<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 1998
REGISTRATION NO. 33-91848
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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FLEETWOOD CREDIT RV RECEIVABLES TRUSTS
(Issuer with respect to the Securities)
FLEETWOOD CREDIT RECEIVABLES CORP.
(Originator of the Trusts described herein)
(Exact name of Registrant as specified in charter)
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<S> <C>
CALIFORNIA 33-0444724
(State or other jurisdiction of incorporation
or organization) (I.R.S. Employer Identification No.)
</TABLE>
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22840 SAVI RANCH PARKWAY
YORBA LINDA, CALIFORNIA 92687
(714) 921-3400
(Address and telephone number of Originator's principal executive offices)
---------------------
LAWRENCE F. PITTROFF
SENIOR VICE PRESIDENT
FLEETWOOD CREDIT RECEIVABLES CORP.
22840 SAVI RANCH PARKWAY
YORBA LINDA, CALIFORNIA 92687
(714) 921-3400
(Name, address and telephone number of agent for service with respect to the
Registrant)
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Copies to:
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<S> <C>
JOSEPH V. GATTI, ESQ. DALE W. LUM, ESQ.
ARTER & HADDEN LLP BROWN & WOOD LLP
1801 K STREET NW 555 CALIFORNIA STREET
WASHINGTON, D.C. 20006 SAN FRANCISCO, CA 94104
</TABLE>
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or 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. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO AMOUNT TO BE AGGREGATE PRICE AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Asset Backed Securities.... $2,000,000,000 100% $2,000,000,000 $590,008.03(2)
===========================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the proposed maximum offering price per unit.
(2) Previously paid.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
INTRODUCTORY NOTE
This Registration Statement contains (i) a form of Prospectus relating to
the offering of series of Asset Backed Notes and/or Asset Backed Certificates by
various Fleetwood Credit RV Receivables Trusts created from time to time by
Fleetwood Credit Receivables Corp. and (ii) two forms of Prospectus Supplement
relating to the offering by Fleetwood Credit RV Receivables 199 - Trusts of
the particular series of Asset Backed Certificates or of Asset Backed Notes and
Asset Backed Certificates described therein. Each form of Prospectus Supplement
relates only to the securities described therein and is a form which may be
used, among others, by Fleetwood Credit Receivables Corp. to offer Asset Backed
Notes and/or Asset Backed Certificates under this Registration Statement.
<PAGE> 3
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 JUNE 17, 1998
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1998)
$
FLEETWOOD CREDIT RV RECEIVABLES 199 - OWNER TRUST
$ % ASSET BACKED NOTES, CLASS A-1
$ FLOATING RATE ASSET BACKED NOTES, CLASS A-2
$ % ASSET BACKED NOTES, CLASS A-3
$ % ASSET BACKED CERTIFICATES
FLEETWOOD CREDIT RECEIVABLES CORP.
SELLER
FLEETWOOD CREDIT CORP.
SERVICER AND
A WHOLLY OWNED SUBSIDIARY OF
ASSOCIATES FIRST CAPITAL CORPORATION
---------------------
The Fleetwood Credit RV Receivables 199 - Owner Trust Asset Backed
Securities will consist of three classes of notes (respectively, the "Class A-1
Notes", "Class A-2 Notes" and "Class A-3 Notes", collectively, the "Notes") and
one class of certificates (the "Certificates" and, together with the Notes, the
"Securities"). Principal, in the amounts set forth herein, and interest at the
Interest Rates and Pass-Through Rate specified herein for each class of Notes
and the Certificates, respectively, will be distributed to the related
Securityholders on the 15th day of each month (or, if such day is not a Business
Day, on the next succeeding Business Day), beginning , 199 .
Distributions on the Certificates will be subordinated to payments due on the
Notes to the extent described herein. Each class of Notes and the Certificates
will be payable in full on the Final Scheduled Distribution Date specified
herein for such Securities.
The Fleetwood Credit RV Receivables 199 - Owner Trust (the "Trust") will be
formed pursuant to a Trust Agreement to be entered into between Fleetwood Credit
Receivables Corp. (the "Seller") and , as Owner Trustee. The
Certificates will be issued pursuant to the Trust Agreement and will represent
fractional undivided interests in the Trust. The Notes will be issued and
secured pursuant to an Indenture to be entered into between the Trust and
, as Indenture Trustee, and will represent obligations of the Trust.
The property of the Trust will primarily include a pool of simple interest
retail installment sale contracts (the "Initial Receivables") secured by new and
used recreational vehicles (the "Initial Financed Vehicles"), certain monies due
under the Initial Receivables on and after 1, 199 , security interests
in the Initial Financed Vehicles, monies on deposit in a Pre-Funding Account and
a Yield Supplement Account to be established with the Indenture Trustee and
certain other property, as more fully described herein. From time to time on or
before , 199 , additional simple interest retail installment sale
contracts (the "Subsequent Receivables" and, together with the Initial
Receivables, the "Receivables") secured by new and used recreational vehicles
(the "Subsequent Financed Vehicles" and, together with the Initial Financed
Vehicles, the "Financed Vehicles"), will be purchased by the Trust from the
Seller from monies on deposit in the Pre-Funding Account. In each case, the
Receivables, including the security interests in the related Financed Vehicles,
will be purchased by the Seller from Fleetwood Credit concurrently with their
conveyance to the Trust. See "Property of the Trust" herein. The Notes will be
secured by the assets of the Trust pursuant to the Indenture.
There currently is no secondary market for the Notes or the Certificates and
there is no assurance that one will develop. The Underwriters expect, but will
not be obligated, to make a market in each class of Notes and the Certificates.
There is no assurance that any such market will develop, or if one does develop,
that it will continue or provide sufficient liquidity.
---------------------
THE NOTES WILL REPRESENT OBLIGATIONS OF, AND THE CERTIFICATES WILL REPRESENT
BENEFICIAL INTERESTS IN, THE TRUST AND WILL NOT REPRESENT OBLIGATIONS OF OR
INTERESTS IN FLEETWOOD CREDIT RECEIVABLES CORP., FLEETWOOD CREDIT CORP.,
ASSOCIATES FIRST CAPITAL CORPORATION, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES.
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 ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS THE SELLER(1)(2)
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<S> <C> <C> <C>
Per Class A-1 Note.............................. % % %
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Per Class A-2 Note.............................. % % %
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Per Class A-3 Note.............................. % % %
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Per Certificate................................. % % %
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Total.................................. $ $ $
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</TABLE>
(1) Plus accrued interest, if any, from , 199 .
(2) Before deduction of expenses payable by the Seller estimated at $ .
---------------------
The Securities are offered by the several Underwriters when, as and if
issued and accepted by them, and subject to reject orders in whole or in part.
It is expected that the delivery of Securities, in book-entry form, will be made
through the facilities of The Depository Trust Company on or about ,
199 , against payment in immediately available funds.
---------------------
[UNDERWRITERS]
---------------------
The date of this Prospectus Supplement is , 199 .
<PAGE> 4
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT THE
OFFERING OF THE NOTES AND THE CERTIFICATES. ADDITIONAL INFORMATION IS CONTAINED
IN THE ACCOMPANYING PROSPECTUS (THE "PROSPECTUS"), AND PROSPECTIVE INVESTORS ARE
URGED TO READ BOTH 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. TO THE EXTENT ANY
STATEMENTS IN THIS PROSPECTUS SUPPLEMENT CONFLICT WITH STATEMENTS IN THE
PROSPECTUS, THE STATEMENTS IN THIS PROSPECTUS SUPPLEMENT SHALL CONTROL.
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of any Class of Notes or
the Certificates. Such transactions may including stabilizing. For a description
of these activities, see "Underwriting."
UNTIL , 199 , ALL DEALERS EFFECTING TRANSACTIONS IN THE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. UPON RECEIPT OF A REQUEST BY AN INVESTOR, OR
SUCH INVESTOR'S REPRESENTATIVE, WITHIN THE PERIOD DURING WHICH THERE IS A
PROSPECTUS DELIVERY OBLIGATION, THE SELLER OR THE UNDERWRITERS WILL PROMPTLY
DELIVER, OR CAUSE TO BE DELIVERED, WITHOUT CHARGE AND IN ADDITION TO SUCH
DELIVERY REQUIREMENTS, A PAPER COPY OF THE PROSPECTUS OR A PROSPECTUS ENCODED IN
AN ELECTRONIC FORMAT.
---------------------
REPORTS TO SECURITYHOLDERS
The Indenture Trustee and the Trustee will provide to the related
Securityholders of record (which shall be Cede & Co., as the nominee of The
Depository Trust Company, unless and until Definitive Securities are issued
under the limited circumstances described in the Prospectus) unaudited monthly
and annual reports concerning the Receivables. See "Certain Information
Regarding the Securities -- Statements to Securityholders" and "-- Evidence as
to Compliance" in the Prospectus. Such reports will not constitute financial
statements prepared in accordance with generally accepted accounting principles.
The Seller, as originator of the Trust, will file with the Securities and
Exchange Commission (the "Commission") such periodic reports as are required
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
S-2
<PAGE> 5
SUMMARY
This Summary is qualified in its entirety by reference to the detailed
information appearing elsewhere herein and in the accompanying Prospectus.
Certain capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto elsewhere in this Prospectus Supplement, or to the
extent not defined herein, shall have the meanings ascribed thereto in the
Prospectus. See the Index of Terms for the location herein of certain
capitalized terms.
Trust...................... Fleetwood Credit RV Receivables 199 - Owner Trust
(the "Trust"). The Trust will be an "Owner Trust"
for purposes of the Prospectus.
Seller..................... Fleetwood Credit Receivables Corp. (the "Seller"),
a wholly owned, limited purpose subsidiary of
Fleetwood Credit Corp. See "The Seller" in the
Prospectus.
Servicer................... Fleetwood Credit Corp. (the "Servicer" or
"Fleetwood Credit"), a wholly owned subsidiary of
Associates First Capital Corporation. See "The
Servicer" in the Prospectus.
Securities Offered
A. General................. The Fleetwood Credit RV Receivables 199 - Owner
Trust Asset Backed Notes (the "Notes") will
represent obligations of the Trust secured by the
assets of the Trust (other than the Certificate
Distribution Account). The Fleetwood Credit RV
Receivables 199 - Owner Trust Asset Backed
Certificates (the "Certificates" and, together with
the Notes, the "Securities") will represent
fractional undivided interests in the Trust. The
Certificates will be "Owner Certificates" for
purposes of the Prospectus.
The Trust will issue three classes of Notes
pursuant to an indenture to be dated as of
1, 199 (the "Indenture"), between the
Trust and , as trustee (the "Indenture
Trustee"), as follows: (i) $ aggregate
principal amount of % Asset Backed Notes, Class
A-1 (the "Class A-1 Notes"); (ii) $
aggregate principal amount of Floating Rate Asset
Backed Notes, Class A-2 (the "Class A-2 Notes") and
(iii) $ aggregate principal amount
of % Asset Backed Notes, Class A-3 (the "Class
A-3 Notes").
The Trust will issue the Certificates pursuant to a
trust agreement to be dated as of 1, 199
(the "Trust Agreement"), between the Seller and
, as trustee (the "Owner Trustee" and,
together with the Indenture Trustee, the
"Trustees"). Payments in respect of the
Certificates will be subordinated to payments on
the Notes to the extent described herein.
Each class of Notes and the Certificates will be
issued in minimum denominations of $1,000 and
$20,000, respectively, and integral multiples of
$1,000 in excess thereof. Definitive Securities
will be issued only under the limited circumstances
described in the Prospectus. See "Certain
Information Regarding the Securities -- Book-Entry
Registration" and "-- Definitive Securities" in the
Prospectus.
B. Property of the Trust... The property of the Trust will primarily include a
pool of simple interest retail installment sale
contracts (the "Initial Receivables") secured by
the new and used recreational vehicles financed
thereby (the "Initial Financed Vehicles"), certain
monies due under the Initial Receivables
S-3
<PAGE> 6
on and after 1, 199 (the "Initial Cutoff
Date"), security interests in the Initial Financed
Vehicles, the Collection Account, the Note
Distribution Account, the Certificate Distribution
Account, the Yield Supplement Account, the
Pre-Funding Account and the Reserve Fund, in each
case together with the proceeds thereof, proceeds
from claims under certain insurance policies in
respect of individual Initial Financed Vehicles or
the related Obligors and certain rights under the
sale and servicing agreement to be dated as of
1, 199 (the "Sale and Servicing
Agreement"), among the Seller, the Servicer and the
Indenture Trustee. From time to time on or before
, 199 , additional simple interest
retail installment sale contracts (the "Subsequent
Receivables" and, together with the Initial
Receivables, the "Receivables") secured by the new
and used recreational vehicles financed thereby
(the "Subsequent Financed Vehicles" and, together
with the Initial Financed Vehicles, the "Financed
Vehicles"), certain monies due under the Subsequent
Receivables on and after the related Subsequent
Cutoff Dates, security interests in the Subsequent
Financed Vehicles and proceeds from claims under
certain insurance policies in respect of individual
Subsequent Financed Vehicles or the related
Obligors will be purchased by the Trust from the
Seller from monies on deposit in the Pre-Funding
Account. See "Property of the Trust" herein.
C. Distribution Dates...... Payments of interest and principal on the
Securities will be made on the fifteenth day of
each month or, if such day is not a Business Day,
on the next succeeding Business Day (each, a
"Distribution Date"), commencing ,
199 . With respect to the Notes, each Distribution
Date will be a "Payment Date" for purposes of the
Prospectus. Payments on the Securities on each
Distribution Date will be paid to the holders of
record of the related Securities on the day
immediately preceding such Distribution Date or, if
Definitive Securities are issued, the last day of
the immediately preceding calendar month (each such
date, a "Record Date").
To the extent not previously paid in full prior to
such time, the outstanding principal amount of (i)
the Class A-1 Notes will be payable on
, 199 (the "Class A-1 Final Scheduled
Distribution Date"), (ii) the Class A-2 Notes will
be payable on , (the "Class A-2 Final
Scheduled Distribution Date"), (iii) the Class A-3
Notes will be payable on , (the
"Class A-3 Final Scheduled Distribution Date") and
(iv) the Certificates will be payable on
, (the "Certificate Final Scheduled
Distribution Date" and, together with the Class A-1
Final Scheduled Distribution Date, the Class A-2
Final Scheduled Distribution Date and the Class A-3
Final Scheduled Distribution Date, the "Final
Scheduled Distribution Dates").
The Receivables............ The Receivables arise from simple interest retail
installment sale contracts originated by dealers in
new and used recreational vehicles (the "Dealers")
which are purchased by Fleetwood Credit. All of the
Receivables will be selected from the contracts
owned by Fleetwood Credit based upon the criteria
described in the Prospectus under "The Receivables"
and "Certain Information Regarding the
Securities -- Sale and Assignment of the
Receivables".
S-4
<PAGE> 7
On or before the date of initial issuance of the
Securities (the "Closing Date"), Fleetwood Credit
will sell the Initial Receivables to the Seller
pursuant to a receivables purchase agreement to be
dated as of 1, 199 (the "Receivables
Purchase Agreement") between the Seller and
Fleetwood Credit. The Seller will, in turn, sell
the Initial Receivables to the Trust pursuant to
the Sale and Servicing Agreement. As of the Initial
Cutoff Date, the Initial Receivables had an
aggregate principal balance of $ , a
weighted average annual percentage rate (the "APR")
of %, a weighted average original maturity of
months and a weighted average remaining maturity
of months.
From time to time during the Funding Period,
pursuant to the Receivables Purchase Agreement,
Fleetwood Credit will be obligated to sell, and the
Seller will be obligated to purchase, Subsequent
Receivables at a purchase price equal to the
aggregate principal amount thereof as of a date in
the related month of transfer designated by
Fleetwood Credit and the Seller (each, a
"Subsequent Cutoff Date"). Pursuant to the Sale and
Servicing Agreement and one or more transfer
agreements (each, a "Transfer Agreement") among the
Seller, the Servicer and the Owner Trustee, and
subject to the satisfaction of certain conditions
described herein, the Seller will in turn sell the
Subsequent Receivables to the Trust at a purchase
price equal to the amount paid by the Seller to
Fleetwood Credit for such Subsequent Receivables,
which purchase price shall be paid from monies on
deposit in the Pre-Funding Account. The aggregate
principal balance of the Subsequent Receivables to
be conveyed to the Trust during the Funding Period
will not exceed $ (i.e., % of the sum
of the Original Pool Balance and the Pre-Funded
Amount). Subsequent Receivables will be transferred
from Fleetwood Credit to the Seller and from the
Seller to the Trust on the Business Day specified
by Fleetwood Credit and the Seller during the month
in which the related Subsequent Cutoff Date occurs
(each, a "Subsequent Transfer Date").
The Pre-Funding Account.... The Pre-Funding Account will be established by
Fleetwood Credit, maintained as a trust account
with the Indenture Trustee and will be designed
solely to hold funds to be applied during the
Funding Period to pay to the Seller the purchase
price for Subsequent Receivables. Monies on deposit
in the Pre-Funding Account will not be available to
cover losses on or in respect of the Receivables.
The Pre-Funding Account will be created with an
initial deposit by the Seller of $ (the
"Pre-Funded Amount"). The "Funding Period" will be
the period from the Closing Date until the earliest
to occur of (i) the date on which the remaining
Pre-Funded Amount is less than $100,000, (ii) the
date on which an Event of Default or Servicer
Default occurs or (iii) the close of business on
the , 199 Distribution Date. The
Funding Period will not exceed 90 days from the
Closing Date, and the aggregate principal balance
of the Subsequent Receivables to be conveyed to the
Trust during the Funding Period will not exceed 25%
of the initial aggregate principal amount of the
Securities. During the Funding Period, on one or
more Subsequent Transfer Dates, the Indenture
Trustee will use the Pre-Funded Amount to purchase
Subsequent Receivables from the Seller. The Seller
expects that the Pre-Funded Amount will be reduced
to less than $100,000 by the
S-5
<PAGE> 8
, 199 Distribution Date, although no assurances
can be given in this regard. In the event that any
portion of the Pre-Funded Amount remains on deposit
in the Pre-Funding Account at the end of the
Funding Period, the Notes will be subject to a
mandatory redemption in part, and the Certificates
may be subject to a mandatory prepayment in part,
in each case as described herein under "The
Notes -- Mandatory Redemption", "The
Certificates -- Mandatory Prepayment" and "Certain
Information Regarding the Securities -- The
Pre-Funding Account; Mandatory Redemption and
Prepayment of the Securities".
The Yield Supplement
Account; The Yield
Supplement Agreement..... Fleetwood Credit will establish a yield supplement
account with the Indenture Trustee for the benefit
of the Securityholders (the "Yield Supplement
Account"). The Yield Supplement Account is designed
solely to hold funds to be applied to provide
payments to the Securityholders in respect of
Receivables the APR of which is less than the sum
of (i) the weighted average of the Interest Rates
and the Pass-Through Rate and (ii) the Servicing
Fee Rate (the "Required Rate"). The Yield
Supplement Account will be created with an initial
deposit (the "Yield Supplement Initial Deposit") in
an amount (which amount may be discounted at a rate
to be specified in the Sale and Servicing
Agreement) equal to the aggregate amount by which
(i) interest on the Principal Balance of each
Initial Receivable for the period commencing on the
Initial Cutoff Date and ending with the scheduled
maturity of each such Receivable (assuming that
payments on such Receivables are made as scheduled
and no prepayments are made) at a rate equal to the
Required Rate, exceeds (ii) interest on such
Principal Balance at the APR of such Receivable
(the "Yield Supplement Amount" and, with respect to
the Initial Receivables, the "Maximum Initial Yield
Supplement Amount").
Fleetwood Credit, the Seller and the Indenture
Trustee will enter into a yield supplement
agreement to be dated as of 1, 199 (the "Yield
Supplement Agreement") pursuant to which on each
Subsequent Transfer Date Fleetwood Credit will
deposit an amount (which amount may be discounted
at a rate to be specified in the Sale and Servicing
Agreement), if any, into the Yield Supplement
Account (the "Additional Yield Supplement Amount")
equal to the aggregate Yield Supplement Amounts in
respect of the related Subsequent Receivables for
the period commencing with the related Subsequent
Cutoff Date and ending with the scheduled maturity
of each related Subsequent Receivable, assuming
that payments on such Receivables are made as
scheduled and no prepayments are made. The
aggregate Additional Yield Supplement Amounts in
respect of the Subsequent Receivables is referred
to herein as the "Maximum Subsequent Yield
Supplement Amount" and, together with the Maximum
Initial Yield Supplement Amount, the "Maximum Yield
Supplement Amount". See "Certain Information
Regarding the Securities -- The Yield Supplement
Account; The Yield Supplement Agreement" herein.
Terms of the Notes......... The principal terms of the Notes will be as
described below:
A. Interest Rates.......... The Class A-1 Notes will bear interest at the rate
of % per annum (the "Class A-1 Rate") and the
Class A-3 Notes will bear interest at the
S-6
<PAGE> 9
rate of % per annum (the "Class A-3 Rate"). The per
annum rate of interest with respect to the Class
A-2 Notes for each Interest Period (the "Class A-2
Rate" and, together with the Class A-1 Rate and the
Class A-3 Rate, the "Interest Rates") will equal
LIBOR for such Interest Period, determined as
described herein under "The Notes -- Payments of
Interest -- Calculation of LIBOR", plus %;
provided that the Class A-2 Rate shall not
exceed % per annum.
B. Interest................ Interest on the outstanding principal amount of the
Notes will accrue at the related Interest Rate from
the Closing Date or from the most recent
Distribution Date on which interest has been paid
to but excluding the following Distribution Date
(each, an "Interest Period"). Interest will be
calculated on the (i) Class A-1 and Class A-3 Notes
on the basis of a 360-day year consisting of twelve
30-day months and (ii) the Class A-2 Notes on the
basis of the actual number of days in each Interest
Period divided by 360. See "The Notes -- Payments
of Interest".
C. Principal............... Principal of the Notes will be payable on each
Distribution Date in an aggregate amount equal to
the Note Principal Distributable Amount, calculated
as described herein under "Certain Information
Regarding the Securities -- Distributions on the
Securities", for the month immediately preceding
the month in which such Distribution Date occurs
(each, a "Collection Period") to the extent of the
Available Amount remaining after the Servicer has
been reimbursed for any outstanding Advances and
has been paid the Servicing Fee (including any
unpaid Servicing Fee with respect to one or more
prior Collection Periods) (collectively, the
"Servicer Payment") and following the payment of
distributions of interest in respect of the Notes.
In addition, on each Distribution Date until the
Notes have been paid in full, all Excess Amounts
will be paid to Noteholders as an additional
payment of principal. See "The Notes -- Payments of
Principal".
On each Determination Date, the Indenture Trustee
will determine the amount in the Collection Account
and the Reserve Fund available for distribution on
the related Distribution Date and shall allocate
such amounts between the Notes and the Certificates
as described herein under "The Notes -- Payments of
Principal". Payments to Securityholders shall be
made on each Distribution Date in accordance with
such allocations. Except as otherwise described
herein under "The Notes -- Mandatory Redemption,"
no principal payments will be made on (i) the Class
A-2 Notes until the Class A-1 Notes have been paid
in full and (ii) the Class A-3 Notes until the
Class A-2 Notes have been paid in full. The unpaid
principal amount of each class of Notes will be
payable on the related Final Scheduled Distribution
Date. See "The Notes -- Payments of Principal"
herein.
D. Redemption.............. The Notes will be subject to mandatory redemption
in part in the event that any portion of the
Pre-Funded Amount remains on deposit in the
Pre-Funding Account at the end of the Funding
Period. See "The Notes -- Mandatory Redemption" and
"Certain Information Regarding the
Securities -- The Pre-Funding Account; Mandatory
Redemption and Prepayment of the Securities"
herein.
In the event of an Optional Purchase or Auction
Sale, each class of Notes outstanding will be
redeemed in whole, but not in part, at a
S-7
<PAGE> 10
redemption price equal to the unpaid principal
amount of the related class of Notes plus accrued
interest thereon at the related Interest Rate. See
"Summary -- Optional Purchase", "-- Termination"
and "The Notes -- Optional Redemption" herein.
Terms of the
Certificates............... The principal terms of the Certificates will be as
described below:
A. Interest................ On each Distribution Date, the Owner Trustee will
distribute pro rata to Certificateholders of record
as of the related Record Date interest in an amount
equal to one-twelfth of the product of % per
annum (the "Pass-Through Rate") and the Certificate
Balance as of the first day of the immediately
preceding Collection Period (after giving effect to
distributions of principal or other reductions in
the Certificate Balance to be made on the
Distribution Date occurring in such immediately
preceding Collection Period) or, in the case of the
first Distribution Date, the Original Certificate
Balance. Such distributions generally will be made
to the extent of the Available Amount remaining
following payment of the Servicer Payment and
interest and principal in respect of the Notes.
Interest on the Certificates will be calculated on
the basis of a 360-day year consisting of twelve
30-day months. See "The
Certificates -- Distributions of Interest" herein.
B. Principal............... On each Distribution Date on or after the earlier
to occur of (i) the Distribution Date on which the
Class A-1 Notes have been paid in full or (ii)
the 199 Distribution Date, principal of the
Certificates will be payable in an amount generally
equal to the Certificate Principal Distributable
Amount for the related Collection Period,
calculated as described herein under "Certain
Information Regarding the
Securities -- Distributions on the Securities".
Such distributions generally will be made to the
extent of the Available Amount remaining following
payment of the Servicer Payment, interest and
principal in respect of the Notes and interest in
respect of the Certificates. The rights of
Certificateholders to receive distributions of
principal will be subordinated to the rights of
Noteholders to receive distributions of interest
and principal to the extent described herein.
Notwithstanding the foregoing, following any
qualification, reduction or withdrawal by either
Rating Agency of its then-current rating of any
class of Notes (each, a "Rating Event"), no
distributions of principal on the Certificates will
be made until all the Notes have been paid in full,
unless such rating has been restored.
Under certain circumstances after the Notes have
been paid in full, amounts on deposit in the
Reserve Fund will be applied to retire the
Certificates. See "The
Certificates -- Distributions of Principal" herein.
C. Prepayment.............. The Certificates will be subject to mandatory
prepayment in part in the event that more than
$100,000 of the Pre-Funded Amount remains on
deposit in the Pre-Funding Account at the end of
the Funding Period. See "The
Certificates -- Mandatory Prepayment" and "Certain
Information Regarding the Securities -- The
Pre-Funding Account; Mandatory Redemption and
Prepayment of the Securities" herein.
In the event of an Optional Purchase or Auction
Sale, the Certificates will be prepaid in whole,
but not in part, at a prepayment price equal to the
Certificate Balance plus accrued interest thereon
at the Pass-
S-8
<PAGE> 11
Through Rate. See "Summary -- Optional Purchase",
"-- Termination" and "The Certificates -- Optional
Prepayment" herein.
Reserve Fund............... The Securityholders will be afforded certain
limited protection, to the extent described herein,
against losses in respect of the Receivables by the
establishment of a segregated trust account held by
the Indenture Trustee for the benefit of the
Securityholders (the "Reserve Fund").
The Reserve Fund will be funded by the Seller on
the Closing Date in an amount equal to $
plus an amount attributable to the maximum
aggregate Negative Carry Amount. Thereafter, all
Excess Amounts will be deposited from time to time
in the Reserve Fund to the extent necessary to
maintain the Reserve Fund at an amount to be
specified in the Sale and Servicing Agreement (the
"Specified Reserve Fund Balance"). "Excess Amounts"
in respect of a Distribution Date will be all
interest collections on or in respect of the
Receivables during the related Collection Period on
deposit in the Collection Account and the
Distribution Accounts, after payment of the
Servicer Payment and distributions of interest and
principal in respect of the Securities on such
Distribution Date. The Specified Reserve Fund
Balance for the first Distribution Date will be
$ , and on any Distribution Date
thereafter will be calculated as described herein
under "Certain Information Regarding the
Securities -- The Reserve Fund".
On each Distribution Date, funds will be withdrawn
from the Reserve Fund to pay the Servicer Payment
and to make required distributions on the
Securities, in each case to the extent Available
Funds are insufficient for such purposes. In
addition, on each Distribution Date relating to the
Funding Period, the Negative Carry Amount, if any,
will be withdrawn from the Reserve Fund and
deposited into the Collection Account.
On each Distribution Date, after giving effect to
all distributions made on such Distribution Date,
any amounts in the Reserve Fund in excess of the
Specified Reserve Fund Balance will be distributed
to the Seller and upon such distribution, the
Securityholders will have no further rights in, or
claims to, such amounts. Notwithstanding the
foregoing, during the Funding Period, all such
Excess Amounts will be deposited into the Reserve
Fund and will not be paid to the Seller until the
Distribution Date immediately succeeding the date
on which the Funding Period ends (or on the
Distribution Date on which the Funding Period ends
if the Funding Period ends on a Distribution Date).
See "Certain Information Regarding the
Securities -- Distributions" and "-- The Reserve
Fund" herein.
Advances; Non-Reimbursable
Payments................. On the Business Day immediately preceding each
Distribution Date, the Servicer will advance, in
respect of each Receivable, an amount equal to all
interest at the related APR which accrued in
respect of such Receivable from the last day upon
which a payment was made on such Receivable through
the last day of the related Collection Period. The
Servicer will be required to make an Advance only
to the extent it determines, in its reasonable
judgment, such Advance will be recoverable from
future payments and collections on or in respect to
the Receivables or otherwise. See
"Summary -- Advances" and "Certain Information
S-9
<PAGE> 12
Regarding the Securities -- Certain Payments by the
Servicer" in the Prospectus.
Optional Purchase.......... The Seller, the Servicer or any successor to the
Servicer, will each have the option to purchase
from the Trust all Receivables then outstanding and
all other property in the Trust on any Distribution
Date following the last day of a Collection Period
as of which the Pool Balance is less than 10% of
the sum of the Pool Balance as of the Initial
Cutoff Date (the "Original Pool Balance") and the
aggregate principal balance of all Subsequent
Receivables conveyed to the Trust as of the related
Subsequent Cutoff Dates (an "Optional Purchase"),
at a purchase price determined as described herein
under "Certain Information Regarding the
Securities -- Termination".
Termination................ If none of the Seller, the Servicer or any
successor to the Servicer exercises its optional
termination right within 90 days after the last day
of the Collection Period as of which such right can
first be exercised, the Indenture Trustee shall
solicit bids for the purchase of all Receivables
remaining in the Trust. In the event that bids are
received as described herein under "Certain
Information Regarding the
Securities -- Termination" in an amount sufficient
to pay, among other things, the unpaid principal
amount of the Securities, together with accrued
interest thereon, the sale proceeds will be
distributed to Securityholders on the second
Distribution Date succeeding the last day of such
Collection Period. If satisfactory bids are not
received, the Indenture Trustee shall decline to
sell the Receivables and shall not be under any
obligation to solicit any further bids or otherwise
negotiate any further sale of the Receivables. The
foregoing sale of the Receivables is referred to
herein as an "Auction Sale." See "Certain
Information Regarding the
Securities -- Termination" herein.
Ratings.................... It is a condition to the issuance of (i) the Notes
that they be rated Aaa by Moody's Investors
Service, Inc. ("Moody's") and AAA by Standard &
Poor's, a division of The McGraw-Hill Companies,
Inc. ("Standard & Poor's" and, together with
Moody's, the "Rating Agencies") and (ii) the
Certificates that they be rated at least A2 by
Moody's and A by Standard & Poor's. The ratings of
each class of Notes and the Certificates will be
based primarily on the value of the Initial
Receivables, the Pre-Funding Account, the terms of
the Securities and the Reserve Fund. The foregoing
ratings do not address the likelihood that the
Securities will be retired following the sale of
the Receivables by the Trustee as described above
under "Termination".
There is no assurance that any rating will not be
lowered or withdrawn by the assigning Rating Agency
if, in its judgment, circumstances so warrant. In
the event that the rating initially assigned to any
class of Notes or the Certificates is subsequently
lowered or withdrawn for any reason, no person or
entity will be obligated to provide any additional
credit enhancement with respect to such Securities.
There can be no assurance whether any other rating
agency will rate any class of Notes or the
Certificates, or if one does, what rating would be
assigned by such other rating agency. A security
rating is not a recommendation to buy, sell or hold
securities.
S-10
<PAGE> 13
Tax Status................. In the opinion of special federal income tax
Counsel to the Seller, 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. In
the opinion of state tax counsel to the Seller, the
same characterizations will apply for California
income and single business tax purposes. 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 income tax purposes. See
"Certain Federal Income Tax Consequences" herein
and in the Prospectus and "Certain State Tax
Consequences" herein.
ERISA Considerations....... Subject to the considerations discussed under
"ERISA Considerations" herein and in the
Prospectus, the Notes will be eligible for purchase
by employee benefit plans that are subject to the
Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
BECAUSE THE CERTIFICATES WILL BE SUBORDINATED TO
THE NOTES, EMPLOYEE BENEFIT PLANS SUBJECT TO ERISA
WILL NOT BE ELIGIBLE TO PURCHASE THE CERTIFICATES.
Any benefit plan fiduciary considering purchase of
the Securities should, among other things, consult
with its counsel in determining whether all
required conditions have been satisfied. See "ERISA
Considerations" herein and in the Prospectus.
Legal Investment........... The Class A-1 Notes have been structured to be
eligible securities for purchase by money market
funds under Rule 2a-7 under the Investment Company
Act of 1940, as amended. A money market fund should
consult its legal advisors regarding the
eligibility of the Class A-1 Notes under Rules
2a-7, the fund's investment policies and objectives
and an investment in the Class A-1 Notes.
S-11
<PAGE> 14
FORMATION OF THE TRUST
GENERAL
The Trust will be a business trust formed under the laws of the State of
Delaware pursuant to the Trust Agreement for the transactions described in this
Prospectus Supplement. After its formation, the Trust will not engage in any
activity other than (i) acquiring, holding and managing the Receivables and the
other assets of the Trust and proceeds therefrom; (ii) issuing the Notes and the
Certificates; (iii) making payments on the Notes and the Certificates; and (iv)
engaging in other activities that are necessary, suitable or convenient to
accomplish the foregoing purposes or are incidental thereto or connected
therewith.
The Trust will initially be capitalized with equity equal to the Original
Certificate Balance, less amounts deposited in the Reserve Fund. The Seller will
retain Certificates with an original principal balance of approximately 1% of
the Original Certificate Balance and the remaining equity interest will be sold
to third party investors that are expected to be unaffiliated with the Seller,
the Servicer or the Trust.
If the protection provided to the Securityholders by the Reserve Fund is
insufficient, the Trust will look only to payments made by or on behalf of the
Obligors on or in respect of the Receivables, the proceeds from the repossession
and sale of Financial Vehicles securing Defaulted Receivables and the proceeds
of Dealer repurchase obligations, if any, more fully described below under
"Property of the Trust," to make distributions on the Securities. In such event,
certain factors such as the failure of the Trust to possess first perfected
security interests in the Financed Vehicles, may limit the ability of the Trust
to realize on the collateral securing the Receivables or may limit the amount
realized to less than the amount due by the related Obligors. Securityholders
may thus be subject to delays in payment and may incur losses on their
investment in the Securities as a result of defaults or delinquencies by
Obligors and depreciation in the value of the related Financial Vehicles. See
"Certain Legal Aspects of the Receivables" in the Prospectus.
The Trust's principal offices will be in , , in care of
, as Owner Trustee, at the address listed below under "The Owner
Trustee".
CAPITALIZATION
The following table illustrates the capitalization of the Trust as of the
Closing Date, as if the issuance and sale of the Securities had taken place on
such date:
<TABLE>
<S> <C>
Class A-1 Notes............................................. $
-------
Class A-2 Notes.............................................
-------
Class A-3 Notes.............................................
-------
Certificates................................................
-------
Total............................................. $
=======
</TABLE>
THE OWNER TRUSTEE
will be the Owner Trustee. is a and its "Corporate
Trust Office" is located at , .
The Owner Trustee will have the rights and duties set forth in the
Prospectus under "Certain Information Regarding the Securities -- The Trustees"
and "-- Duties of the Trustees".
S-12
<PAGE> 15
PROPERTY OF THE TRUST
The property of the Trust will include a pool of simple interest retail
installment sale contracts, originated on or before , 199 (in the
case of the Initial Receivables) and on or before , 199 (in the case
of the Subsequent Receivables), between Dealers and Obligors, certain monies due
thereunder on and after the Initial Cutoff Date or the related Subsequent Cutoff
Date, as the case may be, and amounts on deposit in the Pre-Funding Account. On
or before the Closing Date, Fleetwood Credit will sell the Initial Receivables
to the Seller which will in turn sell them to the Trust. It is anticipated that
Subsequent Receivables will be conveyed to the Trust on one or more Subsequent
Transfer Dates during the Funding Period. Neither the Seller nor the Servicer
may substitute any other retail installment sale contract for any Receivable
sold to the Trust during the term of the Sale and Servicing Agreement.
The assets of the Trust will also include: (i) such amounts as from time to
time may be held in interest bearing trust accounts to be established and
maintained by the Servicer with (a) the Indenture Trustee into which all
payments made on or in respect of the Receivables will be deposited (the
"Collection Account"), (b) the Indenture Trustee into which amounts payable to
the Noteholders will be deposited and distributed (the "Note Distribution
Account") and (c) the Owner Trustee into which amounts payable to the
Certificateholders will be deposited and distributed (the "Certificate
Distribution Account" and, together with the Note Distribution Account, the
"Distribution Accounts"); (ii) security interests in the Financed Vehicles and
any accessions thereto; (iii) the right to proceeds from physical damage, credit
life and disability insurance policies, if any, covering individual Financed
Vehicles or Obligors, as the case may be; (iv) the right to receive proceeds, if
any, of Dealer repurchase obligations; (v) any Servicer Letter of Credit; (vi)
the rights of the Seller under the Receivables Purchase Agreement and the Yield
Supplement Agreement; (vii) the Reserve Fund and the Yield Supplement Account;
and (viii) any and all proceeds of the foregoing. For purposes of the
Prospectus, the Collection Account will be an "Owner Collection Account" and the
Certificate Distribution Account will be an "Owner Certificate Distribution
Account".
The "Pool Balance" will be calculated as described in the Prospectus under
"Property of the Trusts" and will increase during the Funding Period by the
principal amount (not to exceed $ ) of Subsequent Receivables conveyed
to the Trust as of the related Subsequent Cutoff Dates. Coincident with each
such transfer of Subsequent Receivables, the Yield Supplement Agreement will
require Fleetwood Credit to deposit into the Yield Supplement Account an amount
equal to the Additional Yield Supplement Amount, if any, in respect of such
Subsequent Receivables. Additions of Subsequent Receivables will be conditioned
on the compliance with the procedures described in the Receivables Purchase
Agreement and the Sale and Servicing Agreement. Each conveyance of Subsequent
Receivables also will be subject to the conditions described under "Certain
Information Regarding the Securities -- Sale and Assignment of Receivables --
The Subsequent Receivables" in the Prospectus, and to the following additional
conditions, among others: (i) the weighted average APR of the Receivables
(including the Subsequent Receivables) is not less than % and (ii) the
weighted average remaining term of the Receivables (including the Subsequent
Receivables) as of the related Subsequent Transfer Date is not greater than
months.
Because the Subsequent Receivables will be originated after the Initial
Receivables, following their conveyance to the Trust, the characteristics of the
Receivables, including the Subsequent Receivables, may vary from those of the
Initial Receivables. The Seller expects that the principal balances of the
Subsequent Receivables to be added to the Trust will require application of the
entire Pre-Funded Amount by , 199 ; however, there can be no
assurance that a sufficient amount of Subsequent Receivables will be available
for such purpose.
S-13
<PAGE> 16
THE RECEIVABLES
The Receivables will have been purchased by Fleetwood Credit from Dealers
in the ordinary course of business and no adverse selection procedures were
employed by Fleetwood Credit in selecting the Receivables from Fleetwood
Credit's portfolio of recreational vehicle receivables. The Initial Receivables
were, and the Subsequent Receivables will be, selected from Fleetwood Credit's
portfolio of recreational vehicle retail installment sale contracts based on the
criteria described under "The Receivables" in the Prospectus. Each Receivable
was underwritten in accordance with the customary underwriting standards
employed by Fleetwood Credit and described under "The Servicer -- Origination
and Servicing" in the Prospectus. Each Receivable had as of the Initial Cutoff
Date, or will have as of the related Subsequent Cutoff Date, as the case may be,
an APR equal to or greater than %.
As of the Initial Cutoff Date, approximately % of the Initial
Receivables, by Original Pool Balance, were secured by motor homes and
approximately % were secured by travel trailers. Approximately % of
the Initial Receivables, by Original Pool Balance, represented financing of new
recreational vehicles and approximately % represented financing of used
recreational vehicles. As of the Initial Cutoff Date, the average outstanding
principal balances of Initial Receivables secured by motor homes and travel
trailers were $ and $ , respectively. The maximum amount
Fleetwood advances to any customer is 100% of the retail purchase price of the
recreational vehicle being financed. A significant portion of the Initial
Receivables represent financing of recreational vehicles manufactured by
Fleetwood Enterprises, Inc. Except in the case of breach of representations by
the related Dealer, as described under "Property of the Trusts" in the
Prospectus, it is expected that none of the Initial Receivables provide for
recourse to the Dealer who originated the related Initial Receivable. Based upon
information presented by Obligors in their Receivables applications, as of the
Initial Cutoff Date the Initial Receivables were originated in states.
Approximately %, % and % of the Initial Receivables, by Original
Pool Balance, were originated in the States of , and ,
respectively. Each other state accounts for less than 5% of the Initial
Receivables by Original Pool Balance. As of the Initial Cutoff Date,
approximately % of the Original Pool Balance represented Paid-Ahead
Receivables.
COMPOSITION OF THE INITIAL RECEIVABLES
<TABLE>
<S> <C>
Aggregate Principal Balance as of the Initial Cutoff Date... $
Number of Initial Receivables...............................
Average Principal Balance as of the Initial Cutoff Date..... $
Aggregate Original Amount Financed.......................... $
Range of Original Amounts Financed.......................... $ to $
Weighted Average APR(1)..................................... %
Range of APRs............................................... % to %
Weighted Average Original Term(1)........................... months
Range of Original Terms..................................... to months
Weighted Average Remaining Term as of the Initial Cutoff
Date(1)................................................... months
Range of Remaining Terms as of the Initial Cutoff Date...... to months
</TABLE>
- - ---------------
(1) Weighted by unpaid principal balance as of the Initial Cutoff Date.
DISTRIBUTION OF THE INITIAL RECEIVABLES BY APR
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF OF NUMBER INITIAL PERCENTAGE
OF INITIAL OF INITIAL CUTOFF DATE OF ORIGINAL
APR RANGE RECEIVABLES RECEIVABLES POOL BALANCE POOL BALANCE
--------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
% to %............................... % $ %
% to %...............................
% to %...............................
% to %...............................
% to %...............................
% to %...............................
% to %...............................
----- ------ -------- ------
Total................................ % $ %
===== ====== ======== ======
</TABLE>
S-14
<PAGE> 17
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Receivables are charged off when they are deemed to be uncollectible.
Additionally, Fleetwood Credit's policy generally provides for charge-off of
accounts on a contractual basis. Receivables are charged off when they become
180 days contractually delinquent. A contractually delinquent account is one on
which the customer has not made payments as contractually agreed. In addition,
Receivables are charged off when either the related security has been converted
or destroyed or the related security has been repossessed and sold. Increases in
delinquencies and losses occur under adverse economic conditions and increased
consumer bankruptcies. However, Fleetwood Credit's losses have historically
remained fairly stable because of Fleetwood Credit's conservative underwriting
criteria and the favorable demographics of the obligors of the Receivables, who
tend to be older consumers with a more stable financial condition.
Set forth below is certain information concerning Fleetwood Credit's
experience with respect to its portfolio of recreational vehicle receivables
similar to the Receivables.
DELINQUENCY EXPERIENCE
<TABLE>
<CAPTION>
AT AT DECEMBER 31,
MARCH 31, --------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------------- -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Portfolio Outstanding at End of
Period(1)(2).................... $1,303,251,231 $1,241,738,614 $949,664,166 $760,702,992 $661,517,831 $532,764,234
Delinquencies at End of
Period(1)(3)
30-59 Days...................... 3,275,972 4,630,619 $ 3,160,686 $ 2,494,548 $ 1,520,815 $ 1,515,090
60-89 Days...................... 138,777 703,823 342,035 419,116 141,132 193,591
90 Days or More................. 177,650 385,684 33,902 169,736 81,964 324,765
-------------- -------------- ------------ ------------ ------------ ------------
Total Delinquencies............... $ 3,592,399 $ 5,720,126 $ 3,536,623 $ 3,083,400 $ 1,743,911 $ 2,033,446
============== ============== ============ ============ ============ ============
Total Delinquencies as a
Percentage of Portfolio
Outstanding at End of Period.... 0.28% 0.46% 0.37% 0.41% 0.26% 0.38%
</TABLE>
- - ---------------
(1) Includes recreational vehicle receivables that have been sold but are still
serviced by the Servicer.
(2) The sum of all principal amounts outstanding under the recreational vehicle
receivables.
(3) The period of delinquency is based on the number of days payments are
contractually past due.
CREDIT LOSS AND REPOSSESSION EXPERIENCE
<TABLE>
<CAPTION>
THREE MONTHS
ENDED FISCAL YEAR ENDED DECEMBER 31,
MARCH 31, --------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------------- -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Average Portfolio
Outstanding(1)(2)(3)............ $1,275,427,136 $1,113,127,480 $853,227,748 $720,418,169 $596,920,867 $512,484,430
Average Number of Receivables
Outstanding(3).................. 52,438 46,469 36,665 30,367 25,455 22,724
Repossessions as a Percentage of
Average Number of Receivables
Outstanding..................... 3.56% 0.77% 0.66% 0.56% 0.50% 0.71%
Net Losses(1)..................... $ 1,386,401 $ 3,631,982 $ 2,210,186 $ 1,800,947 $ 1,255,618 $ 1,738,647
Net Losses as a Percentage of
Average Portfolio Outstanding... 0.43% 0.33% 0.26% 0.25% 0.21% 0.34%
</TABLE>
- - ---------------
(1) Includes recreational vehicle receivables that have been sold but are still
being serviced by the Servicer.
(2) The sum of all principal amounts outstanding under the recreational vehicle
receivables.
(3) Amounts represent the average of month-end figures for each month in the
periods indicated.
Fleetwood Credit did not acquire recreational vehicle receivables similar
to the Receivables prior to July 1986. Accordingly, Fleetwood Credit's
experience with respect to such receivables is limited and only a small portion
of its recreational vehicle receivables portfolio has reached maturity. There is
no assurance that Fleetwood Credit's delinquency, credit loss and repossession
experience with respect to recreational vehicle receivables in the future, or
the experience of the Trust with respect to the Receivables, will be similar to
that set forth below. Losses and delinquencies are affected by, among other
things, general and regional economic conditions and the supply of and demand
for recreational vehicles.
S-15
<PAGE> 18
MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS
The following discussion supplements the information contained in the
Prospectus under "The Receivables -- Maturity and Prepayment Considerations" and
"Yield Considerations". Except as otherwise provided herein under "The
Notes -- Mandatory Redemption", no principal payments will be made on the Class
A-2 Notes until the Class A-1 Notes have been paid in full and no principal
payments will be made on the Class A-3 Notes until the Class A-2 Notes have been
paid in full. In addition, except as otherwise provided herein under "The
Notes -- Mandatory Redemption", no principal payments on the Certificates will
be made until the earlier to occur of the Distribution Date on which the Class
A-1 Notes have been paid in full or the 199 Distribution Date. See "The
Notes -- Payments of Principal" and "The Certificates -- Distributions of
Principal" 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 Notes and the final distribution in respect of the Certificates could
occur significantly earlier than their respective Final Scheduled Distribution
Dates. Any reinvestment risk resulting from the rate of prepayment of the
Receivables and the distribution of such payments to Securityholders will be
borne entirely by the Securityholders.
THE NOTES
GENERAL
The Notes will be issued pursuant to the Indenture, a form of which has
been filed as an exhibit to the Registration Statement. Copies of the Indenture
(without exhibits) may be obtained by Noteholders upon request in writing to the
Indenture Trustee at its Corporate Trust Office. The following summary does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Indenture and the Notes. The following summary supplements the
general terms and provisions of the Notes of any given Series and the related
Indenture set forth in the Prospectus, to which description reference is hereby
made. The following summary, together with the information herein under "Certain
Information Regarding the Securities," and the information described in the
preceding sentence, describes all of the material terms of the Indenture and the
Notes.
PAYMENTS OF INTEREST
General. Interest on the outstanding principal amount of each class of
Notes will accrue at the related per annum Interest Rates and will be payable to
Noteholders on each Distribution Date. Interest accrued but not paid on any
Distribution Date will be due on the immediately succeeding Distribution Date,
together with, to the extent permitted by applicable law, interest on such
shortfall at the related Interest Rate. Interest payments on the Notes will be
funded from the portion of the Available Amount remaining after payment of the
Servicer Payment. See "Certain Information Regarding the
Securities -- Distributions" and "-- The Reserve Fund" 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 Distribution Date, in which case
each class of Noteholders will receive their ratable share (based upon the
aggregate amount of interest due to such class of Noteholders) of the aggregate
amount available to be distributed in respect of interest on the Notes.
Calculation of LIBOR. The Interest Rate payable on the Class A-2 Notes in
respect of any Interest Period will equal the lesser of (i) the sum of the
London interbank offered rate ("LIBOR") for such Interest Period plus % and
(ii) %. LIBOR for each Interest Period will be determined by the Indenture
Trustee, as calculation agent (in such capacity, the "Calculation Agent") as
follows:
(i) On the second London Banking Day prior to the Distribution Date on
which any Interest Period commences (each, a "LIBOR Determination Date"),
the Calculation Agent will determine the arithmetic mean of the offered
rates for deposits in U.S. dollars for the period of one month, commencing
on such Distribution Date, which appear either (a) on the Telerate Page
3750 as of 11:00 A.M., London time, on that LIBOR Determination Date
("LIBOR Telerate") or (b) the Reuters Screen LIBO Page
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as of 11:00 A.M., London time, on the LIBOR Determination Date ("LIBOR
Reuters"). "London Banking Day" means any business day on which dealings in
deposits in United States dollars are transacted in the London interbank
market and "Telerate Page 3750" means the display designated as page "3750"
on the Telerate Service (or such other page as may replace the 3750 page on
that service or such other service or services as may be nominated by the
British Bankers' Association for the purpose of displaying London interbank
offered rates for U.S. dollar deposits). "Reuters Screen LIBO Page" means
the display designated as Page "LIBO" on the Reuters Monitor Money Rate
Service (or such other page as may replace the LIBO page on that service
for the purpose of displaying London interbank offered rates of major
banks. If at least two such offered rates appear on the Telerate Page 3750,
LIBOR for such Interest Period will be the arithmetic mean of such offered
rates as determined by the Calculation Agent.
(ii) If fewer than two offered rates appear on each of the Telerate
Page 3750 and the Reuters Screen LIBO Page on such LIBOR Determination
Date, the Calculation Agent will request the principal London offices of
each of four major banks in the London interbank market selected by such
Calculation Agent (after consultation with the Seller) to provide such
Calculation Agent with its offered quotations for deposits in U.S. dollars
for the period of one month, commencing on such Distribution Date, to prime
banks in the London interbank market at approximately 11:00 a.m., London
time, on such LIBOR Determination Date and in a principal amount equal to
an amount of not less than $1,000,000 that is representative of a single
transaction in such market at such time. If at least two such quotations
are provided, LIBOR for such Interest Period will be the arithmetic mean of
such quotations. If fewer than two such quotations are provided, LIBOR for
such Interest Period will be the arithmetic mean of rates quoted by three
major banks in The City of New York selected by the Calculation Agent
(after consultation with the Seller) at approximately 11:00 a.m., New York
City time, on such LIBOR Determination Date for loans in U.S. dollars to
leading European banks, for the period of one month, commencing on such
Distribution Date, and in a principal amount equal to an amount of not less
than $1,000,000 that is representative of a single transaction in such
market at such time; provided, however, that if the banks selected as
aforesaid by the Calculation Agent are not quoting rates as mentioned in
this sentence, LIBOR for such Interest Period will be the same as LIBOR for
the immediately preceding Interest Period.
PAYMENTS OF PRINCIPAL
Principal payments will be made to the Noteholders on each Distribution
Date in an amount generally equal to the sum of (i) the Note Percentage,
calculated as described herein under "Certain Information Regarding the
Securities -- Distributions", of the Monthly Principal Payment plus (ii) an
amount (the "Accelerated Principal Distribution Amount") equal to the portion,
if any, of Available Funds remaining after payment of (a) the Servicer Payment,
(b) the Note Interest Distributable Amount, (c) the portion of the Monthly
Principal Payment allocated to the Noteholders pursuant to clause (i) above, (d)
the Certificate Interest Distributable Amount and (e) the portion of the Monthly
Principal Payment allocated to the Certificateholders as described herein under
"The Certificates -- Distributions of Principal". Principal payments on the
Notes will be paid from the portion of the Available Amount remaining after
payment of the Servicer Payment, the Note Interest Distributable Amount and the
Certificate Interest Distributable Amount. See "Certain Information Regarding
the Securities -- Distributions" and "-- The Reserve Fund" herein.
Principal payments on the Notes will be applied on each Distribution Date,
first, to the Class A-1 Notes until the principal amount of the Class A-1 Notes
has been reduced to zero, second, to the Class A-2 Notes until the principal
amount of the Class A-2 Notes has been reduced to zero and, third, to the Class
A-3 Notes until the principal amount of the Class A-3 Notes has been reduced to
zero. To the extent not previously paid in full, the principal amount of the
Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes will be due on the
Class A-1 Final Scheduled Distribution Date, the Class A-2 Final Scheduled
Distribution Date and the Class A-3 Final Scheduled Distribution Date,
respectively. The actual date on which the aggregate outstanding principal
amount of any class of Notes is paid may be earlier than its Final Scheduled
Distribution Date based on a variety of factors, including payments of
Accelerated Principal Distribution Amounts and the factors described under "The
Receivables -- Maturity and Prepayment Considerations" in the Prospectus.
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MANDATORY REDEMPTION
The Notes will be subject to redemption in part on the Distribution Date on
or immediately following the last day of the Funding Period in the event that
any portion of the Pre-Funded Amount remains on deposit in the Funding Account,
after giving effect to the purchase of any Subsequent Receivables on such date
(a "Mandatory Redemption"). If such remaining Pre-Funded Amount is less than or
equal to $100,000, such amount will be applied to redeem the Class A-1 Notes
until the principal amount of the Class A-1 Notes has been reduced to zero, with
any remaining amount being applied to redeem the Class A-2 Notes. If such
remaining Pre-Funded Amount is greater than $100,000, such amount will be used
to redeem each class of Notes and to prepay the Certificates. The aggregate
principal amount of each class of Notes to be redeemed and the Certificates to
be prepaid will be an amount equal to the Pre-Funded Percentage of such class of
Notes or Certificates, as the case may be, multiplied by such remaining
Pre-Funded Amount. The "Pre-Funded Percentage" of a class of Notes or the
Certificates will be the percentage derived from the fraction, the numerator of
which is the initial principal amount of such class of Notes or the Original
Certificate Balance, as applicable, and the denominator of which is the sum of
the aggregate initial principal amount of the Notes and the Original Certificate
Balance.
OPTIONAL REDEMPTION
The Class A-3 Notes will be subject to redemption in whole, but not in
part, on any Distribution Date relating to an Optional Purchase or an Auction
Sale, provided that such Distribution Date occurs after the Class A-1 Notes and
the Class A-2 have been paid in full. The redemption price will equal the unpaid
principal amount of the Class A-3 Notes plus accrued interest thereon at the
Class A-3 Rate. See "Certain Information Regarding the
Securities -- Termination" herein.
THE INDENTURE TRUSTEE
will be the Indenture Trustee. The Indenture Trustee is a
and its Corporate Trust Office is located at ,
, .
The Indenture Trustee will have the rights and duties set forth in the
Prospectus under "Certain Information Regarding the Securities -- The Trustees"
and "-- Duties of the Trustees".
THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the Trust Agreement, a form of
which has been filed as an exhibit to the Registration Statement. Copies of the
Trust Agreement (without exhibits) may be obtained by Certificateholders upon
request in writing to the Owner Trustee at its Corporate Trust Office. The
following summary does not purport to be complete and is subject to and
qualified in its entirety by reference to the Trust Agreement and the
Certificates. 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. The following summary, together with the information herein under
"Certain Information Regarding the Securities," and the information described in
the preceding sentence, describes all of the material terms of the Trust
Agreement and the Certificates.
DISTRIBUTIONS OF INTEREST
Interest on the Certificate Balance will accrue at the Pass-Through Rate
and will be payable to Certificateholders on each Distribution Date. Interest
accrued but not paid on any Distribution Date will be due on the immediately
succeeding Distribution Date together with, to the extent permitted by
applicable law, interest on such shortfall at the Pass-Through Rate. Interest
distributions with respect to the Certificates will be funded from the portion
of the Available Amount remaining after payment of the Servicer Payment and the
Note Interest Distributable Amount. See "Certain Information Regarding the
Securities -- Distributions" and "-- The Reserve Fund" herein.
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The "Certificate Balance" will initially equal $ (the "Original
Certificate Balance") and thereafter will equal the Original Certificate Balance
reduced by (i) all distributions actually made on or prior to the related
Distribution Date to Certificateholders allocable to principal and (ii) Realized
Losses allocable to the Certificates. "Realized Losses" with respect to each
Collection Period will equal the amount by which (a) the aggregate unpaid
principal balance of all Receivables which became Defaulted Receivables during
such Collection Period exceeds (a) the sum of (i) the aggregate liquidation
proceeds recovered in respect of principal of such Defaulted Receivables during
such Collection Period and (ii) recoveries in respect of all Defaulted
Receivables received during such Collection Period, to the extent not otherwise
included in the amount determined pursuant to clause (i) above.
DISTRIBUTIONS OF PRINCIPAL
On each Distribution Date on which principal of the Certificates is
payable, the Certificateholders will be entitled to receive distributions in an
amount generally equal to the Certificate Percentage, calculated as described
herein under "Certain Information Regarding the Securities -- Distributions", of
the Monthly Principal Payment. Distributions with respect to principal will be
funded from the portion of the Available Amount remaining after payment of the
Servicer Payment, the Note Distributable Amount and the Certificate Interest
Distributable Amount. See "Certain Information Regarding the
Securities -- Distributions" and "-- The Reserve Fund" herein.
Notwithstanding the foregoing, upon any qualification, reduction or
withdrawal by any Rating Agency of its rating of any class of Notes, then, with
respect to each Distribution Date thereafter, the Certificateholders will not
receive any distributions of principal until all the Notes have been paid in
full, unless such rating has been restored. In addition, on and after any
Distribution Date on which the Notes have been paid in full, funds in the
Reserve Fund will be applied to reduce the Certificate Balance to zero if, after
giving effect to all distributions required to be made to the Servicer and the
Securityholders on such Distribution Date, the amount on deposit in the Reserve
Fund is equal to or greater than the Certificate Balance. See "Certain
Information Regarding the Securities -- The Reserve Fund".
MANDATORY PREPAYMENT
The Certificates will be subject to prepayment in part on the Distribution
Date on or immediately following the last day of the Funding Period in the event
that more than $100,000 of the Pre-Funded Amount remains on deposit in the
Pre-Funding Account, after giving effect to the purchase of any Subsequent
Receivables on such date (a "Mandatory Prepayment"). The aggregate principal
amount of Certificates to be prepaid will be an amount equal to the Pre-Funded
Percentage of the Certificates multiplied by the Pre-Funded Amount then on
deposit in the Pre-Funding Account.
OPTIONAL PREPAYMENT
The Certificates will be subject to prepayment in whole, but not in part,
on any Distribution Date relating to an Optional Purchase or an Auction Sale.
Certificateholders will receive an amount in respect of the Certificates equal
to the Certificate Balance, together with accrued interest at the Pass-Through
Rate. Any such distribution will effect early retirement of the Certificates.
See "Certain Information Regarding the Securities -- Termination" herein.
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<PAGE> 22
CERTAIN INFORMATION REGARDING THE SECURITIES
BOOK-ENTRY REGISTRATION
Each class of Notes and the Certificates will initially be represented by
one or more certificates registered in the name of Cede & Co. ("Cede"), as the
nominee of The Depository Trust Company ("DTC"). No person acquiring an interest
in any Securities will be entitled to receive a definitive certificate
representing such person's interest, except in the event that Definitive
Securities of the related class are issued under the limited circumstances
described in the Prospectus under "Certain Information Regarding the
Securities -- Definitive Securities". Unless and until Securities are issued in
definitive form, all references herein to distributions, notices, reports and
statements to and to actions by and effects upon the related Securityholders
will refer to the same actions and effects with respect to DTC or Cede, as the
case may be, for the benefit of the related Security Owners in accordance with
DTC procedures. See "Certain Information Regarding the Securities -- General",
"-- Book-Entry Registration" and "-- Definitive Securities" in the Prospectus.
THE PRE-FUNDING ACCOUNT; MANDATORY REDEMPTION AND PREPAYMENT OF THE SECURITIES
The Pre-Funding Account. The Servicer will establish the Pre-Funding
Account in the name of the Indenture Trustee for the benefit of the
Securityholders into which the Pre-Funded Amount will be deposited on the
Closing Date from the net proceeds received from the sale of the Securities and
from which monies will be applied during the Funding Period to purchase
Subsequent Receivables from the Seller. The Pre-Funding Account will be
maintained with the same entity at which the Collection Account is maintained.
The Pre-Funding Account will be part of the Trust but monies on deposit therein
will not be available to cover losses on or in respect of the Receivables. Any
portion of the Pre-Funded Amount remaining on deposit in the Pre-Funding Account
at the end of the Funding Period will be payable as described below under
"-- Mandatory Redemption and Prepayment of the Securities". Monies on deposit in
the Pre-Funding Account may be invested in Permitted Investments under the
circumstances and in the manner to be described in the Sale and Servicing
Agreement. Earnings on investment of funds in the Pre-Funding Account will be
deposited into the Collection Account and losses will be charged against the
funds on deposit in the Pre-Funding Account. See "Certain Information Regarding
the Securities -- The Trust Accounts" in the Prospectus.
Upon each conveyance of Subsequent Receivables to the Trust, an amount
equal to the purchase price paid by the Seller to Fleetwood Credit for such
Subsequent Receivables on the related Subsequent Transfer Date will be withdrawn
from the Pre-Funding Account and paid to the Seller.
Mandatory Redemption and Prepayment of the Securities. The Notes will be
subject to a Mandatory Redemption and the Certificates may be subject to a
Mandatory Prepayment on the Distribution Date immediately succeeding the date on
which the Funding Period ends (or on the Distribution Date on which the Funding
Period ends if the Funding Period ends on a Distribution Date), in the event
that any portion of the Pre-Funded Amount, exclusive of any investment earnings
thereon, remains on deposit in the Pre-Funding Account after giving effect to
the purchase by the Seller and conveyance to the Trust of all Subsequent
Receivables on the related Subsequent Transfer Dates, including any such
purchase and conveyance on the date on which the Funding Period ends.
The amount to be paid to (i) Noteholders in connection with a Mandatory
Redemption will be determined as described herein under "The Notes -- Mandatory
Redemption" and (ii) Certificateholders in connection with a Mandatory
Prepayment will be determined as described herein under "The Certificates --
Mandatory Prepayment". It is anticipated that the aggregate principal amount of
Subsequent Receivables sold to the Trust during the Funding Period will not be
exactly equal to the Pre-Funded Amount and that therefore there will be at least
a nominal amount of principal prepaid to Securityholders.
THE YIELD SUPPLEMENT ACCOUNT; THE YIELD SUPPLEMENT AGREEMENT
The Yield Supplement Account. The Yield Supplement Account will be created
with an initial deposit by Fleetwood Credit of an amount equal to the Yield
Supplement Initial Deposit. The Yield Supplement Initial Deposit will equal an
amount (which amount may be discounted at a rate to be specified in the Sale and
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Servicing Agreement) equal to the aggregate amount by which (i) interest on the
Principal Balance of each Initial Receivable for the period commencing on the
Initial Cutoff Date and ending with the scheduled maturity of each such
Receivable (assuming that payments on such Receivables are made as scheduled and
no prepayments are made) at a rate equal to the Required Rate, exceeds (ii)
interest on such Principal Balances at the APR of each such Receivable (the
"Yield Supplement Amount" and, with respect to the Initial Receivables, the
"Maximum Initial Yield Supplement Amount").
On each Distribution Date, the Indenture Trustee will transfer to the
Collection Account from monies on deposit in the Yield Supplement Account an
amount equal to the Yield Supplement Deposit Amount in respect of the
Receivables for such Distribution Date. See "Distributions on the
Securities -- Deposits to the Collection Account; Priority of Payments" herein.
Amounts on deposit on any Distribution Date in the Yield Supplement Account in
excess of the Maximum Yield Supplement Amount, after giving effect to all
distributions to be made on such Distribution Date, will be paid to the Seller.
Monies on deposit in the Yield Supplement Account may be invested in Permitted
Investments under the circumstances and in the manner described in the Sale and
Servicing Agreement. See "Certain Information Regarding the Securities -- The
Trust Accounts" in the Prospectus. Any monies remaining on deposit in the Yield
Supplement Account upon the termination of the Trust will be paid to the Seller.
The Yield Supplement Agreement. Pursuant to the Yield Supplement Agreement,
on each Subsequent Transfer Date Fleetwood Credit will deposit into the Yield
Supplement Account an amount equal to the Additional Yield Supplement Amount.
The aggregate of the Additional Yield Supplement Amounts in respect of
Subsequent Receivables, if any, is referred to herein as the "Maximum Subsequent
Yield Supplement Amount" and, together with the "Maximum Initial Yield
Supplement Amount", the "Maximum Yield Supplement Amount".
DISTRIBUTIONS ON THE SECURITIES
General. On the eighth calendar day of each month or, if such day is not a
Business Day, the immediately succeeding Business Day (each, a "Determination
Date"), the Servicer will inform the Indenture Trustee of the amount of
Available Funds collected on or in respect of the Receivables, the Negative
Carry Amount, if any, the Yield Supplement Amount in respect of the Receivables,
if any, the amount of Advances and Non-Reimbursable Payments to be made by the
Servicer and the amount of the Servicing Fee and other servicing compensation
payable to the Servicer, in each case with respect to the immediately preceding
Collection Period. On or prior to each Determination Date, the Servicer shall
also determine, among other things, the Note Interest Distributable Amount, the
Certificate Interest Distributable Amount, the Note Principal Distributable
Amount, the Certificate Principal Distributable Amount and, based on the sum of
(i) Available Funds and (ii) amounts on deposit in the Reserve Fund, after
giving effect to the withdrawals therefrom described herein under "Deposits to
the Collection Account" (collectively, the "Available Amount"), the amounts to
be distributed to the Securityholders. Distributions to Noteholders will be made
out of amounts on deposit in the Note Distribution Account and distributions to
Certificateholders will be made out of amounts on deposit in the Certificate
Distribution Account, in each case as described herein.
Determination of Available Funds. "Available Funds" with respect to each
Distribution Date will mean the sum of (i) the earnings received by the
Indenture Trustee during the related Collection Period from investment of the
Pre-Funded Amount on deposit in the Pre-Funding Account; (ii) an amount (the
"Negative Carry Amount") equal to the difference between (a) 30 days' interest
on the Pre-Funded Amount on deposit in the Pre-Funding Account as of the first
day of such Collection Period at a rate equal to the weighted average of the
Interest Rates and the Pass-Through Rate and (b) the amount described in clause
(i) above, which Negative Carry Amount will be withdrawn from the Reserve Fund
and deposited in the Collection Account as described herein under "-- The
Reserve Fund"; (iii) all cash received by the Servicer on or in respect of the
Receivables during the immediately preceding Collection Period (including Non-
Reimbursable Payments and Advances but other than (a) late payment and extension
fees, if any, and other administrative fees and (b) recoveries collected on or
in respect of all Receivables which have been previously repurchased by the
Seller or purchased by the Servicer pursuant to the Sale and Servicing
Agreement);
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(iv) the Repurchase Amounts of all Receivables purchased or repurchased by the
Seller or the Servicer under the Sale and Servicing Agreement in respect of the
immediately preceding Collection Period; and (v) the Yield Supplement Deposit
Amount for the related Collection Period.
With respect to each Collection Period (i) "Collected Interest" will mean
the sum of (a) the portion of all payments received by the Servicer on or in
respect of the Receivables during such Collection Period allocable to interest
and (b) the amounts described in clauses (i), (ii) and (v) of the immediately
preceding paragraph with respect to such Collection Period, and (ii) "Collected
Principal" will mean the portion of all payments received by the Servicer on or
in respect of the Receivables during such Collection Period allocable to
principal.
Deposits to the Collection Account; Priority of Payments. The Servicer will
remit collections received on or in respect of the Receivables within two
Business Days of receipt thereof to the Collection Account unless it satisfies
the conditions described in the Prospectus under "Certain Information Regarding
the Securities -- Collections" permitting the remittance of such collections on
a monthly basis.
In addition, on each Distribution Date, the Trustee will cause the Negative
Carry Amount for the related Collection Period, if any, to be withdrawn from the
Reserve Fund and deposited in the Collection Account and the aggregate Yield
Supplement Amount in respect of the Receivables for the related Collection
Period, if any (the "Yield Supplement Deposit Amount"), to be withdrawn from the
Yield Supplement Account and deposited in the Collection Account.
Deposits to the Distribution Accounts. The amount to be distributed to
Securityholders following the Funding Period in connection with a Mandatory
Redemption or Mandatory Prepayment is described herein under "The
Notes -- Mandatory Redemption" and "The Certificates -- Mandatory Prepayment".
The amount of other distributions to be made on each Distribution Date to
Securityholders will be determined in the manner described below. On each
Distribution Date, the Servicer will instruct the Indenture Trustee to make the
following deposits and distributions, to the extent of the Available Amount, in
the following order of priority:
(i) to the Servicer, from Collected Interest, the Servicer Payment;
(ii) to the Note Distribution Account, from the Available Amount
(after giving effect to the reduction in the Available Amount described in
clause (i) above), the Note Interest Distributable Amount;
(iii) to the Note Distribution Account, from the Available Amount
(after giving effect to the reduction in the Available Amount described in
clauses (i) and (ii) above), the Note Principal Distributable Amount;
(iv) to the Certificate Distribution Account, from the Available
Amount (after giving effect to the reduction in the Available Amount
described in clauses (i) through (iii) above), the Certificate Interest
Distributable Amount;
(v) to the Certificate Distribution Account, from the Available Amount
(after giving effect to the reduction in the Available Amount described in
clauses (i) through (iv) above), the Certificate Principal Distributable
Amount; and
(vi) in the event that the distributions described in clauses (i)
through (v) above have been funded exclusively from Available Funds, any
remaining Available Funds will be deposited into the Reserve Fund until the
amount on deposit therein equals the Specified Reserve Fund Balance, with
any excess being deposited into the Note Distribution Account for payment
to Noteholders as an Accelerated Principal Distribution Amount.
Notwithstanding the foregoing, during the Funding Period, all Excess
Amounts will be deposited into the Reserve Fund and will not be deposited
into the Note Distribution Account until the Distribution Date immediately
succeeding the date on which the Funding Period ends (or on the
Distribution Date on which the Funding Period ends if the Funding Period
ends on a Distribution Date).
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For purposes hereof, the following terms shall have the following meanings:
The "Monthly Principal Payment" will mean, with respect to any Distribution
Date, (i) the Pool Balance as of the last day of the second Collection Period
preceding the Collection Period in which such Distribution Date occurs (or, with
respect to the first Distribution Date, the Original Pool Balance) less (ii) the
Pool Balance as of the last day of the Collection Period relating to such
Distribution Date.
The "Note Distributable Amount" will mean, with respect to any Distribution
Date, the sum of the Note Principal Distributable Amount and the Note Interest
Distributable Amount.
The "Note Interest Distributable Amount" will mean, with respect to any
Distribution Date, the sum of the Note Monthly Interest Distributable Amount for
such Distribution Date and the Note Interest Carryover Shortfall for such
Distribution Date.
The "Note Monthly Interest Distributable Amount" will mean, with respect to
any Distribution Date, interest accrued for the related Interest Period on each
class of Notes at the respective Interest Rate for such class on the outstanding
principal amount of the Notes of such class on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date), after giving effect to all payments of principal to the
Noteholders of such class on or prior to such Distribution Date.
The "Note Interest Carryover Shortfall" will mean, with respect to any
Distribution Date, the excess of the Note Monthly Interest Distributable Amount
for the immediately preceding Distribution Date and any outstanding Note
Interest Carryover Shortfall on such preceding Distribution Date, over the
amount in respect of interest that is actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus, to the extent
permitted by applicable law, interest on the amount of interest due but not paid
to Noteholders on the preceding Distribution Date at the respective Interest
Rates borne by each class of Notes for the related Interest Period.
The "Note Principal Distributable Amount" will mean, with respect to any
Distribution Date, the sum of the Note Monthly Principal Distributable Amount
for such Distribution Date and the Note Principal Carryover Shortfall as of the
close of the preceding Distribution Date; provided, however, that the Note
Principal Distributable Amount shall not exceed the outstanding principal amount
of the Notes; and provided, further, that the Note 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 amount of the Class
A-1 Notes to zero and on the Class A-2 Final Scheduled Distribution Date the
Note Principal Distributable Amount shall not be less than the amount that is
necessary (after giving effect to other amounts to be deposited in the Note
Distribution Account on such Distribution Date and allocable to principal) to
reduce the outstanding principal amount of the Class A-2 Notes to zero. In
addition, on the Final Scheduled Distribution Date, the principal required to be
deposited in the Note Distribution Account will include the amount of any
principal due and remaining unpaid on each Receivable in the Trust as of such
Final Scheduled Distribution Date so as to reduce the outstanding principal
amount of the Class A-3 Notes to zero.
The "Note Monthly Principal Distributable Amount" will mean, with respect
to any Distribution Date, the Note Percentage of the Monthly Principal Payment.
The "Note Percentage" will mean (i) for each Distribution Date to and
including the later to occur of (a) the Distribution Date on which the principal
amount of the Class A-1 Notes is reduced to zero and (b) the
199 Distribution Date, 100%, (ii) for each Distribution Date thereafter to and
including the Distribution Date on which the principal amount of the Class A-3
Notes is reduced to zero, the percentage equivalent of a fraction, the numerator
of which is the outstanding principal amount of the Notes on the Distribution
Date immediately preceding the Distribution Date for which the Note Percentage
is being calculated (after giving effect to all distributions made on such
immediately preceding Distribution Date) and the denominator of which is the
Pool Balance on the last day of the second Collection Period preceding the
Collection Period in which the Distribution Date for which the Note Percentage
is being calculated occurs; provided, however, that on each Distribution Date
following the occurrence of a Rating Event until the
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principal amount of all the Notes is paid in full or such rating is restored,
the Note Percentage shall mean 100%, and (iii) zero for each Distribution Date
thereafter.
The "Note Principal Carryover Shortfall" will mean, with respect to any
Distribution Date, the excess of the Note Monthly Principal Distributable Amount
for the immediately preceding Distribution Date and any outstanding Note
Principal Carryover Shortfall on such preceding Distribution Date over the
amount in respect of principal that is actually deposited in the Note
Distribution Account on such preceding Distribution Date.
The "Certificate Distributable Amount" will mean, with respect to any
Distribution Date, the sum of the Certificate Principal Distributable Amount and
the Certificate Interest Distributable Amount.
The "Certificate Interest Distributable Amount" will mean, with respect to
any Distribution Date, the sum of the Certificate Monthly Interest Distributable
Amount for such Distribution Date and the Certificate Interest Carryover
Shortfall for such Distribution Date.
The "Certificate Monthly Interest Distributable Amount" will mean, with
respect to any Distribution Date, 30 days' interest at the Pass-Through Rate on
the Certificate Balance as of the first day of the immediately preceding
Collection Period (after giving effect to all distributions of principal to be
made on the Distribution Date occurring in such immediately preceding Collection
Period) or, in the case of the first Distribution Date, the Original Certificate
Balance.
The "Certificate Interest Carryover Shortfall" will mean, with respect to
any Distribution Date, the excess of the Certificate Monthly Interest
Distributable Amount for the immediately preceding Distribution Date and any
outstanding Certificate Interest Carryover Shortfall on such 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 Period.
The "Certificate Principal Distributable Amount" will mean, with respect to
any Distribution Date, the sum of the Certificate Monthly Principal
Distributable Amount for such Distribution Date and the Certificate Principal
Carryover Shortfall as of the close of the immediately preceding Distribution
Date; provided, however, that the Certificate Principal Distributable Amount
shall not exceed the Certificate Balance. In addition, on the Certificate Final
Scheduled Distribution Date, the principal required to be deposited into the
Certificate Distribution Account will include the amount of any principal due
and remaining unpaid on each Receivable in the Trust as of the Certificate Final
Scheduled Distribution Date so as to reduce the Certificate Balance to zero, and
remaining after any required distribution to the Note Distribution Account.
The "Certificate Monthly Principal Distributable Amount" will mean, with
respect to any Distribution Date, the Certificate Percentage of the Monthly
Principal Payment.
The "Certificate Percentage" will mean (i) for each Distribution Date to
and including the later to occur of (a) the Distribution Date on which the
principal amount of the Class A-1 Notes is reduced to zero and (b) the
, 199 Distribution Date, zero, and (ii) for each Distribution Date
thereafter to and including the Distribution Date on which the Certificate
Balance is reduced to zero, the percentage equivalent of a fraction, the
numerator of which is the Certificate Balance on the Distribution Date
immediately preceding the Distribution Date for which the Certificate Percentage
is being calculated (after giving effect to all distributions made on such
preceding Distribution Date) and the denominator of which is the Pool Balance on
the last day of the second Collection Period preceding the Collection Period in
which the Distribution Date for which the Certificate Percentage is being
calculated occurs; provided, however, that on each Distribution Date following
the occurrence of a Rating Event until the principal amount of all outstanding
Notes is paid in full or such rating is restored, the Certificate Percentage
shall mean zero.
The "Certificate Principal Carryover Shortfall" will mean, with respect to
any Distribution Date, the excess of the Certificate Monthly Principal
Distributable Amount for the immediately preceding Distribution Date and any
outstanding Certificate Principal Carryover Shortfall on such preceding
Distribution Date, over
S-24
<PAGE> 27
the amount in respect of principal that is actually deposited in the Certificate
Distribution Account on such preceding Distribution Date.
Payments From the Distribution Accounts. On each Distribution Date, all
amounts on deposit in the Note Distribution Account (other than Investment
Earnings) will be paid in the following order of priority:
(i) to the applicable Noteholders, accrued and unpaid interest on the
outstanding principal amount of the applicable class of Notes at the
applicable Interest Rate;
(ii) to the Class A-1 Noteholders in reduction of principal, until the
principal amount of the Class A-1 Notes has been reduced to zero;
(iii) to the Class A-2 Noteholders in reduction of principal, until
the principal amount of the Class A-2 Notes has been reduced to zero; and
(iv) to the Class A-3 Noteholders in reduction of principal, until the
principal amount of the Class A-3 Notes has been reduced to zero.
On each Distribution Date, all amounts on deposit in the Certificate
Distribution Account will be distributed to the Certificateholders in the
following order of priority:
(i) to the Certificateholders, accrued and unpaid interest on the
outstanding Certificate Balance at the Pass-Through Rate; and
(ii) to the Certificateholders in reduction of principal, until the
Certificate Balance has been reduced to zero.
THE RESERVE FUND
The rights of the Certificateholders to receive distributions with respect
to the Receivables generally will be subordinated to the rights of the Servicer
(to the extent of the Servicer Payment) and the Noteholders to the extent
described above. The protection afforded to the Noteholders through the
foregoing subordination will be effected both by the preferential right of the
Noteholders to receive, to the extent described herein, current distributions
with respect to the Receivables and by the establishment of the Reserve Fund.
The Reserve Fund will be funded by the Seller on the Closing Date in an amount
equal to $ plus an amount attributable to the maximum aggregate
Negative Carry Amount. Thereafter, all Excess Amounts will be deposited from
time to time in the Reserve Fund to the extent necessary to maintain the amount
in the Reserve Fund at the Specified Reserve Fund Balance.
The Specified Reserve Fund Balance with respect to the first Distribution
Date will equal $ , and on each Distribution Date thereafter, will
equal the lesser of (i) $ or (ii) % of the sum of the unpaid
principal amount of the Notes and the Certificate Balance (after giving effect
to distributions of principal to be made on such Distribution Date).
Notwithstanding the foregoing, in no event shall the Specified Reserve Fund
Balance be less than $ . However, on each Distribution Date following
any Fiscal Quarter in which losses or delinquencies in respect of the
Receivables exceed the percentages to be specified in the Sale and Servicing
Agreement, the Specified Reserve Fund Balance will be equal to the greater of
the amount described above or an amount equal to the Pool Balance as of the last
day of the related Collection Period multiplied by a percentage determined by
subtracting from % a fraction (expressed as a percentage) equal to one
minus a fraction, the numerator of which will equal the outstanding principal
amount of the Notes and the denominator of which will equal the Pool Balance, in
each case as of the last day of the three related Collection Periods in such
Fiscal Quarter; provided, however, that following any Fiscal Quarter thereafter
in which the losses and delinquencies in respect of the Receivables are less
than the percentages to be specified in the Sale and Servicing Agreement, the
Specified Reserve Fund Balance shall return to the amount described in the first
two sentences of this paragraph. A "Fiscal Quarter" will mean each of the
following three-month periods: (i) January, February and March; (ii) April, May
and June; (iii) July, August and September; and (iv) October, November and
December. In addition, if on any Distribution Date cumulative losses in respect
of the Receivables exceed % of the sum of the Original Pool Balance and the
S-25
<PAGE> 28
aggregate principal balance of all Subsequent Receivables conveyed to the Trust
as of the related Subsequent Cutoff Dates, the Specified Reserve Fund Balance
shall remain at the level in effect as of such date and shall not be reduced
further in accordance with the first sentence of this paragraph.
The Servicer may, from time to time after the date of this Prospectus
Supplement, request each Rating Agency to approve a formula for determining the
Specified Reserve Fund Balance that is different from that described above and
would result in a decrease in the amount of the Specified Reserve Fund Balance
or the manner by which it is funded. If each Rating Agency delivers a letter to
the Trustees to the effect that the use of any such new formulation will not
result in the qualification, reduction or withdrawal of its then-current rating
of any class of Notes or the Certificates, then the Specified Reserve Fund
Balance will be determined in accordance with such new formula. The Sale and
Servicing Agreement will accordingly be amended to reflect such new calculation
without the consent of any Securityholder.
On each Distribution Date, funds will be withdrawn from the Reserve Fund as
described above for distribution first, to the Servicer in respect of the
Servicer Payment, second to Noteholders to the extent of shortfalls in the
amounts available to make distributions of interest on the Notes, third to
Noteholders to the extent of shortfalls in the amounts available to make
distributions of principal on the Notes, fourth to Certificateholders to the
extent of shortfalls in the amounts available to make distributions of interest
on the Certificates and fifth to Certificateholders to the extent of shortfalls
in the amounts available to make distributions of principal on the Certificates.
On each Distribution Date relating to the Funding Period, the amount of
Collected Interest for such Distribution Date will include an amount equal to
the Negative Carry Amount for the related Collection Period, if any, which
amount will be withdrawn from the Reserve Fund and deposited into the Collection
Account.
On each Distribution Date, the Trustee will deposit all Excess Amounts into
the Reserve Fund until the amount on deposit therein equals the Specified
Reserve Fund Balance. If the amount on deposit in the Reserve Fund on such
Distribution Date (after giving effect to all deposits thereto and withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve Fund
Balance, the Indenture Trustee will release and distribute such excess, together
with any Excess Amounts not required to be deposited into the Reserve Fund, to
the Seller. Notwithstanding the foregoing, (i) during the Funding Period, all
Excess Amounts will be deposited into the Reserve Fund and will not be paid to
the Seller until the Distribution Date immediately succeeding the date on which
the Funding Period ends (or on the Distribution Date on which the Funding Period
ends if the Funding Period ends on a Distribution Date) and (ii) under the
circumstances described herein under "The Certificates -- Distributions of
Principal", funds in the Reserve Fund will be applied to reduce the Certificate
Balance to zero. Upon any such release of amounts from the Reserve Fund to the
Seller, the Certificateholders will have no further rights in, or claims to,
such amounts.
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 Fund,
subject to certain limitations, will be paid to the Seller.
The subordination of the Certificates and the Reserve Fund 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 Fund 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 Fund
could be depleted. If the amount required to be withdrawn from the Reserve Fund
to cover shortfalls in collections on the Receivables exceeds the amount of
available cash in the Reserve Fund, 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.
Amounts held from time to time in the Reserve Fund will continue to be held
for the benefit of holders of the Notes and the Certificates. Funds on deposit
in the Reserve Fund may be invested in Permitted
S-26
<PAGE> 29
Investments. Investment income on monies on deposit in the Reserve Fund will not
be available for distribution to Noteholders or Certificateholders or otherwise
subject to any claims or rights of the Noteholders or Certificateholders and
will be paid to the Seller.
SERVICING COMPENSATION
As described in the Prospectus under "Certain Information Regarding the
Securities -- Servicing Compensation", the Servicer will receive a monthly fee,
payable on each Distribution Date, equal to one-twelfth of the product of 1.0%
and the Pool Balance as of the first day of the related Collection Period. The
Servicer will also be entitled to receive additional compensation in the form of
certain late fees, prepayment charges and other administrative fees or similar
charges.
STATEMENTS TO CERTIFICATEHOLDERS
On each Distribution Date, the Trustee will include with each distribution
to each Securityholder of record a statement, setting forth for the related
Collection Period, the information described under "Certain Information
Regarding the Securities -- Statements to Securityholders" in the Prospectus.
TERMINATION
The obligations of the Servicer, the Seller and the Indenture Trustee
pursuant to the Sale and Servicing Agreement, the Trust Agreement and the
Indenture will terminate with respect to the Securityholders upon the earliest
to occur of (i) 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, (ii) the payment to Securityholders of all amounts required to be
paid to them pursuant to the Sale and Servicing Agreement, the Trust Agreement
and the Indenture and (iii) the occurrence of either event described below.
In order to avoid excessive administrative expenses, the Seller or the
Servicer, or any successor to the Servicer, will be permitted at its option to
purchase from the Trust, on any Distribution Date following the last day of a
Collection Period as of which the Pool Balance is 10% or less of the sum of the
Original Pool Balance and the aggregate principal balance of all Subsequent
Receivables conveyed to the Trust as of the related Subsequent Cutoff Dates, all
remaining Receivables at a price equal to the aggregate Repurchase Amounts for
the Receivables (including Defaulted Receivables), plus the appraised value of
any other property held by the Trust (less liquidation expenses). In the event
that both the Seller and the Servicer, or any successor to the Servicer, elect
to purchase the Receivables, the party first notifying the Trustee (based on the
Trustee's receipt of such notice) shall be permitted to purchase the
Receivables. Exercise of such right will effect early retirement of the
Securities.
If neither the Seller nor the Servicer (nor any successor to the Servicer)
exercises its optional termination right within 90 days after the day of a
Collection Period as of which such right can first be exercised, the Trustee
shall solicit bids for the purchase of the Receivables remaining in the Trust.
In the event that satisfactory bids are received as described below, the sale
proceeds will be distributed to Securityholders on the second Distribution Date
succeeding the last day of such Collection Period. Any purchaser of the
Receivables must agree to the continuation of the then current Servicer as
Servicer on terms substantially similar to those in the Sale and Servicing
Agreement. Any such sale will effect early retirement of the Securities.
The Trustee must receive at least two bids from prospective purchasers that
are considered at the time to be competitive participants in the market for
motor vehicle retail installment sale contracts. The highest bid may not be less
than the fair market value of such Receivables and must equal the sum of (i) the
greater of (a) the aggregate Repurchase Amounts for the Receivables (including
Defaulted Receivables), plus the appraised value of any other property held by
the Trust (less liquidation expenses) or (b) an amount that when added to
amounts on deposit in the Collection Account that would constitute Available
Funds for such second succeeding Distribution Date would result in proceeds
sufficient to distribute the sum of (1) the Note Distributable Amount and (2)
the Certificate Distributable Amount, and (ii) the sum of (a) an amount
sufficient to reimburse the Servicer for any outstanding Advances and (b) the
Servicing Fee payable on such
S-27
<PAGE> 30
final Distribution Date, including any unpaid Servicing Fees with respect to one
or more prior Collection Periods. The Indenture Trustee may consult with
financial advisors, including one or more of the Underwriters, to determine if
the fair market value of such Receivables has been offered. Upon the receipt of
such bids, the Indenture Trustee shall sell and assign such Receivables to the
highest bidder and the Securities shall be retired in such Distribution Date. If
any of the foregoing conditions are not met, the Indenture Trustee shall decline
to consummate such sale and shall not be under any obligation to solicit any
further bids or otherwise negotiate any further sale of Receivables remaining in
the Trust. In such event, however, the Indenture Trustee may from time to time
solicit bids in the future for the purchase of such Receivables upon the same
terms described above.
The Indenture Trustee will give written notice of termination to each
Securityholder of record. The final distribution to each Securityholder will be
made only upon surrender and cancellation of such holder's Notes or Certificates
at any office or agency of the Indenture Trustee specified in the notice of
termination. The Indenture Trustee will give a second written notice to
Securityholders of such termination and payment six months after the
Distribution Date stated in the first written notice of termination. Any funds
remaining in the Trust one year after the Indenture Trustee has given such
second written notice will be distributed to the United Way.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Arter & Hadden LLP, special federal income tax counsel to
the Seller, the Trust will not be taxable as an association or publicly traded
partnership taxable as a corporation, but should be classified as a partnership
under the Internal Revenue Code of 1986, as amended (the "Code"). In the opinion
of such counsel, the Notes will be treated as indebtedness and the Certificates
should constitute the equity of the Trust. For a discussion of the anticipated
material federal income tax consequences of the purchase, ownership and
disposition of the Securities, see "Certain Federal Income Tax Consequences" in
the Prospectus.
CERTAIN STATE TAX CONSEQUENCES
The activities to be undertaken by the Servicer in servicing and collecting
the Receivables will take place in California. The State of California imposes a
state individual income tax and a single business tax which is imposed on
corporations, partnerships and other entities doing business in the State of
California. This discussion is based upon present provisions of California
statutes and the regulations promulgated thereunder, and applicable judicial or
ruling authority, all of which are subject to change, which change may be
retroactive. No ruling on any of the issues discussed below will be sought from
the California Department of Treasury.
Because of the variation in each state's tax laws based in whole or in part
upon income, it is impossible to predict tax consequences to holders of Notes
and Certificates in all of the state taxing jurisdictions in which they are
already subject to tax. Noteholders and Certificateholders are urged to consult
their own tax advisors with respect to state tax consequences arising out of the
purchase, ownership and disposition of Notes and Certificates.
For purposes of the following summary, references to the Trust, the Notes,
the Certificates and related terms, parties and documents shall be deemed to
refer, unless otherwise specified herein, to each Trust and the Notes,
Certificates and related terms, parties and documents applicable to such Trust.
TAX CONSEQUENCES WITH RESPECT TO THE NOTES
It is expected that state tax counsel of the Seller ("California Tax
Counsel") will advise the Trust that, assuming the Notes will be treated as debt
for federal income tax purposes, the Notes will be treated as debt for
California income and single business tax purposes. Accordingly, Noteholders not
otherwise subject to taxation in California should not become subject to
taxation in California solely because of a holder's ownership of Notes. However,
a Noteholder already subject to California's income tax or single business tax
could be required to pay additional California tax as a result of the holder's
ownership or disposition of Notes.
S-28
<PAGE> 31
TAX CONSEQUENCES WITH RESPECT TO THE CERTIFICATES
If the arrangement created by the Trust Agreement is treated as a
partnership (not taxable as a corporation) for federal income tax purposes,
California Tax Counsel will deliver its opinion that the same treatment should
also apply for California tax purposes. In such case, the resulting constructive
partnership should not be treated as doing business in California but rather
should be viewed as a passive holder of investments and, as a result, should not
be subject to the California single business tax (which, if applicable, could
possibly result in reduced distributions to Certificateholders). The
Certificateholders also should not be subject to the California single business
tax on income received through the partnership.
Under current law, Certificateholders that are nonresidents of California
and are not otherwise subject to California income tax should not be subject to
California income tax on the income from the constructive partnership. In any
event, classification of the arrangement as a "partnership" would not cause a
Certificateholder not otherwise subject to taxation in California to pay
California tax on income beyond that derived from the Certificates.
If the Certificates are instead treated as ownership interests in an
association taxable as a corporation or a "publicly traded partnership" taxable
as a corporation, then the hypothetical entity should not be subject to the
California single business tax (which, if applicable, could result in reduced
distributions to Certificateholders). A Certificateholder not otherwise subject
to tax in California would not become subject to California tax as a result of
its mere ownership of such an interest.
ERISA CONSIDERATIONS
THE NOTES
The Notes may be purchased by an employee benefit plan or an individual
retirement account (a "Plan") subject to ERISA or Section 4975 of the Code. A
fiduciary of a Plan must determine that the purchase of a Note is consistent
with its fiduciary duties under ERISA and does not result in a nonexempt
prohibited transaction as defined in Section 406 of ERISA or Section 4975 of the
Code. For additional information regarding treatment of the Notes under ERISA,
see "ERISA Considerations" in the Prospectus.
The Notes may not be purchased with the assets of a Plan if the Seller, the
Servicer, the Indenture Trustee, the Owner Trustee or any of their affiliates
(i) has investment or administrative discretion with respect to such Plan
assets; (ii) 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 (a) will serve as a primary basis
for investment decisions with respect to such Plan assets and (b) will be based
on the particular investment needs for such Plan; or (iii) is an employer
maintaining or contributing to such Plan.
THE CERTIFICATES
The Certificates may not be acquired by (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code (other than a
governmental plan described in Section 4975(g)(2) of the Code) or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity or which uses plan assets to acquire Certificates. By
its acceptance of a Certificate, each Certificateholder will be deemed to have
represented and warranted that it is not subject to the foregoing limitation.
Due to the complexities of the foregoing rules and the penalties imposed
upon persons involved in prohibited transactions, it is important that the
fiduciary of an employee benefit plan considering the purchase of Certificates
consult with its counsel regarding the applicability of the prohibited
transaction provisions of ERISA and the Code to such investment. In particular,
while payments made on the Certificates from the property of the Trust or from
monies on deposit in the Reserve Fund are encompassed by the Exemption, payments
made from the Yield Supplement Account (or pursuant to the Yield Supplement
Agreement by Fleetwood Credit) to the Certificateholders may not be included
under the terms of the Exemption since such
S-29
<PAGE> 32
payments are not derived from assets held in the Trust or from amounts on
deposit in the Reserve Fund. Accordingly, fiduciaries of Benefit Plans should
determine, in their particular circumstances, whether the prohibited transaction
provisions of ERISA or the Code might be applicable to payments made from the
Yield Supplement Account or from Fleetwood Credit under the Yield Supplement
Agreement.
The DOL issued Prohibited Transaction Class Exemption ("PTCE") 95-60 on
July 12, 1995 in response to the United States Supreme Court decision John
Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank 114 S.Ct. 517
(1993), in which the Supreme Court held that assets held in an insurance
company's general account may be deemed to be "plan assets" for ERISA purposes
under certain circumstances. Subject to certain conditions, PTCE 95-60 provides
general relief from the prohibited transaction rules that would otherwise be
applicable to assets held in an insurance company's general account. Prospective
insurance company purchasers should consult with their counsel to determine
whether the decision in John Hancock, as modified by PTCE 95-60, affects their
ability to make purchases of the Certificates.
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 199 (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters"), for whom is acting as
representative (the "Representative") have severally but not jointly agreed to
purchase from the Seller the following respective principal amounts of the
Securities:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF PRINCIPAL
CLASS A-1 CLASS A-2 CLASS A-3 AMOUNT OF
UNDERWRITERS NOTES NOTES NOTES CERTIFICATES
------------ --------- --------- --------- ------------
<S> <C> <C> <C> <C>
[Names of Underwriters]................ $ $ $ $
---- ---- ---- ----
Total........................ $ $ $ $
==== ==== ==== ====
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the Securities if any are
purchased.
The Underwriters have advised the Seller that the Underwriters propose
initially to offer the Securities to the public at the respective public
offering prices set forth on the cover page of this Prospectus Supplement, and
to certain dealers at such prices less a concession not in excess of % of
the Class A-1 Note denominations, the Class A-2 Note denominations, the Class
A-3 Note denominations and the Certificate denominations. The Underwriters may
allow and such dealers may reallow a concession not in excess of % of the
Class A-1 Note denominations, % of the Class A-2 Note denominations, %
of the Class A-3 Note denominations and % of the Certificate denominations.
After the initial public offering, the public offering prices and such
concessions may be changed.
The Underwriting Agreement provides that the Seller and Fleetwood Credit
will jointly and severally indemnify the Underwriters against certain
liabilities, including liabilities under applicable securities laws, or
contribute to payments the Underwriters may be required to make in respect
thereof.
Upon receipt of a request by an investor who has received an electronic
Prospectus from an Underwriter or a request by such investor's representative
within the period during which there is an obligation to deliver a Prospectus,
the Seller or the Underwriters will promptly delver, or cause to be delivered,
without charge, a paper copy of this Prospectus Supplement and the Prospectus.
Until the distribution of the Securities is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the Securities. As an exemption to these rules,
the Underwriters are permitted to engage in certain transactions that stabilize
the price of the Securities. Such transactions consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the Securities.
S-30
<PAGE> 33
Neither the Seller nor any Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the prices of the Securities. In addition, neither
the Seller nor any Underwriter makes any representation that the Underwriters
will engage in such transactions or that such transactions, once commenced, will
not be discontinued without notice.
LEGAL OPINIONS
Certain legal matters relating to the Securities will be passed upon for
the Seller by Timothy M. Hayes or Frederic C. Liskow, each a Vice President and
Assistant General Counsel to Associates First Capital Corporation, the parent
company of the Servicer. Mr. Hayes and Mr. Liskow each own shares of Class A
Common Stock of Associates First Capital Corporation, and each have options to
purchase additional shares of such Class A Common Stock. Arter & Hadden LLP,
Washington, D.C. will act as special counsel to the Seller with respect to
certain matters relating to the Securities, including certain federal income tax
matters. Brown & Wood LLP, San Francisco, California will act as counsel for the
Underwriters. Brown & Wood LLP has from time to time represented Fleetwood
Credit in certain matters not related to the offering of the Securities.
S-31
<PAGE> 34
INDEX OF TERMS
Set forth below is a list of certain of the more significant terms used in
this Prospectus Supplement and the pages on which the definitions of such terms
may be found herein.
<TABLE>
<CAPTION>
TERM PAGE
- - ---- ------
<S> <C>
Accelerated Principal Distribution Amount....... S-17
Additional Yield Supplement Account............S-6, S-21
APR............................................. S-5
Auction Sale.................................... S-10
Available Amount................................ S-21
Available Funds................................. S-21
Calculation Agent............................... S-16
Cede............................................ S-20
Certificate Balance............................. S-19
Certificate Distribution Account................ S-13
Certificate Final Scheduled Distribution Date... S-4
Certificate Distributable Amount................ S-24
Certificate Interest Carryover Shortfall........ S-24
Certificate Interest Distributable Amount....... S-24
Certificate Monthly Interest Distributable
Amount........................................ S-24
Certificate Monthly Principal Distributable
Amount........................................ S-24
Certificate Percentage.......................... S-24
Certificate Principal Carryover Shortfall....... S-24
Certificate Principal Distributable Amount...... S-24
Certificates....................................S-1, S-3
Class A-1 Final Scheduled Distribution Date..... S-4
Class A-1 Notes.................................S-1, S-3
Class A-1 Rate.................................. S-6
Class A-2 Final Scheduled Distribution Date..... S-4
Class A-2 Notes.................................S-1, S-3
Class A-2 Rate.................................. S-7
Class A-3 Final Scheduled Distribution Date..... S-4
Class A-3 Notes.................................S-1, S-3
Class A-3 Rate.................................. S-6
Closing Date.................................... S-5
Code............................................ S-28
Collected Interest.............................. S-22
Collected Principal............................. S-22
Collection Account.............................. S-13
Collection Period............................... S-7
Commission...................................... S-2
Corporate Trust Office.......................... S-12
Dealers......................................... S-4
Determination Date.............................. S-21
Distribution Accounts........................... S-13
Distribution Date............................... S-4
DTC............................................. S-20
ERISA........................................... S-11
Excess Amounts.................................. S-9
Final Scheduled Distribution Dates.............. S-4
Financed Vehicles...............................S-1, S-4
Fleetwood Credit................................ S-3
Funding Period.................................. S-5
Indenture....................................... S-3
Indenture Trustee............................... S-3
Initial Cutoff Date.............................S-1, S-4
Initial Financed Vehicles.......................S-1, S-4
Initial Receivables.............................S-1, S-4
Interest Period................................. S-7
Interest Rates.................................. S-6
LIBOR........................................... S-16
LIBOR Determination Date........................ S-16
London Banking Day.............................. S-16
Mandatory Prepayment............................ S-19
Mandatory Redemption............................ S-18
</TABLE>
<TABLE>
<CAPTION>
TERM PAGE
- - ---- ------
<S> <C>
Maximum Initial Yield Supplement Amount........S-6, S-21
Maximum Subsequent Yield Supplement Amount.....S-6, S-21
Maximum Yield Supplement Amount................S-6, S-21
Monthly Principal Payment....................... S-23
Moody's......................................... S-10
Negative Carry Amount........................... S-21
Note Distribution Account....................... S-13
Note Distributable Amount....................... S-23
Note Interest Carryover Shortfall............... S-23
Note Interest Distributable Amount.............. S-23
Note Monthly Interest Distributable Amount...... S-23
Note Monthly Principal Distributable Amount..... S-23
Note Percentage................................. S-23
Note Principal Carryover Shortfall.............. S-24
Note Principal Distributable Amount............. S-23
Notes...........................................S-1, S-3
Optional Purchase............................... S-10
Original Certificate Balance.................... S-19
Original Pool Balance........................... S-10
Owner Certificate Distribution Account.......... S-13
Owner Certificates.............................. S-3
Owner Collection Account........................ S-13
Owner Trust..................................... S-3
Owner Trustee................................... S-3
Pass-Through Rate............................... S-8
Payment Date.................................... S-4
Plan............................................ S-29
Pool Balance.................................... S-13
Pre-Funded Amount............................... S-5
Pre-Funded Percentage........................... S-18
Pre-Funding Account.............................S-1, S-5
Rating Agencies................................. S-10
Rating Event.................................... S-8
Realized Losses................................. S-19
Receivables.....................................S-1, S-4
Receivables Purchase Agreement.................. S-5
Record Date..................................... S-4
Redemption Price................................ S-18
Required Rate................................... S-6
Reserve Fund.................................... S-9
Sale and Servicing Agreement.................... S-4
Securities......................................S-1, S-3
Seller..........................................S-1, S-3
Servicer........................................ S-3
Servicer Payment................................ S-7
Specified Reserve Fund Balance.................. S-9
Standard & Poor's............................... S-10
Subsequent Cutoff Date.......................... S-5
Subsequent Financed Vehicles....................S-1, S-4
Subsequent Receivables..........................S-1, S-4
Subsequent Transfer Date........................ S-5
Transfer Agreement.............................. S-5
Trust...........................................S-1, S-3
Trust Agreement................................. S-3
Underwriting Agreement.......................... S-30
Yield Supplement Account........................ S-6
Yield Supplement Agreement...................... S-6
Yield Supplement Amount........................S-6, S-21
Yield Supplement Deposit Amount................. S-22
Yield Supplement Initial Deposit................ S-6
</TABLE>
S-32
<PAGE> 35
======================================================
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE SELLER, THE SERVICER OR THE
UNDERWRITERS. NEITHER THIS PROSPECTUS NOR THE PROSPECTUS SUPPLEMENT CONSTITUTES
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Reports to Securityholders...................... S-2
Summary......................................... S-3
Formation of the Trust.......................... S-12
Property of the Trust........................... S-13
The Receivables................................. S-14
Maturity, Prepayment and Yield Considerations... S-16
The Notes....................................... S-16
The Certificates................................ S-18
Certain Information Regarding the Securities.... S-20
Certain Federal Income Tax Consequences......... S-28
Certain State Tax Consequences.................. S-28
ERISA Considerations............................ S-29
Underwriting.................................... S-30
Legal Opinions.................................. S-31
Index of Terms.................................. S-32
PROSPECTUS
Available Information........................... 2
Reports to Securityholders...................... 2
Incorporation of Certain Documents by
Reference..................................... 2
Summary......................................... 3
Formation of the Trusts......................... 11
Property of the Trusts.......................... 11
The Receivables................................. 13
Yield Considerations............................ 16
Pool Factors and Trading Information............ 17
Use of Proceeds................................. 18
The Seller...................................... 18
The Servicer.................................... 18
The Notes....................................... 19
The Owner Certificates.......................... 23
The Grantor Certificates........................ 24
Certain Information Regarding the Securities.... 25
Certain Legal Aspects of the Receivables........ 46
Certain Federal Income Tax Consequences......... 52
State Tax Consequences with Respect to Owner
Trusts........................................ 64
ERISA Considerations............................ 64
Plan of Distribution............................ 65
Legal Opinions.................................. 66
Index of Terms.................................. 67
</TABLE>
---------------
UNTIL , 199 , ALL DEALERS EFFECTING TRANSACTIONS IN THE SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION
OF DEALERS TO DELIVER A PROSPECTUS SUPPLEMENT AND THE PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTION.
======================================================
======================================================
$
FLEETWOOD CREDIT RV
RECEIVABLES
199 - OWNER TRUST
$
% ASSET BACKED
NOTES, CLASS A-1
$
FLOATING RATE ASSET BACKED
NOTES, CLASS A-2
$
% ASSET BACKED
NOTES, CLASS A-3
$
% ASSET BACKED CERTIFICATES
FLEETWOOD CREDIT
RECEIVABLES CORP.
SELLER
FLEETWOOD CREDIT CORP.
SERVICER AND
A WHOLLY OWNED SUBSIDIARY OF
ASSOCIATES FIRST CAPITAL
CORPORATION
------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------
[UNDERWRITERS]
======================================================
<PAGE> 36
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 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 WOLD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STAT.
SUBJECT TO COMPLETION, DATED JUNE 17, 1998
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1998)
$
FLEETWOOD CREDIT RV RECEIVABLES 199- GRANTOR TRUST
$ % ASSET BACKED CERTIFICATES, CLASS A
$ % ASSET BACKED CERTIFICATES, CLASS B
FLEETWOOD CREDIT RECEIVABLES CORP.
SELLER
FLEETWOOD CREDIT CORP.
SERVICER AND
A WHOLLY OWNED SUBSIDIARY OF
ASSOCIATES FIRST CAPITAL CORPORATION
---------------------
The Fleetwood Credit RV Receivables 199- Grantor Trust Asset Backed
Certificates (the "Certificates") will consist of one class of senior
certificates (the "Class A Certificates") and one class of subordinated
certificates (the "Class B Certificates"). Principal, and interest to the extent
of the Class A Pass-Through Rate of % per annum, and the Class B
Pass-Through Rate of % per annum, will be distributed to the Class A
Certificateholders and Class B Certificateholders, respectively, on the 15th day
of each month (or, if such day is not a Business Day, on the next succeeding
Business Day), beginning , 199 . The Final Scheduled Distribution
Date will be the Distribution Date.
The Class A Certificates and the Class B Certificates will respectively
evidence in the aggregate undivided ownership interests of % and % of
the Fleetwood Credit RV Receivables 199 - Grantor Trust (the "Trust"). The
Trust will be formed pursuant to a Pooling and Servicing Agreement to be entered
into among Fleetwood Credit Receivables Corp., as Seller (the "Seller"),
Fleetwood Credit Corp., as Servicer ("Fleetwood Credit" or, in its capacity as
Servicer, the "Servicer"), and , as Trustee (the "Trustee"). The rights of
the Class B Certificateholders to receive distributions of interest and
principal will be subordinated to the rights of the Class A Certificateholders
to the limited extent described herein.
The property of the Trust will primarily include a pool of simple interest
retail installment sale contracts (the "Initial Receivables") secured by new and
used recreational vehicles (the "Initial Financed Vehicles"), certain monies due
under the Initial Receivables on and after 1, 199 , security interests
in the Initial Financed Vehicles, monies on deposit in a trust account (the
"Pre-Funding Account") to be established with the Trustee and certain other
property, as more fully described herein. From time to time on or before
, 199 , additional simple interest retail installment sale contracts
(the "Subsequent Receivables" and, together with the Initial Receivables, the
"Receivables") secured by new and used recreational vehicles (the "Subsequent
Financed Vehicles" and, together with the Initial Financed Vehicles, the
"Financed Vehicles"), will be purchased by the Trust from the Seller from monies
on deposit in the Pre-Funding Account. In each case, the Receivables, including
the security interests in the related Financed Vehicles, will be purchased by
the Seller from Fleetwood Credit concurrently with their conveyance to the
Trust. See "Property of the Trust" herein.
There currently is no secondary market for either Class of Certificates and
there is no assurance that one will develop. The Underwriters expect, but will
not be obligated, to make a market in each Class of Certificates. There is no
assurance that any such market will develop, or if one does develop, that it
will continue or provide sufficient liquidity.
---------------------
THE CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST AND WILL NOT REPRESENT
INTERESTS IN OR OBLIGATIONS OF FLEETWOOD CREDIT RECEIVABLES CORP., FLEETWOOD
CREDIT CORP., ASSOCIATES FIRST CAPITAL CORPORATION, THE TRUSTEE OR ANY OF THEIR
RESPECTIVE AFFILIATES.
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 ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
===========================================================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO THE
PUBLIC(1) COMMISSIONS SELLER(1)(2)
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Class A Certificate......................... % % %
- - ---------------------------------------------------------------------------------------------------------------------------
Per Class B Certificate......................... % % %
- - ---------------------------------------------------------------------------------------------------------------------------
Total.................................. $ $ $
===========================================================================================================================
</TABLE>
(1) Plus accrued interest from 1, 199 .
(2) Before deduction of expenses payable by the Seller estimated at $ .
---------------------
The Class A Certificates and Class B Certificates are offered by the several
Underwriters when, as and if issued and accepted by them, and subject to their
right to reject orders in whole or in part. It is expected that delivery of the
Certificates, in book-entry form will be made through the facilities of The
Depository Trust Company on or about , 199 , against payment in
immediately available funds.
---------------------
[UNDERWRITERS]
---------------------
The date of this Prospectus Supplement is , 199 .
<PAGE> 37
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION ABOUT THE
OFFERING OF THE CERTIFICATES. ADDITIONAL INFORMATION IS CONTAINED IN THE
ACCOMPANYING PROSPECTUS (THE "PROSPECTUS"), AND PROSPECTIVE INVESTORS ARE URGED
TO READ BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE
CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. TO THE EXTENT ANY STATEMENTS IN THIS
PROSPECTUS SUPPLEMENT CONFLICT WITH STATEMENTS IN THE PROSPECTUS, THE STATEMENTS
IN THIS PROSPECTUS SUPPLEMENT SHALL CONTROL.
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of either Class of
Certificates. Such transactions may including stabilizing. For a description of
these activities, see "Underwriting."
UNTIL , 199 , ALL DEALERS EFFECTING TRANSACTIONS IN THE
CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. UPON RECEIPT OF A REQUEST BY AN INVESTOR, OR
SUCH INVESTOR'S REPRESENTATIVE, WITHIN THE PERIOD DURING WHICH THERE IS A
PROSPECTUS DELIVERY OBLIGATION, THE SELLER OR THE UNDERWRITERS WILL PROMPTLY
DELIVER, OR CAUSE TO BE DELIVERED, WITHOUT CHARGE AND IN ADDITION TO SUCH
DELIVERY REQUIREMENTS, A PAPER COPY OF THE PROSPECTUS OR A PROSPECTUS ENCODED IN
AN ELECTRONIC FORMAT.
---------------------
REPORTS TO CERTIFICATEHOLDERS
, as Trustee, will provide to Certificateholders
(which shall be Cede & Co. as the nominee of The Depository Trust Company unless
Definitive Certificates are issued under the limited circumstances described in
the Prospectus) unaudited monthly and annual reports concerning the Receivables.
See "Certain Information Regarding the Securities -- Statements to
Securityholders" and "-- Evidence as to Compliance" in the Prospectus. Such
reports will not constitute financial statements prepared in accordance with
generally accepted accounting principles. The Seller, as originator of the
Trust, will file with the Securities and Exchange Commission (the "Commission")
such periodic reports as are required under the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
S-2
<PAGE> 38
SUMMARY
This Summary is qualified in its entirety by reference to the detailed
information appearing elsewhere herein and in the accompanying Prospectus.
Certain capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto elsewhere in this Prospectus Supplement, or to the
extent not defined herein, shall have the meanings ascribed thereto in the
Prospectus. See the Index of Terms for the location herein of certain
capitalized terms.
Trust...................... Fleetwood Credit RV Receivables 199 - Grantor Trust
(the "Trust"). The Trust will be a "Grantor Trust"
for purposes of the Prospectus.
Seller..................... Fleetwood Credit Receivables Corp. (the "Seller"),
a wholly owned, limited purpose subsidiary of
Fleetwood Credit Corp. See "The Seller" in the
Prospectus.
Servicer................... Fleetwood Credit Corp. ("Fleetwood Credit" or, in
its capacity as Servicer, the "Servicer"), a wholly
owned subsidiary of Associates First Capital
Corporation. See "The Servicer" in the Prospectus.
Securities Offered......... The Fleetwood Credit RV Receivables 199 - Grantor
Trust Asset Backed Certificates (the
"Certificates") will consist of one class of senior
certificates (the "Class A Certificates") and one
class of subordinated certificates (the "Class B
Certificates"). The Certificates will be "Grantor
Certificates", the Class A Certificates will be
"Senior Certificates" and the Class B Certificates
will be "Subordinated Certificates" for purposes of
the Prospectus.
Each Certificate will represent a fractional
undivided interest in the Trust. The property of
the Trust will consist primarily of a pool of
simple interest retail installment sale contracts
(the "Initial Receivables") secured by the new and
used recreational vehicles financed thereby (the
"Initial Financed Vehicles"), certain monies due
under the Initial Receivables on and after
1, 199 (the "Initial Cutoff Date"),
security interests in the Initial Financed
Vehicles, an interest bearing account initially
established with the Trustee (the "Certificate
Account") and the proceeds thereof, proceeds from
claims under certain insurance policies in respect
of individual Initial Financed Vehicles or the
related Obligors, certain rights under a pooling
and servicing agreement to be dated as of
1, 199 (the "Agreement"), among the
Seller, the Servicer and , as
trustee (the "Trustee"), and amounts on deposit in
a trust account established for the benefit of the
Certificateholders (the "Pre-Funding Account"). The
Agreement will be a "Pooling and Servicing
Agreement" and the Trustee will be a "Grantor
Trustee" for purposes of the Prospectus. From time
to time on or before , 199 ,
additional simple interest retail installment sale
contracts (the "Subsequent Receivables" and,
together with the Initial Receivables, the
"Receivables") secured by the new and used
recreational vehicles financed thereby (the
"Subsequent Financed Vehicles" and, together with
the Initial Financed Vehicles, the "Financed
Vehicles"), certain monies due under the Subsequent
Receivables after the related Subsequent Cutoff
Dates, security interests in the related Subsequent
Financed Vehicles and proceeds from claims under
certain insurance policies in respect of individual
Subsequent Financed Vehicles or the related
Obligors will be purchased by the Trust from the
Seller from monies on deposit in the Pre-Funding
Account. See "Property of the Trust" herein.
S-3
<PAGE> 39
The Class A Certificates will evidence in the
aggregate an undivided ownership interest (the
"Class A Percentage") of % of the Trust
(initially representing $ ) and the Class
B Certificates will evidence in the aggregate an
undivided ownership interest (the "Class B
Percentage") of % of the Trust (initially
representing $ ). The Class B Certificates
will be subordinated to the Class A Certificates to
the limited extent described herein.
The Certificates will be issued pursuant to the
Agreement in denominations of $1,000 and integral
multiples thereof in book-entry form. Definitive
Certificates will be issued only under the limited
circumstances described in the Prospectus. See
"Certain Information Regarding the
Securities -- Book-Entry Registration" and
"-- Definitive Certificates" in the Prospectus.
Class A Pass-Through
Rate....................... % per annum, calculated on the basis of a 360-day
year consisting of twelve 30-day months (the "Class
A Pass-Through Rate"), payable monthly.
Class B Pass-Through
Rate....................... % per annum, calculated on the basis of a 360-day
year consisting of twelve 30-day months (the "Class
B Pass-Through Rate"), payable monthly.
The Receivables............ The Receivables arise from simple interest retail
installment sale contracts originated by dealers in
new and used recreational vehicles (the "Dealers")
which are purchased by Fleetwood Credit. All of the
Receivables will be selected from the contracts
owned by Fleetwood Credit based upon the criteria
described in the Prospectus under "The Receivables"
and "Certain Information Regarding the
Securities -- Sale and Assignment of the
Receivables".
On or before the date of initial issuance of the
Certificates (the "Closing Date"), Fleetwood Credit
will sell the Initial Receivables to the Seller
pursuant to a receivables purchase agreement to be
dated as of 1, 199 (the "Receivables
Purchase Agreement") between the Seller and
Fleetwood Credit. The Seller will, in turn, sell
the Initial Receivables to the Trust pursuant to
the Agreement. As of the Initial Cutoff Date, the
Initial Receivables had an aggregate principal
balance of $ , a weighted average annual
percentage rate (the "APR") of %, a weighted
average original maturity of months and a weighted
average remaining maturity of months.
From time to time during the Funding Period,
pursuant to the Receivables Purchase Agreement,
Fleetwood Credit will be obligated to sell, and the
Seller will be obligated to purchase, Subsequent
Receivables at a purchase price equal to the
aggregate principal amount thereof as of a date in
the related month of transfer designated by
Fleetwood Credit and the Seller (each, a
"Subsequent Cutoff Date"). Pursuant to the
Agreement and one or more transfer agreements
(each, a "Transfer Agreement") among the Seller,
the Servicer and the Trustee, and subject to the
satisfaction of certain conditions described herein
and in the Prospectus under "Certain Information
Regarding the Securities -- Sale and Assignment of
the Receivables", the Seller will in turn sell the
Subse-
S-4
<PAGE> 40
quent Receivables to the Trust at a purchase price
equal to the amount paid by the Seller to Fleetwood
Credit for such Subsequent Receivables, which
purchase price shall be paid from monies on deposit
in the Pre-Funding Account. The aggregate principal
balance of the Subsequent Receivables to be
conveyed to the Trust during the Funding Period
will not exceed $ (i.e., % of the sum of
the Original Class A Certificate Balance and the
Original Class B Certificate Balance). Subsequent
Receivables will be transferred from Fleetwood
Credit to the Seller and from the Seller to the
Trust on the Business Day specified by Fleetwood
Credit and the Seller during the month in which the
related Subsequent Cutoff Date occurs (each, a
"Subsequent Transfer Date").
The Pre-Funding Account.... The Pre-Funding Account will be established by
Fleetwood Credit, maintained as a trust account
with the Trustee and is designed solely to hold
funds to be applied by the Trustee during the
Funding Period to pay to the Seller the purchase
price for Subsequent Receivables. Monies on deposit
in the Pre-Funding Account will not be available to
cover losses on or in respect of the Receivables.
The Pre-Funding Account will be created with an
initial deposit by the Seller of $ (the
"Pre-Funded Amount"). The "Funding Period" will be
the period from the Closing Date until the earliest
to occur of (i) the date on which the remaining
Pre-Funded Amount is less than $100,000, (ii) the
date on which an Event of Default or Servicer
Default occurs or (iii) the close of business on
, 199 . The Funding Period will not
exceed 90 days from the Closing Date, and the
aggregate principal balance of the Subsequent
Receivables to be conveyed to the Trust during the
Funding Period will not exceed 25% of the initial
aggregate principal amount of the Certificates.
During the Funding Period, on one or more
Subsequent Transfer Dates, the Trustee will use the
Pre-Funded Amount to purchase Subsequent
Receivables from the Seller. The Seller expects
that the Pre-Funded Amount will be reduced to less
than $100,000 by the , 199 Distribution
Date, although no assurances can be given in this
regard. Any portion of the Pre-Funded Amount
remaining on deposit in the Pre-Funding Account at
the end of the Funding Period will be payable as
principal to Certificateholders in accordance with
their respective Class Percentages. See "The
Certificates -- The Pre-Funding Account; Mandatory
Prepayment of the Certificates" herein.
The Yield Supplement
Account; The Yield
Supplement Agreement..... Fleetwood Credit will establish a yield supplement
account with the Trustee for the benefit of the
Certificateholders (the "Yield Supplement
Account"). The Yield Supplement Account is designed
solely to hold funds to be applied by the Trustee
to provide payments to the Certificateholders in
respect of Receivables the APR of which is less
than the sum of (i) the weighted average of the
Class A Pass-Through Rate and the Class B
Pass-Through Rate and (ii) the Servicing Fee Rate
(the "Required Rate").
The Yield Supplement Account will be created with
an initial deposit by Fleetwood Credit (the "Yield
Supplement Account Initial Deposit") in an amount
to be specified in the Agreement. The Yield
Supplement Account Initial Deposit will equal the
aggregate amount (which amount
S-5
<PAGE> 41
may be discounted at a rate to be specified in the
Agreement) by which interest on the Principal
Balance of each Initial Receivable for the period
commencing on the Initial Cutoff Date and ending
with the scheduled maturity of each Receivable,
assuming that payments on such Receivables are made
as scheduled and no prepayments are made, at a rate
equal to the Required Rate, exceeds interest on
such Principal Balances at the APR of each such
Receivable (the "Yield Supplement Amount" and, with
respect to the Initial Receivables, the "Maximum
Initial Yield Supplement Amount").
Fleetwood Credit, the Seller and the Trustee will
enter into a yield supplement agreement to be dated
as of 1, 199 (the "Yield Supplement
Agreement") pursuant to which on each Subsequent
Transfer Date Fleetwood Credit will deposit an
amount (which amount may be discounted at a rate to
be specified in the Agreement), if any, into the
Yield Supplement Account (the "Additional Yield
Supplement Amount") equal to the aggregate Yield
Supplement Amounts in respect of the related
Subsequent Receivables for the period commencing
with the related Subsequent Cutoff Date and ending
with the scheduled maturity of each related
Subsequent Receivable, assuming that payments on
such Receivables are made as scheduled and no
prepayments are made. The aggregate Additional
Yield Supplement Amounts in respect of the
Subsequent Receivables is referred to herein as the
"Maximum Subsequent Yield Supplement Amount" and,
together with the Maximum Initial Yield Supplement
Amount, the "Maximum Yield Supplement Amount." See
"The Certificates -- The Yield Supplement Account;
The Yield Supplement Agreement" herein.
Distribution Dates......... The 15th day of each month (or, if such day is not
a Business Day, the next succeeding Business Day),
beginning , 199 . The final scheduled
Distribution Date (the "Final Scheduled
Distribution Date") will be the
Distribution Date.
Interest................... On each Distribution Date, the Trustee will
distribute to holders of record of (i) the Class A
Certificates (the "Class A Certificateholders") as
of the day 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"), interest
in an amount equal to one-twelfth of the product of
the Class A Pass-Through Rate, calculated on the
basis of a 360-day year consisting of twelve 30-day
months, and the Class A Certificate Balance as of
the immediately preceding Distribution Date (after
giving effect to distributions of principal made on
such immediately preceding Distribution Date), and
(ii) the Class B Certificates (the "Class B
Certificateholders" and, together with the Class A
Certificateholders, the "Certificateholders") as of
the related Record Date, interest in an amount
equal to one-twelfth of the product of the Class B
Pass-Through Rate, calculated on the basis of a
360-day year consisting of twelve 30-day months,
and the Class B Certificate Balance as of the
immediately preceding Distribution Date (after
giving effect to reductions in the Class B
Certificate Balance made on such immediately
preceding Distribution Date). In the case of the
first Distribution Date, the Trustee will
distribute to Certificateholders of record as of
the related Record Date interest in an amount equal
to (a) the product of (i) the Class A Pass-
S-6
<PAGE> 42
Through Rate or Class B Pass-Through Rate, as the
case may be, (ii) the Original Class A Certificate
Balance or Original Class B Certificate Balance, as
the case may be, and (iii) the number of days from
and including the Closing Date to but excluding
such Distribution Date, (b) divided by 360. The
rights of the Class B Certificateholders to receive
distributions of interest, to the extent of
collections on or in respect of the Receivables
allocable to interest and certain available amounts
on deposit in the Reserve Fund and the Yield
Supplement Account, will be subordinated to the
rights of Class A Certificateholders to receive
distributions of interest but will not be
subordinated to the rights of Class A
Certificateholders to receive distributions of
principal, as described herein.
The "Class A Certificate Balance" will initially
equal $ (the "Original Class A Certificate
Balance") and on any Distribution Date will equal
the Original Class A Certificate Balance, reduced
by all distributions of principal actually made on
or prior to such Distribution Date to Class A
Certificateholders. The "Class B Certificate
Balance" will initially equal $ (the
"Original Class B Certificate Balance") and on any
Distribution Date will equal the Original Class B
Certificate Balance, reduced by (i) all
distributions of principal actually made on or
prior to such Distribution Date to Class B
Certificateholders and (ii) Realized Losses
allocable to the Class B Certificates. See "The
Certificates -- Distributions on the Certificates"
herein.
Principal.................. On each Distribution Date, the Trustee will
distribute pro rata (i) to Class A
Certificateholders of record as of the related
Record Date an amount equal to the Class A
Percentage of all payments received by the Servicer
during the immediately preceding calendar month
(each, a "Collection Period") allocable to
principal on or in respect of the Receivables and
(ii) to Class B Certificateholders of record as of
the related Record Date an amount equal to the
Class B Percentage of all payments received by the
Servicer during the related Collection Period
allocable to principal on or in respect of the
Receivables. The rights of the Class B
Certificateholders to receive distributions of
principal will be subordinated to the rights of the
Class A Certificateholders to receive distributions
of interest and principal to the limited extent
described herein.
Mandatory Prepayment....... The Certificates will be prepaid in part on the
Distribution Date immediately succeeding the date
on which the Funding Period ends (or on the
Distribution Date on which the Funding Period ends
if the Funding Period ends on a Distribution Date)
in the event that any portion of the Pre-Funded
Amount remains on deposit in the Pre-Funding
Account after giving effect to the acquisition by
the Seller and sale to the Trust of all Subsequent
Receivables, including any such acquisition and
conveyance on the date on which the Funding Period
ends (a "Mandatory Prepayment"). The amount to be
distributed to Certificateholders of either Class
in connection with any Mandatory Prepayment will
equal the Class A Percentage or the Class B
Percentage, as the case may be, multiplied by the
remaining Pre-Funded Amount. See "The
Certificates -- The Pre-Funded Account; Mandatory
Prepayment of the Certificates" herein.
S-7
<PAGE> 43
Subordination of the Class
B Certificates............. The rights of the Class B Certificateholders to
receive distributions with respect to the
Receivables will be subordinated to the rights of
the Class A Certificateholders to the limited
extent described herein. This subordination is
intended to enhance the likelihood of timely
receipt by Class A Certificateholders of the full
amount of interest and principal required to be
paid to them, and to afford such Class A
Certificateholders limited protection against
losses in respect of the Receivables. No
distribution will be made to the Class B
Certificateholders on any Distribution Date in
respect of (i) interest until the full amount of
interest on the Class A Certificates payable on
such Distribution Date has been distributed to the
Class A Certificateholders and (ii) principal until
the full amount of interest on and principal of the
Class A Certificates payable on such Distribution
Date has been distributed to the Class A
Certificateholders. Distributions of interest on
the Class B Certificates, to the extent of
collections on or in respect of the Receivables
allocable to interest and certain available amounts
on deposit in the Reserve Fund and the Yield
Supplement Account, will not be subordinated to the
payment of principal on the Class A Certificates.
The protection afforded to the Class A
Certificateholders by the subordination feature
described above will be effected both by the
preferential right of the Class A
Certificateholders to receive, to the extent
described herein, current distributions from
collections on or in respect of the Receivables and
by the establishment of the Reserve Fund.
The Reserve Fund........... The Certificateholders will be afforded certain
limited protection, to the extent described herein,
against losses in respect of the Receivables by the
establishment of a segregated trust account held by
the Trustee for the benefit of Certificateholders
(the "Reserve Fund"). The Reserve Fund will not be
part of the Trust.
The Reserve Fund will be funded by the Seller on
the Closing Date in an amount equal to $
plus an amount attributable to the maximum
aggregate Negative Carry Amount. Thereafter, on
each Distribution Date all Excess Amounts, if any,
will be deposited from time to time in the Reserve
Fund to the extent necessary to maintain the
Reserve Fund at an amount to be specified in the
Agreement (the "Specified Reserve Fund Balance").
"Excess Amounts" in respect of a Distribution Date
will be all interest collections on or in respect
of the Receivables on deposit in the Certificate
Account in respect of such Distribution Date, after
the Servicer has been reimbursed for any
outstanding Advances and has been paid the
Servicing Fee (including any unpaid Servicing Fees
with respect to one or more prior Collection
Periods) and after giving effect to all
distributions of interest and principal required to
be made to the Class A and Class B
Certificateholders on such Distribution Date. The
Specified Reserve Fund Balance for the first
Distribution Date will be $ plus an amount
attributable to the maximum aggregate Negative
Carry Amount, and on any Distribution Date
thereafter will be calculated as described herein
under "The Certificates -- The Reserve Fund". On
each Distribution Date, funds will be withdrawn
from the Reserve Fund for distribution, first, to
Class A Certificateholders to the extent of
shortfalls in the amounts available to make
required distributions of interest on the Class A
Certificates, second, to Class B Certifi
S-8
<PAGE> 44
cateholders to the extent of shortfalls in the
amounts available to make required distributions of
interest on the Class B Certificates, third, to
Class A Certificateholders to the extent of
shortfalls in the amounts available to make
required distributions of principal on the Class A
Certificates and fourth, to Class B
Certificateholders to the extent of shortfalls in
the amounts available to make required
distributions of principal on the Class B
Certificates. In addition, on each Distribution
Date relating to the Funding Period, the Negative
Carry Amount, if any, will be withdrawn from the
Reserve Fund and deposited into the Certificate
Account.
On each Distribution Date, after giving effect to
all distributions made on such Distribution Date,
any amounts in the Reserve Fund in excess of the
Specified Reserve Fund Balance will be distributed
to the Seller and upon such distribution the
Certificateholders will have no further rights in,
or claims to, such amounts. Notwithstanding the
foregoing, during the Funding Period, all Excess
Amounts will be deposited into the Reserve Fund and
will not be paid to the Seller until the
Distribution Date immediately succeeding the date
on which the Funding Period ends (or on the
Distribution Date on which the Funding Period ends
if the Funding Period ends on a Distribution Date).
See "The Certificates -- The Reserve Fund" herein.
Advances; Non-Reimbursable
Payments................. On the Business Day immediately preceding each
Distribution Date, the Servicer will advance, in
respect of each Receivable, an amount equal to all
interest at the related APR which accrued in
respect of such Receivable from the last day upon
which a payment was made on such Receivable through
the last day of the related Collection Period. The
Servicer will be required to make an Advance only
to the extent it determines, in its reasonable
judgment, such Advance will be recoverable from
future payments and collections on or in respect of
the Receivables or otherwise. See
"Summary -- Advances" and "Certain Information
Regarding the Securities -- Certain Payments by the
Servicer" in the Prospectus.
Termination................ If none of the Seller, the Servicer or any
successor to the Servicer exercises its optional
termination right within 90 days after the last day
of the Collection Period as of which such right can
first be exercised, the Trustee shall solicit bids
for the purchase of all Receivables remaining in
the Trust. In the event that bids are received as
described herein under "The
Certificates -- Termination" in an amount
sufficient to pay, among other things, the unpaid
principal amount of the Certificates, together with
accrued interest thereon, the sale proceeds will be
distributed to Certificateholders on the second
Distribution Date succeeding the last day of such
Collection Period. If satisfactory bids are not
received, the Trustee shall decline to sell the
Receivables and shall not be under any obligation
to solicit any further bids or otherwise negotiate
any further sale of the Receivables. The foregoing
sale of the Receivables is referred to herein as an
"Auction Sale."
Ratings.................... It is a condition to the issuance of the
Certificates that the Class A Certificates be rated
Aaa by Moody's Investors Service, Inc. ("Moody's")
and AAA by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. ("Standard & Poor's"
and, together with
S-9
<PAGE> 45
Moody's, the "Rating Agencies") and the Class B
Certificates be rated Baa2 by Moody's and A by
Standard & Poor's. The ratings of each Class of
Certificates will be based primarily on the value
of the Initial Receivables, the Pre-Funding
Account, the terms of the Certificates and the
Reserve Fund. The foregoing ratings do not address
the likelihood that the Certificates will be
retired following the sale of the Receivables by
the Trustee as described above under "Termination".
There is no assurance that any rating will not be
lowered or withdrawn by the assigning Rating Agency
if, in its judgment, circumstances so warrant. In
the event that the rating initially assigned to the
Class A Certificates or the Class B Certificates is
subsequently lowered or withdrawn for any reason,
no person or entity will be obligated to provide
any additional credit enhancement with respect to
such Certificates. There can be no assurance
whether any other rating agency will rate the Class
A Certificates or the Class B Certificates, or if
one does, what rating would be assigned by any such
other rating agency. A security rating is not a
recommendation to buy, sell or hold securities.
Tax Status................. In the opinion of special federal income tax
counsel to the Seller, the Trust will be classified
as a grantor trust for federal income tax purposes
and not as an association taxable as a corporation.
For federal income tax purposes, the
Certificateholders will be considered to own
stripped bonds and stripped coupons. See "Certain
Federal Income Tax Consequences" herein and
"Certain Federal Income Tax Consequences -- Tax
Characterization of Grantor Trusts" in the
Prospectus. Certificateholders should consult their
own tax advisors as to the proper treatment of
original issue discount with respect to the
Receivables and the application of the stripped
bond rules.
ERISA Considerations....... Subject to the conditions described herein, the
Class A Certificates may be purchased by employee
benefit plans that are subject to the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"). BECAUSE THE CLASS B CERTIFICATES WILL BE
SUBORDINATED TO THE CLASS A CERTIFICATES, EMPLOYEE
BENEFIT PLANS SUBJECT TO ERISA WILL NOT BE ELIGIBLE
TO PURCHASE CLASS B CERTIFICATES. Any benefit plan
fiduciary considering purchase of the Certificates
should, among other things, consult with its
counsel in determining whether all required
conditions have been satisfied. See "ERISA
Considerations" herein and in the Prospectus.
S-10
<PAGE> 46
FORMATION OF THE TRUST
The Seller will establish the Trust by selling and assigning the property
of the Trust to the Trustee in exchange for the Certificates. The Servicer will
service the Receivables pursuant to the Agreement and will be compensated for
acting as such. See "The Certificates -- Servicing Compensation" herein. To
facilitate servicing and to minimize administrative burden and expense, the
Servicer will be appointed custodian for the Receivables by the Trustee, but
will not stamp the Receivables to reflect the sale and assignment of the
Receivables to the Trust, amend the certificates of title of the Financed
Vehicles or execute any transfer instrument (including, among other instruments,
UCC-3 assignments) relating to any Financed Vehicles. Consequently, in some
states, in the absence of such amendments and actions, the Trustee (and,
accordingly the Certificateholders) will have certain risks with respect to the
Trustee's security interests in the Financed Vehicles. See "Certain Legal
Aspects of the Receivables" in the Prospectus.
If the protection provided to (i) the Class A Certificateholders by the
subordination of the Class B Certificates and by the Reserve Fund and (ii) the
Class B Certificateholders by the Reserve Fund is insufficient, the Trust will
look only to payments made by or on behalf of the Obligors on or in respect of
the Receivables, the proceeds from the repossession and sale of Financed
Vehicles securing Defaulted Receivables and the proceeds of Dealer repurchase
obligations, if any, more fully described below under "Property of the Trust",
to make distributions on the Certificates. In such event, certain factors, such
as the failure of the Trustee to possess first perfected security interests in
the Financed Vehicles, may limit the ability of the Trust to realize on the
collateral securing the Receivables or may limit the amount realized to less
than the amount due by the related Obligors. Certificateholders may thus be
subject to delays in payment and may incur losses on their investment in the
Certificates as a result of defaults or delinquencies by Obligors and
depreciation in the value of the related Financed Vehicles. The rights of the
Class B Certificateholders to receive distributions of principal will be
subordinated to the rights of the Class A Certificateholders to receive
distributions of interest and principal to the extent described herein. See "The
Certificates -- Subordination of the Class B Certificates" herein and "Certain
Legal Aspects of the Receivables" in the Prospectus.
PROPERTY OF THE TRUST
Each Certificate will represent a fractional undivided interest in the
Trust. The property of the Trust will include a pool of simple interest retail
installment sale contracts, originated on or before , 199 (in the
case of the Initial Receivables) and on or before , 199 (in the
case of the Subsequent Receivables), between Dealers in new and used
recreational vehicles, manufactured primarily by Fleetwood Enterprises, Inc.
("Fleetwood Enterprises"), and retail purchasers of those vehicles (the
"Obligors"), and certain monies due thereunder on and after the Initial Cutoff
Date or the related Subsequent Cutoff Date, as the case may be, and amounts on
deposit in the Pre-Funding Account. The Initial Receivables were, and the
Subsequent Receivables will be, originated by Dealers and subsequently assigned
to Fleetwood Credit. Such Receivables will be serviced by Fleetwood Credit and
evidence the indirect financing made available by Fleetwood Credit to the
Obligors. On or before the Closing Date, Fleetwood Credit will sell the Initial
Receivables to the Seller which, in turn, will sell them to the Trust, which
will be formed as described herein under "Formation of the Trust" and in the
Prospectus under "Formation of the Trusts". It is anticipated that Subsequent
Receivables will be conveyed to the Trust on one or more Subsequent Transfer
Dates during the Funding Period.
Neither the Seller nor the Servicer may substitute any other retail
installment sale contract for any Receivable sold to the Trust during the term
of the Agreement. The assets of the Trust will also include: (i) such amounts as
from time to time may be held in the Certificate Account, an interest bearing
trust account to be established and maintained by the Servicer with the Trustee
pursuant to the Agreement; (ii) security interests in the Financed Vehicles and
any accessions thereto; (iii) the right to proceeds from physical damage, credit
life and disability insurance policies, if any, covering individual Financed
Vehicles or Obligors, as the case may be; (iv) the right to receive proceeds of
Dealer repurchase obligations, if any; (v) any Servicer Letter of Credit; (vi)
the rights of the Seller under the Receivables Purchase Agreement and the Yield
Supplement Agreement; and (vii) any and all proceeds of the foregoing. The
Reserve Fund and the
S-11
<PAGE> 47
Yield Supplement Account will be maintained with the Trustee for the benefit of
the Certificateholders, but will not be property of the Trust.
The "Pool Balance" will be calculated as described in the Prospectus under
"Property of the Trusts" and will be increased during the Funding Period by the
principal amount (not to exceed $ ) of Subsequent Receivables conveyed
to the Trust as of the related Subsequent Cutoff Dates. Coincident with each
such transfer of Subsequent Receivables, the Yield Supplement Agreement will
require Fleetwood Credit to deposit into the Yield Supplement Account an amount
equal to the Additional Yield Supplement Amount, if any, in respect of such
Subsequent Receivables. Any such additions of Subsequent Receivables will be
conditioned on the compliance with the procedures described in the Receivables
Purchase Agreement and the Agreement. Each conveyance of Subsequent Receivables
also will be subject to the conditions described under "Certain Information
Regarding the Securities -- Sale and Assignment of Receivables -- The Subsequent
Receivables" in the Prospectus, and to the following additional conditions,
among others: (i) the weighted average APR of the Receivables (including the
related Subsequent Receivables) is not less than % and (ii) the weighted
average remaining term of the Receivables (including the Subsequent Receivables)
as of the related Subsequent Transfer Date is not greater than months.
Because the Subsequent Receivables will be originated after the Initial
Receivables, following their conveyance to the Trust, the characteristics of the
Receivables, including the Subsequent Receivables, may vary from those of the
Initial Receivables. The Seller expects that the principal balances of the
Subsequent Receivables to be added to the Trust will require application of the
entire Pre-Funded Amount by , 199 ; however, there can be no
assurance that a sufficient amount of Subsequent Receivables will be available
for such purpose. If the Pre-Funded Amount has not been reduced to zero by the
end of the Funding Period, the remaining portion thereof will be distributed to
Certificateholders as a prepayment of principal as described herein under "The
Certificates -- The Pre-Funding Account; Mandatory Prepayment of the
Certificates."
THE RECEIVABLES
The Receivables will have been purchased by Fleetwood Credit from Dealers
in the ordinary course of business and no adverse selection procedures were
employed by Fleetwood Credit in selecting the Receivables from Fleetwood
Credit's portfolio of recreational vehicle receivables. Each Receivable was
underwritten in accordance with the customary underwriting standards employed by
Fleetwood Credit and described under "The Servicer -- Origination and Servicing"
in the Prospectus. The Initial Receivables were, and the Subsequent Receivables
will be, selected from Fleetwood Credit's portfolio of recreational vehicle
retail installment sale contracts based on the criteria described under "The
Receivables" in the Prospectus. Each Receivable has as of the Initial Cutoff
Date, or will have as of the related Subsequent Cutoff Date, as the case may be,
an APR equal to or greater than %.
As of the Initial Cutoff Date, approximately % of the Initial
Receivables, by Original Pool Balance, were secured by motor homes and
approximately % were secured by travel trailers. Approximately % of
the Initial Receivables, by Original Pool Balance, represented financing of new
recreational vehicles and approximately % represented financing of used
recreational vehicles. As of the Initial Cutoff Date, the average outstanding
principal balances of Initial Receivables secured by motor homes and travel
trailers were $ and $ , respectively. The maximum amount
Fleetwood advances to any Customer is 100% of the retail purchase price of the
recreational vehicle being financed. A significant portion of the Initial
Receivables represent financing of recreational vehicles manufactured by
Fleetwood Enterprises. Except in the case of breach of representations by the
related Dealer, as described in the Prospectus under "Property of the Trusts",
it is expected that none of the Receivables will provide for recourse to the
Dealer who originated the related Receivable. Based upon information presented
by Obligors in their Receivables applications, as of the Initial Cutoff Date the
Initial Receivables were originated in states. Based on Original Pool Balance,
approximately % of the Initial Receivables were originated in the State of
, approximately % of the Initial Receivables were originated
in the State of and approximately % of the Initial
Receivables were originated in the State of . Each other state
accounts for less than 5% of the Initial Receivables by Original Pool Balance.
As of the Initial Cutoff Date, approximately % of the Original Pool Balance
represented Paid-Ahead Receivables.
S-12
<PAGE> 48
COMPOSITION OF THE INITIAL RECEIVABLES
<TABLE>
<S> <C>
Aggregate Principal Balance as of the Initial Cutoff
Date..................................................... $
Number of Initial Receivables..............................
Average Principal Balance as of the Initial Cutoff Date.... $
Aggregate Original Amount Financed......................... $
Range of Original Amounts Financed......................... $ to $
Weighted Average APR(1).................................... %
Range of APRs.............................................. % to %
Weighted Average Original Term(1).......................... months
Range of Original Terms.................................... to months
Weighted Average Remaining Term as of the Initial Cutoff
Date(1).................................................. months
Range of Remaining Terms as of the Initial Cutoff Date..... to months
</TABLE>
- - ---------------
(1) Weighted by unpaid principal balance as of the Initial Cutoff Date.
DISTRIBUTION OF THE INITIAL RECEIVABLES BY APR
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF NUMBER OF INITIAL PERCENTAGE
INITIAL INITIAL CUTOFF DATE OF ORIGINAL
APR RANGE RECEIVABLES RECEIVABLES POOL BALANCE POOL BALANCE
--------- ----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
% to %................... % $ %
% to %
% to %
% to %
% to %
% to %
% to %
--------- --- ---------- ---
Total.............................. 100%(1) $ 100%(1)
========= === ========== ===
</TABLE>
- - ---------------
(1) Percentages may not add to 100% due to rounding.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Receivables are charged off when they are deemed to be uncollectible.
Additionally, Fleetwood Credit's policy generally provides for charge-off of
accounts on a contractual basis. Receivables are charged off when they become
180 days contractually delinquent. A contractually delinquent account is one on
which the customer has not made payments as contractually agreed. In addition,
Receivables are charged off when either the related security has been converted
or destroyed or the related security has been repossessed and sold. Increases in
delinquencies and losses occur under adverse economic conditions and increased
consumer bankruptcies. However, Fleetwood Credit's losses have historically
remained fairly stable because of Fleetwood Credit's conservative underwriting
criteria and the favorable demographics of the obligors of the Receivables, who
tend to be older consumers with a more stable financial condition.
S-13
<PAGE> 49
Set forth below is certain information concerning Fleetwood Credit's
experience with respect to its portfolio of recreational vehicle receivables
similar to the Receivables.
DELINQUENCY EXPERIENCE
<TABLE>
<CAPTION>
AT AT DECEMBER 31,
MARCH 31, ----------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------------- -------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Portfolio Outstanding at End of
Period(1)(2)................... $1,303,251,231 $1,241,738,614 $949,664,166 $760,702,992 $661,517,831 $ 532,764,234
Delinquencies at End of
Period(1)(3)
30-59 Days..................... 3,275,972 4,630,619 $ 3,160,686 2,494,548 1,520,815 1,515,090
60-89 Days..................... 138,777 703,823 342,035 419,116 141,132 193,591
90 Days or More................ 177,650 385,684 33,902 169,736 81,964 324,765
-------------- -------------- ------------ ------------ ------------ --------------
Total Delinquencies.............. $ 3,592,399 $ 5,720,126 $ 3,536,623 $ 3,083,400 $ 1,743,911 $ 2,033,446
============== ============== ============ ============ ============ ==============
Total Delinquencies as a
Percentage of Portfolio
Outstanding at End of Period... 0.28% 0.46% 0.37% 0.41% 0.26% 0.38%
</TABLE>
- - ---------------
(1) Includes recreational vehicle receivables that have been sold but are still
serviced by the Servicer.
(2) The sum of all principal amounts outstanding under the recreational vehicle
receivables.
(3) The period of delinquency is based on the number of days payments are
contractually past due.
CREDIT LOSS AND REPOSSESSION EXPERIENCE
<TABLE>
<CAPTION>
THREE MONTHS
ENDED FISCAL YEAR ENDED DECEMBER 31,
MARCH 31, --------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------------- -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Average Portfolio
Outstanding(1)(2)(3)............ $1,275,427,136 $1,113,127,480 $853,227,748 $720,418,169 $596,920,867 $512,484,430
Average Number of Receivables
Outstanding(3).................. 52,438 46,469 36,665 30,367 25,455 22,724
Repossessions as a Percentage of
Average Number of Receivables
Outstanding..................... 3.56% 0.77% 0.66% 0.56% 0.50% 0.71%
Net Losses(1)..................... $ 1,386,401 $ 3,631,982 $ 2,210,186 $ 1,800,947 $ 1,255,618 $ 1,738,647
Net Losses as a Percentage of
Average Portfolio Outstanding... 0.43% 0.33% 0.26% 0.25% 0.21% 0.34%
</TABLE>
- - ---------------
(1) Includes recreational vehicle receivables that have been sold but are still
being serviced by the Servicer.
(2) The sum of all principal amounts outstanding under the recreational vehicle
receivables.
(3) Amounts represent the average of month-end figures for each month in the
periods indicated.
Fleetwood Credit did not acquire recreational vehicle receivables similar
to the Receivables prior to July 1986. Accordingly, Fleetwood Credit's
experience with respect to such receivables is limited and only a small portion
of its recreational vehicle receivables portfolio has reached maturity. There is
no assurance that Fleetwood Credit's delinquency, credit loss and repossession
experience with respect to recreational vehicle receivables in the future, or
the experience of the Trust with respect to the Receivables, will be similar to
that set forth below. Losses and delinquencies are affected by, among other
things, general and regional economic conditions and the supply of and demand
for recreational vehicles.
YIELD CONSIDERATIONS
The following discussion supplements the information contained in the
Prospectus under "Yield Considerations".
The Class B Certificates will provide limited protection against losses on
the Receivables. Accordingly, the yield on the Class B Certificates will be
extremely sensitive to the loss experience of the Receivables and the timing of
any such losses. If the actual rate and amount of losses experienced by the
Receivables exceed the rate and amount of such losses assumed by an investor,
the yield to maturity on the Class B Certificates may be lower than anticipated.
S-14
<PAGE> 50
POOL FACTORS AND TRADING INFORMATION
The "Class A Pool Factor" and the "Class B Pool Factor" will be seven-digit
decimal numbers which the Servicer will compute each month indicating the Class
A Certificate Balance and the Class B Certificate Balance at the end of the
related Collection Period as a fraction of the Original Class A Certificate
Balance or Original Class B Certificate Balance, as the case may be. Pursuant to
the Agreement, the Certificateholders will receive monthly reports concerning
the payments received on the Receivables, the Pool Balance, the Class A Pool
Factor and the Class B Pool Factor and various other items of information
pertaining to the Trust. Certificateholders during each calendar year will be
furnished information for tax reporting purposes not later than the latest date
permitted by law. See "Pool Factors and Trading Information" and "Certain
Information Regarding the Securities -- Statements to Securityholders" in the
Prospectus.
THE CERTIFICATES
The Certificates will be issued pursuant to the Agreement. Copies of the
Agreement (without exhibits) may be obtained by Certificateholders upon request
in writing to the Trustee at its Corporate Trust Office. 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
contained in the Prospectus of the general terms and provisions of the Grantor
Certificates of a given Series and the related Pooling and Servicing Agreement,
to which description reference is hereby made. The following summary, together
with the information described in the preceding sentence, describes all of the
material terms of the Agreement and the Certificates.
GENERAL
The Certificates will evidence fractional undivided interests in the Trust
created pursuant to the Agreement and will not represent interests in or
obligations of the Seller, Fleetwood Credit, Associates First Capital
Corporation, the Trustee or any of their respective affiliates. The Class A
Certificates will evidence in the aggregate an undivided ownership interest of
% of the Trust and the Class B Certificates will evidence in the aggregate
an undivided ownership interest of % of the Trust.
In general, it is intended that Class A Certificateholders and Class B
Certificateholders receive, on each Distribution Date, the Class A Percentage
and Class B Percentage, respectively, of all payments allocated to principal on
or in respect of the Receivables collected by the Servicer during the related
Collection Period plus one full month's interest at the Class A Pass-Through
Rate on the Class A Certificate Balance or the Class B Pass-Through Rate on the
Class B Certificate Balance, as the case may be, in each case as of the
immediately preceding Distribution Date (after giving effect to distributions of
principal and, in the case of the Class B Certificates, reduction in the Class B
Certificate Balance, to be made on such immediately preceding Distribution Date)
or, in the case of the first Distribution Date or if no distribution has yet
been made, the Original Class A Certificate Balance and the Original Class B
Certificate Balance, as the case may be. Interest to Certificateholders may be
provided by payments made by or on behalf of Obligors on or in respect of the
Receivables, payments of Yield Supplement Amounts from amounts on deposit in the
Yield Supplement Account (including, in the case of Subsequent Receivables, any
Additional Yield Supplement Amounts) and the Reserve Fund, and Advances and
Non-Reimbursable Payments by the Servicer. See "-- Distributions on the
Certificates" herein. A prepayment of a Receivable may be made by or on behalf
of the related Obligor, by application of certain insurance proceeds, as a
result of a repurchase made by the Seller or a Dealer or a purchase by the
Servicer, as the case may be, or as a result of the repossession and sale of the
related Financed Vehicle or other enforcement measure taken with respect to a
Defaulted Receivable. See "Certain Information Regarding the Securities -- Sale
and Assignment of the Receivables" and "-- Servicing Procedures" in the
Prospectus.
BOOK-ENTRY REGISTRATION
The Certificates will be offered for purchase in denominations of $1,000
and integral multiples thereof in book-entry form. Each Class of Certificates
will initially be represented by one or more certificates registered
S-15
<PAGE> 51
in the name of Cede & Co. ("Cede"), as the nominee of The Depository Trust
Company ("DTC"). No beneficial owner of a Class A Certificate (a "Class A
Certificate Owner"), or a Class B Certificates (a "Class B Certificate Owner"
and, together with the Class A Certificate Owners, the "Certificate Owners"),
will be entitled to receive a certificate representing such owner's interest,
except in the limited circumstances described in the Prospectus. Unless and
until Certificates of a Class are issued in fully registered certificated form
("Definitive Certificates") under certain limited circumstances described in the
Prospectus, all references herein to distributions, notices, reports and
statements to and to actions by and effects upon the related Certificateholders
will refer to the same actions and effects with respect to DTC or Cede, as the
case may be, for the benefit of Certificate Owners in accordance with DTC
procedures. See "Certain Information Regarding the Securities -- General",
"-- Book-Entry Registration" and "-- Definitive Securities" in the Prospectus.
Class A Certificate Owners and Class B Certificate Owners will be "Security
Owners" for purposes of the Prospectus.
THE PRE-FUNDING ACCOUNT; MANDATORY PREPAYMENT OF THE CERTIFICATES
The Pre-Funding Account. The Servicer will establish the Pre-Funding
Account in the name of the Trustee for the benefit of the Certificateholders
into which the Pre-Funded Amount will be deposited on the Closing Date from the
net proceeds received from the sale of the Certificates and from which monies
will be applied during the Funding Period to purchase Subsequent Receivables
from the Seller. The Pre-Funding Account will be maintained with the same entity
at which the Certificate Account is maintained. The Pre-Funding Account will be
part of the Trust but monies on deposit therein will not be available to cover
losses on or in respect of the Receivables. Any portion of the Pre-Funded Amount
remaining on deposit in the Pre-Funding Account at the end of the Funding Period
will be payable as described below as a prepayment of principal to the
Certificateholders. Monies on deposit in the Pre-Funding Account may be invested
in Permitted Investments under the circumstances and in the manner to be
described in the Agreement. Earnings on investment of funds in the Pre-Funding
Account will be deposited into the Certificate Account and losses will be
charged against the funds on deposit in the Pre-Funding Account. See "Certain
Information Regarding the Securities -- The Trust Accounts" in the Prospectus.
Upon each conveyance of Subsequent Receivables to the Trust, an amount
equal to the purchase price paid by the Seller to Fleetwood Credit for such
Subsequent Receivables on the related Subsequent Transfer Date will be withdrawn
from the Pre-Funding Account and paid to the Seller.
Mandatory Prepayment of the Certificates. The Certificates will be subject
to Mandatory Prepayment in part on the Distribution Date immediately succeeding
the date on which the Funding Period ends (or on the Distribution Date on which
the Funding Period ends if the Funding Period ends on a Distribution Date), in
the event that any portion of the Pre-Funded Amount, exclusive of any investment
earnings thereon, remains on deposit in the Pre-Funding Account after giving
effect to the purchase by the Seller and conveyance to the Trust of all
Subsequent Receivables on the related Subsequent Transfer Dates, including any
such purchase and conveyance on the date on which the Funding Period ends.
Upon the occurrence of a Mandatory Prepayment, the holders of Certificates
of each Class will receive an amount equal to the Class A Percentage or the
Class B Percentage, as the case may be, multiplied by the portion of the
Pre-Funded Amount remaining in the Pre-Funding Account. It is anticipated that
the aggregate principal amount of Subsequent Receivables sold to the Trust
during the Funding Period will not be exactly equal to the Pre-Funded Amount and
that therefore there will be at least a nominal amount of principal prepaid to
Certificateholders.
THE YIELD SUPPLEMENT ACCOUNT; THE YIELD SUPPLEMENT AGREEMENT
The Yield Supplement Account. The Yield Supplement Account will be created
with the Yield Supplement Initial Deposit in an amount to be specified in the
Agreement. The Yield Supplement Account Initial Deposit will equal the aggregate
amount (which amount may be discounted at a rate to be specified in the
Agreement) by which (i) interest on the Principal Balance of each Initial
Receivable for the period commencing on the Initial Cutoff Date and ending with
the scheduled maturity of each Receivable, assuming
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that payments on such Receivables are made as scheduled and no prepayments are
made, at a rate equal to the Required Rate, exceeds (ii) interest on such
Principal Balances at the APR of each such Receivable (the "Yield Supplement
Amount" and, with respect to the Initial Receivables, the "Maximum Initial Yield
Supplement Amount").
On each Distribution Date, the Trustee will transfer to the Certificate
Account from monies on deposit in the Yield Supplement Account an amount equal
to the Yield Supplement Deposit Amount in respect of the Receivables for such
Distribution Date. See "-- Distributions on the Certificates" herein. Amounts on
deposit on any Distribution Date in the Yield Supplement Account in excess of
the Maximum Yield Supplement Amount, after giving effect to all distributions to
be made on such Distribution Date, will be paid to the Seller. Monies on deposit
in the Yield Supplement Account may be invested in Permitted Investments under
the circumstances and in the manner described in the Agreement. See "Certain
Information Regarding the Securities -- The Trust Accounts" in the Prospectus.
Any monies remaining on deposit in the Yield Supplement Account upon the
termination of the Trust will be paid to the Seller. The Yield Supplement
Account will not be part of the Trust.
The Yield Supplement Agreement. Pursuant to the Yield Supplement Agreement,
on each Subsequent Transfer Date Fleetwood Credit will deposit into the Yield
Supplement Account an amount equal to the Additional Yield Supplement Amount.
The aggregate of the Additional Yield Supplement Amounts in respect of
Subsequent Receivables, if any, is referred to herein as the "Maximum Subsequent
Yield Supplement Amount" and, together with the "Maximum Initial Yield
Supplement Amount", the "Maximum Yield Supplement Amount".
DISTRIBUTIONS ON THE CERTIFICATES
On the eighth calendar day of each month or, if such day is not a Business
Day, the immediately succeeding Business Day (the "Determination Date"), the
Servicer will inform the Trustee of the amount of Available Funds collected on
or in respect of the Receivables, the Negative Carry Amount, if any, the Yield
Supplement Amount in respect of the Receivables, if any, the amount of Advances
and Non-Reimbursable Payments to be made by the Servicer and the amount of the
Servicing Fee and other servicing compensation payable to the Servicer, in each
case with respect to the immediately preceding Collection Period. On or prior to
each Determination Date, the Servicer shall also determine the Class A
Distributable Amount, the Class B Distributable Amount and, based on the
Available Funds and other amounts available for distribution on the related
Distribution Date as described below, determine the amounts to be distributed to
the Class A Certificateholders and the Class B Certificateholders.
On each Distribution Date, the Trustee will cause the Negative Carry Amount
for the related Collection Period, if any, to be withdrawn from the Reserve Fund
and deposited in the Certificate Account and the aggregate Yield Supplement
Amount in respect of the Receivables for the related Collection Period, if any
(the "Yield Supplement Deposit Amount"), to be withdrawn from the Yield
Supplement Account and deposited in the Certificate Account.
The Trustee shall make distributions to the Certificateholders out of
amounts on deposit in the Certificate Account. The amount to be distributed to
the Certificateholders following the Funding Period in connection with a
Mandatory Prepayment is described herein under "The Pre-Funding Account;
Mandatory Prepayment of the Certificates". The amount of other distributions to
be made on each Distribution Date to Certificateholders shall be determined in
the manner described below.
Determination of Available Funds. "Available Funds" with respect to each
Distribution Date will mean the sum of (i) the earnings received by the Trustee
during the related Collection Period from investment of the Pre-Funded Amount on
deposit in the Pre-Funding Account, (ii) an amount (the "Negative Carry Amount")
equal to the difference between (a) one month's interest on the Pre-Funded
Amount on deposit in the Pre-Funding Account as of the first day of such
Collection Period at a rate equal to the weighted average of the Class A and
Class B Pass-Through Rates and (b) the amount described in clause (i) above,
which Negative Carry Amount will be withdrawn from the Reserve Fund as described
herein under "Subordination of the Class B Certificates" and "The Reserve Fund",
(iii) all cash received by the Servicer on or in respect of
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the Receivables during the related Collection Period (including Non-Reimbursable
Payments and Advances but other than (a) late payment and extension fees, if
any, and other administrative fees and (b) recoveries collected on or in respect
of all Receivables which have been previously repurchased by the Seller or
purchased by the Servicer pursuant to the Agreement), (iv) the Repurchase
Amounts of all Receivables purchased or repurchased by the Seller or the
Servicer under the Agreement in respect of the immediately preceding Collection
Period and (v) the Yield Supplement Deposit Amount for the related Collection
Period.
With respect to each Collection Period (i) "Collected Interest" will mean
the sum of (a) the portion of all payments received by the Servicer on or in
respect of the Receivables during such Collection Period allocable to interest
and (b) the amounts described in clauses (i), (ii) and (v) of the immediately
preceding paragraph with respect to such Collection Period, and (ii) "Collected
Principal" will mean the portion of all payments received by the Servicer on or
in respect of the Receivables during such Collection Period allocable to
principal.
Calculation of Distributable Amounts. The "Class A Distributable Amount"
with respect to each Distribution Date will mean the sum of (i) the "Class A
Principal Distributable Amount", which will equal the Class A Percentage of the
Monthly Principal Payment (but not exceeding the Class A Certificate Balance as
of such Distribution Date) and (ii) the "Class A Interest Distributable Amount",
which will equal one month's interest at the Class A Pass-Through Rate on the
Class A Certificate Balance as of the first day of the immediately preceding
Collection Period (after giving effect to distributions of principal to be made
on the Distribution Date occurring in such immediately preceding Collection
Period) or, in the case of the first Distribution Date or if no distribution has
yet been made, the Original Class A Certificate Balance.
In addition, with respect to the Distribution Date relating to the
Collection Period in which the last Receivable in the Trust is scheduled to
mature, the Class A Principal Distributable Amount will include the portion of
such amount necessary (after giving effect to the other amounts described above
to be distributed to the Class A Certificateholders on such Distribution Date
allocable to principal) to reduce the Class A Certificate Balance to zero.
The "Class B Distributable Amount" with respect to each Distribution Date
will be calculated in the same manner as the Class A Distributable Amount,
appropriately modified to relate to the Class B Certificates, but will also
include recoveries to the extent allocable to principal on Receivables which
became Defaulted Receivables in one or more prior Collection Periods. The "Class
B Principal Distributable Amount" and the "Class B Interest Distributable
Amount" with respect to each Distribution Date will be calculated in the same
manner as the Class A Principal Distributable Amount and the Class A Interest
Distributable Amount, respectively, in each case appropriately modified to
related to the Class B Certificates.
The "Monthly Principal Payment" with respect to each Distribution Date will
equal (i) the sum of the Pool Balance (or, with respect to the first
Distribution Date, the Original Pool Balance) plus the amount on deposit in the
Pre-Funding Account (other than investment earnings), in each case as of the
first day of the related Collection Period, less (ii) the sum of the Pool
Balance plus the amount on deposit in the Pre-Funding Account (other than
investment earnings), in each case as of the last day of the related Collection
Period.
The "Class A Certificate Balance" will initially equal the Original Class A
Certificate Balance and on any Distribution Date will equal the Original Class A
Certificate Balance, reduced by all distributions actually made on or prior to
such Distribution Date to Class A Certificateholders allocable to principal. The
"Class B Certificate Balance" will initially equal the Original Class B
Certificate Balance and on any Distribution Date will equal the Original Class B
Certificate Balance reduced by (i) all distributions actually made on or prior
to such Distribution Date to Class B Certificateholders allocable to principal
and (ii) Realized Losses allocable to the Class B Certificates. "Realized
Losses" with respect to each Collection Period will equal the amount by which
(a) the aggregate unpaid principal balance of all Receivables which became
Defaulted Receivables during such Collection Period exceeds (b) the sum of (i)
the aggregate liquidation proceeds recovered in respect of principal of such
Defaulted Receivables during such Collection Period and (ii) recoveries in
respect of all Defaulted Receivables received in such Collection Period, to the
extent not otherwise included in the amount determined pursuant to clause (i)
above.
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Payment of Distributable Amounts. Prior to each Distribution Date, the
Servicer will calculate the amount to be distributed to the Certificateholders.
On each Distribution Date, the Trustee will distribute to Certificateholders the
following amounts in the following order of priority, to the extent of Available
Funds for such Distribution Date:
(i) to the Class A Certificateholders, an amount equal to the Class A
Interest Distributable Amount and any unpaid Class A Interest Carryover
Shortfall, such amount to be paid from Collected Interest (as Collected
Interest has been reduced by reimbursing the Servicer for any outstanding
Advances and paying the Servicer the Servicing Fee, including any unpaid
Servicing Fees with respect to one or more prior Collection Periods); and
if such Collected Interest is insufficient, the Class A Certificateholders
will receive such deficiency first, from the Class B Percentage of
Collected Principal and second, if such amounts are still insufficient,
from monies on deposit in the Reserve Fund;
(ii) to the Class B Certificateholders, an amount equal to the Class B
Interest Distributable Amount and any unpaid Class B Interest Carryover
Shortfall, such amount to be paid from Collected Interest (after giving
effect to the reduction in Collected Interest described in clause (i)
above); and if such Collected Interest is insufficient, the Class B
Certificateholders will be entitled to receive such deficiency from monies
on deposit in the Reserve Fund;
(iii) to the Class A Certificateholders, an amount equal to the Class
A Principal Distributable Amount and any unpaid Class A Principal Carryover
Shortfall, such amount to be paid from Collected Principal (after giving
effect to the reduction in Collected Principal described in clause (i)
above); and if such Collected Principal is insufficient, the Class A
Certificateholders will be entitled to receive such deficiency first, from
Collected Interest (after giving effect to the reduction in Collected
Interest described in clauses (i) and (ii) above) and second, if such
amounts are still insufficient, from monies on deposit in the Reserve Fund;
and
(iv) to the Class B Certificateholders, an amount equal to the Class B
Principal Distributable Amount and any unpaid Class B Principal Carryover
Shortfall, such amount to be paid from Collected Principal (after giving
effect to the reduction in Collected Principal described in clauses (i) and
(iii) above); and if such Collected Principal is insufficient, the Class B
Certificateholders will be entitled to receive such deficiency first, from
Collected Interest (after giving effect to the reduction in Collected
Interest described in clauses (i), (ii) and (iii) above) and second, if
such amounts are still insufficient, from monies on deposit in the Reserve
Fund.
The "Class A Interest Carryover Shortfall" with respect to any Distribution
Date will equal the excess, if any, of the Class A Interest Distributable Amount
for such Distribution Date and any outstanding Class A Interest Carryover
Shortfall from the immediately preceding Distribution Date plus interest on such
outstanding Class A Interest Carryover Shortfall, to the extent permitted by
law, at the Class A Pass-Through Rate from such immediately preceding
Distribution Date through the current Distribution Date, over the amount of
interest distributed to the Class A Certificateholders on such Distribution
Date. The "Class A Principal Carryover Shortfall" with respect to any
Distribution Date will equal the excess of the Class A Principal Distributable
Amount plus any outstanding Class A Principal Carryover Shortfall with respect
to one or more prior Distribution Dates over the amount of principal that the
holders of the Class A Certificates actually received on such Distribution Date.
The "Class B Interest Carryover Shortfall" and the "Class B Principal
Carryover Shortfall" with respect to any Distribution Date will be calculated in
the same manner as the Class A Interest Carryover Shortfall and the Class A
Principal Carryover Shortfall, respectively, in each case appropriately modified
to relate to the Class B Certificates.
Any Excess Amounts in the Certificate Account with respect to any
Distribution Date, after giving effect to the distributions described in clauses
(i) through (iv) of the third preceding paragraph, will be distributed in the
following amounts and in the following order of priority: (i) to the Reserve
Fund until the amount on deposit therein equals the Specified Reserve Fund
Balance and (ii) to the Seller. Notwithstanding the foregoing, during the
Funding Period, all Excess Amounts will be deposited into the Reserve Fund and
will not
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be paid to the Seller until the Distribution Date immediately succeeding the
date on which the Funding Period ends (or on the Distribution Date on which the
Funding Period ends if the Funding Period ends on a Distribution Date).
SUBORDINATION OF THE CLASS B CERTIFICATES
The rights of the Class B Certificateholders to receive distributions with
respect to the Receivables will be subordinated to the rights of the Servicer
(to the extent that the Servicer is reimbursed for any outstanding Advances and
is paid the Servicing Fee, including any unpaid Servicing Fees with respect to
one or more prior Collection Periods) and Class A Certificateholders to the
extent described below. This subordination is intended to enhance the likelihood
of timely receipt by Class A Certificateholders of the full amount of interest
and principal required to be paid to them, and to afford such Certificateholders
limited protection against losses in respect of the Receivables.
No distribution will be made to the Class B Certificateholders on any
Distribution Date in respect of (i) interest until the full amount of interest
on the Class A Certificates payable on such Distribution Date has been
distributed to the Class A Certificateholders and (ii) principal until the full
amount of interest on and principal of the Class A Certificates payable on such
Distribution Date has been distributed to the Class A Certificateholders.
Distributions of interest on the Class B Certificates, to the extent of
Collected Interest and certain available amounts on deposit in the Reserve Fund
and the Yield Supplement Account, will not be subordinated to the payment of
principal on the Class A Certificates. Because the rights of the Class B
Certificateholders to receive distributions of principal will be subordinated to
the rights of the Class A Certificateholders to receive distributions of
interest and principal to the extent described herein, the aggregate amount of
principal distributions on the Class B Certificates may be affected by the loss
experience of the Receivables. If the aggregate amount of losses experienced by
the Receivables exceeds the amount on deposit in the Reserve Fund, Class B
Certificateholders may not recover their initial investment in the Class B
Certificates.
THE RESERVE FUND
In the event of delinquencies or losses on the Receivables, the protection
afforded to the Class A Certificateholders will be effected both by the
application of available funds for such Distribution Date in the priorities
specified herein under "-- Distributions on the Certificates -- Payment of
Distributable Amounts", and the establishment of the Reserve Fund. The Reserve
Fund will not be a part of or otherwise includible in the Trust and will be a
segregated trust account held by the Trustee. The Reserve Fund will be funded by
the Seller on the Closing Date in an amount equal to $ plus an amount
attributable to the maximum aggregate Negative Carry Amount. Thereafter, on each
Distribution Date, all Excess Amounts, if any, will be deposited from time to
time in the Reserve Fund to the extent necessary to maintain the amount in the
Reserve Fund at the Specified Reserve Fund Balance. Any assets (and earnings
thereon) in the Reserve Fund will be owned by, and taxed to, the Seller for
federal income and state and local franchise tax purposes.
The Specified Reserve Fund Balance with respect to the first Distribution
Date will equal $ plus an amount equal to the maximum aggregate
Negative Carry Amount. On each Distribution Date thereafter, will equal % of
the sum of the Class A Certificate Balance and the Class B Certificate Balance
(after giving effect to distributions of principal and, in the case of the Class
B Certificates, any other reductions in the Class B Certificate Balance to be
made on such Distribution Date); provided, however, that so long as the
foregoing sum of the Class A Certificate Balance and the Class B Certificate
Balance exceeds $ , the Specified Reserve Fund Balance will not be less
than $ . From and after the Distribution Date as of which the foregoing
sum of the Class A Certificate Balance and the Class B Certificate Balance is
less than $ , the Specified Reserve Fund Balance will equal such sum.
Notwithstanding the foregoing, on each Distribution Date following any Fiscal
Quarter in which losses or delinquencies in respect of the Receivables exceed
the percentages to be specified in the Agreement, the Specified Reserve Fund
Balance will be equal to the greater of the amount described above or an amount
equal to the Pool Balance as of the immediately preceding Record Date multiplied
by a percentage determined by subtracting from % a fraction (expressed as a
percentage) equal to one minus a fraction, the numerator of which will equal the
Class A
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Certificate Balance and the denominator of which will equal the Pool Balance
plus an amount equal to the amount on deposit in the Pre-Funding Account (other
than investment earnings), in each case as of the last day of the three related
Collection Periods in such Fiscal Quarter; provided, however, that following any
Fiscal Quarter thereafter in which the losses and delinquencies in respect of
the Receivables are less than the percentages to be specified in the Agreement,
the Specified Reserve Fund Balance shall return to the amount described in the
first two sentences of this paragraph. A "Fiscal Quarter" will mean each of the
following three month periods: (i) January, February and March; (ii) April, May
and June; (iii) July, August and September; and (iv) October, November and
December. In addition, if on any Distribution Date cumulative losses in respect
of the Receivables exceed % of the sum of the Original Pool Balance and the
aggregate principal balance of all Subsequent Receivables conveyed to the Trust
as of the related Subsequent Cutoff Dates, the Specified Reserve Fund Balance
shall remain at the level in effect as of such date and shall not be reduced
further in accordance with the first sentence of this paragraph.
The Servicer may, from time to time after the date of this Prospectus
Supplement, request each Rating Agency to approve a formula for determining the
Specified Reserve Fund Balance that is different from that described above and
would result in a decrease in the amount of the Specified Reserve Fund Balance
or the manner by which it is funded. If each Rating Agency delivers a letter to
the Trustee to the effect that the use of any such new formulation will not
result in the qualification, reduction or withdrawal of its then-current rating
of either Class of Certificates, then the Specified Reserve Fund Balance will be
determined in accordance with such new formula. The Agreement will accordingly
be amended to reflect such new calculation without the consent of any
Certificateholder.
On each Distribution Date, funds will be withdrawn from the Reserve Fund as
described above for distribution first, to Class A Certificateholders to the
extent of shortfalls in the amounts available to make required distributions of
interest on the Class A Certificates, second to Class B Certificateholders to
the extent of shortfalls in the amounts available to make required distributions
of interest on the Class B Certificates, third to Class A Certificateholders to
the extent of shortfalls in the amounts available to make required distributions
of principal on the Class A Certificates and fourth to Class B
Certificateholders to the extent of shortfalls in the amounts available to make
required distributions of principal on the Class B Certificates.
On each Distribution Date relating to the Funding Period, the amount of
Collected Interest for such Distribution Date will include an amount equal to
the Negative Carry Amount for the related Collection Period, if any, which
amount will be withdrawn from the Reserve Fund.
On each Distribution Date, the Trustee will deposit all Excess Amounts, if
any, into the Reserve Fund until the amount on deposit therein equals the
Specified Reserve Fund Balance. If the amount on deposit in the Reserve Fund on
such Distribution Date (after giving effect to all deposits thereto or
withdrawals therefrom on such Distribution Date) is greater than the Specified
Reserve Fund Balance, the Trustee will release and distribute such excess,
together with any Excess Amounts not required to be deposited into the Reserve
Fund, to the Seller. Notwithstanding the foregoing, during the Funding Period,
all Excess Amounts will be deposited into the Reserve Fund and will not be paid
to the Seller until the Distribution Date immediately succeeding the date on
which the Funding Period ends (or on the Distribution Date on which the Funding
Period ends if the Funding Period ends on a Distribution Date). Upon any such
release of amounts from the Reserve Fund, the Certificateholders will have no
further rights in, or claims to, such amounts.
Amounts held from time to time in the Reserve Fund will continue to be held
for the benefit of holders of the Certificates. Funds on deposit in the Reserve
Fund may be invested in Permitted Investments. Investment income on monies on
deposit in the Reserve Fund will not be available for distribution to
Certificateholders or otherwise subject to any claims or rights of the
Certificateholders and will be paid to the Seller.
If on any Distribution Date the Class B Certificate Balance equals zero and
amounts on deposit in the Reserve Fund have been depleted as a result of losses
in respect of the Receivables, the protection afforded to the Class A
Certificateholders by the subordination of the Class B Certificates and by the
Reserve Fund will be exhausted. In addition, if on any Distribution Date amounts
on deposit in the Reserve Fund have been depleted, the protection afforded to
the Class B Certificateholders by the Reserve Fund will be exhausted. In
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either of the foregoing circumstances, the Class A Certificateholders or the
Class B Certificateholders, as the case may be, will bear directly the risks
associated with ownership of the Receivables.
Neither the Class B Certificateholders, the Seller nor the Servicer will be
required to refund any amounts properly distributed or paid to them, whether or
not there are sufficient funds on any subsequent Distribution Date to make full
distributions to the Class A Certificateholders.
EXAMPLE OF DISTRIBUTIONS
The following chart sets forth an example of the application of the
foregoing provisions to the first monthly distribution in respect of the
Certificates:
<TABLE>
<S> <C> <C>
1........ Initial Cutoff Date. The Original Pool Balance will equal
the aggregate unpaid principal balance of the Receivables
as of the opening of business on this date.
1-31..... Collection Period. The Servicer will receive monthly
payments, prepayments and other proceeds on or in respect
of the Receivables.
8........ Determination Date. On this date, the Servicer will
notify the Trustee of, among other things, the amounts to
be distributed on the Distribution Date.
14....... The Business Day immediately preceding the Distribution
Date. On or before this date, the Servicer will make or
will cause to be made the required remittances to the
Certificate Account.
14....... Record Date. Distributions on the Distribution Date will
be made to Certificateholders of record at the close of
business on this date.
15....... Distribution Date. On this date, the Trustee will make
the distributions described above.
</TABLE>
SERVICING COMPENSATION
As described in the Prospectus under "Certain Information Regarding the
Securities -- Servicing Compensation", the Servicer will receive a monthly fee,
payable on each Distribution Date, equal to one-twelfth of the product of 1.0%
and the Pool Balance as of the first day of the related Collection Period. The
Servicer will also be entitled to receive additional compensation in the form of
certain late fees, prepayment charges and other administrative fees or similar
charges.
STATEMENTS TO CERTIFICATEHOLDERS
On each Distribution Date, the Trustee will include with each distribution
to each Class A Certificateholder and Class B Certificateholder of record a
statement, setting forth for the related Collection Period, the information
described under "The Securities -- Statements to Securityholders" in the
Prospectus.
TERMINATION
The obligations of the Servicer, the Seller and the Trustee pursuant to the
Agreement will terminate with respect to the Certificateholders upon the
earliest to occur of (i) 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, (ii) the payment to Certificateholders of all
amounts required to be paid to them pursuant to the Agreement and (iii) the
occurrence of either event described below.
In order to avoid excessive administrative expenses, the Seller or the
Servicer, or any successor to the Servicer, will be permitted at its option to
purchase from the Trust, on any Distribution Date following the last day of a
Collection Period as of which the Pool Balance is 10% or less of the sum of the
Original Pool Balance and the aggregate principal balance of all Subsequent
Receivables conveyed to the Trust as of the related
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Subsequent Cutoff Dates, all remaining Receivables at a price equal to the
aggregate Repurchase Amounts for the Receivables (including Defaulted
Receivables), plus the appraised value of any other property held by the Trust
(less liquidation expenses). In the event that both the Seller and the Servicer,
or any successor to the Servicer, elect to purchase the Receivables, the party
first notifying the Trustee (based on the Trustee's receipt of such notice)
shall be permitted to purchase the Receivables. Exercise of such right will
effect early retirement of the Certificates.
If neither the Seller nor the Servicer (nor any successor to the Servicer)
exercises its optional termination right within 90 days after the last day of
the Collection Period as of which such right can first be exercised, the Trustee
shall solicit bids for the purchase of the Receivables remaining in the Trust.
In the event that satisfactory bids are received as described below, the sale
proceeds will be distributed to Certificateholders on the second Distribution
Date succeeding the last day of such Collection Period. Any purchaser of the
Receivables must agree to the continuation of the then current Servicer as
Servicer on terms substantially similar to those in the Agreement. Any such sale
will effect early retirement of the Certificates.
The Trustee must receive at least two bids from prospective purchasers that
are considered at the time to be competitive participants in the market for
recreational vehicle retail installment sale contracts. The highest bid may not
be less than the fair market value of such Receivables and must equal the sum of
(i) the greater of (a) the aggregate Repurchase Amounts for the Receivables
(including Defaulted Receivables), plus the appraised value of any other
property held by the Trust (less liquidation expenses) or (b) an amount that
when added to amounts on deposit in the Certificate Account that would
constitute Available Funds for such second succeeding Distribution Date would
result in proceeds sufficient to distribute the sum of (1) the Class A
Distributable Amount plus any unpaid Class A Principal and Interest Carryover
Shortfalls and (2) the Class B Distributable Amount plus any unpaid Class B
Principal and Interest Carryover Shortfalls, and (ii) the sum of (a) an amount
sufficient to reimburse the Servicer for any outstanding Advances and (b) the
Servicing Fee payable on such final Distribution Date, including any unpaid
Servicing Fees with respect to one or more prior Collection Periods. The Trustee
may consult with financial advisors, including the Underwriters, to determine if
the fair market value of such Receivables has been offered. Upon the receipt of
such bids, the Trustee shall sell and assign such Receivables to the highest
bidder and the Certificates shall be retired on such Distribution Date. If any
of the foregoing conditions are not met, the Trustee shall decline to consummate
such sale and shall not be under any obligation to solicit any further bids or
otherwise negotiate any further sale of Receivables remaining in the Trust. In
such event, however, the Trustee may from time to time solicit bids in the
future for the purchase of such Receivables upon the same terms described above.
The Trustee will give written notice of termination to each
Certificateholder of record. The final distribution to each Certificateholder
will be made only upon surrender and cancellation of such holder's Certificates
at any office or agency of the Trustee specified in the notice of termination.
The Trustee will give a second written notice to Certificateholders of such
termination and payment six months after the Distribution Date stated in the
first written notice of termination. Any funds remaining in the Trust one year
after the Trustee has given such second written notice will be distributed to
the United Way.
THE TRUSTEE
will be the Trustee under the Agreement. The Trustee's Corporate
Trust Office is located at , telephone ( ) .
The Trustee will have the rights and duties set forth in the Prospectus
under "Certain Information Regarding the Securities -- The Trustees" and
"-- Duties of the Trustees".
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following general discussion of certain federal income tax consequences
of the purchase, ownership and disposition of the Certificates supplements the
discussion under "Certain Federal Income Tax Consequences -- Tax
Characterization of Grantor Trusts" in the Prospectus. Potential investors are
strongly urged to review the tax considerations discussed in the Prospectus in
their entirety and to consult their own tax advisors with respect to the tax
consequences of an investment in the Certificates.
TAX STATUS OF THE TRUST
In the opinion of Arter & Hadden LLP, special federal tax counsel to the
Seller, the Trust will be classified as a grantor trust under subpart E, part I
of subchapter J of the Internal Revenue Code of 1986, as amended (the "Code"),
and not as an association taxable as a corporation for federal income tax
purposes. As a result, each Certificateholder will be subject to federal income
taxation as if it owned directly the portion of the Trust's assets allocable to
its Certificates and as if it paid directly its share of the reasonable expenses
paid by the Trust, except as described in the Prospectus. The Certificateholders
will be considered to own stripped bonds and stripped coupons as described under
"Certain Federal Income Tax Consequences -- Tax Characterization of Grantor
Trusts -- General" and "-- Stripped Bonds and Stripped Coupons" in the
Prospectus.
ERISA CONSIDERATIONS
Any plan fiduciary which proposes to cause a Benefit Plan (as defined in
the Prospectus) to acquire the Certificates should consult with its counsel with
respect to the potential consequences of such an investment under ERISA, and/or
the Code. The following discussion of certain ERISA Considerations supplements
the discussion in the Prospectus under "ERISA Considerations". Potential
investors in the Certificates are strongly urged to review the ERISA
considerations discussed in the Prospectus and to consult their own counsel with
respect to the applicability of the "prohibited transactions" rules of ERISA and
the Code and the "plan assets" provisions of ERISA to any such investment.
THE CLASS A CERTIFICATES
The Department of Labor (the "DOL") has granted an administrative exemption
to (Prohibited Transaction Exemption ) (the "Exemption") from
certain of the prohibited transaction rules of ERISA with respect to the initial
purchase, the holding and the subsequent resale by Benefit Plans of certificates
in 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 recreational vehicle installment
obligations such as the Receivables. The Exemption will apply to the
acquisition, holding and resale of Class A Certificates by a Benefit Plan,
provided that specific conditions (certain of which are described below) are
met. It is believed that the Exemption will apply to the acquisition, holding
and disposition in the secondary markets of Class A Certificates by Benefit
Plans and that all conditions of the Exemption other than those within the
control of the investors have been or will be met.
Among the conditions which must be satisfied for the Exemption to apply to
the acquisition by a Benefit Plan of the Class A Certificates are the following
(each of which has been or will be met in connection with the Class A
Certificates):
(i) The acquisition of the Class A Certificates by a Benefit Plan is
on terms (including the price for the Class A Certificates) that are at
least as favorable to the Benefit Plan as they would be in an arm's-length
transaction with an unrelated party.
(ii) The rights and interests evidenced by the Class A Certificates
acquired by the Benefit Plan are not subordinated to the rights and
interests evidenced by other Certificates of the Trust.
(iii) The Class A Certificates acquired by the Benefit Plan have
received a rating at the time of such acquisition that is in one of the
three highest generic rating categories from any of Standard & Poor's,
Moody's, Duff & Phelps Credit Rating Co. or Fitch Investors Service, L.P.
S-24
<PAGE> 60
(iv) The Trustee must not be an affiliate of any other member of the
Restricted Group (as defined below).
(v) 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. 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.
In addition, it is a condition that any Benefit Plan investing in the Class
A Certificates be an "accredited investor" as defined in Rule 501(a)(1) of
Regulation D of the Commission under the Securities Act of 1933, as amended.
The Exemption does not apply to Benefit Plans sponsored by the Seller, the
Underwriters, the Trustee, the Servicer, any Obligor with respect to the
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 the Receivables included in the Trust constitutes more than 5% of the
aggregate unamortized principal balance of the Trust (i.e., the initial
principal amount of the Certificates). Moreover, the Exemption provides relief
from certain self-dealing/conflict of interest prohibited transactions, only if,
among other requirements (i) a Benefit Plan's investment in the Class A
Certificates does not exceed 25% of all of the Class A Certificates outstanding
at the time of the acquisition and (ii) immediately after the acquisition, no
more than 25% of the assets of a Benefit Plan with respect to which the person
who has discretionary authority or renders investment advice are invested in the
Class A Certificates representing an interest in a trust containing assets sold
or serviced by the same entity.
Due to the complexities of the foregoing rules and the penalties imposed
upon persons involved in prohibited transactions, it is important that the
fiduciary of an employee benefit plan considering the purchase of Class A
Certificates consult with its counsel regarding the applicability of the
prohibited transaction provisions of ERISA and the Code to such investment.
The DOL issued Prohibited Transaction Class Exemption ("PTCE") 95-60 on
July 12, 1995 in response to the United States Supreme Court decision John
Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank 114 S.Ct. 517
(1993), in which the Supreme Court held that assets held in an insurance
company's general account may be deemed to be "plan assets" for ERISA purposes
under certain circumstances. Subject to certain conditions, PTCE 95-60 provides
general relief from the prohibited transaction rules that would otherwise be
applicable to assets held in an insurance company's general account. Prospective
insurance company purchasers should consult with their counsel to determine
whether the decision in John Hancock, as modified by PTCE 95-60, affects their
ability to make purchases of the Certificates.
THE CLASS B CERTIFICATES
The Exemption will not be available for Class B Certificates because the
Class B Certificates are subordinate interests. Accordingly, no Plan will be
eligible to purchase or otherwise hold Class B Certificates and no beneficial
interest therein may be sold or otherwise transferred to a Plan.
S-25
<PAGE> 61
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 199 (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters"), for whom is acting as
representative (the "Representative") have severally but not jointly agreed to
purchase from the Seller the following respective principal amounts of the Class
A Certificates and the Class B Certificates:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
OF CLASS A OF CLASS B
UNDERWRITERS CERTIFICATES CERTIFICATES
------------ ---------------- ----------------
<S> <C> <C>
[Names of Underwriters].............................. $ $
---------- ----------
Total...................................... $ $
========== ==========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the Certificates if any are
purchased.
The Underwriters have advised the Seller that the Underwriters propose
initially to offer the Class A Certificates and Class B Certificates to the
public at the respective public offering prices set forth on the cover page of
this Prospectus Supplement, and to certain dealers at such prices less a
concession not in excess of % of the Class A Certificate denominations
and % of the Class B Certificate denominations. The Underwriters may allow
and such dealers may reallow a concession not in excess of % of the Class A
Certificate denominations and % of the Class B Certificate denominations.
After the initial public offering, the public offering prices and such
concessions may be changed.
The Underwriting Agreement provides that the Seller and Fleetwood Credit
will jointly and severally indemnify the Underwriters against certain
liabilities, including liabilities under applicable securities laws, or
contribute to payments the Underwriters may be required to make in respect
thereof.
Upon receipt of a request by an investor who has received an electronic
Prospectus from an Underwriter or a request by such investor's representative
within the period during which there is an obligation to deliver a Prospectus,
the Seller or the Underwriters will promptly deliver, or cause to be delivered,
without charge, a paper copy of this Prospectus Supplement and the Prospectus.
Until the distribution of the Certificates is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the Certificates. As an exemption to these
rules, the Underwriters are permitted to engage in certain transactions that
stabilize the price of the Certificates. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Certificates.
Neither the Seller nor any Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the prices of the Certificates. In addition, neither
the Seller nor any Underwriter makes any representation that the Underwriters
will engage in such transactions or that such transactions, once commenced, will
not be discontinued without notice.
S-26
<PAGE> 62
LEGAL OPINIONS
Certain legal matters relating to the Certificates will be passed upon for
the Seller by Timothy M. Hayes or Frederic C. Liskow, each a Vice President and
Assistant General Counsel to Associate First Capital Corporation, the parent
company of the Servicer. Mr. Hayes and Mr. Liskow each own shares of Class A
Common Stock of Associates First Capital Corporation, and each have options to
purchase additional shares of such Class A Common Stock. Arter & Hadden LLP,
Washington, D.C. will act as special counsel to the Seller with respect to
certain matters relating to the Certificates, including certain federal income
tax matters. Brown & Wood LLP, San Francisco, California will act as counsel for
the Underwriters. Brown & Wood LLP has from time to time represented Fleetwood
Credit in certain matters not related to the offering of the Certificates.
S-27
<PAGE> 63
INDEX OF TERMS
Set forth below is a list of certain of the more significant terms used in
this Prospectus Supplement and the pages on which the definitions of such terms
may be found herein.
<TABLE>
<CAPTION>
TERM PAGE
---- ------
<S> <C>
Additional Yield Supplement Amount.............. S-6
Agreement....................................... S-3
APR............................................. S-4
Available Funds................................. S-18
Cede............................................ S-16
Certificate Account............................S-3, S-11
Certificateholders.............................. S-6
Certificates....................................S-1, S-3
Class A Certificate Balance....................S-7, S-18
Class A Certificate Owner....................... S-16
Class A Certificateholders...................... S-6
Class A Certificates............................S-1, S-3
Class A Distributable Amount.................... S-18
Class A Interest Carryover Shortfall............ S-19
Class A Interest Distributable Amount........... S-18
Class A Pass-Through Rate....................... S-4
Class A Percentage.............................. S-4
Class A Pool Factor............................. S-15
Class A Principal Carryover Shortfall........... S-19
Class A Principal Distributable Amount.......... S-18
Class B Certificate Balance....................S-7, S-19
Class B Certificate Owner....................... S-16
Class B Certificateholders...................... S-6
Class B Certificates............................S-1, S-3
Class B Distributable Amount.................... S-18
Class B Interest Carryover Shortfall............ S-20
Class B Pass-Through Rate....................... S-4
Class B Percentage.............................. S-4
Class B Pool Factor............................. S-15
Class B Principal Carryover Shortfall........... S-20
Closing Date.................................... S-4
Code............................................ S-23
Collected Interest.............................. S-18
Collected Principal............................. S-18
Collection Period............................... S-7
Commission...................................... S-2
Dealers......................................... S-4
Determination Date.............................. S-17
Distribution Dates.............................. S-6
DOL............................................. S-23
DTC............................................. S-16
ERISA........................................... S-10
Exchange Act.................................... S-2
Exemption....................................... S-23
Final Scheduled Distribution Date............... S-6
</TABLE>
<TABLE>
<CAPTION>
TERM PAGE
---- ------
<S> <C>
Financed Vehicles...............................S-1, S-3
Fiscal Quarter.................................. S-21
Fleetwood Credit................................S-1, S-3
Funding Period.................................. S-5
Initial Cutoff Date............................. S-3
Initial Financed Vehicles.......................S-1, S-3
Initial Receivables.............................S-1, S-3
Mandatory Prepayment............................ S-7
Maximum Initial Yield Supplement Amount........S-6, S-17
Maximum Subsequent Yield Supplement Amount.....S-6, S-17
Maximum Yield Supplement Amount................S-6, S-17
Monthly Principal Payment....................... S-18
Moody's......................................... S-9
Negative Carry Amount........................... S-18
Original Class A Certificate Balance............ S-7
Original Class B Certificate Balance............ S-7
Pool Balance.................................... S-12
Pre-Funded Amount............................... S-5
Pre-Funding Account.............................S-1, S-3
Prospectus...................................... S-2
Rating Agencies................................. S-9
Realized Losses................................. S-19
Receivables.....................................S-1, S-3
Receivables Purchase Agreement.................. S-4
Record Date..................................... S-6
Required Rate................................... S-5
Reserve Fund.................................... S-8
Restricted Group................................ S-24
Seller..........................................S-1, S-3
Servicer........................................S-1, S-3
Specified Reserve Fund Balance.................. S-8
Standard & Poor's............................... S-9
Subsequent Cutoff Date.......................... S-4
Subsequent Financed Vehicles....................S-1, S-3
Subsequent Receivables..........................S-1, S-3
Subsequent Transfer Date........................ S-5
Transfer Agreement.............................. S-4
Trust...........................................S-1, S-3
Trustee.........................................S-1, S-3
Underwriting Agreement.......................... S-25
Yield Supplement Account........................ S-5
Yield Supplement Account Initial Deposit.............S-5
Yield Supplement Agreement...................... S-6
Yield Supplement Amount........................S-6, S-17
Yield Supplement Deposit Amount................. S-17
</TABLE>
S-28
<PAGE> 64
======================================================
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE SELLER, THE SERVICER OR THE
UNDERWRITERS. NEITHER THIS PROSPECTUS NOR THE PROSPECTUS SUPPLEMENT CONSTITUTES
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Reports to Certificateholders................... S-2
Summary......................................... S-3
Formation of the Trust.......................... S-11
Property of the Trust........................... S-11
The Receivables................................. S-12
Yield Considerations............................ S-14
Pool Factors and Trading Information............ S-14
The Certificates................................ S-15
Certain Federal Income Tax Consequences......... S-24
ERISA Considerations............................ S-24
Underwriting.................................... S-26
Legal Opinions.................................. S-27
Index of Terms.................................. S-28
PROSPECTUS
PAGE
-----
Available Information........................... 2
Reports to Securityholders...................... 2
Incorporation of Certain Documents by
Reference..................................... 2
Summary......................................... 3
Formation of the Trusts......................... 11
Property of the Trusts.......................... 11
The Receivables................................. 13
Yield Considerations............................ 16
Pool Factors and Trading Information............ 17
Use of Proceeds................................. 18
The Seller...................................... 18
The Servicer.................................... 18
The Notes....................................... 19
The Owner Certificates.......................... 23
The Grantor Certificates........................ 24
Certain Information Regarding the Securities.... 25
Certain Legal Aspects of the Receivables........ 46
Certain Federal Income Tax Consequences......... 52
State Tax Consequences with Respect to Owner
Trusts........................................ 64
ERISA Considerations............................ 64
Plan of Distribution............................ 65
Legal Opinions.................................. 66
Index of Terms.................................. 67
</TABLE>
---------------
UNTIL , 199 , ALL DEALERS EFFECTING TRANSACTIONS IN THE
CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS IS IN ADDITION TO
THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
======================================================
======================================================
FLEETWOOD CREDIT RV
RECEIVABLES
199 - GRANTOR TRUST
$
$
% ASSET BACKED
CERTIFICATES, CLASS A
$
% ASSET BACKED
CERTIFICATES, CLASS B
FLEETWOOD CREDIT
RECEIVABLES CORP.
SELLER
FLEETWOOD CREDIT CORP.
SERVICER AND
A WHOLLY OWNED SUBSIDIARY OF
ASSOCIATES FIRST CAPITAL
CORPORATION
------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------
[UNDERWRITERS]
, 199
======================================================
<PAGE> 65
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
PRELIMINARY PROSPECTUS DATED MAY 28, 1998
PROSPECTUS
FLEETWOOD CREDIT RV RECEIVABLES TRUSTS
ASSET BACKED NOTES
ASSET BACKED CERTIFICATES
---------------------
FLEETWOOD CREDIT RECEIVABLES CORP.
SELLER
FLEETWOOD CREDIT CORP.
SERVICER AND
A WHOLLY OWNED SUBSIDIARY OF
ASSOCIATES FIRST CAPITAL CORPORATION
---------------------
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 (each, a "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 (each, a "Prospectus Supplement").
Except as otherwise provided in the related Prospectus Supplement, the
Securities will be offered only in book-entry form. This Prospectus may not be
used to consummate sales of Securities of any Series unless accompanied by a
Prospectus Supplement.
Each Series of Securities will be issued by either an owner trust (each, an
"Owner Trust") or a grantor trust (each, a "Grantor Trust" and, together with
the Owner Trusts, the "Trusts") to be formed with respect to such Series. Each
Series of Securities issued by an Owner Trust will include one or more classes
of Notes representing indebtedness of the Owner Trust and one or more classes of
Certificates representing fractional undivided interests in such Owner Trust
(the "Owner Certificates" and, together with the related Notes, the "Owner
Securities"). Each Series of Securities issued by a Grantor Trust will consist
of one or more classes of Certificates representing fractional undivided
interests in such Grantor Trust (the "Grantor Certificates").
The property of each Trust will primarily include a pool of simple interest
retail installment sale contracts (the "Receivables") secured by the new and
used recreational vehicles financed thereby (the "Financed Vehicles"), certain
monies due under the Receivables on and after the Cutoff Date set forth in the
related Prospectus Supplement, security interests in the Financed Vehicles and
certain other property, as more fully described herein and in the related
Prospectus Supplement. In addition, if so specified in the related Prospectus
Supplement, after the date of initial issuance of the related Securities, all or
a portion of the Receivables may be purchased from the Seller from time to time
during the Funding Period specified in such Prospectus Supplement from monies on
deposit in a Pre-Funding Account. In each case, the Receivables, including the
security interests in the related Financed Vehicles and certain related
property, will be purchased by Fleetwood Credit Receivables Corp. (the "Seller")
from Fleetwood Credit Corp. ("Fleetwood Credit") concurrently with their
conveyance to a Trust. To the extent specified in the related Prospectus
Supplement, an insurance policy, surety bond, letter of credit, reserve fund,
spread account or other form of credit enhancement, or any combination thereof,
may be provided with respect to a Series of Securities, or one or more classes
of Securities of a Series.
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. As more fully described herein and in the
related Prospectus Supplement, distributions on any class of Securities may be
senior or subordinated to distributions on one or more other classes of
Securities of the related Series, and payments on the Owner Certificates of any
Series may be subordinated in priority to payments on the related Notes of such
Series. If described in the related Prospectus Supplement, a Series of Owner
Securities may include one or more classes of Owner Securities entitled to
principal distributions with disproportionate, nominal or no distributions in
respect of interest, or to interest distributions with disproportionate, nominal
or no distributions in respect of principal.
Except as otherwise provided in the related Prospectus Supplement, the only
obligations of the Seller and Fleetwood Credit, as originator of the related
Receivables with respect to a Series of Securities, will be pursuant to certain
representations and warranties relating to the Receivables. Fleetwood Credit
will be the servicer (in such capacity, the "Servicer") for each Series of
Securities and its obligations as Servicer will be limited to its contractual
servicing obligations described herein and in the related Prospectus Supplement.
There will have been no secondary market for any Securities sold hereunder
prior to the offering thereof and there is no assurance that one will develop.
The Underwriters named in the Prospectus Supplement relating to a Series of
Securities will expect, but will not be obligated, to make a market in each
class of the related Securities. There can be no assurance that any such market
will develop, or if one does develop, that it will continue or provided
sufficient liquidity.
---------------------
EXCEPT AS OTHERWISE SPECIFIED IN THE RELATED PROSPECTUS SUPPLEMENT, EACH
SERIES OF NOTES WILL REPRESENT OBLIGATIONS OF, AND THE RELATED OWNER
CERTIFICATES WILL REPRESENT INTERESTS IN, THE RELATED OWNER TRUST ONLY, AND EACH
SERIES OF GRANTOR CERTIFICATES WILL REPRESENT INTERESTS IN THE RELATED GRANTOR
TRUST ONLY, AND IN EACH CASE WILL NOT REPRESENT OBLIGATIONS OF OR INTERESTS IN,
AND WILL NOT BE GUARANTEED OR INSURED BY, FLEETWOOD CREDIT RECEIVABLES CORP.,
FLEETWOOD CREDIT CORP., ASSOCIATES FIRST CAPITAL CORPORATION, THE TRUSTEES OR
ANY OF THEIR RESPECTIVE AFFILIATES.
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.
---------------------
The date of this Prospectus is , 1998.
<PAGE> 66
AVAILABLE INFORMATION
The Seller has filed with the Securities and Exchange Commission (the
"Commission") on behalf of each Trust a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement"), of which this Prospectus is a part, under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities being
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement which is available
for inspection without charge at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and the regional offices of the Commission at Citicorp Center, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661-2511, and Suite 1300,
Seven World Trade Center, New York, New York 10048. Copies of such information
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also
maintains a site on the World Wide Web (http://www.sec.gov) that contains
reports, proxy statements and other information regarding registrants that file
electronically with the Commission. The Servicer, on behalf of the Trusts, 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, and the rules
and regulations of the Commission thereunder.
REPORTS TO SECURITYHOLDERS
The Trustee of each Trust will provide to Securityholders (which shall be
Cede & Co. as the nominee of The Depository Trust Company unless Definitive
Certificates are issued under the limited circumstances described herein)
unaudited monthly and annual reports concerning the Receivables. See "Certain
Information Regarding the Securities -- Statements to Securityholders" and "--
Evidence as to Compliance".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All reports and other documents filed by the Seller, on behalf of any
Trust, pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the respective dates of filing of such
documents. Any statement contained herein or in a document all or a portion of
which is 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 Seller will provide without charge to each person, including any
beneficial owner of Securities, to whom a copy of this Prospectus is delivered,
on the written or oral request of any such person, a copy of any or all of the
documents incorporated herein by reference, except the exhibits to such
documents (unless such exhibits are specifically incorporated by reference in
such documents). Requests for such copies should be directed to Secretary,
Fleetwood Credit Receivables Corp., 22840 Savi Ranch Parkway, Yorba Linda,
California 92687 or by calling (714) 921-3400.
2
<PAGE> 67
SUMMARY
This Summary is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus and in the related Prospectus
Supplement with respect to the Securities of any Series offered thereby. Certain
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto elsewhere in this Prospectus. See the Index of Terms for the
location herein of certain capitalized terms.
Issuer..................... With respect to any Series of Securities issued by
(i) an Owner Trust, the Trust to be formed pursuant
to a trust agreement (the "Trust Agreement")
between the Seller and the entity named as trustee
in the related Prospectus Supplement (the "Owner
Trustee") or (ii) a Grantor Trust, the Trust to be
formed pursuant to a pooling and servicing
agreement (the "Pooling and Servicing Agreement")
among the Seller, the Servicer and the entity named
as trustee in the related Prospectus Supplement
(the "Grantor Trustee").
Seller..................... Fleetwood Credit Receivables Corp. (the "Seller"),
a wholly owned, limited purpose subsidiary of
Fleetwood Credit Corp.
Servicer................... Fleetwood Credit Corp. ("Fleetwood Credit" or, in
its capacity as Servicer, the "Servicer"), a wholly
owned subsidiary of Associates First Capital
Corporation ("First Capital").
Securities Offered......... Each Series of Securities will be issued by either
an Owner Trust or a Grantor Trust. Each Series of
Securities issued by an Owner Trust will consist of
one or more classes of Notes and one or more
classes of Certificates. The Notes will be issued
and secured pursuant to an indenture (the
"Indenture") between the Owner Trust and the entity
named therein as trustee (the "Indenture Trustee"
and, together with the Owner Trustee and Grantor
Trustee, the "Trustees"). The Owner Certificates
will be issued and secured pursuant to the Trust
Agreement under which such Owner Trust will be
formed. Each Series of Securities issued by a
Grantor Trust will consist of one or more classes
of Grantor Certificates issued pursuant to the
Pooling and Servicing Agreement under which such
Grantor Trust will be formed.
Registration of the
Securities................. Unless otherwise specified in the related
Prospectus Supplement, each class of Securities
will initially be represented by one or more
certificates registered in the name of Cede & Co.
("Cede"), as the nominee of The Depository Trust
Company ("DTC"). No person acquiring an interest in
the related Securities (each, a "Security Owner")
will be entitled to receive a definitive
certificate representing such person's interest,
except in the event that Definitive Securities are
issued under the limited circumstances described
herein. Unless and until Securities are issued in
definitive form, all references herein to
distributions, notices, reports and statements to
and to actions by and effects upon the related
Securityholders will refer to the same actions and
effects with respect to DTC or Cede, as the case
may be, for the benefit of the related Security
Owners in accordance with DTC procedures.
If so provided in the related Prospectus
Supplement, Security Owners may elect to hold their
interests through DTC, in the United States, or
Cedel Bank, societe anonyme ("Cedel") or the
Euroclear System ("Euroclear"), in Europe.
Transfers within DTC, Cedel or Euroclear, as the
case may be, will be in accordance with the usual
rules and operating
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procedures of the relevant system. Cross-market
transfers between persons holding directly or
indirectly through DTC, on the one hand, and
counterparties holding directly or indirectly
through Cedel or Euroclear, on the other, will be
effected in DTC through Citibank, N.A. or The Chase
Manhattan Bank, the relevant depositaries
(collectively, the "Depositaries") of Cedel or
Euroclear, respectively, and each a participating
member of DTC. See "Certain Information Regarding
the Securities -- Book-Entry Registration" and "--
Definitive Securities".
Unless otherwise specified in the related
Prospectus Supplement, the Notes and Owner
Certificates will be issued in minimum
denominations of $1,000 and $20,000, respectively,
and integral multiples of $1,000 in excess thereof,
and the Grantor Certificates will be issued in
minimum denominations of $1,000 and integral
multiples thereof.
A. Owner Securities
The Notes.................. 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 fixed, variable, adjustable or any
combination of the foregoing. The related
Prospectus Supplement will specify the Interest
Rate, or the method for determining the Interest
Rate, for each class of Notes.
A Series of Owner Securities may include one or
more classes of Notes which differ as to Interest
Rate, the timing and priority of payments,
seniority, allocation of losses or amount of
payments of principal or interest. Additionally,
payments of principal or interest in respect of any
such class or classes may or may not be made upon
the occurrence of specified events or on the basis
of collections from designated portions of the
Receivables comprising assets of the related Trust
(the "Receivables Pool"). If specified in the
related Prospectus Supplement, one or more classes
of Notes ("Strip Notes") may be entitled to (i)
principal payments with disproportionate, nominal
or no interest payments or (ii) interest payments
with disproportionate, nominal or no principal
payments.
The Owner Certificates..... Unless otherwise specified in the related
Prospectus Supplement, each class of Owner
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 Owner Certificates, the
"Pass-Through Rate"). Each class of Owner
Certificates may have a different Pass-Through
Rate, which may be fixed, variable, adjustable or
any combination of the foregoing. The related
Prospectus Supplement will specify the Pass-
Through Rate, or the method for determining the
Pass-Through Rate, for each class of Owner
Certificates.
Unless otherwise specified in the related
Prospectus Supplement, each class of Owner
Certificates will be entitled to monthly
distributions of a portion of all payments received
by the Servicer on or in respect of the Receivables
comprising the related Receivables Pool during the
immediately preceding calendar month (each, a
"Collection Period") allocable to principal.
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A Series of Owner Securities may include two or
more classes of Owner Certificates which differ as
to Pass-Through Rate, timing and priority of
distributions, seniority, allocations of losses or
amount of distributions in respect of principal or
interest. Additionally, 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 related
Receivables Pool. If specified in the related
Prospectus Supplement, one or more classes of Owner
Certificates ("Strip Certificates") may be entitled
to (i) principal distributions with
disproportionate, nominal or no interest
distributions or (ii) interest distributions with
disproportionate, nominal or no principal
distributions.
Except as otherwise specified in the related
Prospectus Supplement, distributions in respect of
the Owner Certificates will be subordinated in
priority of payment to payments on the related
Notes.
B. Grantor Certificates.... Unless otherwise specified in the related
Prospectus Supplement, each class of Grantor
Certificates will have a stated Certificate Balance
specified in the related Prospectus Supplement and
will accrue interest on such Certificate Balance at
a specified Pass-Through Rate, which may be fixed,
variable, adjustable or any combination of the
foregoing. If one or more classes of Grantor
Certificates are issued, each class of Grantor
Certificates may have a different Pass-Through
Rate. The related Prospectus Supplement will
specify the Pass-Through Rate, or the method for
determining the Pass-Through Rate, for each class
of Grantor Certificates.
Unless otherwise specified in the related
Prospectus Supplement, each class of Grantor
Certificates will be entitled to monthly
distributions of a portion of all payments received
by the Servicer on or in respect of the Receivables
comprising the related Receivables Pool during the
related Collection Period allocable to principal.
If a Grantor Trust issues one or more classes of
Grantor Certificates, one or more classes will be
senior certificates (the "Senior Certificates") and
one or more classes will be subordinated
certificates (the "Subordinated Certificates"), in
each case to the extent described in the related
Prospectus Supplement.
Distribution Dates and
Payment Dates.............. Unless otherwise specified in the related
Prospectus Supplement, payments of interest and
principal, to the extent and in the manner
described therein, will be made on the Securities
of each Series, whether issued by an Owner Trust or
a Grantor Trust, on the 15th day of each month (or,
if such day is not a Business Day, the next
succeeding Business Day), to holders of record as
of the day 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") beginning
on a Distribution Date specified in the related
Prospectus Supplement (each, a "Distribution
Date"). The respective final scheduled Distribution
Dates (each, a "Final Scheduled Distribution Date")
for each class of Securities will be specified in
the related Prospectus Supplement. Unless otherwise
specified in the related Prospectus Supplement, the
dates for payments of interest and principal on the
Notes of any Series will be the same as the
Distribution Dates for the related Owner
Certificates (each, a "Payment Date").
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Property of the Trusts..... The property of each Trust will primarily include a
pool of retail installment sale contracts which,
except as otherwise provided in the related
Prospectus Supplement, bear interest on the simple
interest method (the "Initial Receivables"),
secured by the new and used recreational vehicles
financed thereby (the "Initial Financed Vehicles"),
certain monies due under the Initial Receivables on
and after the Initial Cutoff Date set forth in the
related Prospectus Supplement (the "Initial Cutoff
Date"), security interests in the Initial Financed
Vehicles, certain accounts and the proceeds thereof
and proceeds from claims under certain insurance
policies in respect of individual Initial Financed
Vehicles or the related Obligors and certain rights
under the agreements described below. On the date
of initial issuance of a Series of Securities
specified in the related Prospectus Supplement (the
"Closing Date"), the Seller will sell the Initial
Receivables having an aggregate principal balance
specified in such Prospectus Supplement as of the
related Initial Cutoff Date to the related Trust
pursuant to (i) in the case of an Owner Trust, a
sale and servicing agreement among the Seller, the
Servicer and the Trust (each, a "Sale and Servicing
Agreement") or (ii) in the case of a Grantor Trust,
the related Pooling and Servicing Agreement. With
respect to each Series of Notes, the rights and
benefits of the Seller under the related
Receivables Purchase Agreement and of the Owner
Trust under the related Sale and Servicing
Agreement and all other related Transfer
Agreements, if any, will be assigned to the
Indenture Trustee as collateral for such Notes. The
property of each Trust will also include amounts on
deposit in certain trust accounts, including the
related Collection Account and any Pre-Funding
Account, the Distribution Accounts (in the case of
an Owner Trust) and, if so specified in the related
Prospectus Supplement, any Yield Supplement
Account, Reserve Fund or other account identified
therein.
The Receivables............ The Receivables arise from simple interest retail
installment sale contracts originated by dealers in
new and used recreational vehicles (the "Dealers")
which are purchased by Fleetwood Credit. All of the
Receivables will be selected from such contracts
owned by Fleetwood Credit based upon the criteria
described under "The Receivables" and "Certain
Information Regarding the Securities -- Sale and
Assignment of the Receivables".
On or before the related Closing Date, Fleetwood
Credit will sell the Initial Receivables with
respect to a Trust to the Seller pursuant to a
receivables purchase agreement (each, a
"Receivables Purchase Agreement") between the
Seller and Fleetwood Credit.
Pre-Funding Accounts....... If so specified in the related Prospectus
Supplement, from time to time during the Funding
Period specified therein, pursuant to the related
Receivables Purchase Agreement, Fleetwood Credit
will be obligated to sell, and the Seller will be
obligated to purchase, Subsequent Receivables (the
"Subsequent Receivables") at a purchase price equal
to the aggregate principal amount thereof as of the
related Subsequent Cutoff Date. Pursuant to the
related Sale and Servicing Agreement or Pooling and
Servicing Agreement and one or more transfer
agreements (each, a "Transfer Agreement" and,
together with the Sale and Servicing Agreement or
Pooling and Servicing Agreement, as the case may
be, the "Transfer and Servicing Agreements") among
the Seller, the Servicer
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and the related Owner Trustee or Grantor Trustee,
as the case may be, and subject to the satisfaction
of certain conditions described herein, the Seller
will in turn sell the Subsequent Receivables to the
related Trust at a purchase price equal to the
amount paid by the Seller to Fleetwood Credit for
such Receivables, which purchase price shall be
paid from monies on deposit in the Pre-Funding
Account. The aggregate principal balance of the
Subsequent Receivables to be conveyed to any Trust
during the related Funding Period will not exceed
the amount deposited in the Pre-Funding Account on
the related Closing Date (the "Pre-Funded Amount").
The aggregate principal balance of the Subsequent
Receivables to be conveyed to the related Trust
during the related Funding Period will not exceed
25% of the Original Principal Balance of the
Securities of the related Trust. The Subsequent
Receivables will be transferred from Fleetwood
Credit to the Seller and from the Seller to the
Trust on the Business Day specified by Fleetwood
Credit and the Seller in each month in which the
related Cutoff Date occurs. See "Property of the
Trusts" and "Certain Information Regarding the
Securities -- Pre-Funding Accounts; Mandatory
Prepayment of Securities".
Any Pre-Funding Account will be maintained with the
related Indenture Trustee or Grantor Trustee and
will be designed solely to hold funds to be applied
by such Trustee during the Funding Period to pay to
the Seller the purchase price for such Subsequent
Receivables. Monies on deposit in a Pre-Funding
Account will not be available to cover losses on or
in respect of the related Receivables.
Each Pre-Funding Account will be created with an
initial deposit by the Seller of the Pre-Funded
Amount. Each "Funding Period" will be the period
from the related Closing Date until the earliest to
occur of (i) the date on which the remaining
Pre-Funded Amount is less than $100,000, (ii) the
date on which an Event of Default or Servicer
Default (so long as Fleetwood Credit is the
Servicer) occurs or (iii) the close of business on
the Payment Date or Distribution Date specified in
the related Prospectus Supplement, but in no event
will the Funding Period be longer than 90 days.
During the Funding Period, on one or more Transfer
Dates, the Pre-Funded Amount will be applied to
purchase Subsequent Receivables from the Seller.
Any portion of the Pre-Funded Amount remaining on
deposit in a Pre-Funding Account at the end of the
related Funding Period, after giving effect to the
sale to the related Trust of all Subsequent
Receivables, will be payable as a partial
prepayment of principal to holders of the related
Securities in the amount and manner specified in
the related Prospectus Supplement. See "Certain
Information Regarding the Securities -- General"
and "-- Pre-Funding Accounts; Mandatory Prepayment
of Securities".
Yield Supplement Accounts
and Agreements............. If specified in the related Prospectus Supplement,
Fleetwood Credit will establish a yield supplement
account with the related Indenture Trustee or
Grantor Trustee for the benefit of the holders of
the related Securities (each, a "Yield Supplement
Account"). Each Yield Supplement Account will be
designed solely to hold funds to be applied by the
related Owner Trustee or Grantor Trustee, as the
case may be, to provide payments to the
Securityholders in respect of Receivables the APR
of
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which is less than the sum of (i) the weighted
average of the applicable Interest Rates and
Pass-Through Rates of all classes of Securities of
such Series and (ii) the related Servicing Fee Rate
(the "Required Rate").
Unless otherwise specified in the related
Prospectus Supplement, each Yield Supplement
Account will be created with an initial deposit by
Fleetwood Credit (the "Yield Supplement Initial
Deposit") in an amount specified in the related
Prospectus Supplement. Except as otherwise provided
in the related Prospectus Supplement, the Yield
Supplement Initial Deposit will equal the net
present value (discounted at a per annum rate
specified in the related Pooling and Servicing
Agreement or Sale and Servicing Agreement, as the
case may be) of the aggregate amount by which
interest on the principal balance of each
Subsequent Receivable for the period commencing on
the Subsequent Cutoff Date and ending with the
scheduled maturity of each Receivable, assuming
that payments on such Receivables are made as
scheduled and no prepayments are made, at the
Required Rate exceeds interest on such principal
balances at the APR of each such Receivable (the
"Yield Supplement Amount" and, with respect to the
Subsequent Receivables, the "Maximum Initial Yield
Supplement Amount").
If a Yield Supplement Account and a Pre-Funding
Account are established with respect to any Trust,
Fleetwood Credit, the Seller and the related
Grantor Trustee or Owner Trustee and Indenture
Trustee, as the case may be, will enter into a
yield supplement agreement to be dated as of the
Initial Cutoff Date (the "Yield Supplement
Agreement") pursuant to which, on each Subsequent
Transfer Date, Fleetwood Credit will deposit into
the Yield Supplement Account an amount (the
"Additional Yield Supplement Amount") equal to the
net present value (discounted at the per annum rate
specified in the related Pooling and Servicing
Agreement or Sale and Servicing Agreement, as the
case may be) of the aggregate Yield Supplement
Amounts, if any, in respect of Subsequent
Receivables for periods commencing with the related
Subsequent Cutoff Date and ending with the
scheduled maturities of the related Subsequent
Receivables, assuming that payments on such
Receivables are made as scheduled and no
prepayments are made. The aggregate of the
Additional Yield Supplement Amounts in respect of
the Subsequent Receivables is referred to herein as
the "Maximum Subsequent Yield Supplement Amount"
and, together with the Maximum Initial Yield
Supplement Amount, the "Maximum Yield Supplement
Amount". See "Certain Information Regarding the
Securities -- Yield Supplement Accounts; Yield
Supplement Agreements".
Credit and Cash Flow
Enhancement.............. To the extent specified in the related Prospectus
Supplement, credit enhancement, if any, with
respect to a Trust or one or more classes of
Securities may include any one or more of the
following: subordination of one or more other
classes of Securities of the same Series, Reserve
Funds, Spread Accounts, surety bonds, insurance
policies, letters of credit, credit or liquidity
facilities, Cash Collateral Accounts, over-
collateralization, 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
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other arrangements. Unless otherwise specified in
the related Prospectus Supplement, each form of
credit enhancement will have certain limitations
and exclusions from coverage thereunder, which will
be described in the related Prospectus Supplement.
See "Certain Information Regarding the
Securities -- Credit and Cash Flow Enhancement".
Advances................... Unless otherwise specified in the related
Prospectus Supplement, on the Business Day
immediately preceding each Payment Date and
Distribution Date (each, a "Deposit Date"), the
Servicer will advance to a Trust, in respect of
each Receivable in the related Receivables Pool, an
amount equal to all accrued interest at the related
APR which accrued in respect of such Receivable
from the last day upon which a payment was made on
such Receivable through the last day of the related
Collection Period (each, an "Advance"). The
Servicer will be required to make an Advance only
to the extent it determines such Advance will be
recoverable from future payments and collections on
or in respect of the Receivables or otherwise. See
"Certain Information Regarding the
Securities -- Certain Payments by the Servicer".
Servicing Fee.............. Unless otherwise specified in the related
Prospectus Supplement, the Servicer will receive a
monthly fee, payable on each Distribution Date,
equal to one-twelfth of the product of 1.0% (the
"Servicing Fee Rate") and the Pool Balance as of
the first day of the related Collection Period.
Unless otherwise specified in the related
Prospectus Supplement, the Servicer will be
entitled to receive additional servicing
compensation in the form of certain late fees,
prepayment charges and other administrative fees or
similar charges. See "Certain Information Regarding
the Securities -- Servicing Compensation".
Termination................ Unless otherwise specified in the related
Prospectus Supplement, within ten days following
the last day of a Collection Period as of which the
Pool Balance of any Trust is 10% or less of the sum
of the Original Pool Balance and the aggregate
principal balance of all Subsequent Receivables
conveyed to such Trust as of the related Subsequent
Cutoff Dates, the related Indenture Trustee or
Grantor Trustee, as the case may be, shall solicit
bids for the purchase of the Receivables remaining
in such Trust. In the event that satisfactory bids
are received as described in the related Prospectus
Supplement, the sale proceeds will be distributed
to the related Securityholders on the Payment Date
or Distribution Date specified in the related
Prospectus Supplement. If satisfactory bids are not
received, the related Trustee shall decline to sell
such Receivables and shall not be under any
obligation to solicit any further bids or otherwise
negotiate any further sale of such Receivables. See
"Certain Information Regarding the
Securities -- Termination".
Tax Status................. Upon the issuance of each Series of Securities,
except as otherwise specified in the related
Prospectus Supplement, special federal income tax
counsel to the Seller will deliver an opinion to
the effect that (i) with respect to any Series of
Owner Securities, for federal income tax purposes
the Notes will constitute indebtedness and the
Owner Certificates will constitute interests in a
trust fund that will not be treated as an
association taxable as a corporation or as a
publicly traded partnership taxable as a
corporation or (ii) with respect to any Series of
Grantor Certificates, for federal income tax
purposes the related Grantor Trust
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will be treated as a grantor trust and not as an
association taxable as a corporation. See "Certain
Federal Income Tax Consequences".
ERISA Considerations....... Subject to the considerations described under
"ERISA Considerations" and in the related
Prospectus Supplement, the Notes of any Series
issued by an Owner Trust and the Senior
Certificates (or if only one class of Grantor
Certificates is issued thereby, the Grantor
Certificates) issued by any Grantor Trust may be
purchased by employee benefit plans that are
subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and other plans
or arrangements subject to Section 4975 of the Code
(each, a "Plan"). Unless otherwise specified in the
related Prospectus Supplement, neither the Owner
Certificates of any Series issued by an Owner Trust
nor any Subordinated Certificates issued by a
Grantor Trust may be purchased by Plans. Any Plan
fiduciary considering purchase of the Securities
should, among other things, consult with its
counsel in determining whether all required
conditions have been satisfied. See "ERISA
Considerations".
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FORMATION OF THE TRUSTS
With respect to each Series of Securities, the Seller will establish a
Trust pursuant to the related Trust Agreement or Pooling and Servicing Agreement
for the transactions described herein and in the related Prospectus Supplement.
The Seller will establish each Trust by selling and assigning the property of
such Trust to the related Owner Trustee or Grantor Trustee, as the case may be,
in exchange for the related Securities. The Servicer will service the
Receivables pursuant to the related Sale and Servicing Agreement or Pooling and
Servicing Agreement, as the case may be, and will be compensated for acting as
such. See "Certain Information Regarding the Securities -- Servicing
Compensation". To facilitate servicing and to minimize administrative burden and
expense, the Servicer will be authorized by the Seller and the related Grantor
Trustee or Owner Trustee and Indenture Trustee, as the case may be, to retain
physical possession of the Receivables comprising the related Receivables Pool
and other documents relating thereto as custodian for such Trust, and will
neither stamp or amend such Receivables to reflect the sale and assignment
thereof to the Trust, nor amend the certificates of title of the related
Financed Vehicles. In the absence of amendments to the certificates of title, a
Trust may not have a perfected security interest in the related Financed
Vehicles in all states, and such Trust and the Certificateholders will bear
certain risks with respect to its security interests in the Financed Vehicles in
many states. See "Certain Legal Aspects of the Receivables".
If the protection provided to (i) Noteholders by the subordination of the
related Owner Certificates and the other credit enhancement for the Notes, (ii)
Owner Certificateholders by the credit enhancement for the Owner Certificates or
(iii) Grantor Certificateholders by the credit enhancement for the Grantor
Certificates is insufficient, such Securityholders and the related Trust must
look to payments made by or on behalf of the Obligors on or in respect of the
related Receivables, the proceeds from the repossession and sale of Financed
Vehicles securing Defaulted Receivables and the proceeds of Dealer repurchase
obligations, if any, as more fully described herein under "Property of the
Trusts", to make distributions on the Securities. In such event, certain
factors, such as the failure of the related Owner Trustee or Grantor Trustee, as
the case may be, to possess first priority perfected security interests in the
Financed Vehicles, may limit the ability of a Trust to realize on the collateral
securing the related Receivables or may limit the amount realized to less than
the amount due by the related Obligors. Securityholders may thus be subject to
delays in payment and may incur losses on their investment in such Securities as
a result of defaults or delinquencies by Obligors and depreciation in the value
of the related Financed Vehicles. See "Certain Information Regarding the
Securities -- Credit and Cash Flow Enhancement" and "Certain Legal Aspects of
the Receivables".
Except as otherwise described in the related Prospectus Supplement, the
activities of each Trust will be limited to (i) acquiring, managing and holding
the related Receivables and the other assets contemplated herein and in the
related Prospectus Supplement and proceeds therefrom, (ii) issuing the related
Securities and making payments and distributions thereon and (iii) engaging in
other activities that are necessary, suitable or convenient to accomplish any of
the foregoing or are incidental thereto or connected therewith.
The principal offices of each Grantor Trustee or Owner Trustee and
Indenture Trustee, as the case may be, will be specified in the related
Prospectus Supplement.
PROPERTY OF THE TRUSTS
Except as otherwise provided in the related Prospectus Supplement, the
property of each Trust will primarily consist of a pool of simple interest
retail installment sale contracts, originated before the related Initial Cutoff
Date in the case of the Initial Receivables and before the related Subsequent
Cutoff Date in the case of the Subsequent Receivables, between dealers (the
"Dealers") in new and used recreational vehicles and retail purchasers (the
"Obligors"), and certain monies due thereunder on and after the related Cutoff
Date and amounts on deposit in the related Pre-Funding Account, if any. Except
as otherwise provided in the related Prospectus Supplement, the Financed
Vehicles will have been manufactured primarily by Fleetwood Enterprises, Inc.
The Receivables will be originated by Dealers and subsequently assigned to
Fleetwood Credit. All of the Receivables will be serviced by Fleetwood Credit
and will evidence the indirect financing made available by Fleetwood Credit to
the Obligors. On or before the Closing Date with respect to any Series of
Securities, Fleetwood Credit will sell the related Initial Receivables to the
Seller which will in turn
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sell such Initial Receivables to the related Trust. To the extent so provided in
the related Prospectus Supplement, Subsequent Receivables will be conveyed to
the Trust from time to time during the Funding Period. Any Subsequent
Receivables so conveyed will also be assets of the Trust, subject, in the case
of any Owner Trust, to the prior rights of the related Indenture Trustee and the
Noteholders therein. Neither the Seller nor the Servicer may substitute any
other retail installment sale contract for any Receivable sold to a Trust during
the term of the related Trust.
The assets of each Trust will also include: (i) such amounts as from time
to time may be held in separate trust accounts to be established and maintained
by the Servicer with the related Grantor Trustee or Owner Trustee and Indenture
Trustee pursuant to the related Pooling and Servicing Agreement or Sale and
Servicing Agreement and Indenture, as the case may be, and the monies on deposit
in such accounts as described in the related Prospectus Supplement; (ii)
security interests in the related Financed Vehicles and any accessions thereto;
(iii) the right to proceeds from physical damage, credit life and disability
insurance policies, if any, covering individual Financed Vehicles or Obligors,
as the case may be; (iv) the right to receive proceeds of Dealer repurchase
obligations, if any; (v) any Servicer Letter of Credit; (vi) the rights of the
Seller under the related Receivables Purchase Agreement and Yield Supplement
Agreement, if any; (vii) any property that shall have secured a Receivable and
that shall have been acquired by the related Trust; and (viii) any and all
proceeds of the foregoing; provided that, with respect to any Series of Notes,
the relevant rights and benefits with respect to such property will be assigned
by the Seller and the related Owner Trustee, as applicable, to the related
Indenture Trustee for the benefit of the related Noteholders. Any Yield
Supplement Account will be maintained with the related Indenture Trustee or
Grantor Trustee, as the case may be, for the benefit of the related
Securityholders. Unless otherwise specified in the related Prospectus
Supplement, any Yield Supplement Account will be part of the related Owner Trust
but will not be part of the related Grantor Trust. To the extent specified in
the related Prospectus Supplement, a Reserve Fund or other form of credit
enhancement may be a part of the property of any given Trust or may be held by
the related Trustee for the benefit of the related Securityholders.
With respect to each Receivables Pool, the "Pool Balance" as of the first
day of a Collection Period will represent the aggregate principal balance of the
related Receivables at the end of the immediately preceding Collection Period,
after giving effect to all payments of principal received from or on behalf of
Obligors and all payments of principal on Receivables to be repurchased remitted
by the Seller or the Servicer, as the case may be, all for such immediately
preceding Collection Period. The Pool Balance will be computed by allocating
payments on or in respect of the Receivables to principal and to interest using
the simple interest method.
With respect to each Receivables Pool, the Pool Balance as of the related
Initial Cutoff Date will equal the Original Pool Balance. With respect to any
Trust as to which a Pre-Funding Account has been established, the Pool Balance
will be increased during the Funding Period by the aggregate principal balance
of Subsequent Receivables conveyed to such Trust as of the related Subsequent
Cutoff Dates. Any such additions of Subsequent Receivables will be conditioned
on the compliance with the procedures described in the related Receivables
Purchase Agreement and Transfer and Servicing Agreement. While any Pre-Funding
Account will be established in an amount such that the aggregate principal
balance of the Subsequent Receivables to be added to the related Trust will
require application of the entire Pre-Funded Amount by the Distribution Date or
Payment Date on which the Funding Period is scheduled to terminate, there can be
no assurance that a sufficient amount of Subsequent Receivables will be
available for such purpose. If the Pre-Funded Amount has not been reduced to
zero by the end of any Funding Period, the remaining portion thereof will be
distributed to the related Securityholders as a prepayment of principal as
described under "Certain Information Regarding the Securities -- Pre-Funding
Accounts; Mandatory Prepayment of the Securities".
Pursuant to agreements between Fleetwood Credit and the Dealers, each
Dealer is obligated after origination to repurchase from Fleetwood Credit
recreational vehicle receivables that do not meet certain representations and
warranties made by such Dealer. Such representations and warranties relate
primarily to the origination of such receivables and the perfection of the
security interests in the related financed vehicles, and do not typically relate
to the creditworthiness of the related Obligors or the collectability of such
receivables. Although any Dealer agreements with respect to the Receivables will
not be assigned to the related Trustee, each Sale and Servicing Agreement and
Pooling and Servicing Agreement will require that
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any recovery by Fleetwood Credit pursuant to Dealer repurchase obligations be
deposited in an account established with respect to the related Trust in
satisfaction of the Servicer's repurchase obligations under the related Transfer
and Servicing Agreements. It is expected that the assignments of receivables to
Fleetwood Credit by Dealers do not generally provide for recourse to the Dealer
for unpaid amounts in the event of a default by an Obligor, other than in
connection with the breach of the Dealer's representations and warranties.
THE RECEIVABLES
GENERAL
The Receivables will be purchased by Fleetwood Credit from Dealers in the
ordinary course of business. Except as otherwise provided in the related
Prospectus Supplement, the Receivables will be selected from Fleetwood Credit's
portfolio of recreational vehicle retail installment sale contracts. The Seller
will make the following representations and warranties as to the Receivables
relating to a particular Prospectus Supplement, on which the related Issuer will
rely in acquiring such Receivables. Such representations and warranties will
speak as of the execution and delivery of the related Sale and Servicing
Agreement or Pooling and Servicing Agreement, as applicable, in the case of the
Initial Receivables, and as of the related Subsequent Transfer Date in the case
of the Subsequent Receivables, but will in each case survive the sale, transfer
and assignment of the related Receivables to the Issuer and, in the case of an
Owner Trust, any subsequent assignment or transfer and the pledge thereof to the
Indenture Trustee pursuant to the related Indenture. The following is a list of
the material representations and warranties to be made with respect to the
Receivables: (i) each Receivable will be originated in the United States of
America; (ii) each Receivable has been validly assigned by Fleetwood Credit in
accordance with its terms and subsequently sold by Fleetwood Credit to the
Seller; (iii) each Receivable creates or shall create a valid, subsisting and
enforceable first priority perfected security interest in favor of Fleetwood
Credit in the related Financed Vehicle, which security interest has been
assigned by Fleetwood Credit to the Seller and shall be assignable, and shall be
so assigned, by the Seller to the related Trustee; each Receivable will have a
fixed annual percentage rate ("APR") equal to or greater than the minimum APR
set forth in the related Prospectus Supplement; (iv) each Receivable will
provide for level monthly payments which provide interest at the related APR and
fully amortize the amount financed over an original term no greater than 180
months; (v) no Receivable will be more than 30 days past due as of the related
Cutoff Date; (vi) each Receivable complied at the time it was originated or
made, and complies at the time of execution of the related Sale and Servicing
Agreement or Pooling and Servicing Agreement, as applicable, 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 Billing Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices 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 other consumer credit, equal credit opportunity
and disclosure laws; (vii) 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; (viii) in the case of Obligors in
the military service (including an Obligor who is a member of the National Guard
or is in the reserves) whose Receivable is subject to the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended (the "Soldiers' and Sailors' Relief Act"),
or the California Military Reservist Relief Act of 1991 (the "Military Reservist
Relief Act"), no such Obligor (each, a "Relief Act Obligor") will have made a
claim to Fleetwood Credit that (A) the amount of interest on the related
Receivable should be limited to 6% pursuant to the Soldiers' and Sailors' Relief
Act during the period of such Obligor's active duty status or (B) payments on
such Receivable should be delayed pursuant to the Military Reservist Relief Act,
in either case unless a court has ordered otherwise upon application of
Fleetwood Credit; and (ix) no selection procedures adverse to the related
Securityholders have been utilized in selecting the Receivables from those
Receivables of Fleetwood Credit that met the foregoing selection criteria.
Except as otherwise provided in a Prospectus Supplement, interest in
respect of the Receivables will accrue on the simple interest method (i.e., the
interest portion of each monthly payment will equal the interest on the
outstanding principal balance of the related Receivable for the number of days
since the most recent payment made on such Receivable and the balance, if any,
of such monthly payment will be applied to
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principal). The Financed Vehicles will consist of motor homes and travel
trailers. It is expected that with respect to each Trust, a significant portion
of the Receivables will represent financings of recreational vehicles
manufactured by Fleetwood Enterprises, Inc. Except in the case of breach of
representations by the related Dealer, as described under "Property of the
Trusts", it is expected that none of the Receivables will provide for recourse
to the Dealer who originated the related Receivable.
Additional information with respect to each Receivables Pool will be set
forth in the related Prospectus Supplement, including, to the extent
appropriate, the composition, distribution by APR, states of origination and
portion of such Receivables Pool secured by new vehicles and by used vehicles.
DELINQUENCIES, REPOSSESSIONS AND NET LOSSES
Certain information concerning the experience of Fleetwood Credit
pertaining to delinquencies, repossessions and net losses with respect to new
and used recreational vehicle receivables will be set forth in each Prospectus
Supplement. There can be no assurance that the delinquency, repossession and net
loss experience on any Receivables Pool will be comparable to prior experience
or to such information.
MATURITY AND PREPAYMENT CONSIDERATIONS
Except as otherwise provided in the related Prospectus Supplement, all of
the Receivables will be prepayable at any time without any penalty. If
prepayments are received on the Receivables, the actual weighted average life of
the Receivables (and, accordingly, the weighted average life of the Securities)
can be shorter than the scheduled weighted average life, which is based on the
assumption that payments will be made as scheduled and that no prepayments will
be made. For this purpose the term "prepayments" includes, among other things,
voluntary prepayments by Obligors, regular installment payments made in advance
of their scheduled due dates, liquidations due to default, proceeds from
physical damage, credit life and credit disability insurance policies and
repurchases by the Seller or a Dealer or a purchase by the Servicer, as the case
may be, of certain Receivables as described herein. "Weighted average life"
means the average amount of time during which each dollar of principal on a
Receivable is outstanding. 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 a Financed Vehicle without the
consent of the Servicer. In addition, the weighted average life of the
Securities of any Series as to which a Pre-Funding Account has been created will
be affected by any Mandatory Prepayment under the circumstances described under
"Certain Information Regarding the Securities -- Pre-Funding Accounts; Mandatory
Prepayment of Securities" and early retirement of any Securities of any Series
may be effected by the exercise of the option of the Seller or the Servicer, or
any successor to the Servicer, to purchase all of the Receivables comprising the
related Receivables Pool when the Pool Balance is 10% or less of the sum of the
Original Pool Balance and the aggregate principal balance of all Subsequent
Receivables conveyed to the related Trust as of the related Subsequent Cutoff
Dates or, if no such entity exercises such option, the solicitation of bids for,
and the sale of, the Receivables by the Trustee. See "Certain Information
Regarding the Securities -- Termination".
Fleetwood Credit did not acquire recreational vehicle receivables prior to
July 1986. Because recreational vehicle receivables generally amortize over a
long period of time, only a small portion of its recreational vehicle
receivables portfolio has reached maturity. Accordingly, Fleetwood Credit's
experience with respect to recreational vehicle receivables is limited and no
prediction can be made as to the rate of prepayments on the Receivables
comprising a Receivables Pool in either stable or changing interest rate
environments. Except as otherwise provided in the related Prospectus Supplement,
Fleetwood Credit is not aware of any publicly available industry statistics that
set forth principal prepayment experience for recreational vehicle retail
installment sale contracts similar to the Receivables over an extended period of
time, and its experience with respect to recreational vehicle receivables
included in its portfolio is insufficient to draw any conclusions with respect
to the expected prepayment rates of the Receivables.
In light of the foregoing, there can be no assurance as to the amount of
principal payments to be made on the Securities of any Series or class on any
Payment Date or Distribution Date since such amount will depend, in part, on the
amount of principal collected on the related Receivables Pool during the
applicable Collection
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Period. Any reinvestment risk resulting from a faster or slower incidence of
prepayment of Receivables and the distribution of such prepayments to
Securityholders will be borne entirely by the Securityholders. 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.
PAID-AHEAD RECEIVABLES
If an Obligor, in addition to making a regularly scheduled monthly payment,
makes one or more additional monthly payments in any Collection Period (for
example, because the Obligor intends to be on vacation the following month),
such additional payments will be treated as a prepayment of principal and
applied to reduce the principal balance of the related Receivable in such
Collection Period. Unless otherwise requested by the Obligor, the Obligor will
not be required to make any scheduled monthly payment in respect of such
Receivable (a "Paid-Ahead Receivable") for the number of months corresponding to
the number of such additional scheduled monthly payments that were made (the
"Paid-Ahead Period"). During the Paid-Ahead Period, interest will continue to
accrue on the principal balance of the related Receivable, as reduced by the
application of such additional scheduled monthly payments made in the Collection
Period in which such Receivable became a Paid-Ahead Receivable. A Paid-Ahead
Receivable will not be considered delinquent during the related Paid-Ahead
Period. An interest shortfall with respect to each Paid-Ahead Receivable will
exist during each Collection Period during the Paid-Ahead Period and the
Servicer may be required to make an Advance in respect of such shortfall, as
described under "Certain Information Regarding the Securities -- Certain
Payments by the Servicer". Notwithstanding the foregoing, no Advances will be
made in respect of principal in respect of a Paid-Ahead Receivable.
Because interest in respect of the Receivables will accrue on the simple
interest method, scheduled monthly payments on a Paid-Ahead Receivable paid by
an Obligor following the end of the Paid-Ahead Period may be insufficient to
cover the interest that has accrued since the last payment was made prior to the
Paid-Ahead Period. Notwithstanding such insufficiency, the related Receivable
will be considered current. This situation will continue until sufficient
payments have been made to cover all accrued interest on such Paid-Ahead
Receivable since the beginning of the Paid-Ahead Period and the principal
balance of such Receivable is once again being amortized. Depending on the
principal balance and APR of the related Paid-Ahead Receivables, and on the
number of payments that were paid-ahead, there may be extended periods of time
during which Paid-Ahead Receivables that are current are not amortizing. During
such periods, no distributions in respect of principal will be made to
Securityholders with respect to such Receivables.
Paid-Ahead Receivables will affect the weighted average lives of the
Securities. The distribution of the paid-ahead amount on the Distribution Date
following the Collection Period in which such amount was received will generally
shorten the weighted average lives of the Securities. However, depending on the
length of time during which a Paid-Ahead Receivable is not amortized as
described above, the weighted average lives of the Securities may be extended.
In addition, to the extent the Servicer makes Advances with respect to a
Paid-Ahead Receivable which subsequently goes into default, because liquidation
proceeds with respect to such Receivable will be applied first to reimburse the
Servicer for such Advances, the loss with respect to such Receivable may be
larger than would have been the case had such Advances not been made.
Fleetwood Credit's portfolio of recreational vehicle installment sale
receivables has historically included receivables which have been paid-ahead by
one or more scheduled monthly payments. There can be no assurance as to the
number of Receivables which may become Paid-Ahead Receivables or the number or
the principal amount of the scheduled payments which may be paid-ahead.
RECREATIONAL VEHICLES
Motor homes are recreational camping and travel vehicles built on or as an
integral part of a self-propelled motor vehicle chassis. A motor home may
provide kitchen, sleeping and bathroom facilities, is equipped with the ability
to store and carry fresh water and sewage and may be one of the following types:
Motor Home: The living unit has been entirely constructed on a bare,
specially designed motor vehicle chassis.
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Van Camper: A panel-type truck to which the manufacturer adds any two
of the following conveniences: sleeping, kitchen and toilet facilities. The
manufacturer also adds 110-volt hookup, fresh water storage, city water
hookup and top extension to provide more headroom.
Mini Motor Home: This unit is built on an automotive manufactured van
frame with an attached cab section having a gross vehicle weight rating of
6,500 pounds or more, with an overall height of less than eight feet. The
manufacturer completes the body section containing the living area and
attaches it to the cab section.
Compact Motor Home: This unit is built on an automotive manufactured
cab and chassis having a gross vehicle weight rating of less than 6,500
pounds. It may provide any or all of the conveniences of the larger units.
Travel trailers are trailers designed to be towed by a motorized vehicle
(e.g., automobile, van or pickup truck) and are of such size and weight as not
to require a special highway movement permit. A travel trailer is designed to
provide temporary living quarters for recreational, camping or travel use, does
not require permanent on-site hookup and can be one of the following types:
Conventional Travel Trailer: This unit ranges typically from 12 feet
to 35 feet in length, and is towed by means of a bumper or frame hitch
attached to the towing vehicle.
Park Trailer: These are designed for seasonal or temporary living.
When set up, the unit may be connected to utilities necessary for operation
of installed fixtures and appliances. The unit is built on a single chassis
mounted on wheels. Park trailers are no more than 40 feet in overall body
length and no more than 12 feet in overall body width when in the traveling
mode. The unit is designed for set-up by persons without special skills
using only hand tools which may include lifting, pulling or supporting
devices.
Fifth-Wheel Travel Trailer: This unit can be equipped the same as the
conventional travel trailer, but is constructed with a raised forward
section that allows a bi-level floor plan. This style is designed to be
towed by a vehicle equipped with a device known as a fifth-wheel hitch.
Folding Camping Trailer: This is a vehicular portable unit mounted on
wheels and constructed with collapsible partial sidewalls which fold for
towing by another vehicle and unfold at the campsite to provide temporary
living quarters for recreational, camping or travel use.
Slide-In Camper: This is a portable unit designed to be loaded onto
and unloaded from the bed of a pickup truck, constructed to provide
temporary living quarters for recreational travel or camping use.
YIELD CONSIDERATIONS
Interest will be payable on the Notes of any Series or class at the related
Interest Rate, to the extent and on the Payment Dates specified in the related
Prospectus Supplement. Unless otherwise specified in the related Prospectus
Supplement, interest on the Receivables will be distributed to holders of Owner
Certificates or Grantor Certificates of any Series on each Distribution Date to
the extent set forth in the related Prospectus Supplement at the related
PassThrough Rate specified therein applied to the Certificate Balance of such
class, as of the first day of the immediately preceding Collection Period (after
giving effect to distributions of principal to be made on the Distribution Date
in such immediately preceding Collection Period) or, in the case of the first
Distribution Date, applied to the Original Certificate Balance of such class. In
the case of each payment of principal on a Receivable, the related Owner
Certificateholders and Grantor Certificateholders will receive interest for the
full month, in part from the Non-Reimbursable Payment by the Servicer. See
"Certain Information Regarding the Securities -- Certain Payments by the
Servicer".
The Receivables will have different APRs, and the APR of some of the
Receivables may be less than the Required Rate. Because any Yield Supplement
Account will be created with an initial deposit of an amount equal to the
Maximum Initial Yield Supplement Amount in respect of the Initial Receivables
and any related Yield Supplement Agreement will require Fleetwood Credit to
deposit an amount equal to the Maximum
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Subsequent Yield Supplement Amount in respect of the Subsequent Receivables, if
any, disproportionate rates of prepayments between Receivables with higher and
lower APRs should not affect the yield to Securityholders on the principal
balance of the outstanding Securities of any Series.
Except as otherwise provided in the related Prospectus Supplement, the
effective yields to Securityholders will be below the yields otherwise produced
by the Interest Rate or Pass-Through Rate, as the case may be, for the related
class of Securities because the distribution of principal and of interest that
accrues on the underlying Receivables in respect of any Collection Period will
not be made until the related Payment Date or Distribution Date, as applicable,
which will not be earlier than the fifteenth day of the following month unless
otherwise specified in the related Prospectus Supplement.
Any class of subordinated Securities will provide limited protection
against losses on the Receivables to one or more other classes of Securities.
Accordingly, the yield on such subordinated Securities may be extremely
sensitive to the loss experience of the related Receivables Pool and the timing
of any such losses. If the actual rate and amount of losses experienced by such
Receivables Pool exceed the rate and amount of such losses assumed by an
investor, the yield to maturity on such subordinated Securities may be lower
than anticipated.
POOL FACTORS AND TRADING INFORMATION
The "Note Pool Factor" for each class of Notes will be a seven-digit
decimal which the Servicer will compute prior to each distribution with respect
to such Notes indicating the remaining outstanding principal amount 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 amount of such class of Notes. The "Certificate Pool
Factor" for each class of Owner Certificates or Grantor Certificates, as the
case may be, will be a seven-digit decimal which the Servicer will compute prior
to each distribution with respect to such Certificates indicating the remaining
Certificate Balance of such class of Certificates, as of the related
Distribution Date (after giving effect to distributions to be made on such
Distribution Date), as a fraction of the initial Certificate Balance of such
class of Certificates. Each Note Pool Factor and each Certificate Pool Factor
will initially be 1.0000000 as of the related Closing Date, and thereafter will
decline to reflect reductions in the outstanding principal amount of the
applicable class of Notes, or the reduction of the Certificate Balance of the
applicable class of Owner Certificates or Grantor Certificates, as the case may
be. A Noteholder's portion of the aggregate outstanding principal amount of the
related class of Notes will be the product of (i) the original denomination of
such Noteholder's Note and (ii) the applicable Note Pool Factor at the time of
determination. A Certificateholder's portion of the aggregate outstanding
Certificate Balance for the related class of Owner Certificates or Grantor
Certificates, as the case may be, will be the product of (a) the original
denomination of such Certificateholder's Certificate and (b) the applicable
Certificate Pool Factor at the time of determination.
Unless otherwise provided in the related Prospectus Supplement, the
Noteholders, with respect to any Owner Trust, will receive reports on or about
each Payment Date concerning payments received on the Receivables, the Pool
Balance, each Note Pool Factor and various other items of information, and the
Owner Certificateholders or Grantor Certificateholders, as the case may be, with
respect to any Trust will receive reports on or about each Distribution Date
concerning payments received on the Receivables, the Pool Balance, each
Certificate Pool Factor and various other items of information. In addition,
Securityholders of record during any calendar year will be furnished information
for tax reporting purposes not later than the latest date permitted by law. See
"Certain Information Regarding the Securities -- Statements to Securityholders".
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USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement, the net
proceeds to be received by the Seller from the sale of the Securities will be
applied to the purchase of the Initial Receivables from Fleetwood Credit
pursuant to the related Receivables Purchase Agreement and to the funding of any
Pre-Funding Account up to the Pre-Funded Amount, which monies will be applied to
purchase Subsequent Receivables pursuant to the related Transfer and Servicing
Agreements.
THE SELLER
The Seller was incorporated in the State of California on January 15, 1991
as a wholly owned, limited purpose subsidiary of Fleetwood Credit. The principal
executive offices of the Seller are located at 22840 Savi Ranch Parkway, Yorba
Linda, California 92687. Its telephone number is (714) 921-3400.
The Seller was organized principally for the purpose of purchasing
recreational vehicle retail installment sale contracts from Fleetwood Credit and
transferring such retail installment sale contracts to third parties in
connection with its activities as a limited purpose subsidiary of Fleetwood
Credit. The Seller's Articles of Incorporation limit the activities of the
Seller to the above purposes and to any activities incidental thereto.
THE SERVICER
GENERAL
Fleetwood Credit was incorporated in the State of California on December
31, 1985, and is a wholly owned subsidiary of First Capital, which acquired
Fleetwood Credit from Fleetwood Enterprises, Inc. in May 1996. Prior to April 7,
1998, First Capital was a majority indirect-owned subsidiary of Ford Motor
Company. On April 7, 1998, Ford distributed to its stockholders all of its
shares in First Capital in a tax-free distribution. Effective with such
distribution, First Capital is no longer a subsidiary of Ford. Fleetwood
Credit's principal activities are the financing of the acquisition by Dealers
for resale of various new recreational vehicles, a significant portion of which
to date have been manufactured by Fleetwood Enterprises, and used recreational
vehicles acquired in the ordinary course of business and the acquisition from
such Dealers of installment obligations with respect to the sale of such
recreational vehicles.
The principal executive offices of Fleetwood Credit are located at 22840
Savi Ranch Parkway, Yorba Linda, California 92687. Its telephone number is (714)
921-3400.
ORIGINATION AND SERVICING
Fleetwood Credit purchases retail installment sale contracts secured by new
and used recreational vehicles from Dealers located throughout the United
States. In keeping with the practice of Fleetwood Credit, the Receivables will
be originated by Dealers in accordance with Fleetwood Credit's requirements
under agreements with such Dealers. The Receivables will be purchased in
accordance with Fleetwood Credit's underwriting standards, which emphasize the
prospective purchaser's ability to pay and creditworthiness, as well as the
asset value of the recreational vehicle to be financed. Applications submitted
to Fleetwood Credit must list sufficient information to process the application,
including the applicant's income, residential status, monthly mortgage or rent
payment and other personal information. Upon receipt of an application,
Fleetwood Credit obtains a credit report from an independent credit bureau. The
credit report is reviewed by Fleetwood Credit to determine the applicant's
current credit status and past credit performance. Factors considered negative
generally include past due credit, repossessions, loans charged off by other
lenders and previous bankruptcy. Positive factors such as amount of credit and
favorable payment history are also considered.
The credit decision is made utilizing a credit scoring system and other
considerations. The credit scoring system includes an assessment of residence
and employment stability and credit bureau information. Other considerations
include income requirements and the ratio of income to total debt. An assessment
is made of the relative degree of credit risk indicated by these criteria
pursuant to Fleetwood Credit's automated
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processing system. The system will recommend approval of applicants scoring
above a predetermined threshold and will recommend rejection for scores below
that level, although the underwriting staff for the appropriate region has the
ultimate approval or rejection authority.
Fleetwood Credit retail installment sale contract requires that obligors
maintain specific levels and types of insurance coverage, including physical
damage insurance, to protect the related recreational vehicle against loss. At
the time of purchase, an obligor signs a statement which indicates that he
either has or will have the necessary insurance, and which shows the name and
address of the insurance company along with a description of the type of
coverage. Obligors are generally required to provide Fleetwood Credit with
evidence of compliance with the foregoing insurance requirements; however,
Fleetwood Credit performs no ongoing verification of such insurance coverage.
The amount of a retail installment sale contract secured by a new or used
recreational vehicle generally will not exceed 120% of the dealer invoice cost
of the related recreational vehicle plus optional features at the dealer cost,
sales tax, title and registration fees, insurance premiums for credit life and
credit disability insurance and certain fees for extended service contracts.
YEAR 2000 COMPLIANCE
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process date fields containing a two
digit year is commonly referred to as the Year 2000 Compliance issue. As the
year 2000 approaches, such systems may be unable to accurately process certain
date-based information.
Fleetwood Credit has identified all significant applications that will
require modification to ensure Year 2000 Compliance. Internal and external
resources are being used to make the required modifications and test Year 2000
Compliance. The modification process of all significant applications is
substantially complete. Fleetwood Credit plans on completing the testing process
of all significant applications by December 31, 1998.
In addition, Fleetwood Credit has communicated with others with whom it
does significant business to determine their Year 2000 Compliance readiness and
the extent to which Fleetwood Credit is vulnerable to any third party Year 2000
issues. However, there can be no guarantee that the systems of other companies
on which Fleetwood Credit's systems rely will be timely converted, or that a
failure to convert by another company, or a conversion that is incompatible with
the Fleetwood Credit's systems, would not have a material adverse effect on
Fleetwood Credit.
The total cost to Fleetwood Credit of these Year 2000 Compliance activities
has not been and is not anticipated to be material to its financial position or
results of operations in any given year. These costs and the date on which
Fleetwood Credit plans to complete the Year 2000 modification and testing
processes are based on management's best estimates, which were derived utilizing
numerous assumptions of future events including the continued availability of
certain resources, third party modification plans and other factors. However,
there can be no guarantee that these estimates will be achieved and actual
results could differ from those plans.
THE NOTES
GENERAL
Each Owner Trust will issue one or more classes of Notes pursuant to an
Indenture, a form of which has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. A copy of the Indenture
(without exhibits) may be obtained by Noteholders upon request in writing to the
Indenture Trustee at its Corporate Trust Office. The following summary does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the provisions of the related Notes and Indenture. Where
particular provisions or terms used in the Indenture are referred to, the actual
provisions (including definitions of terms) are incorporated by reference as
part of this summary.
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Unless otherwise specified in the related Prospectus Supplement, each class
of Notes will initially be represented by one or more certificates registered in
the name of the nominee of DTC (together with any successor depository selected
by the Trust, the "Depository"). Unless otherwise specified in the related
Prospectus Supplement, the Notes will be available for purchase in minimum
denominations of $1,000 and integral multiples thereof in book-entry form only.
See "Certain Information Regarding the Securities -- Book-Entry Registration"
and "-- Definitive Securities".
DISTRIBUTIONS ON THE NOTES
The timing and priority of payment, seniority, allocations of losses,
Interest Rate and amount of or method of determining payments of principal and
interest on each class of Notes of a Series will be described in the related
Prospectus Supplement. The rights 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 one or more other 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 will be made prior to
payments of principal thereon. If so provided in the related Prospectus
Supplement, a Series of Notes may include one or more classes of Strip Notes
entitled to (i) principal payments with disproportionate, nominal or no interest
payments or (ii) interest payments with disproportionate, nominal or no
principal payments. Each class of Notes may have a different Interest Rate,
which may be a fixed, variable or adjustable Interest Rate (and which may be
zero for certain classes of Strip Notes), or any combination of the foregoing.
The related Prospectus Supplement will specify the Interest Rate for each class
of Notes of a Series or the method for determining such Interest Rate. Unless
otherwise specified in the related Prospectus Supplement, interest on the Notes
will be calculated on the basis of a 360-day year consisting of twelve 30-day
months. If so specified in the related Prospectus Supplement, one or more
classes of Notes of a Series may have fixed principal payment schedules.
Noteholders will be entitled to receive as payments of principal on any 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. 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 from amounts on deposit in the Pre-Funding Account at the
end of the Funding Period, if any, or as a result of the sale of the related
Receivables Pool.
Unless otherwise specified in the related Prospectus Supplement, 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 a
Payment Date, in which case each class of Noteholders will receive its ratable
share (based upon the aggregate amount of interest due to such class of
Noteholders) of the aggregate amount available to be distributed in respect of
interest on the Notes of such Series. See "Certain Information Regarding the
Securities -- Distributions on the Securities" and "-- Credit and Cash Flow
Enhancement".
In the case of a Series of Notes that includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal and
interest, and any schedule or formula or other provisions applicable to the
determination thereof, of each such class will be set forth in the related
Prospectus Supplement. Unless otherwise specified 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.
CERTAIN PROVISIONS OF THE INDENTURE
Events of Default; Rights upon Event of Default. Unless otherwise specified
in the related Prospectus Supplement, "Events of Default" in respect of a Series
of Notes under the related Indenture will consist of: (i) a default for five
days or more in the payment of any interest on any such Note; (ii) a default in
the payment of the principal of or any installment of the principal of any such
Note when the same becomes due and payable; (iii) a default in the observance or
performance in any material respect of any covenant or agreement of the related
Trust made in such Indenture and the continuation of any such default for a
period of 60 days after notice thereof is given to the related Trust by the
applicable Indenture Trustee or to such Owner
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Trust and the related Indenture Trustee by the holders of Notes representing
more than 25% of the voting interests thereof, voting together as a single
class; (iv) any representation or warranty made by such Owner Trust in the
related Indenture or in any certificate or other writing delivered pursuant
thereto or in connection therewith having been incorrect in any material respect
as of the time made, and such breach not having been cured within 30 days after
notice thereof is given to such Owner Trust by the applicable Indenture Trustee
or to such Owner Trust and such Indenture Trustee by the holders of Notes
representing more than 25% of the voting interests thereof, voting together as a
single class; or (v) certain events of bankruptcy, insolvency, receivership or
liquidation of such Owner Trust. The amount of principal required to be paid to
Noteholders of any Series under the related Indenture will generally be limited
to amounts available to be deposited in the applicable Note Distribution
Account. Therefore, unless otherwise specified in the related Prospectus
Supplement, the failure to pay principal on a class of Notes generally will not
result in the occurrence of an Event of Default until the Final Scheduled
Distribution 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 not less than a
majority in principal amount of the outstanding Notes, voting together as a
single class, may declare the principal of such Notes to be immediately due and
payable. Such declaration may, under certain circumstances, be rescinded by the
holders of not less than a majority in principal amount of such outstanding
Notes, voting together as a single class.
If the Notes of any Series are declared due and payable following an Event
of Default, the related Indenture Trustee may institute proceedings to collect
amounts due or foreclose on the property of the related Owner Trust, exercise
remedies as a secured party, sell the related Receivables or elect to have the
applicable Owner 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 Indenture Trustee will be prohibited from selling the related
Receivables following an Event of Default, other than a default in the payment
of any principal of or a default for five days or more in the payment of any
interest on any Note of such Series, 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 of and the accrued interest on such
outstanding Notes at the date of such sale or (iii) such Indenture Trustee
determines that the proceeds of sale of the 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 not less than
66 2/3% of the aggregate outstanding amount of such Notes. Following a
declaration of acceleration upon an Event of Default, (i) Noteholders will be
entitled to ratable repayment of principal on the basis of their respective
unpaid principal amounts and (ii) repayment in full of the accrued interest on
the Notes and any such payments will be made prior to any further payment of
interest on the related Owner Certificates or in respect of the Certificate
Balance of such Owner Certificates.
Subject to the provisions of the applicable Indenture relating to the
duties of the related Indenture Trustee, if an Event of Default occurs and is
continuing with respect to a Series of Notes, such Indenture Trustee will be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the holders of such Notes, if it
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 Notes of such Series
representing not less than 51% of the voting interests thereof, voting together
as a single class, 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 Notes representing not less than 51% of the voting
interests thereof, voting together as a single class, 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 the holders
of all outstanding Notes.
Unless otherwise specified in the related Prospectus Supplement, no holder
of a Note will have the right to institute any proceeding with respect to the
related Indenture, unless (i) such holder previously has given to the applicable
Indenture Trustee written notice of a continuing Event of Default; (ii) the
holders of not less
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than 25% in principal amount of the outstanding Notes of such Series, voting
together as a single class, have made written request to such Indenture Trustee
to institute such proceeding in its own name as Indenture Trustee; (iii) such
holder or holders have offered such Indenture Trustee reasonable indemnity; (iv)
such Indenture Trustee has for 60 days failed to institute such proceeding; and
(v) no direction inconsistent with such written request has been given to such
Indenture Trustee during such 60-day period by the holders of a majority in
principal amount of such outstanding Notes, voting together as a single class.
If the Indenture Trustee knows that an Event of Default has occurred and is
continuing, the Indenture Trustee will mail to each related Noteholder notice of
the Event of Default within 30 days after obtaining knowledge of such Event of
Default. Except in the case of a failure to pay principal of or interest on any
Note, the Indenture Trustee may withhold such notice if and so long as it
determines in good faith that withholding the notice is in the interests of
Noteholders.
Certain Covenants. Each Indenture will provide that the related Owner Trust
may not consolidate with or merge into any other entity, unless, among other
things, (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 Owner Trust's obligation to
make due and punctual payments upon the Notes of the related Series and the
performance or observance of every agreement and covenant of such Owner Trust
under the Indenture; (iii) no Event of Default shall have occurred and be
continuing immediately after such merger or consolidation; (iv) such Owner Trust
has been advised by each Rating Agency that such merger or consolidation will
not result in the qualification, reduction or withdrawal of its then-current
rating of any class of the related Series of Notes or any class of the related
Owner Certificates; and (v) such Owner Trust has received an opinion of counsel
to the effect that such consolidation or merger would have no material adverse
tax consequence to the Owner Trust or to any related Noteholder or Owner
Certificateholder.
Each Owner Trust will not, among other things, (i) except as expressly
permitted by the related Indenture, the related Transfer and Servicing
Agreements or certain related documents with respect to such Owner Trust
(collectively, the "Related Documents"), sell, transfer, exchange or otherwise
dispose of any of the assets of such Owner Trust; (ii) claim any credit on or
make any deduction from the principal and interest payable in respect of the
related Notes (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 Owner Trust; (iii)
dissolve or liquidate in whole or in part; (iv) permit the validity or
effectiveness of such Indenture to be impaired or permit any person to be
released from any covenants or obligations with respect to the related Notes
under such Indenture except as may be expressly permitted thereby; (v) permit
any lien, charge, excise, claim, security interest, mortgage or other
encumbrance to be created on or extend to or otherwise arise upon or burden the
assets of such Owner Trust or any part thereof, or any interest therein or the
proceeds thereof; or (vi) permit the lien of the related Indenture not to
constitute a valid first priority security interest in the assets of such Owner
Trust.
Each Indenture Trustee and the related Noteholders, by accepting the
related Notes, will covenant that they will not at any time institute against
the applicable Owner Trust any bankruptcy, reorganization or other proceeding
under any federal or state bankruptcy or similar law.
With respect to any Owner Trust, neither the related Indenture Trustee nor
the related Owner Trustee in its individual capacity, nor any holder of an Owner
Certificate representing an ownership interest in such Owner 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 Owner Trust
contained in the related Indenture.
No Owner Trust may engage in any activity other than as described herein or
in the related Prospectus Supplement. No Owner 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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Satisfaction and Discharge of Indenture. Each Indenture will be discharged
with respect to the collateral securing the related Notes upon the delivery to
the related Indenture Trustee for cancellation of all such Notes or, with
certain limitations, upon deposit with such Indenture Trustee of funds
sufficient for the payment in full of all such Notes.
THE OWNER CERTIFICATES
GENERAL
Each Owner Trust will issue one or more classes of Owner Certificates
pursuant to a Trust Agreement, a form of which has been filed as an exhibit to
the Registration Statement of which this Prospectus forms a part. The following
summary does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the provisions of the related Owner Certificates
and Trust Agreement. Where particular provisions or terms used in the Trust
Agreement are referred to, the actual provisions (including definitions of
terms) are incorporated by reference as part of this Summary.
Unless otherwise specified in the related Prospectus Supplement, each class
of Owner Certificates will initially be represented by one or more certificates
registered in the name of the Depository. Unless otherwise specified in the
related Prospectus Supplement, the Owner Certificates will be available for
purchase in minimum denominations of $20,000 and integral multiples of $1,000 in
excess thereof in book-entry form only. See "Certain Information Regarding the
Securities -- Book-Entry Registration" and "-- Definitive Securities".
DISTRIBUTIONS ON THE OWNER CERTIFICATES
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 Owner Certificates of a
Series will be described in the related Prospectus Supplement. Distributions of
interest on such Owner Certificates will be made on the Distribution Dates
specified in the related Prospectus Supplement and will be made prior to
distributions with respect to principal of such Owner Certificates. To the
extent provided in the related Prospectus Supplement, a Series of Owner
Certificates may include one or more classes of Strip Certificates entitled to
(i) principal distributions with disproportionate, nominal or no interest
distributions or (ii) interest distributions with disproportionate, nominal or
no principal distributions. Each class of Owner 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 Owner
Certificates of a Series or the method for determining such Pass-Through Rate.
Unless otherwise specified in the related Prospectus Supplement, interest on the
Owner Certificates will be calculated on the basis of a 360-day year consisting
of twelve 30-day months. Distributions in respect of any class of Owner
Certificates will be subordinated to payments in respect of the Notes as more
fully described in the related Prospectus Supplement.
In the case of a Series of Owner Certificates that includes two or more
classes, the timing, sequential order, priority of payment or amount of
distributions in respect of interest and principal, and any schedule or formula
or other provisions applicable to the determination thereof, of each such class
shall be as set forth in the related Prospectus Supplement. Unless otherwise
provided in the related Prospectus Supplement, distributions in respect of the
Owner Certificates of a Series will be subordinated to payments in respect of
the Notes of such Series as more fully described in the related Prospectus
Supplement. Distributions in respect of interest on and principal of any class
of Owner Certificates will be made on a pro rata basis among all the Owner
Certificates of such class.
Each Trust Agreement will provide that the applicable Owner Trustee does
not have the power to commence a voluntary proceeding in bankruptcy with respect
to the related Owner Trust without the unanimous prior approval of all Owner
Certificateholders and the delivery to such Owner Trustee by each such
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Owner Certificateholder of a certificate certifying that such Owner
Certificateholder reasonably believes that such Owner Trust is insolvent.
THE GRANTOR CERTIFICATES
GENERAL
Each Grantor Trust will issue one or more classes of Grantor Certificates
pursuant to a Pooling and Servicing Agreement, a form of which has been filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
A copy of the Pooling and Servicing Agreement (without exhibits) may be obtained
by Grantor Certificateholders upon request in writing to the Grantor Trustee at
its Corporate Trust Office. The following summary does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the related Grantor Certificates and Pooling and Servicing
Agreement. Where particular provisions or terms used in the Pooling and
Servicing Agreement are referred to, the actual provisions (including
definitions of terms) are incorporated by reference as part of this summary.
Unless otherwise specified in the related Prospectus Supplement, each class
of Grantor Certificates will initially be represented by one or more
certificates registered in the name of the Depository. Unless otherwise
specified in the related Prospectus Supplement, the Grantor Certificates will be
available for purchase in minimum denominations of $1,000 and integral multiples
of $1,000 in excess thereof in book-entry form only. See "Certain Information
Regarding the Securities -- Book-Entry Registration" and "-- Definitive
Securities".
DISTRIBUTIONS ON THE GRANTOR CERTIFICATES
The timing and priority of distributions, Pass-Through Rates and amount of
or method of determining distributions with respect to principal and interest on
the Grantor Certificates of any Series will be described in the related
Prospectus Supplement. Interest will be distributed to the holders of the
Grantor Certificates on the Distribution Dates specified in the related
Prospectus Supplement and will be made prior to distributions with respect to
principal unless otherwise specified therein. Each class of Grantor Certificates
may have a different Pass-Through Rate. The related Prospectus Supplement will
specify the Pass-Through Rate for each class of Grantor Certificates, or the
initial Pass-Through Rate and the method for determining such Pass-Through Rate.
Unless otherwise specified in the related Prospectus Supplement, interest on the
Grantor Certificates will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. Distributions in respect of interest on and
principal of any class of Grantor Certificates will be made on a pro rata basis
among all of the Grantor Certificates of such class.
Unless otherwise specified in the related Prospectus Supplement, each class
of Grantor Certificates will be entitled to monthly distributions of a portion
of all payments received by the Servicer during the related Collection Period
allocable to principal on or in respect of the related Receivables. Each Grantor
Certificate will represent the fractional undivided interest in the related
Grantor Trust specified in the related Prospectus Supplement. Thus, if two
classes of Grantor Certificates are issued by a Grantor Trust, in general, the
Senior Certificateholders and Subordinated Certificateholders will be entitled
to receive, on each Distribution Date, specified percentages (respectively, the
"Senior Percentage" and the "Subordinated Percentage") of all payments allocated
to principal on or in respect of the related Receivables collected by the
Servicer during the related Collection Period plus a full month's interest at
the related Pass-Through Rate on the Certificate Balance of the Senior
Certificates or the Subordinated Certificates, as the case may be, in each case
as of the first day of such Collection Period (after giving effect to
distributions of principal to be made on the Distribution Date occurring during
such Collection Period).
Unless otherwise specified in the related Prospectus Supplement, if two or
more classes of Grantor Certificates are issued, the rights of the holders of
the Subordinated Certificates to receive distributions of principal will be
subordinated to the rights of the holders of the Senior Certificates to receive
distributions of interest and principal to the extent described in the related
Prospectus Supplement.
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CERTAIN INFORMATION REGARDING THE SECURITIES
BOOK-ENTRY REGISTRATION
Unless otherwise specified in the related Prospectus Supplement, each class
of Securities offered hereby will be represented by one or more certificates
registered in the name of Cede, as nominee of DTC. Unless otherwise specified in
the related Prospectus Supplement, Security Owners may hold beneficial interests
in Securities through DTC (in the United States) or Cedel or Euroclear (in
Europe) directly if they are participants of such systems, or indirectly through
organizations which are participants in such systems.
No Security Owner will be entitled to receive a certificate representing
such person's interest in the Securities, except as set forth below. Unless and
until Securities of a class are issued in fully registered certificated form
("Definitive Securities") under the limited circumstances described below, all
references herein to actions by Noteholders, Certificateholders or
Securityholders shall refer to actions taken by DTC upon instructions from DTC
Participants, and all references herein to distributions, notices, reports and
statements to Noteholders, Certificateholders or Securityholders shall refer to
distributions, notices, reports and statements to Cede, as the registered holder
of the Securities, for distribution to Securityholders in accordance with DTC
procedures. As such, it is anticipated that the only Noteholder,
Certificateholder or Securityholder will be Cede, as nominee of DTC. Security
Owners will not be recognized by the related Trustee as Noteholders,
Certificateholders or Securityholders as such terms will be used in the relevant
agreements, and Security Owners will only be permitted to exercise the rights of
holders of Securities of the related class indirectly through DTC and DTC
Participants, as further described below.
Cedel and Euroclear will hold omnibus positions on behalf of their
participants through customers' securities accounts in their respective names on
the books of their respective Depositaries which in turn will hold such
positions in customers' securities accounts in the Depositaries' names on the
books of DTC.
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel or
Euroclear participants, on the other, will be effected in DTC in accordance with
DTC rules on behalf of the relevant European international clearing system by
its Depositary. However, each such cross-market transaction 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. The relevant European international
clearing system will, if the transaction meets its settlement requirements,
deliver instructions to its Depositary to take action to effect final settlement
on its behalf by delivering or receiving securities in DTC, and making or
receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Cedel Participants and Euroclear Participants may
not deliver instructions directly to the Depositaries.
Because of time-zone differences, credits of securities received in Cedel
or Euroclear as a result of a transaction with a DTC Participant will be made
during subsequent securities settlement processing and dated the business day
following the DTC settlement date. Such credits or any transactions in such
securities settled during such processing will be reported to the relevant
Euroclear or Cedel participant on such business day. Cash received in Cedel or
Euroclear as a result of sales of Securities by or through a Cedel Participant
or a Euroclear Participant to a DTC 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.
DTC is a limited-purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the Uniform Commercial Code (the "UCC") in effect in the
State of New York and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC was created to hold securities for its
participating members ("DTC Participants") and to
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facilitate the clearance and settlement of securities transactions between DTC
Participants through electronic book-entry changes in accounts of DTC
Participants, thereby eliminating the need for physical movement of
certificates. DTC Participants include securities brokers and dealers (including
the Underwriters), banks, trust companies and clearing corporations. Indirect
access to the DTC system also is available to banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly (the "Indirect DTC Participants").
The rules applicable to DTC and DTC Participants are on file with the
Commission.
Security Owners that are not DTC Participants or Indirect DTC Participants
but desire to purchase, sell or otherwise transfer ownership of, or an interest
in, the Securities may do so only through DTC Participants and Indirect DTC
Participants. DTC Participants will receive a credit for the Securities on DTC's
records. The ownership interest of each Security Owner will in turn be recorded
on respective records of the DTC Participants and Indirect DTC Participants.
Security Owners will not receive written confirmation from DTC of their
purchase, but Security Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the DTC Participant or Indirect DTC Participant through which the
Security Owner entered into the transaction. Transfers of ownership interests in
the Securities of any class will be accomplished by entries made on the books of
DTC Participants acting on behalf of Security Owners.
To facilitate subsequent transfers, all Securities deposited by DTC
Participants with DTC will be registered in the name of Cede, a nominee of DTC.
The deposit of Securities with DTC and their registration in the name of Cede
will effect no change in beneficial ownership. DTC will have no knowledge of the
actual Security Owners and its records will reflect only the identity of the DTC
Participants to whose accounts such Securities are credited, which may or may
not be the Security Owners. DTC Participants and Indirect DTC Participants will
remain responsible for keeping account of their holdings on behalf of their
customers. While the Securities of a Series are held in book-entry form,
Security Owners will not have access to the list of Security Owners of such
Series, which may impede the ability of Security Owners to communicate with each
other.
Conveyance of notices and other communications by DTC to DTC Participants,
by DTC Participants to Indirect DTC Participants and by DTC Participants and
Indirect DTC Participants to Certificate Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among DTC
Participants on whose behalf it acts with respect to the Securities and is
required to receive and transmit distributions of principal of and interest on
the Securities. DTC Participants and Indirect DTC Participants with which
Security Owners 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 Security Owners.
DTC's practice is to credit DTC Participants' accounts on each Payment Date
or Distribution Date in accordance with their respective holdings shown on its
records, unless DTC has reason to believe that it will not receive payment on
such Distribution Date. Payments by DTC Participants and Indirect DTC
Participants to Security Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of such DTC Participant and not of DTC, the related Owner
Trustee, Indenture Trustee or Grantor Trustee (or any paying agent appointed
thereby), the Seller or the Servicer, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal of and
interest on each class of Securities to DTC will be the responsibility of the
related Owner Trustee, Indenture Trustee or Grantor Trustee (or any paying
agent), disbursement of such payments to DTC Participants will be the
responsibility of DTC and disbursement of such payments to the related Security
Owners will be the responsibility of DTC Participants and Indirect DTC
Participants. As a result, under the book-entry format, Security Owners may
experience some delay in their receipt of payments. DTC will forward such
payments to its DTC Participants which thereafter will forward them to Indirect
DTC Participants or Security Owners.
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Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect DTC Participants and certain banks, the ability of a Security
Owner to pledge Securities to persons or entities that do not participate in the
DTC system, or otherwise take actions with respect to such Securities, may be
limited due to the lack of a physical certificate for such Securities.
DTC has advised the Seller that it will take any action permitted to be
taken by a Securityholder only at the direction of one or more DTC Participants
to whose account with DTC the Securities are credited. Additionally, DTC has
advised the Seller that it will take such actions with respect to specified
percentages of the Securityholders' interest only at the direction of and on
behalf of DTC Participants whose holdings include undivided interests that
satisfy such specified percentages. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are taken
on behalf of DTC Participants whose holdings include such undivided interests.
Neither DTC nor Cede will consent or vote with respect to the Securities.
Under its usual procedures, DTC will mail an "Omnibus Proxy" to the related
Owner Trustee, Indenture Trustee or Grantor Trustee as soon as possible after
any applicable Record Date for such a consent or vote. The Omnibus Proxy will
assign Cede's consenting or voting rights to those DTC Participants to whose
accounts the related Securities are credited on that record date (which record
date will be identified in a listing attached to the Omnibus Proxy).
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for its participating organizations ("Cedel
Participants") and facilitates the clearance and settlement of securities
transactions between Cedel Participants through electronic book entry changes in
accounts of Cedel Participants, thereby eliminating the need for physical
movement of certificates. Transactions may be settled in Cedel in any of 28
currencies, including United States dollars. Cedel provides to Cedel
Participants, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Cedel interfaces with domestic markets in several
countries. As a professional depository, Cedel is subject to regulation by the
Luxembourg Monetary Institute. Cedel Participants are recognized financial
institutions around the world including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations and may include any underwriters, agents or dealers with respect
to a Series of Securities offered hereby. Indirect access to Cedel is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Cedel Participant,
either directly or indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to clear and
settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Transactions may now be settled in 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
arrangements for cross-market transfers with DTC described above. The Euroclear
System is operated by The Chase Manhattan Bank 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 any underwriters,
agents or dealers with respect to a Series of Securities offered hereby.
Indirect access to the Euroclear System is also available to other firms that
clear through or maintain a custodial relationship with a Euroclear Participant,
either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
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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, withdrawals 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
withholding in accordance with relevant United States tax laws and regulations.
See "Certain Federal Income Tax Consequences". Cedel or the Euroclear Operator,
as the case may be, will take any other action permitted to be taken by a
Securityholder on behalf of a Cedel Participant or Euroclear Participant only in
accordance with its relevant rules and procedures and subject to its
Depositary's ability to effect such actions on its behalf through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of Securities among participants of DTC, Cedel
and Euroclear, they are under no obligation to perform or continue to perform
such procedures and such procedures may be discontinued at any time.
Except as required by law, none of the Servicer, the Seller or the related
Owner Trustee, Indenture Trustee or Grantor Trustee will have any liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of Securities of any series held by DTC's nominee, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
DEFINITIVE SECURITIES
Unless otherwise stated in the related Prospectus Supplement, Definitive
Securities representing the Securities of any Series or class will be issued to
Security Owners or their respective nominees only if (i) the related
Administrator, in the case of an Owner Trust, or the Seller, in the case of a
Grantor Trust, advises the related Trustee that DTC is no longer willing or able
to discharge properly its responsibilities as Depository with respect to the
related Securities, and the Administrator or the Seller, as the case may be, is
unable to locate a qualified successor, (ii) the Administrator or the Seller, as
the case may be, at its option, advises the related Trustee that it elects to
terminate the book-entry system through DTC or (iii) after the occurrence of an
Event of Default or Servicer Default, Security Owners evidencing not less than
51% of the voting interests of the related Securities, voting together as a
single class, advise DTC in writing that the continuation of a book-entry system
through DTC (or a successor thereto) is no longer in the best interests of the
related Security Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the related Owner Trustee will be required to notify the
related Security Owners, through Participants, and the Indenture Trustee or
Grantor Trustee, as the case may be, of the availability of Definitive
Securities. Upon surrender by DTC of the certificates representing all
Securities of any affected class and the receipt of instructions for re-
registration, the applicable Trustee will issue Definitive Securities to the
related Security Owners.
Distributions on the Definitive Securities will thereafter be made by the
related Trustee directly to holders of the Definitive Securities in accordance
with the procedures set forth herein and to be set forth in the related
Indenture, Trust Agreement or Pooling and Servicing Agreement, as the case may
be. Interest payments and any principal payments on the related Securities on
each Distribution Date will be made to holders in whose names the Definitive
Securities were registered at the close of business on the Record Date with
respect to such Distribution Date. Distributions will be made by check mailed to
the address of such holders as they appear on the register specified in the
related Trust Agreement, Indenture or Pooling and Servicing Agreement, as the
case may be. The final payment on any Securities (whether Definitive Securities
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or Securities registered in the name of a Depository or its nominee), however,
will be made only upon presentation and surrender of such Securities at the
office or agency specified in the notice of final distribution to
Securityholders. The related Owner Trustee, Indenture Trustee or Grantor Trustee
(or the related paying agent) will provide such notice to registered
Securityholders prior to the date of such final distribution as will be provided
in the related Trust Agreement, Indenture or Pooling and Servicing Agreement.
Definitive Securities will be transferable and exchangeable at the offices
of the related Owner Trustee, Indenture Trustee or Grantor Trustee (or any
security registrar appointed thereby), as set forth in the related Trust
Agreement, Indenture or Pooling and Servicing Agreement, as the case may be. No
service charge will be imposed for any registration of transfer or exchange, but
such Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith.
SALE AND ASSIGNMENT OF THE RECEIVABLES
The Initial Receivables. On or prior to the Closing Date pursuant to the
related Receivables Purchase Agreement, Fleetwood Credit will sell and assign to
the Seller, without recourse, its entire interest in and to the related Initial
Receivables, including its security interests in the related Initial Financed
Vehicles. At the time of initial issuance of the related Securities, the Seller
will sell and assign to the related Owner Trustee or Grantor Trustee, as the
case may be, without recourse, all of its right, title and interest in and to
such Initial Receivables, including its security interests in such Initial
Financed Vehicles. Each Initial Receivable will be identified in a schedule
appearing as an exhibit to the related Receivables Purchase Agreement and Sale
and Servicing Agreement or Pooling and Servicing Agreement, as the case may be
(the "Schedule of Receivables"). Concurrently with the sale and assignment of
such Initial Receivables to the related Owner Trustee or Grantor Trustee
pursuant to the related Sale and Servicing Agreement or Pooling and Servicing
Agreement, such Owner Trustee or Grantor Trustee will execute, authenticate and
deliver (or cause the Indenture Trustee to execute, authenticate and deliver)
the related Securities to the Seller in exchange therefor. The net proceeds
received by the Seller from the sale of the Securities will be applied to the
purchase of the Initial Receivables and to the deposit of the Pre-Funded Amount
into any Pre-Funding Account established with respect to the related Trust.
The Subsequent Receivables. With respect to any Trust as to which a
Pre-Funding Account is established, during the Funding Period, pursuant to the
related Receivables Purchase Agreement, Fleetwood Credit will be obligated to
sell and the Seller will be obligated to purchase, Subsequent Receivables having
an aggregate principal balance as of the related Subsequent Cutoff Dates not to
exceed the Pre-Funded Amount. On each Subsequent Transfer Date, Fleetwood Credit
will sell and assign to the Seller, without recourse, its entire right, title
and interest in and to the Subsequent Receivables, including its security
interests in the Subsequent Financed Vehicles. Each Subsequent Receivable will
be identified in a supplement to the Schedule of Receivables. Unless otherwise
specified in the related Prospectus Supplement, the purchase price to be paid to
Fleetwood Credit for each Subsequent Receivable will equal the principal amount
thereof as of the related Subsequent Cutoff Date. Pursuant to the related
Transfer and Servicing Agreements, the Seller will in turn sell the Subsequent
Receivables to the related Owner Trustee or Grantor Trust, as the case may be.
In connection with each purchase of Subsequent Receivables, such Trust will be
required to pay to the Seller an amount equal to the amount paid by the Seller
to Fleetwood Credit for such Subsequent Receivables, which purchase price will
be paid from monies on deposit in the related Pre-Funding Account. Upon the
conveyance of Subsequent Receivables to the Trust on a Subsequent Transfer Date,
the related Pool Balance will increase in an amount equal to the aggregate
principal balance of such Subsequent Receivables as of the related Subsequent
Cutoff Date. Coincident with each such transfer of Subsequent Receivables, the
related Yield Supplement Agreement, if any, will require Fleetwood Credit to
deposit into the related Yield Supplement Account an amount equal to the
Additional Yield Supplement Amount, if any, in respect of such Subsequent
Receivables.
Each conveyance of Subsequent Receivables will be subject to the following
conditions, among others: (i) such Subsequent Receivables must satisfy the
eligibility criteria described under "Representations and Warranties"; (ii) such
Subsequent Receivables will not have been selected by either Fleetwood Credit or
the Seller in a manner that it believes is adverse to the interests of the
related Securityholders; (iii) the weighted
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average APR of the Receivables (including the Subsequent Receivables) is not
less than the minimum APR specified in the related Prospectus Supplement; (iv)
the weighted average remaining term of the Receivables (including the Subsequent
Receivables) as of the related Subsequent Transfer Date is not greater than the
maximum weighted average remaining term specified in the related Prospectus
Supplement; (v) neither the Seller nor the related Owner Trustee or Grantor
Trustee, as the case may be, shall have been advised by any nationally
recognized statistical rating agency by whom a rating has been assigned to any
class of Securities of the related Series at the request of the Seller (each, a
"Rating Agency") that the conveyance of such Subsequent Receivables will result
in a qualification, modification or withdrawal of its then-current rating of any
such class of Securities; and (vi) the related Owner Trustee or Grantor Trustee,
as the case may be, shall have received certain opinions of counsel as to, among
other things, the enforceability and validity of the Transfer Agreement relating
to such conveyance of Subsequent Receivables. The Funding Period will not exceed
90 days, and the aggregate principal balance of the Subsequent Receivables to be
conveyed to the related Trust during the related Funding Period will not exceed
25% of the Original Principal Balance of the Securities of the related Trust.
Because in each case the Subsequent Receivables will be originated after
the Initial Receivables, following their conveyance to a Trust, the aggregate
characteristics of the Receivables Pool, including the Subsequent Receivables,
may vary from those of the Initial Receivables.
Representations and Warranties. In each Receivables Purchase Agreement,
Fleetwood Credit will represent and warrant to the Seller, and, in the related
Transfer and Servicing Agreements, the Seller will represent and warrant to the
related Owner Trustee or Grantor Trustee, as the case may be, among other
things, that, on the related Closing Date (with respect to the Initial
Receivables and Initial Financed Vehicles) and on each Subsequent Transfer Date
(with respect to the related Subsequent Receivables and Subsequent Financed
Vehicles): (i) the information set forth in the related Schedule of Receivables
with respect to the related Receivables is correct in all material respects;
(ii) the Obligor on each such Receivable is required to maintain physical damage
insurance covering the related Financed Vehicle in accordance with Fleetwood
Credit's normal requirements; (iii) to its knowledge, on the Closing Date or the
related Subsequent Transfer Date, as the case may be, the transferred
Receivables are free and clear of all security interests, liens, charges and
encumbrances and no offsets, defenses or counterclaims against Fleetwood Credit
or the Seller, as the case may be, have been asserted or threatened; (iv) on the
Closing Date or the related Subsequent Transfer Date, each of the transferred
Receivables is secured by a first priority perfected security interest in the
related Financed Vehicle in favor of Fleetwood Credit; (v) each transferred
Receivable, at the time it was originated, complied and, on the Closing Date or
the related Subsequent Transfer Date, as the case may be, complies, in all
material respects with applicable federal and state laws, including, without
limitation, consumer credit, truth-in-lending, equal credit opportunity and
disclosure laws; and (vi) the related Obligor has not been identified by
Fleetwood Credit as being a Relief Act Obligor.
Repurchase of Certain Receivables by the Seller. As of the second (or, if
the Seller so elects, the first) Record Date following the discovery by or
notice to the Seller of a breach of any such representation or warranty that
materially and adversely affects the interests of the related Securityholders in
a Receivable, the Seller, unless it cures the breach, will repurchase such
Receivable from the related Trust and, pursuant to the related Receivables
Purchase Agreement, Fleetwood Credit will purchase such Receivable from the
Seller, at a price equal to the unpaid principal balance owed by the Obligor
plus interest thereon at a rate equal to the Required Rate to the last day of
the month of repurchase (the "Repurchase Amount"). This repurchase obligation
will constitute the sole remedy available to the Securityholders, the related
Owner Trustee or Grantor Trustee, as the case may be, and, in the case of Owner
Securities, the related Indenture Trustee, for any such uncured breach. The
obligation of the Seller to repurchase a Receivable will not be conditioned on
performance by Fleetwood Credit of its obligation to repurchase such Receivable
from the Seller pursuant to the related Receivables Purchase Agreement.
SERVICING PROCEDURES
To assure uniform quality in servicing the Receivables and the Servicer's
own portfolio of recreational vehicle receivables and to reduce administrative
costs, each Owner Trustee, Indenture Trustee and Grantor
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Trustee will appoint the Servicer as custodian of the Receivables for the
related Trust. The Receivables will not be physically segregated from other
recreational vehicle retail installment sale contracts of the Servicer, or those
which the Servicer services for others, to reflect the transfer to the Trust.
However, the Servicer's accounting records and computer systems will reflect the
sale and assignment of the Receivables to the related Trust, and UCC financing
statements reflecting each such sale and assignment will be filed. See "Certain
Legal Aspects of the Receivables -- General".
The Servicer will in each case make reasonable efforts to collect all
payments due with respect to the Receivables and, in a manner consistent with
the related Transfer and Servicing Agreements, will continue such collection
procedures as it follows with respect to comparable recreational vehicle retail
installment sale contracts it services for itself and others. See "Certain Legal
Aspects of the Receivables". Consistent with its normal procedures, the Servicer
may, in its discretion, arrange with an Obligor to extend or modify the payment
schedule on any Receivable. Notwithstanding the foregoing, the Servicer may not
extend the stated maturity of such Receivable beyond the scheduled maturity of
the Receivable having the latest scheduled maturity as of the related Subsequent
Cutoff Date. Such arrangements may result in the Servicer being required to
repurchase such Receivable for the Repurchase Amount, or to make an Advance in
respect of such Receivable, without any reimbursement therefor. The Servicer
will follow such normal collection practices and procedures as it deems
necessary or advisable to realize upon any Receivable with respect to which it
determines that eventual payment in full is unlikely. The Servicer may sell the
related Financed Vehicle securing any such Receivable at a public or private
sale, or take any other action permitted by applicable law.
THE TRUST ACCOUNTS
With respect to each Owner Trust, the Servicer will establish and maintain
with (i) the related Indenture Trustee one or more accounts, in the name of the
Indenture Trustee on behalf of the related Owner Securityholders, into which all
payments made on or in respect of the related Receivables will be deposited (the
"Owner Collection Account"), (ii) such Indenture Trustee an account, in the name
of the Indenture Trustee on behalf of the related Noteholders, into which
amounts released from the Owner Collection Account and any related Trust Account
or other credit enhancement for payment to such Noteholders will be deposited
and from which all distributions to such Noteholders will be made (the "Note
Distribution Account") and (iii) the related Owner Trustee an account, in the
name of the Owner Trustee on behalf of the related Owner Certificateholders,
into which amounts released from the Owner Collection Account and any Trust
Account or other credit enhancement for distribution to such Owner
Certificateholders will be deposited and from which all distributions to such
Owner Certificateholders will be made (the "Owner Certificate Distribution
Account"). With respect to each Grantor Trust, the Servicer will establish and
maintain with the related Grantor Trustee an account, in the name of the Grantor
Trustee on behalf of the related Grantor Certificateholders, into which all
payments made on or in respect of the related Receivables and amounts released
from any related Trust Account or other credit enhancement for payment to such
Grantor Certificateholders will be deposited and from which all distributions to
such Grantor Certificateholders will be made (the "Grantor Collection Account"
and, together with the Owner Collection Account, the "Collection Accounts").
Any other accounts to be established with respect to a Trust, including any
Pre-Funding Account, Yield Supplement Account or Reserve Fund, will be described
in the related Prospectus Supplement.
For each Series of Securities, funds in any related Collection Account,
Note Distribution Account, Owner Certificate Distribution Account, Pre-Funding
Account, Reserve Fund, Yield Supplement Account or other accounts identified in
the related Prospectus Supplement (collectively, the "Trust Accounts") will be
invested as provided in the related Sale and Servicing Agreement or Pooling and
Servicing Agreement, as the case may be, in Permitted Investments. "Permitted
Investments" will generally be limited to investments acceptable to the Rating
Agencies as being consistent with the rating of the related Securities. Except
as described below or in the related Prospectus Supplement, Permitted
Investments will be limited to obligations or securities that mature on or
before the related Deposit Date. However, to the extent permitted by the Rating
Agencies, funds in any Reserve Fund may be invested in securities that will not
mature prior to the next Payment Date with respect to such Notes and will not be
sold to meet any shortfalls. Thus, the amount
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on deposit in any Reserve Fund at any time may be less than the balance of the
Reserve Fund. If the amount required to be withdrawn from any Reserve Fund to
cover shortfalls in collections on the related Receivables (as provided in the
related Prospectus Supplement) exceeds the amount on deposit in the Reserve
Fund, a temporary shortfall in the amounts distributed to the related
Noteholders or Certificateholders could result, which could, in turn, increase
the average life of the related Notes or Certificates. Except as otherwise
specified in the related Prospectus Supplement, investment earnings on funds
deposited in the Trust Accounts, other than the Pre-Funding Account, net of
losses and investment expenses (collectively, "Investment Earnings"), will be
deposited in the applicable Note Distribution Account or Owner Certificate
Distribution Account (with respect to each Owner Trust) or Grantor Collection
Account (with respect to each Grantor Trust) on each Deposit Date, as the case
may be, and shall be treated as collections of interest on the related
Receivables.
Except as otherwise provided in the related Prospectus Supplement, each
Trust Account shall be maintained with the related Indenture Trustee or Grantor
Trustee, as the case may be, so long as such Trustee has short-term credit
ratings (the "Required Deposit Ratings") at least equal to Prime-1 by Moody's
Investors Service, Inc. ("Moody's") and A-1+ by Standard & Poor's, a division of
The McGraw-Hill Companies, Inc. ("Standard & Poor's") or each Trust Account
shall be maintained in a non-interest bearing segregated trust account for the
benefit of the Securityholders, located in the corporate trust department of a
depository institution or trust company having corporate trust powers (which may
include such Trustee). If the short-term unsecured debt obligations of such
Trustee are not rated at least equal to the Required Deposit Ratings, the
Servicer will, with the assistance of such Trustee, as necessary, cause each
Trust Account to be moved to a depository institution or trust company whose
short-term unsecured debt obligations are rated at least equal to the Required
Deposit Ratings or moved to a segregated trust account located in a corporate
trust department of a depository institution or trust company as described
above.
COLLECTIONS
Unless otherwise specified in the related Prospectus Supplement, except
under the circumstances described in the immediately succeeding paragraph, the
Servicer will deposit all payments on or in respect of the Receivables
comprising a Receivables Pool received from or on behalf of the related Obligors
and all proceeds of such Receivables collected during each Collection Period
into the related Collection Account not later than two Business Days after
receipt thereof. Notwithstanding the foregoing, such deposits and collections in
respect of a Collection Period may be remitted to the related Collection Account
by the Servicer on a monthly basis not later than each Deposit Date if (i) so
long as Fleetwood Credit is the Servicer and its short-term unsecured debt
obligations are rated at least equal to Prime-1 by Moody's and A-1 by Standard &
Poor's (the "Required Servicer Ratings") or (ii) the Servicer obtains a letter
of credit, surety bond or insurance policy (the "Servicer Letter of Credit") as
provided in the related Sale and Servicing Agreement or Pooling and Servicing
Agreement, as the case may be, under which demands for payment will be made to
secure timely remittance of monthly collections to the related Collection
Account and, in the case of either clause (i) or (ii) above, the related Trustee
is provided with a letter from each Rating Agency to the effect that the
utilization of such alternative remittance schedule will not result in a
qualification, reduction or withdrawal of its then-current rating of any class
of Securities of such Series. In the event that the Servicer is permitted to
make remittances of collections to the related Collection Account on a monthly
basis pursuant to satisfaction of either of the conditions described above, the
related Sale and Servicing Agreement or Pooling and Servicing Agreement, as the
case may be, will be modified, to the extent necessary to reflect such change in
the timing of such remittances, without the consent of any Securityholder. The
Seller or the Servicer, as the case may be, will remit the aggregate Repurchase
Amount of any Receivables to be repurchased from the related Trust into the
related Collection Account on or before the related Deposit Date. Pending
deposit into a 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, the related
Securityholders might incur a loss.
To the extent set forth in the related Prospectus Supplement, the Servicer
may, in order to satisfy the requirements described above, obtain a letter of
credit or other security for the benefit of the related Trust to
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secure timely remittances of collections on the related Receivables and payment
of the aggregate Repurchase Amount with respect to Receivables repurchased by
the Servicer.
PRE-FUNDING ACCOUNTS; MANDATORY PREPAYMENT OF SECURITIES
Pre-Funding Accounts. In connection with any Trust, the Servicer may
establish an account in the name of the related Indenture Trustee or Grantor
Trustee, as the case may be, for the benefit of the holders of Securities of the
related Series into which the Pre-Funded Amount will be deposited on the Closing
Date from the net proceeds received from the sale of the Securities and from
which monies will be applied during the Funding Period to purchase Subsequent
Receivables from the Seller (each, a "Pre-Funding Account"). Each Pre-Funding
Account will be maintained with the same entity at which the related Collection
Account is maintained. The Pre-Funding Account will be part of such Trust but
monies on deposit therein will not be available to cover losses on or in respect
of the related Receivables. Any portion of the Pre-Funded Amount remaining on
deposit in the Pre-Funding Account at the end of the related Funding Period will
be payable as described below as a prepayment of principal to the related
Securityholders. Monies on deposit in the Pre-Funding Account may be invested in
Permitted Investments under the circumstances and in the manner described in the
related Sale and Servicing Agreement or Pooling and Servicing Agreement, as the
case may be. Except as otherwise specified in the related Prospectus Supplement,
Investment Earnings on investment of funds in a Pre-Funding Account will be
deposited into the related Collection Account and shall be treated as
collections of interest on the related Receivables.
Upon each conveyance of Subsequent Receivables to a Trust, an amount equal
to the purchase price paid by the Seller to Fleetwood Credit for such Subsequent
Receivables on the related Subsequent Transfer Date will be withdrawn from the
Pre-Funding Account and paid to the Seller.
Mandatory Prepayment of the Securities. Unless otherwise provided in the
related Prospectus Supplement, the Securities of any Series as to which a
Pre-Funding Account has been established will be subject to a "Mandatory
Prepayment" on the Distribution Date immediately succeeding the date on which
the Funding Period ends (or on the Distribution Date on which the Funding Period
ends if the Funding Period ends on a Distribution Date), in the event that any
portion of the Pre-Funded Amount, exclusive of any investment earnings thereon,
remains on deposit in the Pre-Funding Account after giving effect to the
purchase by the Seller and conveyance to the related Trust of all Subsequent
Receivables on the related Subsequent Transfer Dates, including any such
purchase and conveyance on the date on which the Funding Period ends.
Upon the occurrence of any such Mandatory Prepayment, the holders of
Securities of each class of such Series may receive as a prepayment a portion of
the Pre-Funded Amount remaining in the Pre-Funding Account as specified in the
related Prospectus Supplement. Although each Pre-Funding Account will be funded
in an amount that the Seller anticipates will allow the related Trust to acquire
Subsequent Receivables during the Funding Period in an aggregate principal
amount equal to the Pre-Funded Amount, it is unlikely that the aggregate
principal amount of Subsequent Receivables sold to such Trust will exactly equal
the Pre-Funded Amount, and therefore it is likely that there will be at least a
nominal amount of principal prepaid to Securityholders.
YIELD SUPPLEMENT ACCOUNTS; YIELD SUPPLEMENT AGREEMENTS
Yield Supplement Accounts. Each Yield Supplement Account will be designed
solely to hold funds to be applied by the related Grantor Trustee or Owner
Trustee and Indenture Trustee to provide payments to Securityholders in respect
of Receivables the APR of which is less than the Required Rate. Each Yield
Supplement Account will be maintained with the same entity at which the related
Collection Account is maintained and, unless otherwise specified in the related
Prospectus Supplement, will be created with an initial deposit by Fleetwood
Credit of the Yield Supplement Initial Deposit.
On each Distribution Date, the related Indenture Trustee or Grantor Trustee
will transfer to the related Collection Account from monies on deposit in the
Yield Supplement Account an amount equal to the Yield Supplement Deposit Amount
in respect of the Receivables for such Distribution Date. Unless otherwise
specified in the related Prospectus Supplement, amounts on deposit on any
Distribution Date in the Yield
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Supplement Account in excess of the Maximum Yield Supplement Amount, after
giving effect to all distributions to be made on such Distribution Date, will be
released to the Seller. Monies on deposit in the Yield Supplement Account may be
invested in Permitted Investments under the circumstances and in the manner
described in the related Sale and Servicing Agreement or Pooling and Servicing
Agreement, as the case may be. Except as otherwise specified in the related
Prospectus Supplement, Investment Earnings on investment of funds in a Yield
Supplement Account will be deposited into such Yield Supplement Account. Unless
otherwise specified in the related Prospectus Supplement, any monies remaining
on deposit in a Yield Supplement Account upon the termination of the related
Trust pursuant to its terms shall be released to the Seller. Except as otherwise
specified in the related Prospectus Supplement, each Yield Supplement Accounts
will not be part of or otherwise includible in the related Trusts.
Yield Supplement Agreements. If a Yield Supplement Account is established
with respect to any Trust as to which a Pre-Funding Account has been
established, Fleetwood Credit, the Seller and the related Grantor Trustee or
Owner Trustee and Indenture Trustee, as the case may be, will enter into a Yield
Supplement Agreement to be dated as of the related Cutoff Date pursuant to
which, on each Transfer Date, Fleetwood Credit will deposit into the Yield
Supplement Account the Additional Yield Supplement Amount calculated as
described under "Summary -- Yield Supplement Accounts; Yield Supplement
Agreements" in respect of the related Receivables. Each Yield Supplement
Agreement will affect only Receivables having APRs less than the related
Required Rate.
CERTAIN PAYMENTS BY THE SERVICER
With respect to each Trust, on each Deposit Date, the Servicer will be
required, subject to the limitations set forth below, to advance to the related
Trust an amount equal to all accrued interest, if any, on the unpaid principal
balance of each related Receivable at the related APR since the most recent date
upon which a payment was made in respect of such Receivable by or on behalf of
the related Obligor through the last day of the related Collection Period (each,
an "Advance"). The obligation of the Servicer to make an Advance will be limited
to circumstances in which the Servicer, in its reasonable discretion, determines
such Advance will ultimately be reimbursable from subsequent payments made by or
on behalf of the related Obligor, from insurance proceeds, from liquidation
proceeds or otherwise, except in the case of the waiver by the Servicer of any
scheduled interest on a Receivable, in which case the Servicer shall be required
to make an Advance of such interest amount without the right of subsequent
reimbursement. In making Advances, the Servicer will endeavor to maintain
monthly payments of interest at the related Interest Rates or Pass-Through Rates
to Securityholders, rather than to guarantee or insure against losses.
Accordingly, all Advances (except such waivers of scheduled interest and
Non-Reimbursable Payments) shall be reimbursable to the Servicer, without
interest, if and when a payment relating to a Receivable with respect to which
an Advance has previously been made is subsequently received. In addition,
Advances in respect of a Receivable (other than a Receivable repurchased by the
Seller) as to which (i) a scheduled payment is 180 days delinquent or (ii) the
Servicer has determined that eventual payment in full is unlikely and has
repossessed and liquidated the related Financed Vehicle within such 180-day
period (each, a "Defaulted Receivable") shall also be reimbursable (except with
respect to such waivers of scheduled interest) to the Servicer from collections
on or in respect of other Receivables comprising part of the related Receivables
Pool to the extent that the Servicer determines that such Advance will not be
recoverable from payments made on or in respect of such Defaulted Receivable.
When a prepayment of principal is made on or in respect of a Receivable,
interest is paid on the unpaid principal balance of such Receivable only to the
date of such payment. To ensure that Securityholders will not be adversely
affected by any shortfall in interest resulting from any such payment, the
related Sale and Servicing Agreement or Pooling and Servicing Agreement, as the
case may be, will require the Servicer to deposit into the related Collection
Account on each Deposit Date, without the right of subsequent reimbursement,
such amount as may be necessary to assure that the distributions made on the
related Payment Date or Distribution Date in respect of such Receivable to the
related Securityholders include an amount equal to interest at a rate equal to
the Required Rate on the amount of such principal payment from
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the date of payment through the last day of the related Collection Period (each,
a "Non-Reimbursable Payment").
The Servicer will remit to the related Collection Account an amount equal
to each Advance and Non-Reimbursable Payment to be made in respect of a
Collection Period not later than the related Deposit Date.
NET DEPOSITS
Unless otherwise specified in the related Prospectus Supplement, for
administrative convenience and with respect to each Trust, the Servicer will be
permitted to make deposits of collections, Advances, Non-Reimbursable Payments
and Repurchase Amounts for or in respect of each Collection Period net of
distributions to be made to the Servicer with respect to such Collection Period.
The Servicer, however, will account to each Trustee and to the related
Securityholders as if all deposits and distributions were made individually.
SERVICING COMPENSATION
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Trust the Servicer will be entitled to receive, out of interest
collected on or in respect of the related Receivables, the Servicing Fee for
each Collection Period equal to one-twelfth of the product of the Servicing Fee
Rate, which, except as otherwise specified in the related Prospectus Supplement
will equal 1.0%, and the Pool Balance as of the first day of such Collection
Period. The Servicing Fee will be calculated and paid based upon a 360-day year
consisting of twelve 30-day months. The Servicer will also collect and retain
any late fees, prepayment charges and other administrative fees or similar
charges allowed by applicable law with respect to the Receivables.
The Servicing Fee will compensate the Servicer for performing the functions
of a third party servicer of recreational vehicle receivables as an agent for
the related Trust, including collecting and posting all payments, responding to
inquiries of Obligors on the Receivables, investigating delinquencies, sending
payment statements and reporting tax information to Obligors, paying costs of
disposition of Defaulted Receivables and policing the collateral. The Servicing
Fee payable with respect to any Trust also will compensate the Servicer for
administering the related Receivables Pool, including making Advances and
Non-Reimbursable Payments, accounting for collections, furnishing monthly and
annual statements to the Grantor Trustee or Owner Trustee and Indenture Trustee,
as the case may be, with respect to distributions, generating federal income tax
information and paying certain taxes, accounting fees, outside auditor fees,
data processing costs and other costs incurred in connection with administering
the related Receivables.
DISTRIBUTIONS ON THE SECURITIES
With respect to each Series of Securities, beginning on the Payment Date or
Distribution Date specified in the related Prospectus Supplement, distributions
of principal and interest (or, where applicable, in respect of principal only or
interest only) on each class of Securities entitled thereto will be made by the
related Trustee (or paying agent) to the Noteholders and the Certificateholders,
respectively, of such Series. The timing, calculation, allocation, order,
source, priorities of and requirements for all distributions to each class of
Owner Securities and Grantor Certificates will be set forth in the related
Prospectus Supplement.
With respect to each Owner Trust, on each Payment Date or Distribution
Date, as applicable, collections on or in respect of the related Receivables
will be transferred from the Owner Collection Account to the Note Distribution
Account and Certificate Distribution Account for distribution to the Noteholders
and Owner Certificateholders to the extent provided in the related Prospectus
Supplement. With respect to each Grantor Trust, on each Distribution Date
distributions to the related Certificateholders will be made from the Grantor
Collection Account directly. Credit enhancement, such as a Reserve Fund, will be
available to cover any shortfalls in the amount available for distribution on
such date to the related Securityholders 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 Series will be subordinated to
distributions in respect of interest on such class, distributions in respect of
one or more classes of Owner Certificates may be subordinated to payments in
respect of the Notes of such
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Series and distributions in respect of principal of any class of Subordinated
Certificates will be subordinated to distributions in respect of interest and
principal of the related Senior Certificates.
CREDIT AND CASH FLOW ENHANCEMENT
The amounts and types of any credit enhancement arrangements and the
provider thereof, if applicable, with respect to each class of Securities of a
Series will be set forth in the related Prospectus Supplement. To the extent
provided in the related Prospectus Supplement, credit enhancement may be in the
form of subordination of one or more classes of Securities, Reserve Funds, Cash
Collateral Accounts, Spread Accounts, letters of credit, surety bonds, insurance
policies, over-collateralization, 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 the
foregoing. If specified in the applicable Prospectus Supplement, credit
enhancement for a class of Securities may cover one or more other classes of
Securities of the same Series, and credit enhancement for a Series of Securities
may cover one or more other Series of Securities. The type, characteristics and
amount of the credit enhancement with respect to any Series or class of
Securities will be determined based on several factors, including the
characteristics of the related Receivables Pool as of the related Cutoff Date,
and will be established on the basis of the requirements of each applicable
Rating Agency.
If credit enhancement is provided with respect to Securities of any Series,
the related Prospectus Supplement will include a description of (i) the amount
payable thereunder; (ii) any conditions to payment thereunder not otherwise
described herein; (iii) the conditions (if any) under which the amount payable
thereunder may be reduced, terminated or replaced; (iv) any material provisions
of any agreement relating to the credit enhancement; and (v) certain descriptive
information with respect to any third-party provider of credit enhancement. If
so described in the related Prospectus Supplement, credit enhancement with
respect to a Series of Securities may be available to pay principal of any class
of Securities of such Series following the occurrence of certain Events of
Default or Servicer Defaults with respect to such Securities. In such event, the
provider of such credit enhancement may have an interest in certain cash flows
from the related Receivables to the extent described in such Prospectus
Supplement and may be entitled to the benefit of the related Trust's interest in
such Receivables. Unless otherwise provided in the related Prospectus
Supplement, such interests will be subordinated to the interests of the related
Securityholders.
The presence of a Reserve Fund or other form of credit enhancement is
intended to enhance the likelihood of receipt by the Securityholders of such
class or Series of the full amount of principal or 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 all principal and interest
thereon. If losses occur which exceed the amount covered by such credit
enhancement or which are not covered by such credit enhancement, such
Securityholders will bear their allocable share of such losses, 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 may be exhausted by the
claims of Securityholders of other Series.
Subordination. If so specified in the related Prospectus Supplement, one or
more classes of Owner Securities may be subordinated to one or more other
classes of Owner Securities of such Series. If a Grantor Trust issues two or
more classes of Grantor Certificates, the Subordinated Grantor Certificates of
such Series will be subordinated to the related Senior Grantor Certificates. The
rights of the holders of subordinated Securities to receive distributions of
principal or interest on any Payment Date or Distribution Date will be
subordinated to the rights of the holders of the Securities which are senior to
such Securities to the extent set forth in the related Prospectus Supplement.
Such subordination may be limited in amount and may not be available to cover
certain types of losses. The related Prospectus Supplement will also set forth
information concerning the amount of subordination of any class or classes of
Securities in a Series, the circumstances under which the subordination will be
applicable, the manner, if any, in which the amount of subordination will
decrease over time and the conditions under which amounts available from
payments that
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would otherwise be made to holders of the subordinated Securities will be
distributed to holders of Securities which are senior thereto. Generally, the
amount of subordination available will be decreased by the amounts which are
otherwise payable to the holders of subordinated Securities and are paid to the
holders of the Securities which are senior thereto.
Reserve Fund. If so provided in the related Prospectus Supplement, pursuant
to the related Sale and Servicing Agreement or Pooling and Servicing Agreement,
as the case may be, the Seller will establish for any Series or one or more
classes of Securities of such Series an account (the "Reserve Fund"), which will
be maintained with the applicable Indenture Trustee or Grantor Trustee, as the
case may be. Unless otherwise provided in the related Prospectus Supplement, the
Reserve Fund will be maintained with the same entity at which the related
Collection Account is maintained and will be funded by an initial deposit by the
Seller on the related Closing Date in the amount specified in the related
Prospectus Supplement, if any. The amount on deposit in each Reserve Fund will
be increased on each Payment Date or Distribution Date up to the balance
specified in the related Prospectus Supplement by the deposit therein of
collections on or in respect of the related Receivables remaining on each such
Payment Date or Distribution Date after all other required payments and
distributions have been made. The related Prospectus Supplement will describe
the circumstances and manner under which distributions may be made out of the
Reserve Fund, to holders of the Securities covered thereby, to the Servicer or
to the Seller. Upon any distribution to the Servicer or Seller of amounts from
the Reserve Fund, the related Securityholders will not have any rights in, or
claims to, such amount. Each Reserve Fund will be a segregated trust account
held by the related Indenture Trustee or Grantor Trustee, as the case may be,
for the benefit of the holders of the class or classes of Securities specified
therein. Unless otherwise specified in the related Prospectus Supplement, the
Reserve Fund will be a part of the related Owner Trust but will not be a part of
or otherwise includible in the related Grantor Trust.
Letter of Credit. If so specified in the related Prospectus Supplement,
credit enhancement may be provided with respect to any Series or class of
Securities in the form of a letter of credit issued by a bank or financial
institution specified in such Prospectus Supplement (the "LOC Issuer"). Subject
to the terms and conditions specified in the related Prospectus Supplement, the
LOC Issuer will be obligated to honor drawings under a letter of credit in an
aggregate dollar amount (which may be fixed or may be reduced as described in
the related Prospectus Supplement), net of unreimbursed payments thereunder,
equal to the amount described in the related Prospectus Supplement. The amount
available under any letter of credit will be reduced to the extent of the
unreimbursed payments thereunder. A letter of credit may not cover all types of
losses.
Cash Collateral Account. If so specified in the related Prospectus
Supplement, the Securities of any class or Series may have the benefit of a cash
collateral account (each, a "Cash Collateral Account"). Unless otherwise
specified in the related Prospectus Supplement, a Cash Collateral Account with
respect to the Securities of any class or Series will be maintained with the
same entity at which the related Collection Account is located and will be
funded in full on the related Closing Date and the funds on deposit therein may
be invested in Permitted Investments. The amount available to be withdrawn from
a Cash Collateral Account will be the lesser of the amount on deposit in the
Cash Collateral Account and the amount specified in the Prospectus Supplement.
The related Prospectus Supplement will set forth the circumstances under which
withdrawals will be made from the Cash Collateral Account.
Spread Account. If so specified in the related Prospectus Supplement,
support for the Securities of any Series or class of Securities may be provided
by the periodic deposit of certain available excess cash flows from the related
Receivables Pool into an account (the "Spread Account") maintained with the same
entity at which the Collection Account is located. Funds on deposit from time to
time in a Spread Account are intended to assure the subsequent distributions of
interest and principal on such Securities in the manner specified in the related
Prospectus Supplement.
Surety Bond or Insurance Policy. If so specified in the related Prospectus
Supplement, a surety bond or insurance policy may be purchased for the benefit
of the holders of the Securities of any Series or class to assure distributions
of interest or principal with respect to such Securities in the manner and
amount specified in such Prospectus Supplement.
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STATEMENTS TO SECURITYHOLDERS
Unless otherwise provided in the related Prospectus Supplement, with
respect to each Series of Securities, on or prior to each Payment Date or
Distribution Date, the Servicer will prepare and forward to the related Trustee
to be included with each distribution to each Securityholder of record a
statement, setting forth for the related Collection Period, among other things,
the following information:
(i) the amount of the distribution allocable to principal on each
class of Securities of such Series;
(ii) the amount of the distribution allocable to interest on each
class of Securities of such Series;
(iii) the Securityholder's pro rata portion of the applicable
Servicing Fee and any additional servicing compensation paid to the
Servicer allocable to each class of Securities of such Series;
(iv) the Pool Balance and the Pool Factor applicable to each class of
Securities of such Series as of the related Record Date;
(v) the aggregate amount of unreimbursed Advances and the change in
such amount from the immediately preceding Collection Period;
(vi) the amount, if any, of proceeds received during the related
Collection Period in connection with any physical damage insurance policies
covering Financed Vehicles;
(vii) the amount, if any, of proceeds received during the related
Collection Period from Dealer or Seller repurchase obligations relating to
Defaulted Receivables or defective Receivables or Servicer repurchase
obligations relating to Receivables in respect of which certain servicing
covenants have been breached;
(viii) the amount, if any, distributed to Securityholders from any
Reserve Fund or other form of credit enhancement;
(ix) the balance of any Reserve Fund, letter of credit, Cash
Collateral Account or Spread Account established with respect to such
Series, expressed as a percentage of the Pool Balance and, in the event the
amount on deposit in each such account or the outstanding amount available
under such letter of credit has been reduced to zero, the number and
aggregate dollar amount of Defaulted Receivables;
(x) the amount of any shortfall in interest or principal distributions
on such Payment Date or Distribution Date, as applicable, and any change in
such shortfalls from the preceding Payment Date or Distribution Date;
(xi) the outstanding Principal Amount of each class of Notes and
Certificate Balance of each class of Owner Certificates or Grantor
Certificates, as the case may be, of such Series as of such Record Date,
after giving effect to payments allocated to principal reported under
clause (i) above;
(xii) the Interest Rate with respect to each class of Notes and the
Pass-Through Rate with respect to each class of Owner Certificates or
Grantor Certificates, as the case may be, of such Series in effect for the
next period, if such Securities have variable or adjustable Interest Rates
or Pass-Through Rates;
(xiii) the aggregate amount of realized losses in respect of
Receivables which became Defaulted Receivables during the related
Collection Period, if any, as of such Record Date and the change in such
amount from the immediately preceding Record Date;
(xiv) the amount otherwise distributable to any class of subordinated
Securities that is instead being distributed to any class of senior
Securities of such Series on such Distribution Date;
(xv) with respect to any Series of Securities as to which a
Pre-Funding Account has been established, for Payment Dates or Distribution
Dates during the Funding Period, the remaining Pre-Funded Amount on deposit
in the Pre-Funding Account, the amount, if any, withdrawn to purchase
Subsequent Receivables or the amount of any other reduction in the amount
on deposit therein during such Collection Period and the amount of any
Additional Yield Supplement Amounts deposited into the
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Yield Supplement Account in respect of Subsequent Receivables transferred
to the Trust during the related Collection Period;
(xvi) with respect to any Trust as to which a Yield Supplement Account
has been established, the Yield Supplement Amount, the Yield Supplement
Deposit Amount and the amount on deposit in the Yield Supplement Account
after giving effect to distributions made on such Distribution Date;
(xvii) for the Payment Date or Distribution Date that is or
immediately follows the end of the Funding Period, if any, the amount of
the Pre-Funded Amount that has not been used to purchase Subsequent
Receivables and is being or will be distributed as a prepayment of
principal to Securityholders; and
(xviii) such other information as may be specified in the related
Prospectus Supplement.
Items (i), (ii) and (iii) above will be expressed as a dollar amount per
Security with a denomination of $1,000. In addition, within the prescribed
period of time for tax reporting purposes after the end of each calendar year
during the term of each Trust, the related Trustee will mail to each Person who
at any time during such calendar year shall have been a registered
Securityholder a statement containing certain information for the purposes of
such Securityholder's preparation of federal income tax returns. See "Certain
Federal Income Tax Consequences".
EVIDENCE AS TO COMPLIANCE
The Owner Certificates and the Grantor Certificates. Each Sale and
Servicing Agreement or Pooling and Servicing Agreement will provide that a firm
of independent public accountants will furnish to the related Grantor Trustee or
Owner Trustee, as the case may be, on or before April 30 of each year a
statement as to compliance by the Servicer during the preceding 12 months ended
December 31 (or shorter period in the case of the first such statement) with
certain standards relating to the servicing of the related Receivables.
Each Sale and Servicing Agreement or Pooling and Servicing Agreement will
also provide for delivery to the related Grantor Trustee or Owner Trustee, as
the case may be, on or before April 30 of each year, of a certificate signed by
an officer of the Servicer stating that the Servicer has fulfilled its
obligations under the related Sale and Servicing Agreement or Pooling and
Servicing Agreement throughout the preceding 12 months ended December 31 (or
shorter period in the case of the first such statement) or, if there has been a
default in the fulfillment of any such obligation, describing each such default.
The Notes. Each Owner Trust will be required to file annually with the
related Indenture Trustee a written statement as to the fulfillment of its
obligations under the related Indenture.
The Indenture Trustee for each Owner 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 such Indenture, the amount, interest rate and
maturity date of certain indebtedness owing by such Trust to the applicable
Indenture Trustee in its individual capacity, the property and funds physically
held by such Indenture Trustee as such and any action taken by it that
materially affects the related Notes and that has not been previously reported.
Copies of the foregoing statements and certificates may be obtained by
Securityholders by a request in writing addressed to the related Trustee.
CERTAIN MATTERS REGARDING THE SERVICER
Each Sale and Servicing Agreement or Pooling and Servicing Agreement will
provide that the Servicer may not resign from its obligations and duties as
Servicer thereunder, except upon determination that its performance of such
duties is no longer permissible under applicable law. No such resignation will
become effective until the related Indenture Trustee, Owner Trustee or Grantor
Trustee, as the case may be, or a successor servicer has assumed the Servicer's
servicing obligations and duties under the related Sale and Servicing Agreement
or Pooling and Servicing Agreement.
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Unless otherwise provided in the related Prospectus Supplement, each Sale
and Servicing Agreement and Pooling and Servicing Agreement will further provide
that neither the Servicer nor any of its directors, officers, employees and
agents will be under any liability to the related Trust or 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 negligence in the performance of duties or by
reason of reckless disregard of obligations and duties thereunder. The Servicer
will be under no obligation to appear in, prosecute or defend any legal action
that is not incidental to its 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.
Any corporation into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger or consolidation to which the Servicer
is a party, or any corporation succeeding to all or substantially all of the
business of the Servicer, which corporation assumes the obligations of the
Servicer, will be the successor to the Servicer under the related Sale and
Servicing Agreement or Pooling and Servicing Agreement.
SERVICER DEFAULTS
Unless otherwise provided in the related Prospectus Supplement, a "Servicer
Default" under each Sale and Servicing Agreement or Pooling and Servicing
Agreement will consist of: (i) any failure by the Servicer (or the Seller, so
long as Fleetwood Credit is the Servicer) to deliver to the related Trustee as
required by such agreement for distribution to the Securityholders any required
payment, or any failure by the Servicer to deliver a Servicer's Certificate with
respect to any Payment Date or Distribution Date, which failure continues
unremedied for three Business Days after discovery by an officer of the Servicer
(or the Seller, so long as Fleetwood Credit is the Servicer), or written notice
of such failure is given (a) to the Servicer or the Seller, as the case may be,
by the related Trustee or (b) to the Seller or the Servicer, as the case may be,
and to the related Trustee by, in the case of an Owner Trust, holders of Notes
evidencing not less than 25% of the voting interests thereof, voting together as
a single class, or, if the Notes have been paid in full, by the holders of Owner
Certificates evidencing not less than 25% of the voting interests thereof,
voting together as a single class, and, in the case of a Grantor Trust by the
holders of Grantor Certificates evidencing not less than 25% of the voting
interests of such Grantor Certificates, voting together as a single class; (ii)
any failure by the Servicer (or the Seller, so long as Fleetwood Credit is the
Servicer) duly to observe or perform in any material respect any covenant or
agreement in the related Sale and Servicing Agreement or Pooling and Servicing
Agreement which failure materially and adversely affects the rights of
Securityholders and which continues unremedied for 60 days after the giving of
written notice of such failure is given as described in clause (i) above; and
(iii) certain events of bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings and certain actions
by the Servicer (or the Seller, so long as Fleetwood Credit is the Servicer)
indicating its insolvency, reorganization pursuant to bankruptcy proceedings or
inability to pay its obligations (each, an "Insolvency Event").
RIGHTS UPON SERVICER DEFAULT
Unless otherwise provided in the related Prospectus Supplement, as long as
a Servicer Default remains unremedied, (i) in the case of an Owner Trust, the
related Indenture Trustee or holders of Notes of the related Series representing
not less than 51% of the voting interests thereof (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 holders of Owner Certificates evidencing not less than
51% of the voting interests thereof), voting together as a single class, or (ii)
in the case of a Grantor Trust, the related Grantor Trustee or holders of
Grantor Certificates evidencing not less than 51% of the voting interests
thereof, voting together as a single class, may terminate all the rights and
obligations of the Servicer under the related Sale and Servicing Agreement or
Pooling and Servicing Agreement, whereupon such Indenture Trustee or Grantor
Trustee, as the case may be, will succeed, without further action, to all the
responsibilities, duties and liabilities of the Servicer in its capacity as such
under such agreement and will be entitled to similar compensation arrangements.
If, however, a
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bankruptcy trustee or similar official has been appointed for the Servicer, and
no Servicer Default other than such appointment has occurred, such trustee or
official may have the power to prevent the Indenture Trustee or the Noteholders
(or Owner Certificateholders) or the Grantor Trustee or the Grantor
Certificateholders, as the case may be, from effecting a transfer of servicing.
In the event that the related Indenture Trustee or Grantor Trustee is unwilling
or unable so to act, it may appoint or petition a court of competent
jurisdiction to appoint a successor with a net worth of at least $100,000,000
and whose regular business includes the servicing of recreational vehicle or
motor vehicle receivables. The Indenture Trustee or Grantor Trustee, as the case
may be, may make such arrangements for compensation to be paid, which in no
event may be greater than the servicing compensation paid to the Servicer under
the related Sale and Servicing Agreement or Pooling and Servicing Agreement.
Notwithstanding such termination, the Servicer shall be entitled to payment of
certain amounts payable to it prior to such termination, for services rendered
prior to such termination.
WAIVER OF PAST DEFAULTS
Unless otherwise provided in the related Prospectus Supplement, in the case
of (i) each Owner Trust, the holders of related Notes evidencing not less than
51% of the voting interests thereof (or, if all of the Notes have been paid in
full and the Indenture has been discharged in accordance with its terms, the
holders of related Owner Certificates evidencing not less than 51% of the voting
interests thereof), voting together as a single class, or (ii) each Grantor
Trust, holders of Grantor Certificates evidencing not less than 51% of the
voting interest thereof, voting together as a single class, may, on behalf of
all such Securityholders, waive any default by the Servicer in the performance
of its obligations under the related Sale and Servicing Agreement or Pooling and
Servicing Agreement, as the case may be, and its consequences, except a default
in making any required deposits to or payments from the related Trust Accounts
in accordance with such agreement or in respect of a covenant or provision of
such agreement that cannot be modified or amended without the consent of each
Securityholder (in which event the related waiver will require the approval of
holders of all of the Securities of such Series). No such waiver will impair the
Securityholders' rights with respect to subsequent Servicer Defaults.
Except as otherwise provided in the related Prospectus Supplement, the
"voting interests" of each Series of (i) Notes will be allocated among the
Noteholders or related Security Owners, as the case may be, in accordance with
the unpaid principal amount of the related Notes; (ii) Owner Certificates will
be allocated among the Owner Certificateholders or related Security Owners, as
the case may be, in accordance with the Certificate Balance represented thereby;
and (iii) Grantor Certificates will be allocated among the Grantor
Certificateholders or related Security Owners, as the case may be, in accordance
with the Certificate Balance represented thereby; except that in certain
circumstances any Securities held by the Seller, the Servicer (so long as
Fleetwood Credit is the Servicer) or any of their respective affiliates shall be
excluded from such determination.
AMENDMENT
Amendment of the Trust Agreements and Pooling and Servicing Agreements.
Unless otherwise specified in the related Prospectus Supplement, each Trust
Agreement and Pooling and Servicing Agreement may be amended without the consent
of the related Owner Certificateholders or Grantor Certificateholders, as the
case may be, to cure any ambiguity, correct or supplement any provision therein
which may be inconsistent with any other provision therein, to add any other
provisions with respect to matters or questions arising under such agreement
which are not inconsistent with the provisions thereof, to add or provide for
any credit enhancement for any class of Securities of the related Series or to
permit certain changes with respect to the amount required to be maintained on
deposit in the Reserve Fund or any Servicer Letter of Credit, if any; provided,
that any such action will not, in the opinion of counsel satisfactory to the
related Owner Trustee or Grantor Trustee, as the case may be, materially and
adversely affect the interests of any such Securityholder; and provided further,
that in the case of a change with respect to the amount required to be
maintained on deposit in any Reserve Fund or Servicer Letter of Credit the Owner
Trustee or the Grantor Trustee, as the case may be, receives a letter from each
applicable Rating Agency to the effect that its then-current rating on
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any class of Securities of the related Series will not be qualified, reduced or
withdrawn due to such amendment.
Unless otherwise specified in the related Prospectus Supplement, each Trust
Agreement and Pooling and Servicing Agreement may also be amended from time to
time with the consent of the holders of Owner Certificates or Grantor
Certificates, as the case may be, evidencing not less than 51% of the voting
interests thereof, voting together as a single class, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of such agreement or of modifying in any manner the rights of the related
Securityholders of each class of such Series; provided, that no such amendment
may (i) except as described above, increase or reduce in any manner the amount
of or accelerate or delay the timing of collections of payments on or in respect
of the Receivables or distributions on the Notes or the Certificates or (ii)
reduce the aforesaid percentage of the voting interests of which the holders of
any class of Securities of such Series are required to consent to any such
amendment, without the consent of the holders of all of the relevant class of
Securities.
Amendment of the Indentures. Unless otherwise specified in the related
Prospectus Supplement with respect to a Series of Notes, each Owner Trust and
related Indenture Trustee (on behalf of such Owner Trust) may, without consent
of the related Noteholders, enter into one or more supplemental indentures for
any of the following purposes: (i) to correct or amplify the description of the
collateral or to add additional collateral; (ii) to provide for the assumption
of the Notes and the Indenture obligations by a permitted successor to the Owner
Trust; (iii) to add additional covenants for the benefit of the related
Noteholders and Owner Certificateholders, or to surrender any rights or powers
conferred upon the Owner Trust; (iv) to convey, transfer, assign, mortgage or
pledge any property to the Indenture Trustee; (v) to cure any ambiguity or
correct or supplement any provision in the Indenture or in any supplemental
indenture which may be inconsistent with any other provision in the Indenture,
any supplemental indenture or any Transfer and Servicing Agreement or certain
other agreements, provided that such action shall not adversely affect the
holders of the Notes; (vi) to provide for the acceptance of the appointment of a
successor Indenture Trustee or to add to or change any of the provisions of the
Indenture as shall be necessary and permitted to facilitate the administration
by more than one trustee; (vii) to modify, eliminate or add to the provisions of
the Indenture in order to comply with the Trust Indenture Act of 1939, as
amended; and (viii) to add any provisions to, change in any manner, or eliminate
any of the provisions of, the Indenture or modify in any manner the rights of
Noteholders under such Indenture; provided that any action specified in clause
(viii) shall not, as evidenced by any opinion of counsel, adversely affect in
any material respect the interests of any related Noteholder unless such
Noteholder's consent is otherwise obtained as described below.
Unless otherwise specified in the related Prospectus Supplement with
respect to a Series of Notes, each Owner Trust and related Indenture Trustee (on
behalf of such Owner Trust) may, with the consent of the Holders of the related
Notes evidencing not less than a majority of the voting interests thereof,
voting together as a single class, enter into one or more supplemental
indentures for the purpose of 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 the Holders of the related Notes
thereunder; provided, however, that no such supplemental indenture shall without
the consent of the holder of each such outstanding Note affected thereby, among
other things: (i) change the due date of any installment of principal of or
interest on any such Note or reduce the principal amount thereof, the interest
rate specified thereon (or the method by which such interest is calculated) or
the redemption price with respect thereto or change any place of payment where
or the coin or currency in which any such Note or any interest thereon is
payable; (ii) impair the right to institute suit for the enforcement of certain
provisions of the related Indenture regarding payment; (iii) reduce the
percentage of the aggregate amount of the outstanding Notes of such Series, the
consent of the holders of which is required for any such supplemental indenture
or the consent of the holders of which is required for any waiver of compliance
with certain provisions of the related Indenture or of certain defaults
thereunder and their consequences as provided for in such Indenture; (iv) modify
or alter the provisions of the related Indenture regarding the voting of Notes
held by the applicable Owner Trust, any other obligor on such Notes, the Seller
or any of their respective affiliates; (v) reduce the percentage of the voting
interests of such Notes, the consent of the holders of which is required to
direct the related Indenture Trustee to sell or liquidate the
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Receivables if the proceeds of such sale would be insufficient to pay the
principal amount and accrued but unpaid interest on the outstanding Notes of
such Series; (vi) decrease the percentage of the voting interests of such Notes
required to amend the provisions of the related Indenture which specify the
applicable percentage of voting interests of the Notes of such Series necessary
to amend such Indenture or certain other related agreements; or (vii) permit the
creation of any lien ranking prior to or on a parity with the lien of the
related Indenture with respect to any of the 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.
LIST OF SECURITYHOLDERS
Unless otherwise provided in the related Prospectus Supplement, upon the
written request of the Servicer, the related Owner Trustee, Indenture Trustee or
Grantor Trustee (or a registrar appointed thereby), as registrar of a class of
Securities, will provide to the Servicer within 15 days after receipt of such
request, a list of the names and addresses of all Securityholders of such Class.
In addition, three or more holders of such Securities or holders of Securities
evidencing not less than 25% of the voting interests of such class, upon
compliance by such Securityholders with certain provisions of the related Trust
Agreement, Indenture or Pooling and Servicing Agreement may request that such
registrar afford such Securityholders access during business hours to the
current list of Securityholders of Securities of the related Series for purposes
of communicating with other Securityholders with respect to their rights under
such Trust Agreement, Indenture or Pooling and Servicing Agreement.
Unless otherwise provided in the related Prospectus Supplement, each Trust
Agreement, Indenture and Pooling and Servicing Agreement will not provide for
the holding of any annual or other meetings of Securityholders.
OWNER TRUST; INSOLVENCY EVENT
Unless otherwise provided in the related Prospectus Supplement, with
respect to any Owner Trust, if an Insolvency Event occurs with respect to the
Seller, the Receivables comprising the related Receivables Pool will be
liquidated and such Owner Trust will be terminated 90 days after the date of
such Insolvency Event, unless, before the end of such period, the Owner Trustee
shall have received written instructions from (i) holders of the Owner
Certificates representing more than 51% of the voting interests thereof, voting
together as a single class, and (ii) holders of Notes representing more than 51%
of the voting interests thereof, voting together as a single class, to the
effect that each such party disapproves of the liquidation of such Receivables
and termination of such Owner Trust. Promptly after the occurrence of an
Insolvency Event with respect to the Seller, notice thereof is required to be
given to the related Owner Securityholders; provided, that any failure to give
such notice will not prevent or delay termination of such Owner Trust. Upon any
such termination of an Owner Trust, the related Owner Trustee shall direct the
related Indenture Trustee promptly to sell the assets of such Owner Trust (other
than the Certificate Distribution Account and any other Trust Account relating
solely to the Owner Certificates of such Series) in a commercially reasonable
manner and on commercially reasonable terms. The proceeds from any such sale,
disposition or liquidation of the Receivables of such Owner Trust will be
treated as collections on such Receivables and deposited in the related
Collection Account. With respect to any Owner Trust, if the proceeds from the
liquidation of the related Receivables and any amounts on deposit in the related
Trust Accounts are not sufficient to pay the related Notes and Owner
Certificates in full, the amount of principal returned to the holders thereof
will be reduced in the manner provided in the related Trust Agreement and
Indenture and some or all of the related Owner Securityholders will incur a
loss.
With respect to each Owner Trust, each Trust Agreement will provide that
the Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy with respect to the related Owner Trust without the unanimous prior
approval of all related Owner Certificateholders (including the Seller) and the
delivery to such Owner Trustee of a certificate certifying that each such Owner
Certificateholder reasonably believes that such Owner Trust is insolvent.
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TERMINATION
Unless otherwise specified in the related Prospectus Supplement, the
obligations of the Servicer, the Seller and any Owner Trustee, Indenture Trustee
or Grantor Trustee with respect to the related Securityholders pursuant to the
related Trust Agreement, Indenture or Pooling and Servicing Agreement, as the
case may be, will terminate upon the earliest to occur of (i) the maturity or
other liquidation of the last Receivable in the related Receivables Pool and the
disposition of any amounts received upon liquidation of any property remaining
in the related Trust, (ii) the payment to such Securityholders of all amounts
required to be paid to them pursuant to such agreement and (iii) the occurrence
of either event described below.
Unless otherwise specified in the related Prospectus Supplement, in order
to avoid excessive administrative expenses, the Seller or the Servicer (or any
successor to the Servicer) will be permitted at its option to purchase from any
Trust all remaining Receivables in the related Receivables Pool at a price equal
to the aggregate Repurchase Amounts for the Receivables (including Defaulted
Receivables), plus the appraised value of any other property then held by such
Trust (less liquidation expenses), on any Distribution Date following a Record
Date as of which the related Pool Balance is less than or equal to 10% of the
sum of the Original Pool Balance and, with respect to any Trust as to which a
Pre-Funding Account has been established, the aggregate principal balance of all
Subsequent Receivables conveyed to such Trust as of the related Subsequent
Cutoff Dates. In the event that both the Seller and the Servicer, or any
successor to the Servicer, elect to purchase the Receivables, the party first so
notifying the related Owner Trustee or Grantor Trustee (based on such Trustee's
receipt of such notice) shall be permitted to purchase the Receivables.
If and to the extent provided in the related Prospectus Supplement, within
ten days following a Record Date as of which the related Pool Balance is less
than or equal to the percentage specified in such Prospectus Supplement of the
sum of the Original Pool Balance and, with respect to any Trust as to which a
Pre-Funding Account has been established, the aggregate principal balance of all
Subsequent Receivables conveyed to such Trust as of the related Subsequent
Cutoff Dates, the related Owner Trustee or Grantor Trustee, as the case may be,
shall solicit bids for the purchase of the Receivables remaining in such Trust.
In the event that satisfactory bids are received as described below, the sale
proceeds will be distributed to Securityholders on the Payment Date or
Distribution Date specified in the related Prospectus Supplement. Any purchaser
of the Receivables must agree to the continuation of Fleetwood Credit as
Servicer on terms substantially similar to those in the related Sale and
Servicing Agreement or Pooling and Servicing Agreement, as the case may be.
The related Owner Trustee or Grantor Trustee, as the case may be, must
solicit bids for the purchase of the Receivables and other property then held in
such Trust in the manner and subject to the terms and conditions set forth in
the related Prospectus Supplement. If such Trustee receives satisfactory bids as
described in such Prospectus Supplement, then the Receivables remaining in such
Trust will be sold to the highest bidder and the Securities of such Series shall
be retired on such Distribution Date. If any of the foregoing conditions are not
met, such Trustee shall decline to consummate such sale and shall not be under
any obligation to solicit any further bids or otherwise negotiate any further
sale of Receivables remaining in such Trust. In such event, however, the
applicable Trustee may from time to time solicit bids in the future for the
purchase of such Receivables upon the same terms described above.
The related Owner Trustee and Indenture Trustee or Grantor Trustee, as the
case may be, will give written notice of termination to each related
Securityholder of record. The final distribution to each related Securityholder
will be made only upon surrender and cancellation of such holder's Securities at
the office or agency of such Trustee specified in the notice of termination. Any
funds remaining in such Trust, after such Trustee has taken certain measures to
locate a Securityholder and such measures have failed, will be distributed to
the United Way.
As more fully described in the related Prospectus Supplement, in the case
of (i) an Owner Trust, any outstanding Notes of the related Series will be
redeemed concurrently with either of the events specified above, and the
subsequent distribution to the related Owner Certificateholders of all amounts
required to be distributed to them pursuant to the related Trust Agreement will
effect early retirement of the Owner Certificates of such Series and (ii) a
Grantor Trust, the distribution to the related Grantor Certificateholders of all
amounts required to be distributed to them pursuant to the related Pooling and
Servicing Agreement will effect early retirement of the Grantor Certificates of
such Series.
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PAYMENT IN FULL OF NOTES
Except as otherwise provided in the related Prospectus Supplement, 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 Owner 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.
THE TRUSTEES
The Grantor Trustee or Owner Trustee and Indenture Trustee, as the case may
be, for each Trust, in each case together with the address of its Corporate
Trust Office, will be identified in the related Prospectus Supplement. The
liability of the Owner Trustee or Grantor Trustee in connection with the
issuance and sale of the related Series of Securities will be limited solely to
the express obligations of such Trustee set forth in the related Transfer and
Servicing Agreement. The liability of the related Indenture Trustee in
connection with the issuance and sale of the Notes of any Series will be limited
solely to the express obligations of such Indenture Trustee set forth in the
related Indenture. A Trustee may resign at any time, in which event the
Servicer, or its successor, will be obligated to appoint a successor trustee.
The Servicer may also remove the Owner Trustee or Grantor Trustee, as the case
may be, and the Administrator may remove the Indenture Trustee, in each case if
such Trustee becomes insolvent or ceases to be eligible to continue as trustee
under the related Trust Agreement, Pooling and Servicing Agreement or Indenture,
as the case may be. In such event, the Servicer or Administrator, as the case
may be, 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.
Unless otherwise provided in the related Prospectus Supplement, each
Trustee and any of its affiliates may hold Securities in their own names or as
pledgees. For the purpose of meeting the legal requirements of certain
jurisdictions, the Servicer and the related Owner Trustee, Indenture Trustee or
Grantor Trustee, as the case may be, acting jointly (or in some instances, the
related Owner Trustee and Indenture Trustee or Grantor Trustee acting alone)
will have the power to appoint co-trustees or separate trustees of all or any
part of a Trust. In the event of such an appointment, all rights, powers, duties
and obligations conferred or imposed upon such Trustee by the related Indenture
or Transfer and Servicing Agreements will be conferred or imposed upon such
trustee and such separate trustee or co-trustee jointly, or, in any jurisdiction
in which such trustee will be incompetent or unqualified to perform certain
acts, singly upon such separate trustee or co-trustee who will exercise and
perform such rights, powers, duties and obligations solely at the direction of
such trustee.
Unless otherwise specified in the related Prospectus Supplement, each Trust
Agreement, Indenture and Pooling and Servicing Agreement will provide that the
Servicer will pay the fees of the related Owner Trustee, Indenture Trustee or
Grantor Trustee. Unless otherwise specified in the related Prospectus
Supplement, each Sale and Servicing Agreement and Pooling and Servicing
Agreement will further provide that the related Owner Trustee or Grantor Trustee
will be entitled to indemnification by the Servicer for, and will be held
harmless against, any loss, liability or expense incurred by such trustee not
resulting from is own willful misfeasance, bad faith or negligence (other than
by reason of a breach of any of its representations or warranties set forth in
such agreement).
DUTIES OF THE TRUSTEES
Unless otherwise provided in the related Prospectus Supplement, each
Trustee will make no representations as to the validity or sufficiency of any
Trust Agreement, Indenture or Pooling and Servicing Agreement, the Securities
issued pursuant thereto (other than the execution and authentication thereof),
or of any Receivables or related documents, and will not be accountable for the
use or application by the Seller or the Servicer of any funds paid to the Seller
or the Servicer in respect of such Securities or the related Receivables, or the
investment of any monies by the Servicer before such monies are deposited into
the related Collection Account. The Trustees will not independently verify the
existence or characteristics of the Receivables. If no Event of Default or
Servicer Default has occurred and is continuing, each Trustee will be required
to perform
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only those duties specifically required of it under the related Indenture or
Transfer and Servicing Agreement. Generally those duties will be limited to the
receipt of the various certificates and reports or other instruments required to
be furnished to such Trustee under such agreements, in which case it will only
be required to examine them to determine whether they conform to the
requirements of such agreements. No Trustee will be charged with knowledge of a
failure by the Servicer to perform its duties under the relevant agreements
which failure constitutes an Event of Default or a Servicer Default unless such
Trustee obtains actual knowledge of such failure as specified in such
agreements.
Unless otherwise provided in the related Prospectus Supplement, no Trustee
will be under any obligation to exercise any of the rights or powers vested in
it by the related Indenture or Transfer and Servicing Agreement or to make any
investigation of matters arising thereunder or to institute, conduct or defend
any litigation thereunder or in relation thereto at the request, order or
direction of any of the relevant Securityholders, unless such Securityholders
have offered to such trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby. No
Securityholder will have any right under any such agreement to institute any
proceeding with respect to such agreement, unless such holder previously has
given to such Trustee written notice of default and (i) the default arises from
the Servicer's failure to remit payments when due or (ii) the holders of
Securities evidencing not less than 25% of the voting interests of all of the
Securities of such Series, voting together as a single class, have made written
request upon such Trustee to institute such proceeding in its own name as
Trustee thereunder and have offered to such Trustee reasonable indemnity and
such Trustee for 30 days has neglected or refused to institute any such
proceedings.
OWNER TRUST; SELLER LIABILITY
Unless otherwise provided in the related Prospectus Supplement, each Trust
Agreement will require the Seller to agree to be liable directly to an injured
party for the entire amount of any losses, claims, damages or liabilities (other
than those incurred by a Securityholder in the capacity of an investor with
respect to the related Owner 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 Seller
was a general partner.
ADMINISTRATION AGREEMENT
Unless otherwise provided in the related Prospectus Supplement, Fleetwood
Credit, in its capacity as administrator (the "Administrator"), will enter into
an agreement (each, an "Administration Agreement") with each Owner 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 other administrative obligations required by the related Indenture.
Unless otherwise specified in the related Prospectus Supplement, as compensation
for the performance of the Administrator's obligations under the applicable
Administration Agreement and as reimbursement for its expenses related thereto,
the Administrator will be entitled to a monthly administration fee (the
"Administration Fee"), which fee will be paid by the Servicer.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
GENERAL
The transfer of Receivables to any Trust, the perfection of such Trust's
security interest in such Receivables and the enforcement of rights to realize
on the related Financed Vehicles as collateral for such Receivables are subject
to a number of federal and state laws, including the UCC as in effect in various
states. The Servicer and the Seller will take such action as is required to
perfect the rights of each Owner Trustee or Grantor Trustee, on behalf of the
related Trust, in the related Receivables. If, inadvertently or otherwise,
another party purchases (including the taking of a security interest in) the
Receivables transferred to any Trust for new value in the ordinary course of its
business, without actual knowledge of the related Trust's interests therein, and
takes possession of such Receivables, such purchaser would acquire an interest
in such Receivables superior to the interest of such Trust.
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SECURITY INTERESTS IN THE FINANCED VEHICLES
General. Retail installment sale contracts such as the Receivables evidence
the credit sale of recreational vehicles by dealers to obligors; the contracts
also constitute personal property security agreements and include grants of
security interests in the related recreational vehicles under the UCC. In most
states, perfection rules relating to security interests in recreational vehicles
are generally governed under state certificate of title statutes or by the
vehicle registration laws of the state in which each recreational vehicle is
located. In states which have adopted the Uniform Motor Vehicle Certificate of
Title and Anti-Theft Act, security interests in recreational vehicles may be
perfected either by notation of the secured party's lien on the certificate of
title or by delivery of the certificate of title and payment of a fee to the
state motor vehicle authority, depending on particular state law. In states that
do not have a certificate of title statute or that make no provision for
notation of a security interest on a certificate of title, perfection is usually
accomplished by filing pursuant to the provisions of the UCC. In most states, a
security interest in a recreational vehicle is perfected by notation of the
secured party's lien on the vehicle's certificate of title. Each Receivable will
prohibit the sale or transfer of the related Financed Vehicle without the
consent of Fleetwood Credit.
All retail installment sale contracts that Fleetwood Credit originates or
acquires from Dealers name Fleetwood Credit as obligee or assignee and as the
secured party. Fleetwood Credit also takes all actions necessary under the laws
of the state in which the related recreational vehicles are located to perfect
its security interest in such recreational vehicles, including, where
applicable, having a notation of its lien recorded on the related certificate of
title or delivering the required documents and fees, and obtaining possession of
the certificate of title (if possible).
Perfection. Pursuant to each Receivables Purchase Agreement, Fleetwood
Credit will sell and assign its security interests in the Financed Vehicles
securing Receivables that will comprise a Receivables Pool to the Seller and,
pursuant to the related Transfer and Servicing Agreements, the Seller will
assign its security interests in such Financed Vehicles to the related Owner
Trustee or Grantor Trustee. However, because of the administrative burden and
expense, neither Fleetwood Credit, the Seller nor any Trustee will amend any
certificate of title to identify such Trustee as the new secured party on the
certificates of title relating to such Financed Vehicles. However, UCC financing
statements with respect to the transfer of Fleetwood Credit's security interest
in such Financed Vehicles to the Seller and the transfer to such Trustee of the
Seller's security interest in the Financed Vehicles will be filed. In addition,
the Servicer will continue to hold any certificates of title relating to the
Financed Vehicles in its possession as custodian for each Trustee pursuant to
the related Sale and Servicing Agreement or Pooling and Servicing Agreement. See
"Certain Information Regarding the Securities -- Sale and Assignment of the
Receivables".
A security interest in a motor vehicle registered in the State of
California (in which, except as otherwise provided in the related Prospectus
Supplement, the greatest number of Financed Vehicles will be registered) may be
perfected only by depositing with the Department of Motor Vehicles a properly
endorsed certificate of title for the vehicle showing the secured party as legal
owner thereon or if the vehicle has not been previously registered, an
application in usual form for an original registration together with an
application for registration of the secured party as legal owner. However, under
the California Vehicle Code, a transferee of a security interest in a motor
vehicle is not required to reapply to the Department of Motor Vehicles for a
transfer of registration when the interest of the transferee arises from the
transfer of a security agreement by the legal owner to secure payment or
performance of an obligation. Accordingly, under California law, an assignment
such as that under each of the related Receivables Purchase Agreement and the
related Transfer and Servicing Agreement is an effective conveyance of Fleetwood
Credit's and the Seller's security interest, as the case may be, without such
re-registration, and under the Receivables Purchase Agreement the Seller will
succeed to Fleetwood Credit's, and under the related Transfer and Servicing
Agreement the related Trustee will succeed to the Seller's rights as secured
party. With respect to Financed Vehicles registered in other states, such
Trustee may not have a first perfected security interest in such Financed
Vehicles.
In most states, assignments such as those under the related Receivables
Purchase Agreement and Transfer and Servicing Agreements are an effective
conveyance of a security interest without amendment of any lien noted on a
vehicle's certificate of title, and the assignee succeeds thereby to the
assignor's rights as
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secured party. Although re-registration of the recreational vehicle is not
necessary to convey a perfected security interest in the related Financed
Vehicles to a Trust, because the related Trust will not be listed as legal owner
on the certificates of title to such Financed Vehicles, a Trust's security
interest could be defeated through fraud or negligence. However, in the absence
of fraud, forgery or administrative error, the notation of Fleetwood Credit's
lien on the certificates of title will be sufficient to protect a Trust against
the rights of subsequent purchasers of a Financed Vehicle or subsequent
creditors who take a security interest in a Financed Vehicle. In each
Receivables Purchase Agreement, Fleetwood Credit will represent and warrant, and
in each Transfer and Servicing Agreement, the Seller will represent and warrant
that it has, or has taken all action necessary to obtain, a perfected security
interest in each related Financed Vehicle. If there are any Financed Vehicles
securing a Receivable in the related Receivables Pool as to which Fleetwood
Credit failed to obtain a first-priority perfected security interest, a Trust's
security interest would be subordinate to, among others, subsequent purchasers
of such Financed Vehicles and holders of first-priority perfected security
interests therein. Such a failure, however, would constitute a breach of
Fleetwood Credit's representations and warranties under the related Receivables
Purchase Agreement and the Seller's representations and warranties under the
related Transfer and Servicing Agreements and, pursuant to the related Transfer
and Servicing Agreements, the Seller would be required to repurchase such
Receivable from the Trust and Fleetwood Credit would be required to purchase
such Receivable from the Seller, in each case unless the breach were cured. See
"Certain Information Regarding the Securities -- Sale and Assignment of the
Receivables". The Seller will assign its rights under each Receivables Purchase
Agreement to the related Trustee.
Continuity of Perfection. Under the laws of most states, a perfected
security interest in a recreational vehicle continues for four months after the
vehicle is moved to a new state from the one in which it is initially registered
and thereafter until the owner re-registers such recreational vehicle in the new
state. A majority of states require surrender of a certificate of title to
re-register a vehicle. In those states that require a secured party to hold
possession of the certificate of title to maintain perfection of the security
interest, the secured party would learn of the re-registration through the
request from the obligor under the related installment sale contract to
surrender possession of the certificate of title. In the case of vehicles
registered in states providing for the notation of a lien on the certificate of
title but not possession by the secured party, the secured party would receive
notice of surrender from the state of re-registration if the security interest
is noted on the certificate of title. Thus, the secured party would have the
opportunity to reperfect its security interest in the vehicles in the state of
relocation. However, these procedural safeguards will not protect the secured
party if through fraud, forgery or administrative error, the debtor somehow
procures a new certificate of title that does not list the secured party's lien.
Additionally, in states that do not require a certificate of title for
registration of a vehicle, re-registration could defeat perfection. In the
ordinary course of servicing the Receivables, Fleetwood Credit will take steps
to effect re-perfection upon receipt of notice of re-registration or information
from the Obligor as to relocation. Similarly, when an Obligor sells a Financed
Vehicle and the purchaser thereof attempts to re-register such vehicle,
Fleetwood Credit must surrender possession of the certificate of title or will
receive notice as a result of having its lien noted thereon before such
re-registration can be effected. Accordingly, in such states, Fleetwood Credit
will have an opportunity to require satisfaction of the related Receivable
before its lien is released. Under each Sale and Servicing Agreement and Pooling
and Servicing Agreement, the Servicer will be obligated to take appropriate
steps, at its own expense, to maintain perfection of a security interest in the
related Financed Vehicles.
Priority of Certain Liens by Operation of Law. Under the laws of most
states, liens for repairs performed on a recreational vehicle and liens for
unpaid taxes take priority over even a first perfected security interest in such
vehicle. The Internal Revenue Code of 1986, as amended, also grants priority to
certain federal tax liens over the lien of a secured party. The laws of certain
states and federal law permit the confiscation of motor vehicles by governmental
authorities under certain circumstances if used in unlawful activities, which
may result in the loss of a secured party's perfected security interest in a
confiscated recreational vehicle. Fleetwood Credit will represent and warrant to
the Seller in each Receivables Purchase Agreement and the Seller will represent
and warrant to the related Trustee in each Transfer and Servicing Agreement
that, as of the Closing Date or the related Transfer Date, as the case may be,
the security interest in each related Financed Vehicle is prior to all other
present liens upon and security interests in such Financed Vehicle. However,
liens for repairs or taxes could arise at any time during the term of a
Receivable. No notice need be given to the related
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Trustee or Securityholders in the event such a lien or confiscation arises. Any
such lien or confiscation arising after the Closing Date will not give rise to
Fleetwood Credit's repurchase obligation under any Receivables Purchase
Agreement or the Seller's repurchase obligation under any Transfer and Servicing
Agreement.
REPOSSESSION
In the event of default by an obligor, the holder of the related retail
installment sale contract has all the remedies of a secured party under the UCC,
except where specifically limited by other state laws. The UCC remedies of a
secured party include the right to repossession by self-help means, unless such
means would constitute a breach of the peace. Self-help repossession is the
method employed by the Servicer in most cases and is accomplished simply by
taking possession of the related recreational vehicle. In cases where the
obligor objects or raises a defense to repossession, or if otherwise required by
applicable state law, a court order must be obtained from the appropriate state
court, and the vehicle must then be recovered in accordance with that order. In
some jurisdictions, the secured party is required to notify the debtor of the
default and the intent to repossess the collateral and be given a time period
within which to cure the default prior to repossession. Generally, such right of
cure may only be exercised on a limited number of occasions during the term of
the related contract. In most states, under certain circumstances after the
vehicle has been repossessed, the obligor may reinstate the related contract by
paying the delinquent installments and other amounts due.
NOTICE OF SALE; REDEMPTION RIGHTS
In the event of default by the obligor, some jurisdictions (not including
California) require that the obligor be notified of the default and be given a
time period within which to cure the default prior to repossession. Generally,
this right of cure may only be exercised on a limited number of occasions during
the term of the related contract.
The UCC and other state laws require the secured party to provide the
obligor with reasonable notice of the date, time and place of any public sale
and/or the date after which any private sale of the collateral may be held. The
obligor has the right to redeem the collateral prior to actual sale by paying
the secured party the unpaid principal balance of the obligation, accrued
interest thereon plus reasonable expenses for repossessing, holding and
preparing the collateral for disposition and arranging for its sale, plus, in
some jurisdictions, reasonable attorneys' fees or in some states, by payment of
delinquent installments or the unpaid principal balance of the related
obligation.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the Financed Vehicles generally will be applied
first to the expenses of resale and repossession and then to the satisfaction of
the related indebtedness. While some states impose prohibitions or limitations
on deficiency judgments if the net proceeds from resale do not cover the full
amount of the indebtedness, a deficiency judgment can be sought in certain other
states that do not prohibit or limit such judgments. In addition to the notice
requirement, the UCC requires that every aspect of the sale or other
disposition, including the method, manner, time, place and terms, be
"commercially reasonable". Generally, courts have held that when a sale is not
"commercially reasonable", the secured party loses its right to a deficiency
judgment. In addition, the UCC permits the debtor or other interested party to
recover for any loss caused by noncompliance with the provisions of the UCC.
Also, prior to a sale, the UCC permits the debtor or other interested person to
restrain the secured party from disposing of the collateral if it is established
that the secured party is not proceeding in accordance with the "default"
provisions under the UCC. However, the deficiency judgment would be a personal
judgment against the obligor for the shortfall, and a defaulting obligor can be
expected to have very little capital or sources of income available following
repossession. Therefore, in many cases, it may not be useful to seek a
deficiency judgment or, if one is obtained, it may be settled at a significant
discount or be uncollectible.
Occasionally, after the resale of a recreational vehicle and payment of all
related expenses and indebtedness, there is a surplus of funds. In that case,
the UCC requires the creditor to remit the surplus to
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any holder of a subordinate lien with respect to such vehicle or, if no such
lienholder exists, to the former owner of the vehicle.
CERTAIN BANKRUPTCY CONSIDERATIONS
The Seller has taken steps in structuring the transactions described herein
that are intended to make it unlikely that the voluntary or involuntary
application for relief by Fleetwood Credit under the United States Bankruptcy
Code or similar applicable state laws (collectively, "Insolvency Laws") will
result in consolidation of the assets and liabilities of the Seller with those
of Fleetwood Credit. These steps include the creation of the Seller as a wholly
owned, limited purpose subsidiary pursuant to articles of incorporation
containing certain limitations (including requiring that the Seller must have at
least two "Independent Directors" and restrictions on the nature of the Seller's
business and on its ability to commence a voluntary case or proceeding under any
Insolvency Law without the affirmative vote of a majority of its directors,
including each Independent Director). In addition, to the extent that the Seller
has granted a security interest in any Receivables to a Trust which was validly
perfected before the bankruptcy or insolvency of Fleetwood Credit and which was
not taken or granted in contemplation of insolvency or with the intent to
hinder, delay or defraud Fleetwood Credit or its creditors, such security
interest should not be subject to avoidance, and payments to such Trust with
respect to the Receivables should not be subject to recovery by a creditor or
trustee in bankruptcy of Fleetwood Credit. If, notwithstanding the foregoing,
(i) a court concluded that the assets and liabilities of the Seller should be
consolidated with those of Fleetwood Credit in the event of the application of
applicable Insolvency Laws to Fleetwood Credit or following the bankruptcy or
insolvency of Fleetwood Credit the security interest in certain Receivables
granted by the Seller to a Trustee should be avoided, (ii) a filing were made
under any Insolvency Law by or against the Seller or (iii) an attempt were made
to litigate any of the foregoing issues, delays in payments on the related
Securities and possible reductions in the amount of such payments could occur.
At the time of initial issuance of the Securities of each Series, Arter & Hadden
LLP, special counsel to Fleetwood Credit and the Seller, will render an opinion
which concludes that following the bankruptcy of Fleetwood Credit, a court,
applying the principles set forth in such opinion, should not allow a creditor
or trustee in bankruptcy to consolidate the assets and liabilities of Fleetwood
Credit and the Seller on the basis of any applicable legal theory theretofore
recognized by a court of competent jurisdiction so as to adversely affect the
ultimate payment of all amounts owing under such Securities.
Fleetwood Credit and the Seller will treat each of the transactions
described herein as a separate sale of the Receivables comprising a Receivables
Pool to the Seller, such that the automatic stay provisions of the United States
Bankruptcy Code would not apply to the Receivables in the event that Fleetwood
Credit were to become a debtor in a bankruptcy case. A case decided by the
United States Court of Appeals for the Tenth Circuit in 1993 contains language
to the effect that under the UCC accounts sold by a debtor would remain property
of the debtor's bankruptcy estate, whether or not the sale of accounts was
perfected under the UCC. UCC Article 9 applies to the sale of chattel paper as
well as the sale of accounts and although the Receivables constitute chattel
paper under the UCC rather than accounts, perfection of a security interest in
both chattel paper and accounts may be accomplished by the filing of a UCC-1
financing statement. If, following a bankruptcy of Fleetwood Credit, a court
were to follow the reasoning of the Tenth Circuit reflected in the case
described above, then the Receivables could be included in the bankruptcy estate
of Fleetwood Credit and delays in payments of collections on or in respect of
the Receivables could occur.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related regulations
impose substantial requirements upon creditors and servicers involved in
consumer finance. These laws include the Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Federal Trade Commission Act, the Fair Credit Billing Act,
the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B and Z, the
Soldiers' and Sailors' Relief Act, the Military Reservist Relief Act, state
adaptations of the National Consumer Act and of the Uniform Consumer Credit Code
and state motor vehicle retail installment sales acts, retail installment sales
acts and other similar laws.
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Also, the laws of certain states impose finance charge ceilings and other
restrictions on consumer transactions and require contract disclosures in
addition to those required under federal law. These requirements impose specific
statutory liabilities upon creditors who fail to comply with their provisions.
In some cases, this liability could affect the ability of an assignee such as a
Trustee to enforce consumer finance contracts such as the Receivables.
The so-called "Holder-in-Due-Course Rule" of the Federal Trade Commission
(the "FTC Rule"), has the effect of subjecting any assignee of the seller in a
consumer credit transaction to all claims and defenses which the obligor in the
transaction could assert against the seller of the goods. Liability under the
FTC Rule is limited to the amounts paid by the obligor under the contract, and
the holder of the contract may also be unable to collect any balance remaining
due thereunder from the obligor. The FTC Rule is generally duplicated by the
Uniform Consumer Credit Code, other state statutes or the common law in certain
states. Most of the Receivables will be subject to the requirements of the FTC
Rule. Accordingly, the related Owner Trustee or Grantor Trustee, as holder of
the Receivables comprising a Receivables Pool, will be subject to any claims or
defenses that the purchasers of the related Financed Vehicles may assert against
the seller of such Financed Vehicles. Such claims are limited to a maximum
liability equal to the amounts paid by the Obligor under the related
Receivables.
Under most state vehicle dealer licensing laws, sellers of recreational
vehicles are required to be licensed to sell vehicles at retail sale. In
addition, with respect to used vehicles, the Federal Trade Commission's Rule on
Sale of Used Vehicles requires that all sellers of used vehicles prepare,
complete, and display a "Buyer's Guide" which explains the warranty coverage for
such vehicles. Furthermore, Federal Odometer Regulations promulgated under the
Motor Vehicle Information and Cost Savings Act requires that all sellers of used
vehicles furnish a written statement signed by the seller certifying the
accuracy of the odometer reading. If a seller is not properly licensed or if
either a Buyer's Guide or Odometer Disclosure Statement was not provided to the
purchaser of a Financed Vehicle, the Obligor may be able to assert a defense
against the seller of the Financed Vehicle. If an Obligor on a Receivable were
successful in asserting any such claim or defense, the Servicer would pursue on
behalf of the related Trust any reasonable remedies against the seller or
manufacturer of the vehicle, subject to certain limitations as to the expense of
any such action specified in the related Sale and Servicing Agreement or Pooling
and Servicing Agreement.
Courts have applied general equitable principles to secured parties
pursuing repossession or litigation involving deficiency balances. These
equitable principles may have the effect of relieving an obligor from some or
all of the legal consequences of a default.
In several cases, consumers have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections of the Fourteenth Amendment to the Constitution of the United
States. Courts have generally either upheld the notice provisions of the UCC and
related laws as reasonable or have found that the creditor's repossession and
resale do not involve sufficient state action to afford constitutional
protection to consumers.
Fleetwood Credit will represent and warrant under each Receivables Purchase
Agreement and the Seller will represent and warrant under the related Transfer
and Servicing Agreements that each related Receivable complies with all
requirements of law in all material respects. Accordingly, if an Obligor has a
claim against a Trustee for violation of any law and such claim materially and
adversely affects the interests of the related Securityholders in a Receivable,
such violation would constitute a breach of such representation and warranty
under the related Receivables Purchase Agreement and Transfer and Servicing
Agreements and will create an obligation of Fleetwood Credit and the Seller to
repurchase such Receivable unless the breach is cured. See "Certain Information
Regarding the Securities -- Sale and Assignment of the Receivables".
Any shortfall in payments on or in respect of the Receivables described
under this subheading, to the extent not otherwise covered by a Reserve Fund or
other form of credit enhancement, could result in losses to the holders of the
related Securities.
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OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a creditor to
realize upon collateral or enforce a deficiency judgment. For example, in a
Chapter 13 proceeding under the federal bankruptcy law, a court may prevent a
creditor from repossessing a recreational vehicle, and, as part of the
rehabilitation plan, reduce the amount of the secured indebtedness to the market
value of the recreational vehicle at the time of bankruptcy (as determined by
the court), leaving the party providing financing as a general unsecured
creditor for the remainder of the indebtedness. A bankruptcy court may also
reduce the monthly payments due under the related contract or change the rate of
interest and time of repayment of the indebtedness.
Under the terms of the Soldiers' and Sailors' Relief Act, an Obligor who
enters the military service after the origination of such Obligor's Receivable
(including an Obligor who is a member of the National Guard or is in reserve
status at the time of the origination of the Receivable and is later called to
active duty) may not be charged interest above an annual rate of 6% during the
period of such Obligor's active duty status, unless a court orders otherwise
upon application of the lender. In addition, pursuant to the Military Reservist
Relief Act, under certain circumstances, California residents called into active
duty with the reserves can delay payments on retail installment contracts,
including the Receivables, for a period, not to exceed 180 days, beginning with
the order to active duty and ending 30 days after release. It is possible that
the foregoing could have an effect on the ability of the Servicer to collect
full amounts of interest on certain of the Receivables. In addition, the Relief
Acts impose limitations which would impair the ability of the Servicer to
repossess an affected Receivable during the Obligor's period of active duty
status. Thus, in the event that such a Receivable goes into default, there may
be delays and losses occasioned by the inability to realize upon the related
Financed Vehicle in a timely fashion.
Any shortfall pursuant to either of the two immediately preceding
paragraphs, to the extent not otherwise covered by a Reserve Fund or other form
of credit enhancement, could result in losses to the holders of the related
Securities.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the material federal income tax
consequences of the purchase, ownership and disposition of Securities. This
summary is based upon laws, regulations, rulings and decisions currently in
effect, all of which are subject to change, possibly on a retroactive basis. The
discussion does not deal with all federal tax consequences applicable to all
categories of investors, some of which may be subject to special rules. In
addition, this summary is generally limited to investors who will hold the
Securities as "capital assets" (generally, property held for investment) within
the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended
(the "Code"), and who do not hold the Securities as part of a "straddle", a
"hedge" or a "conversion transaction". Furthermore, no authority exists
concerning the tax treatment of some aspects of the Securities or transactions
similar to those described herein. Accordingly, the ultimate federal income tax
treatment of the Securities may differ from that described below.
Investors should consult their own tax advisors to determine the federal,
state, local and other tax consequences of the purchase, ownership and
disposition of the Securities. 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 federal income tax consequences discussed below, and no
assurance can be given that the IRS will not take contrary positions. Arter &
Hadden LLP, counsel to the Seller, or such other counsel identified in the
related Prospectus Supplement ("Counsel"), has delivered an opinion regarding
the certain federal income tax matters described below and will deliver an
opinion regarding tax matters applicable to each Series of Securities. Such
opinion, however, will not be binding on the IRS or the courts. The opinion of
Counsel will address only those issues specifically identified below as being
covered by such opinion; however, the opinion of Counsel also will state that
additional discussion below accurately sets forth Counsel's advice with respect
to material tax issues.
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TAX CHARACTERIZATION OF OWNER TRUSTS
In connection with the issuance of each Series of Owner Securities, Counsel
will deliver its opinion that the Owner Trust will not be classified as an
association (or publicly traded partnership) taxable as a corporation for
federal income tax purposes. This opinion will be based on, among other things,
the assumption that the terms of the Trust Agreement and related documents will
be complied with, and on Counsel's conclusions that (i) the Owner Trust will 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 income of the
Owner Trust will exempt it from the rule that certain publicly traded
partnerships are taxable as corporations.
If the Owner Trust were taxable as a corporation for federal income tax
purposes, it would be subject to corporate income tax on its taxable income. The
Owner Trust's taxable income would include all its income on the related
Receivables, which may be reduced by its interest expense on the Notes. Any such
corporate income tax could materially reduce cash available to make payments on
the Notes and distributions on the Owner Certificates, and Owner
Certificateholders could be liable for any such tax that is unpaid by the Owner
Trust.
TAX CONSEQUENCES TO HOLDERS OF THE NOTES
Treatment of the Notes as Indebtedness. The Seller will agree, and the
Noteholders will agree by their purchase of Notes, to treat the Notes as debt
for federal income tax purposes. Counsel will, except as otherwise provided in
the related Prospectus Supplement, render an opinion that the Notes will be
classified as debt for federal income tax purposes. The discussion below assumes
this characterization of the Notes is correct.
OID, Indexed Securities, etc. The discussion below assumes that all
payments on the Notes are denominated in U.S. dollars, and that the Notes are
not Indexed Securities or Strip Notes. Moreover, the discussion assumes that the
interest formula for the Notes meets the requirements for "qualified stated
interest" under Treasury regulations ("OID Regulations") relating to original
issue discount ("OID"), and that any OID on the Notes (i.e., any excess of the
principal amount of the Notes over their issue price) does not exceed a de
minimis amount (i.e., 1/4% of their principal amount multiplied by the number
of full years included in their term), all within the meaning of such OID
Regulations. If these conditions are not satisfied with respect to a Series of
Notes, additional tax considerations with respect to such Notes will be
disclosed in the applicable Prospectus Supplement.
Interest Income on the Notes. Based on the above assumptions, except as
discussed in the following paragraph, the Notes will not be considered issued
with OID. The stated interest thereon will be taxable to a Noteholder as
ordinary interest income when received or accrued in accordance with such
Noteholder's method of tax accounting. Under the OID regulations, a holder of a
Note issued with a de minimis amount of OID must include such OID in income, on
a pro rata basis, as principal payments are made on the Note. A purchaser who
buys a Note for more or less than its principal amount will generally be
subject, respectively, to the premium amortization or market discount rules of
the Code.
However, because a failure to pay interest currently on the Notes is not a
default and the Notes do not contain terms and conditions that make the
likelihood of late payment or nonpayment a remote contingency, under the OID
Regulations the Notes might be viewed as having been issued with OID. This
interpretation would not significantly affect accrual basis holders of Notes,
although it would somewhat accelerate taxable income to cash basis holders by in
effect requiring them to report interest income on the accrual basis.
A holder of a Note that has a fixed maturity date of not more than one year
from the issue date of such Note (a "Short-Term Note") may be subject to special
rules. An accrual basis holder of a Short-Term Note (and certain cash method
holders, including regulated investment companies, as set forth in Section 1281
of the Code) generally would be required to report interest income as interest
accrues on a straight-line basis over the term of each interest period. Other
cash basis holders of a Short-Term Note would, in general, be required to report
interest income as interest is paid (or, if earlier, upon the taxable
disposition of the Short-Term Note). However, a cash basis holder of a
Short-Term Note reporting interest income as it is paid may
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be required to defer a portion of any interest expense otherwise deductible on
indebtedness incurred to purchase or carry the Short-Term Note until the taxable
disposition of the Short-Term Note. A cash basis taxpayer may elect under
Section 1281 of the Code to accrue interest income on all nongovernment debt
obligations with a term of one year or less, in which case the taxpayer would
include interest on the Short-Term Note in income as it accrues, but would not
be subject to the interest expense deferral rule referred to in the preceding
sentence. Certain special rules apply if a Short-Term Note is purchased for more
or less than its principal amount.
Sale or Other Disposition. If a Noteholder sells a Note, the holder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the holder's adjusted tax basis in the Note. The
adjusted tax basis of a Note to a particular Noteholder will equal the holder's
cost for the Note, increased by any market discount, acquisition discount, OID
and gain previously included by such Noteholder in income with respect to the
Note and decreased by the amount of bond premium (if any) previously amortized
and by the amount of principal payments previously received by such Noteholder
with respect to such Note. Any such gain or loss will be capital gain or loss if
the Note was held as a capital asset, except for gain representing accrued
interest and accrued market discount not previously included in income. Capital
losses generally may be used only to offset capital gains. Net capital gains of
individuals are subject to differing tax rates depending on the holding period
of the Note.
Foreign holders. Interest payments made (or accrued) to a Noteholder who is
a nonresident alien, foreign corporation or other non-United States person (a
"foreign person") generally will be considered "portfolio interest", and
generally will not be subject to United States federal income tax and
withholding tax, if the interest is not effectively connected with the conduct
of a trade or business within the United States by the foreign person and the
foreign person (i) is not actually or constructively a "10 percent shareholder"
of the Owner Trust or the Seller (including a holder of 10% of the outstanding
Owner Certificates of the related Series) or a "controlled foreign corporation"
with respect to which the Owner Trust or the Seller is a "related person" within
the meaning of the Code and (ii) provides the Owner Trustee or other person who
is otherwise required to withhold U.S. tax with respect to the Notes with an
appropriate statement (on Form W-8 or a similar form), signed under penalty of
perjury, certifying that the beneficial owner of the Note is a foreign person
and providing the foreign person's name and address. If a Note is held through a
securities clearing organization or certain other financial institutions, the
organization or institution may provide the relevant signed statement to the
withholding agent; in that case, however, the signed statement must be
accompanied by a Form W-8 or substitute form provided by the foreign person that
owns the Note. If such interest is not portfolio interest, then it will be
subject to United States federal income and withholding tax at a rate of 30%,
unless reduced or eliminated pursuant to an applicable tax treaty.
Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Note by a foreign person will be exempt from United
States federal income and withholding tax, provided that (i) such gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and (ii) in the case of an individual foreign
person, the foreign person is not present in the United States for 183 days or
more in the taxable year.
Backup Withholding. Each holder of a Note (other than an exempt holder such
as a corporation, tax exempt organization, qualified pension and profit-sharing
trust, individual retirement account or nonresident alien who provides
certification as to status as a nonresident) will be required to provide, under
penalty of perjury, a certificate containing the holder's name, address, correct
federal taxpayer identification number and a statement that the holder is not
subject to backup withholding. Should a nonexempt Noteholder fail to provide the
required certification, the Owner Trust will be required to withhold 31% of the
amount otherwise payable to the holder, and remit the withheld amount to the IRS
as a credit against the holder's federal income tax liability.
Possible Alternative Treatments of the Notes. If, contrary to the opinion
of Counsel, the IRS successfully asserted that one or more of the Notes did not
represent debt for federal income tax purposes, the Notes might be treated as
equity interests in the Owner Trust. If so treated, the Owner Trust might be
taxable as a corporation with the adverse consequences described above (and the
resulting taxable corporation would not
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be able to reduce its taxable income by deductions for interest expense on Notes
recharacterized as equity). Alternatively, and most likely in the view of
Counsel, the Owner Trust might be treated as a publicly traded partnership that
would not be taxable as a corporation because it would meet certain qualifying
income tests. Nonetheless, treatment of the Notes as equity interests in such a
publicly traded partnership could have adverse tax consequences to certain
holders. For example, income to certain tax-exempt entities (including pension
funds) would be "unrelated business taxable income", income to foreign holders
generally would be subject to U.S. tax and U.S. tax return filing and
withholding requirements, and individual holders might be subject to certain
limitations on their ability to deduct their share of Owner Trust expenses.
TAX CONSEQUENCES TO HOLDERS OF THE OWNER CERTIFICATES
Treatment of Owner Trust as a Partnership. The Seller and the Servicer will
agree, and the related Owner Certificateholders will agree by their purchase of
Owner Certificates, to treat the Owner Trust as a partnership for purposes of
federal and state income tax, franchise tax and any other tax measured in whole
or in part by income, with the assets of the partnership being the assets held
by the Owner Trust, the partners of the partnership being the Owner
Certificateholders (and the Seller in its capacity as recipient of distributions
from any Reserve Fund), and the Notes being debt of the partnership. However,
the proper characterization of the arrangement involving the Owner Trust, the
Owner Certificates, the Notes, the Seller and the Servicer is not certain
because there is no authority on transactions closely comparable to that
contemplated herein.
A variety of alternative characterizations are possible. For example,
because the Owner Certificates have certain features characteristic of debt, the
Owner Certificates might be considered debt of the Seller or the Owner Trust.
Any such characterization would not result in materially adverse tax
consequences to Owner Certificateholders as compared to the consequences from
treatment of the Owner Certificates as equity in a partnership, described below.
The following discussion assumes that the Owner Certificates represent equity
interests in a partnership.
Indexed Securities, etc. The following discussion assumes that all payments
on the Owner Certificates are denominated in U.S. dollars, none of the Owner
Certificates are Indexed Securities or Strip Certificates, and that a Series of
Securities includes a single class of Owner Certificates. If these conditions
are not satisfied with respect to any given Series of Owner Certificates,
additional tax considerations with respect to such Owner Certificates will be
disclosed in the related Prospectus Supplement.
Partnership Taxation. As a partnership, the Owner Trust will not be subject
to federal income tax. Rather, each Owner Certificateholder will be required to
separately take into account such holder's allocated share of income, gains,
losses, deductions and credits of the Owner Trust. The Owner Trust's income will
consist primarily of interest and finance charges earned on the related
Receivables (including appropriate adjustments for market discount, OID and bond
premium) and any gain upon collection or disposition of such Receivables. The
Owner Trust's deductions will consist primarily of interest accruing with
respect to the Notes, servicing and other fees, and losses or deductions upon
collection or disposition of Receivables.
The tax items of a partnership are allocable to the partners in accordance
with the Code, Treasury regulations and the partnership agreement (i.e., the
Trust Agreement and related documents). However, inasmuch as the Owner Trust's
payment of the Pass-Through Rates on each Owner Certificate is payable to the
related Owner Certificateholder without regard to the income of the Owner Trust,
the Owner Trust's payment of such amounts to each Owner Certificateholder should
be treated (and the Owner Trust intends to so treat the amounts) as a
"guaranteed payment" within the meaning of Section 707(c) of the Code, and not
as a distributive share of the Owner Trust's income. Such guaranteed payments
will be considered ordinary income to an Owner Certificateholder but may not be
considered interest income for federal income tax purposes. The Trust Agreement
will provide, in general, that the Owner Certificateholders will be allocated
taxable income of the Owner Trust for each month equal to the sum of (i) the
interest that accrues on the Owner Certificates in accordance with their terms
for such month, including interest accruing at the related Pass-Through Rate for
such month and interest on amounts previously due on the Owner Certificates but
not yet distributed; (ii) any Owner Trust income attributable to discount on the
related Receivables that corresponds to any excess of the principal amount of
the Owner Certificates over their initial issue price;
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(iii) prepayment premium payable to the Owner Certificateholders for such month;
and (iv) any other amounts of income payable to the Owner Certificateholders for
such month. Such allocation will be reduced by any amortization by the Owner
Trust of premium on Receivables that corresponds to any excess of the issue
price of Owner Certificates over their principal amount. All remaining taxable
income of the Owner Trust will be allocated to the Seller. Based on the economic
arrangement of the parties, this approach for allocating Owner Trust income
should be permissible under applicable Treasury regulations, although no
assurance can be given that the IRS would not require a greater amount of income
to be allocated to Owner Certificateholders. Moreover, even under the foregoing
method of allocation, Owner Certificateholders may be allocated income equal to
the entire Pass-Through Rate plus the other items described above, even though
the Owner Trust might not have sufficient cash to make current cash
distributions of such amount. Thus, cash basis holders will in effect be
required to report income from the Owner Certificates on the accrual basis and
Owner Certificateholders may become liable for taxes on Owner Trust income even
if they have not received cash from the Owner Trust to pay such taxes. In
addition, because tax allocations and tax reporting will be done on a uniform
basis for all Owner Certificateholders but Owner Certificateholders may be
purchasing Owner Certificates at different times and at different prices, Owner
Certificateholders may be required to report on their tax returns taxable income
that is greater or less than the amount reported to them by the Owner Trust.
All of the taxable income allocated to an Owner Certificateholder that is a
pension, profit sharing or employee benefit plan or other tax-exempt entity
(including an individual retirement account) will constitute "unrelated business
taxable income" generally taxable to such a holder under the Code.
An individual Owner Certificateholder's share of expenses of the Owner
Trust (including fees to the Servicer but not interest expense) would be
miscellaneous itemized deductions. Such deductions might be disallowed to the
individual in whole or in part and might result in such holder being taxed on an
amount of income that exceeds the amount of cash actually distributed to such
holder over the life of the Owner Trust.
The Owner Trust intends to make all tax calculations relating to income and
allocations to Owner Certificateholders on an aggregate basis. If the IRS were
to require that such calculations be made separately for each Receivable, the
Owner Trust might be required to incur additional expense but it is believed
that there would not be a material adverse effect on Owner Certificateholders.
Discount and Premium. Except as otherwise provided in the related
Prospectus Supplement, it is believed that the Receivables were not issued with
OID, and, therefore, the Owner Trust should not have OID income. However, the
purchase price paid by the Owner Trust for the related 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 Owner Trust will make this
calculation on an aggregate basis, but might be required to recompute it on a
Receivable-by-Receivable basis.
If the Owner Trust acquires the related Receivables at a market discount or
premium, it will elect to include any such discount in income currently as it
accrues over the life of such Receivables or to offset any such premium against
interest income on such Receivables. As indicated above, a portion of such
market discount income or premium deduction may be allocated to Owner
Certificateholders.
Section 708 Termination. Under Section 708 of the Code, the Owner Trust
will be deemed to terminate for federal income tax purposes if 50% or more of
the capital and profits interests in the Owner Trust are sold or exchanged
within a 12-month period. If such a termination occurs, the Owner Trust will be
considered to have transferred all of its assets and liabilities to a new
partnership and then to have immediately liquidated and distributed interests in
the new partnership to the continuing Owner Certificateholders. The Owner Trust
will not comply with certain technical requirements that might apply when such a
constructive termination occurs. As a result, the Owner Trust may be subject to
certain tax penalties and may incur additional expenses if it is required to
comply with those requirements. Furthermore, the Owner Trust might not be able
to comply due to lack of data.
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Disposition of Owner Certificates. Generally, capital gain or loss will be
recognized on a sale of Owner Certificates in an amount equal to the difference
between the amount realized and the seller's tax basis in the Owner Certificates
sold. An Owner Certificateholder's tax basis in an Owner Certificate will
generally equal the holder's cost increased by the holder's share of Trust
income (includible in income) and decreased by any distributions received with
respect to such Owner Certificate. In addition, both the tax basis in the Owner
Certificates and the amount realized on a sale of an Owner Certificate would
include the holder's share of the Notes and other liabilities of the Owner
Trust. A holder acquiring Owner Certificates at different prices may be required
to maintain a single aggregate adjusted tax basis in such Owner Certificates,
and, upon sale or other disposition of some of the Owner Certificates, allocate
a portion of such aggregate tax basis to the Owner Certificates sold (rather
than maintaining a separate tax basis in each Owner Certificate for purposes of
computing gain or loss on a sale of that Owner Certificate).
Any gain on the sale of an Owner Certificate attributable to the holder's
share of unrecognized accrued market discount on the related Receivables would
generally be treated as ordinary income to the holder and would give rise to
special tax reporting requirements. The Owner 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 Owner Trust will elect to
include market discount in income as it accrues.
If an Owner 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 Owner Certificates that exceeds the
aggregate cash distributions with respect thereto, such excess will generally
give rise to a capital loss upon the retirement of the Owner Certificates.
Allocations Between Transferors and Transferees. In general, the Owner
Trust's taxable income and losses will be determined monthly and the tax items
for a particular calendar month will be apportioned among the Owner
Certificateholders in proportion to the principal amount of Owner Certificates
owned by them as of the close of the last day of such month. As a result, a
holder purchasing Owner Certificates may be allocated tax items (which will
affect its tax liability and tax basis) attributable to periods before the
actual transaction.
The use of such a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or losses
of the Owner Trust might be reallocated among the Owner Certificateholders. The
Seller will be authorized to revise the Owner 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 an Owner Certificateholder sells
its Owner Certificates at a profit (loss), the purchasing Owner
Certificateholder will have a higher (lower) basis in the Owner Certificates
than the selling Owner Certificateholder had. The tax basis of the Owner Trust's
assets will not be adjusted to reflect that higher (or lower) basis unless the
Owner 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 Owner Trust will not make such election. As a result, Owner
Certificateholders might be allocated a greater or lesser amount of Owner Trust
income than would be appropriate based on their own purchase price for Owner
Certificates.
Administrative Matters. The Owner Trustee is required to keep or have kept
complete and accurate books of the Owner Trust. Such books will be maintained
for financial reporting and tax purposes on an accrual basis and the fiscal year
of the Owner Trust will be the calendar year. The Owner Trustee will file a
partnership information return (IRS Form 1065) with the IRS for each taxable
year of the Owner Trust and will report each Owner Certificateholder's allocable
share of items of Owner Trust income and expense to holders and the IRS on
Schedule K-1. The Owner Trust will provide the Schedule K-l information to
nominees that fail to provide the Owner Trust with the information statement
described below and such nominees will be required to forward such information
to the beneficial owners of the Owner Certificates. Generally, holders must file
tax returns that are consistent with the information return filed by the Trust
or be subject to penalties unless the holder notifies the IRS of all such
inconsistencies.
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Under Section 6031 of the Code, any person that holds Owner Certificates as
a nominee at any time during a calendar year is required to furnish the Owner
Trust with a statement containing certain information on the nominee, the
beneficial owners and the Owner Certificates so held. Such information includes
(i) the name, address and taxpayer identification number of the nominee and (ii)
as to each beneficial owner (a) the name, address and identification number of
such person, (b) 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 (c) certain
information on Owner Certificates that were held, bought or sold on behalf of
such person throughout the year. In addition, brokers and financial institutions
that hold Owner Certificates through a nominee are required to furnish directly
to the Trust information as to themselves and their ownership of Owner
Certificates. A clearing agency registered under Section 17A of the Exchange Act
is not required to furnish any such information statement to the Owner Trust.
The information referred to above for any calendar year must be furnished to the
Owner Trust on or before the following January 31. Nominees, brokers and
financial institutions that fail to provide the Owner Trust with the information
described above may bc subject to penalties.
The Seller will be designated as the tax matters partner for each Owner
Trust in the related Trust Agreement and, as such, will be responsible for
representing the Owner 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 Owner Trust by the appropriate taxing authorities
could result in an adjustment of the returns of the Owner Certificateholders,
and, under certain circumstances, an Owner Certificateholder may be precluded
from separately litigating a proposed adjustment to the items of the Owner
Trust. An adjustment could also result in an audit of an Owner
Certificateholder's returns and adjustments of items not related to the income
and losses of the Owner Trust.
Tax Consequences to Foreign Owner Certificateholders. It is not clear
whether the Owner Trust would be considered to be engaged in a trade or business
in the United States for purposes of federal withholding taxes with respect to
non-U.S. persons because there is no clear authority dealing with that issue
under facts substantially similar to those described herein. Although it is not
expected that the Owner Trust would be engaged in a trade or business in the
United States for such purposes, the Owner Trust will withhold as if it were so
engaged in order to protect the Owner Trust from possible adverse consequences
of a failure to withhold. The Owner Trust expects to withhold on the portion of
its taxable income that is allocable to foreign Certificateholders pursuant to
Section 1446 of the Code, as if such income were effectively connected to a U.S.
trade or business, at a rate of 35% for foreign holders that are taxable as
corporations and 39.6% for all other foreign holders. Subsequent adoption of
Treasury regulations or the issuance of other administrative pronouncements may
require the Owner Trust to change its withholding procedures. In determining a
holder's withholding status, the Owner Trust may rely on IRS Form W-8, IRS Form
W-9 or the holder's certification of nonforeign status signed under penalty of
perjury.
Backup Withholding. Distributions made on the Owner Certificates and
proceeds from the sale of the Owner Certificates will be subject to a "backup"
withholding tax of 31% if, in general, the Owner Certificateholder fails to
comply with certain identification procedures, unless the holder is an exempt
recipient under applicable provisions of the Code.
TAX CHARACTERIZATION OF GRANTOR TRUSTS
In connection with the issuance of each Series of Grantor Trust
Certificates, Counsel will deliver its opinion that the Grantor Trust will be
classified as a grantor trust under subpart E, part I of subchapter J of the
Code and not as an association taxable as a corporation for federal income tax
purposes. Grantor Certificateholders will be treated as the owners of the
Grantor Trust, except as described below.
General. For purposes of federal income tax, each Grantor Trust will be
deemed to have acquired the following assets: (i) the principal portion of each
Receivable comprising part of the related Receivables Pool plus a portion of the
interest due on each such Receivable (the "Trust Stripped Bond"), (ii) if such
Grantor
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Trust issues two or more classes of Grantor Certificates, a portion of the
interest due on each Receivable equal to the difference between the Pass-Through
Rate on the Subordinated Certificates and the Pass-Through Rate on the Senior
Certificates multiplied by a portion of each Receivable equal to the product of
the principal balance of such Receivable multiplied by a fraction, the numerator
of which is the aggregate Certificate Balance of the Subordinated Certificates
and the denominator of which is the sum of the aggregate Certificate Balance of
each class of Grantor Certificates of such Series (such fraction, the
"Subordinated Percentage", and one minus the Subordinated Percentage, the
"Senior Percentage") (herein the "Trust Stripped Coupon"), (iii) the right, if
any, to receive Yield Supplement Deposit Amounts and (iv) the right, if any, to
receive payments from a Reserve Fund or other source of credit enhancement. All
interest due on each Receivable in excess of that portion of such interest
included in either the Trust Stripped Bond or the Trust Stripped Coupon above
will have been retained by the Seller (the "Excess Receivable Amounts").
The Senior Certificateholders in the aggregate will own the Senior
Percentage of the Trust Stripped Bond, and accordingly each Senior
Certificateholder will be treated as owning its pro rata share of such asset.
The Senior Certificateholders will not own any portion of the Trust Stripped
Coupon. The Subordinated Certificateholders in the aggregate own both the
Subordinated Percentage of the Trust Stripped Bond plus 100% of the Trust
Stripped Coupon, if any, and accordingly each Subordinated Certificateholder
will be treated as owning its pro rata share of both such assets.
Each Grantor Certificateholder will be required to report on its federal
income tax return, in a manner consistent with its method of accounting, its pro
rata share of the entire gross income of the Grantor Trust, including interest
or finance charges earned on the Receivables, certain amounts received from the
Reserve Fund, if any, any Yield Supplement Deposit Amounts, any other payment
from the Reserve Fund, if any, and any gain or loss upon collection or
disposition of the related Receivables. In computing its federal income tax
liability, a Grantor Certificateholder will be entitled to deduct, consistent
with its method of accounting, its pro rata share of reasonable fees payable to
the Servicer that are paid or incurred by the Grantor Trust as provided in
Sections 162 or 212 of the Code and any allowable amortization deductions with
respect to the foregoing Yield Supplement Deposit Amounts and payments from the
Reserve Fund, if any. If a Grantor Certificateholder is an individual, estate or
trust the deduction for its pro rata share of such fees will be allowed only to
the extent that all of its miscellaneous itemized deductions, including its
share of such fees, exceed 2% of its adjusted gross income. In addition, Code
Section 68 provides that itemized deductions otherwise allowable for a taxable
year of an individual taxpayer whose adjusted gross income exceeds a specified
amount will be reduced by the lesser of (i) 3% of the excess, if any, of
adjusted gross income over such amount, or (ii) 80% of the amount of itemized
deductions otherwise allowable for such year. As a result, such investors
holding Grantor Certificates, directly or indirectly through a pass-through
entity, may have aggregate taxable income in excess of the aggregate amount of
cash received on such Grantor Certificates with respect to interest at the
related Pass-Through Rate on such Certificates. A Grantor Certificateholder
using the cash method of accounting must take into account its pro rata share of
income and deductions as and when collected by or paid by the Grantor Trust. A
Grantor Certificateholder using the accrual method of accounting must take into
account its pro rata share of income and deductions as and when such amounts
become due to or payable by the Grantor Trust.
The Trust Stripped Bond will be treated as a "stripped bond" within the
meaning of Section 1286 of the Code. The Trust Stripped Coupon will be treated
as a "stripped coupon" within the meaning of Section 1286 of the Code. As a
result, the Grantor Certificateholders will be deemed to hold interests in
"stripped bonds" and "stripped coupons." For purposes of Code Section 1271
through 1288, Code Section 1286 treats a stripped bond or a stripped coupon as
an obligation issued on the date that such stripped interest is created.
Guidance by the IRS suggests that a servicing fee in excess of reasonable
servicing ("excess servicing") will be treated under the stripped bond rules. It
is expected that for federal income tax purposes, the Seller will be viewed as
having retained a portion of each interest payment on each Receivable sold to
the related Grantor Trust. To the extent that the Receivables are characterized
as "stripped bonds," as described above, the income of the Trust allocable to
Grantor Certificateholders will not include the portion of the interest on the
Excess Receivable Amounts or the excess servicing treated as strips, and the
deductions allocable to Grantor Certificateholders will be limited to their
respective shares of reasonable servicing and other fees. In addition,
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a Grantor Certificateholder will not be subject to the market discount and
premium rules discussed below with respect to the stripped Receivables, but
instead will be subject to the original issue discount rules contained in the
Code. A Grantor Certificateholder will be required to include any original issue
discount in income as it accrues, regardless of whether cash payments are
received, using a method reflecting a constant rate of interest on the related
Receivables.
Stripped Bonds and Stripped Coupons. Although the tax treatment of stripped
bonds is not entirely clear, based on guidance by the IRS, each purchaser of a
Grantor Certificate will be treated as the purchaser of a stripped bond which
generally should be treated as a single debt instrument issued on the day it is
purchased for purposes of calculating any original issue discount. Generally,
under Treasury regulations issued with respect to section 1286 of the Code (the
"Section 1286 Treasury Regulations"), if the discount on a stripped bond
certificate is larger than a de minimis amount (as calculated for purposes of
the original issue discount rules of the Code) such stripped bond certificate
will be considered to have been issued with original issue discount. See
"Accrual of Original Issue Discount". Based on the preamble to the Section 1286
Treasury Regulations, Counsel is of the opinion that, although the matter is not
entirely clear, the interest income on the Senior Certificates and the
Subordinated Certificates (less the stripped coupon amount) at the sum of the
Pass-Through Rate for the Senior Certificates and the portion of the Servicing
Fee Rate that does not constitute excess servicing will be treated as "qualified
stated interest" within the meaning of the Section 1286 Treasury Regulations and
such income will be so treated in the Grantor Trustee's tax information
reporting.
Accrual of Original Issue Discount. In determining whether a Grantor
Certificateholder has purchased its interest in the related Receivables (or any
Receivable) at a discount, a portion of the purchase price for a Grantor
Certificate (i) will be allocated to any Yield Supplement Deposit Amounts and
any payments from the Reserve Fund or other form of credit enhancement and (ii)
may be allocated to the accrued interest on the Receivables at the time of
purchase as though such accrued interest were a separate asset, thus, in each
case, reducing the portion of the purchase price allocable to the Grantor
Certificateholder's undivided interest in the Receivables (the "Purchase
Price"). If the Grantor Certificates are considered to be issued with OID, the
rules described in this paragraph would apply. Generally, the owner of a
stripped bond issued or acquired with OID must include in gross income the sum
of the "daily portions", as defined below, of the OID on such Grantor
Certificate for each day on which it owns a Grantor Certificate, including the
date of purchase but excluding the date of disposition. In the case of an
original Grantor Certificateholder, the daily portions of OID with respect to a
Grantor Certificate generally would be determined as follows. A calculation will
be made of the portion of OID that accrues on the Grantor Certificate during
each successive monthly accrual period (or shorter period in respect of the date
of original issue or the final Distribution Date). This will be done, in the
case of each full monthly accrual period, by adding (i) the present value as of
the close of such accrual period of all remaining payments to be received on the
Grantor Certificate under the prepayment assumption used in respect of the
Grantor Certificates and (ii) any payments received during such accrual period,
and subtracting from that total the "adjusted issue price" of the Grantor
Certificate at the beginning of such accrual period. No representation is made
that the Receivables will prepay at any prepayment assumption. The "adjusted
issue price" of a Grantor Certificate at the beginning of the first accrual
period is its issue price (as determined for purposes of the OID rules of the
Code) and the "adjusted issue price" of a Grantor Certificate at the beginning
of a subsequent accrual period is the "adjusted issued price" at the beginning
of the immediately preceding accrual period plus the amount of OID allocable to
that accrual period and reduced by the amount of any payment made at the end of
or during that accrual period. The OID accruing during such accrual period will
then be divided by the number of days in the period to determine the daily
portion of OID for each day in the period. With respect to an initial accrual
period shorter than a full monthly accrual period, the daily portions of OID
must be determined according to any reasonable method set forth in the Treasury
Regulations with respect to OID.
With respect to the Grantor Certificates of any Series issued by a Grantor
Trust, the method of calculating OID as described above will cause the accrual
of original issue discount to either increase or decrease (but never below zero)
in any given accrual period to reflect the fact that prepayments are occurring
at a faster or slower rate than the prepayment assumption used in respect of the
Grantor Certificates.
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Subsequent purchasers that purchase Grantor Certificates at more than a de
minimis discount should consult their tax advisors with respect to the proper
method to accrue such OID.
Premium. The purchase of a Grantor Certificate at more than its adjusted
principal amount will result in the creation of a premium with respect to the
interest in the underlying Receivables represented by such Grantor Certificates.
In determining whether a Grantor Certificateholder has purchased its interest in
the related Receivables (or any Receivable) at a premium, a portion of the
purchase price for a Grantor Certificate (i) will be allocated to any Yield
Supplement Deposit Amounts and any payments from a Reserve Fund or other source
of credit enhancement and (ii) may be allocated to the accrued interest on the
Receivables at the time of purchase as though such accrued interest were a
separate asset, thus, in each case, reducing the portion of the purchase price
allocable to the Grantor Certificateholder's undivided interest in the
Receivables. A purchaser (who does not hold the Grantor Certificate for sale to
customers or in inventory) may elect under Section 171 of the Code to amortize
such premium. Under the Code, premium is allocated among the interest payments
on the Receivables to which it relates and is considered as an offset against
(and thus a reduction of) such interest payments. With certain exceptions, such
an election would apply to all debt instruments held or subsequently acquired by
the electing holder.
Holders of Grantor Certificates acquired at a premium are urged to consult
with their own tax advisors regarding the proper treatment of the Grantor
Certificates for federal income tax purposes.
Yield Supplement Deposit Amounts and Payments from Reserve Funds. The
manner in which income with respect to any Yield Supplement Deposit Amounts and
payments from any Reserve Fund should be accrued is not clear. Moreover, the sum
of the income and deductions properly reportable by a Grantor Certificateholder
in any taxable year may not equal the amounts that would be reportable if a
Grantor Certificateholder held, instead of an interest in the Receivables, such
Yield Supplement Deposit Amounts and payments from a Reserve Fund either, (i) a
debt instrument bearing interest at the related Pass-Through Rate or (ii) an
interest in a trust holding Receivables each of which bears interest at a rate
at least equal to the sum of the Pass-Through Rate for the Subordinated
Certificates plus the Servicing Fee Rate. It is possible that a Grantor
Certificateholder will be required to report as income on a current basis its
pro rata share of all amounts received by the Trust from the Yield Supplement
Account, if any, and the Reserve Fund. In such event, the Grantor
Certificateholder should be entitled to amortize in some manner the portion of
the purchase price paid for its Grantor Certificate that is allocable to its pro
rata interest in such Yield Supplement Deposit Amounts and payments from a
Reserve Fund. It is not clear whether such amortization deduction would be
computed on a method reflecting a constant rate of amortization, a straight-line
method of amortization, or some other method. Alternatively, it is possible that
income attributable to any Yield Supplement Deposit Amounts and payments from a
Reserve Fund could be accounted for as though the Grantor Certificateholder
purchased two original issue discount instruments having an "issue price" equal
to the portion of the purchase price allocable to such Yield Supplement Deposit
Amounts and payments from such Reserve Fund, respectively and a "stated
redemption price" equal to the total of all payments projected to be made
pursuant to such Yield Supplement Deposit Amounts and payments from such Reserve
Fund, respectively. It is not clear whether, and to what extent, the amounts
includible in income or amortizable under any of these methods would be adjusted
to take account of prepayments on the Receivables. Moreover, it is possible that
the IRS might contend that none of the above methods is appropriate, and that
income with respect to any Yield Supplement Deposit Amounts and payments from a
Reserve Fund should be reported by a Grantor Certificateholder in some other
manner. In addition, to the extent that the amounts paid from any Yield
Supplement Account or from a Reserve Fund decline during any period by reason of
prepayments on the related Receivables, fewer than anticipated losses on the
Receivables or greater than anticipated earnings on any Pre-Funding Account, it
is possible that a portion of the amount amortizable by the Grantor
Certificateholder during such period would be treated as a capital loss (which
would not offset ordinary income), rather than as an ordinary deduction. It is
expected that the annual statement furnished to Grantor Certificateholders will
report the net income derived from any Yield Supplement Deposit Amounts and
payments from any Reserve Fund using a method that caused the total income
attributable to a Grantor Certificate to equal income at the applicable
Pass-Through Rate on the related Certificate Balance. Grantor
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Certificateholders are advised to consult their tax advisors regarding the
appropriate method of accounting for income attributable to any Yield Supplement
Deposit Amounts and payments from any Reserve Fund.
Sale of a Grantor Certificate. If a Grantor Certificate is sold, gain or
loss will be recognized equal to the difference between the amount realized on
the sale (exclusive of amounts attributable to accrued and unpaid interest,
which will be treated as ordinary income) allocable to each of the Receivables,
any Yield Supplement Deposit Amounts and payments from any Reserve Fund and the
Grantor Certificateholder's adjusted basis in each of the foregoing. A Grantor
Certificateholder's adjusted basis will equal the Grantor Certificateholder's
cost for the Grantor Certificate, increased by any discount previously included
in income, and decreased (but not below zero) by any previously amortized
premium and by the amount of payments previously received on the related
Receivables. Any gain or loss will be capital gain or loss if the Grantor
Certificate was held as a capital asset, except that gain will be treated in
whole or in part as ordinary interest income to the extent of the seller's
interest in accrued market discount not previously taken into income on
underlying Receivables having a fixed maturity date of more than one year from
the date of origination. Net capital gains of individuals are subject to
differing tax rates depending upon the holding period of the Grantor
Certificates.
SUBORDINATED CERTIFICATEHOLDERS
General. As stated above the Pass-Through Rate in respect of Subordinated
Certificates will be equal to the sum of (i) the Subordinated Percentage of the
Pool Balance multiplied by the Pass-Through Rate for the Senior Certificates,
(ii) a portion of the interest accrued on each Receivable (the "Trust Stripped
Coupon") and (iii) the right to receive Yield Supplement Deposit Amounts and
certain payments from any Reserve Fund. Because the purchase price paid by each
Subordinated Certificateholder will be allocated between that
Certificateholder's interest in the Trust Stripped Bond and the Trust Stripped
Coupon based on the relative fair market values of each asset on the date such
Grantor Certificate is purchased, the Trust Stripped Bond may be issued with
OID.
Trust Stripped Bond. Except to the extent modified below, the income on the
Trust Stripped Bond represented by the Grantor Certificate will be reported in
the same manner as described above for holders of the Certificates. The interest
income on the Subordinated Certificates at the Pass-Through Rate for the Senior
Certificates and the portion of the applicable Servicing Fee Rate that does not
constitute excess servicing will be treated as qualified stated interest.
Trust Stripped Coupon. The Trust Stripped Coupon will be treated as a debt
instrument with OID equal to the excess of the total amount payable with respect
to such Trust Stripped Coupon (based on the prepayment assumption used in
pricing the Grantor Certificates) over the portion of the purchase price
allocated thereto. The sum of the daily portions of OID on the Trust Stripped
Coupon for each day during a year in which the Subordinated Certificateholder
holds the Trust Stripped Coupon will be included in the Grantor
Certificateholder's income.
Effect of Subordination. If the Subordinated Certificateholders receive
distributions of less than their share of the Grantor Trust's receipts of
principal or interest (the "Shortfall Amount") because of the subordination of
the Subordinated Certificates, holders of Subordinated Certificates would
probably be treated for federal income tax purposes as if they had (i) received
as distributions their full share of such receipts, (ii) paid over to the Senior
Certificateholders an amount equal to such Shortfall Amount and (iii) retained
the right to reimbursement of such amounts to the extent such amounts are
otherwise available as a result of collections on the related Receivables or
amounts available in any Reserve Fund.
Under this analysis, (i) Subordinated Certificateholders would be required
to accrue as current income any interest or OID income of the Grantor Trust that
was a component of the Shortfall Amount, even though such amount was in fact
paid to the Senior Certificateholders, (ii) a loss would only be allowed to the
Subordinated Certificateholders when their right to receive reimbursement of
such Shortfall Amount became worthless (i.e., when it becomes clear that amount
will not be available from any source to reimburse such loss) and (iii)
reimbursement of such Shortfall Amount prior to such a claim of worthlessness
would not be taxable income to Subordinated Certificateholders because such
amount was previously included in income. Those results should not significantly
affect the inclusion of income for Subordinated Certificateholders on the
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accrual method of accounting, but could accelerate inclusion of income to
Subordinated Certificateholders on the cash method of accounting by, in effect,
placing them on the accrual method. Moreover, the character and timing of loss
deductions on certificates such as the Subordinated Certificates is unclear.
Subordinated Certificateholders are strongly urged to consult their own tax
advisors regarding the appropriate timing, amount and character of any losses
sustained with respect to the Subordinated Certificates including any loss
resulting from the failure to recover previously accrued interest or discount
income.
FOREIGN GRANTOR CERTIFICATEHOLDERS
Interest attributable to Receivables which is received by a foreign Grantor
Certificateholder will generally not be subject to the normal 30% withholding
tax imposed with respect to such payments, provided that (i) the foreign Grantor
Certificateholder does not own, directly or indirectly, 10% or more of, and is
not a controlled foreign corporation related to, the Seller and (ii) such holder
fulfills certain certification requirements. Under such requirements, the holder
must certify, under penalty of perjury, that it is not a "United States person"
and provide its name and address. For this purpose, "United States person" means
a citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof or an estate or trust the income of which is
includible in gross income for United States federal income tax purposes,
regardless of its source. Gain realized upon the sale of a Grantor Certificate
by a foreign Grantor Certificateholder generally will not be subject to United
States withholding tax. If, however, such interest or gain is effectively
connected to the conduct of a trade or business within the United States by such
foreign Grantor Certificateholder, such holder will be subject to United States
federal income tax thereon at regular rates. Potential investors who are not
United States persons should consult their own tax advisors regarding the
specific tax consequences to them of owing a Grantor Certificate.
It is not clear whether amounts received by Grantor Certificateholders that
are attributable to payments received from any Yield Supplement Deposit Amounts
or from any Reserve Fund would be subject to withholding tax. Accordingly, a
Grantor Certificate may not be a suitable investment for non-United States
persons.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Grantor Trustee will furnish or make available, within the prescribed
period of time for tax reporting purposes after the end of each calendar year,
to each Grantor Certificateholder or each person holding a Grantor Certificate
on behalf of a Grantor Certificateholder at any time during such year, such
information as the Grantor Trustee deems necessary or desirable to assist
Grantor Certificateholders in preparing their federal income tax returns.
Payments made on the Grantor Certificates and proceeds from the sale of the
Grantor Certificates will not be subject to a "backup" withholding tax of 31%
unless, in general, a Grantor Certificateholder fails to comply with certain
reporting procedures and is not an exempt recipient under applicable provisions
of the Code.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
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STATE TAX CONSEQUENCES WITH RESPECT TO OWNER TRUSTS
The activities to be undertaken by the Master Servicer in servicing and
collecting the Receivables will take place in California. The State of
California imposes a state individual income tax and a corporate franchise tax
which is imposed on corporations, publicly traded partnerships, associations and
certain other entities doing business in the State of California. This
discussion is based upon present provisions of California statutes and the
regulations promulgated thereunder, and applicable judicial or ruling authority,
all of which are subject to change, which change may be retroactive.
Because of the variation in each state's tax laws based in whole or in part
upon income, it is impossible to predict tax consequences to holders of Notes
and Owner Certificates in all of the state taxing jurisdictions in which they
are already subject to tax. Noteholders and Owner Certificateholders are urged
to consult their own tax advisors with respect to state tax consequences arising
out of the purchase, ownership and disposition of Notes and Owner Certificates.
TAX CONSEQUENCES WITH RESPECT TO THE NOTES
It is expected that Counsel will advise each Trust that issues Notes that,
assuming the Notes will be treated as debt for federal income tax purposes, the
Notes will be treated as debt for California income and franchise tax purposes.
Accordingly, Noteholders not otherwise subject to taxation in California should
not become subject to taxation in California solely because of a holder's
ownership of Notes. However, a Noteholder already subject to California's income
tax or franchise tax could be required to pay additional California tax as a
result of the holder's ownership or disposition of Notes.
TAX CONSEQUENCES WITH RESPECT TO THE OWNER CERTIFICATES
Based on a ruling issued by the Franchise Tax Board with respect to the
California tax characterization of the Owner Trust as a partnership and not as
an association taxable as a corporation or other taxable entity, if the
arrangement created by the Trust Agreement is treated as a partnership (not
taxable as a corporation) for federal income tax purposes, Counsel will opine
that the same treatment should also apply for California tax purposes. In such
case, the resulting constructive partnership should not be treated as doing
business in California but rather should be viewed as a passive holder of
investments and, as a result, should not be subject to the California franchise
tax (which, if applicable, could possibly result in reduced distributions to
Owner Certificateholders). The Owner Certificateholders also should not be
subject to the California franchise tax on income received through the
partnership.
Under current law, Owner Certificateholders that are nonresidents of
California and are not otherwise subject to California income tax should not be
subject to California income tax on the income from the constructive
partnership. In any event, classification of the arrangement as a "partnership"
would not cause an Owner Certificateholder not otherwise subject to taxation in
California to pay California tax on income beyond that derived from the
Certificates.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code prohibit a pension, profit
sharing or other employee benefit plan, as well as individual retirement
accounts and certain types of Keogh Plans (each, a "Plan"), from engaging in
certain transactions involving "plan assets" with persons that are "parties in
interest" under ERISA or "disqualified persons" under the Code with respect to
the Plan. ERISA also imposes certain duties on persons who are fiduciaries of
Plans subject to ERISA and prohibits certain transactions between a plan and
parties in interest with respect to such Plans. Under ERISA, any person who
exercises any authority or control with respect to the management or disposition
of the assets of a Plan is considered to be a fiduciary of such Plan (subject to
certain exceptions not here relevant). A violation of these "prohibited
transaction" rules may generate excise tax and other liabilities under ERISA and
the Code for such persons.
64
<PAGE> 129
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA)
are not subject to ERISA requirements.
Under a regulation (the "Plan Assets Regulation") issued by the United
States Department of Labor ("Labor"), the assets of a Trust would be treated as
plan assets of a Plan for the purposes of ERISA and the Code if the Plan
acquired an "equity interest" in such Trust, and none of the exceptions
contained in the Plan Assets Regulation (and in subsequent administrative
exemptions issued by Labor) was applicable. An equity interest is defined under
the Plan Assets Regulation as an interest other than an instrument which is
treated as indebtedness under applicable local law and which has no substantial
equity features. The likely treatment in this context of the Securities of a
given series will be discussed in the related Prospectus Supplement.
Due to the complexities of the "prohibited transaction" rules and the
penalties imposed upon persons involved in prohibited transactions, it is
important that the fiduciary of any Plan considering the purchase of Securities
consult with its counsel regarding the applicability of the prohibited
transaction provisions of ERISA and the Code to such investment.
PLAN OF DISTRIBUTION
Unless otherwise provided in the related Prospectus Supplement, on the
terms and conditions set forth in the separate underwriting agreements with
respect to the Securities of any Series or class issued by a Trust (each, an
"Underwriting Agreement"), the Seller will agree to cause the related Trust to
sell to the underwriters named therein and in the related Prospectus Supplement,
and each of such underwriters will severally agree to purchase, the principal
amount of each class of Securities of the related Series set forth therein and
in the related Prospectus Supplement.
In each Underwriting Agreement, the several underwriters will agree,
subject to the terms and conditions set forth therein, to purchase all the
Securities described therein which are offered hereby and by the related
Prospectus Supplement if any of such Securities are purchased. Pursuant to each
Underwriting Agreement, the closing of the sale of any class of Securities
subject thereto will be conditioned on the closing of the sale of all other
classes of such series that are subject to such Underwriting Agreement or any
other Underwriting Agreement or Purchase Agreement covering Securities of such
Series.
Each Prospectus Supplement will either (i) set forth the price at which
each class of Securities 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 times of such sales. After the initial public offering of any
such Securities, such public offering prices and such concessions may be
changed.
Each Underwriting Agreement will provide that the Seller and Fleetwood
Credit will jointly and severally indemnify the related 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officer or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered will be set forth in the related Prospectus Supplement.
65
<PAGE> 130
LEGAL OPINIONS
Certain legal matters relating to the Securities will be passed upon for
the Seller by Timothy M. Hayes or Frederic C. Liskow, each a Vice President and
Assistant General Counsel to First Capital, the parent company of the Servicer.
Mr. Hayes and Mr. Liskow each own shares of Class A Common Stock of First
Capital, and each have options to purchase additional shares of such Class A
Common Stock. Arter & Hadden LLP, Washington, D.C. will act as special counsel
to the Seller with respect to certain matters relating to the Securities,
including certain federal income tax matters relating to the Securities. Brown &
Wood LLP, San Francisco, California will act as counsel for the Underwriters.
Brown & Wood LLP has from time to time represented Fleetwood Credit in certain
matters not related to the offering of the Securities.
66
<PAGE> 131
INDEX OF TERMS
Set forth below is a list of certain of the more significant terms used in
this Prospectus and the pages on which the definitions of such terms may be
found herein.
<TABLE>
<CAPTION>
TERM PAGE
---- ----
<S> <C>
Additional Yield Supplement Amount............... 8
Administration Agreement......................... 44
Administration Fee............................... 45
Administrator.................................... 44
Advance.......................................... 9
Advance.......................................... 32
Cash Collateral Account.......................... 35
Certificate Balance.............................. 4
Certificates..................................... 1
Closing Date..................................... 6
Code............................................. 50
Collection Accounts.............................. 30
Collection Period................................ 5
Commission....................................... 2
Cooperative...................................... 26
Cutoff Date...................................... 6
Dealers.......................................... 6
Dealers.......................................... 11
Defaulted Receivable............................. 33
Deposit Date..................................... 9
Distribution Date................................ 5
Euroclear........................................ 26
Euroclear Operator............................... 26
Excess Receivable Amounts........................ 57
Exchange Act..................................... 2
Final Scheduled Distribution Date................ 6
Financed Vehicles................................ 1
FTC Rule......................................... 49
Grantor Certificates............................. 1
Grantor Collection Account....................... 30
Grantor Trust.................................... 1
Grantor Trustee.................................. 3
Indenture........................................ 3
Indenture Trustee................................ 3
Indirect DTC Participants........................ 24
Initial Financed Vehicles........................ 6
Insolvency Event................................. 39
LOC Issuer....................................... 35
Maximum Initial Yield Supplement Amount.......... 8
Military Reservist Relief Act.................... 13
Non-Reimbursable Payment......................... 33
Note Distribution Account........................ 30
Notes............................................ 1
Obligors......................................... 11
Owner Certificate Distribution Account........... 30
Owner Certificates............................... 1
Owner Collection Account......................... 29
Owner Securities................................. 1
Owner Trust...................................... 1
Owner Trustee.................................... 3
Paid-Ahead Period................................ 14
</TABLE>
<TABLE>
<CAPTION>
TERM PAGE
---- ----
<S> <C>
Paid-Ahead Receivable............................ 14
Payment Date..................................... 6
Plan............................................. 10
Plan............................................. 62
Plan Assets Regulation........................... 62
Pooling and Servicing Agreement.................. 3
Pre-Funding Account.............................. 31
Pre-Funded Amount................................ 7
Prospectus Supplement............................ 1
Purchase Price................................... 58
Rating Agency.................................... 28
Receivables...................................... 6
Receivables...................................... 1
Receivables Pool................................. 4
Receivables Purchase Agreement................... 6
Record Date...................................... 5
Relief Act Obligor............................... 13
Repurchase Amount................................ 29
Required Deposit Ratings......................... 30
Required Rate.................................... 8
Required Servicer Ratings........................ 31
Reserve Fund..................................... 35
Sale and Servicing Agreement..................... 6
Schedule of Receivables.......................... 27
Securities....................................... 1
Securities Act................................... 2
Security Owner................................... 3
Seller........................................... 3
Seller........................................... 1
Senior Certificates.............................. 5
Series........................................... 1
Servicer Letter of Credit........................ 31
Servicing Fee Rate............................... 9
Shortfall Amount................................. 60
Soldiers' and Sailors' Relief Act................ 13
Spread Account................................... 36
Subordinated Certificates........................ 5
Transfer Agreement............................... 7
Transfer and Servicing Agreements................ 7
Trust Agreement.................................. 3
Trust Stripped Bond.............................. 56
Trust Stripped Coupon............................ 60
Trustees......................................... 3
Trusts........................................... 1
UCC.............................................. 24
Underwriting Agreement........................... 63
Yield Supplement Account......................... 8
Yield Supplement Agreement....................... 8
Yield Supplement Amount.......................... 8
Yield Supplement Initial Deposit................. 8
</TABLE>
67
<PAGE> 132
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be incurred in connection
with the offering of the Securities being registered herein:
<TABLE>
<S> <C>
SEC registration fee........................................ $ 590,008.03
Legal fees and expenses..................................... 150,000.00
Accounting fees and expenses................................ 50,000.00
Blue sky fees and expenses.................................. 5,000.00
Rating agency fees.......................................... 500,000.00
Trustee's fees and expenses................................. 25,000.00
Printing.................................................... 85,000.00
Miscellaneous............................................... 25,000.00
-------------
Total............................................. $1,525,008.03
=============
</TABLE>
All of the above amounts, other than the Securities and Exchange Commission
filing fee, are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317(b) of the California Corporations Code (the "Corporations
Code") provides that a corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any "proceeding" (as
defined in Section 317(a) of the Corporations Code), other than an action by or
in the right of the corporation to procure a judgment in its favor, by reason of
the fact that such person is or was a director, officer, employee or other agent
of the corporation (collectively, an "Agent"), against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with such proceeding if the Agent acted in good faith and in a manner
the Agent reasonably believed to be in the best interest of the corporation and,
in the case of a criminal proceeding, had no reasonable cause to believe the
conduct was unlawful.
Section 317(c) of the Corporations Code provides that a corporation shall
have power to indemnify any Agent who was or is a party or is threatened to be
made a party to any threatened, pending or completed action by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
such person is or was an Agent, against expenses actually and reasonably
incurred by the Agent in connection with the defense or settlement of such
action if the Agent acted in good faith and in a manner such Agent believed to
be in the best interest of the corporation and its shareholders.
Section 317(c) further provides that no indemnification may be made
thereunder for any of the following: (i) in respect of any matter as to which an
Agent shall have been adjudged to be liable to the corporation, unless the court
in which such proceeding is or was pending shall determine that such Agent is
fairly and reasonably entitled to indemnity for expenses, (ii) of amounts paid
in settling or otherwise disposing of a pending action without court approval
and (iii) of expenses incurred in defending a pending action which is settled or
otherwise disposed of without court approval.
Section 317(d) of the Corporations Code requires that an Agent be
indemnified against expenses actually and reasonably incurred to the extent the
Agent has been successful on the merits in the defense of proceedings referred
to in subdivisions (b) or (c) of Section 317.
Except as provided in Section 317(d), and pursuant to Section 317(e),
indemnification under Section 317 shall be made by the corporation only if
specifically authorized and upon a determination that indemnification is proper
in the circumstances because the Agent has met the applicable standard of
conduct, by any of the following: (i) a majority vote of a quorum consisting of
directors who are not parties to the proceeding, (ii) if such a quorum of
directors is not obtainable, by independent legal counsel in a written
II-1
<PAGE> 133
opinion, (iii) approval of the shareholders, provided that any shares owned by
the Agent may not vote thereon, or (iv) the court in which such proceeding is or
was pending.
Pursuant to Section 317(f) of the Corporations Code, the corporation may
advance expenses incurred in defending any proceeding upon receipt of an
undertaking by the Agent to repay such amount if it is ultimately determined
that the Agent is not entitled to be indemnified.
Section 317(h) provides, with certain exceptions, that no indemnification
shall be made under Section 317 where it appears that it would be inconsistent
with a provision of the corporation's articles, bylaws, a shareholder resolution
or an agreement which prohibits or otherwise limits indemnification, or where it
would be inconsistent with any condition expressly imposed by a court in
approving a settlement.
Section 317(i) authorizes a corporation to purchase and maintain insurance
on behalf of an Agent for liabilities arising by reason of the Agent's status,
whether or not the corporation would have the power to indemnify the Agent
against such liability under the provisions of Section 317.
Reference is also made to Section 7 of the Form of Underwriting Agreement
to be executed by the Registrant, Fleetwood Credit Corp. and any Underwriter of
the Securities offered hereby (see Exhibit 1.1), which provides for
indemnification of the Registrant under certain circumstances.
Article IX of the Articles of Incorporation of the Registrant provides for
the indemnification of the officers and directors of the Registrant to the
fullest extent permissible under California law.
Article IV, Section 4.01 of the Bylaws of the Registrant requires that the
Registrant indemnify, and, in certain instances, advance expenses to, its
agents, with respect to certain costs, expenses, judgments, fines, settlements
and other amounts incurred in connection with any proceeding, to the full extent
permitted by applicable law.
In addition, Article IV, Section 4.03 of the Bylaws of the Registrant
authorizes the Registrant to purchase and maintain insurance to the extent
provided by Section 3.17(i) of the Corporations Code.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1.1 -- Form of Underwriting Agreement for Grantor Certificates*
1.2 -- Form of Underwriting Agreement for Owner Securities*
4.1 -- Form of Trust Agreement (including form of Owner
Certificates issued by Owner Trusts)*
4.2 -- Form of Indenture (including form of Notes issued by
Owner Trusts)*
4.3 -- Form of Pooling and Servicing Agreement (including forms
of Grantor Certificates issued by Grantor Trusts)*
4.4 -- Form of Standard Terms and Conditions of Pooling and
Servicing Agreement*
5.1 -- Opinion of Frederic C. Liskow, Esq. with respect to
legality*
8.1 -- Opinion of Arter & Hadden LLP with respect to tax
matters*
10.1 -- Form of Receivables Purchase Agreement*
10.2 -- Form of Sale and Servicing Agreement*
10.3 -- Form of Transfer Agreement*
10.4 -- Form of Yield Supplement Agreement*
10.5 -- Form of Administration Agreement*
23.1 -- Consent of Frederic C. Liskow, Esq. (included in Exhibit
5.1)*
23.2 -- Consent of Arter & Hadden LLP (included in Exhibit 8.1)*
24.1 -- Powers of Attorney of Directors and Officers of
Registrant (included on Page II-7)*
25.1 -- Statement of Eligibility and Qualification of Indenture
Trustee**
</TABLE>
- - ---------------
* Previously filed.
** To be filed by amendment or pursuant to Section 305(b)(2) of the Trust
Indenture Act of 1939.
II-2
<PAGE> 134
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes as follows:
(a) 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; (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; (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 paragraphs (a)(i) and
(a)(ii) do not apply if the information required to be included in a
posteffective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "Securities 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 thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) For purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(e) To provide to the Underwriters at the closing dates specified in
the Underwriting Agreements certificates in such denominations and
registered in such names as required by the Underwriters to provide prompt
delivery to each purchaser.
(f) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission (the "Commission") such indemnification
is against public policy as expressed in the Securities Act and is
therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than payment by the 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, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
(g) To file an application for the purpose of determining the
eligibility of the Indenture Trustee to act under subsection (a) of Section
310 of the Trust Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Securities Act.
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<PAGE> 135
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that (i) it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and (ii) it reasonably believes
that the securities offered under this Registration Statement will be
"investment grade securities", as such term is defined under Transaction
Requirements B.2 of the Instructions to Form S-3, at the time of sale of such
securities, and has duly caused this Amendment No. 3 to the Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Irving, State of Texas, on the 17th day of June,
1998.
FLEETWOOD CREDIT RECEIVABLES CORP.
By: /s/ MARVIN T. RUNYON, III
----------------------------------
Marvin T. Runyon, III
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to this Registration Statement has been signed by the following persons in
the capacities and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DOY B. HENLEY* Director June 17, 1998
- - -----------------------------------------------------
Doy B. Henley
/s/ HAROLD D. MARSHALL* Director and President June 17, 1998
- - ----------------------------------------------------- (Principal Executive
Harold D. Marshall Officer)
/s/ JAMES W. PARKER* Director June 17, 1998
- - -----------------------------------------------------
James W. Parker
/s/ LAWRENCE F. PITTROFF* Director and Senior Vice June 17, 1998
- - ----------------------------------------------------- President
Lawrence F. Pittroff
/s/ JOHN F. HUGHES* Executive Vice President June 17, 1998
- - ----------------------------------------------------- and Treasurer (Principal
John F. Hughes Financial Officer)
/s/ DENNIS J. MANDICK* Executive Vice President June 17, 1998
- - ----------------------------------------------------- and Controller (Principal
Dennis J. Mandick Accounting Officer)
</TABLE>
* By signing his name hereto, Marvin T. Runyon, III signs this document on
behalf of each of the persons indicated above pursuant to powers of attorney
duly executed by such persons.
By /s/ MARVIN T. RUNYON, III
-----------------------------------
Attorney-in-fact
II-4
