=============================================================================
RECEIVABLES SALE AGREEMENT
Dated as of June 29, 1998
among
PREMIER RECEIVABLES L.L.C.
as Seller,
CHRYSLER FINANCIAL CORPORATION
as Servicer,
OLD LINE FUNDING CORP.
as Purchaser
and
ROYAL BANK OF CANADA
as Agent
=============================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I: DEFINITIONS......................................................1
ARTICLE II: THE SALE AND PURCHASE..........................................13
SECTION 2.1. Sale and Purchase....................................13
SECTION 2.2. Purchase Price.......................................14
SECTION 2.3. Seller's Optional Termination........................14
ARTICLE III: FEES AND EXPENSES.............................................15
SECTION 3.1. Determination of Carrying Costs......................15
(a) Purchase Discount.............................15
(b) Servicer Fee..................................17
SECTION 3.2. Interest on Unpaid Amounts...........................17
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE...............................17
SECTION 4.1. Conditions Precedent to Purchase.....................17
(a) Absence of Liens..............................18
(b) Financing Statements..........................18
(c) Schedule of Contracts.........................18
(d) Seller Resolutions............................18
(e) Servicer Resolutions..........................18
(f) Legal Opinion of Counsel to the
Seller and the Servicer.......................19
(g) Good Standing Certificates....................19
(h) Representations and Covenants.................19
(i) Other Documents...............................19
(j) Upfront Fee..........Error! Bookmark not defined.
ARTICLE V: SETTLEMENT PROCEDURES...........................................20
SECTION 5.1. Collections .........................................20
SECTION 5.2. Application of Collections...........................20
SECTION 5.3. Application of Collections on
Settlement Dates.....................................21
SECTION 5.4. Servicer Report......................................21
SECTION 5.5. Repurchase Obligations...............................21
ARTICLE VI: SERVICING OF RECEIVABLES.....................................21
SECTION 6.1. Appointment and Duties of Servicer...................22
i
SECTION 6.2. Replacement of Servicer..............................22
SECTION 6.3. Custody of Receivable Files..........................24
SECTION 6.4. Duties of Servicer as Custodian......................25
SECTION 6.5. Effective Period and Termination.....................25
ARTICLE VII: REPRESENTATIONS AND WARRANTIES................................26
SECTION 7.1. Representations and Warranties of
the Seller and the Servicer..........................26
ARTICLE VIII: COVENANTS...................................................27
SECTION 8.1. Affirmative Covenants of the Seller and the
Servicer.............................................28
SECTION 8.2. Reporting Requirements of the Servicer...............28
SECTION 8.3. Negative Covenants of the Seller and the Servicer....29
SECTION 8.4. Protection of the Purchaser's Interest...............30
ARTICLE IX: AGENT.........................................................30
SECTION 9.1. Appointment of Agent.................................30
ARTICLE X: MISCELLANEOUS..................................................31
SECTION 10.1. Amendments, Etc.....................................31
SECTION 10.2. Notices, Etc........................................31
SECTION 10.3. No Waiver; Remedies.................................31
SECTION 10.4. Binding Effect; Assignability.......................31
SECTION 10.5. Governing Law.......................................32
SECTION 10.6. Construction of the Agreement.......................32
SECTION 10.7. No Proceedings......................................33
SECTION 10.8. Confidentiality.....................................33
SECTION 10.9. Execution in Counterparts...........................33
SECTION 10.10. Indemnification by Seller of Investors, etc........33
EXHIBITS
EXHIBIT A - Form of Servicer Report
EXHIBIT B - Form of Opinion of Counsel
ii
RECEIVABLES SALE AGREEMENT, dated as of June 29, 1998,
among PREMIER RECEIVABLES L.L.C., a Michigan limited liability company, as
the "Seller," CHRYSLER FINANCIAL CORPORATION, a Michigan corporation, as the
initial "Servicer," OLD LINE FUNDING CORP., a Delaware corporation, as the
"Purchaser," and ROYAL BANK OF CANADA, a Canadian chartered bank acting
through its New York Branch, as the "Agent" for the Investors.
ARTICLE I: DEFINITIONS
"Adverse Claim" means any mortgage, pledge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(consensual, statutory or other), charge, security arrangement, or any other
encumbrance or other right or claim in, of or on any Person's assets or
properties in favor of any other Person, of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic
effect as any of the foregoing).
"Agent" means Royal Bank of Canada, a Canadian chartered
bank acting through its New York Branch, and any successor or assign thereof
under Section 9.1.
"Agreement" means this Receivables Sale Agreement, as it
may be amended from time to time.
"Aggregate Principal Balance" means, at any time, the
aggregate Principal Balance of all Purchased Receivables at such time.
"Amount Financed" means (i) with respect to any Receivable
that is not a Balloon Payment Receivable, the amount advanced under such
Receivable toward the purchase price of the Financed Vehicle and any related
costs, exclusive of any amount allocable to the premium of force-placed
physical damage
insurance covering the Financed Vehicle; and (ii) with respect to a Balloon
Payment Receivable, an amount equal to the present value of the fixed level
payment monthly installments (not including the amount designated as the
Balloon Payment) under the Balloon Payment Receivable, assuming that each
payment is made on the due date in the month in which such payment is due,
discounted at the APR for such Balloon Payment Receivable.
"Annual Percentage Rate" or "APR" of a Receivable means the
annual rate of finance charges stated in the related Contract.
"Balloon Payment" means, for any Receivable, the dollar
amount of any payment which is not a level monthly payment (other than the
first or last payment made on the Receivable which is minimally different
from the other level payments).
"Balloon Payment Program" means a retail installment sale
program in which the final payment is a Balloon Payment and the Balloon
Payment may be made by the Obligor by (i) payment in full in cash of the
Balloon Payment, (ii) return of the Financed Vehicle to the Servicer in lieu
of paying the Balloon Payment in cash provided that certain conditions are
satisfied or (iii) refinancing the Balloon Payment in accordance with certain
conditions.
"Balloon Payment Receivable" means any Contract listed on
the Schedule of Contracts that provides for amortization of the loan over a
series of fixed level payment monthly installments in accordance with the
actuarial method, the simple interest method or the Rule of 78s, but also
requires a final payment that is greater than the scheduled monthly payments
and is due after payment of such scheduled monthly payments and that may be
made by (i) payment in full in cash of a Balloon Payment, (ii) return of the
Financed Vehicle to the Servicer provided certain conditions are satisfied or
(iii) refinancing the Balloon Payment in accordance with certain conditions.
"Business Day" means any day other than a day on which
banks are not authorized to be open or required to be closed in New York
City.
"Carrying Costs" means, for each Settlement Period, an
amount equal to the sum of:
2
(i) (PD + PF) x DSP x AI
---
360
plus
(ii) SF x DP x APB
--
360
where PD = Purchase Discount
PF = Program Fee
SF = Servicer Fee
DSP = the number of days in such
Settlement Period
DP = thirty days, except for the
initial Settlement Period when
it shall be the number of days
from the Cut-Off Date to June
30, 1998
AI = the average daily Investment for
such Settlement Period
APB = the Aggregate Principal Balance
on the first day of such
Settlement Period.
"Carrying Costs True-up Amount" has the meaning assigned to
that term in Section 3.1(a).
"Certificate of Title" means any certificate, instrument or
other document issued by a state or other governmental authority in respect
of any motor vehicle for the purpose of evidencing the ownership of, or any
Adverse Claim in or against, such motor vehicle.
"CFC" means Chrysler Financial Corporation, a Michigan
corporation.
3
"Collection" means any amount paid by an Obligor or any
other party with respect to a Purchased Receivable, including Liquidation
Proceeds.
"Contract" means, with respect to any Receivable, any and
all instruments, agreements, invoices or other writings pursuant to which
such Receivable arises or which evidence such Receivable.
"Credit and Collection Policy" means the credit and
collection policies and practices of the Servicer and any successor Servicer
relating to Receivables and Contracts, such policies being subject to
unilateral revision or modification at any time by the Servicer or successor
Servicer.
"Credit Facilities" means each of the committed loan
facilities, lines of credit, letters of credit and other forms of credit
enhancement available to the Purchaser which are not Liquidity Facilities.
"Cut-Off Date" means June 25, 1998.
"Dealer" means an automobile or light-duty truck dealership
located within the United States at or through which a Financed Vehicle shall
have been purchased or is proposed to be purchased.
"Delinquency Ratio" means, as of the last calendar day of
any month, a fraction, expressed as a percentage, the numerator of which is
the sum of the Principal Balances of all Receivables which were Delinquent
Receivables as of the last calendar day of such month and the last calendar
day of each of the two immediately preceding months, to the extent such
preceding months exist, and the denominator of which is the sum of the
Aggregate Principal Balance on such last calendar day of such month and on
the last calendar day of each of the two immediately preceding months, to the
extent such preceding months exist.
"Delinquent Receivable" means any Receivable which has 10%
or more of a scheduled payment past due for more than 60 days.
"Designated Account" means an account in the name of and
owned by the Agent, designated by the Agent in a writing delivered to the
Seller pursuant
4
to the provisions of Section 5.1, for the purpose of receiving Collections of
Purchased Receivables.
"Eligible Receivable" means, as of the Cut-Off Date, any
Receivable:
(i) the Obligor of which (a) is a resident of the United
States and (b) is not an affiliate of the originating Dealer or any
of the parties hereto,
(ii) the Obligor of which (a) is not the Obligor of any
Receivable which has 10% or more of a scheduled payment past due for
more than 60 days and (b) is not the subject of any bankruptcy,
insolvency or reorganization proceeding or any other proceeding
seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any
substantial part of its property,
(iii) which is "chattel paper" within the meaning of
Section 9-105 of the UCC of all applicable jurisdictions,
(iv) which is denominated and payable only in United
States dollars in the United States,
(v) which (a) has been originated in the United States
by a Dealer for the retail sale of a Financed Vehicle in the
ordinary course of such Dealer's business and (b) satisfies all
applicable requirements of the Credit and Collection Policy,
(vi) which arises under a Contract (a) which, together
with such Receivable, is (1) in full force and effect and
constitutes the legal, valid and binding obligation of the related
Obligor, enforceable against such Obligor in accordance with its
terms, and (2) subject to no dispute, offset, counterclaim or other
defense, and (b) with respect to which (x) no default, breach,
violation or event permitting acceleration under the terms thereof
has occurred and (y) there has not arisen any condition that, with
notice or lapse of time or both, would constitute a default, breach,
violation or event permitting acceleration under the terms thereof,
5
(vii) which, together with the related Contract, (a) is
secured by a perfected, valid, subsisting and enforceable first
priority security interest in favor of CFC in the related Financed
Vehicle, (b) contains customary and enforceable provisions such that
the rights and remedies of the holder of such security interest are
adequate for realization against the collateral of the benefits of
the security, and (c) was originated and transferred to the Seller
without any conduct constituting fraud or misrepresentation on the
part of the applicable Dealer, CFC or the Seller,
(viii) which, together with the related Contract,
immediately following the execution of such Contract, was purchased
by (and the originating Dealer has validly assigned all of its
right, title and interest therein to) CFC, which, in turn, has sold
such Receivable to the Seller, and such purchase and assignment of
such Receivable, such Contract and the Related Security to CFC is
expressly contemplated in such Contract,
(ix) which, together with the Contract related thereto,
does not contravene any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations
relating to usury, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no part of the
Contract related thereto is in violation of any such law, rule or
regulation,
(x) the Financed Vehicle securing which (a) is free and
clear of any Adverse Claim other than the security interest therein
then being assigned by the Seller to the Agent for the benefit of
the Investors, and no enforcement action, whether by repossession or
otherwise, has been taken with respect to such Financed Vehicle, and
(b) is covered by the Required Insurance in respect of such Financed
Vehicle, and such Required Insurance is in full force and effect,
and the proceeds of the Required Insurance has been assigned to the
Seller and such proceeds are fully assignable to the Agent, for the
benefit of the Investors,
(xi) as to which the Agent has not notified the Seller
that such Receivable or class of Receivables is not acceptable as an
Eligible
6
Receivable, including, without limitation, because such Receivable
arises under a Contract that is not acceptable,
(xii) with respect to the outstanding balance thereof,
(a) the related Contract requires that payment in full of such
outstanding balance is scheduled to be made (1) not earlier than
three months after, and (2) not later than 72 months after the date
any interest therein is purportedly transferred to the Agent for the
benefit of the Investors hereunder and (b) such outstanding balance
is scheduled to be paid in equal consecutive monthly installments,
unless such Receivable arises under a Balloon Payment Program, and
(xiii) which Receivable bears interest at the per annum
rate stated on the face of the related Contract, which per annum
rate remains fixed during the term of such Receivable and accrued
interest on such Receivable is payable monthly, in arrears.
"Fee Agreement" means the agreement, dated as of the date
hereof, between the Agent and the Seller with respect to fees paid in
connection with this Agreement, as the same may be amended from time to time.
"Finance Charges" means, with respect to any Receivable and
its related Contract, any finance, interest or similar charges paid by an
Obligor pursuant to such Contract, including, without limitation, any charge
paid in connection with any extension or adjustment under such Contract
(without regard to whether any such extension or adjustment is permitted
under the terms of this Agreement).
"Financed Vehicle" means an automobile or light-duty truck,
together with all accessions thereto, securing an Obligor's indebtedness
under the applicable Contract.
"Hedging Proceeds" means any amount payable by CFC to the
Agent under an interest rate swap confirmation, dated as of June 29, 1998, as
the same may be amended.
7
"Insolvency Event" means, with respect to a specified
Person, (a) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of such Person or any substantial
part of its property in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part
of its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part
of its property, or the making by such Person of any general assignment for
the benefit of creditors, or the failure by such Person generally to pay its
debts as such debts become due, or the taking of action by such Person in
furtherance of any of the foregoing.
"Insurance Policy" means (i) any comprehensive and
collision, fire, theft or other insurance policy maintained by an Obligor in
which the Servicer is named as loss payee with respect to one or more
Financed Vehicles, and (ii) any credit, life or disability insurance
maintained by an Obligor in connection with any Contract.
"Investment" means the aggregate amount of cash paid by the
Purchaser to the Seller for the Purchase, less the amount of all Collections
received and applied as reductions of Investment pursuant to Article V.
"Investor" means the Purchaser and all other owners by
assignment or otherwise of a Receivable (originally purchased by the
Purchaser) or any interest therein and, to the extent of the undivided
interests so purchased, shall include any participants.
"Liquidated Receivable" means any Receivable liquidated by
the Servicer through the sale of a Financed Vehicle or otherwise.
8
"Liquidation Proceeds" means, with respect to any
Liquidated Receivable, the monies collected in respect thereof, from whatever
source, net of the sum of any amounts expended by the Servicer in connection
with such liquidation and any amounts required by law to be remitted to the
Obligor on such Liquidated Receivable.
"Liquidity Facilities" means each of the loan facilities,
asset purchase agreements, lines of credit and other financial accommodations
available to the Purchaser to support the liquidity of the Purchaser's
commercial paper notes and medium term notes.
"Net Loss" for a month means the sum of the Aggregate
Principal Balance of all Purchased Receivables which are deemed to be
uncollectible for such month, minus any Liquidation Proceeds received during
such month, plus any losses resulting from disposition expenses paid during
such month.
"Net Loss Ratio" means, as of the last day of any month, a
fraction, expressed as a percentage, the numerator of which is the product of
(i) the sum of the Net Loss for such month and the two immediately preceding
months, to the extent such months exist, and (ii) a factor of 12 divided by
the number of months included in the sum in clause (i), and the denominator
of which is the average of the Aggregate Principal Balance on the first day
of the month and the first day of the two immediately preceding months, to
the extent such months exist.
"Obligor" means any Person which is obligated to make
payment on a Receivable.
"Person" means any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"Precomputed Receivable" means any Receivable under which
the portion of a payment allocable to earned interest (which may be referred
to in the related Contract as an add-on finance charge) and the portion
allocable to the Amount Financed is determined according to the sum of
periodic balances or the sum of monthly balances or any equivalent method or
which is a monthly actuarial receivable.
9
"Principal Balance" means with respect to any Receivable
the outstanding principal balance thereof determined in accordance with the
Credit and Collection Policy and the Servicer's customary calculation
methods, provided, that with respect to a Receivable identified as a Balloon
Payment Receivable, the Principal Balance shall not include the Balloon
Payment.
"Program Fee" means the fee specified as such in the Fee
Agreement which shall include all annual expenses, including but not limited
to legal fees, audit fees, filing and administrative fees, liquidity and
credit enhancement fees and dealer commissions.
"Purchase" has the meaning assigned to that term in
Section 2.1.
"Purchase Date" means the date on which the conditions
precedent to the Purchase described in Section 4.1 have been satisfied or
waived.
"Purchase Discount" has the meaning assigned to that term
in Section 3.1(a).
"Purchased Receivable" means an Eligible Receivable arising
under a Contract listed on the Schedule of Contracts delivered to the Agent
prior to the Purchase Date being sold to the Purchaser under this Agreement.
Each Purchased Receivable is a Simple Interest Receivable.
"Purchaser" means Old Line Funding Corp. and any successor
or assign of the Purchaser that is a receivables investment company which in
the ordinary course of its business issues commercial paper or other
securities to fund its acquisition and maintenance of receivables.
"Receivable" means the indebtedness and other obligations
of an Obligor arising under a Contract, whether such indebtedness or other
obligations constitute accounts, chattel paper, instruments or general
intangibles, and including, without limitation, the obligation to pay any
Finance Charges with respect thereto.
"Receivables Files" means the documents specified in
Section 6.3.
10
"Related Security" means, with respect to any Receivable:
(i) all of the Seller's interest in the Financed
Vehicle, the financing of the purchase of which gave rise to such
Receivable, including, without limitation, all of the Seller's
right, title and interest in and to the proceeds of the Insurance
Policies, and all warranties, indemnities, service obligations and
other contract rights issued or granted by, or otherwise existing
under applicable law against, the manufacturer or Dealer in respect
of such Financed Vehicle,
(ii) all other security interests or liens and
property subject thereto from time to time, if any, purporting to
secure payment of such Receivable, whether pursuant to the Contract
related to such Receivable, or otherwise, together with all
financing statements signed by an Obligor describing any collateral
securing such Receivable, and including, without limitation, all
security interests or liens, and property subject thereto, granted
by any Person (whether or not the primary Obligor on such
Receivable) under or in connection therewith,
(iii) all books, records and other information relating to
such Receivable, including, without limitation, all Contracts,
(iv) all service contracts and other contracts and
agreements relating to such Receivable, and
(v) all proceeds of any of the foregoing.
"Required Insurance" means an Insurance Policy with respect
to a Financed Vehicle (i) that has been issued to the Obligor by an insurance
company acceptable to the Servicer, (ii) that provides comprehensive
collision, fire, theft and other physical damage coverage, (iii) that is in
an amount not less than the market value of the applicable Financed Vehicle
and (iv) that has the Servicer noted as the loss payee thereon.
"Reserve" means an amount equal to 5.25% of the Investment
as of the Purchase Date, which will be delivered in the form of Receivables.
11
"Sale Documents" means this Agreement, the Fee Agreement,
the Exhibits hereto to which the Seller is a party and all other
certificates, instruments, agreements and documents executed from time to
time by the Seller in connection with the transactions contemplated in this
Agreement.
"Scheduled Payment" means the required monthly payment
arising from a Contract for a Precomputed Receivable.
"Schedule of Contracts" means the list of Contracts
delivered to the Agent, such list being in microfiche, paper or electronic
format.
"Seller" means Premier Receivables L.L.C., a Michigan
limited liability company, and its successors and permitted assigns.
"Servicer" means CFC or any replacement thereof under
Article VI.
"Servicer Default" has the meaning assigned to that term
in Section 6.2.
"Servicer Fee" has the meaning assigned to the term in
Section 3.1(b).
"Servicer Report" means the report in the form of Exhibit A
hereto to be provided by the Servicer in accordance with Section 5.4 of this
Agreement, which report shall include a calculation of the Delinquency Ratio
and the Net Loss Ratio for the applicable month.
"Settlement Date" means the 10th day of each month
following a related Settlement Period (or if such 10th day is not a Business
Day, the next succeeding Business Day).
"Settlement Period" means a calendar month, provided, that,
for purposes of the initial Settlement Period, such period shall commence as
of the Purchase Date and end on June 30, 1998; provided, however, that for
purposes of calculating the Servicer Fee for the initial Settlement Period,
such period shall commence as of the Cut-Off Date and end on June 30, 1998.
12
"Simple Interest Method" means the method of allocating a
fixed level payment to principal and interest, pursuant to which the portion
of such payment that is allocated to interest is equal to the product of (a)
the fixed rate of interest, (b) the unpaid principal balance and (c) a
fraction, the numerator of which is the number of days elapsed since the
preceding payment of interest was made and the denominator of which is 365,
and the remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under
which the portion of a payment allocable to interest and the portion
allocable to principal is determined in accordance with the Simple Interest
Method.
ARTICLE II: THE SALE AND PURCHASE
SECTION 2.1. Sale and Purchase. Upon the terms and subject
to the conditions set forth herein, effective as of the Purchase Date,
(i) the Seller hereby sells, transfers and assigns to
the Purchaser all of the Seller's right, title and interest to and
in the Purchased Receivables, together with the Related Security and
Collections from and after the Cut-Off Date relating to such
Purchased Receivables,
(ii) the Purchaser hereby purchases and accepts the
transfer and assignment of all of the Seller's right, title and
interest to and in the Purchased Receivables, together with the
Related Security and Collections relating to such Purchased
Receivables (the foregoing sale, transfer and assignment being
referred to as the "Purchase") and
(iii) the Purchaser hereby, without any further action
hereunder, does sell, transfer, assign, set over and otherwise
convey to the Seller, effective as of the Purchase Date, without
recourse, representation or warranty of any kind, all right, title
and interest of the Purchaser in and to the Balloon Payments, all
monies due and to become due and all amounts received with respect
thereto and all proceeds thereof.
13
SECTION 2.2. Purchase Price. The purchase price payable by
the Purchaser for the Purchase shall equal the Aggregate Principal Balance as
of the Cut-Off Date. Such purchase price shall be comprised of a cash
component and a deferred payment component. The cash component of the
purchase price shall be paid by the Purchaser to the Seller on the Purchase
Date and shall equal the Aggregate Principal Balance of the Purchased
Receivables as of the Cut-Off Date minus the Reserve calculated as of such
Purchase Date. Upon and after the reduction of the Investment to zero and the
payment in full of all other amounts due to the Purchaser hereunder, all
Collections or other cash received by the Purchaser on account of Receivables
and the interest of the Purchaser therein and all Receivables held by or on
behalf of the Purchaser will be transmitted in the form received by the
Purchaser to the Seller. The transmission of such amount by the Purchaser
shall be deemed to satisfy the payment of the deferred payment component of
the purchase price under this Section 2.2.
SECTION 2.3. Optional Termination. Chrysler Financial
Corporation shall have the right, on five (5) Business Days' written notice
to the Agent, at any time following the reduction of the Aggregate Principal
Balance hereunder to a level that is less than ten percent (10%) of the
Aggregate Principal Balance on the Purchase Date, to purchase from the
Purchaser all, and not part, of the then outstanding Purchased Receivables,
together with the Related Security and Collections relating to such Purchased
Receivables. The purchase price in respect thereof shall be an amount equal
to the Investment outstanding at such time plus all other amounts payable
(whether due or accrued) hereunder or under any other Sale Document to the
Investors or the Agent at such time. Such purchase shall be without
representation, warranty or recourse of any kind by, on the part of or
against the Investors or the Agent.
ARTICLE III: FEES AND EXPENSES
SECTION 3.1. Determination of Carrying Costs. In
calculating the amount of Carrying Costs to be distributed each Settlement
Period out of Collections of Purchased Receivables:
(a) Purchase Discount.
14
(i) "Purchase Discount" shall mean an amount equal to
the weighted average of the following:
(1) the weighted average of the discount rates on
all commercial paper notes issued at a discount and
outstanding during the related Settlement Period (other than
commercial paper notes the proceeds of which are used by the
Purchaser to (x) purchase receivables, or extend financing
secured thereby, at a fixed interest rate or (y) conduct any
arbitrage activities of the Purchaser), converted to an annual
yield-equivalent rate on the basis of a 360-day year;
(2) the weighted average of the annual interest
rates payable on all interest-bearing commercial paper notes
outstanding during the related Settlement Period (other than
the commercial paper notes described in clauses (x) and (y) of
paragraph (1) above), on the basis of a 360-day year; and
(3) the weighted average of the annual interest
rates applicable to any Liquidity Facilities under which the
Purchaser has borrowed loans or sold interests during the
related Settlement Period which loans shall be borrowed only
after a determination by the Purchaser that financing its
activities during such period by issuing commercial paper
notes would not be practicable or cost efficient;
provided that, to the extent that the Investment is funded by a
specific issuance of commercial paper notes and/or by a specific
borrowing or sale under a Liquidity Facility or a Credit Facility,
the Purchase Discount shall equal the rate or weighted average of
the rates applicable to such issuance or borrowing or sale,
provided, further, that, for purposes of the foregoing, the interest
rates applicable under any Liquidity Facility shall not exceed the
reserve adjusted "LIBO Rate" quoted by the Agent plus 0.25% per
annum (unless not available) and the interest rates under any Credit
Facility shall not exceed the rate of interest per annum published
on such day (or, if not then published, on the most recently
preceding day) in The Wall Street Journal as the "Prime Rate" per
annum.
15
(ii) Two Business Days prior to the end of each
Settlement Period, the Agent shall determine the Purchase Discount
pursuant to (i) above by using the actual Purchase Discount for each
day elapsed in such month and estimating the Purchase Discount for
each remaining day in such month. In addition, the Agent shall
concurrently notify the Servicer of the actual Purchase Discount for
any days during the immediately preceding Settlement Period with
respect to which the Purchase Discount was estimated, and the
difference, if any, between the Carrying Costs actually paid using
the estimated Purchase Discount and the Carrying Costs which would
have been paid had the actual Purchase Discount been available (such
differential being the "Carrying Costs True-up Amount"). If the
amount of Carrying Costs paid for such immediately preceding
Settlement Period based upon an estimated Purchase Discount was less
than the amount of Carrying Costs for such Settlement Period based
upon the actual Purchase Discount, the amount of Collections
remitted to the Agent pursuant to Section 5.2 shall be increased by
an amount equal to the Carrying Costs True-up Amount, or, if the
amount of Carrying Costs paid for such immediately preceding
Settlement Period based upon an estimated Purchase Discount was
greater than the amount of Carrying Costs for such Settlement Period
based upon the actual Purchase Discount, the amount of Collections
remitted to the Agent pursuant to Section 5.2 shall be decreased by
an amount equal to the Carrying Costs True-up Amount.
(b) Servicer Fee. "Servicer Fee" shall mean a servicer fee
in respect of each Settlement Period, equal to 1.0% per annum (assuming a
30/360 day basis) of the Principal Balance of Purchased Receivables on the
first day of such Settlement Period; the Servicer Fee shall be remitted by
the Purchaser to the Servicer from Collections received pursuant to Article V
hereof. If CFC is acting as the Servicer, then the Servicer shall retain an
amount equal to the Servicer Fee (in full satisfaction of the payment of such
fee to the Servicer) out of amounts required to be remitted by the Servicer
in accordance with Section 5.3(a).
SECTION 3.2. Interest on Unpaid Amounts. To the extent
that the Seller or Servicer fails to pay when due to the Investors or the
Agent any fee, expense or other amount payable hereunder or under any Sale
Document, interest shall be due and payable on such unpaid amount, for each
day until paid in full, at
16
the rate of interest per annum published on such day (or, if not then
published, on the most recently preceding day) in The Wall Street Journal as
the "Prime Rate." Changes in the rate payable hereunder shall be effective on
each date on which a change in the "Prime Rate" is so published.
ARTICLE IV: CONDITIONS PRECEDENT TO PURCHASE
SECTION 4.1. Conditions Precedent to Purchase. The
following conditions must be satisfied before the Purchaser will make the
Purchase:
(a) Absence of Liens. The Seller shall certify that all
Purchased Receivables, Related Security and all proceeds thereof are free and
clear of any Adverse Claim.
(b) Financing Statements. The Agent will have received
acknowledgment copies of UCC-1 financing statements, and all other documents
reasonably requested by the Agent, to evidence the perfection of the interest
of the Agent on behalf of the Investors in the Purchased Receivables, the
Related Security and the Collections.
(c) Schedule of Contracts. The Agent will have received
the Schedule of Contracts.
(d) Seller Resolutions. The Agent will have received a
certificate of the Seller attesting to:
(i) the resolutions of the majority interest of the
Seller's members authorizing the execution by the Seller of the Sale
Documents to be executed by the Seller;
(ii) the names and signatures of the officers of the
Seller's members authorized to execute the Sale Documents to be
executed by the Seller; and
(iii) the completeness and correctness of the attached
articles of organization and operating agreement of the Seller.
17
(e) Servicer Resolutions. The Agent will have received a
certificate of the Servicer's Secretary or Assistant Secretary
attesting to:
(i) the resolutions of the Servicer's Board of
Directors (or an executive committee thereof) authorizing the
execution by the Servicer of the Sale Documents to be executed by
the Servicer;
(ii) the names and signatures of the officers of the
Servicer authorized to execute the Sale Documents to be executed by
the Servicer; and
(iii) the completeness and correctness of the attached
restated articles of incorporation and by-laws of the Servicer.
(f) Legal Opinion of Counsel to the Seller and the
Servicer. The Agent will have received an opinion from counsel to the Seller
and the Servicer, such counsel being "in-house" counsel unless otherwise
required by any agencies providing a credit rating to the transaction
contemplated hereby, substantially in the form attached hereto as Exhibit B,
together with such other matters as the Agent may reasonably request.
(g) Good Standing Certificates. The Agent will have
received certificates of recent date issued by the Secretary of State of the
State of Michigan, as to the legal existence and good standing of the Seller
and the Servicer.
(h) Representations and Covenants. On and as of the
Purchase Date (i) the representations and warranties of the Seller and the
Servicer in Article VII shall be true and correct with the same effect as if
made on such date and (ii) the Seller and the Servicer shall be in compliance
with the covenants set forth in Article VIII. The Seller and the Servicer, by
accepting the proceeds of such Purchase, shall be deemed to have certified as
to the truth and accuracy of each of the matters described in the foregoing
clauses (i) and (ii), both before and after giving effect to such Purchase.
(i) Other Documents. The Agent will have received all
other documents that the Agent had reasonably requested from the Seller or
the Servicer.
18
ARTICLE V: SETTLEMENT PROCEDURES
SECTION 5.1. Collections. The Servicer shall segregate all
Collections from other funds of the Servicer and the Seller within two
Business Days of receipt thereof and hold such Collections in trust for the
Investors in the Designated Account, provided, however, notwithstanding the
foregoing, for so long as (i) CFC remains the Servicer, (ii) no Servicer
Default shall have occurred and be continuing and (iii) CFC maintains a
long-term unsecured senior debt rating of at least BBB- by Standard & Poor's
Ratings Group and Baa3 by ▇▇▇▇▇'▇ Investors Service, Inc., the Servicer shall
not be required to segregate all Collections and shall remit such Collections
with respect to each Settlement Period to the Agent on the Settlement Date
relating to such Settlement Period. The Seller will not deposit or otherwise
credit, or cause or permit to be so deposited or credited, to the Designated
Account cash or cash proceeds other than Collections of the Purchased
Receivables.
SECTION 5.2. Application of Collections. All collections
for the Settlement Period shall be applied by the Servicer as follows:
(a) With respect to each Receivable (other than a Balloon
Payment Receivable), payments by or on behalf of the Obligor shall be applied
in the case of Precomputed Receivables, to the Scheduled Payment and, in the
case of Simple Interest Receivables, to interest and principal in accordance
with the Simple Interest Method.
(b) All Liquidation Proceeds with respect to any Balloon
Payment Receivable shall be applied first to the related Receivable and only
after the payment in full of the Principal Balance thereof plus accrued but
unpaid interest thereon shall any such Liquidation Proceeds be applied to, or
constitute, the related Balloon Payment.
SECTION 5.3. Application of Collections on Settlement
Dates. The Servicer will, by 3:00 P.M. (New York time) on each Settlement
Date, from Collections received during the preceding Settlement Period, pay
to the Agent and the Agent shall distribute such Collections, together with
any Hedging Proceeds received by the Agent with respect to such Settlement
Period, to the Investors (a) first, an amount equal to the Carrying Costs for
the Settlement Period (as such
19
amount shall be increased or decreased by the Carrying Costs True-up Amount,
if any, for the immediately preceding Settlement Period as determined
pursuant to Section 3.1(a)(ii)) and (b) second, all remaining Collections as
a reduction to Investment.
SECTION 5.4. Servicer Report. The Servicer will provide the
Agent, either in writing or electronically, with a Servicer Report with
respect to each Settlement Period no later than 15 days following the end of
such Settlement Period (or, if such 15th day is not a Business Day, the next
succeeding Business Day).
SECTION 5.5. Repurchase Obligations. If on any day the
Agent determines that the Seller has extended the maturity of any Contract
relating to a Purchased Receivable or that a Purchased Receivable was not an
Eligible Receivable on the Purchase Date, the Seller agrees to pay to the
Agent for the account of the Investors the amount of the outstanding balance
of such Receivable in full, and the subject Purchased Receivable shall
thereupon be deemed reconveyed to the Seller. Any amounts received by the
Agent pursuant to this Section 5.5 with respect to a Purchased Receivable
shall be applied to reduce the Investment.
ARTICLE VI: SERVICING OF RECEIVABLES
SECTION 6.1. Appointment and Duties of Servicer. The Agent
and the Seller each hereby appoint CFC as the Servicer and CFC accepts such
appointment. The Servicer, for the benefit of the Investors (to the extent
provided herein), shall manage, service, administer, make collections and
discharge liens on the Purchased Receivables with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to all
comparable automotive receivables that it services for itself or others. If
the Servicer shall commence a legal proceeding to enforce a Purchased
Receivable, the Investors shall thereupon be deemed to have automatically
assigned, solely for the purpose of collection, such Purchased Receivables to
the Servicer. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Purchased Receivable on the ground that
it shall not be a real party in interest or a holder entitled to enforce such
Purchased Receivable, the Agent shall, at the Servicer's
20
expense and direction, take steps to enforce such Receivable, including
bringing suit in its name or the name of the Investors. The Agent shall upon
the written request of the Servicer furnish the Servicer with any powers of
attorney and other documents reasonably necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties hereunder.
SECTION 6.2. Replacement of Servicer.
(a) If any of the following events (a "Servicer Default")
shall occur and be continuing:
(i) any failure by the Servicer to make any payment
or deposit required to be made hereunder and the continuance of such
failure for a period of five Business Days;
(ii) any representation or warranty made by the
Servicer in Section 7.1 or any information set forth in a Servicer
Report or other certificate delivered to the Agent, shall prove to
have been incorrect in any material respect when made, which
continues to be incorrect in any material respect for a period of
sixty days after the earlier of the date on which an officer of the
Servicer has actual knowledge thereof and the date on which written
notice thereof has been given to the Servicer requiring the same to
be remedied, by the Agent;
(iii) failure on the part of the Servicer to observe
or perform in any material respect any other term, covenant or
agreement in this Agreement or any other Sale Document which
continues unremedied for sixty days after the earlier of the date on
which an officer of the Servicer has actual knowledge of such
failure and the date on which written notice of such failure has
been given to the Servicer requiring the same to be remedied, by the
Agent; or
(iv) an Insolvency Event with respect to the Seller or
the Servicer,
then, so long as such Servicer Default shall not have been remedied, the
Agent shall have the right to remove CFC (or any successor Servicer) as
Servicer by
21
giving written notice thereof to the Servicer. On and after receipt of such
written notice, all authority and power of the Servicer under this Agreement
shall, without further action, pass to and be vested in such successor
Servicer as may be appointed by the Agent; provided however, that the
Servicer cannot be removed until a successor Servicer is selected and
appointed and such successor Servicer meets industry-wide standards for being
a Servicer of retail automotive receivables.
(b) If CFC is removed as Servicer, CFC shall transfer to
any successor Servicer designated by the Agent all records, correspondence
and documents (including computer software) requested by the Agent or such
successor Servicer and permit such Persons to have access to, and to copy,
all software used by the Servicer in the collection, administration or
monitoring of the Purchased Receivables. In the case of software that is then
licensed by, or otherwise made available to, the Servicer from or by any
third party, the Servicer shall use its best efforts to obtain such consents
and otherwise take all actions necessary in order to enable any Servicer
hereunder to succeed to all rights of CFC to the quiet use and enjoyment of
such software for the purpose of discharging the obligations of the Servicer
under or in connection with the Sale Documents.
(c) Following the occurrence of a Servicer Default, (i)
the Agent may (a) notify Obligors of the ownership interest of the Agent on
behalf of the Investors hereunder in the Purchased Receivables and the
Related Security, (b) notify each issuer of an Insurance Policy of the
ownership interest of the Agent on behalf of the Investors hereunder in the
Purchased Receivables and in the Related Security (including the applicable
Financed Vehicle and Insurance Policy thereon), and (c) direct the Seller to,
whereupon the Seller immediately shall, note the interest of the Agent on
behalf of the Investors hereunder on each Certificate of Title relating to
each Financed Vehicle and (ii) the Investors and the Agent shall have, in
addition to all other rights and remedies under this Agreement or otherwise,
all other rights and remedies provided under the Uniform Commercial Code of
the applicable jurisdiction and other applicable laws, which rights shall be
cumulative.
(d) In the event of a Servicer Default, each of the Seller
and the Servicer (with respect to itself) will, unless the Agent has
otherwise consented in writing, at any reasonable time, permit the Agent or
its agents or representatives,
22
to visit and inspect any of its properties, to examine its books of account
and other records and files relating to Purchased Receivables (including,
without limitation, computer tapes and disks) and to discuss its affairs,
business, finances and accounts with its officers and employees. The Seller
shall pay to the Agent and the Investors any and all reasonable costs and
expenses of the Agent and the Investors, if any (including reasonable counsel
fees and expenses) in connection with the enforcement of this Agreement and
the other documents delivered hereunder.
SECTION 6.3. Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Agent and the Seller hereby irrevocably appoint the Servicer, and the
Servicer hereby accepts such appointment, to act for the benefit of the
Investors and the Seller as custodian of the following documents or
instruments which are hereby or will hereby be constructively delivered to
the Agent, as pledgee of the Seller, as of the Purchase Date with respect to
each Purchased Receivable (the "Receivable Files"):
(a) the fully executed original of the Contract related to
such Purchased Receivable;
(b) the original credit application fully executed by the
Obligor;
(c) the original Certificate of Title or such documents
that the Servicer or the Seller shall keep on file, in accordance with its
customary procedures, evidencing the security interest of the Seller in the
Financed Vehicle; and
(d) any and all other documents that the Servicer or the
Seller shall keep on file, in accordance with its customary procedures,
relating to a Purchased Receivable, an Obligor or a Financed Vehicle.
SECTION 6.4. Duties of Servicer as Custodian. The Servicer
shall hold the Receivable Files as custodian for the benefit of the Seller
and the Investors and maintain such accurate and complete accounts, records
and computer systems pertaining to each Receivable File as shall enable the
Seller to comply with this Agreement. In performing its duties as custodian
the Servicer
23
shall act with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to receivable files relating to all
comparable automotive receivables that the Servicer services for itself or
others.
SECTION 6.5. Effective Period and Termination. The
Servicer's appointment as custodian shall become effective as of the Cut-Off
Date and shall continue in full force and effect until terminated pursuant to
this Section. If CFC shall cease to be Servicer in accordance with the
provisions of this Agreement, the appointment of such Servicer as custodian
shall be terminated by the Agent. The Agent may terminate the Servicer's
appointment as custodian at any time following the occurrence of a Servicer
Default under Section 6.2(a) upon thirty days written notification to the
Servicer. As soon as practicable after any termination of such appointment,
the Servicer shall deliver the Receivable Files to the Agent or to a Person
designated by the Agent at a place or places as the Agent may reasonably
designate.
ARTICLE VII: REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Seller
and the Servicer. Each of the Seller and the Servicer makes, with respect to
itself, the following representations and warranties to the Investors and the
Agent.
(a) It is a limited liability company or corporation, as
applicable, duly organized or incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization or
incorporation and is duly qualified and in good standing as a foreign
corporation or limited liability company in each jurisdiction where the
failure to be so qualified could materially adversely affect its ability to
perform its obligations hereunder.
(b) The execution, delivery and performance by the Seller
and the Servicer of the Sale Documents are within the Seller's and the
Servicer's respective corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) the Seller's or the
Servicer's respective articles of organization or charter, as applicable, or
operating agreement or by-laws, as applicable, or (ii) any law or contractual
restriction binding on or affecting the Seller or the Servicer, and do not
result in or require the creation of any Adverse
24
Claim (other than pursuant hereto) upon or with respect to any of its
properties; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Seller or the
Servicer of the Sale Documents, or for the perfection of or the exercise by
the Agent on behalf of the Investors of its rights and remedies under the
Sale Documents, except for the filing of the financing statements referred to
in Section 4.1(b).
(d) Each Sale Document constitutes the legal, valid and
binding obligation of the Seller and the Servicer, respectively, enforceable
in accordance with its terms.
(e) There is no pending or threatened action or proceeding
affecting the Seller or the Servicer or any of its subsidiaries before any
court, governmental agency or arbitrator which may materially adversely
affect (i) its financial condition or operations or (ii) its ability to
perform its obligations under the Sale Documents, or which could affect the
legality, validity or enforceability of any Sale Document or of the interest
of the Agent on behalf of the Investors in the Purchased Receivables.
(f) The Seller is the legal and beneficial owner of the
Receivables, the Related Security and Collections, free and clear of any
Adverse Claim, except as created by this Agreement; upon consummation of the
Purchase, the Agent on behalf of the Investors will acquire a valid and
perfected first priority ownership interest in the Purchased Receivables and
in the Related Security and the Collections with respect thereto, free and
clear of any Adverse Claim except as created by this Agreement.
(g) The information provided by the Seller to the Servicer
for use in each Servicer Report prepared under Section 5.4 and all
information and Sale Documents furnished or to be furnished at any time by
the Seller to the Agent in connection with this Agreement is or will be
accurate in all material respects as of its date, and no such document will
contain any untrue statement of a material fact
25
or will omit to state a material fact which is necessary to make the facts
stated therein not misleading.
(h) The Seller is treating the conveyance of the interest
in the Purchased Receivables and the Collections under this Agreement to the
Agent on behalf of the Investors as a sale for purposes of generally accepted
accounting principles.
ARTICLE VIII: COVENANTS
SECTION 8.1. Affirmative Covenants of the Seller and the
Servicer. Until the Investment is reduced to zero and all other amounts due
to the Agent and the Investors hereunder have been paid in full, each of the
Seller and the Servicer (with respect to itself) will, unless the Agent has
otherwise consented in writing:
(a) Maintain its existence in the jurisdiction of its
organization or incorporation, and qualify and remain qualified in good
standing as a foreign corporation or limited liability company in each
jurisdiction where the failure to be so qualified could materially adversely
affect its ability to perform its obligations hereunder.
(b) Maintain and implement administrative and operating
procedures, and keep and maintain all records and other information,
reasonably necessary or advisable for the collection of the Purchased
Receivables (including, without limitation, records adequate to permit the
daily identification of Purchased Receivables and all Collections and
adjustments to Purchased Receivables).
(c) At its expense timely and fully perform and comply
with all material provisions and covenants required to be observed by CFC or
the Seller under the Contracts related to the Purchased Receivables.
(d) Comply in all material respects with the Credit and
Collection Policy in regard to each Purchased Receivable and any Contract
related to such Receivable.
26
(e) Treat the conveyance of the interest in the Purchased
Receivables and the Collections under this Agreement as a sale for purposes
of generally accepted accounting principles.
SECTION 8.2. Reporting Requirements of the Servicer. Until
the Investment is reduced to zero and all amounts due to the Agent and the
Investors hereunder have been paid in full, the Servicer will, unless the
Agent shall otherwise consent in writing, furnish to the Agent:
(a) the Servicer Report as required under Section 5.4;
(b) as soon as possible, and in any event within thirty
days, a description and, if applicable, the steps being taken with respect
thereto by the Persons affected thereby of: (i) the occurrence of any
Servicer Default or event which with the passage of time or the giving of
notice or both would constitute a Servicer Default or (ii) the institution of
any litigation, arbitration proceeding or governmental proceeding which could
be reasonably likely to have a material adverse effect on the performance by
the Servicer of its obligations under this Agreement or the other Sale
Documents or the collectibility of the Purchased Receivables; and
(c) such other information, documents, records or reports
respecting the Purchased Receivables or the condition or operations,
financial or otherwise, of the Servicer or the Seller as the Agent may from
time to time reasonably request.
SECTION 8.3. Negative Covenants of the Seller and the
Servicer. Until the Investment is reduced to zero and all other amounts due
to the Agent and the Investors hereunder have been paid in full, neither the
Seller nor the Servicer will, unless the Agent has otherwise consented in
writing;
(a) Except as provided herein, sell, assign (by operation
of law or otherwise) or otherwise dispose of, or create or suffer to exist
any Adverse Claim upon or with respect to any Purchased Receivables, the
Related Security or any Collections or assign any right to receive income in
respect thereof.
27
(b) Amend or otherwise modify the terms of any Purchased
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto, in each case, in any manner which is inconsistent with the
Credit and Collection Policy.
SECTION 8.4. Protection of the Purchaser's Interest.
(a) Until the Investment is reduced to zero and all other
amounts due to the Agent and the Investors hereunder have been paid in full,
each of the Seller and the Servicer agrees that from time to time, at its
expense, it will promptly execute and deliver all instruments and documents
and take all action that the Agent may from time to time reasonably request
in order to perfect, evidence and protect the validity, enforceability,
perfection and priority of the interest of the Agent on behalf of the
Investors in the Purchased Receivables, the Related Security and the
Collections and to enable the Agent and/or the Investors to exercise or
enforce any of its rights hereunder. Without limiting the generality of the
foregoing, the Seller and the Servicer will: (i) on or prior to the date
hereof, ▇▇▇▇ its master data processing records with a legend describing the
Agent's and the Investors' interests therein; and (ii) upon the request of
the Agent, execute and file such financing or continuation statements or
amendments thereto or assignments thereof as may be requested by the Agent,
provided, however, that the Seller is not required to deliver the Contracts
to anyone other than the Servicer;
(b) To the fullest extent permitted by applicable law, the
Agent shall be permitted to sign and file continuation statements and
amendments thereto and assignments thereof without the Seller's signature.
Carbon, photographic or other reproduction of this Agreement or any financing
statement shall be sufficient as a financing statement.
ARTICLE IX: AGENT
SECTION 9.1. Appointment of Agent. The Investors have
appointed Royal Bank of Canada as their initial Agent. The Agent is
responsible for administering and enforcing this Agreement and fulfilling all
other duties expressly assigned to it in this Agreement. The Investors have
granted the Agent the authority to take all actions necessary to assure the
Seller's compliance with
28
the terms of this Agreement and to take all actions required or permitted to
be performed by the Investors under this Agreement.
ARTICLE X: MISCELLANEOUS
SECTION 10.1. Amendments, Etc. No amendment or waiver of,
or consent to the Seller's or the Servicer's departure from, any provision of
this Agreement shall be effective unless it is in writing and signed by the
Agent, on behalf of the Investors, and in the case of any amendment, by the
Seller and the Servicer and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which it was given.
SECTION 10.2. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein,
be in writing (including photocopy, facsimile, electronic mail or other
digital communication) and sent, as to each party hereto, at its address set
forth under its name on the signature pages hereto, or at such other address
as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective when sent.
SECTION 10.3. No Waiver; Remedies. No failure on the part
of the Agent to exercise, and no delay in exercising, any right hereunder or
under any Sale Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 10.4. Binding Effect; Assignability.
(a) This Agreement shall be binding upon and inure to the
benefit of the Seller, the Servicer, the Investors, the Agent and their
respective successors and assigns, except that the Seller shall not have the
right to assign any interest herein without the prior written consent of the
Agent. The Investors may assign any of their rights or obligations hereunder
to any Person; provided that in the case of any such assignment proposed to
be made prior to the occurrence of a Servicer
29
Default, the consent of the Seller (which consent shall not be unreasonably
withheld) shall be required.
(b) This Agreement shall create and constitute the
continuing obligation of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time as the Investment is
reduced to zero and all other amounts due to the Agent and the Investors
hereunder have been paid in full; provided, however, that the rights and
remedies of the Purchaser under Article IX and the provisions of Section 10.7
shall survive any termination of this Agreement.
SECTION 10.5. Governing Law. This Agreement and the Sale
Documents shall be governed by, and construed in accordance with, the laws of
the State of New York, except to the extent that the perfection of the
interests of the Investors in the Receivables or remedies hereunder, in
respect thereof, are governed by the laws of a jurisdiction other than the
State of New York.
SECTION 10.6. Construction of the Agreement. The parties
hereto intend that the conveyance of the interest in the Purchased
Receivables by the Seller to the Agent on behalf of the Investors shall be
treated as sales for purposes of generally accepted accounting principles.
If, despite such intention, a determination is made that such transactions
shall not be treated as sales, then this Agreement shall be interpreted to
constitute a security agreement and the transactions effected hereby shall be
deemed to constitute a secured financing by the Agent on behalf of the
Investors to the Seller under applicable law. For such purpose, the Seller
hereby grants to the Agent on behalf of the Investors a continuing security
interest in the Purchased Receivables and the Related Security and
Collections related thereto to secure the obligations of the Seller to the
Agent on behalf of the Investors hereunder.
SECTION 10.7. No Proceedings. Each of the Seller, the
Agent, the Investors and the Servicer each hereby agrees that it will not
institute against the Purchaser any bankruptcy, reorganization, insolvency or
similar proceeding until the date which is one year plus one day since the
last day on which any commercial paper notes or medium term notes issued by
the Purchaser were outstanding.
30
SECTION 10.8. Confidentiality. The Investors and the Agent
agree to maintain the confidentiality of any information regarding the Seller
and Servicer obtained in accordance with the terms of this Agreement which is
not publicly available, but the Investors and the Agent may, with advance
notice to the Seller and Servicer, reveal such information (a) to applicable
rating agencies, liquidity providers and credit providers, (b) as necessary
or appropriate in connection with the administration or enforcement of this
Agreement or its funding of the Purchase under this Agreement, (c) as
required by law, government regulation, court proceeding or subpoena or (d)
to bank regulatory agencies and examiners.
SECTION 10.9. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.10. Indemnification by Seller of Investors, etc.
Without limiting any other rights which the Investors, the Agent and their
respective officers, directors, employees, agents and Affiliates may have
hereunder or under applicable law, the Seller hereby indemnifies such parties
and holds them harmless from and against any and all damages, losses, claims,
liabilities and related costs and expenses (including attorneys' fees and
disbursements) incurred by any of them arising out of or resulting from this
Agreement or the purchase by the Purchaser of any interest in the Purchased
Receivables or the Related Security and Collections related thereto,
including, without limitation:
(a) any warranty or products liability claim allegedly
arising out of or in connection with merchandise or services which are the
subject of, or were financed with the proceeds of, any Contract under which
any of the Purchased Receivables arise, or any use or misuse by any Person of
any Financed Vehicle (including, without limitation, any use involving the
handling or disposition of any hazardous substance or waste material);
31
(b) the failure to vest in the Agent for the benefit of the
Investors an ownership or first perfected security interest in the Purchased
Receivables, the Related Security and Collections in respect thereof, free
and clear of any Adverse Claim other than as authorized hereunder; and
(c) the commingling of Collections of Purchased Receivables
at any time with other funds.
32
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed by their duly authorized officers as of the date set forth on
the cover page of this Agreement.
SELLER PREMIER RECEIVABLES L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary of Premier Auto
Receivables Company, a Member of
the Seller
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Tel. No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
SERVICER CHRYSLER FINANCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Treasurer
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Assistant Secretary
Tel. No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
PURCHASER OLD LINE FUNDING CORP.
33
By: ROYAL BANK OF CANADA,
as attorney in fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Manager
Address: c/o Lord Securities Corporation
Two Wall Street, 19th Floor
New York, NY 10005
Attention: Vice President
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Manager
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Managing Director,
North American
Securitization Group
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
35