithstanding anything in this Agreement to the
contrary, the Servicer may refinance any Receivable by accepting
a new promissory note from the related Obligor and applying the
proceeds of such refinancing to pay all obligations in full of
such Obligor under such Receivable. The receivable created by
the refinancing shall not be property of the Issuer.
SECTION 4.3. Realization Upon Receivables. The
Servicer shall use reasonable efforts, consistent with its
customary servicing procedures, to repossess or otherwise take
possession of the Financed Vehicle securing any Receivable which
the Servicer shall have determined to be a Defaulted Receivable
or otherwise. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable
in its servicing of new or used automobile receivables, which may
include reasonable efforts to realize upon any recourse to
Dealers, consigning the Financed Vehicle to a Dealer for resale
and selling the Financed Vehicle at public or private sale. The
Servicer shall be entitled to recover from proceeds all
reasonable expenses incurred by it in the course of converting
the Financed Vehicle into cash proceeds. The Liquidation
Proceeds realized in connection with any such action with respect
to a Receivable shall be deposited by the Servicer in the
Collection Account in the manner specified in Section 5.2 and
shall be applied to reduce (or to satisfy, as the case may be)
the Repurchase Amount of the Receivable, if such Receivable is to
be repurchased by the Seller pursuant to Section 3.2, or is to be
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purchased by the Servicer pursuant to Section 4.7. The foregoing
shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall
not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine
in its sole discretion that such repair and/or repossession will
increase the Liquidation Proceeds of the related Receivable by an
amount equal to or greater than the amount of such expenses.
SECTION 4.4. [Reserved]
SECTION 4.5. Maintenance of Security Interests in
Financed Vehicles. The Servicer, in accordance with its
customary servicing procedures, shall take such steps as are
necessary to maintain perfection of the first priority security
interest created in any Financed Vehicle which secures a
Receivable. The Owner Trustee, on behalf of the Issuer, and the
Trustee hereby authorizes the Servicer, and the Servicer hereby
agrees, to take such steps as are necessary to reperfect such
security interest in the event of the relocation of a Financed
Vehicle or for any other reason, in either case, when the
Servicer has knowledge of the need for such re-perfection. In
the event that the assignment of a Receivable to the Issuer and
by the Issuer to the Trustee pursuant to the Indenture is
insufficient without a notation on the related Financed Vehicle's
certificate of title, or without fulfilling any additional
administrative requirements under the laws of the state in which
the Financed Vehicle is located, to grant to the Trustee a
perfected security interest in the related Financed Vehicle, the
Servicer hereby agrees that the Seller's listing as the secured
party on the certificate of title is deemed in its capacity as
agent of the Trustee and further agrees to hold such certificate
of title as the Trustee's agent and custodian; provided, however,
that the Servicer shall not, nor shall the Owner Trustee, the
Trustee or Holders have the right to require that the Servicer,
make any such notation on the related Financed Vehicles'
certificate of title or fulfill any such additional
administrative requirement of the laws of the state in which a
Financed Vehicle is located.
SECTION 4.6. Covenants of Servicer. The Servicer
hereby makes the following covenants on which the Issuer will
rely in accepting the Receivables:
(i) Security Interest to Remain in Force. The
Financed Vehicle securing each Receivable shall not be
released from the security interest granted by the
Receivable in whole or in part except if such Financed
Vehicle is substituted in whole by the manufacturer,
dealer or seller as a result of mechanical defects or a
total loss of the Financed Vehicle because of accident
or theft or as otherwise contemplated herein;
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(ii) No Impairment. The Servicer shall not
impair the rights of the Issuer, the Trustee or any Holder in
the Receivables; and
(iii) Extensions, Defaulted Receivables. The
Servicer shall not increase the number of payments
under a Receivable, nor increase the Amount Financed
under a Receivable, nor extend or forgive payments on a
Receivable, except as provided in Section 4.2. In the
event that at the end of the scheduled term of any
Receivable, the outstanding principal amount thereof is
such that the final payment to be made by the related
Obligor is larger than the regularly scheduled payment
of principal and interest made by such Obligor, the
Servicer may permit such Obligor to pay such remaining
principal amount in more than one payment of principal
and interest; provided, however, that the last such
payment shall be due on or prior to the Collection
Period immediately preceding the Certificate Final
Distribution Date.
SECTION 4.7. Purchase of Receivables Upon Breach.
The Seller, the Servicer, the Trustee or the Owner
Trustee, as the case may be, shall inform the other parties
promptly, in writing, upon the discovery by the Seller, the
Servicer or an Authorized Officer of the Trustee or the Owner
Trustee, as the case may be, of any breach by the Servicer of its
covenants under Section 4.6 which materially and adversely
affects the interest of the Holders in any Receivable (for this
purpose, any breach of the covenant set forth in Section 4.6(iii)
shall be deemed to materially and adversely affect the interest
of the Holders in a Receivable). Except as otherwise specified
in Section 4.2, unless the breach shall have been cured by the
last day of the Collection Period following the Collection Period
in which such discovery occurred (or, at the Servicer's election,
the last day of the Collection Period in which such discovery
occurred), the Servicer shall purchase any Receivable materially
and adversely affected by such breach, as of such last day. In
consideration of the purchase of such Receivable, the Servicer
shall remit the Repurchase Amount (less any Liquidation Proceeds
deposited, or to be deposited, by the Servicer in the Collection
Account with respect to such Receivable pursuant to Section 4.3)
in the manner specified in Section 5.4. The sole remedy of the
Issuer, the Owner Trustee, the Trustee or the Holders against the
Servicer with respect to a breach pursuant to Section 4.2 or 4.6
shall be to require the Servicer to purchase Receivables pursuant
to this Section 4.7. The Owner Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to
this Section 4.7 or the eligibility of any Receivable for
purposes of this Agreement.
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SECTION 4.8. Servicing Fee. The Servicing
Fee for a Collection Period shall equal the sum of (i) the product of one-
twelfth of the Servicing Fee Rate and the Pool Balance as of the
close of business on the last day of the immediately preceding
Collection Period and (ii) Late Fees received from Obligors
during such Collection Period and in addition, as part of the
Servicing Fee, the Servicer shall be entitled to receive
investment earnings when and as paid on amounts on deposit in the
Trust Accounts or earned on collections pending deposit in the
Trust Accounts. The Servicer shall be required to pay from its
own account all expenses incurred by it in connection with its
activities hereunder (including fees and disbursements of the
Issuer, the Owner Trustee, the Trustee, the Owner Trustee's and
the Trustee's counsel, the Paying Agent, the Authenticating
Agent, the Note Registrar and the Certificate Registrar and
independent accountants and auditors, taxes imposed on the
Servicer, and other costs incurred in connection with
administering and servicing the Receivables) except federal,
state and local income and franchise taxes, if any, of the Issuer
or any Holder or any expenses in connection with realizing upon
Receivables under Section 4.3.
SECTION 4.9. Servicer's Certificate. On or before
each Determination Date, the Servicer shall deliver to the
Trustee, the Owner Trustee, the Paying Agent and the Rating
Agencies a Servicer's Certificate substantially in the form of
Exhibit A hereto, for the Collection Period preceding such
Determination Date, containing all information necessary to make
the distributions pursuant to Section 5.5, and all information
necessary for the Paying Agent to send statements to Holders
pursuant to Section 5.7. The Servicer shall deliver to the
Rating Agencies any information, to the extent it is available to
the Servicer, that the Rating Agencies reasonably request in
order to monitor the Issuer. The Servicer shall also specify
each Receivable which the Seller or the Servicer is required to
repurchase or purchase, as the case may be, as of the last day of
the preceding Collection Period and each Receivable which the
Servicer shall have determined to be a Defaulted Receivable
during the preceding Collection Period. Subsequent to the
Closing Date, the form of Servicer's Certificate may be revised
or modified to cure any ambiguities or inconsistencies with this
Agreement; provided, however, that no material information shall
be deleted from the form of Servicer's Certificate. In the event
that the form of Servicer's Certificate is revised or modified in
accordance with the preceding sentence, a form thereof, as so
revised or modified, shall be provided to the Owner Trustee, the
Paying Agent, the Trustee and each Rating Agency.
SECTION 4.10. Annual Statement as to Compliance.
(a) The Servicer shall deliver to a firm of independent certified
public accountants, on or before March 31 of each year commencing
March 31, 199_, a certificate signed by the chairman of the
board, the president, the treasurer, the controller, any
executive or senior vice president or any vice president of the
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Servicer, stating that (a) a review of the activities of the
Servicer during the year ended the preceding December 31 (or
shorter period in the case of the first such certificate) and of
its performance under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all
its obligations in all material respects under this Agreement
throughout such year (or shorter period in the case of the first
such report), or, if there has been a default in the fulfillment
of any such obligation, specifying each such default known to
such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustee, the
Owner Trustee and each Rating Agency promptly after having
obtained knowledge thereof, but in no event later than five
Business Days thereafter, an Officer's Certificate specifying any
event which with the giving of notice or lapse of time, or both,
would become Events of Servicing Termination under Section 8.1.
The Seller shall deliver to the Trustee and the Owner Trustee,
promptly after having obtained knowledge thereof, but in no event
later than five Business Days thereafter, an Officer's
Certificate specifying any event which with the giving of notice
or lapse of time, or both, would become Events of Servicing
Termination under Section 8.1.
SECTION 4.11. Annual Audit Report. The Servicer shall
cause a firm of independent public accountants (which may provide
other services to the Servicer or the Seller) to prepare a report
(with a copy of the certificate described in Section 4.10(a)
attached) addressed to the Board of Directors of the Servicer,
for the information and use of the Trustee, the Owner Trustee and
the Rating Agencies on or before March 31 of each year, beginning
March 31, 199_, to the effect that, with respect to the twelve
months (or shorter period in the case of the first such report)
ended the preceding December 31, such firm has either (A)
examined a written assertion by the Servicer about the
effectiveness of the Servicer's internal control structure over
the processing and reporting of transactions relating to
securitized automobile loans with respect to the criteria set
forth by the Servicer (the "Assertion") and that, on the basis of
such examination, such firm is of the opinion that the Servicer's
Assertion is fairly stated in all material respects except for
(i) such exceptions as such firm believes to be immaterial and
(ii) such other exceptions as shall be set forth in such firm's
report, or (B) such firm has performed the following Procedures:
1. For a sample of daily cash receipts during the preceding
calendar year, perform the following:
a. Trace total cash receipts to deposits on bank
statements.
b. Agree cash receipts for securitized loans to computer
reports.
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c. Trace cash receipts for securitized loans to
disbursements to the Owner Trustee and the Trustee.
2. For a sample of monthly cash receipt reports, perform the
following:
a. Agree total cash receipts per the cash receipt reports
to "Total Payments From Obligors Applied to Collection
Period" per monthly Servicer Certificates.
b. Agree total principal payments per the cash receipt
reports to "Principal Payments" per monthly Servicer
Certificates.
3. For a sample of loans delinquent 30 days or more, selected
from the loan delinquency report at a point in time, trace
loan number to inclusion in the loan collection system.
The determination of which of the two alternative reports to be
prepared and delivered, and the size of each sample to be tested,
shall be decided in the sole discretion of the Servicer. The
report of the independent certified public accountants shall also
indicate that such accounting firm is independent of the Servicer
within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
SECTION 4.12. Access by Holders to Certain
Documentation and Information Regarding Receivables. The
Servicer shall provide to the Holders access to the Receivable
Files in such cases where the Holder shall be required by
applicable statutes or regulations to have access to such
documentation. Access by the Holders shall be afforded without
charge, but only upon reasonable request and during normal
business hours which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations.
Nothing in this Section 4.12 shall affect the obligation of the
Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section 4.12.
SECTION 4.13. Reports to Holders and the Rating
Agencies. (a) The Trustee or the Owner Trustee, as applicable,
shall provide to any Holder who so requests in writing (addressed
to the Corporate Trust Office of such trustee) a copy of any
Servicer's Certificate described in Section 4.9, of the annual
statement described in Section 4.10, or the annual report
described in Section 4.11. The Trustee or the Owner Trustee, as
applicable, may require the Holder to pay a reasonable sum to
cover the cost of the Trustee's or the Owner Trustee's, as
applicable, complying with such request.
(b) The Trustee or the Owner Trustee, as applicable,
shall forward to the Rating Agencies the statement to Holders
described in Section 5.7 and any other reports it may receive
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pursuant to this Agreement to (i) Standard & Poor's Ratings
Services, Asset-Backed Surveillance Group, 25 Broadway, New York,
New York 10004 and (ii) Moody's Investors Service, Inc., ABS
Monitoring Dept., 99 Church Street, 4th Floor, New York, New York
10007.
ARTICLE V
TRUST ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS
SECTION 5.1. Establishment of Trust Accounts.
(a) The Servicer shall establish and maintain:
(i) For the benefit of the Noteholders and the
Certificateholders, in the name of the Trustee, an
Eligible Deposit Account for the deposit of Collections
(the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders and the
Certificateholders.
(ii) For the benefit of the Noteholders, in the
name of the Trustee, an Eligible Deposit Account for
the deposit of distributions to the Noteholders (the
"Note Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders.
(iii) For the benefit of the Noteholders and the
Certificateholders, in the name of the Trustee, an
Eligible Deposit Account for the deposit of funds
pursuant to Sections 5.1(d) and 5.5(c) (the "Reserve
Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
Should any depositary of the Collection Account, the
Note Distribution Account or the Reserve Account (collectively,
the "Trust Accounts") or of the Certificate Distribution Account
(including the Seller) cease to be either a Qualified Institution
or a Qualified Trust Institution, then the Servicer shall, with
the Seller's assistance as necessary, cause the related account
to be moved to a Qualified Institution or a Qualified Trust
Institution, unless the Servicer provides the Trustee with a
letter from the Rating Agencies to the effect that the current
ratings assigned to the Certificates and the Notes, by the Rating
Agencies will not be adversely affected by such depositary's
ceasing to be a Qualified Institution or a Qualified Trust
Institution, as the case may be.
(b) All amounts held in the Trust Accounts and the
Certificate Distribution Account shall be invested by the bank or
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trust company then maintaining the account (at the written
direction of the Servicer (or, if investment earnings on amounts
on deposit in the Certificate Distribution Account are not being
paid to the Servicer, the Seller) in Permitted Investments that
mature not later than the Deposit Date next succeeding the date
of investment except, if the Trust Accounts are maintained with
the Trustee or the Certificate Distribution Account is maintained
with the Owner Trustee, as applicable, for investment on which
the Trustee or the Owner Trustee, as applicable, is the obligor
(including repurchase agreements on which the Trustee or the
Owner Trustee, as applicable, in its commercial capacity is
liable as principal), which investments may mature on such
Distribution Date; provided, however, that once such amounts have
been invested by such bank or trust company, as applicable, in
Permitted Investments, such Permitted Investments must be held or
maintained until they mature on or before the dates described
above.
(c) The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust
Accounts and in all proceeds thereof (excluding investment income
thereon) and all such funds, investments, proceeds and income
shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole
dominion and control of Trustee for the benefit of the
Noteholders and the Certificateholders, or the Noteholders, as
the case may be.
(d) On the Closing Date, the Seller shall deposit the
Reserve Account Deposit into the Reserve Account. Amounts on
deposit in the Reserve Account will be released and distributed
to the Seller and the General Partner on each Distribution Date
to the extent that the amount on deposit in the Reserve Account
(after giving effect to all deposits therein or withdrawals
therefrom on such Distribution Date) exceeds the Specified Reserve
Account Balance. Upon any distribution to the Seller or the General
Partner of amounts from the Reserve Account, Holders will not have
any rights in, or claims to, such amounts. Amounts properly
distributed to the Seller or the General Partner from the
Reserve Account or otherwise shall not be available under any
circumstances to the Issuer, the Trustee, the Owner Trustee or
the Holders and the Seller or the General Partner shall in no
event thereafter be required to refund any such distributed amounts.
(e) With respect to the Trust Account Property, the
Trustee agrees, by its respective acceptance hereof, that:
(i) any Trust Account Property or any property in
a Trust Account that is held in deposit accounts shall
be held solely in the Eligible Deposit Accounts subject
to the last paragraph of Section 5.1(a); and, except as
otherwise provided herein, each such Eligible Deposit
Account shall be subject to the exclusive custody and
control of the Trustee and the Trustee shall have sole
signature authority with respect thereto;
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(ii) any Trust Account Property that constitutes
Physical Property shall be delivered to the Trustee in
accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or
disposition, solely by the Trustee or a financial
intermediary (as such term is defined in Section 8-
313(4) of the UCC) acting solely for the Trustee;
(iii) any Trust Account Property that is a book-
entry security held through the Federal Reserve System
pursuant to Federal book-entry regulations shall be
delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the
Trustee, pending maturity or disposition, through
continued book-entry registration of such Trust Account
Property as described in such paragraph; and
(iv) any Trust Account Property that is an
"uncertificated security" under Article 8 of the UCC
and that is not governed by clause (iii) above shall be
delivered to the Trustee in accordance with paragraph
(c) of the definition of "Delivery" and shall be
maintained by the Trustee, pending maturity or
disposition, through continued registration of the
Trustee's (or its nominee's) ownership of such
security.
Effective upon Delivery of any Trust Account Property, the
Trustee shall be deemed to have represented that it has purchased
such Trust Account Property for value, in good faith and without
notice of any adverse claim thereto.
(f) The Servicer shall have the power, revocable by
the Trustee or by the Owner Trustee with the consent of the
Trustee, to instruct the Trustee to make withdrawals and payments
from the Trust Accounts for the purpose of permitting the
Servicer or the Owner Trustee to carry out its respective duties
hereunder or permitting Trustee to carry out its duties under the
Indenture. The Servicer will not direct the Trustee to make any
investment of any funds or to sell any investment held in any of
the Trust Accounts unless the security interest Granted and
perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without
any further action by any Person, and, in connection with any
direction to the Trustee to make any such investment or sale, if
requested by the Trustee, the Servicer shall deliver to the
Trustee an Opinion of Counsel, acceptable to the Trustee, to such
effect.
SECTION 5.2. Collections. The Servicer shall remit
daily within forty-eight hours of receipt to the Collection
Account all payments by or on behalf of the Obligors on the
Receivables and all Liquidation Proceeds, both as collected
during the Collection Period. Chase USA has requested that, so
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long as it is acting as the Servicer, the Servicer be permitted
to make remittances of collections on a less frequent basis than
that specified in the immediately preceding sentence. It is
understood that such less frequent remittances may be made only
on the specific terms and conditions set forth below in this
Section 5.2 and only for so long as such terms and conditions are
fulfilled. Accordingly, notwithstanding the provisions of the
first sentence of this Section 5.2, the Servicer shall remit such
collections to the Collection Account in Automated Clearinghouse
Corporation next-day funds or immediately available funds no
later than 11:00 a.m., New York City time, on the Deposit Date
but only for so long as (i) either (a) the short-term certificate
of deposit ratings of the Servicer are at least "P-1" by Moody's
and "A-l" by Standard & Poor's or (b) the Servicer provides the
Trustee with a letter from the Rating Agencies to the effect that
the current ratings assigned to the Notes by the Rating Agencies
will not be adversely affected by the remittance of Collections
on a monthly, rather than a daily, basis and (ii) the Servicer
shall be Chase USA. [Upon remittance by the Servicer of
Collections to the Collection Account pursuant to the preceding
sentence, the Paying Agent shall provide written notice to the
Trustee and the Owner Trustee no later than 11 a.m., New York
City time, on each Deposit Date setting forth the amounts
remitted by the Servicer on such date and, if the Paying Agent
fails to provide the Trustee and the Owner Trustee, with such
written notice by 12 noon, New York City time, on such Deposit
Date, then the Trustee and the Owner Trustee shall assume that no
deposits were made to the Collection Account pursuant to this
Section 5.2.] For purposes of this Section 5.2 the phrase
"payments made on behalf of the Obligors" shall mean payments
made by Persons other than the Seller or the Servicer.
SECTION 5.3. [Reserved].
SECTION 5.4. Additional Deposits. The Servicer, or
the Seller, as the case may be, shall deposit into the Collection
Account the aggregate Purchase or Repurchase Amount pursuant to
Sections 3.2 and 4.7, as applicable. All remittances shall be
made to the Collection Account, in Automated Clearinghouse
Corporation next-day funds or immediately available funds, no
later than 11 a.m., New York City time, on the Deposit Date.
SECTION 5.5. Distributions. (a) No later than 12
noon, New York City time, on each Determination Date, the
Servicer shall calculate all amounts required to determine the
amounts to be deposited from the Reserve Account into the
Collection Account and from the Collection Account into the Note
Distribution Account and the Certificate Distribution Account
with respect to the next succeeding Distribution Date.
(b) On the Business Day prior to each Distribution
Date, the Servicer shall instruct the Trustee in writing (based
on the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section
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4.9) to withdraw from the Reserve Account and deposit in the
Collection Account and the Trustee shall so withdraw and deposit
the Reserve Account Transfer Amount for such Distribution Date.
(c) Not later than 12:00 noon, New York City time, on
each Distribution Date, at the Servicer's direction, the Trustee,
or the Paying Agent on behalf of the Trustee, shall cause to be
made the following distributions, by wire transfer of immediately
available funds, in the following order of priority and in the
amounts set forth in the Servicer's Certificate for such
Distribution Date:
[(i) to the Servicer, to the extent of the Total
Distribution Amount, the sum of (x) the Servicing Fee
for the preceding Collection Period, plus (y) the
amount of any Servicing Fee previously due but not
paid, if any, to the extent such amounts are not
deducted from the Servicer's remittance to the
Collection Account pursuant to Section 5.6;
(ii) to the Administrator, to the extent of the
Total Distribution Amount (as such amount has been
reduced by the distribution described in clause (c)(i)
above), an amount equal to sum of (x) $____ on account
of its monthly fee, plus (y) the amount of any
Administration Fee due to the Administrator previously
due but not paid, if any, to the extent such amounts
are not deducted from the Servicer's remittance to the
Collection Account pursuant to Section 5.6;]
(iii) to the Note Distribution Account, to the
extent of the sum of the Total Distribution Amount
remaining after the distributions described in clauses
(c)(i) and (ii) above and the Reserve Account Transfer
Amount, if any, for such Distribution Date, the
Noteholders' Interest Distributable Amount;
(iv) to the Owner Trustee for deposit in the
Certificate Distribution Account, to the extent of the
sum of the Total Distribution Amount and the Reserve
Account Transfer Amount, if any, for such Distribution Date,
remaining after the distributions described in clauses
(c)(i) through (iii) above, the Certificateholders' Interest
Distributable Amount;
(v) to the Note Distribution Account, to the
extent of the sum of the Total Distribution Amount and
the Reserve Account Transfer Amount, if any, for such
Distribution Date, remaining after the distributions
described in clauses (c)(i) through (iv) above, the
Noteholders' Principal Distributable Amount;
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(vi) to the Owner Trustee for deposit in the
Certificate Distribution Account, to the extent of the
sum of the Total Distribution Amount and the Reserve
Account Transfer Amount, if any, for such Distribution Date
remaining after the distributions described in clauses
(c)(i) through (v) above, the Certificateholders'
Principal Distributable Amount; and
(vii) to the Reserve Account, any amounts
remaining.
In the event that the Collection Account is maintained
with an institution other than the Trustee, the Servicer shall
instruct and cause such institution to make all deposits and
distributions pursuant to this Section 5.5(c) on the related
Deposit Date.
SECTION 5.6. Net Deposits. Chase USA (in whatever
capacity) may make the remittances pursuant to Sections 5.2 and
5.4 above, net of amounts to be retained by it or distributed to
it (also in whatever capacity) pursuant to Section 4.8 (if
applicable) and Section 5.5, if (a) it shall be the Servicer and
(b) it is entitled, pursuant to Section 5.2, to make deposits on
a monthly basis, rather than a daily basis. Nonetheless, the
Servicer shall account for all of the above described amounts as
if such amounts were deposited and distributed separately.
SECTION 5.7. Statements to Certificateholders and
Noteholders. (a) On each Distribution Date, the Servicer shall
provide to the Trustee (with a copy of the Rating Agencies) and
to the Owner Trustee (for the Owner Trustee to forward to each
Certificateholder of record pursuant to the Trust Agreement) a
statement substantially in the form of [Exhibit A to Schedule E]
(or such other form that is acceptable to the Trustee, the Owner
Trustee and the Servicer) setting forth at least the following
information as to the Notes (separately stating such information
as to the Class A-1 Notes and the Class A-2 Notes) and the
Certificates, to the extent applicable:
(i) the amount of such distribution allocable to
principal;
(ii) the amount of such distribution allocable to
interest;
(iii) the Pool Balance as of the close of business
on the last day of the preceding Collection Period;
(iv) the Outstanding Amount of each class of the
Notes, the Class A-1 Note Pool Factor, the Class A-2
Note Pool Factor, the Certificate Balance and the
Certificate Pool Factor, in each case after giving
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effect to payments allocated to principal reported
under (i) above;
(v) the amount of the Servicing Fee paid to the
Servicer with respect to the related Collection Period;
(vi) the amount of the Administration Fee paid to
the Administrator with respect to such Collection
Period;
(vii) the aggregate amount of the Purchase Amounts
for Purchased Receivables with respect to the related
Collection Period paid by each of the Seller and the
Servicer (accounted for separately);
(viii) the amount of Aggregate Net Losses and
Aggregate Principal Balance of Defaulted Receivables,
if any, for such Collection Period;
(ix) the balance of the Reserve Account on such
Distribution Date, after giving effect to deposits and
withdrawals made with respect to such Distribution
Date;
(x) the Specified Reserve Account Balance for
such Distribution Date;
(xi) the Total Distribution Amount for such
Collection Period;
(xii) the Noteholders' Distributable Amount, the
components thereof, and the amount, if any, to be
withdrawn from the Reserve Account and deposited into
the Note Distribution Account pursuant to Section
5.5(c); and
(xiii) the Certificateholder's Distributable Amount,
the components thereof, and the amount, if any, to be
withdrawn from the Reserve Account and deposited into
the Certificate Distribution Account pursuant to
Section 5.5(d).
(xiv) the aggregate amount of the Purchase
Amounts for Purchased Receivables with respect to such
Collection Period;
(xv) the amount of Aggregate Net Losses, if any,
for such Collection Period; and
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(xvi) the balance of the Reserve Account on such
Distribution Date, after giving effect to deposits and
withdrawals made with respect to such Distribution
Date;
(xvii) the Specified Reserve Account Balance for
such Distribution Date;
(xviii) the Noteholders' Distributable Amount, the
components thereof, and the amount, if any, to be
withdrawn from the Reserve Account and deposited into
the Note Distribution Account pursuant to Section
5.05(c); and
(xix) the Certificateholder's Distribution Amount,
the components thereof, and the amount, if any, to be
withdrawn from the Reserve Account and deposited into
the Certificate Distribution Account pursuant to
Section 5.05(d).
Each amount set forth pursuant to subclause (i), (ii),
(v), (vi), (xi) or (xii) above shall be expressed as a dollar
amount per $1,000 of original principal balance of a Note.
Within the prescribed period of time for tax reporting
purposes after the end of each calendar year during the term of
the Indenture, the Trustee shall mail to each Person who at any
time during such calendar year shall have been a Noteholder and
received any payment thereon, a statement containing the amounts
described in (i) and (ii) above and any other information
required by applicable tax laws, for the purposes of such
Noteholder's preparation of Federal income tax returns.
ARTICLE VI
THE SELLER
SECTION 6.1. Representations of Seller. The Seller
makes the following representations on which the Issuer shall
rely in acquiring the Receivables. The representations shall
speak as of the execution and delivery of this Agreement, and
shall survive the sale of the Receivables to the Issuer and
pledge thereof to the Trustee pursuant to the Indenture.
(i) Organization and Good Standing. The Seller
has been duly organized and is validly existing as a
national banking association in good standing under the
laws of the United States of America, with power and
authority to own its properties and to conduct its
business as such properties are currently owned and
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such business is presently conducted, and had at all
relevant times, and has, power, authority, and legal
right to acquire and own the Receivables.
(ii) Power and Authority. The Seller has the
power and authority to execute and deliver this
Agreement and the other Basic Documents to which it is
a party and to carry out their respective terms, the
Seller has full power and authority to sell and assign
the property to be sold and assigned to the Issuer as
the Owner Trust Estate and has duly authorized such
sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery, and
performance of this Agreement and the other Basic
Documents to which it is a party has been duly
authorized by the Seller by all necessary corporate
action.
(iii) Valid Sale; Binding Obligations. This
Agreement effects a valid sale, transfer, and
assignment of the Receivables, enforceable against
creditors of and purchasers from the Seller; this
Agreement and each of the other Basic Documents to
which it is a party constitutes a legal, valid, and
binding obligation of the Seller enforceable in
accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization,
or other similar laws affecting the enforcement of
creditors' rights in general and by general principles
of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(iv) No Violation. The consummation of the
transactions contemplated by this Agreement and the
other Basic Documents and the fulfillment of the terms
hereof and thereof do not conflict with, result in any
breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a
default under, the articles of association or bylaws of
the Seller, or conflict with or breach any of the
material terms or provisions of, or constitute (with or
without notice or lapse of time) a default under, any
indenture, agreement, or other instrument to which the
Seller is a party or by which it is bound; nor result
in the creation or imposition of any lien upon any of
its properties pursuant to the terms of any such
indenture, agreement, or other instrument; nor violate
any law or, to the best of the Seller's knowledge, any
order, rule, or regulation applicable to the Seller of
any court or of any federal or state regulatory body,
administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or
its properties.
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(v) No Proceedings. There are no proceedings or
investigations pending, or, to the Seller's best
knowledge, threatened, before any court, regulatory
body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or
its properties: (a) asserting the invalidity of this
Agreement, any other Basic Document, the Notes or the
Certificates, (b) seeking to prevent the issuance of
the Notes or the Certificates or the consummation of
any of the transactions contemplated by this Agreement
or any other Basic Document, (c) seeking any
determination or ruling that might materially and
adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability
of, this Agreement, any other Basic Document, the Notes
or the Certificates, or (d) relating to the Seller and
which might adversely affect the federal or state
income tax attributes of the Notes or the Certificates.
SECTION 6.2. Liability of Seller; Indemnities. The
Seller shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Seller in such
capacity under this Agreement and shall have no other obligations
or liabilities hereunder.
The Seller shall indemnify, defend and hold harmless
the Issuer, the Owner Trustee and the Trustee from and against
any taxes that may at any time be asserted against any such
Person with respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale of
the Notes and the Certificates, including any sales, gross
receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any
taxes asserted with respect to ownership of the Receivables or
federal or other income taxes, including franchise taxes measured
by net income), arising out of the transactions contemplated by
this Agreement and the other Basic Documents, and costs and
expenses in defending against the same.
The Seller shall indemnify, defend, and hold harmless
the Issuer, the Owner Trustee and the Trustee from and against
any loss, liability or expense incurred by reason of (i) the
Seller's wilful misfeasance, bad faith, or negligence in the
performance of its duties hereunder, or by reason of reckless
disregard of the obligations and duties hereunder and (ii) the
Seller's violation of federal or state securities laws in
connection with the registration of the sale of the Notes and the
Certificates.
Indemnification under this Section 6.2 shall include
reasonable fees and expenses of counsel and expenses of
litigation. If the Seller shall have made any indemnity payments
to the Issuer, the Owner Trustee or the Trustee, respectively,
pursuant to this Section 6.2 and the Issuer, the Owner Trustee or
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the Trustee, respectively, thereafter shall collect any of such
amounts from others, the Issuer, the Owner Trustee or the
Trustee, respectively, shall repay such amounts to the Seller,
without interest.
SECTION 6.3. Merger or Consolidation of Seller. Any
corporation or other entity (i) into which the Seller may be
merged or consolidated, (ii) which may result from any merger,
conversion, or consolidation to which the Seller shall be a
party, or (iii) which may succeed to all or substantially all of
the business of the Seller, which corporation or other entity
shall be bound to perform every obligation of the Seller under
this Agreement, shall be the successor to the Seller hereunder
without the execution or filing of any document or any further
act by any of the parties to this Agreement. The Seller shall
give prompt written notice of any merger or consolidation to the
Issuer, the Owner Trustee, the Trustee, the Servicer and the
Rating Agencies.
SECTION 6.4. Limitation on Liability of Seller and
Others. The Seller and any director, officer, employee or agent
of the Seller may rely in good faith on the advice of counsel or
on any document of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising hereunder
or under any other Basic Documents. The Seller shall not be
under any obligation under this Agreement to appear in,
prosecute, or defend any legal action that shall be unrelated to
its obligations under this Agreement or any other Basic Document,
and that in its opinion may involve it in any expense or
liability.
SECTION 6.5. Seller May Own Notes and Certificates.
The Seller and any Person controlling, controlled by, or under
common control with the Seller may in its individual or any other
capacity become the owner or pledgee of Notes or Certificates
with the same rights as it would have if it were not the Seller
or an affiliate thereof, except as otherwise provided in the
definition of "Noteholder" or "Certificateholder" specified in
Section 1.1. Notes or Certificates so owned by or pledged to the
Seller or such controlling or commonly controlled Person shall
have an equal and proportionate benefit under the provisions of
this Agreement, without preference, priority, or distinction as
among all of the Notes or Certificates, as applicable.
ARTICLE VII
THE SERVICER
SECTION 7.1. Representations of Servicer. The
Servicer makes the following representations on which the Issuer
shall rely in acquiring the Receivables. The representations
shall speak as of the execution and delivery of this Agreement
(or as of a date a Person (other than the Trustee) becomes
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Servicer pursuant to Section 7.3 and Section 8.2 in a case of a
successor to the Servicer), and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Trustee
pursuant to the Indenture.
(i) Organization and Good Standing. The Servicer
has been duly organized and is validly existing as a
national banking association or corporation and is in
good standing under the laws of the United States of
America or the jurisdiction of its incorporation, with
power and authority to own its properties and to
conduct its business as such properties are currently
owned and such business is presently conducted, and had
at all relevant times, and has, power, authority, and
legal right to acquire, own, sell, and service the
Receivables and to hold the Receivable Files as
custodian on behalf of the Issuer.
(ii) Power and Authority. The Servicer has the
power and authority to execute and deliver this
Agreement and the Basic Documents to which it is a
party and to carry out the terms thereof; and the
execution, delivery, and performance of this Agreement
and the other Basic Documents has been duly authorized
by the Servicer by all necessary corporate action.
(iii) Binding Obligations. This Agreement and the
other Basic Documents to which it is a party constitute
legal, valid, and binding obligations of the Servicer
enforceable in accordance with their respective terms
subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, liquidation or other
similar laws and equitable principles relating to or
affecting the enforcement of creditors' rights, whether
considered in a proceeding at law or in equity.
(iv) No Violation. The consummation of the
transactions contemplated by this Agreement and the
other Basic Documents and the fulfillment of the terms
hereof and thereof do not conflict with, result in any
breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a
default under, the articles of association or bylaws of
the Servicer, or conflict with or breach any of the
material terms or provisions of, or constitute (with or
without notice or lapse of time) a default under, any
indenture, agreement, or other instrument to which the
Servicer is a party or by which it is bound; nor result
in the creation or imposition of any lien upon any of
its properties pursuant to the terms of any such
indenture, agreement, or other instrument; nor violate
any law or, to the best of the Servicer's knowledge,
any order, rule, or regulation applicable to the
Servicer of any court or of any federal or state
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regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over
the Servicer or its properties.
(v) No Proceedings. There are no proceedings or
investigations pending, or to the Servicer's best
knowledge, threatened, before any court, regulatory
body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer
or its properties: (a) asserting the invalidity of this
Agreement, the Notes or the Certificates, (b) seeking
to prevent the issuance of the Notes or the
Certificates or the consummation of any of the
transactions contemplated by this Agreement or any
other Basic Document, (c) seeking any determination or
ruling that might materially and adversely affect the
performance by the Servicer of its obligations under,
or the validity or enforceability of, this Agreement,
any other Basic Document, the Notes or the
Certificates, or (d) relating to the Servicer and which
might adversely affect the federal or state income tax
attributes of the Notes or the Certificates.
(vi) Fidelity Bond. The Servicer maintains a
fidelity bond in such form and amount as is customary
for banks acting as custodian of funds and documents in
respect of retail automotive installment sales
contracts.
SECTION 7.2. Liability of Servicer; Indemnities. The
Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Servicer
under this Agreement and shall have no other obligations or
liabilities hereunder.
(i) The Servicer shall defend, indemnify, and
hold harmless the Issuer, the Owner Trustee, the
Trustee and the Holders from and against any and all
costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use,
ownership, or operation by the Servicer or any
affiliate thereof of a Financed Vehicle.
(ii) The Servicer shall indemnify, defend, and
hold harmless the Issuer, the Owner Trustee and the
Trustee from and against any taxes that may at any time
be asserted against the Issuer with respect to the
transactions contemplated in this Agreement, including,
without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property,
privilege, or license taxes (but not including any
taxes asserted with respect to, and as of the date of,
the sale of the Receivables to the Issuer or the
issuance and original sale of the Notes or the
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Certificates, or asserted with respect to ownership of
the Receivables or federal, state or other income
taxes, including franchise taxes measured by net
income) arising out of distributions on the Notes or
the Certificates and costs and expenses in defending
against the same.
(iii) The Servicer shall indemnify, defend, and
hold harmless the Issuer, the Owner Trustee, the
Trustee and the Holders from and against any and all
costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense,
loss, claim, damage, or liability arose out of, or was
imposed upon the Issuer, the Owner Trustee, the Trustee
or the Holders through the wilful misfeasance, gross
negligence, or bad faith of the Servicer in the
performance of its duties under this Agreement or by
reason of reckless disregard of its obligations and
duties under this Agreement.
Indemnification under this Section 7.2 shall include
reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer shall have made any indemnity
payments pursuant to this Section 7.2 and the recipient
thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts to the Servicer,
without interest. The indemnification obligations of the
Servicer set forth in this Section 7.2 shall survive the
termination of such Servicer with respect to any act or failure
to act which occurs prior to such Servicer's termination.
SECTION 7.3. Merger or Consolidation of Servicer.
Any corporation or other entity (i) into which the Servicer may
be merged or consolidated, (ii) which may result from any merger,
conversion, or consolidation to which the Servicer shall be a
party, or (iii) which may succeed to all or substantially all of
the business of the Servicer, which corporation or other entity
shall be bound to perform every obligation of the Servicer
hereunder, shall be the successor to the Servicer under this
Agreement without the execution or filing of any document or any
further act on the part of any of the parties to this Agreement.
The Servicer shall promptly inform the Issuer, the Owner Trustee,
the Trustee, the Seller and the Rating Agencies in writing of any
such merger or consolidation.
SECTION 7.4. Limitation on Liability of Servicer and
Others.
(a) Neither the Servicer nor any of the directors or
officers or employees or agents of the Servicer shall be under
any liability to the Issuer, the Owner Trustee, the Trustee or
the Holders, except as provided under this Agreement, for any
action taken or for refraining from the taking of any action
pursuant to this Agreement; provided, however, that this
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provision shall not protect the Servicer or any such person
against any liability that would otherwise be imposed by reason
of wilful misfeasance, gross negligence, or bad faith in the
performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement, except that
employees of either the Servicer or its affiliates will be
protected against any liability that would otherwise be imposed
by reason of negligence. The Servicer and any director or
officer or employee or agent of the Servicer may rely in good
faith on the advice of counsel or on any document of any kind
prima facie properly executed and submitted by any Person
respecting any matters arising under this Agreement.
(b) The Servicer, and any director, or officer,
employee or agent of the Servicer, shall be indemnified by the
Issuer and held harmless against any loss, liability, or expense
(including reasonable attorneys' fees and expenses) incurred in
connection with any legal action relating to the performance of
the Servicer's duties under this Agreement, other than (i) any
loss or liability otherwise reimbursable pursuant to this
Agreement or the Basic Documents; (ii) any loss, liability, or
expense incurred solely by reason of the Servicer's wilful
misfeasance, negligence, or bad faith in the performance of its
duties hereunder or by reason of reckless disregard of its
obligations and duties under this Agreement or the Basic
Documents; and (iii) any loss, liability, or expense for which
the Issuer is to be indemnified by the Servicer under this
Agreement or the Basic Documents. Any amounts due the Servicer
pursuant to this Section shall be payable on a Distribution Date
from the Collection Account only after all payments required to
be made on such date to the Holders and the Servicer have been
made.
(c) Except as provided in this Agreement, the Servicer
shall not be under any obligation to appear in, prosecute, or
defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may
involve it in any expense or liability; provided, however, that
the Servicer may undertake any reasonable action that it may deem
necessary or desirable in respect of this Agreement and the
rights and duties of the parties to this Agreement and the
interests of the Holders under this Agreement. In such event,
the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs, and liabilities of
the Issuer, and the Servicer shall be entitled to be reimbursed
therefor. Any amounts due the Servicer pursuant to this Section
shall be payable on a Distribution Date from the Collection
Account only after all payments required to be made on such date
to the Holders and the Servicer shall have been made.
The Person to be indemnified shall provide the Issuer,
the Owner Trustee and the Trustee with a certificate and
accompanying Opinion of Counsel requesting indemnification and
setting forth the basis for such request.
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SECTION 7.5. Servicer Not To Resign. Except as
permitted by Section 7.3, the Servicer shall not resign from its
obligations and duties under this Agreement except (i) upon
determination that the performance of its duties shall no longer
be permissible under applicable law or (ii) in the event of the
appointment of a successor Servicer, upon receipt by the Issuer
of notice from each of Standard & Poor's and Moody's to the
effect that the rating then assigned to the Certificates or the
Notes by each respective rating agency will not be withdrawn or
reduced as a result of such resignation and such appointment.
Notice of any such determination permitting the resignation of
Chase USA shall be communicated to the Issuer, the Trustee, the
Owner Trustee and the Rating Agencies at the earliest practicable
time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any
such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect
delivered to the Issuer, the Trustee and the Owner Trustee
concurrently with such notice. No such resignation shall become
effective until the Trustee (which shall not be obligated to act
as successor Servicer if the Servicer has resigned for a reason
other than that the performance of its duties are no longer
permissible under applicable law) or a successor Servicer shall
have assumed the responsibilities and obligations of the Servicer
hereunder in accordance with Section 8.2.
SECTION 7.6. Delegation of Duties. So long as Chase
USA acts as Servicer, the Servicer shall have the right, in the
ordinary course of its business, to delegate any of its duties
under this Agreement to any Person. Any compensation payable to
such Person shall be paid by the Servicer from its own funds and
none of the Issuer, the Owner Trustee, the Trustee or the Holders
shall have any liability to such Person with respect thereto.
Notwithstanding any delegation of duties by the Servicer pursuant
to this Section 7.6, the Servicer shall not be relieved of its
liability and responsibility with respect to such duties, and any
such delegation shall not constitute a resignation within the
meaning of Section 7.5. Any agreement that may be entered into
by the Servicer and a Person that provides for any delegation of
the Servicer's duties hereunder shall be deemed to be between the
Servicer and such Person alone, and the Issuer, the Owner
Trustee, the Trustee and Holders shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or
liabilities with respect thereto.
ARTICLE VIII
EVENTS OF SERVICING TERMINATION
SECTION 8.1. Events of Servicing Termination. Any
one of the following events which shall occur and be continuing
shall constitute an event of default hereunder (each, a "Events
of Servicing Termination"):
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(i) Any failure by the Servicer to deliver to the
Trustee the Servicer's Certificate for the related
Collection Period, or any failure by the Servicer to
deliver to the Trustee, for deposit in any of the Trust
Accounts or the Certificate Distribution Account, any
proceeds or payment required to be so delivered under
the terms of the Certificates or the Notes and this
Agreement (or, in the case of a payment or deposit to
be made not later than the Deposit Date, the failure to
make such payment or deposit on such Deposit Date),
which failure continues unremedied for a period of five
Business Days after (A) discovery by an officer of the
Servicer or (B) written notice (1) to the Servicer by
the Trustee or the Owner Trustee or (2) to the Trustee
or Owner Trustee, as applicable, and the Servicer by
the Holders of Notes evidencing not less than 25% of
the Outstanding Amount of the Notes (or, if the Notes
have been paid in full, by Holders of the Certificates
evidencing not less than 25% of the Certificate
Balance);
(ii) Failure on the part of the Servicer duly to
observe or to perform in any material respect any other
covenants or agreements of the Servicer set forth in
this Agreement or the Indenture, which failure shall
(a) materially and adversely affect the rights of the
Issuer or the Holders, and (b) continues unremedied for
a period of 60 days after the date on which written
notice of such failure, requiring the same to be
remedied, shall have been given (1) to the Servicer by
the Trustee or the Owner Trustee, or (2) to the Trustee
or the Owner Trustee, as applicable, and the Servicer
by the Holders of Notes evidencing not less than 25% of
the Outstanding Amount of the Notes (or, if the Notes
have been paid in full, by Holders of the Certificates
evidencing not less than 25% of the Certificate
Balance);
(iii) The entry of a decree or order by a court or
agency or supervisory authority having jurisdiction in
the premises for the appointment of a conservator,
receiver, or liquidator for the Servicer in any
insolvency, readjustment of debt, marshalling of assets
and liabilities, or similar proceedings, or for the
winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(iv) The consent by the Servicer to the
appointment of a conservator or receiver or liquidator
in any insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings of or
relating to the Servicer or of or relating to
substantially all of its property; or the Servicer
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shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take
advantage of any applicable insolvency or
reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend
payment of its obligations.
Upon the occurrence of any Events of Servicing Termination
described above, and in each and every case and for so long as
such Events of Servicing Termination shall not have been
remedied, either the Trustee or the Holders of Notes evidencing
not less than 50% of the Outstanding Amount of the Notes (or, if
the Notes have been paid in full and the Indenture has been
discharged in accordance with its terms, by the Owner Trustee or
the Holders of Certificates evidencing not less than 50% of the
Certificate Balance), by notice given in writing to the Servicer
(and to the Trustee or the Owner Trustee, as applicable, if given
by Holders) may terminate all of the rights and obligations of
the Servicer under this Agreement. On or after the receipt by
the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the
Certificates, the Notes or the Receivables or otherwise, shall
pass to and be vested in the Trustee pursuant to this Section
8.1; and, without limitation, the Trustee shall be hereby
authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all
other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the
transfer and endorsement of the Receivable Files, or otherwise.
The predecessor Servicer shall cooperate with the successor
Servicer and the Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under
this Agreement, including the transfer to the successor Servicer
for administration by it of all cash amounts that shall at the
time be held by the predecessor Servicer for deposit, shall have
been deposited by the Servicer in the Collection Account, or
shall thereafter be received with respect to a Receivable. All
reasonable costs and expenses (including attorneys' fees and
disbursements) incurred in connection with transferring the
Receivable Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this
Section 8.1 shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and
expenses. The Trustee and the Owner Trustee shall give written
notice of any termination of the Servicer to their related
Holders, and the Trustee shall give such notice to the Rating
Agencies.
SECTION 8.2. Trustee to Act; Appointment of
Successor. Upon the Servicer's receipt of notice of termination
pursuant to Section 8.1 or resignation pursuant to Section 7.5,
the Trustee shall be the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement, and
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shall be subject to all the responsibilities, duties and
liabilities arising thereafter relating thereto placed on the
Servicer by the terms and provisions of this Agreement. As
compensation therefor, the Trustee shall be entitled to such
compensation (whether payable out of the Collection Account or
otherwise) as the Servicer would have been entitled to under this
Agreement if no such notice of termination or resignation had
been given. Notwithstanding the above, the Trustee may, if it
shall be unwilling so to act, or shall, if it shall be legally
unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established financial institution
(x) having a net worth of not less than $100,000,000 as of the
last day of the most recent fiscal quarter for such institution
and (y) whose regular business shall include the servicing of
automobile receivables, as successor Servicer under this
Agreement; provided, that the appointment of any such successor
Servicer will not result in the withdrawal or reduction of the
outstanding rating assigned to the Certificates or the Notes by
Rating Agency. In connection with such appointment, the Trustee
may make such arrangements for the compensation of such successor
Servicer out of payments on Receivables as it and such successor
Servicer shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer
under this Agreement. The Trustee and such successor Servicer
shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. Unless the
Trustee shall be prohibited by law from so acting, the Trustee
shall not be relieved of its duties as successor Servicer under
this Section 8.2 until the newly appointed successor Servicer
shall have assumed the responsibilities and obligations of the
Servicer under this Agreement.
SECTION 8.3. Notification to Noteholders and
Certificateholders. Upon any Servicer termination, or
appointment of a successor Servicer pursuant to this Article
VIII, the Owner Trustee shall give prompt written notice thereof
to Certificateholders and the Trustee shall give prompt written
notice thereof to the Noteholders, at their respective addresses
of record, and to the Rating Agencies.
SECTION 8.4. Waiver of Past Defaults. The Holders of
Notes evidencing at least a majority of the Outstanding Amount of
the Notes (or, the Holders of Certificates evidencing not less
than a majority of the Certificate Balance, in the case of any
Event of Servicing Termination that does not adversely affect the
Trustee or the Noteholders) may, on behalf of all such Holders,
waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in
the failure to make any required deposits to or payments from any
of the Trust Accounts in accordance with this Agreement. Upon
any such waiver of a past default, such default shall cease to
exist, and any Events of Servicing Termination arising therefrom
shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or
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other default or impair any right consequent thereon except to
the extent expressly so waived. The Servicer shall give prompt
written notice of any waiver to the Rating Agencies.
ARTICLE IX
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables;
Trust Termination. (a) As of the last day of any Collection
Period as of which the Pool Balance shall be equal to or less
than the Optional Purchase Percentage of the Original Pool
Balance, the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts and the Certificate
Distribution Account. To exercise such option, the Servicer
shall notify the Trustee, the Owner Trustee, the Note Registrar
and the Certificate Registrar in writing, no later than the 25th
day of the Collection Period following which purchase is to be
effected, shall pay the aggregate Repurchase Amount for the
Receivables (including Defaulted Receivables) and shall succeed
to all interests in, to and under such property. The payment
shall be made in the manner specified in Section 5.4, and shall
be distributed pursuant to Section 5.5. The Trustee shall not
permit the purchase of the Owner Trust Estate pursuant to this
Section unless either (i) the Servicer's long-term unsecured debt
is rated at the time of such purchase at least BBB- and Baa3 by
the Rating Agencies, or (ii) the Servicer provides to the Trustee
an Opinion of Counsel in form reasonably satisfactory to the
Trustee and in form and substance satisfactory to the Rating
Agencies to the effect that such purchase will not constitute a
fraudulent transfer under applicable state and federal law.
(b) Upon any sale of the assets of the Issuer pursuant
to Section 9.2 of the Trust Agreement or Article V of the
Indenture, the Servicer shall instruct the Trustee or the Owner
Trustee, as applicable, in writing to deposit the proceeds from
such sale after all payments and reserves therefrom (including
the expenses of such sale) have been made (the "Sale Proceeds")
in the Collection Account. On the Distribution Date on which the
Sale Proceeds are deposited in the Collection Account (or, if
such proceeds are not so deposited on a Distribution Date, on the
Distribution Date immediately following such deposit), the
Servicer shall instruct the Trustee or the Owner Trustee, as
applicable, in writing to make, and the Trustee or the Owner
Trustee, as applicable, shall make the following deposits and
distributions (after the application on such Distribution Date of
the Total Distribution Amount pursuant to Section 5.5) from the
Sale Proceeds and any funds remaining on deposit in the Reserve
Account (including the proceeds of any sale on investments
therein):
(i) to the Note Distribution Account, any portion
of the Noteholders' Interest Distributable Amount not
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otherwise deposited into the Note Distribution Account
on such Distribution Date;
(ii) to the Note Distribution Account, the
Outstanding Amount of the Notes (after giving effect to
the reduction in the Outstanding Amount of the Notes to
result from the deposits made in the Note Distribution
Account on such Distribution Date);
(iii) to the Certificate Distribution Account, any
portion of the Certificateholders' Interest
Distributable Account not otherwise deposited into the
Certificate Distribution Account on such Distribution
Date; and
(iv) to the Certificate Distribution Account, the
Certificate Balance and any Certificateholders'
Principal Carryover Shortfall (after giving effect to
the reduction in the Certificate Balance to result from
the deposits made in the Certificate Distribution
Account on such Distribution Date).
Any Sale Proceeds remaining after the deposits described above
shall be paid to the Seller.
(c) Notice of any termination of the Issuer shall be
given by the Servicer to the Owner Trustee, the Trustee and the
Rating Agencies as soon as practicable after the Servicer has
received notice thereof.
(d) Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and
interest on the Notes, the Certificateholders will succeed to the
rights of the Noteholders hereunder (other than rights to receive
payments under Section 5.5(b)) and the Owner Trustee will succeed
to the rights of, and assume the obligations of, the Trustee
pursuant to this Agreement.
(e) After the payment to the Trustee, the Owner
Trustee, the Holders and the Servicer of all amounts required to
be paid under this Agreement, the Indenture and the Trust
Agreement, any amounts on deposit in the Reserve Account or the
Collection Account shall be paid to [the Seller] and any other
asset remaining in the Owner Trust Estate shall be distributed to
[the Seller].
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment. This Agreement may be
amended by the Seller, the Servicer and the Owner Trustee, with
the prior consent of the Trustee and prior notice to the Rating
Agencies but without prior notice to or the consent of any of the
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Holders, (i) to cure any ambiguity, to correct or supplement any
provisions in this Agreement which may be inconsistent with any
other provisions herein, to evidence a succession to the Servicer
or the Seller pursuant to this Agreement or to add any other
provisions with respect to matters or questions arising under
this Agreement that shall not be inconsistent with the provisions
of this Agreement; provided, however, that such action shall not,
as evidenced by an Officer's Certificate and/or an Opinion of
Counsel delivered to the Owner Trustee and the Trustee, adversely
and materially affect the interests of the Issuer or any of the
Holders and provided, further, that the Servicer shall deliver
written notice of such changes to each Rating Agency prior to the
execution of any such amendment, or (ii) to effect a transfer or
assignment in compliance with Section 10.7(i) of this Agreement.
Notwithstanding the foregoing, no amendment modifying the
provisions of Section 5.5 shall become effective without the
prior written confirmation of each of the Rating Agencies that
such amendment will not result in a downgrade or withdrawal of
any of the then current ratings assigned by them to the
Certificates and the Notes.
This Agreement may also be amended from time to time by
the Seller, the Servicer and the Owner Trustee, with the consent
of the Trustee, the Holders of Certificates evidencing at least a
majority of the Certificate Balance of the Certificates and the
consent of the Holders of Notes evidencing at least a majority of
the Outstanding Amount of the Notes, for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement, or of modifying in any manner
the rights of the Noteholders or the Certificateholders
(including effecting a transfer or assignment in compliance with
Section 10.7(a)(ii) of this Agreement); provided, however, that
no such amendment, except with the consent of the Holders of all
Certificates or Notes, as applicable, then outstanding, shall (a)
increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments of Receivables, or
distributions that shall be required to be made on any
Certificate or Note, or (b) reduce the aforesaid percentage of
the Certificate Balance of the Certificates or the Outstanding
Amount of the Notes required to consent to any such amendment.
Promptly after the execution of any amendment or
consent referred to in this Section 10.1, the Owner Trustee shall
furnish a copy of such amendment or consent to the Trustee and
each Noteholder and Certificateholder and to the Rating Agencies.
It shall not be necessary for the consent of the
Trustee, the Certificateholders or the Noteholders pursuant to
this Section10.1 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining
such consents and of evidencing the authorization of the
execution thereof by Certificateholders or Noteholders shall be
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subject to such reasonable requirements as the Trustee or the
Owner Trustee may prescribe.
Prior to the execution of any amendment to this
Agreement, the Trustee and the Owner Trustee shall be entitled to
receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this
Agreement. The Trustee and the Owner Trustee shall not be
obligated to enter into any such amendment which affects the
Trustee's and the Owner Trustee's own rights, duties or
immunities under this Agreement.
Prior to the execution of any amendment to this
Agreement, other than an amendment permitted pursuant to clause
(i) of the first paragraph of this Section 10.1, the Servicer
shall have received prior written confirmation from each of the
Rating Agencies that the rating of the Certificates and the Notes
then assigned by them will not be reduced or withdrawn as a
result of such amendment.
SECTION 10.2. Protection of Title to Owner Trust
Estate.
(a) The Seller shall execute and file such financing
statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the
interests of the Issuer and the Trustee in the Receivables and in
the proceeds thereof. The Servicer shall deliver (or cause to be
delivered) to the Owner Trustee and the Trustee file-stamped
copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change
its name, identity, or corporate structure in any manner that
would, could, or might make any financing statement or
continuation statement filed by the Seller in accordance with
paragraph (a) above seriously misleading within the meaning of
9-402(7) (or any comparable section) of the Relevant UCC, unless
it shall have given the Owner Trustee and the Trustee at least 30
days prior written notice thereof.
(c) The Seller and the Servicer shall give the Owner
Trustee and the Trustee at least 60 days prior written notice of
any relocation of its principal executive office if, as a result
of such relocation, the applicable provisions of the Relevant UCC
would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing
statement. The Servicer shall at all times maintain each office
from which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records
as to each Receivable accurately and in sufficient detail to
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permit (i) the reader thereof to know at any time the status of
such Receivable, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation
between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the
Collection Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems
so that, from and after the time of sale under this Agreement of
the Receivables to the Issuer, the Servicer's master computer
records (including archives) that shall refer to a Receivable
indicate clearly, by numerical code or otherwise, that such
Receivable is owned by the Issuer and has been pledged to the
Trustee. Indication of the Issuer's and Trustee's interest in a
Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, the Receivable shall have
been paid in full, repurchased or assigned pursuant hereto.
(f) If at any time the Seller or the Servicer shall
propose to sell, grant a security interest in, or otherwise
transfer any interest in a new or used automobile receivables to
any prospective purchaser, creditor, or other transferee, the
Seller or the Servicer, as the case may be, shall give to such
prospective purchaser, creditor, or other transferee computer
tapes, records, or print-outs (including any restored from
archives) that, if they shall refer in any manner whatsoever to
any Receivable, shall indicate clearly that such Receivable has
been sold and is owned by the Issuer and has been pledged to the
Trustee.
(g) The Servicer shall permit the Trustee and the
Owner Trustee and their respective agents upon reasonable notice
at any time during normal business hours which does not
unreasonably interfere with the Servicer's normal operations or
customer or employee relations to inspect, audit, and make copies
of and abstracts from the Servicer's records regarding the
Receivables.
(h) Upon request, the Servicer shall furnish to the
Owner Trustee or the Trustee, within five Business Days, a list
of all Receivables by contract number and name of Obligor then
held by the Issuer, together with a reconciliation of such list
to the Schedule of Receivables attached as Schedule A to this
Agreement and to each of the Servicer Certificates indicating
removal of Receivables from the Owner Trust Estate.
(i) The Servicer shall deliver to the Owner Trustee
and the Trustee:
(i) upon the execution and delivery of this
Agreement, an Opinion of Counsel either (a) stating
that, in the opinion of such counsel, all financing
statements and continuation statements have been
executed and filed that are necessary fully to preserve
64
<PAGE>
and protect the interest of the Issuer and the Trustee
in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in
which such details are given, or (b) stating that, in
the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest; and
(ii) on or before March 31 of each year,
commencing with [March 31], 199__, an Opinion of
Counsel, dated as of such date, either (a) stating
that, in the opinion of such counsel, all financing
statements and continuation statements have been
executed and filed that are necessary fully to preserve
and protect the interest of the Owner Trustee and the
Trustee in the Receivables, and reciting the details of
such filings or referring to prior opinions of Counsel
in which such details are given, or (b) stating that,
in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest.
Notwithstanding the provisions of Section 10.5, such
Opinion of Counsel may be sent by regular non-certified
mail, and such mailed opinion shall be deemed delivered
when so mailed.
(j) The Seller shall, to the extent required by
applicable law, cause the Certificates and the Notes to be
registered with the Securities and Exchange Commission pursuant
to Section 12(b) or Section 12(g) of the Exchange Act within the
time periods specified in such sections.
(k) For the purpose of facilitating the execution of
this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of
which counterparts shall constitute but one and the same
instrument.
SECTION 10.3. [Reserved].
SECTION 10.4. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York without reference to its conflict of law
provision, and the obligations, rights, remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 10.5. Notices. All demands, notices, and
communications under this Agreement shall be in writing,
personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the Seller, c/o Chase Automotive
Finance, 900 Stewart Avenue, Garden City, New York 11530
Attention: Financial Controller, or at such other address as
shall be designated by the Seller in a written notice to the
Trustee, (b) in the case of the Servicer, c/o Chase Automotive
65
<PAGE>
Finance, 900 Stewart, Garden City, New York 11530, Attention:
Financial Controller, or at such other address as shall be
designated by the Servicer in a written notice to the Trustee,
(c) in the case of the Trustee, at ____________________________,
___________, _________ __________ Attention: __________________,
and, (d) in the case of the Issuer and the Owner Trustee, at
______________________, ___________, _________ _____, Attention:
______________________. Any notice required or permitted to be
mailed to a Holder shall be given by first class mail, postage
prepaid, at the address of record of such Holder. Any notice to
a Holder so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether
or not the Holder shall receive such notice.
SECTION 10.6. Severability of Provisions. If any one
or more of the covenants, agreements, provisions, or terms of
this Agreement shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions, or terms shall be
deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this
Agreement or of the Certificates or of the Notes or the rights of
the Holders thereof.
SECTION 10.7. Assignment[; References to Chase USA].
(a) Notwithstanding anything to the contrary contained herein,
except as provided in Sections 8.3 and 9.3, neither the Seller
nor the Servicer may assign all, or a portion of, its rights,
obligations and duties under this Agreement unless (i) (A) such
transfer or assignment will not result in a reduction or
withdrawal by Standard & Poor's or Moody's of the rating then
assigned to the Notes or the Certificates and (B) the Trustee and
the Owner Trustee have consented to such transfer or assignment,
which consents shall not be unreasonably withheld or (ii) the
Trustee, the Owner Trustee and Holders of Certificates evidencing
not less than 51% of the Certificate Balance and the consent of
the Holders of Notes evidencing not less than 51% of the
Outstanding Amount of the Notes, consent thereto. Any transfer
or assignment with respect to the Servicer of all of its rights,
obligations and duties will not become effective until a
successor Servicer has assumed the Servicer's rights, duties and
obligations under this Agreement. In the event of a transfer or
assignment pursuant to clause (ii) above, the Rating Agencies
shall be provided with notice of such transfer or assignment.
[(b) References in this Agreement to Chase USA as
Seller and/or Servicer hereunder shall refer to a national
banking association having its principal executive offices
located at 200 Jericho Quadrangle, Jericho, New York 11759 and
shall be deemed to include any successor or assign Chase USA (New
York) in connection with the Proposed Merger.]
SECTION 10.8. Certificates and Notes Nonassessable and
Fully Paid. The interests represented by the Certificates and
66
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Notes shall be nonassessable for any losses or expenses of the
Issuer or for any reason whatsoever, and, upon authentication
thereof by the Trustee and the Owner Trustee pursuant to the
Trust Agreement and the Indenture, respectively, each Certificate
and Note shall be deemed fully paid.
SECTION 10.9. Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the
parties hereto, the Certificateholders and Noteholders and their
respective successors and permitted assigns. Except as otherwise
provided in this Agreement, no other person will have any right
or obligation hereunder.
SECTION 10.10. Assignment to Trustee. The Seller
hereby acknowledges and consents to any mortgage, pledge,
assignment and grant of a security interest by the Issuer to the
Trustee pursuant to the Indenture for the benefit of the
Noteholders of all right, title and interest of the Issuer in, to
and under the Receivables and the other property constituting the
Owner Trust Estate and/or the assignment of any or all of the
Issuer's rights and obligations hereunder to the Trustee.
SECTION 10.11. Limitation of Liability of Owner Trustee
and Trustee. (a) Notwithstanding anything contained herein to
the contrary, this Agreement has been countersigned by
____________________ not in its individual capacity but solely in
its capacity as Owner Trustee of the Issuer, and in no event
shall ____________________ in its individual capacity or, except
as expressly provided in the Trust Agreement, as beneficial owner
of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of its duties or
obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the
contrary, this Agreement has been acknowledge and accepted by
________________________ not in its individual capacity but
solely as Trustee, and in no event shall ____________________
have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer
hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer.
67
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
CHASE MANHATTAN BANK USA, N.A.,
as Seller and Servicer
By ______________________________
Name:
Title:
CHASE MANHATTAN AUTO OWNER TRUST,
SERIES 199__-__
as Issuer
By ______________________________,
not in its individual
capacity but solely as
Owner Trustee on behalf
of the Issuer
By:______________________________
Name:
Title:
Acknowledged and Accepted:
________________________________
not in its individual capacity,
but solely in its capacity
as Trustee
By:_________________________
Name:
Title:
68
<PAGE>
SCHEDULE A
[LIST OF RECEIVABLES]
Delivered to the Owner Trustee and the Trustee
on the Closing Date.
69
<PAGE>
SCHEDULE B
Location of Receivable Files
[The Chase Manhattan Bank]
20 Clinton Avenue South
5th Floor
SENECA Building
Rochester, New York 14604
Iron Mountain
Route 9-W South
P.O. Box 477
Pt. Ewen, NY 12466
[The Chase Manhattan Bank]
900 Stewart Avenue
Garden City, NY 11530
70
<PAGE>
EXHIBIT A
[FORM OF SERVICER'S CERTIFICATE]
A-1
<PAGE>
EXHIBIT B
[FORM OF CERTIFICATEHOLDER AND NOTEHOLDER REPORT]
E-1
<PAGE>
OH&S Draft
8/26/96
- --------------------------------------------------------------------------------
CHASE MANHATTAN AUTO OWNER TRUST 199_-_
Class A-1 _____% Asset Backed Notes
Class A-2 _____% Asset Backed Notes
INDENTURE
Dated as of ______, 199__
---------------------------------
as Trustee
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.1 Definitions................................................................. 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act........................... 2
SECTION 1.3 Usage of Terms.............................................................. 2
SECTION 1.4 Calculations of Interest.................................................... 3
ARTICLE II
THE NOTES
SECTION 2.1 Form........................................................................ 3
SECTION 2.2 Execution, Authentication and Delivery...................................... 3
SECTION 2.3 Temporary Notes............................................................. 4
SECTION 2.4 Registration of Transfer and Exchange....................................... 4
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.................................. 6
SECTION 2.6 Persons Deemed Owner........................................................ 7
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest....................... 7
SECTION 2.8 Cancellation................................................................ 8
SECTION 2.9 Release of Collateral....................................................... 8
SECTION 2.10 Book-Entry Notes............................................................ 8
SECTION 2.11 Notices to Clearing Agency.................................................. 9
SECTION 2.12 Definitive Notes............................................................ 10
SECTION 2.13 Authenticating Agent........................................................ 10
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest........................................... 12
SECTION 3.2 Maintenance of Office or Agency............................................. 12
SECTION 3.3 Money for Payments To Be Held in Trust...................................... 12
SECTION 3.4 Existence................................................................... 14
SECTION 3.5 Protection of Trust Estate.................................................. 14
SECTION 3.6 Opinions as to Trust Estate................................................. 15
SECTION 3.7 Performance of Obligations; Servicing of Receivables........................ 15
SECTION 3.8 Negative Covenants.......................................................... 16
SECTION 3.9 Annual Statement as to Compliance........................................... 17
SECTION 3.10 The Issuer May Consolidate, Etc. Only on Certain Terms...................... 17
SECTION 3.11 Successor or Transferee..................................................... 19
SECTION 3.12 No Other Business........................................................... 20
SECTION 3.13 No Borrowing................................................................ 20
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 3.14 Servicer's Obligations...................................................... 20
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities........................... 20
SECTION 3.16 Capital Expenditures........................................................ 20
SECTION 3.17 Restricted Payments......................................................... 20
SECTION 3.18 Notice of Events of Default................................................. 21
SECTION 3.19 Further Instruments and Acts................................................ 21
SECTION 3.20 Dissolution upon Bankruptcy of the General Partner.......................... 21
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture..................................... 21
SECTION 4.2 Application of Trust Money.................................................. 22
SECTION 4.3 Repayment of Moneys Held by Paying Agent.................................... 23
SECTION 4.4 Duration of the Position of the Trustee for the Benefit of
Certificateholders.......................................................... 23
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default........................................................... 23
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.......................... 24
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by the Trustee......... 24
SECTION 5.4 Remedies; Priorities........................................................ 27
SECTION 5.5 Optional Preservation of the Receivables.................................... 28
SECTION 5.6 Limitation of Suits......................................................... 28
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal and Interest....... 29
SECTION 5.8 Restoration of Rights and Remedies.......................................... 29
SECTION 5.9 Rights and Remedies Cumulative.............................................. 29
SECTION 5.10 Delay or Omission Not a Waiver.............................................. 29
SECTION 5.11 Control by Noteholders...................................................... 30
SECTION 5.12 Waiver of Past Defaults..................................................... 30
SECTION 5.13 Undertaking for Costs....................................................... 31
SECTION 5.14 Waiver of Stay or Extension Laws............................................ 31
SECTION 5.15 Action on Notes............................................................. 31
SECTION 5.16 Performance and Enforcement of Certain Obligations.......................... 32
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
Page
ARTICLE VI
THE TRUSTEE
<S> <C> <C>
SECTION 6.1 Duties of the Trustee....................................................... 32
SECTION 6.2 Rights of the Trustee....................................................... 34
SECTION 6.3 Individual Rights of the Trustee............................................ 35
SECTION 6.4 The Trustee's Disclaimer.................................................... 35
SECTION 6.5 Notice of Defaults.......................................................... 35
SECTION 6.6 Reports by the Trustee to Holders........................................... 35
SECTION 6.7 Compensation and Indemnity.................................................. 35
SECTION 6.8 Replacement of the Trustee.................................................. 36
SECTION 6.9 Successor Trustee by Merger................................................. 37
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee............................... 37
SECTION 6.11 Eligibility; Disqualification............................................... 38
SECTION 6.12 Preferential Collection of Claims Against the Issuer........................ 39
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 The Issuer To Furnish the Trustee Names and Addresses of the Noteholders.. . 39
SECTION 7.2 Preservation of Information; Communications to the Noteholders.............. 39
SECTION 7.3 Reports by the Issuer....................................................... 40
SECTION 7.4 Reports by the Trustee...................................................... 40
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money......................................................... 40
SECTION 8.2 Trust Accounts.............................................................. 41
SECTION 8.3 General Provisions Regarding Accounts....................................... 42
SECTION 8.4 Release of Trust Estate..................................................... 43
SECTION 8.5 Opinion of Counsel.......................................................... 43
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders...................... 44
SECTION 9.2 Supplemental Indentures with Consent of the Noteholders..................... 45
SECTION 9.3 Effect of Supplemental Indenture............................................ 46
SECTION 9.4 Conformity with Trust Indenture Act......................................... 47
</TABLE>
(iii)
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 9.5 Reference in Notes to Supplemental Indentures............................... 47
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.................................................................. 47
SECTION 10.2 Form of Redemption Notice................................................... 48
SECTION 10.3 Notes Payable on Redemption Date............................................ 48
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc................................... 48
SECTION 11.2 Form of Documents Delivered to the Trustee.................................. 50
SECTION 11.3 Actions of Noteholders...................................................... 51
SECTION 11.4 Notices, etc., to the Trustee, the Issuer, and Rating Agencies.............. 52
SECTION 11.5 Notices to Noteholders; Waiver.............................................. 52
SECTION 11.6 Alternate Payment and Notice Provisions..................................... 53
SECTION 11.7 Conflict with Trust Indenture Act........................................... 53
SECTION 11.8 Effect of Headings and Table of Contents.................................... 53
SECTION 11.9 Successors and Assigns...................................................... 53
SECTION 11.10 Separability................................................................ 54
SECTION 11.11 Benefits of Indenture....................................................... 54
SECTION 11.12 Legal Holidays.............................................................. 54
SECTION 11.13 GOVERNING LAW............................................................... 54
SECTION 11.14 Counterparts................................................................ 54
SECTION 11.15 Recording of Indenture...................................................... 54
SECTION 11.16 Trust Obligation............................................................ 54
SECTION 11.17 No Petition................................................................. 55
SECTION 11.18 Inspection.................................................................. 55
</TABLE>
Exhibit A Schedule of Receivables
Exhibit B Form of Class A-1 Note
Exhibit C Form of Class A-2 Note
Exhibit D Note Depository Agreement
(iv)
<PAGE>
CROSS REFERENCE TABLE 1
<TABLE>
<CAPTION>
TIA Section Indenture Section
<S> <C> <C>
310 (a)(1).................................................................................. 6.11
(a)(2).................................................................................. 6.11
(a)(3).................................................................................. 6.10
(a)(4).................................................................................. N.A. 2
(a)(5).................................................................................. 6.11
(b) ............................................................................... 6.8; 6.11
(c) ............................................................................... N.A.
311 (a) ............................................................................... 6.12
(b) ............................................................................... 6.12
(c) ............................................................................... N.A.
312 (a) ............................................................................... 7.1; 7.2
(b) ............................................................................... 7.2
(c) ............................................................................... 7.2
313 (a) ............................................................................... 7.4
(b)(1).................................................................................. 7.4
(b)(2).................................................................................. 7.4
(c) ............................................................................... 7.4
(d) ............................................................................... 7.3
314 (a) ............................................................................... 7.3
(b) ............................................................................... 3.6
(c)(1).................................................................................. 11.1
(c)(2).................................................................................. 11.1
(c)(3).................................................................................. 11.1
(d) ............................................................................... 11.1
(e) ............................................................................... 11.1
(f) ............................................................................... N.A.
315 (a) ............................................................................... 6.1
(b) ............................................................................... 6.5; 11.5
(c) ............................................................................... 6.1
(d) ............................................................................... 6.1
(e) ............................................................................... 5.13
316 (a) (last sentence)..................................................................... 1.1
(a)(1)(A)............................................................................... 5.11
(a)(1)(B)............................................................................... 5.12
(a)(2).................................................................................. N.A.
(b) ............................................................................... 5.7
(c) ............................................................................... N.A.
317 (a)(1).................................................................................. 5.3
(a)(2).................................................................................. 5.3
</TABLE>
- --------
1 Note: This Cross Reference Table shall not, for any purpose,
be deemed to be part of this Indenture.
2 N.A. means Not Applicable.
<PAGE>
<TABLE>
<S> <C> <C>
(b) ............................................................................... 3.3
318 (a) ............................................................................... 11.7
</TABLE>
<PAGE>
INDENTURE dated as of , 199 , between CHASE MANHATTAN AUTO TRUST 199_,
a Delaware business trust (the "Issuer"), and _______________________, an
__________ banking corporation, solely as trustee and not in its individual
capacity (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's Class A-1 __%
Asset Backed Notes (the "Class A-1 Notes"), and Class A-2 __% Asset Backed Notes
(the "Class A-2 Notes" and, together with the Class A-1 Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee at the Closing Date, as
Trustee for the benefit of the Holders of the Notes and (only to the extent
expressly provided herein) the Certificateholders, all of the Issuer's right,
title and interest in, to and under (a) the Receivables listed in Schedule A
hereto, all proceeds thereof and all amounts and monies due [or received]
thereon on and after the Cutoff Date (including proceeds of the repurchase of
Receivables by the Seller pursuant to Section 3.2 of the Sale and Servicing
Agreement or the purchase of Receivables by the Servicer pursuant to Section
4.7 of the Sale and Servicing Agreement); (b) the security interests in the
Financed Vehicles granted by the Obligors pursuant to the Receivables and in
any repossessed Financed Vehicles; (c)Liquidation Proceeds and in any proceeds
of any extended warranties, theft and physical damage, credit life or credit
disability policies relating to the Financed Vehicles or the Obligors; (d) any
proceeds from Dealer repurchase obligations relating to the Receivables; (e)
funds on deposit from time to time in the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income
thereon); (f) the Sale and Servicing Agreement; and (g) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and
other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction except
as set forth herein, and to secure compliance with the provisions of this
Indenture, all as provided in this Indenture.
<PAGE>
The Trustee, as trustee on behalf of the Holders of the Notes,
acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and agrees to perform its duties
required in this Indenture to the best of its ability to the end that the
interests of the Holders of the Notes and (only to the extent expressly
provided herein) Holders of the Certificates may be adequately and effectively
protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Capitalized terms are used in this Indenture
as defined in Section 1.1 to the Sale and Servicing Agreement dated as of _____,
199_, between the Issuer and CHASE MANHATTAN BANK USA, N.A., as Seller and
Servicer.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.3 Usage of Terms. With respect to all terms in this
Indenture, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein entered into in
accordance with their respective terms and not prohibited by this Indenture;
references to Persons include their permitted successors and assigns; and the
term "including" means "including without limitation." All references herein
to Articles, Sections,
2
<PAGE>
Subsections and Exhibits are references to Articles, Sections, Subsections and
Exhibits contained in or attached to this Indenture unless otherwise
specified.
SECTION 1.4 Calculations of Interest. All calculations of interest
made hereunder shall be made on the basis of a year of 360 days of twelve
30-day months.
ARTICLE II
THE NOTES
SECTION 2.1 Form. The Class A-1 Notes and the Class A-2 Notes, in
each case together with the Trustee's certificate of authentication, shall be
in substantially the forms set forth in Exhibits B and C, respectively, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note. Each Note shall be dated the date
of its authentication. The Notes shall be issuable as registered Notes in the
minimum denomination of $1,000 and in integral multiples thereof (except for
one Note of each class which may be issued in a denomination other than an
integral multiple of $1,000).
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes. No Note shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose, unless
there appears on such Note a certificate of authentication substantially in
the form provided for herein executed by the Trustee by the manual signature
of one of its authorized signatories, and such certificate upon any Note shall
be conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder. The terms of the Notes set forth in
Exhibits B and C are part of the terms of this Indenture.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
SECTION 2.2 Execution, Authentication and Delivery. The
Notes shall be executed on behalf of the Issuer by any of its
Authorized Officers or by any other authorized signatory of the
3
<PAGE>
Issuer. The signature of any such Authorized Officer on the Notes may be manual
or facsimile.
The Trustee shall, upon written order of the Seller, authenticate and
deliver Class A-1 Notes for original issue in an aggregate principal amount of
$______ and Class A-2 Notes for original issue in the aggregate principal amount
of $______. The respective aggregate principal amount of Class A-1 Notes and
Class A-2 Notes outstanding at any time may not exceed such amounts, except as
provided in Section 2.5.
SECTION 2.3 Temporary Notes. Pending the preparation of Definitive
Notes, the Issuer may execute, and at the direction of the Issuer the Trustee
shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing
such Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4 Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe,
the Note Register shall provide for the registration of the Notes
and the registration of transfers of the Notes. The Chase
Manhattan Bank shall initially be "Note Registrar" for the purpose
of registering Notes and transfers of Notes as herein provided. In
the event that, subsequent to the date of issuance of the Notes,
The Chase Manhattan Bank notifies the Trustee that it is unable to
act as Note Registrar, the Trustee shall act, or the Trustee shall,
with the consent of the Issuer, appoint another bank or trust
company, having an office or agency located in The City of New York
and which agrees to act in accordance with the provisions of this
Indenture applicable to it, to act, as successor Note Registrar
under this Indenture.
The Trustee may revoke such appointment and remove The Chase
Manhattan Bank as Note Registrar if the Trustee determines in its sole
discretion that The Chase Manhattan Bank failed to perform its obligations
under this Indenture in any material respect. The Chase Manhattan Bank shall
be permitted to resign as Note Registrar
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upon 30 days' written notice to the Trustee, the Seller and the Servicer;
provided, however, that such resignation shall not be effective and The Chase
Manhattan Bank shall continue to perform its duties as Note Registrar until
the Trustee has appointed a successor Note Registrar with the consent of the
Issuer.
If a Person other than the Trustee is appointed by the Issuer as the
Note Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Trustee shall have the right to
inspect the Note Register at all reasonable times and to obtain copies
thereof, and the Trustee shall have the right to conclusively rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.2, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
the Trustee shall authenticate and (if the Note Registrar is different than
the Trustee, then the Note Registrar shall) deliver to the Noteholder, in the
name of the designated transferee or transferees, one or more new Notes,
in any authorized denominations, of the same class and a like aggregate
principal amount.
At the option of the Holder, the Notes may be exchanged for other
Notes in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office
or agency. Whenever any Notes are so surrendered for exchange, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute
and the Trustee shall authenticate and (if the Note Registrar is different
than the Trustee, then the Note Registrar shall) deliver to the Noteholder,
the Notes which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of the
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by,
the Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by a commercial bank or trust company located, or
having a correspondent located in the City of New York or the city in which
the Corporate Trust Office is located, or by a member firm of a national
securities exchange, and (ii) accompanied by such other documents as the
Trustee may require.
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No service charge shall be made to a Holder for any registration of
transfer or exchange of the Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other
than exchanges pursuant to Section 2.3 or 9.5 not involving any transfer.
The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of the Notes selected for redemption or of any Note for
a period of 15 days preceding the due date for any payment in full with
respect to the Note.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes. If
(i) any mutilated Note is surrendered to the Note Registrar, or the
Note Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered
to the Note Registrar and the Trustee such security or indemnity as
may be required by them to hold the Issuer, the Note Registrar and
the Trustee harmless, then, in the absence of notice to the Issuer,
the Note Registrar or the Trustee that such Note has been acquired
by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the UCC are met, the Issuer shall execute and the
Trustee shall authenticate and (if the Note Registrar is different
from the Trustee, the Note Registrar shall) deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note of like class, tenor and denomination;
provided that if any such destroyed, lost or stolen Note, but not
a mutilated Note, shall have become or within seven days shall be
due and payable, or shall have been called for redemption, instead
of issuing a replacement Note, the Issuer may pay such destroyed,
lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note
pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement
Note was issued presents for payment such original Note, the
Issuer, the Note Registrar and the Trustee shall be entitled to
recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note
from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer, the Note Registrar or the Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Trustee) connected therewith.
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Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee, the Note
Registrar and any agent of the Issuer, the Trustee or the Note Registrar may
treat the Person in whose name any Note is registered (as of the day of
determination) as the owner of such Note for the purpose of receiving payments
of principal of and interest, if any, on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Issuer, the
Trustee or the Note Registrar nor any agent of the Issuer, the Trustee or the
Note Registrar shall be bound by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of the Class A-1
Note and the Class A-2 Note, set forth in Exhibits B and C, respectively, and
such interest shall be payable on each Distribution Date as specified therein.
Any installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one
or more Predecessor Notes) is registered on the preceding Record Date, by
check mailed first-class, postage prepaid, to such Person's address as it
appears on the Note Register on such Record Date, except that, unless
Definitive Notes have been issued pursuant to Section 2.12, with respect to
the Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payment will be
made by wire transfer in immediately available funds to the account designated
by such nominee, except for the final installment of principal payable with
respect to such Note on a Distribution Date or on a Final Scheduled
Distribution Date (and except for the Redemption Price for any Note called for
redemption pursuant to Section 10.1(a)) which shall be payable as provided
below. The funds represented by any such checks returned undelivered shall be
held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments no
later than 12 noon, New York City time, on each Distribution Date as provided
in the forms of the Class A-1 Note and the Class A-2 Note, set forth in
Exhibits B and C, respectively. Notwithstanding the foregoing, the entire
unpaid
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principal amount of the Notes shall be due and payable, if not previously
paid, on the date on which an Event of Default shall have occurred and be
continuing, if the Trustee or the Holders of the Notes representing a majority
of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.2. All
principal payments on each class of Notes shall be made pro rata to the
Noteholders of such class entitled thereto. The Trustee shall notify the
Person in whose name a Note is registered at the close of business on the
Record Date preceding the Distribution Date on which the Issuer expects that
the final installment of principal of and interest on such Note will be paid.
Such notice shall be (i)transmitted by facsimile on such Record Date if
Book-Entry Notes are outstanding or (ii)mailed as provided in Section 10.2 not
later than three Business Days after such Record Date if Definitive Notes are
outstanding and shall specify that such final installment will be payable only
upon presentation and surrender of such Note and shall specify the place where
such Note may be presented and surrendered for payment of such installment.
SECTION 2.8 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly cancelled by the Note Registrar. The Issuer may at any time
deliver to the Note Registrar for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly cancelled
by the Note Registrar. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Note Registrar in accordance with its standard retention or
disposal policy as in effect at the time unless the Issuer shall direct that
they be destroyed or returned to it; provided that such direction is timely
and the Notes have not been previously disposed of by the Note Registrar.
SECTION 2.9 Release of Collateral. Subject to Section 11.1, the
Trustee shall release property from the lien of this Indenture only upon
request of the Issuer accompanied by an Officer's Certificate, an Opinion of
Counsel and Independent Certificates in accordance with the TIA 314(c) and
314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to
the effect that the TIA does not require any such Independent Certificates.
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to , as agent for The Depository Trust Company, the
initial Clearing Agency, by, or on behalf of, the Issuer. Such Notes shall
initially be registered on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Note Owner
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will receive a Definitive Note representing such Note Owner's interest in such
Note, except as provided in Section 2.12. Unless and until definitive, fully
registered Notes have been issued to Note Owners pursuant to Section 2.12:
(a) the provisions of this Section shall be in full force and effect;
(b) the Note Registrar, the Paying Agent and the Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole Holder of the
Notes, and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(d) the rights of the Note Owners shall be exercised only through the
Clearing Agency (or to the extent the Note Owners are not Clearing Agency
Participants, through the Clearing Agency Participants through which such Note
Owners own Book-Entry Certificates) and shall be limited to those established
by law and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants and all references in this Indenture to
actions by the Noteholders shall refer to actions taken by the Clearing Agency
upon instructions from the Clearing Agency Participants, and all references in
this Indenture to distributions, notices, reports and statements to the
Noteholders shall refer to distributions, notices, reports and statements to
the Clearing Agency, as registered holder of the Notes, as the case may be,
for distribution to the Note Owners in accordance with the procedures of the
Clearing Agency. Pursuant to the Note Depository Agreement, unless and until
Definitive Notes are issued pursuant to Section 2.12, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency Participants
and receive and transmit payments of principal of and interest on the Notes to
such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of the Holders of the Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent that it
has received instructions to such effect from the Note Owners and/or Clearing
Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered such
instructions to the Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to the Note Owners pursuant to
Section 2.12, the Trustee shall
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give all such notices and communications specified herein to be given to the
Holders of the Notes to the Clearing Agency, and shall have no obligation to
the Note Owners.
SECTION 2.12 Definitive Notes. If (a) the Servicer advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Notes, and the
Servicer is unable to locate a qualified successor, (b) the Servicer at its
option advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency, or (c) after the occurrence of
an Event of Default, the Note Owners representing beneficial interests
aggregating not less than 50% of the Outstanding Amount of the Notes advise
the Trustee and the Clearing Agency in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of the Note Owners, then the Clearing Agency shall notify all the
Note Owners of the occurrence of any such event and of the availability of
Definitive Notes to the Note Owners requesting the same. Upon surrender to the
Note Registrar of the typewritten Note or Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by re- registration instructions,
the Issuer shall execute and the Trustee shall authenticate and (if the Note
Registrar is different than the Trustee, then the Note Registrar shall)
deliver the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of the Definitive Notes, the Trustee shall recognize the Holders of
the Definitive Notes as Noteholders.
SECTION 2.13 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents (each,
an "Authenticating Agent") with respect to the Notes which shall be authorized
to act on behalf of the Trustee in authenticating the Notes in connection with
the issuance, delivery, registration of transfer, exchange or repayment of the
Notes. The Trustee hereby appoints The Chase Manhattan Bank as Authenticating
Agent for the authentication of the Notes upon any registration of transfer or
exchange of such Notes. Whenever reference is made in this Indenture to the
authentication of the Notes by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent, other than The Chase Manhattan Bank, shall be
acceptable to the Issuer.
(b) Any institution succeeding to the corporate agency
business of an Authenticating Agent shall continue to be an
Authenticating Agent without the execution or filing of any paper
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or any further act on the part of the Trustee or such Authenticating Agent.
(c) An Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and the Issuer. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving notice of
termination to such Authenticating Agent and to the Issuer. Upon receiving
such a notice of resignation or upon such a termination, or in case at any
time an Authenticating Agent shall cease to be acceptable to the Trustee or
the Issuer, the Trustee promptly may appoint a successor Authenticating Agent
with the consent of the Issuer. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless acceptable to the Issuer.
(d) The Servicer shall pay the Authenticating Agent from time to time
reasonable compensation for its services under this Section 2.13.
(e) The provisions of Sections 6.1, 6.2, 6.3, 6.4, 6.7 and 6.9 shall
be applicable to any Authenticating Agent.
(f) Pursuant to an appointment made under this Section 2.13, the
Notes may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially
the following form:
This is one of the Notes referred to in the within mentioned
Indenture.
______________________________________,
as Trustee
By: ______________________________________
Authorized Officer
or
_______________________________________
as Authenticating Agent
for the Trustee,
_______________________________________
Authorized Officer
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ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer
will duly and punctually pay the principal of and interest on the
Notes in accordance with the terms of the Notes and this Indenture.
Without limiting the foregoing, subject to Section 8.2(c), the
Issuer will cause to be distributed all amounts on deposit in the
Note Distribution Account on a Distribution Date deposited therein
pursuant to the Sale and Servicing Agreement (i) for the benefit of
the Class A-1 Notes, to Class A-1 Noteholders and (ii) for the
benefit of the Class A-2 Notes, to Class A-2 Noteholders. Amounts
properly withheld under the Code by any Person from a payment to
any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes
of this Indenture.
SECTION 3.2 Maintenance of Office or Agency. The Issuer
will maintain in The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange.
The Issuer hereby initially appoints the Note Registrar to serve as
its agent for the foregoing purposes. The Issuer will give prompt
written notice to the Trustee of the location, and of any change in
the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such
surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Trustee
as its agent to receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust. As
provided in Sections 8.2(a) and (b), all payments of amounts due
and payable with respect to any Notes that are to be made from
amounts withdrawn from the Collection Account and the Note
Distribution Account pursuant to Section 8.2(c) shall be made on
behalf of the Issuer by the Trustee or by another Paying Agent, and
no amounts so withdrawn from the Collection Account and the Note
Distribution Account for payments on the Notes shall be paid over
to the Issuer except as provided in this Section 3.3.
On or before each Distribution Date and Redemption Date, the Trustee
or the Paying Agent shall deposit at the direction of the Servicer in
accordance with Section 5.5 of the Sale and Servicing Agreement in the Note
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the Notes, such sum to be held in trust for the benefit of
the Persons entitled thereto and (unless the Paying Agent is the Trustee or
deposit was made by the Trustee) shall promptly notify the Trustee of its
action or failure so to act.
The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts
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as Paying Agent, it hereby so agrees), subject to the provisions of this
Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Trustee notice of any default by the Issuer of
which it has actual knowledge (or any other obligor upon the Notes)
in the making of any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Trustee all sums held by it in trust for the payment of the
Notes if at any time it ceases to meet the standards required to be
met by the Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which the sums were held by such Paying Agent; and upon such a payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Subject to applicable laws with respect to the escheat of funds, any
money held by the Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on its request; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Issuer
for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided that the Trustee or such
Paying Agent, before being required to make any such repayment, shall at the
expense of the Issuer cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of
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general circulation in The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Issuer. The Trustee shall also
adopt and employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice
of such repayment to the Holders whose notes have been called but have not
been surrendered for redemption or whose right to or interest in moneys due
and payable but not claimed is determinable from the records of the Trustee or
of any Paying Agent, at the last address of record for each such Holder).
SECTION 3.4 Existence. Except as otherwise permitted by the
provisions of Section 3.10, the Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor to the Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5 Protection of Trust Estate. The Issuer will from time to
time prepare (or shall cause to be prepared), execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(a) maintain or preserve the lien and security interest
(and the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
(b) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture;
(c) enforce the rights of the Trustee and the
Noteholders in any of the Collateral; or
(d) preserve and defend title to the Trust Estate and the
rights of the Trustee and the Noteholders in such Trust Estate
against the claims of all persons and parties.
The Issuer hereby designates the Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Trustee pursuant to this Section.
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SECTION 3.6 Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Trustee an Opinion of Counsel either stating that,
in the opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto,
and any other requisite documents, and with respect to the execution and
filing of any financing statements and continuation statements, as are
necessary to perfect and make effective the lien and security interest of this
Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before March 31 of each calendar year, commencing with
March 31, 199_, the Issuer shall furnish to the Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been
taken with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as are necessary to maintain the lien
and security interest created by this Indenture and reciting the details of
such action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until March 31 in
the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Receivables. (a)
The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, any other Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Trustee in an Officer's Certificate of the
Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer
has contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in
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the Trust Estate, including but not limited to preparing (or causing to be
prepared) and filing (or causing to be filed) all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture
and the Sale and Servicing Agreement in accordance with and within the time
periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of an Event
of Servicing Termination under the Sale and Servicing Agreement, the Issuer
shall promptly notify the Trustee and the Rating Agencies thereof in
accordance with Section11.4, and shall specify in such notice the action, if
any, the Issuer is taking in respect of such default. If an Event of Servicing
Termination shall arise from the failure of the Servicer to perform any of its
duties or obligations under the Sale and Servicing Agreement with respect to
the Receivables, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Trustee. As soon as a successor Servicer (other than the Trustee) is
appointed, the Issuer shall notify the Trustee of such appointment, specifying
in such notice the name and address of such successor Servicer.
(f) Without derogating from the absolute nature of the assignment
granted to the Trustee under this Indenture or the rights of the Trustee
hereunder, the Issuer agrees that, unless such action is specifically
permitted hereunder or under the other Basic Documents, it will not, without
the prior written consent of the Trustee or the Holders of at least a majority
of Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral or the Basic
Documents, or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement; provided that no such amendment
shall (i) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, distributions that are required to be made for the
benefit of the Noteholders, or (ii) reduce the aforesaid percentage of the
Notes which are required to consent to any such amendment, without the consent
of the Holders of all the Outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Trustee or
such Holders, the Issuer agrees, promptly following a request by the Trustee
to do so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Trustee may deem
necessary or appropriate under the circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(a) except as expressly permitted by this Indenture or
the other Basic Documents, sell, transfer, exchange or
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otherwise dispose of any of the properties or assets of the
Issuer, including those included in the Trust Estate, unless
directed to do so by the Trustee;
(b) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or
assert any claim against any present or former Noteholder by reason
of the payment of the taxes levied or assessed upon any part of the
Trust Estate; or
(c) (i) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations
with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (ii) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than
the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof
or any interest therein or the proceeds thereof (other than tax
liens, mechanics' liens and other liens that arise by operation of
law, in each case on a Financed Vehicle and arising solely as a
result of an action or omission of the related Obligor) or (iii)
permit the lien of this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanics' or
other lien) security interest in the Trust Estate.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will
deliver to the Trustee on or before March 31 of each year, commencing March
31, 199_, and otherwise in compliance with the requirements of TIA
Section 314(a)(4), an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that
(a) a review of the activities of the Issuer during such
year and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions and
covenants in all material respects under this Indenture throughout
such year, or, if there has been a default in the compliance of any
such condition or covenant, specifying each such default known to
such Authorized Officer and the nature and status thereof.
SECTION 3.10 The Issuer May Consolidate, Etc. Only on
Certain Terms. (a) The Issuer shall not consolidate or merge with
or into any other Person, unless
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(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized
and existing under the laws of the United States of America or any
state and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of and
interest on all the Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been
taken; and
(vi) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture comply
with this Section 3.10 and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) Except as otherwise expressly permitted by this Indenture or the
other Basic Documents, the Issuer shall not convey or transfer all or
substantially all of its properties or assets, including those included in the
Trust Estate, to any Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any state, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of and interest on all the Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided
herein, (C) expressly agree by means of such supplemental indenture
that all right, title and interest so
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conveyed or transferred shall be subject and subordinate to the
rights of the Holders of the Notes, (D) unless otherwise provided in
such supplemental indenture, expressly agree to indemnify, defend and
hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and
(E) expressly agree by means of such supplemental indenture that such
Person (or if a group of persons, then one specified Person) shall
prepare (or cause to be prepared) and make all filings with the
Commission (and any other appropriate Person) required by the
Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been
taken; and
(vi) the Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply
with this Section 3.10 and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
SECTION 3.11 Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Chase Manhattan Auto Trust 199_ will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice to the Trustee from the Person acquiring such
assets and properties stating that Chase Manhattan Auto Owner Trust 199_ is
to be so released.
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SECTION 3.12 No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the other Basic
Documents, issuing the Notes and the Certificates, making payments thereon, and
such other activities that are necessary, suitable or desirable to accomplish
the foregoing or are incidental thereto as set forth in Section 2.3 of the
Trust Agreement.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for money borrowed in respect of the Notes or in
accordance with the Basic Documents.
SECTION 3.14 Servicer's Obligations. The Issuer shall use its best
efforts to cause the Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.5
of the Sale and Servicing Agreement.
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuming
another's payment or performance on any obligation or capability of so doing
or otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make
any capital contribution to, any other Person.
SECTION 3.16 Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty) other than the purchase of the Receivables and
related property pursuant to the Sale and Servicing Agreement.
SECTION 3.17 Restricted Payments. The Issuer shall not, directly or
indirectly, (a) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to Servicer, (b) redeem, purchase, retire, or
otherwise acquire for value any such ownership or equity interest or security
or (c) set aside or otherwise segregate any amounts for any such purpose;
provided that the Issuer may make, or cause to be made, distributions to the
Servicer, the Owner Trustee, the Trustee and the Certificateholders as
permitted by, and to the extent funds are available for such purpose under,
the Basic Documents. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the other Basic Documents.
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SECTION 3.18 Notice of Events of Default. The Issuer agrees to give
the Trustee and the Rating Agencies prompt written notice of each Event of
Default, any Event of Servicing Termination and each default on the part of
the Seller of its obligations under the Sale and Servicing Agreement.
SECTION 3.19 Further Instruments and Acts. Upon request of the
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.20 Dissolution upon Bankruptcy of the General Partner. The
Trustee shall, upon receipt of the written notice of an Insolvency Event
described in Section 9.2 of the Trust Agreement, give prompt written notice to
the Noteholders of the occurrence of such event. Each Noteholder shall be
entitled to provide the Owner Trustee the instructions described in such
Section 9.2 of the Trust Agreement if such Noteholder disapproves of the
liquidation of the Receivables and the termination of the Issuer.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the
Notes except as to (a) rights or registration of transfer and
exchange, (b) substitution of mutilated, destroyed, lost or stolen
Notes, (c) rights of Noteholders to receive payments of principal
thereof and interest thereon, (d) Sections 3.2, 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.15, 3.16 and 3.18, (e) the rights, obligations
and immunities of the Trustee hereunder (including the rights of
the Trustee under Section 6.7 and the obligations of the Trustee
under Sections 4.2 and 4.4) and (f) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them, and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when
(i) either
(A) All Notes theretofore authenticated and
delivered (other than (1) the Notes that have been
destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.5 and (2) the Notes for which
payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as
provided in Section 3.3) have been delivered to the Trustee
for cancellation; or
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(B) all Notes not theretofore delivered to the
Trustee for cancellation:
(1) have become due and payable,
(2) will become due and payable at their
respective Final Scheduled Distribution Dates
within one year, or
(3) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the
Issuer,
and the Issuer, in the case of clauses (1), (2) or (3) of
Section 4.1(i)(B), has irrevocably deposited or caused to be
irrevocably deposited with the Trustee cash or direct
obligations of or obligations guaranteed by the United
States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire unpaid
principal and accrued interest on such Notes not theretofore
delivered to the Trustee for cancellation when due on their
respective Final Scheduled Distribution Dates or Redemption
Date (if the Notes shall have been called for redemption
pursuant to Section 10.1(a)), as the case may be;
(ii) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(iii) the Issuer has delivered to the Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the
Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section
11.1(a) and each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited with the
Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such moneys
need not be segregated from other funds except to the extent required herein
or in the Sale and Servicing Agreement or required by law.
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SECTION 4.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture
with respect to the Notes, all moneys then held by any Paying Agent
other than the Trustee under the provisions of this Indenture with
respect to such Notes shall, upon demand of the Issuer, be paid to
the Trustee to be held and applied according to Section 3.3 and
thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 4.4 Duration of the Position of the Trustee for the Benefit of
Certificateholders. Notwithstanding (i)the earlier payment in full of all
principal and interest due to the Noteholders under the terms of the Notes of
each class, (ii)the cancellation of such Notes pursuant to Section 2.8 and
(iii)the discharge of the Trustee's duties hereunder with respect to such Notes,
the Trustee shall continue to act in the capacity of the Trustee hereunder for
the benefit of the Certificateholders and the Trustee, for the benefit of the
Certificateholders, shall comply with its obligations under Sections 5.1, 5.5,
8.1 and 8.2 of the Sale and Servicing Agreement, as appropriate, until such
time as all distributions in respect of Certificate Balance and interest due
to the Certificateholders have been paid in full.
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(a) default in the payment of any interest on any Note
when the same becomes due and payable, and such default shall
continue for a period of five days;
(b) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes
due and payable;
(c) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with) which
default
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materially and adversely affects the rights of the Noteholders, and
which default shall continue or not be cured for a period of 30 days
(or for such longer period, not in excess of 90 days, as may be
reasonably necessary to remedy such default; provided that such
default is capable of remedy within 90 days or less and the Servicer
on behalf of the Owner Trustee delivers an Officer's Certificate to
the Trustee to the effect that the Issuer has commenced, or will
promptly commence and diligently pursue, all reasonable efforts to
remedy such default) after there shall have been given, by registered
or certified mail, to the Issuer by the Trustee or to the Issuer and
the Trustee by the Holders of at least 25% of the Outstanding Amount
of the Notes, a written notice specifying such default and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; and
(d) an Insolvency Event shall have occurred for the Issuer.
The Issuer shall deliver to the Trustee, within five days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (c), its status and what action the Issuer is
taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case
the Trustee or the Holders of the Notes representing not less than a majority
of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Trustee if given by the Noteholders), and upon any such declaration the unpaid
principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article V provided, the
Holders of the Notes representing a majority of the Outstanding Amount of the
Notes, by written notice to the Issuer and the Trustee, may rescind and annul
such declaration and its consequences; provided, that, no such rescission
shall affect any subsequent default or impair any right consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by the Trustee. (a) The Issuer covenants that if (i)
default is made in the payment of any interest on any Note when the
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same becomes due and payable, and such default continues for a period of five
days, or (ii) default is made in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable, the Issuer will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of the Notes, the whole amount then due and payable on
such Notes for principal and interest, with interest upon the overdue
principal, and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue installments of interest, at the rate borne
by the Notes and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee
and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a proceeding for the collection of the sums so due and unpaid,
and may prosecute such proceeding to judgment or final decree, and may enforce
the same against the Issuer or other obligor upon such Notes and collect in
the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Trustee may,
as more particularly provided in Section 5.4, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders, by such
appropriate proceedings as the Trustee shall deem most effective to protect
and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in the case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of any Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section,
shall be entitled and empowered, by intervention in such proceedings or
otherwise:
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(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as
a result of negligence, bad faith or willful misconduct) and of the
Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of the Notes in any election of a
trustee, a standby trustee or person performing similar functions in
any such proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders and of
the Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee or the Holders of the Notes allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to
the making of payments directly to such Noteholders, to pay to the Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Trustee without
the possession of any of the Notes or the production thereof in any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express
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trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Trustee, each predecessor Trustee and
their respective agents and attorneys, shall be for the ratable benefit of the
Holders of the Notes.
(g) In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party), the Trustee shall be held to represent
all the Holders of the Notes, and it shall not be necessary to make any
Noteholder a party to any such proceedings.
SECTION 5.4 Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing and the Notes have been accelerated under
Section 5.2, the Trustee may do one or more of the following (subject to
Section 5.5):
(i) institute proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on
the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes moneys adjudged
due;
(ii) institute proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect
to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the
rights and remedies of the Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights
or interest therein, at one or more public or private sales called
and conducted in any manner permitted by law;
provided that the Trustee may not sell or otherwise liquidate the
Trust Estate following an Event of Default, unless (A) the Holders of
100% of the Outstanding Amount of the Notes consent thereto, (B) the
proceeds of such sale or liquidation distributable to the Noteholders
are sufficient to discharge in full all amounts then due and unpaid
upon such Notes for principal and interest, or (C)there has been an
Event of Default described in Section 5.1(a) or (b) and the Trustee
determines that the Trust Estate will not continue to provide
sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been
declared due and payable, and the Trustee obtains the consent of
Holders of 66-2/3% of the Outstanding Amount of the Notes. In
determining such sufficiency or insufficiency with respect to clause
(B) and (C), the Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of
national reputation as to the
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feasibility of such proposed action and as to the sufficiency
of the Trust Estate for such purpose.
(b) If the Trustee collects any money or property pursuant to this
Article V, it shall pay out such money or property (and other amounts
including amounts held on deposit in the Reserve Account) held as Collateral
for the benefit of the Noteholders in the following order:
FIRST: to the Trustee for amounts due under Section 6.7; and
SECOND: to the Collection Account for distribution pursuant
to Section 9.1(b) of the Sale and Servicing Agreement.
SECTION 5.5 Optional Preservation of the Receivables. If
the Notes have been declared to be due and payable under Section
5.2 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Trustee may,
but need not, elect to maintain possession of the Trust Estate. It
is the desire of the parties hereto and the Noteholders that there
be at all times sufficient funds for the payment of principal of
and interest on the Notes, and the Trustee shall take such desire
into account when determining whether or not to maintain possession
of the Trust Estate. In determining whether to maintain possession
of the Trust Estate, the Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting
firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such
purpose.
SECTION 5.6 Limitation of Suits. No Holder of any Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Trustee to
institute such proceeding in respect of such Event of Default in its
own name as the Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to it against the costs, expenses
and liabilities to be incurred in complying with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute
such proceedings; and
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(e) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of the Notes
shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of
any other Holders of the Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of the Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.
SECTION 5.8 Restoration of Rights and Remedies. If the
Trustee or any Noteholder has instituted any Proceeding to enforce
any right or remedy under this Indenture and such Proceeding has
been discontinued or abandoned for any reason or has been
determined adversely to the Trustee or to such Noteholder, then and
in every such case the Issuer, the Trustee and the Noteholders
shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the
Noteholders shall continue as through no such proceeding had been
instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Trustee or to the
Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission of
the Trustee or any Holder of any Note to exercise any right or remedy accruing
upon any Default or Event of Default shall
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29
impair any such right or remedy or constitute a waiver of any such Default or
Event of Default or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Trustee or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by the Noteholders, as the case may be.
SECTION 5.11 Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee with respect to the Notes or exercising any trust or power conferred
on the Trustee; provided that
(a) such direction shall not be in conflict with any
rule of law or with this Indenture;
(b) subject to the express terms of Section 5.4, any
direction to the Trustee to sell or liquidate the Trust Estate shall
be by the Holders of the Notes representing not less than 100% of the
Outstanding Amount of the Notes;
(c) if the conditions set forth in Section 5.5 have been
satisfied and the Trustee elects to retain the Trust Estate pursuant
to such Section, then any direction to the Trustee by Holders of the
Notes representing less than 100% of the Outstanding Amount of the
Notes to sell or liquidate the Trust Estate shall be of no force and
effect;
(d) the Trustee may take any other action deemed proper
by the Trustee that is not inconsistent with such direction;
and
(e) such direction shall be in writing;
provided, further, that, subject to Section 6.1, the Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.12 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2, the
Holders of the Notes of not less than a majority of the Outstanding Amount of
the Notes may, on behalf of all such Holders, waive any past Default or Event
of Default and its consequences except a Default (a) in payment of principal
of or interest on any of the Notes or (b) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of
the Holder of each Note. In the case of any such waiver, the Issuer, the
Trustee and the Holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereto.
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Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto. The Issuer shall give prompt written notice of any waiver to the
Rating Agencies.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken, suffered or omitted by it
as the Trustee, the filing by any party litigant in such Proceeding of an
undertaking to pay the costs of such Proceeding, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such Proceeding, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Trustee, (b) any suit instituted by any Noteholder or group of Noteholders, in
each case holding in the aggregate more than 10% of the Outstanding Amount of
the Notes, or, (c) any suit instituted by any Noteholder for the enforcement
of the payment of principal of or interest on any Note on or after the
respective due dates expressed in such Note and in this Indenture (or, in the
case of redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead or in any manner whatsoever,
claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, that
may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been
enacted.
SECTION 5.15 Action on Notes. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Trustee against the Issuer or by the levy of any execution
under such judgment upon any portion of the Trust Estate or upon any of the
assets of the Issuer.
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SECTION 5.16 Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Trustee to do so and at the
Administrator's expense, the Issuer agrees to take all such lawful action as
the Trustee may request to compel or secure the performance and observance by
the Seller and the Servicer, as applicable, of each of their respective
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale and Servicing Agreement to the extent and in
the manner directed by the Trustee, including the transmission of notices of
default on the part of the Seller or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of their respective
obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of
66-2/3% of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or
the Servicer under or in connection with the Sale and Servicing Agreement,
including the right or power to take any action to compel or secure
performance or observance by the Seller or the Servicer of each of their
respective obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the Sale and
Servicing Agreement, and any right of the Issuer to take such action shall be
suspended.
ARTICLE VI
THE TRUSTEE
SECTION 6.1 Duties of the Trustee. (a) The Trustee, both prior to and
after the occurrence of an Event of Default, shall undertake to perform such
duties and only such duties as are specifically set forth in this Indenture
and the Sale and Servicing Agreement. If an Event of Default known to the
Trustee has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and the Sale and Servicing Agreement
and use the same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs; provided, however, that if the Trustee shall assume the
duties of the Servicer pursuant to Section 8.2 of the Sale and Servicing
Agreement, the Trustee in performing such duties shall use the degree of skill
and attention customarily exercised by a servicer with respect to automobile
receivables that it services for itself.
The Trustee, upon receipt of any resolutions, certificates,
statements, opinions, reports, documents, orders, or other
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instruments furnished to the Trustee that shall be specifically required to be
furnished pursuant to any provision of this Indenture or the Sale and
Servicing Agreement, shall examine them to determine whether they conform to
the requirements of this Indenture or the Sale and Servicing Agreement;
provided, however, that the Trustee shall not be responsible for the accuracy
or content of any such resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Servicer to the Trustee
pursuant to this Indenture or the Sale and Servicing Agreement.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own bad faith or wilful malfeasance; provided, however, that
(i) prior to the occurrence of an Event of Default, and after the curing of
all such Events of Default, the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and the Sale
and Servicing Agreement, and no implied covenants or obligations shall be read
into this Indenture or the Sale and Servicing Agreement against the Trustee,
and in the absence of bad faith on its part or manifest error, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture or the Sale and
Servicing Agreement. The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts nor shall the
Trustee be liable with respect to any action it takes or omits to take in good
faith in accordance with this Indenture or in accordance with a direction
received by it pursuant to Section 5.11.
(c) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.
(d) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it, and none of the provisions contained in this
Indenture shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer
(including its obligations as custodian) under this Indenture except during
such time, if any, as the Trustee shall be the successor to, and be vested
with the
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rights, duties, powers and privileges of, the Servicer in accordance with the
terms of the Sale and Servicing Agreement.
(f) The Trustee shall not be charged with knowledge of an Event of
Default until such time as a Responsible Officer shall have actual knowledge
or have received written notice thereof.
(g) Except for actions expressly authorized by this Indenture or,
based upon an Opinion of Counsel, in the best interests of the Noteholders,
the Trustee shall take no action reasonably likely to impair the security
interests created or existing under any Receivable or to impair the value of
any Receivable.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 6.2 Rights of the Trustee. (a) The Trustee may conclusively
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Opinion of Counsel. The Trustee shall not be liable for any action it
takes, suffers or omits to take in good faith in reliance on the Opinion of
Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of,
any such agent, attorney, custodian or nominee appointed with due care by it
hereunder. The Trustee shall have no duty to monitor the performance of the
Issuer.
(d) The Trustee shall not be personally liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, that the Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the written advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the written advice or opinion of such
counsel.
(f) [Reserved].
(g) Prior to the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, or other paper or document, unless
requested in writing to do so by Holders of the Notes evidencing not less than
25% of the Amount Outstanding of the Notes; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses, or
liabilities likely to be incurred by it in the making of such investigation
shall be, in the opinion of the Trustee, not reasonably assured to the Trustee
by the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such cost, expense, or liability or payment
of such expenses as a condition precedent to so proceeding. The reasonable
expense of every such examination shall be paid by the Issuer or by the Servicer
at the direction of the Issuer or, if paid by the Trustee, shall be reimbursed
by the Issuer or by the Servicer at the direction of the Issuer upon demand.
Nothing in this clause (g) shall affect the obligation of the Issuer or the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors.
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SECTION 6.3 Individual Rights of the Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of the Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights
it would have if it were not the Trustee. Any Paying Agent, the Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4 The Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, shall not be accountable for the Issuer's use of
the proceeds from the Notes, and shall not be responsible for any statement of
the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Trustee's certificate of
authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is continuing
and if it is either actually known or written notice of the existence thereof
has been delivered to a Responsible Officer of the Trustee, the Trustee shall
mail to each Noteholder notice of the Default within 90 days after such
knowledge or notice occurs. Except in the case of a Default in
accordance with the provisions of Section 313(c) of the TIA in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note), the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interest of the Noteholders.
SECTION 6.6 Reports by the Trustee to Holders. The Trustee shall
deliver to each Noteholder such information as may be reasonably required to
enable such Holder to prepare its Federal and state income tax returns.
SECTION 6.7 Compensation and Indemnity. The Issuer shall cause the
Administrator pursuant to the Administration Agreement to pay to the Trustee
from time to time reasonable compensation for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of
an express trust. The Issuer shall cause the Administrator pursuant to the
Administration Agreement to reimburse the Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
in addition to the compensation for its services. Such expenses shall include
the reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts.
The Issuer shall cause the Administrator pursuant to the Administration
Agreement to indemnify the Trustee against any and all loss, liability or
expense (including the fees of either in-house counsel or outside counsel, but
not both) incurred by it in connection with the administration of this trust
and the performance of its duties hereunder. The Trustee shall notify the
Issuer and the Administrator promptly of any claim for which it may seek
indemnity.
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The Administrator's payment obligations to the Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in Section 5.1(d)
with respect to the Issuer, the expenses are intended to constitute expenses
of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.8 Replacement of the Trustee. (a) The Trustee may give
notice of its intent to resign at any time by so notifying the Issuer. The
Holders of a majority in Outstanding Amount of the Notes may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee. The
Issuer shall remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) the Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of
the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee gives notice of its intent to resign or is removed
or if a vacancy exists in the office of the Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the
Issuer shall promptly appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer and thereupon the
resignation or removal of the Trustee shall become effective, and the
successor Trustee, without any further act, deed or conveyance shall have all
the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Noteholders. The
retiring Trustee shall promptly transfer all property held by it as the
Trustee to the successor Trustee.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee gives notice of its intent to resign or is removed, the
retiring Trustee, the Issuer or the Holders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) Any resignation or removal of the Trustee and appointment
of a Successor Trustee pursuant to any of the provisions of this
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Section shall not become effective until acceptance of appointment by the
successor Trustee pursuant to Section 6.8(c) and payment of all fees and
expenses owed to the outgoing Trustee.
(g) Notwithstanding the resignation or removal of the Trustee
pursuant to this Section, the Issuer's and the Servicer's obligations under
Section 6.7 shall continue for the benefit of the retiring Trustee. The
Trustee shall not be liable for the acts or omissions of any successor
Trustee.
SECTION 6.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee. The Trustee shall provide the
Issuer and the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor Trustee may authenticate such Notes either in the
name of any predecessor hereunder or in the name of the successor Trustee; and
in all such cases such certificate of authentication shall have the same full
force as is provided anywhere in the Notes or in this Indenture with respect
to the certificate of authentication of the Trustee.
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Issuer may at the time be located, the Trustee shall have the power and
may execute and deliver all instruments to appoint one or more Persons to act
as a co-trustee or co-trustees, or separate trustee or separate trustees, of
all or any part of the Trust, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Trust, or
any part hereof, and, subject to the other provisions of this Section, such
power, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. The Administrator will pay all reasonable fees and
expenses of any co-trustee or co-trustees or separate trustee or separate
trustees. The appointment of any separate trustee or co-trustee shall not
absolve the Trustee of its obligations under this Indenture. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 6.11 and no notice to the Noteholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 6.8.
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(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Issuer or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder,
including acts or omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee (with a copy given to the Issuer).
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11 Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA 310(a). The
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Trustee shall have a combined capital and surplus of at least $100,000,000 as
of the last day of the most recent fiscal quarter for such institution and
shall be subject to examination or supervision by federal or state authorities.
The Trustee shall comply with TIA Section 310(b), including the optional
provision permitted by the second sentence of TIA Section 310(b)(9); provided
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in the TIA Section
310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against the Issuer. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 The Issuer To Furnish the Trustee Names and Addresses of
the Noteholders. The Issuer will furnish or cause to be furnished to the
Trustee (a) not more than five days after each Record Date, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders as of such Record Date and (b) at such other times as the Trustee may
request in writing, within 14 days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than 10 days
prior to the time such list is furnished, provided that so long as the Trustee
is the Note Registrar, no such list shall be required to be furnished.
SECTION 7.2 Preservation of Information; Communications to the
Noteholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Trustee as provided in
Section 7.1 and the names and addresses of the Holders of Notes received by
the Trustee in its capacity as the Note Registrar. The Trustee may destroy any
list furnished to it as provided in such Section 7.1 upon receipt of a new
list so furnished.
(b) The Noteholders may communicate pursuant to TIA 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
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SECTION 7.3 Reports by the Issuer. (a) The Issuer shall:
(i) file with the Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Issuer may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Trustee (and the Trustee shall transmit
by mail to all Noteholders described in TIA 313(c)) such summaries of
any information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may
be required by rules and regulations prescribed from time to time by
the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year
of the Issuer shall end on December 31 of each year.
SECTION 7.4 Reports by the Trustee. If required by TIA 313(a), within
60 days after each March 31, beginning with March 31, 199_, the Trustee shall
mail to each Noteholder as required by TIA Section 313(c) a brief report dated
as of such date that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Section 313(b). A copy of each report at the time of its
mailing to Noteholders shall be filed by the Trustee with the Commission and
each stock exchange, if any, on which the Notes are listed. The Issuer shall
notify the Trustee if and when the Notes are listed on any stock exchange. On
each Distribution Date, the Trustee shall include with each payment to each
Noteholder a copy of the statement for the related Collection Period provided to
the Trustee pursuant to Section 5.7 of the Sale and Servicing Agreement.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise provided herein,
the Trustee may demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the
Trustee pursuant to this Indenture. The Trustee shall apply all such money
received by it as provided in this Indenture and the Sale and Servicing
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Agreement. Except as otherwise provided in this Indenture, if any default
occurs in the making of any payment or performance under any agreement or
instrument that is part of the Trust Estate, the Trustee may take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings. Any such action shall
be without prejudice to any right to claim a Default or Event of Default under
this Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.2 Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Servicer to establish and maintain, in the name of the
Trustee, for the benefit of the Noteholders and the Certificateholders, the
Trust Accounts as provided in Section 5.1 of the Sale and Servicing Agreement.
(b) Before each Distribution Date, the Servicer and the
Seller are required to deposit the Total Distribution Amount with
respect to the preceding Collection Period in the Collection Account
pursuant to Sections 5.2 and 5.4 of the Sale and Servicing Agreement.
Before each Distribution Date, the Trustee shall withdraw the Reserve
Account Transfer Amount for such Distribution Date from the Reserve
Account and deposit it in the Collection Account in accordance with
Section 5.5(b) of the Sale and Servicing Agreement. On or before each
Distribution Date, the Trustee or the Paying Agent on behalf of the
Trustee shall transfer the Noteholders' Distributable Amount for such
Distribution Date from the Collection Account to the Note
Distribution Account in accordance with Section 5.5 of the Sale and
Servicing Agreement.
(c) Not later than 12:00 noon, New York City time, on each
Distribution Date, the Trustee or the Paying Agent on behalf of the
Trustee shall distribute all amounts on deposit in the Note
Distribution Account to Noteholders to the extent of amounts due and
unpaid on the Notes for principal and interest in the following
amounts and in the following order of priority:
(i) to accrued and unpaid interest on the Notes;
provided that if there are not sufficient funds in the Note
Distribution Account to pay the entire amount of accrued and
unpaid interest then due on the Notes, the amount in the
Note Distribution Account shall be applied to the payment of
such interest on the Notes pro rata on the basis of the
total such interest due on the Notes;
(ii) unless otherwise provided in clause (iv)
below, to the Holders of the Class A-1 Notes until the
Outstanding Amount of the Class A-1 Notes is reduced to
zero;
(iii) unless otherwise provided in clause (iv)
below, to the Holders of the Class A-2 Notes until the
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Outstanding Amount of the Class A-2 Notes is reduced to
zero; and
(iv) if the Notes have been declared immediately
due and payable as provided in Section 5.2, any amounts
remaining in the Note Distribution Account after the
applications described in Section 8.2(c)(i) shall be applied
to the repayment of principal on each of the Notes pro rata
on the basis of the respective unpaid principal amount of
each such Note.
SECTION 8.3 General Provisions Regarding Accounts. (a) In accordance
with Section 5.1(b) of the Sale and Servicing Agreement, all funds in the
Trust Accounts shall be invested in Permitted Investments upon written
direction of the Servicer. All income or other gain from investments of moneys
deposited in the Trust Accounts shall be paid to the Servicer, and any loss
resulting from such investments shall be charged to such account. The Servicer
will not direct the Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
Granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Trustee to
make any such investment or sale, if requested by the Trustee, the Servicer
shall deliver to the Trustee an Opinion of Counsel, acceptable to the Trustee,
to such effect.
(b) Subject to Section 6.1(b), the Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Permitted Investment included therein except
for losses attributable to the Trustee's failure to make payments on such
Permitted Investments issued by the Trustee, in its commercial capacity as
principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Trust Accounts to the Trustee by
11:00 a.m. New York City time (or such other time as may be agreed by the
Servicer and the Trustee) on any Business Day, or (ii) a Default or Event of
Default shall have occurred and be continuing with respect to the Notes but
the Notes shall not have been declared due and payable pursuant to Section
5.2, or, if such Notes shall have been declared due and payable following an
Event of Default, amounts collected or receivable from the Trust Estate are
being applied in accordance with Section 5.5 as if there had not been such a
declaration; then the Trustee shall, to the fullest extent practicable, invest
and reinvest funds in the Trust Accounts in one or more Permitted Investments.
The Trustee shall not be liable for losses in respect of such investments in
Permitted Investments that comply with the requirements of the Basic
Documents.
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SECTION 8.4 Release of Trust Estate. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.7, the Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Trustee's
interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Trustee as provided in this Article VIII shall be
bound to ascertain the Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.
(b) The Trustee shall, at such time as there are no Notes Outstanding,
and all sums due the Trustee pursuant to Section 6.7 have been paid, release any
remaining portion of the Trust Estate that secured the Notes from the lien of
this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Note Distribution Account. The Trustee shall
(i)release any remaining portion of the Trust Estate that secures the
Certificates from the lien of this Indenture and (ii)release to the Issuer
or any other Person entitled thereto any funds then on deposit in the Reserve
Account or the Collection Account only to such time as (x)there are no Notes
Outstanding, (y)all payments in respect of Certificate Balance and interest due
to the Certificateholders have been paid in full and (z)all sums due to the
Trustee pursuant to Section 6.7 have been paid. The Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.4(b) only
upon receipt of an Issuer Request accompanied by an Officer's Certificate, an
Opinion of Counsel and (if required by the TIA) Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.1.
SECTION 8.5 Opinion of Counsel. The Trustee shall receive at least
seven days' notice when requested by the Issuer to take any action pursuant to
Section 8.4(a), accompanied by copies of any instruments involved, and the
Trustee may also require as a condition of such action, an Opinion of Counsel,
in form and substance satisfactory to the Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders; provided, however
that such Opinion of Counsel shall not be required to express an opinion as to
the fair value of the Trust Estate. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Trustee in connection with
any such action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies by the Issuer, when authorized by the Issuer Request, at
any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to
assure, convey and confirm unto the Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and
the assumption by any such successor of the covenants of issuer
herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right
or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided that such action shall not materially and
adversely affect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the
Notes and to add to or change any of the provisions of this Indenture
as shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
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The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Holders of the Notes but with
prior notice to the Rating Agencies by the Issuer, as evidenced to the
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided that such
action shall not, as evidenced by an Opinion of Counsel, materially and
adversely affect the interests of any Noteholder.
SECTION 9.2 Supplemental Indentures with Consent of the Noteholders.
The Issuer and the Trustee, when authorized by the Issuer, also may, with
prior notice to the Rating Agencies and with the consent of the Holders of a
majority of the Outstanding Amount of the Notes, by Act of such Holders
delivered to the Issuer and the Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or the Redemption Price with
respect thereto, change the provision of this Indenture relating to
the application of collections on, or the proceeds of the sale of,
the Trust Estate to payment of principal of or interest on the Notes,
or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as
provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
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(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Trustee to sell or liquidate the Trust
Estate pursuant to Section 5.4;
(v) modify any provision of this Section except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or any of the other Basic
Documents cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Distribution Date
(including the calculation of any of the individual components of
such calculation) or to affect the rights of the Holders of the Notes
to the benefit of any provisions for the mandatory redemption of the
Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on
a parity with the lien of this Indenture with respect to any part of
the Trust Estate or, except as otherwise permitted or contemplated
herein or in the Basic Documents, terminate the lien of this
Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this
Indenture.
The Trustee may determine whether or not any Notes would be affected
by any supplemental indenture and any such determination shall be conclusive
upon the Holders of all Notes, whether theretofore or thereafter authenticated
and delivered hereunder. The Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Noteholders shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates
a notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 9.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations
of rights,
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obligations, duties, liabilities and immunities under this Indenture of the
Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be an be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.4 Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall comply in all respects with the Trust Indenture Act.
SECTION 9.5 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption. (a) The Class A-2 Notes are subject to
redemption in whole, but not in part, on any Distribution Date upon the
exercise by the Servicer of its option to purchase the Receivables pursuant to
Section 9.1(a) of the Sale and Servicing Agreement. The Notes shall be
redeemed for the Redemption Price; provided that the Issuer has available
funds sufficient to pay the Redemption Price. The Servicer or the Issuer shall
furnish notice of such election to the Trustee not later than the 25th day of
the month prior to the Redemption Date and the Issuer shall deposit with the
Trustee in the Note Distribution Account the Redemption Price of the Class A-2
Notes to be redeemed whereupon all such Class A-2 Notes shall be due and
payable on the Redemption Date.
(b) If the assets of the Issuer are sold pursuant to Section 9.2 of
the Trust Agreement, all amounts deposited in the Note Distribution Account
pursuant to Section 9.1(b) of the Sale and Servicing Agreement shall be paid
to the Noteholders up to the Outstanding Amount of the Notes together with all
accrued and unpaid interest thereon. If amounts are to be paid to the
Noteholders pursuant to this Section, the Servicer or the Issuer shall, to the
extent practicable, furnish notice of such event to the Trustee not later than
25 days prior to the Redemption Date whereupon all such amounts shall be
payable on the Redemption Date.
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SECTION 10.2 Form of Redemption Notice. (a) Notice of redemption
under Section 10.1(a) shall be given by the Trustee by facsimile or by
first-class mail, postage prepaid, transmitted or mailed prior to the
applicable Redemption Date to each Holder of Class A-2 Notes, as of the close
of business on the Record Date preceding the applicable Redemption Date, at
such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable and that payments shall be made
only upon presentation and surrender of such Class A-2 Notes and the
place where such Class A-2 Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency to be
maintained as provided in Section 3.2); and
(iv) that interest on the Class A-2 Notes shall cease to
accrue on the Redemption Date.
Notice of redemption of the Class A-2 Notes shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice
of redemption, or any defect therein, to any Holder of any Class A-2 Notes
shall not impair or affect the validity of the redemption of any other Class
A-2 Note.
(b) Prior notice of redemption under Section 10.1(b) is not
required to be given to Noteholders.
SECTION 10.3 Notes Payable on Redemption Date. The Notes to
be redeemed shall, following notice of redemption as required by
Section 10.2 (in the case of redemption pursuant to Section
10.1(a)), on the Redemption Date become due and payable at the
Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption
Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Trustee to take any action under
any provision of this Indenture, the Issuer shall furnish to the Trustee (i)
an Officer's Certificate stating that all conditions precedent, if any,
provided for in this
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Indenture relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, and (iii) (if required
by the TIA) an Independent Certificate from a firm of certified public
accountants meeting the applicable requirements of this Section, except that,
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation
as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Trustee that is to be made the basis for the release of
any property or securities subject to the lien of this Indenture, the Issuer
shall, in addition to any obligation imposed in Section 11.1(a) or elsewhere
in this Indenture, furnish to the Trustee an Officer's Certificate certifying
or stating the opinion of each person signing such certificate as to the fair
value (within 90 days of such deposit) to the Issuer of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i), the
Issuer shall also deliver to the Trustee an Independent Certificate
as to the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities made
the basis of any such withdrawal or release since the commencement of
the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) and this clause (ii),
is 10% or more of the Outstanding Amount of the Notes,
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but such a certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof to the Issuer as
set forth in the related Officer's Certificate is less than $25,000
or less than one percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any
Repurchased Receivables or Defaulted Receivables, whenever any
property or securities are to be released from the lien of this
Indenture, the Issuer shall also furnish to the Trustee an Officer's
Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will
not impair the security under this Indenture in contravention of the
provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii), the
Issuer shall also furnish to the Trustee an Independent Certificate
as to the same matters if the fair value of the property or
securities and of all other property other than Repurchased
Receivables and Defaulted Receivables, or securities released from
the lien of this Indenture since the commencement of the then current
calendar year, as set forth in the certificates required by clause
(iii) and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in
the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less
than $25,000 or less than one percent of the then Outstanding Amount
of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of
this Section, the Issuer may (A) collect, liquidate, sell or
otherwise dispose of the Receivables as and to the extent permitted
or required by the Basic Documents and (B) make cash payments out of
the Trust Accounts as and to the extent permitted or required by the
Basic Documents.
SECTION 11.2 Form of Documents Delivered to the Trustee. In
any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered
by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person my certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon
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a certificate to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate
or opinion is based are erroneous. Any such certificate of an Authorized
Officer or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer
or officers of the Servicer, the Seller or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,
be construed to affect the Trustee's right to rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in
Article VI.
SECTION 11.3 Actions of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by the
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by an
agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, when required, to the Issuer or
the Servicer. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee, the Issuer and the Servicer,
if made in the manner provided in this Section 11.3.
(b) The fact and date of the execution by any Noteholder of
any such instrument or writing may be proved in any reasonable
manner which the Trustee deems sufficient.
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(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Noteholder shall bind every Holder of every Note
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done, by the
Trustee, the Issuer or the Servicer in reliance thereon, whether or not
notation of such action is made upon such Note.
(d) The Trustee may require such additional proof of any matter
referred to in this Section 11.3 as it shall deem necessary.
SECTION 11.4 Notices, etc., to the Trustee, the Issuer, and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(a) The Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered or
mailed certified mail, return receipt requested and shall be deemed
to have been duly given upon receipt by the Trustee at its Corporate
Trust Office, or
(b) The Issuer by the Trustee or any Noteholder shall be
sufficient for every purpose hereunder if personally delivered or
mailed certified mail, return receipt to the Issuer addressed to:
Chase Manhattan Auto Owner Trust 199_-_, in care of [Owner Trustee]
or at any other address previously furnished in writing to the
Trustee by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Trustee.
Notices required to be given to the Rating Agencies by the Issuer,
the Trustee or the Owner Trustee shall be in writing, personally delivered or
mailed certified mail, return receipt requested to (i) in the case of Moody's,
at the following address: Moody's Investors Service, Inc., 99 Church Street,
New York, New York 10004 and (ii) in the case of S&P, at the following
address: Standard & Poor's Ratings Group, 26 Broadway (15th Floor), New York,
New York 10004, Attention of Asset Backed Surveillance Department; or as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where this
Indenture provides for notice to Noteholders of any event, such
notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage
prepaid to each Noteholder affected by such event, at his address
as it appears on the Note Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in
any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and
52
<PAGE>
any notice that is mailed in the manner herein provided shall conclusively be
presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to the Noteholders when such notice is required to
be given pursuant to any provision of this Indenture, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other right or obligations
created hereunder, and shall not under any circumstance constitute a Default
or Event of Default.
SECTION 11.6 Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the
Issuer may enter into any agreement with any Holder of a Note providing for a
method of payment, or notice by the Trustee or any Paying Agent to such Holder
that is different from the methods provided for in this Indenture for such
payments or notices, provided that such methods are reasonable and consented
to by the Trustee (which consent shall not be unreasonably withheld). The
Issuer will furnish to the trustee a copy of each such agreement, and the
Trustee will cause payments to be made and notices to be given in accordance
with such agreements.
SECTION 11.7 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind
53
<PAGE>
its successors and assigns. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.10 Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not be affected
or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders and (only
to the extent expressly provided herein) the Certificateholders, and any other
party secured hereunder, and any other person with an ownership interest in
any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably
acceptable to the Trustee) to the effect that such recording is necessary
either for the protection of the Noteholders or any other person secured
hereunder or for the enforcement of any right or remedy granted to the Trustee
under this Indenture or to satisfy any provision of the TIA.
SECTION 11.16 Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the
54
<PAGE>
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Trustee and the
Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity. For all purposes of this Indenture, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII and of the Trust Agreement.
SECTION 11.17 No Petition. The Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Issuer or the General
Partner or join in any institution against the General Partner or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Basic Documents.
SECTION 11.18 Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Trustee, during the Issuer's
normal business hours, to examine all the books of account, records, reports,
and other papers of the Issuer, to make copies and extracts therefrom, to
cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees and independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Trustee
shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except
to the extent that the Trustee may reasonably determine that such disclosure
is consistent with its Obligations hereunder.
55
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
THE CHASE MANHATTAN AUTO
OWNER TRUST 199_,
By:______________________________
Name:
Title:
________________________________,
not in its individual capacity
but solely as Trustee
By:______________________________
Name:
Title:
56
<PAGE>
EXHIBIT A
SCHEDULE OF RECEIVABLES
EXHIBIT B
<PAGE>
FORM OF A-1 NOTES
REGISTERED $_________________3
No. R-____ CUSIP NO. __________
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC). ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.
CHASE MANHATTAN AUTO OWNER TRUST 199_-_
____% CLASS A-1 ASSET BACKED NOTES
Chase Manhattan Auto Owner Trust 199_-_, a trust organized and
existing under the laws of the State of Delaware (including any successor, the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of __________ DOLLARS ($__________),
partially payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction, the numerator of which is $__________
and the denominator of which is $__________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-1 Notes pursuant to Section 3.1 of the Indenture; provided that the
entire unpaid principal amount of this Note shall be due and payable on the
earlier of the __________ Distribution Date and the Redemption Date, if any,
pursuant to Section 10.1(a) of the Indenture. The Issuer will pay interest on
this Note at the rate per annum shown above, on each Distribution Date until
the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Sections 2.7,
3.1 and 8.2 of the Indenture. Interest on this Note will accrue for each
Distribution Date from the most recent Distribution Date
________
3 Denominations of $1,000 and integral multiples of $1,000 in
excess thereof.
<PAGE>
on which interest has been paid to but excluding the then current Distribution
Date or, if no interest has yet been paid, from __________, 199_. Interest
will be computed on the basis of actual days elapsed in a 360-day year. Such
principal of and interest on this Note shall be paid in the manner specified
in the Indenture.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the trustee whose name appears below by manual signature, this Note shall not
be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: __________, 199_
CHASE MANHATTAN AUTO OWNER TRUST
199_._
By:__________________________________
not in its individual capacity
but solely as Owner Trustee
under the Trust Agreement
By:__________________________________
Name:
Title:
B-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within mentioned Indenture.
Dated: __________, 199_
_______________________________,
not in its individual capacity
but solely as Indenture Trustee
By:_____________________________
Authorized Signatory
B-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ____% Class A-1 Asset Backed Notes (herein called the "Class
A-1 Notes" or the "Notes"), all issued under an Indenture dated as of _______,
199_ (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and , not in its individual capacity but solely
as trustee (the "Indenture Trustee"), which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are not otherwise defined herein and that are
defined in the Indenture shall have the meanings assigned to them in or pursuant
to the Indenture.
The Notes and the Class A-2 Notes are and will be equally and ratably
secured by the collateral pledges as security therefor as provided in the
Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
Each Holder or Note Owner, by acceptance of a Note, or, in the case
of a Note Owner, a beneficial interest in the Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Owner Trustee or the
Trustee or of any successor or assign of the Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
<PAGE>
It is the intent of the Seller, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any other
tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Issuer. The Noteholders, by acceptance of a Note, agree to
treat, and to take no action inconsistent with the treatment of, the Notes for
such tax purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that they will not at any time institute against the General Partner or the
Issuer or join in any institution against General Partner or Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or State
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Basic Documents.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither ________________________________, in
its individual capacity, any owner of a beneficial interest in the Issuer, nor
any of their respective partners, beneficiaries, agents, officers, directors,
employees, successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest
on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and
indemnifications have been made by the Trustee for the sole purposes of
binding the interests of the Trustee in the assets of the Issuer. The Holder
of this Note by the acceptance hereof agrees that, except as expressly
provided in the Basic Documents, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided that nothing contained herein
shall be taken to prevent recourse to, and enforcement against, the assets of
the Issuer for any and all liabilities, obligations and undertakings contained
in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- ------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- ------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _____, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:__________ ___________________________________****
Signature Guaranteed:
______
**** NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular without alteration, enlargement or any change
whatsoever.
<PAGE>
EXHIBIT C
FORM OF A-2 NOTES
REGISTERED $_________________1
No. R-____ CUSIP NO. __________
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACT
HEREOF.
CHASE MANHATTAN AUTO OWNER TRUST 199__
__% CLASS A-2 ASSET BACKED NOTES
Chase Manhattan Auto Owner Trust 199__, a trust organized and
existing under the laws of the State of Delaware (including any successor, the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ______________________ DOLLARS
($____________), partially payable on each Distribution Date in an amount
equal to the result obtained by multiplying (i) a fraction, the numerator of
which is $_____________ and the denominator of which is $____________ by the
(ii) the aggregate amount, if any, payable from the Note Distribution Account
in respect of principal on the Class A-1 Notes pursuant to Section 3.1 of the
Indenture; provided that the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the _________________ Distribution Date
and the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.
No payments of principal of the Class A-2 Notes will be made until the
principal of the Class A-1 Notes has been paid in full. The Issuer will pay
interest on this Note at the rate per annum shown above, on each Distribution
Date until the principal of this Note is paid or made available for payment,
on the principal amount of this Note outstanding on the preceding Distribution
Date (after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Sections 2.7,
3.1 and 8.2 of the Indenture. Interest
______
1 Denominations of $1,000 and integral multiples of $1,000 in
excess thereof.
<PAGE>
on this Note will accrue for each Distribution Date from the most recent
Distribution Date on which interest has been paid to but excluding the then
current Distribution Date or, if no interest has yet been paid, from
____________, 199__. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. Such principal of and interest on this Note shall be
paid in the manner specified in the Indenture.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not
be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: ____________________, 199__
CHASE MANHATTAN AUTO OWNER TRUST 199__
By______________________________________
, not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By:_____________________________________
Name:
Title:
C-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: ____________________, 199__
______________________________________,
not in its individual capacity, but
solely as Indenture Trustee
By:___________________________________
Authorized Signatory
C-3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its _____% Class A-2 Asset Backed Notes (herein called the
"Class A-2 Notes" or the "Notes"), all issued under an Indenture dated as of
199__ (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and ______________________, not in its
individual capacity but solely as trustee (the "Indenture Trustee"), which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights and obligations thereunder the of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture. All terms used in this Note that are
not otherwise defined herein and that are defined in the Indenture shall have
the meanings assigned to them in or pursuant to the Indenture.
The Notes and the Class A-1 Notes are and will be equally and ratably
secured by the collateral pledged as security therefor as provided in the
Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
Each Holder or Note Owner, by acceptance of a Note, or, in the case
of a Note Owner, a beneficial interest in the Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director, employee
or agent of the Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Trustee or the Owner
Trustee or of any successor or assign of the Trustee or the Owner Trustee in
its individual capacity, except that any such Person may have expressly agreed
(it being understood that the Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any other
tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Issuer. The Noteholders, by acceptance of a Note, agree to
treat, and to take no action
<PAGE>
inconsistent with the treatment of, the Notes for such tax purposes
as indebtedness of the Issuer.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that they will not at any time institute against the General Partner or the
Issuer, or join in any institution against the General Partner or Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Basic Documents.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither ____________________________________,
in its individual capacity, any owner of a beneficial interest in the Issuer,
nor any of their respective partners, beneficiaries, agents, officers,
directors, employees, successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and
indemnifications have been made by the Trustee for the sole purpose of binding
the interests of the Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
C-2
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
_________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
_________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: ______________________ _____________________________*
Signature Guaranteed:
____________________________
________
* NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular without alteration, enlargement or any change
whatsoever.
<PAGE>
EXHIBIT D
Note Depository Agreement
<PAGE>
(FORM OF)
CERTIFICATE OF TRUST OF
CHASE MANHATTAN AUTO OWNER TRUST 199__-__
THIS certificate of Trust of Chase Manhattan Auto Owner Trust 199__-__
(the "TRUST"), dated as of ________, 199__, is being duly executed and filed by
____________________________, a _________________________ banking corporation,
and _______________________, a __________________________, as trustees, to form
a business trust under the Delaware Business Trust Act (13 Del Code, Section
3801 et seq.).
(a) Name. The name of the business trust formed hereby is CHASE
MANHATTAN AUTO OWNER TRUST 199__-__.
(b) Delaware Trustee. The name and business address of the trustee of
the Trust resident in the State of Delaware is ______________.
(c) This Certificate of Trust will be effective ________, 199___.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
By: __________________________________
not in its individual capacity,
but solely as owner trustee of
the Trust.
By: ___________________________________
Name:
Title:
<PAGE>
Exhibit 4.3(B)
TRUST AGREEMENT, dated as of ___________, 199__, between CHASE MANHATTAN
BANK USA, N.A., a national banking association, as Depositor, and [___________
_______________], a Delaware banking corporation, not in its individual capacity
but solely as Owner Trustee. The Depositor and the Owner Trustee hereby agree as
follows:
1. The trust created hereby shall be known as "Chase Manhattan Auto
Owner Trust 199__-__", in which name the Owner Trustee may conduct the business
of the Trust, make and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Owner Trustee the sum of $1. The Owner Trustee hereby acknowledges receipt of
such amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Owner Trustee hereby declares that it will hold the
trust estate in trust for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del.C. Section 3801 et seq. and
that this document constitute the governing instrument of the Trust. The Owner
Trustee is hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in the form attached hereto.
3. The Depositor and the Owner Trustee, together with the General Partner
named therein, will enter into an amended and restated Trust Agreement,
satisfactory to each such party, to provide for the contemplated operation of
the Trust created hereby. Prior to the execution and delivery of such amended
and restated Trust Agreement, the Owner Trustee shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law.
4. This Trust Agreement may be executed in one or more counterparts.
5. The Owner Trustee may resign upon thirty days prior notice to the
Depositor.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
[ ]
----------------------------------,
not in its individual capacity
but solely as Owner Trustee
By:
-------------------------------
Name:
Title:
CHASE MANHATTAN BANK USA, N.A., as
Depositor
By:
-------------------------------
Name:
Title:
<PAGE>
OH&S Draft
8/21/96
================================================================================
CHASE MANHATTAN AUTO OWNER TRUST 199_-_
TRUST AGREEMENT
among
[CHASE MANHATTAN BANK USA, N.A.,
as Depositor
[--------------,]
as General Partner
and
------------------------------,
as Owner Trustee
Dated as of _________, 199_
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1. Capitalized Terms.......................... 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name....................................... 2
SECTION 2.2 Office..................................... 2
SECTION 2.3 Purposes and Powers........................ 2
SECTION 2.4 Appointment of Owner Trustee............... 3
SECTION 2.5 Initial Capital Contribution of Trust
Estate..................................... 3
SECTION 2.6 Declaration of Trust....................... 3
SECTION 2.7 Title to Issuer Property................... 3
SECTION 2.8 Situs of Issuer............................ 4
SECTION 2.9 Representations and Warranties of the
Depositor.................................. 4
SECTION 2.10 Liability of Owners........................ 4
SECTION 2.11. Guaranteed Payments/Gross Income
Allocations................................ 5
SECTION 2.12. Deduction and Loss Allocations............. 6
SECTION 2.13. Special Allocations........................ 6
SECTION 2.14. Amended and Restated Trust Agreement....... 6
SECTION 2.15. Required Net Worth of General Partner...... 6
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 Initial Ownership.......................... 7
SECTION 3.2 The Certificates........................... 7
SECTION 3.3 Execution, Authentication and Delivery
of Certificates............................ 7
SECTION 3.4 Registration of Transfer and Exchange of
Certificates............................... 7
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen
Certificates............................... 9
SECTION 3.6 Persons Deemed Certificateholders.......... 9
SECTION 3.7 Access to List of Certificateholders'
Names and Addresses........................ 10
SECTION 3.8 Maintenance of Office or Agency............ 10
SECTION 3.9 Appointment of Paying Agent................ 10
SECTION 3.10 Book-Entry Certificates.................... 11
SECTION 3.11 Notices to Clearing Agency................. 12
SECTION 3.12 Definitive Certificates.................... 12
<PAGE>
SECTION 3.13 Authenticating Agent....................... 13
SECTION 3.14 Actions of Certificateholders.............. 15
SECTION 3.15. Disposition of Certificates by General
Partner.................................... 15
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Owners with Respect to
Certain Matters............................ 16
SECTION 4.2 Action by Certificateholders with
Respect to Certain Matters................. 16
SECTION 4.3 Action by Certificateholders with Respect
to Bankruptcy.............................. 17
SECTION 4.4 Restrictions on Certificateholders' Power.. 17
SECTION 4.5 Majority Control........................... 17
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Certificate Distribution
Account.................................... 17
SECTION 5.2 Application of Funds in Certificate
Distribution Account....................... 18
SECTION 5.3 Method of Payment.......................... 19
SECTION 5.4 No Segregation of Monies; No Interest...... 19
SECTION 5.5 Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue
Service and Others......................... 19
SECTION 5.6 Signature on Returns; Tax Matters Partner.. 19
SECTION 5.7 Capital Accounts........................... 20
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1 General Authority.......................... 21
SECTION 6.2 General Duties............................. 21
SECTION 6.3 Action upon Instruction.................... 21
SECTION 6.4 No Duties Except as Specified in this
Agreement or in Instructions............... 22
SECTION 6.5 No Action Except under Specified Documents
or Instructions............................ 22
SECTION 6.6 Restrictions............................... 23
ARTICLE VII
CONCERNING OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties............ 23
SECTION 7.2 Furnishing of Documents.................... 25
SECTION 7.3 Representations and Warranties............. 25
ii
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SECTION 7.4 Reliance; Advice of Counsel................ 26
SECTION 7.5 Not Acting in Individual Capacity.......... 27
SECTION 7.6 Owner Trustee May Own Certificates and
Notes...................................... 27
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1 Owner Trustee's Fees and Expenses.......... 27
SECTION 8.2 Indemnification............................ 27
SECTION 8.3 Payments to Owner Trustee.................. 28
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.1 Termination of Trust Agreement............. 28
SECTION 9.2 Dissolution upon Bankruptcy of the General
Partner.................................... 30
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner
Trustee.................................... 30
SECTION 10.2 Resignation or Removal of Owner Trustee.... 31
SECTION 10.3 Successor Owner Trustee.................... 31
SECTION 10.4 Merger or Consolidation of Owner Trustee... 32
SECTION 10.5 Appointment of Co-Trustee or Separate
Trustee.................................... 32
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Supplements and Amendments................. 34
SECTION 11.2 No Legal Title to Owner Trust Estate in
Certificateholders......................... 35
SECTION 11.3 Limitations on Rights of Other............. 35
SECTION 11.4 Notices.................................... 35
SECTION 11.5 Severability............................... 36
SECTION 11.6 Separate Counterparts...................... 36
SECTION 11.7 Successors and Assigns..................... 36
SECTION 11.8 No Petition................................ 36
SECTION 11.9 No Recourse................................ 36
SECTION 11.10 Headings................................... 37
SECTION 11.11 GOVERNING LAW.............................. 37
SECTION 11.12 Certificate Transfer Restrictions.......... 37
SECTION 11.13. Seller Payment Obligation.................. 37
[SECTION 11.14. References to the Depositor or Chase
Manhattan Bank USA, N.A.].................. 37
iii
<PAGE>
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Certificate Depository Agreement
iv
<PAGE>
TRUST AGREEMENT dated as of ___________, 199_ among CHASE MANHATTAN
BANK USA, N.A., a national banking association, as the depositor ("Chase
USA") and in its capacity as the depositor, the "Depositor"),
__________________, a ____________________________ (the "General Partner"),
and _______________________, a __________ banking corporation, as the Owner
Trustee.
ARTICLE I
DEFINITIONS
SECTION 1.1. Capitalized Terms. Capitalized terms are used in this
Agreement as defined in Section 1.1 to the Sale and Servicing Agreement
between the trust established by this Agreement and Chase USA, as Seller and
Servicer, dated as of ___________, 199_, as the same may be amended and
supplemented from time to time.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(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. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder," and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(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) All calculations of the amount of interest accrued on
<PAGE>
the Certificates shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The trust created hereby shall be known as "Chase
Manhattan Auto Owner Trust 199__" (hereinafter, the "Issuer") in which name
the Owner Trustee may conduct the business of such trust, make and execute
contracts and other instruments on behalf of such trust and sue and be sued.
SECTION 2.2 Office. The office of the Issuer shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders and
the Depositor.
SECTION 2.3 Purposes and Powers. The purpose of the Issuer is, and
the Issuer shall have the power and authority, to engage in the following
activities:
(a) to issue the Notes pursuant to the Indenture and
the Certificates pursuant to this Agreement, and to sell,
transfer or exchange the Notes and the Certificates;
(b) to acquire the property and assets set forth in the
Sale and Servicing Agreement from the Depositor pursuant to the terms
thereof, to make payments or distributions on the Notes and
Certificates, to make deposits to and withdrawals from the Reserve
Account and other accounts established under the Sale and Servicing
Agreement;
(c) to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate pursuant to the Indenture and to hold, manage
and distribute to the Certificateholders pursuant to the terms of the
Sale and Servicing Agreement;
(d) to enter into and perform its obligations under the
Basic Documents to which it is a party;
(e) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(f) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the
2
<PAGE>
making of distributions to the Certificateholders and the
Noteholders.
Issuer is hereby authorized to engage in the foregoing activities. Issuer
shall not engage in any activity other than in connection with the foregoing
or other than as required or authorized by the terms of this Agreement or the
other Basic Documents.
SECTION 2.4 Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Issuer effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of
the foregoing contribution, which shall constitute the initial Owner Trust
Estate and shall be deposited in the Certificate Distribution Account. The
Depositor shall pay the organizational expenses of the Issuer as they may
arise or shall, upon the request of the Owner Trustee, promptly reimburse the
Owner Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Issuer under the Basic Documents. It is the
intention of the parties hereto that the Issuer constitute a business trust
under the Business Trust Statute and that this Agreement constitute the
governing instrument of such business trust. It is the intention of the
parties hereto that, solely for income and franchise tax purposes, the Issuer
shall be treated as a partnership. The parties agree that, unless otherwise
required by appropriate tax authorities, the Issuer will file or cause to be
filed annual or other necessary returns, reports and other forms consistent
with the characterization of the Issuer as a partnership for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and to the extent not inconsistent
herewith, in the Business Trust Statute with respect to accomplishing the
purposes of the Issuer. The Owner Trustee shall file the Certificate of Trust
with the Secretary of State of Delaware.
SECTION 2.7 Title to Issuer Property. Legal title to all the Owner
Trust Estate shall be vested at all times in the Issuer as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case the title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
3
<PAGE>
SECTION 2.8 Situs of Issuer. The Issuer will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Issuer shall be located in the State of
Delaware or the State of New York. Payments will be received by the Issuer
only in Delaware or New York, and payments will be made by the Issuer only
from Delaware or New York. The only office of the Issuer will be at its office
in Delaware.
SECTION 2.9 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:
(a) The Depositor has been duly organized and is validly
existing as a national banking association in good standing under the
laws of the United States of America, with power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at
all relevant times, and has, power, authority and legal right to
acquire and own the Receivables.
(b) The Depositor has the corporate power and authority to
execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Issuer,
and the Depositor has duly authorized such sale and assignment and
deposit to the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been duly
authorized by the Depositor by all necessary corporate action.
(c) The consummation of the transactions contemplated by
this Agreement and the other Basic Documents and the fulfillment of
the terms hereof, do not conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without notice
or lapse of time) a default under, the articles of association or
bylaws of the Depositor, or conflict with or breach any of the
material terms or provisions of or constitute (with or without notice
or lapse of time) a default under any indenture, agreement or other
instrument to which the Depositor is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the best of the Depositor's knowledge, any
order, rule or regulation applicable to the Depositor of any court or
of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the
Depositor or its properties.
SECTION 2.10 Liability of Owners. (a) The General Partner
shall be liable directly to and will indemnify the injured party
4
<PAGE>
for all losses, claims, damages, liabilities and expenses of the Issuer
(including Expenses (as defined in Section 8.02)), to the extent that, if all
amounts due on the Notes and Certificates were paid in full at the time such
liability becomes due, the remaining assets of the Issuer would be
insufficient to pay such amount) to the extent that the General Partner would
be liable if the Issuer were a partnership under the Delaware Revised Uniform
Limited Partnership Act in which the General Partner were a general partner;
provided, however, that the General Partner shall not be liable for any losses
incurred by a Certificateholder in the capacity of an investor in the
Certificates or a Noteholder in the capacity of an investor in the Notes. In
addition, any third party creditors of the Issuer (other than in connection
with the obligations described in the preceding proviso for which the General
Partner shall not be liable) shall be deemed third party beneficiaries of this
paragraph. The obligations of the General Partner under this paragraph shall
be evidenced by the Certificates described in Section 3.15, which for purposes
of the Business Trust Statute shall be deemed to be a separate class of
Certificates from all other Certificates issued by the Issuer; provided,
however, that the rights and obligations evidenced by all Certificates,
regardless of class, shall, except as provided in this Section, be identical.
(b) No Certificateholder, other than to the extent set forth in
subsection 2.10(a), shall have any personal liability for any liability or
obligation of the Issuer.
SECTION 2.11. Guaranteed Payments/Gross Income Allocations.
(a) Inasmuch as the Certificateholders' Interest Distributable Amount is
determined and paid hereunder without regard to the income of the Issuer, the
Issuer shall treat payments of such amounts as "guaranteed payments" within
the meaning of Section 707(c) of the Code. Consequently, Certificateholders
will have ordinary income equal to their allocable share of the
Certificateholders' Interest Distributable Amount, the Issuer will have an
equivalent deduction for Federal income tax purposes and no amount of the
gross income of the Issuer shall be allocable to the Certificateholders (and
there will be no corresponding increase in a Certificateholders's Capital
Account under Section 5.7). In the event that any taxing authority does not
respect such tax treatment, the gross income of the Issuer for any calendar
month as determined for Federal income tax purposes shall be allocated, after
giving effect to special allocations set forth in Section 2.12 of this
Agreement and for purposes of maintaining Capital Accounts under Section 5.7
of this Agreement as follows:
(1) first, among the Owners as of the close of the last day
of such calendar month, in proportion to their ownership of the
principal amount of Certificates on such date, an amount of gross
income equal to the amount of interest that accrues in such calendar
month on the Certificates in accordance with their terms, including
interest accruing thereon at the Certificate Rate monthly and
5
<PAGE>
interest on amounts previously due under the Certificates and
not yet paid as provided therein; and
(2) the balance of gross income, if any, to the General
Partner.
If the gross income of the Issuer for any month is insufficient for the
allocations described in clause (a) above, subsequent items of gross income
shall first be allocated to make up such shortfall before being allocated as
provided in clause (b).
(b) In the event the initial issue price of the Certificates differs
from their initial principal amount, there shall be specially allocated to the
Certificateholders the portion, if any, of the offset for premium (in the case
the issue price of the Certificates exceeds their principal amount) or market
discount income (in the case the principal amount of the Certificates exceeds
their issue price) on the Receivables accruing for a calendar month that is
attributable to such difference.
SECTION 2.12. Deduction and Loss Allocations. All items of deduction
and loss of the Issuer shall be allocated to the General Partner and the Seller.
SECTION 2.13. Special Allocations.(a)In the event any
Certificateholder unexpectedly receives any adjustments, allocations or
distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Issuer income and gain shall be
specially allocated to such Certificateholder in an amount and manner
sufficient to eliminate, to the extent required by the Treasury Regulations,
the deficit, if any, in the balance of the Capital Account of such
Certificateholder as quickly as possible. This Section 2.13(a) is intended to
comply with the qualified income offset provision in Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations.
SECTION 2.14. Amended and Restated Trust Agreement. This Agreement
amends and restates in its entirety the Trust Agreement dated as of
[_______________] between the Depositor and Owner Trustee.
SECTION 2.15. Required Net Worth of General Partner. For so long as
any Notes or Certificates shall remain outstanding, the General Partner shall
take all actions necessary to maintain its net worth (exclusive of its
interest in the Trust) equal to $[insert amount equal to 10% of the sum of the
initial Certificate Balance and the initial balance of the Reserve Account];
provided, however, that the General Partner may maintain a lesser net worth
(exclusive of its interest in the Issuer) if it shall have obtained an opinion
from Simpson Thacher & Bartlett that the maintenance of such lesser net worth
will not cause the Issuer to be classified as an association taxable as a
corporation for Federal income tax purposes.
6
<PAGE>
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 Initial Ownership. Upon the formation of the Issuer by
the contribution by the Depositor pursuant to Section 2.5 and until the
issuance of the Certificates, the Depositor shall be the sole beneficiary of
the Trust.
SECTION 3.2 The Certificates. The Certificates shall be issued in
denominations of $1,000 and integral multiples thereof; provided that one
Certificate may be issued that includes any residual portion of the initial
Certificate Balance in a denomination other than an integral multiple of
$1,000. The Certificates shall be executed on behalf of the Issuer by manual
or facsimile signature of an Authorized Officer or other authorized signatory
of the Owner Trustee. Certificates bearing the manual or facsimile signatures
of individuals who were, at the time when such signatures shall have been
affixed, authorized to sign on behalf of the Issuer, shall be validly issued
and entitled to the benefit of this Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of authentication and delivery of such Certificates. No
Certificate shall entitle the Holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate
a certificate of authentication substantially in the form set forth in Exhibit
A, executed by the Owner Trustee [or _________________, as the Owner Trustee's
authentication agent] by manual or facsimile signature; such authentication
shall constitute conclusive evidence that such Certificate shall have been
duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. A transferee of a Certificate shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder, upon due registration of such
Certificate in such transferee's name pursuant to Section 3.4.
SECTION 3.3 Execution, Authentication and Delivery of Certificates.
Concurrently with the transfer of the Receivables to the Issuer pursuant to
the Sale and Servicing Agreement, the Owner Trustee shall cause the
Certificates in an aggregate principal amount equal to the initial Certificate
Balance to be executed on behalf of the Issuer, authenticated and delivered to
or upon the written order of the Depositor, signed by its chairman of the
board, its president or any vice president, without further corporate action
by the Depositor, in authorized denominations.
SECTION 3.4 Registration of Transfer and Exchange of Certificates.
The Owner Trustee shall cause to be kept at the office or agency to be
maintained pursuant to Section 3.8 by a certificate registrar (the
"Certificate Registrar"), a register (the "Certificate Register") in which,
subject to such reasonable
7
<PAGE>
regulations as it may prescribe, the Certificate Registrar shall provide for
the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Chase Manhattan Bank shall be the initial
Certificate Registrar. In the event that, subsequent to the date of issuance
of the Certificates, The Chase Manhattan Bank notifies the Owner Trustee that
it is unable to act as the Certificate Registrar, the Owner Trustee shall act,
or the Owner Trustee shall, with the consent of the Depositor, appoint another
bank or trust company, having an office or agency located in The City of New
York and which agrees to act in accordance with the provisions of this
Agreement applicable to it, to act, as successor Certificate Registrar under
this Agreement.
The Owner Trustee may revoke such appointment and remove The Chase
Manhattan Bank as the Certificate Registrar if the Owner Trustee determines in
its sole discretion that The Chase Manhattan Bank failed to perform its
obligations under this Agreement in any material respect. The Chase Manhattan
Bank shall be permitted to resign as the Certificate Registrar upon 30 days'
written notice to the Owner Trustee, the Depositor and the Issuer; provided,
however, that such resignation shall not be effective and The Chase Manhattan
Bank shall continue to perform its duties as the Certificate Registrar until
the Owner Trustee has appointed a successor Certificate Registrar with the
consent of the Depositor.
Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and (if the Certificate Registrar is different than the
Owner Trustee, then the Certificate Registrar shall) deliver (or shall cause
The Chase Manhattan Bank as its authenticating agent to authenticate and
deliver), in the name of the designated transferee or transferees, one or more
new Certificates in authorized denominations of a like class and aggregate
face amount dated the date of authentication by the Owner Trustee or any
authenticating agent. At the option of a Holder, Certificates may be exchanged
for other Certificates of the same class in authorized denominations of a like
aggregate amount upon surrender of the Certificates to be exchanged at the
office or agency maintained pursuant to Section 3.8.
Whenever any Certificate is surrendered for exchange, the Owner
Trustee shall execute, authenticate and (if the Certificate Registrar is
different than the Owner Trustee, then the Certificate Registrar shall)
deliver the Certificates which the Cer- tificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the Holder, which signature on such
assignment must be guaranteed by a member of the New York Stock Exchange or a
commercial bank or trust company.
8
<PAGE>
Each Certificate surrendered for registration of transfer or exchange
shall be canceled and subsequently disposed of by the Owner Trustee in
accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar,
of if the Certificate Registrar shall receive evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (b) there shall be
delivered to the Certificate Registrar and the Owner Trustee such security or
indemnity as may be required by them to save each of them harmless, then in
the absence of notice that such Certificate shall have been acquired by a bona
fide purchaser, the Owner Trustee on behalf of Issuer shall execute and the
Owner Trustee, or The Chase Manhattan Bank, as the Owner Trustee's
authenticating agent, shall authenticate and (if the Certificate Registrar is
different from the Owner Trustee, then the Certificate Registrar shall)
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like class, tenor and denomination.
If, after delivery of such replacement Certificate, a bona fide purchaser of
the original Certificate in lieu of which such replacement Certificate was
issued presents for payment such original Certificate, the Owner Trustee or
the Certificate Registrar shall be entitled to recover such replacement
Certificate from such Person to whom such replacement Certificate was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the Owner
Trustee or the Certificate Registrar in connection therewith. In connection
with the issuance of any new Certificate under this Section 3.5, the Owner
Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in
Issuer, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. The provisions of this Section 3.5 are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement of mutilated, destroyed, lost or
stolen Certificates.
SECTION 3.6 Persons Deemed Certificateholders. Prior to due
presentation of a Certificate for registration of transfer, the Owner Trustee
or the Certificate Registrar may treat the Person in whose name any
Certificate shall be registered in the Certificate Register as the owner of
such Certificate for the purpose of receiving distributions pursuant to
Section 5.2 and for all other
9
<PAGE>
purposes whatsoever, and neither the Owner Trustee nor the Certificate
Registrar shall be bound by any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
Addresses. The Certificate Registrar shall furnish or cause to be furnished to
the Servicer and the Depositor (and to the Owner Trustee, if the Owner Trustee
is not the Certificate Registrar) within 15 days after receipt by the
Certificate Registrar of a request therefor from the Servicer or the Depositor
(or the Owner Trustee) in writing, a list, in such form as the Servicer or the
Depositor may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If, at such time, if
any, as Definitive Certificates have been issued, if three or more Holders of
Certificates or one or more Holders of Certificates evidencing not less than
25% of the Certificate Balance apply in writing to the Certificate Registrar,
and such application states that the applicants desire to communicate with
other Certificateholders with respect to their rights under this Agreement or
under the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Certificate
Registrar shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed to hold none of the Depositor, the
Certificate Registrar, the Servicer or the Owner Trustee accountable by reason
of the disclosure of its name and address, regardless of the source from which
such information was derived.
SECTION 3.8 Maintenance of Office or Agency. The Owner Trustee shall
maintain in The City of New York, an office or offices or agency or agencies
where Certificates may be surrendered for registration of transfer or
exchange. The Owner Trustee initially designates the offices of The Chase
Manhattan Bank, as its office for such purposes. The Owner Trustee shall give
prompt written notice to the Depositor, the Servicer and to the
Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
SECTION 3.9 Appointment of Paying Agent. The Paying Agent shall have
the revocable power to withdraw funds from the Certificate Distribution
Account, make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.2 and shall report the amounts of
such distributions to the Owner Trustee. Any Paying Agent shall have the
revocable power to withdraw funds from the Certificate Distribution Account
for the purpose of making the distributions referred to above. The Owner
Trustee may revoke such power and remove the Paying Agent if the Owner Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material respect or for
other good cause. The Paying Agent shall initially be The Chase Manhattan
Bank. The Paying Agent shall be permitted to resign upon
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30 days' written notice to the Owner Trustee and the Servicer. In the event
that The Chase Manhattan Bank shall no longer be the Paying Agent, the Owner
Trustee shall appoint a successor to act as Paying Agent (which shall be a
bank or trust company and may be the Owner Trustee), with the consent of the
Depositor (which consent shall not be unreasonably withheld). The Owner
Trustee shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Owner Trustee (unless it is the Owner Trustee) to execute and
deliver to the Owner Trustee an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Owner Trustee that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Certificateholders in trust
for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders. The Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon the removal of a Paying Agent,
such Paying Agent shall also return all funds in its possession to the Owner
Trustee. The provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the
Owner Trustee also in its role as Paying Agent, for so long as the Owner
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 3.10 Book-Entry Certificates. Except as specified in Section
3.15, the Certificates, upon original issuance, will be issued in the form of
a typewritten Certificate or Certificates representing Book-Entry
Certificates, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by or on behalf of the Issuer. Such Book-Entry Certificate or
Certificates shall initially be registered on the Certificate Register in the
name of Cede & Co., the nominee of the initial Clearing Agency, and no
beneficial owner (other than the Depositor) will receive a definitive
Certificate representing such beneficial owner's interest in such Certificate,
except as provided in Section 3.12. Unless and until Definitive Certificates
have been issued to beneficial owners pursuant to Section 3.12:
(a) the provisions of this Section 3.10 shall be in
full force and effect;
(b) the Certificate Registrar, the Paying Agent and the
Owner Trustee shall be entitled to deal with the Clearing Agency and
the Clearing Agency Participants for all purposes of this Agreement
relating to the Book-Entry Certificates (including the payment of
principal of and interest on the Book-Entry Certificates and the
giving of instructions or directions to Certificate Owners of
Book-Entry Certificates) as the sole Holder of Book-Entry
Certificates and shall have no obligations to Certificate Owners
thereof;
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(c) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions
of this Section shall control;
(d) the rights of Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Clearing Agency (or
to the extent Certificateholders are not Clearing Agency
Participants, through the Clearing Agency Participants through which
such Certificateholders own Book-Entry Certificates), and shall be
limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or Clearing Agency
Participants, and all references in this Agreement to actions by
Certificateholders shall refer to actions taken by the Clearing
Agency upon instructions from the Clearing Agency Participants, and
all references in this Agreement to distributions, notices, reports
and statements to Certificateholders shall refer to distributions,
notices, reports and statements to the Clearing Agency, as registered
holder of the Certificates, as the case may be, for distribution to
Certificateholders in accordance with the procedures of the Clearing
Agency. Pursuant to the Certificate Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 3.12,
the initial Clearing Agency will make book-entry transfers among
Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Book-Entry Certificates to such
Clearing Agency Participants; and
(e) whenever this Agreement requires or permits actions to
be taken based upon instructions or directions of the Holders of
Certificates evidencing a specified percentage of the Certificate
Balance, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Certificate Owners and/or Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Book-Entry Certificates
and has delivered such instructions to the Owner Trustee.
SECTION 3.11 Notices to Clearing Agency. Whenever a notice or other
communication to Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 3.12, the Owner Trustee and the Paying Agent shall give
all such notices and communications specified herein to be given to
Certificateholders to the Clearing Agency, and shall have no obligations to
Certificate Owners.
SECTION 3.12 Definitive Certificates. If (a) the Servicer advises the
Owner Trustee in writing that the Clearing Agency is no longer willing or able
to properly discharge its responsibilities with respect to the Certificates,
and the Servicer is unable to locate a qualified successor, (b) the Servicer
at its option elects to terminate the book-entry system through the Clearing
Agency, or
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(c) after the occurrence of an Event of Default or an Event of Servicing
Termination, Certificate Owners of the Certificates representing beneficial
interests aggregating not less than 50% of the Certificate Balance advise the
Clearing Agency and the Owner Trustee in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of Certificate Owners, then the Clearing Agency shall notify all
Certificate Owners of the occurrence of any such event and of the availability
of the Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Certificate Registrar of the typewritten Certificate or
Certificates representing the Book-Entry Certificates by the Clearing Agency,
accompanied by re-registration instructions, the Owner Trustee shall execute,
authenticate, or cause to be authenticated, and (if the Certificate Registrar
is different than the Owner Trustee, then the Certificate Registrar shall)
deliver the Definitive Certificates in accordance with the instructions of the
Clearing Agency. Neither the Certificate Registrar nor the Owner Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Clearing Agency shall be deemed to be
imposed upon and performed by the Certificate Registrar, to the extent
applicable with respect to such Definitive Certificates, and the Owner Trustee
and the Paying Agent shall recognize the Holders of the Definitive
Certificates as Certificateholders. The Definitive Certificates shall be
printed, lithographed or engraved or may be produced in any other matter as is
reasonably acceptable to the Owner Trustee, as evidenced by its execution
thereof.
SECTION 3.13 Authenticating Agent.
(a) The Owner Trustee may appoint one or more
authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Owner Trustee in authenticating
the Certificates in connection with the issuance, delivery,
registration of transfer, exchange or repayment of the Certificates.
The Owner Trustee hereby appoints The Chase Manhattan Bank as
Authenticating Agent for the authentication of Certificates upon any
registration of transfer or exchange of such Certificates. Whenever
reference is made in this Agreement to the authentication of
Certificates by the Owner Trustee or the Owner Trustee's certificate
of authentication, such reference shall be deemed to include
authentication on behalf of the Owner Trustee by an authenticating
agent and a certificate of authentication executed on behalf of the
Owner Trustee by an authenticating agent. Each authenticating agent,
other than The Chase Manhattan Bank, shall be subject to acceptance
by the Depositor.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an
authenticating agent without the execution or filing of any
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paper or any further act on the part of the Owner Trustee or
such authenticating agent.
(c) An authenticating agent may at any time resign by
giving written notice of resignation to the Owner Trustee and the
Depositor. The Owner Trustee may at any time terminate the agency of
an authenticating agent by giving notice of termination to such
authenticating agent and to the Depositor. Upon receiving such a
notice of resignation or upon such a termination, or in case at any
time an authenticating agent shall cease to be acceptable to the
Owner Trustee or the Depositor, the Owner Trustee promptly may
appoint a successor authenticating agent with the consent of the
Depositor. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to the
Depositor.
(d) The Servicer shall pay the Authenticating Agent from
time to time reasonable compensation for its services under this
Section 3.13.
(e) The provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall
be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section
3.13, the Certificates may have endorsed thereon, in lieu of the
Owner Trustee's certificate of authentication, an alternate
certificate of authentication in substantially the following form:
This is one of the Certificates referred to in the within
mentioned Agreement.
-----------------------------,
as Owner Trustee
By:
-----------------------------
Authorized Officer
or
-----------------------------
as Authenticating Agent
for the Owner Trustee,
-----------------------------
Authorized Officer
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SECTION 3.14 Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be
given or taken by the Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by agent duly
appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Owner Trustee and, when required, to
the Depositor or the Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor
of the Owner Trustee, the Depositor and the Servicer, if made in the
manner provided in this Section 3.14.
(b) The fact and date of the execution by any Certifi-
cateholder of any such instrument or writing may be proved in any
reasonable manner which the Owner Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind every
Holder of every Certificate issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of
anything done, or omitted to be done, by the Owner Trustee, the
Depositor or the Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(d) The Owner Trustee may require such additional proof of
any matter referred to in this Section 3.14 as it shall deem
necessary.
SECTION 3.15. Disposition of Certificates by General Partner. On the
Closing Date, the General Partner shall purchase from the Depositor
Certificates representing at least 1.00% of the Certificate Balance and, at
all times thereafter, shall retain beneficial and record ownership of
Certificates representing at least 1.00% of the Certificate Balance. Any
attempted transfer of any Certificate that would reduce such interest of the
General Partner below 1.00% of the Certificate Balance shall be void. The
Owner Trustee shall cause any Certificate issued to the General Partner to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE." Certificates
issued to the General Partner shall be in definitive form only.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Owners with Respect to Certain Matters.
With respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action
and the Certificateholders shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the
Issuer (except claims or lawsuits brought in connection with the
collection of the Receivables) and the compromise of any material
action, claim or lawsuit brought by or against the Issuer (except
with respect to the aforementioned claims or lawsuits for collection
of the Receivables);
(b) the election by the Issuer to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder
is required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interest
of the Certificateholders;
(e) the amendment, change or modification of the Sale and
Servicing Agreement, except to any amendment where the consent of any
Certificateholder is not required under the terms of the Sale and
Servicing Agreement; or
(f) the appointment pursuant to the Indenture of a successor
Trustee or the consent to the assignment by the Note Registrar, the
Paying Agent, the Trustee or the Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
The Owner Trustee shall notify the Certificateholders in writing of any
appointment of a successor Paying Agent, Authenticating Agent or Certificate
Registrar within five Business Days thereof.
SECTION 4.2 Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of the Certificateholders, to (a) remove the Servicer under the Sale and
Servicing Agreement pursuant to Article VIII thereof, (b) remove the
Administrator under the
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Administration Agreement pursuant to Section 8 thereof or (c)except as
expressly provided in the Basic Documents, sell the Receivables or any
interest therein after the termination of the Indenture. The Owner Trustee
shall take the actions referred to in the preceding sentence only upon written
instructions signed by the Certificateholders.
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary proceeding
in bankruptcy relating to the Issuer without the unanimous prior approval of
all Certificateholders unless the Owner Trustee reasonably believes that the
Issuer is insolvent.
SECTION 4.4 Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any
obligation of the Issuer or the Owner Trustee under this Agreement or any of
the other Basic Documents or would be contrary to Section 2.3 nor shall the
Owner Trustee be obligated to follow any such direction, if given.
SECTION 4.5 Majority Control. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Agreement
may be taken by the Holders of Certificates evidencing not less than a
majority of the Certificate Balance. Except as expressly provided herein, any
written notice of the Certificateholders delivered pursuant to this Agreement
shall be effective if signed by the Holders of Certificates evidencing not
less than a majority of the Certificate Balance at the time of the delivery of
such notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Certificate Distribution Account. The
Owner Trustee, for the benefit of Certificateholders, shall establish and
maintain in the name of the Issuer an Eligible Deposit Account (the
"Certificate Distribution Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders. Except as otherwise provided herein, the Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee for the benefit of the Certificateholders.
The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Certificate Distribution Account and
in all proceeds thereof. If, at any time, the Certificate Distribution Account
ceases to be an Eligible Deposit Account, the Servicer shall within 10
Business Days following notification of such occurrence (or such longer
period, not to exceed 30 calendar days, as to which
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each Rating Agency may confirm their rating of the Certificates), establish a
new Certificate Distribution Account as an Eligible Deposit Account and shall
cause the Owwner Trustee to transfer any cash and/or any investments to such
new Certificate Distribution Account.
SECTION 5.2 Application of Funds in Certificate Distribution Account.
(a) Not later than 12:00 noon, New York City time, on each Distribution Date,
the Owner Trustee or the Paying Agent on behalf of the Owner Trustee will,
based on the information contained in the Servicer's Certificate delivered on
the related Determination Date pursuant to Section 4.9 of the Sale and
Servicing Agreement, distribute to Certificateholders, to the extent of the
funds available, amounts deposited in the Certificate Distribution Account
pursuant to Section 5.5 of the Sale and Servicing Agreement on such
Distribution Date in the following order of priority:
(i) first, to the Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata basis,
an amount equal to the Certificateholders' Principal Distributable
Amount.
(b) On each Distribution Date, the Owner Trustee shall send, or cause
to be sent, to each Certificateholder the statement provided to the Owner
Trustee by the Servicer pursuant to Section 5.7 of the Sale and Servicing
Agreement on such Distribution Date.
(c) In the event that any withholding tax is imposed on the Issuer's
payment (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Owner Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by the Issuer (but such authorization shall not prevent the Owner Trustee
from contesting any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Issuer and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax
is payable with respect to a distribution (such as a distribution to a
non-United States Certificateholder), the Owner Trustee may in its sole
discretion withhold such amounts in accordance with this clause (c). In the
event that a Certificateholder wishes to apply for a refund of any such
withholding tax, the Owner Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder
agrees to reimburse the Owner Trustee for any out-of-pocket expenses incurred.
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SECTION 5.3 Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution
Date shall be made to each Certificateholder of record on the preceding Record
Date either (a) by wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior
to such Distribution Date and such Holder's Certificates in the aggregate
evidence a denomination of not less than $1,000,000 or (b) by check mailed to
such Certificateholder at the address of such Holder appearing in the
Certificate Register: provided that, unless Definitive Certificates have been
issued pursuant to Section 3.12, with respect to Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), distributions will be made by wire transfer in
immediately available funds to the account designated by such nominee.
SECTION 5.4 No Segregation of Monies; No Interest. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee or any Paying Agent
hereunder need not be segregated in any manner except to the extent required
by law and may be deposited under such general conditions as may be prescribed
by law, and neither the Owner Trustee nor any Paying Agent shall be liable for
any interest thereon.
SECTION 5.5 Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. The Owner Trustee
shall (a) maintain (or cause to be maintained) the books of the Issuer on a
calendar year basis on the accrual method of accounting, (b) deliver (or cause
to be delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required
(including Schedule K-1) to enable each Certificateholder to prepare its
Federal and state income tax returns, (c) prepare and file such tax returns
relating to the Issuer (including a partnership information return, Form
1065), and make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or
regulation thereunder so as to maintain the Trust's characterization as a
partnership for Federal income tax purposes and (d) collect or cause to be
collected any withholding tax as described in and in accordance with Section
5.2(c) with respect to income or distributions to Certificateholders. The
General Partner shall sign all tax information returns filed pursuant to this
Section 5.5 and any other returns as may be required by law. The Owner Trustee
shall elect under Section 1278 of the Code to include in income currently any
market discount that accrues with respect to the Receivables. The Owner
Trustee shall not make the election provided under Section 754 of the Code.
SECTION 5.6 Signature on Returns; Tax Matters Partner. (a)
Notwithstanding the provisions of Section 5.5, the General Partner
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shall sign on behalf of the Issuer the tax returns of the Issuer, unless
applicable law requires the Owner Trustee to sign such documents, in which
case such documents shall be signed by the Owner Trustee at the written
direction of the General Partner.
(b) The General Partner shall be the "tax matters partner" of the
Issuer pursuant to the Code.
SECTION 5.7 Capital Accounts.The Issuer shall maintain accounts
("Capital Accounts") with respect to each Owner (including the Depositor).
For this purpose, Capital Accounts shall be maintained in accordance with
the following provisions:
(a) Each Certificateholder's Capital Account shall be
increased by the Capital Contributions (as defined below) of such
Certificateholder, such Certificateholder's distributive share of
gross income (if any) and any items in the nature of income or gain
which are specially allocated to such Certificateholder pursuant to
Section 2.12.
(b) Each Certificateholder's Capital Account shall be reduced
by any amount distributed to such Certificateholder (including, in
the case of the Depositor, any amount released or otherwise
distributed to the Depositor from the Reserve Account under Section
5.05(b) of the Sale and Servicing Agreement) and any items which are
specially allocated to such Certificateholder pursuant to Section
2.12.
(c) In the event all or a portion of a Certificate is
transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to
the extent it related to such Certificate or a portion thereof.
"Capital Contribution" means the amount of any cash contributed to
the Issuer by a Certificateholder [(including any amounts deemed to be
contributed in connection with the original issuance of the Certificates)],
including, in the case of the Depositor, the amount of any Receivables
contributed by the Depositor (with such amount for Receivables intended to
reflect the amount of the Receivables and monies due thereon or with respect
thereto, including accrued but unpaid interest and finance charges, conveyed to
the Issuer by the Depositor on the Closing Date under Article II of the Sale and
Servicing Agreement. The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with section 1.704-l(b) of the Treasury Regulations and shall be interpreted in
a manner consistent therewith.
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ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Issuer is
named as a party and each certificate or other document attached as an exhibit
to or contemplated by the Basic Documents to which the Issuer is named as a
party and any amendment thereto, in each case, in such form as the Depositor
shall approve as evidenced conclusively by the Owner Trustee's execution
thereof, and, on behalf of the Issuer at the written direction of the
Depositor, to direct the Trustee to authenticate and deliver Class A-1 Notes
in the aggregate principal amount of $________, and Class A-2 Notes in the
aggregate principal amount of $________. In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Issuer pursuant to the Basic Documents. The Owner Trustee is
further authorized from time to time to take such action as the Administrator
recommends or directs in writing with respect to the Basic Documents.
SECTION 6.2 General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant
to the terms of this Agreement and the other Basic Documents and to administer
the Issuer in the interest of Certificateholders, subject to the Basic
Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee or
the Issuer hereunder or under any other Basic Document, and the Owner Trustee
shall not be liable for the default or failure of the Administrator to carry
out its obligations under the Administration Agreement.
SECTION 6.3 Action upon Instruction. (a) Subject to Article IV, the
Certificateholders may, by written instruction, direct the Owner Trustee in
the management of the Issuer. Such direction may be exercised at any time by
written instruction of the Certificateholders pursuant to Section 4.5.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any other Basic Document if (i)
the Owner Trustee shall have obtained an Opinion of Counsel to the effect that
such action is likely to result in liability on the part of the Owner Trustee
or is contrary to the terms hereof or of any other Basic Document or is
otherwise contrary to law and (ii) a copy of such opinion has been provided to
the Depositor and the Administrator.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of
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this Agreement or any other Basic Document or is unsure as to the application
of any provision of this Agreement or any Basic Document, or if any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee shall
promptly give notice (in such form as shall be appropriate under the
circumstances) to the Certificateholders requesting instruction as to the
course of action to be adopted, and to the extent the Owner Trustee acts in
good faith in accordance with any written instruction of the
Certificateholders received, the Owner Trustee shall not be liable on account
of such action to any Person. If the Owner Trustee shall not have received
appropriate instruction within ten days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or
the other Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action
or inaction.
SECTION 6.4 No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall undertake to perform such duties and
only such duties as are specifically set forth in this Agreement and the other
Basic Documents, and no implied covenants or obligations shall be read into
this Agreement or the other Basic Documents. The Owner Trustee shall not have
any duty or obligation to manage, make any payment with respect to, register,
record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to
otherwise take or refrain from taking any action under, or in connection with,
any document contemplated hereby to which the Owner Trustee is a party, except
as expressly provided by the terms of this Agreement or in any document or
written instruction received by the Owner Trustee pursuant to Section 6.3; and
no implied duties or obligations shall be read into this Agreement or any
Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to prepare or file
any Commission filing for the Issuer or to record this Agreement or any other
Basic Document. The Owner Trustee nevertheless agrees that it will, at its own
cost and expense, promptly take all action as may be necessary to discharge
any Liens on any part of the Owner Trust Estate that result from actions by,
or claims against, the Owner Trustee that are not related to the ownership or
the administration of the Owner Trust Estate.
SECTION 6.5 No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use,
sell, dispose of or otherwise deal with any part of the Owner Trust
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Estate except (i) in accordance with the powers granted to and the authority
conferred upon the Owner Trustee pursuant to this Agreement, (ii) in
accordance with the Basic Documents, and (iii) in accordance with any document
or instruction delivered to the Owner Trustee pursuant to Section 6.3.
SECTION 6.6 Restrictions. The Owner Trustee shall not (a)take any
action that is inconsistent with the purposes of the Issuer set forth in
Section 2.3 or (b) take any action or amend this Agreement in any manner that,
to the best knowledge of the Owner Trustee, would result in the Trust's
becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.
ARTICLE VII
CONCERNING OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its
duties hereunder with respect to such trusts but only upon the
terms of this Agreement. The Owner Trustee also agrees to disburse
all moneys actually received by it constituting part of the Owner
Trust Estate upon the terms of the other Basic Documents and this
Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any
circumstances, except (i) for its own willful misconduct, bad faith
or negligence or (ii) in the case of the breach of any
representation or warranty contained in Section 7.3 expressly made
by the Owner Trustee. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding
sentence):
(a) The Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Owner
Trustee unless it is proved that the Owner Trustee was negligent in
ascertaining the pertinent facts;
(b) The Owner Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with
the instructions of the Certificateholders given pursuant to Section
6.3;
(c) No provision of this Agreement or any other Basic
Document shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in its own performance of any
of its rights or powers hereunder or under any other Basic Document
if the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured or provided to it;
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(d) Under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of
the Basic Documents, including the principal of and interest
on the Notes;
(e) The Owner Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this Agreement or
for the due execution hereof by the Depositor or for the form,
character, genuineness, sufficiency, value or validity of any of the
Owner Trust Estate or for or in respect of the validity or
sufficiency of the Basic Documents, other than the certificate of
authentication on the Certificates, shall not be accountable for the
use or application by the Depositor of the proceeds from the
Certificates, and the Owner Trustee shall in no event assume or incur
any liability, duty or obligation to any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in
the Basic Documents. The Owner Trustee shall at no time have any
responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and
priority of any security interest created by any Receivable in any
Financed Vehicle or the maintenance of any such perfection and
priority; or the ability of the Owner Trust Estate to generate the
payments to be distributed to Certificateholders under this Agreement
or the Noteholders under the Indenture, including: the existence,
condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents
of any Receivable on any computer or other record thereof; the
validity of the assignment of any Receivable to the Issuer or of any
intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the
Depositor or the Servicer with any warranty or representation made
under any Basic Document or in any related document or the accuracy
of any such warranty or representation or any action of the Trustee
or the Servicer or any subservicer taken in the name of the Owner
Trustee;
(f) The Owner Trustee shall not be liable for the default or
misconduct of the Trustee or the Servicer under any of the Basic
Documents or otherwise, and the Owner Trustee shall have no
obligation or liability to perform the obligations of the Issuer
under this Agreement or the Basic Documents that are required to be
performed by the Administrator under the Administration Agreement,
the Trustee under the Indenture or the Servicer under the Sale and
Servicing Agreement;
(g) The Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation under this
Agreement or otherwise or in relation to this Agreement or any other
Basic Document, at the request, order
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or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any other Basic Document shall
not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence, bad faith or willful
misconduct in the performance of any such act; and
(h) The Owner Trustee, upon receipt of any resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Owner Trustee that shall be
specifically required to be furnished pursuant to any provision of
this Agreement or the other Basic Documents, shall examine them to
determine whether they conform to the requirements of this Agreement
or such other Basic Document; provided, however, that the Owner
Trustee shall not be responsible for the accuracy or content of any
such resolution, certificate, statement, opinion, report, document,
order or other instrument furnished to the Owner Trustee pursuant to
this Agreement or the other Basic Documents.
SECTION 7.2 Furnishing of Documents. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3 Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is a banking corporation duly organized and
validly existing in good standing under the laws of the
State of Delaware and having an office within the State of
Delaware. It has all requisite corporate power, authority
and legal right to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this
Agreement, and this Agreement will be executed and delivered
by one of its officers who is duly authorized to execute and
deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of
this Agreement, nor the consummation by it of the
transactions contemplated hereby nor compliance by it with
any of the terms or provisions hereof will contravene any
federal or Delaware law, governmental rule or regulation
governing the banking or trust powers of
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the Owner Trustee or any judgment, writ, decree or order
applicable to it, or constitute any default under its
charter documents or by-laws or, with or without notice or
lapse of time, any indenture, mortgage, contract, agreement
or instrument to which it is a party or by which any of its
properties may be bound.
(d) The execution, delivery and performance by the
Owner Trustee of this Agreement does not require the
authorization, consent, or approval of, the giving of notice
to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or
agency regulating the corporate trust activities of the
Owner Trustee.
(e) This Agreement has been duly authorized,
executed and delivered by the Owner Trustee and shall
constitute the legal, valid, and binding agreement of the
Owner Trustee, enforceable in accordance with its terms.
SECTION 7.4 Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer, secretary or other authorized officers of the relevant party, as to
such fact or matter, and such certificate shall constitute full protection to
the Owner Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, but the
Owner Trustee shall be liable for the conduct or misconduct of such agents or
attorneys and (ii)may consult with counsel, accountants and other skilled
persons knowledgeable in the relevant area to be selected with reasonable care
and employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such persons and not
contrary to this Agreement or any Basic Document.
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SECTION 7.5 Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created
__________________________ acts solely as the Owner Trustee hereunder and not
in its individual capacity and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
SECTION 7.6 Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or
pledgee of the Certificates or the Notes and may deal with the Depositor, the
Trustee and the Servicer in banking transactions with the same rights as it
would have if it were not the Owner Trustee.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1 Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder
such fees as have been separately agreed upon before the date
hereof between the Depositor and the Owner Trustee, and the Owner
Trustee shall be entitled to be reimbursed by the Administrator
for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may
employ in connection with the exercise and performance of its
rights and its duties hereunder except any such expenses as may
arise from its negligence, wilful misfeasance, or bad faith or that
is the responsibility of Certificateholders under this Agreement.
SECTION 8.2 Indemnification. The Administrator shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from
and against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever (collectively, "Expenses") which may at any time be imposed
on, incurred by, or asserted against the Owner Trustee or any Indemnified
Party in any way relating to or arising out of this Agreement, the other Basic
Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee hereunder, except only
that the Administrator shall not be liable for or required to indemnify the
Owner Trustee from and against Expenses arising or resulting from any of the
matters described in the third sentence of Section 7.1. The indemnities
contained in this Section shall survive the resignation or termination of the
Owner Trustee or the termination of this Agreement. If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against any Indemnified Party in respect
of
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which indemnity may be sought pursuant to this Section 8.2, such Indemnified
Party shall promptly notify the General Partner in writing, and the
Administrator upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Administrator may designate in such proceeding and
shall pay the reasonable fees and expenses of such counsel related to such
proceeding. The Administrator shall not be liable for any settlement of any
claim or proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
Administrator agrees to indemnify any Indemnified Party from and against any
loss or liability by reason of such settlement or judgment. The Administrator
shall not, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such proceeding.
SECTION 8.3 Payments to Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article VIII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.1 Termination of Trust Agreement. (a) This Agreement (other
than Article VIII) and the Issuer shall terminate and be of no further force
or effect, (i)the Distribution Date next succeeding the month which is six
months after the final distribution by the Owner Trustee of all moneys or
other property or proceeds of the Owner Trust Estate in accordance with the
terms of the Indenture, the Sale and Servicing Agreement and Article V,
including the payment to the Certificateholders of all amounts required to be
paid to them pursuant to this Agreement or (ii)at the time provided in Section
9.2; provided, however, that in no event shall the Trust created by this
Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador to
the Court of St. James's, living on the date of this Agreement. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder or Certificate Owner (other than the General Partner as
provided in Section 9.2.) shall not (x)operate to terminate this Agreement or
the Issuer, nor (y)entitle such Certificateholder's or Certificate Owner's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of
the Issuer or the Owner Trust Estate nor (z)otherwise affect the rights,
obligations and liabilities of the parties hereto.
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(b) Except as provided in clause (a), neither the Depositor
nor any Certificateholder shall be entitled to revoke or terminate
the Trust.
(c) Notice of any termination of the Issuer, specifying the
Distribution Date upon which the Certificateholders shall surrender their
Certificates to the Owner Trustee or the Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter
to the Certificateholders mailed within five Business Days of receipt of
notice of such termination from the Servicer given pursuant to Section 9.1(c)
of the Sale and Servicing Agreement, stating (i) the Distribution Date upon or
with respect to which final payment of the Certificates shall be made upon or
with respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Owner
Trustee or the Paying Agent therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Owner
Trustee or the Paying Agent therein specified. The Owner Trustee shall give
such notice to the Certificate Registrar (if other than the Owner Trustee) and
the Paying Agent at the time such notice is given to the Certificateholders.
Upon presentation and surrender of the Certificates, the Owner Trustee or the
Paying Agent shall cause to be distributed to the Certificateholders amounts
distributable on such Distribution Date pursuant to Section 5.2.
If all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Owner Trust Estate after exhaustion of such remedies shall be distributed,
subject to applicable escheat laws, by the Owner Trustee to the Depositor.
(d) Any funds remaining in the Issuer after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Depositor.
(e) Upon the winding up of the Issuer and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
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SECTION 9.2 Dissolution upon Bankruptcy of the General Partner. In the
event that an Insolvency Event shall occur with respect to the General Partner,
this Agreement shall be terminated in accordance with Section9.1, 90 days after
the date of such Insolvency Event, unless, before the end of such 90-day period,
the Owner Trustee shall have received written instructions from the Noteholders
holding a majority of the Outstanding Amount of each of the Class A-1 Notes and
the Class A-2 Notes, the Certificateholders holding a majority of the
Certificate Balance (other than the General Partner) and the holders of a
majority of all interests in any Reserve Account (other than the General
Partner) to the effect that each such party disapproves of the liquidation of
the Receivables and termination of the Issuer. Promptly after the occurrence of
any Insolvency Event with respect to the General Partner, (i)the General Partner
shall give the Trustee and the Owner Trustee written notice such Insolvency
Event, (ii)the Owner Trustee shall, upon the receipt of such written notice from
the General Partner, give prompt written notice to the Certificate-holders of
the occurrence of such event, and (iii)the Trustee shall, upon receipt of
written notice of such Insolvency Event, give prompt written notice to the
Noteholders of the occurrence of such event: provided that any failure to give a
notice required by this sentence shall not prevent or delay, in any manner, a
termination of the Issuer pursuant to the first sentence of this Section 9.2.
Upon a termination pursuant to this Section, the Owner Trustee shall promptly
sell the assets of the Owner Trust Estate in a commercially reasonable manner
and on commercially reasonable terms. The net proceeds of such a sale of the
assets of the Issuer (after the costs and expenses of the Owner Trustee of such
sale) shall be treated as collections under the Sale and Servicing Agreement and
shall be distributed in accordance with Section 9.1(b) thereof.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation authorized to exercise corporate
trust powers; and having a combined capital and surplus of at least
$100,000,000 and subject to supervision or examination by Federal or state
authorities. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purpose of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.2. In
addition, at all times the Owner Trustee or a co-trustee
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30
shall be a person that satisfies the requirements of Section 3807(a) of the
Business Trust Statute (the "Delaware Trustee").
SECTION 10.2 Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the
Administrator. Upon receiving such notice of resignation, the
Administrator shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days
after the giving of such notice of resignation, the resigning Owner
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Administrator shall
promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner Trustee and
payment of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.3 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Administrator shall provide notice of
such resignation or removal of the Owner Trustee to each of the Rating
Agencies.
SECTION 10.3 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to
the Administrator and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or
removal of the predecessor Owner Trustee shall become effective and such
successor Owner Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under this Agreement, with like effect as if originally named as
the Owner Trustee. The predecessor Owner Trustee shall upon payment of its
fees and expenses deliver to the successor Owner Trustee all documents and
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31
statements and monies held by it under this Agreement; and the Administrator
and the predecessor Owner Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Owner Trustee all such rights, powers,
duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Administrator shall mail notice of the successor of such
Owner Trustee to all Certificateholders, the Trustee, the Noteholders and the
Rating Agencies. If the Administrator shall fail to mail such notice within 10
days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.
SECTION 10.4 Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting
form any merger, conversion or consolidation to which the Owner
Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Owner
Trustee, shall be the successor of the Owner Trustee hereunder,
provided such corporation shall be eligible pursuant to Section
10.1, without the execution or filing of any instrument or any
further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided further that the
Owner Trustee shall mail notice of such merger or consolidation to
the Rating Agencies.
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Vehicle may at the time be
located, the Administrator and the Owner Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Owner Trustee to act as co-trustee, jointly with the
Owner Trustee, or separate trustee or separate trustees, of all or any part of
the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Issuer, or any part thereof, and, subject to the other provisions
of this Section, such powers, duties, obligations, rights and trusts as the
Administrator and the Owner Trustee may consider necessary or desirable. If
the Administrator shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, the Owner Trustee alone shall
have the power to make such appointment. If the Delaware Trustee shall become
incapable of acting, resign or be removed, unless the Owner Trustee is
qualified to act as the Delaware Trustee, a successor co-trustee shall
promptly be
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32
appointed in the manner specified in this Section 10.5 to act as the Delaware
Trustee. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.1 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised
or performed by the Owner Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Issuer or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely
at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly
may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall become incapable
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33
of acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Owner Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Supplements and Amendments. This Agreement may be
amended by the Depositor, the General Partner and the Owner Trustee, with
prior written notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity or defect, to
correct or supplement any provisions in this Agreement or for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders or the General Partner; provided that
such action shall not, as evidenced by an Opinion of Counsel, materially and
adversely affect the interests of any Noteholder or Certificateholder;
provided, further, that the Depositor shall deliver written notice of such
amendments to each Rating Agency prior to the execution of any such amendment.
Notwithstanding the foregoing, no amendment modifying the provisions of
Section 5.2 shall become effective without the prior written confirmation of
each of the Rating Agencies that such amendment will not result in a downgrade
or withdrawal of the then current rating assigned by each of them to the
Certificates.
This Agreement may also be amended from time to time by the
Depositor, the General Partner, and the Owner Trustee, with prior written
notice to the Rating Agencies, with the consent of the Holders of Notes
evidencing not less than 51% of the Outstanding Amount of the Notes and, to
the extent affected thereby, the consent of the Holders of Certificates
evidencing not less than 51% of the Certificate Balance for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or modifying in any manner the rights of the
Noteholders or the Certificateholders; provided that no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the Receivables or distributions that
shall be required to be made for the benefit of the Noteholders or the
Certificateholders, or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance required to consent to any
such amendment.
Promptly after the execution of any amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder, the Trustee and each of the Rating
Agencies.
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34
It shall not be necessary for the consent of Certificateholders or
the Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents
(and any other consents of the Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization
of the execution thereof by the Certificateholders shall be subject to such
reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
the Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of the Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement. The Owner Trustee may, but shall
not be obligated to, enter into any such amendment which affects the Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.2 No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest
therein only in accordance with Articles V and IX. No transfer, by operation
of law or otherwise, of any right, title or interest of the Certificateholders
to and in their ownership interest in the Owner Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to
an accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3 Limitations on Rights of Others. Except for
Sections 2.7 and 2.10, the provisions of this Agreement are solely
for the benefit of the Owner Trustee, the Depositor, the General
Partner, the Certificateholders and, to the extent expressly
provided herein, the Trustee and the Noteholders, and nothing in
this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained
herein.
SECTION 11.4 Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed certified mail, return receipt requested and shall be deemed to have
been duly given upon receipt, if to the Owner Trustee, addressed to
__________________________ Attn: ___________________; if to the
<PAGE>
35
Depositor, addressed to, _________________________________, Attn:
___________________; if to the General Partner, addressed to _______________,
Attn: __________; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice.
SECTION 11.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 11.6 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor, the General Partner, the Owner Trustee and its successors and each
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument
or action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.8 No Petition. The Owner Trustee (not in its individual
capacity but solely as the Owner Trustee), by entering into this Agreement,
each Certificateholder, by accepting a Certificate, and the Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenants and
agrees that it will not at any time institute against the General Partner, or
join in any institution against the General Partner of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates, the Notes,
this Agreement or any of the Basic Documents.
SECTION 11.9 No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Issuer only and do not represent interests in or
obligations of the Depositor, the Servicer, the General Partner, the Owner
Trustee, the Trustee or
<PAGE>
36
any Affiliate thereof, and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated in this
Agreement, the Certificates or the other Basic Documents.
SECTION 11.10 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.11 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.12 Certificate Transfer Restrictions. (a) The
Certificates may not be acquired by or for the account of (i) an
employee benefit plan (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) which
is subject to the provisions of Title I of ERISA, (ii) a plan (as
defined in Section 4975(e)(1) of the Code other than a governmental
or church plan described in Section 4975(g)(2) or (3) of the Code),
or (iii) any entity whose underlying assets include "plan assets"
by reason of any such plan's investment in the entity (excluding
any investment company that is registered under the Investment
Company Act of 1940, as amended) (each, a "Benefit Plan"). By
accepting and holding a Certificate, the Holder thereof shall be
deemed to have represented and warranted that it is not a Benefit
Plan, and that no assets of a Benefit Plan were used to acquire the
Certificate. The foregoing restrictions shall not apply to
acquisitions of Certificates with assets of the general account of an
insurance company, to the extent permitted under Section 401(c) of
ERISA.
(b) The Certificates may not be acquired by or for the
account of an individual or entity that is not a U.S. person as
defined in Section 7701(a)(30) of the Code and any transfer of a
Certificate to a person that is not a U.S. person shall be void.
By accepting and holding a Certificate, the Holder shall be deemed
to have represented and warranted under penalties of perjury that
it (or, if it is acting as a nominee, the beneficial owner) is a
U.S. person.
SECTION 11.13. Seller Payment Obligation. The Seller shall be
responsible for payment of the Administrator's fees under the Administration
Agreement (to the extent not paid pursuant to Section 5.5 of the Sale and
Servicing Agreement) and shall reimburse the Administrator for all expenses
and liabilities of the Administrator incurred thereunder.
[SECTION 11.14. References to the Depositor or Chase Manhattan Bank
USA, N.A. References herein to the Depositor or Chase Manhattan Bank USA, N.A.
shall refer to a national banking association having its principal executive
offices located at 200 Jericho Quadrangle, Jericho, New York 11759 and shall be
deemed to include any successor or assign of Chase USA in connection with the
Proposed Merger.]
<PAGE>
37
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
---------------------------,
as Owner Trustee
By:
-----------------------
Name:
Title:
CHASE MANHATTAN BANK USA, N.A..
as the Depositor
By:
----------------------
Name:
Title:
as General Partner
By:
----------------------
Name:
Title:
Acknowledged and accepted
with respect to Section 9.2
of this Trust Agreement
- ------------------------------
not in its individual capacity, but
solely in its capacity as Trustee
By:
----------------------------
Name:
Title:
<PAGE>
38
EXHIBIT A
NUMBER $
R- CUSIP NO.______
[THIS CERTIFICATE IS NOT TRANSFERRABLE]*
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF (i) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) WHICH IS SUBJECT TO THE
PROVISIONS OF TITLEI OF ERISA, (ii) A PLAN (AS DEFINED IN SECTION4975(e)(1) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OTHER THAN A PLAN
DESCRIBED IN SECTION4975(g)(2) OR (3) OF THE CODE), OR (iii) ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF A PLAN'S INVESTMENT IN
THE ENTITY (EXCLUDING ANY INVESTMENT COMPANY THAT IS REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED). BY ACCEPTING AND HOLDING THIS
CERTIFICATE, THE HOLDER HEREOF AND THE CERTIFICATE OWNER SHALL EACH BE DEEMED
TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT SUCH A PLAN AND THAT NO
ASSETS OF SUCH A PLAN WERE USED TO ACQUIRE THIS CERTIFICATE. THE FOREGOING
RESTRICTIONS SHALL NOT APPLY TO ACQUISITIONS OF CERTIFICATES WITH ASSETS OF THE
GENERAL ACCOUNT OF AN INSURANCE COMPANY, TO THE EXTENT PERMITTED UNDER SECTION
401(c) OF ERISA.
THE CERTIFICATES MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF AN
INDIVIDUAL OR ENTITY THAT IS NOT A U.S. PERSON AS DEFINED IN SECTION
7701(A)(30) OF THE CODE. BY ACCEPTING AND HOLDING A CERTIFICATE, THE HOLDER
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT (OR, IF IT IS ACTING
AS A NOMINEE, THE BENEFICIAL OWNER) IS A U.S. PERSON.
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE IN INSTALLMENTS AS
SET FORTH IN THE TRUST AGREEMENT ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF
THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.]
- --------
* To be included in the General Partner's 1% Certificate.
Exhibit A, Page 1
<PAGE>
CHASE MANHATTAN AUTO OWNER TRUST 199_
___% ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Issuer, as defined below, the property of which includes a pool of retail
installment sale contracts or purchase money notes and security agreements
secured by new or used automobiles or light duty trucks and sold to the Issuer
by Chase Manhattan Bank USA, N.A., a national banking association.
(This Certificate does not represent an interest in or obligation of Chase
Manhattan Bank USA, N.A. or any of its Affiliates, except to the extent
described below.)
THIS CERTIFIES THAT ___________________________ is the registered
owner of __________________ DOLLARS nonassessable, fully-paid, beneficial
ownership interest in certain distributions of Chase Manhattan Auto Owner
Trust 199_-_ (the "Issuer") formed by Chase Manhattan Bank USA, N.A., a
national banking association (the "Depositor"). This Certificate has a
Certificate Rate of ___% per annum.
Exhibit A, Page 2
<PAGE>
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
- ------------------------ -----------------------------
or
as Owner Trustee as Owner Trustee
By:
--------------------------
Authenticating Agent
By:---------------------
Exhibit A, Page 3
<PAGE>
Issuer was created pursuant to a Trust Agreement dated as of _____,
199_ (the "Trust Agreement"), among the Depositor, ____________, as General
Partner (the "General Partner") and _____________________, as owner trustee
("Owner Trustee"), a summary of certain of the pertinent provisions of which
is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in Section
1.1 of the Sale and Servicing Agreement between the Issuer and Chase Manhattan
Bank USA, N.A., as Seller and Servicer, dated as of _____, 199_, as the same
may be amended or supplemented from time to time.
This Certificate is one of the duly authorized Certificates
designated as "___% Asset Backed Certificates" (herein called the
"Certificates"). Also issued under the Indenture dated as of _________, 199__,
between the Issuer and ____________________, as trustee, are two classes of
Notes designated as "Class A-1 ___% Asset Backed Notes" (the "Class A-1
Notes"), and "Class A-2 ___% Asset Backed Notes" (the "Class A-2 Notes" and,
together with the Class A-1 Notes, the "Notes"). This Certificate is issued
under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the holder of this Certificate by virtue
of the acceptance hereof assents and by which such holder is bound.
The holder of this Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
It is the intent of the Depositor, the General Partner and
Certificateholders that, for purposes of Federal income taxes, the Issuer will
be treated as a partnership and the Depositor, the General Partner and the
Certificateholders will be treated as partners in that partnership. The
Certificateholders by acceptance of a Certificate, agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the General Partner, or join in any institution against the General Partner
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificates, the Notes, the Trust Agreement or any of the Basic Documents.
Each Certificateholder, by its acceptance of a Certificate or a
beneficial interest in a Certificate, acknowledges and agrees that the General
Partner is authorized to determine whether or not
Exhibit A, Page 4
<PAGE>
to cause the Issuer to make the election contemplated in Internal Revenue
Service Notice 95-14 to elect that the trust be classified as a partnership
for Federal income tax purposes in the event that the ability to make such
election becomes available to the Issuer, and acknowledges and agrees that the
General Partner is authorized to direct the Owner Trustee to take such acts or
actions as may be required to effectuate such election. Each
Certificateholder, by its acceptance of a Certificate or a beneficial interest
in a Certificate, agrees to take such actions (and direct the Owner Trustee to
take such acts or actions) as the General Partner or the Owner Trustee shall
reasonably request in order to effectuate such election.
The Certificates do not represent an obligation of, or an interest
in, the Depositor, the Servicer, the General Partner, the Owner Trustee, the
Trustee or any Affiliates of any of them and no recourse may be had against
such parties or their assets, except as may be expressly set forth or
contemplated herein or in the Trust Agreement, the Indenture or the other
Basic Documents.
This certificate may not be acquired by or for the account of (i) an
employee benefit plan (as defined in section3(3) of the employee retirement
income security act of 1974, as amended ("ERISA")) which is subject to the
provisions of titlei of erisa, (ii) a plan (as defined in Section4975(e)(1) of
the Internal Revenue Code of 1986, as amended (the "Code") other than a plan
described in Section4975(g)(2) or (3) of the code), or (iii) any entity whose
underlying assets include "plan assets" by reason of a plan's investment in
the entity (excluding any investment company that is registered under the
Investment Company Act of 1940, as amended). By accepting and holding this
Certificate, the holder hereof and the Certificate Owner shall each be deemed
to have represented and warranted that it is not such a plan and that no
assets of such a plan were used to acquire this Certificate. The foregoing
restrictions shall not apply to acquisitions of Certificates with assets of the
general account of an insurance company, to the extent permitted under Section
401(c) of ERISA.
The Certificates may not be acquired by or for the account of an
individual or entity that is not a U.S. Person as defined in Section
7701(A)(30) of the Code. By accepting and holding a Certificate, the Holder
shall be deemed to have represented and warranted that it (or, if it is acting
as a Nominee, the Beneficial Owner) is a U.S. Person.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Exhibit A, Page 5
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of Issuer and not in
its individual capacity, has caused this Certificate to be duly executed.
CHASE MANHATTAN AUTO
OWNER TRUST 199__
By:
-----------------------
not in its individual
capacity, but solely as
Owner Trustee
Dated: By:
------------------------
Exhibit A, Page 6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code,
of assignee)
the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
___________________________________________ Attorney to transfer said
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
*
----------------------------------
Signature Guaranteed:
*
----------------------------------
- --------
* NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Certificate in every particular, without alteration, enlargement or
any change whatever. Such signature must be guaranteed by a member
firm of the New York Stock Exchange or a commercial bank or trust
company.
Exhibit A, Page 7
<PAGE>
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
CHASE MANHATTAN AUTO OWNER TRUST 199_-_
THIS Certificate of Trust of Chase Manhattan Auto Owner Trust 199_-_
(the "Trust"), dated as of _____, 199_, is being duly executed and filed by
_____________________, a ___________ banking corporation, and
____________________, a ___________________, as trustees, to form a business
trust under the Delaware Business Trust Act (13 DelCode, Section 3801 et seq.).
(a) Name. The name of the business trust formed hereby is
CHASE MANHATTAN AUTO OWNER TRUST 199_-_.
(b) Delaware Trustee. The name and business address of the
trustee of the Trust resident in the State of Delaware is ______.
(c) This Certificate of Trust will be effective _____, 199_.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
By:
------------------------------,
not in its individual capacity,
but solely as owner trustee of
the Trust.
By:
------------------------------
Name:
Title:
Exhibit B, Page 1
<PAGE>
EXHIBIT C
CERTIFICATE DEPOSITORY AGREEMENT
Exhibit C, Page 1
<PAGE>
Form of Administration Agreement
OHS Draft
8/26/96
- --------------------------------------------------------------------------------
CHASE MANHATTAN AUTO TRUST 199_-_
Class A-1 _____% Asset Backed Notes
Class A-2 ____% Asset Backed Notes
------------------------------------
ADMINISTRATION AGREEMENT
Dated as of ________, 199_
------------------------------------
----------------
Administrator
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
1.Duties of Administrator.................................. 2
2.Records.................................................. 9
3.Compensation............................................. 9
4.Additional Information To Be Furnished to Issuer......... 9
5.Independence of Administrator............................ 9
6.No Joint Venture......................................... 9
7.Other Activities of Administrator........................ 9
8.Term of Agreement; Resignation and Removal of
Administrator......................................... 9
9.Action upon Termination, Resignation or Removal.......... 11
10.Notices................................................. 11
11.Amendments.............................................. 12
12.Successors and Assigns.................................. 12
13.GOVERNING LAW........................................... 13
14.Headings................................................ 13
15.Counterparts............................................ 13
16.Severability............................................ 13
17.Not Applicable to [Name of Administrator] in Other
Capacities............................................ 13
18.Limitation of Liability of Owner Trustee and Trustee.... 13
19.Third-Party Beneficiary................................. 14
20.Successor Servicer. .......................................14
[21. Nonpetition Covenants....................................14
EXHIBIT A - Form of Power of Attorney
i
<PAGE>
ADMINISTRATION AGREEMENT dated as of ________, 1996, among CHASE
MANHATTAN AUTO TRUST 199_-____, a Delaware business trust (the "Issuer"),
__________________, a ____________________________, as administrator (the
"Administrator"), CHASE MANHATTAN BANK USA, N.A., a national banking
association (the "Seller"), and __________________________________, a
____________________________, not in its individual capacity but solely as
Trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS the Issuer is issuing the Class A-1 _____% Asset Backed Notes
(the "Class A-1 Notes") and the Class A-2 ____% Asset Backed Notes ("Class A-2
Notes" and, together with the Class A-1 Notes, the "Notes") pursuant to the
Indenture dated as of _________, 1996 (as amended, modified or supplemented
from time to time in accordance with the provisions thereof, the "Indenture"),
between the Issuer and the Trustee and the ____% Asset Backed Certificates
(the "Certificates") pursuant to the Trust Agreement dated as of __________,
1996 (as amended, modified or supplemented from time to time in accordance
with the provisions thereof) among the Seller [, ___________________, as
General Partner] and __________, as owner trustee (the "Owner Trustee").
WHEREAS the Issuer has entered into certain agreements in connection
with the issuance of the Notes and the Certificates, including (i) a Sale and
Servicing Agreement dated as of _________, 1996 (the "Sale and Servicing
Agreement") (capitalized terms used herein and not defined herein shall have
the meanings assigned such terms in the Sales and Servicing Agreement) among
the Issuer, Chase Manhattan Bank USA, N.A. ("Chase USA"), as Servicer, and the
Seller, (ii) a Depository Agreement dated ________, 1996 (the "Note Depository
Agreement") among the Issuer, the Servicer, the Trustee and The Depository
Trust Company and a Depository Agreement dated __________ among the Issuer,
the Owner Trustee, the Servicer and The Depository Trust Company (the
"Certificate Depository Agreement," and together with the Note Depository
Agreement, the "Depository Agreements," and (iii) the Indenture (the Sale and
Servicing Agreement, the Trust Agreement, the Depository Agreements and the
Indenture being hereinafter referred to collectively as the "Related
Agreements");
WHEREAS pursuant to the Related Agreements, the Issuer and the Owner
Trustee are required to perform certain duties in connection with (a) the
Notes and the collateral therefor pledged pursuant to the Indenture (the
"Collateral") and (b) the Certificates (the holders of the Certificates being
referred to herein as the "Owners");
WHEREAS the Issuer and the Owner Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the
<PAGE>
Owner Trustee referred to in the preceding clause, and to provide such
additional services consistent with the terms of this Agreement and the
Related Agreements as the Issuer and the Owner Trustee may from time to time
request;
WHEREAS the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Duties of Administrator. (a) Duties with Respect to the Related
Agreements. (i) The Administrator agrees to perform all its duties as
Administrator and the duties of the Issuer and the Owner Trustee under the
Depository Agreements. In addition, the Administrator shall consult with the
Owner Trustee regarding the duties of the Issuer and the Owner Trustee under
the Related Agreements. The Administrator shall monitor the performance of the
Issuer and shall advise the Owner Trustee when action is necessary to comply
with the Issuer's or the Owner Trustee's duties under the Indenture and the
Depository Agreements. The Administrator shall prepare for execution by the
Issuer or the Owner Trustee or shall cause the preparation by other
appropriate persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer or the Owner
Trustee to prepare, file or deliver pursuant to the Indenture and the
Depository Agreements. In furtherance of the foregoing, the Administrator
shall take all appropriate action that it is the duty of the Issuer or the
Owner Trustee to take pursuant to the Indenture including, without limitation,
such of the foregoing as are required with respect to the following matters
under the Indenture (references are to sections of the Indenture):
(A) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes, if any,
and delivery of the same to the Trustee (Section 2.2);
(B) the duty to cause the Note Register to be kept and to
give the Trustee notice of any appointment of a new Note Registrar
and the location, or change in location, of the Note Register
(Section 2.4);
(C) the notification of Noteholders of the final
principal payment on their Notes (Section 2.7(b));
(D) the preparation, obtaining or filing of the
instruments, opinions and certificates and other documents
required for the release of collateral (Section 2.9);
2
<PAGE>
(E) the preparation of Definitive Notes and arranging
the delivery thereof (Section 2.12);
(F) the maintenance of an office or agency in the Borough of
Manhattan, the City of New York for registration of transfer or
exchange of Notes (Section 3.2);
(G) the duty to cause newly appointed Paying Agents, if any,
to deliver to the Trustee the instrument specified in the Indenture
regarding funds held in trust (Section 3.3);
(H) the direction to Paying Agents to pay to the Trustee
all sums held in trust by such Paying Agents (Section 3.3);
(I) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and each
other instrument and agreement included in the Trust Estate (Section
3.4);
(J) the preparation of all supplements, amendments,
financing statements, continuation statements, if any, instruments of
further assurance and other instruments, in accordance with Section
3.5 of the Indenture, necessary to protect the Trust Estate (Section
3.5);
(K) the obtaining of the Opinion of Counsel on the Closing
Date and the annual delivery of Opinions of Counsel, in accordance
with Section 3.6 of the Indenture, as to the Trust Estate, and the
annual delivery of the Officers' Certificate and certain other
statements, in accordance with Section 3.9 of the Indenture, as to
compliance with the Indenture (Sections 3.6 and 3.9);
(L) the identification to the Trustee in an Officers'
Certificate of a Person with whom the Issuer has contracted to
perform its duties under the Indenture (Section 3.7(b));
(M) the notification of the Trustee and the Rating Agencies
of a Event of Servicing Termination pursuant to the Sale and
Servicing Agreement and, if such Event of Servicing Termination
arises from the failure of the Servicer to perform any of its duties
under the Sale and Servicing Agreement, the taking of all reasonable
steps available to remedy such failure (Section 3.7(d));
(N) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its
obligation under the Indenture (Section 3.11(b));
3
<PAGE>
(O) the delivery of notice to the Trustee of each Event of
Default, Event of Servicing Termination and each default by the
Seller under the Sale and Servicing Agreement (Section 3.18);
(P) the taking of such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this
Indenture or to compel or secure the performance and observance by
the Seller and the Servicer of their obligations under the Sale and
Servicing Agreement: (Sections 3.19 and 5.16);
(Q) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate and the obtaining of the Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.1);
(R) the compliance with any written directive of the Trustee
with respect to the sale of the Trust Estate in a commercially
reasonable manner if an Event of Default shall have occurred and be
continuing (Section 5.4);
(S) [provide the Trustee with the information necessary to
deliver] [the delivery] to each Noteholder such information as may be
reasonably required to enable such Holder to prepare its Federal and
State income tax returns (Section 6.6);
(T) the preparation and delivery of notice to
Noteholders of the removal of the Trustee and the appointment
of a successor Trustee (Section 6.8);
(U) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate
trustee and any written instruments necessary in connection with the
resignation or removal of the Trustee or any co-trustee or separate
trustee (Sections 6.8 and 6.10);
(V) the furnishing of the Trustee with the names and
addresses of Noteholders during any period when the Trustee is not
the Note Registrar (Section 7.1);
(W) the preparation and, after execution by the Issuer, the
filing with the Commission, any applicable state agencies and the
Trustee of documents required to be filed on a periodic basis with,
and summaries thereof as may be required by rules and regulations
prescribed by, the Commission and any applicable state agencies and
the transmission of such summaries, as necessary, to the Noteholders
(Section 7.3);
(X) the obtaining of an Officers' Certificate, Opinion
of Counsel and Independent Certificates, if necessary, for the
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<PAGE>
release of the Trust Estate as defined in the Indenture
(Sections 8.4 and 8.5);
(Y) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders of notices with respect
to such supplemental indentures (Sections 9.1 and 9.2);
(Z) the execution of new Notes conforming to any
supplemental indenture (Section 9.5);
(AA) [provide the Trustee with the form of notice
necessary to deliver] the notification of Noteholders of
redemption of the Notes (Section 10.2);
(BB) the preparation of all Officers' Certificates, Opinions
of Counsel and Independent Certificates with respect to any requests
by the Issuer to the Trustee to take any action under the Indenture
(Section 11.1(a));
(CC) the preparation and delivery of Officers' Certificates
and the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section 11.1(b));
(DD) the notification of the Rating Agencies, upon the
failure of the Trustee to give such notification, of the information
required pursuant to Section 11.4 of the Indenture (Section 11.4);
(EE) the preparation and delivery to the Noteholders and
the Trustee of any agreements with respect to alternate
payment and notice provisions (Section 11.6);
(FF) the recording of the Indenture, if applicable
(Section 11.15); and
(ii)The Administrator will:
(A)pay the Trustee in accordance with Section 6.7 of the
Indenture reasonable compensation for all services rendered by the
Trustee under the Indenture;
(B)reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee
in accordance with Section 6.7 of the Indenture; and
(C)indemnify the Trustee in accordance with Section 6.7 of
the Indenture. The failure by the Trustee to notify the Issuer and
the Administrator promptly of any claim for which
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<PAGE>
it may seek indemnity shall not relieve the Issuer and the
Administrator of its obligation hereunder. The Issuer shall cause the
Administrator to defend any claim against the Trustee, the Trustee
may have separate counsel and the Issuer shall or shall cause the
Administrator to pay the fees and expenses of such counsel.
Notwithstanding anything herein to the contrary, neither the Issuer
nor the Administrator need reimburse any expense or indemnify against
any loss, liability or expense incurred by the Trustee through the
Trustee's own wilful misconduct, negligence or bad faith.
(D) indemnify the Owner Trustee and its agents for, and to
hold them harmless against, any losses, liability or expense incurred
without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the transactions
contemplated by the Trust Agreement, including the reasonable costs
and expenses of defending themselves against any claim or liability
in connection with the exercise or performance of any of their powers
or duties pursuant to Section 8.2 of the Trust Agreement.
(b)Additional Duties.(i)In addition to the duties of the
Administrator set forth above, the Administrator shall perform such
calculations and shall prepare for execution by the Issuer or the Owner
Trustee or shall cause the preparation by other appropriate persons of all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer or the Owner Trustee to prepare, file or
deliver pursuant to the Related Agreements, and at the request of the Owner
Trustee shall take all appropriate action that it is the duty of the Issuer or
the Owner Trustee to take pursuant to the Related Agreements. Subject to
Section 5 of this Agreement, and in accordance with the directions of the
Owner Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Trust Estate
(including the Related Agreements) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
promptly notifying the Owner Trustee in the event that any withholding tax is
imposed on the Issuer's payments (or allocations of income) to an
"Certificateholder" as contemplated in Section 5.2(c) of the Trust Agreement.
Any such notice shall specify the amount of any withholding tax required to be
withheld by the Owner Trustee pursuant to such provision.
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<PAGE>
(iii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Owner Trustee and the Issuer set forth in
Sections 2.11 and 5.5(a), (b) and (c) and 5.7 of the Trust Agreement with
respect to, among other things, accounting and reports to Certificateholders
and the maintenance of Capital Accounts; provided, however, that the Owner
Trustee shall retain responsibility for the distribution of the Schedule K-1s
necessary to enable each Certificateholder to prepare its federal and state
income tax returns.
(iv) The Administrator may satisfy its obligations with respect to
clauses (ii) and (iii) above by retaining, at the expense of the
Administrator, a firm of independent public accountants (the "Accountants")
acceptable to the Owner Trustee which shall perform the obligations of the
Administrator thereunder. In connection with paragraph (ii) above, the
Accountants will provide prior to ________, 199_ [insert date within one-month
of Closing Date], a letter in form and substance satisfactory to the Owner
Trustee as to whether any tax withholding is then required and, if required,
the procedures to be followed with respect thereto to comply with the
requirements of the Code. The Accountants shall be required to update the
letter in each instance that any additional tax withholding is subsequently
required or any previously required tax withholding shall no longer be
required.
(v) Notwithstanding anything in the Trust Agreement to the
contrary, the Administrator shall upon termination of the Issuer pursuant to
Section 9.2 of the Trust Agreement promptly sell the assets of the Owner Trust
Estate in accordance with Section 9.2 of the Trust Agreement.
(vi) The Administrator shall perform the duties of the
Administrator specified in Sections 10.2 and 10.3 of the Trust Agreement
required to be performed in connection with the resignation or removal of the
Owner Trustee, the duties of the Administrator specified in Section 10.5 of
the Trust Agreement required to be performed in connection with the
appointment and payment of co-Trustees, and any other duties expressly
required to be performed by the Administrator under the Trust Agreement.
(vii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer than would be
available from unaffiliated parties.
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<PAGE>
(viii) It is the intention of the parties hereto that the
Administrator shall, and the Administrator hereby agrees to, execute on behalf
of the Issuer or the Owner Trustee all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Issuer
or the Owner Trustee to prepare, file or deliver pursuant to the Basic
Documents. In furtherance thereof, the Owner Trustee shall, on behalf of
itself and of the Issuer, execute and deliver to the Administrator, and to
each successor Administrator appointed pursuant to the terms hereof, one or
more powers of attorney substantially in the form of Exhibit A hereto,
appointing the Administrator the attorney-in-fact of the Owner Trustee and the
Issuer for the purpose of executing on behalf of the Owner Trustee and the
Issuer all such documents, reports, filings, instruments, certificates and
opinions.
(c) Non-Ministerial Matters.(i)With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Owner
Trustee of the proposed action and the Owner Trustee shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, "non-ministerial matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection of the
Receivables);
(C) the amendment, change or modification of the Related
Agreements;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Trustees pursuant to the Indenture or the
appointment of successor Administrators or successor Servicers, or
the consent to the assignment by the Note Registrar, the Paying Agent
or the Trustee of its obligations under the Indenture; and
(E) the removal of the Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) make any payments
to the Noteholders or Certificateholders under the Related Agreements, (y)
sell the Trust Estate pursuant to Section 5.4 of the Indenture or (z) take any
other action that the Issuer directs the Administrator not to take on its
behalf.
8
<PAGE>
2. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer, the
Owner Trustee, the Trustee and the Seller at any time during normal business
hours.
3. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement, the Administrator shall be
entitled to $____ per month which shall be payable in accordance with Section
5.5 of the Sale and Servicing Agreement.
4. Additional Information To Be Furnished to Issuer. The Administrator
shall furnish to the Issuer from time to time such additional information
regarding the Collateral as the Issuer shall reasonably request.
5. Independence of Administrator. For all purposes of this Agreement,
the Administrator shall be an independent contractor and shall not be subject
to the supervision of the Issuer or the Owner Trustee with respect to the
manner in which it accomplishes the performance of its obligations hereunder.
Unless expressly authorized by the Issuer or the Owner Trustee, as the case
may be, the Administrator shall have no authority to act for or represent the
Issuer or the Owner Trustee in any way and shall not otherwise be deemed an
agent of the Issuer or the Owner Trustee.
6. No Joint Venture. Nothing contained in this Agreement shall (i)
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) be construed to impose
any liability as such on any of them or (iii) be deemed to confer on any of
them any express, implied or apparent authority to incur any obligation or
liability on behalf of the others.
7. Other Activities of Administrator. Nothing herein shall prevent the
Administrator or its affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in
business activities similar to those of the Issuer, the Owner Trustee or the
Trustee.
8. Term of Agreement; Resignation and Removal of Administrator.
(a) This Agreement shall continue in force until the dissolution of the
Issuer, upon which event this Agreement shall automatically terminate.
(b) Subject to Sections 8(e) and (f), the Administrator may resign its
duties hereunder by providing the Issuer with at least 60 days' prior written
notice.
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(c)Subject to Sections 8(e) and (f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least 60
days prior written notice.
(d)Subject to Sections 8(e) and (f), at the sole option of the
Issuer, the Administrator may be removed immediately upon written notice of
termination from the Issuer to the Administrator if any of the following
events shall occur:
(i) the Administrator shall default in the performance of
any of its duties under this Agreement and, after notice of such
default, shall not cure such default within ten days (or, if such
default cannot be cured in such time, shall not give within ten days
such assurance of cure as shall be reasonably satisfactory to the
Issuer);
(ii) a court having jurisdiction in the premises shall
enter a decree or order for relief, and such decree or order shall
not have been vacated within 60 days, in respect of the Administrator
in any involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect or appoint a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for the Administrator or any substantial part of its
property or order the winding-up or liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall consent to
the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official for the Administrator or
any substantial part of its property, shall consent to the taking of
possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become
due.
The Administrator agrees that if any of the events specified in
clause (ii) or (iii) of this Section shall occur, it shall give written notice
thereof to the Issuer and the Indenture Trustee within seven days after the
happening of such event.
(e)No resignation or removal of the Administrator pursuant to this
Section shall be effective until (i) a successor Administrator shall have been
appointed by the Issuer and (ii) such successor Administrator shall have
agreed in writing to be bound by the terms of this Agreement in the same
manner as the Administrator is bound hereunder.
(f)The appointment of any successor Administrator shall be
effective only after receipt of written confirmation from each
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<PAGE>
Rating Agency that the proposed appointment will not result in the
qualification, downgrading or withdrawal of any rating assigned to the Notes
and Certificates by such Rating Agency.
9. Action upon Termination, Resignation or Removal. Promptly upon the
effective date of termination of this Agreement pursuant to Section 8(a) or
the resignation or removal of the Administrator pursuant to Section 8(b) or
(c), respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon such
termination pursuant to Section 8(a) deliver to the Issuer all property and
documents of or relating to the Collateral then in the custody of the
Administrator. In the event of the resignation or removal of the Administrator
pursuant to Section 8(b) or (c), respectively, the Administrator shall
cooperate with the Issuer and take all reasonable steps requested to assist
the Issuer in making an orderly transfer of the duties of the Administrator.
10. Notices. Any notice, report or other communication given hereunder
shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to
(b) if to the Administrator, to
(c) if to the Indenture Trustee, to
(d) if to the Seller, to
11
<PAGE>
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed
given if such notice is mailed by certified mail, postage prepaid, or
hand-delivered to the address of such party as provided above, except that
notices to the Indenture Trustee are effective only upon receipt.
11. Amendments. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Issuer, the Administrator
and the Trustee, with the written consent of the Owner Trustee and without the
consent of the Noteholders and the Certificateholders, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or Certificateholders; provided that such amendment will not, in
the Opinion of Counsel, materially and adversely affect the interest of any
Noteholder or Certificateholder. This Agreement may also be amended by the
Issuer, the Administrator and the Trustee with the written consent of the
Owner Trustee and the holders of Notes evidencing a majority in the
Outstanding Amount of the Notes and the holders of Certificates evidencing a
majority of the Certificate Balance for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of Noteholders or the
Certificateholders; provided, however, that no such amendment may (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that are required to
be made for the benefit of the Noteholders or Certificateholders or (ii)
reduce the aforesaid percentage of the holders of Notes and Certificates which
are required to consent to any such amendment, without the consent of the
holders of all the outstanding Notes and Certificates. Notwithstanding the
foregoing, the Administrator may not amend this Agreement without the
permission of the Seller, which permission shall not be unreasonably withheld.
12. Successors and Assigns. This Agreement may not be assigned by the
Administrator unless such assignment is previously consented to in writing by
the Issuer and the Owner Trustee and subject to receipt by the Owner Trustee
of written confirmation from each Rating Agency that such assignment will not
result in the qualification, downgrading or withdrawal of any rating assigned
to the Notes and Certificates by such Rating Agency in respect thereof. An
assignment with such consent and satisfaction, if accepted by the assignee,
shall bind the assignee hereunder in the same manner as the Administrator is
bound hereunder. Notwithstanding the foregoing, this Agreement may be assigned
by the Administrator without the consent of the Issuer or the Owner Trustee to
a corporation or other organization that is a successor (by merger,
consolidation or purchase of assets) to the
12
<PAGE>
Administrator, provided that such successor organization executes and delivers
to the Issuer, the Owner Trustee and the Trustee an agreement in which such
corporation or other organization agrees to be bound hereunder by the terms of
said assignment in the same manner as the Administrator is bound hereunder.
Subject to the foregoing, this Agreement shall bind any successors or assigns
of the parties hereto.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
14. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
15. Counterparts. This Agreement may be executed in counterparts, each
of which when so executed shall together constitute but one and the same
agreement.
16. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
17. Not Applicable to [Name of Administrator] in Other Capacities.
Nothing in this Agreement shall affect any obligation [Name of Administrator]
may have in any other capacity.
18. Limitation of Liability of Owner Trustee and Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
instrument has been signed by ______________________ not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall ______________________ in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer
hereunder, as to all of which recourse shall be had solely to the assets of
the Issuer. For all purposes of this Agreement, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by __________________________________ not in its
individual capacity but solely as Trustee and in no event shall
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<PAGE>
__________________________________ have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of the
Issuer.
19. Third-Party Beneficiary. Each of the Seller (to the extent provided
in Section 11) and the Owner Trustee is a third-party beneficiary to this
Agreement and is entitled to the rights and benefits hereunder and may enforce
the provisions hereof as if it were a party hereto.
20. Successor Servicer. The Administrator shall undertake, as promptly
as possible after the giving of notice of termination to the Servicer of the
Servicer's rights and powers pursuant to Section 8.2 of the Sale and Servicing
Agreement, to enforce the provisions of Section 8.2 with respect to the
appointment of a successor Servicer.
[21. Nonpetition Covenants. Notwithstanding any prior termination of
this Agreement, the Seller, the Administrator, the Owner Trustee and the
Indenture Trustee shall not, prior to the date which is one year and one day
after the termination of this Agreement with respect to the Issuer, acquiesce,
petition or otherwise invoke or cause the Issuer or the General Partner to
invoke the process of any court of government authority for the purpose of
commencing or sustaining a case against the Issuer or the General Partner
under any Federal or state bankruptcy, insolvency or similar law or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or the General Partner or any substantial part
of its property, or ordering the winding up or liquidation of the affairs of
the Issuer or the General Partner.]
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
CHASE MANHATTAN AUTO OWNER TRUST
199_-__
By:___________________________
not in its individual capacity
but solely as Owner Trustee,
By:___________________________
Name:
Title:
not in its individual
capacity but solely as
Indenture Trustee,
By:___________________________
Name:
Title:
[_____________], as Administrator,
By:___________________________
Name:
Title:
CHASE MANHATTAN BANK USA, N.A.
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT A
[Form of Power of Attorney]
POWER OF ATTORNEY
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, that ______________________, a
____________________________, not in its individual capacity but solely as
owner trustee ("Owner Trustee") for Chase Manhattan Auto Owner Trust 199_-__
("Trust"), does hereby make, constitute and appoint
____________________________, as Administrator under the Administration
Agreement (as defined below), and its agents and attorneys, as
Attorneys-in-Fact to execute on behalf of the Owner Trustee or the Trust all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Owner Trustee or the Trust to prepare, file or
deliver pursuant to the Related Documents (as defined in the Administration
Agreement), including, without limitation, to appear for and represent the
Owner Trustee and the Trust in connection with the preparation, filing and
audit of federal, state and local tax returns pertaining to the Trust, and
with full power to perform any and all acts associated with such returns and
audits that the Owner Trustee could perform, including without limitation, the
right to distribute and receive confidential information, defend and assert
positions in response to audits, initiate and defend litigation, and to
execute waivers of restriction on assessments of deficiencies, consents to the
extension of any statutory or regulatory time limit, and settlements. For the
purpose of this Power of Attorney, the term "Administration Agreement" means
the Administration Agreement dated as of ________, 199_ among the Trust,
_____________, as Administrator and Servicer, and
__________________________________, as Indenture Trustee, as such may be
amended from time to time.
All powers of attorney for this purpose heretofore filed or executed
by the Owner Trustee are hereby revoked.
EXECUTED this ____ day of _______, 199_.
___________________________
___________________, not in
its individual capacity
but solely as Owner
Trustee
By:___________________________
Name:
Title:
<PAGE>
August 27, 1996
Chase Manhattan Bank USA, N.A.
200 Jericho Quadrangle
Jericho, New York 11759
Chase Manhattan Bank USA, N.A.
802 Delaware Avenue
Wilmington, Delaware 19801
Ladies and Gentlemen:
We have acted as counsel to Chase Manhattan Bank USA, N.A., a
national banking association ("Chase USA (New York)"), and Chase Manhattan
Bank USA, N.A., a national banking association (formerly The Chase
Manhattan Bank (USA)) ("Chase USA (Delaware)") and together with Chase USA
(New York), the "Registrants"), in connection with the filing by the
Registrants with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), of a Registration
Statement on Form S-3, Registration No. 333-7575, and amendment No. 1 to such
Registration Statement filed by the Registrants under the Act (as so amended,
the "Registration Statement"), registering Asset Backed Notes (the "Notes")
and Asset Backed Certificates (the "Certificates") to be issued by one or more
trusts to be formed by one of the Registrants (each, a "Trust") either pursuant
to a Trust Agreement among such Registrant, a special purpose wholly owned
subsidiary of such Registrant (the "General Partner") and the owner trustee
designated thereunder, substantially in the form filed as Exhibit 4.3(C) to
the Registration Statement (the "Trust Agreement"), or a Pooling and Servicing
Agreement between such Registrant, as seller and servicer, and the trustee
designated thereunder, substantially in the form filed as Exhibit 4.1(A) to
the Registration Statement (the "Pooling and Servicing Agreement"). The
Certificates of a particular series will represent undivided interests in
the assets of the related Trust and will be issued pursuant to the Trust
Agreement or the Pooling and Servicing Agreement, as the case may be.
The Notes of a particular series will be issued and secured pursuant to
an Indenture between the related Trust and the indenture trustee
<PAGE>
Chase Manhattan Bank USA, N.A. and
Chase Manhattan Bank USA, N.A. -2- August 24, 1996
designated thereunder, substantially in the form filed as Exhibit 4.2 to
the Registration Statement (the "Indenture"). The Notes and the
Certificates are hereinafter collectively referred to as the "Offered
Securities."
In that connection, we have examined the forms of Trust Agreement,
Pooling and Servicing Agreement and Indenture. In addition, we have
examined and relied as to matters of fact upon, originals or copies,
certified or otherwise indentified to our satisfaction, of such
corporate records, agreements, documents, and other instruments and such
certificates or comparable documents of public officials and of officers
and representatives of the Registrants, and have made such other and
further investigations, as we have deemed relevant and necessary as a
basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
In addition, we have assumed that (i) a Prospectus Supplement will have
been prepared and filed with the Commission describing the Offered
Securities; (ii) all Offered Securities issued will be issued and sold
in compliance with applicable federal and state securities laws and
solely in the manner stated in the Registration Statement and the
applicable Prospectus Supplement; and (iii) a definitive purchase,
underwriting or similar agreement with respect to any Offered Securities
will have been duly authorized and validly executed and delivered by the
applicable Registrant and the other parties thereto.
Based upon the foregoing, we are of the opinion that:
1. When a Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the applicable Registrant and
the trustee designated therein, such Pooling and Servicing Agreement
will constitute a valid and legally binding obligation of such
Registrant enforceable against such Registrant in accordance with its
terms.
2. When a Trust Agreement has been duly authorized, executed
and delivered by the applicable Registrant, the General Partner and the
owner trustee designated therein, such Trust Agreement will constitute a
valid and legally binding obligation of such Registrant enforceable
against such Registrant in accordance with its terms.
3. When the issuance and terms of the Certificates of a
particular series have been duly authorized by the applicable
Registrant, when such Certificates
<PAGE>
Chase Manhattan Bank USA, N.A. and
Chase Manhattan Bank USA, N.A. -3- August 24, 1996
have been duly executed and authenticated in accordance with the
terms of the related Pooling and Servicing Agreement or Trust Agreement,
as the case may be, and when such Certificates have been delivered and
sold in accordance with the provisions of the applicable definitive
purchase, underwriting or similar agreement as contemplated by the
Registration Statement, upon payment of the consideration therefor
provided for therein, such Certificates will be legally issued, fully
paid and non-assessable and outstanding and entitled to the benefits
provided for by the related Pooling and Servicing Agreement or Trust
Agreement, as the case may be.
4. When the related Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended, the issuance and terms of
the Notes of a particular series have been duly authorized by the
applicable Registrant, when such Notes have been duly executed and
authenticated in accordance with the terms of the related Indenture, and
when such Notes have been delivered and sold in accordance with the
provisions of the applicable definitive purchase, underwriting or
similar agreement as contemplated by the Registration Statement, upon
payment of the consideration therefor provided for therein, such Notes
will constitute valid and legally binding obligations of such
Registrant, enforceable against the Registrant in accordance with its
terms.
Our opinions are subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing.
We hereby confirm that the statements set forth in the forms of
prospectus supplements forming a part of the Registration Statement (the
"Prospectus Supplements") under the headings "Certain Federal Income Tax
Consequences" accurately describe the material federal income tax
consequences to holders of the Offered Securities.
We are members of the Bar of the State of New York, and we do
not express any opinion herein concerning any law other than the law of
the State of New York and the Federal law of the United States.
<PAGE>
Chase Manhattan Bank USA, N.A. and
Chase Manhattan Bank USA, N.A. -4- August 24, 1996
We hereby consent to the use of our name under the headings
"Certain Federal Income Tax Consequences" and "Legal Matters" in the
Prospectus Supplements forming a part of the Registration Statement and
to the use of this opinion for filing with the Registration Statement as
Exhibit 5.1 thereto.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her
capacity as an officer or director of The Chase Manhattan Bank (USA) (the
"Bank"), hereby constitutes and appoints, DEBORAH L. DUNCAN, CHARLES A. WALSH,
RICHARD L. CRAIG, MICHAEL H. GANZ, KEITH SCHUCK and ANDREW T. SEMMELMAN, and
each of them severally, his or her true and lawful attorneys-in-fact and agents,
with full power to act with or without the others and with full power of
substitution and resubstitution for and on behalf of him or her and in his or
her name, place and stead, in any and all capacities, to perform any and all
acts and do all things and to execute any and all instruments which said
attorneys-in-fact and agents and each of them may deem necessary or desirable to
enable the Bank to comply with the Securities Act of 1933, as amended (the
"Act"), and any rules, regulations and requirements of the Securities and
Exchange Commission (the "SEC") thereunder in connection with the filing of the
accompanying registration statement under the Act for this registration of (i)
debt obligations of the Bank or a limited purpose subsidiary of the Bank, or
other entity secured by a pledge of identified financial assets of the Bank,
(ii) fixed, fractional, undivided ownership interests in the corpus of a grantor
trust to which identified financial assets of the Bank will be conveyed, (iii)
certificates representing a participation interest in identified financial
assets of the Bank, or in a financial instrument acquired with such assets, (iv)
interests in a real estate mortgage investment conduit (as defined in Section
860D of the Internal Revenue Code of 1986, as amended) or (v) interests in a
limited purpose subsidiary or other entity of the Bank, to which identified
assets of the Bank will be conveyed, authorized for offer and issuance by the
Board of Directors of the Bank pursuant to resolutions adopted by such Board of
Directors on May 23, 1996 (the "Securities"), including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign the name of each undersigned director and officer in such capacity, to a
registration statement on Form S-1, Form S-3, Form S-11 or such other form as
may be determined to be applicable and, if appropriate, a second registration
statement that will become effective upon filing pursuant to Rule 462(b) under
the Act ("Registration Statements") to be filed with the SEC with respect to any
Securities, to any and all amendments to any such Registration Statements
(including post-effective amendments) and to any or all other instruments or
documents to be filed as a part of or in connection with any such Registration
Statements or any and all amendments thereto (including post-effective
amendments), whether such instruments or documents are filed before or after the
effective date of any such Registration Statements, and to appear before the SEC
in connection with any matter relating thereto, hereby granting to such
attorneys-in-fact and agents, and each of them, full power to do and perform any
and all acts and things requisite and necessary to be done in connection
therewith as the undersigned might or could do in person, and hereby ratifying
and confirming all that said attorneys-in-fact and agents and each of them may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of June 3, 1996.
/s/ William Hoefling
--------------------------
William Hoefling
Director
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her
capacity as an officer or director of The Chase Manhattan Bank (USA) (the
"Bank"), hereby constitutes and appoints, DEBORAH L. DUNCAN, CHARLES A. WALSH,
RICHARD L. CRAIG, MICHAEL H. GANZ, KEITH SCHUCK and ANDREW T. SEMMELMAN, and
each of them severally, his or her true and lawful attorneys-in-fact and agents,
with full power to act with or without the others and with full power of
substitution and resubstitution for and on behalf of him or her and in his or
her name, place and stead, in any and all capacities, to perform any and all
acts and do all things and to execute any and all instruments which said
attorneys-in-fact and agents and each of them may deem necessary or desirable to
enable the Bank to comply with the Securities Act of 1933, as amended (the
"Act"), and any rules, regulations and requirements of the Securities and
Exchange Commission (the "SEC") thereunder in connection with the filing of the
accompanying registration statement under the Act for this registration of (i)
debt obligations of the Bank or a limited purpose subsidiary of the Bank, or
other entity secured by a pledge of identified financial assets of the Bank,
(ii) fixed, fractional, undivided ownership interests in the corpus of a grantor
trust to which identified financial assets of the Bank will be conveyed, (iii)
certificates representing a participation interest in identified financial
assets of the Bank, or in a financial instrument acquired with such assets, (iv)
interests in a real estate mortgage investment conduit (as defined in Section
860D of the Internal Revenue Code of 1986, as amended) or (v) interests in a
limited purpose subsidiary or other entity of the Bank, to which identified
assets of the Bank will be conveyed, authorized for offer and issuance by the
Board of Directors of the Bank pursuant to resolutions adopted by such Board of
Directors on May 23, 1996 (the "Securities"), including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign the name of each undersigned director and officer in such capacity, to a
registration statement on Form S-1, Form S-3, Form S-11 or such other form as
may be determined to be applicable and, if appropriate, a second registration
statement that will become effective upon filing pursuant to Rule 462(b) under
the Act ("Registration Statements") to be filed with the SEC with respect to any
Securities, to any and all amendments to any such Registration Statements
(including post-effective amendments) and to any or all other instruments or
documents to be filed as a part of or in connection with any such Registration
Statements or any and all amendments thereto (including post-effective
amendments), whether such instruments or documents are filed before or after the
effective date of any such Registration Statements, and to appear before the SEC
in connection with any matter relating thereto, hereby granting to such
attorneys-in-fact and agents, and each of them, full power to do and perform any
and all acts and things requisite and necessary to be done in connection
therewith as the undersigned might or could do in person, and hereby ratifying
and confirming all that said attorneys-in-fact and agents and each of them may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of June 27, 1996.
/s/ Charles R. Walsh
--------------------------
Charles R. Walsh
Director
