As filed with the Securities and Exchange Commission on [ , 1997]
Registration No. 333-
Post Effective Amendment No. 1 to Registration Statement No. 33-55795
_____________________________________________________________________________
_____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CARCO AUTO LOAN MASTER TRUST
(In which the Certificates evidence undivided interests)
U.S. AUTO RECEIVABLES COMPANY
(Originator of the Trust described herein)
(Exact name of registrant as specified in its charter)
DELAWARE 6146 38-2997412
(State of (Primary Standard Industrial (I.R.S. Employer
Incorporation) Classification Code Number) Identification No.)
27777 Franklin Road
Southfield, Michigan 48034
(248) 948-3031
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
CHRISTOPHER A. TARAVELLA, ESQ.
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
(248) 948-3060
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
GREGORY M. SHAW, ESQ.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019-7475
(212) 474-1902
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement
becomes effective as determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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 a post-effective amendment filed pursuant to Rule
462(c) 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 delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of each class of to be Offering Price Aggregate Registration
securities to be registered Registered Per Unit(1) Offering Price(1) Fee
- --------------------------- ---------- ----------- ----------------- -------------
<S> <C> <C> <C> <C>
Asset Backed Certificates $6,000,000,000 100% $6,000,000,000 $1,818,182
<FN>
(1) Estimated solely for the purpose of calculating the registration fee.
</TABLE>
<PAGE>
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, or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
In accordance with Rule 429 of the General Rules and Regulations under
the Securities Act of 1933, the Prospectus included herein is a combined
Prospectus which also relates to $100,000,000 of unissued Asset Backed
Certificates registered under Registration No. 33-55795 and this Registration
Statement constitutes Post-Effective Amendment No. 1 to such Registration
Statement.
_______________________________________________________________________________
_______________________________________________________________________________
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus supplement and the accompanying prospectus
shall not constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
[Single Class]
Subject to Completion Dated [ ], 1997
PROSPECTUS SUPPLEMENT
To Prospectus dated , 1997
$
CARCO Auto Loan Master Trust
[Floating Rate] [ %] Auto Loan
Asset Backed Certificates, Series [199_-_]
U.S. AUTO RECEIVABLES COMPANY, Seller
CHRYSLER FINANCIAL CORPORATION, Servicer
The [Floating Rate] [ %] Auto Loan Asset Backed Certificates, Series
[199_-_] (the "Series [199_-_] Certificates") offered hereby evidence
undivided interests in certain assets of the CARCO Auto Loan Master Trust
(the "Trust") created pursuant to a Pooling and Servicing Agreement among
U.S. Auto Receivables Company ("USA" or the "Seller"), Chrysler Financial
Corporation, as servicer ("CFC" or the "Servicer"), and The Bank of New York,
as trustee. The Trust assets include wholesale receivables (the
"Receivables") generated from time to time in a portfolio of revolving
financing arrangements (the "Accounts") with automobile dealers to finance
their automobile and light duty truck inventory and collections on the
Receivables. Certain assets of the Trust will be allocated to Series [199_-_]
Certificateholders, including the right to receive a varying percentage of
each month's collections with respect to the Receivables at the times and in
the manner described herein. The Seller will own the remaining interest in
the Trust not represented by the Series [199_-_] Certificates or the
Certificates of any other Series issued by the Trust (the "Seller's
Interest"). The Trust previously has issued [ ] other Series of Certificates
(each, a "Series"). From time to time, subject to certain conditions, the
Seller may offer other Series of Certificates, which may have terms
significantly different from the terms of the Series [199_-_] Certificates.
The issuance of additional Series of Certificates may impact the timing of
payments received by Series [199_-_] Certificateholders.
[Interest will accrue on the Series [199_-_] Certificates at the rate
of [ ]% per annum (the "Certificate Rate").] [Interest will accrue on the
Series [199_-_] Certificates at the rate of [ ]% per annum [above] [below]
[times] [ ] (the "Index") prevailing on the Adjustment Date (as defined
herein) [, subject to certain limitations described herein] (the "Certificate
Rate").] [Interest with respect to the Series [199_-_] Certificates is
payable on the [ ] day of each [month] [quarter] [other] (or, if such day is
not a business day, on the next succeeding business day) (each, [a
"Distribution Date"] [an "Interest Payment Date"]), commencing on [ ,] 199[ ].
Principal with respect to the Series [199_-_] Certificates [is
scheduled to be paid on [ ]] [is scheduled to be distributed on each
Distribution Date commencing on the Distribution Date in , and ending on the
Distribution Date in ] but may be paid earlier or later under certain
circumstances described herein.
The Seller's Interest will be subordinated to the rights of the Series
[199_-_] Certificateholders to the limited extent of the Available
Subordinated Amount as described herein. [Describe other Enhancement, if any,
and any additional subordination of the Seller's Interest, if applicable.]
Prospective investors should consider the factors set forth under "Risk
Factors" commencing on page [ ] herein and on page [ ] in the Prospectus.
THE SERIES [199_-_] CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE TRUST
ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF THE SELLER, THE
SERVICER OR ANY AFFILIATE THEREOF. NEITHER THE SERIES [199_-_]
CERTIFICATES NOR THE RECEIVABLES ARE INSURED OR GUARANTEED
BY ANY GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
===============================================================================
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to the
Public(1) Discount Seller(1)(2)
--------- ------------ --------------
<S> <C> <C> <C>
Per Certificate ................. % % %
Total ........................... $ $ $
===============================================================================
<FN>
(1) Plus accrued interest, if any, at the Certificate Rate from [ ],
199[ ].
(2) Before deducting expenses, estimated to be $[ ].
</TABLE>
The Series [199_-_] Certificates are offered subject to prior sale, and
subject to the Underwriters' right to reject orders in whole or in part. It
is expected that delivery of the Series [199_-_] Certificates will be made in
book-entry form only through the Same Day Funds Settlement System of The
Depository Trust Company [, CEDEL S.A. and the Euroclear System] on or about
, 199 .
[Underwriters]
The date of this Prospectus Supplement is , 199 .
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SERIES [199 - ]
CERTIFICATES. SPECIFICALLY, THE UNDERWRITER MAY OVERALLOT IN CONNECTION WITH
THE OFFERING, AND MAY BID FOR, AND PURCHASE, THE SERIES [199 - ] CERTIFICATES
IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING".
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION WITH RESPECT
TO THE OFFERING OF THE SERIES [199 - ] CERTIFICATES. ADDITIONAL INFORMATION
IS CONTAINED IN THE PROSPECTUS AND PURCHASERS ARE URGED TO READ BOTH THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE SERIES [199 - ]
CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
<PAGE>
SUMMARY OF SERIES TERMS
This summary of Series Terms sets forth and defines specific terms of
the Series [199_-_] Certificates offered in this Prospectus Supplement and
the Prospectus, but is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus Supplement and in the
Prospectus. Reference is made to the Index of Principal Terms in each of this
Prospectus Supplement and the Prospectus for the location herein and therein
of the definitions of certain capitalized terms used herein. Certain
capitalized terms used but not defined herein have the meanings assigned to
such terms in the Prospectus.
Title of Securities .... [Floating Rate] [ %] Auto Loan Asset Backed
Certificates, Series [199_-_] (the "Series [199_-_]
Certificates").
The Series [199_-_]
Invested Amount ..... [The Series [199_-_] Invested Amount is expected to
be approximately $[ ] on the Series Issuance Date
(based on information as of the Series Cut-Off Date)
and represents the principal amount of the Series
[199_-_] Certificates invested in Receivables as of
the Series Issuance Date.] [The Invested Amount is
subject to increase to the extent amounts are
withdrawn from the Excess Funding Account and paid to
the Seller. The Seller expects, although there can be
no assurance, that the Invested Amount of the Series
[199_-_] Certificates will equal the outstanding
principal balance of the Series [199_-_] Certificates
within [ ] months of the Series Issuance Date.] [The
Series [199_-_] Invested Amount will be zero on the
Series Issuance Date and is expected to remain at
zero until [ ], the Expected Payment
Date for the [Floating Rate] [ %] Auto Loan Asset
Backed Certificates, Series [ ] (the "Paired
Series"), at which time the Series [199_-_] Invested
Amount is expected to equal the initial principal
amount of the Series [199_-_] Certificates (the
period from the Series Issuance Date to the payment
in full of the Paired Series is referred to herein as
the "Prefunded Period").] [The Invested Amount is
subject to decrease to the extent funds are deposited
in the Excess Funding Account and, subsequently, to
increase to the extent amounts are withdrawn from the
Excess Funding Account and paid to the Seller. The
Invested Amount is also subject to reduction during
the [Accumulation Period] [Controlled Amortization
Period], any Early Amortization Period [and any
Reinvestment Period] and at such other times as
deposits are made to the Excess Funding Account in
connection with the payment of Receivables.]
Interest ............... Interest on the principal balance of the Series
[199_-_] Certificates will accrue at the Certificate
Rate and will be payable to Series [199_-_]
Certificateholders on the [ ] day of each [month]
[quarter] [other] (or, if such day is not a business
day, on the next succeeding business day) (each, a
["Distribution Date"] ["Interest Payment Date"]),
commencing [ ], 19[ ] [, provided that,
during any Early Amortization Period, interest will
be distributed to Series [19_-_] Certificateholders
on each Distribution Date, commencing on the first
Distribution Date following the occurrence of an
Early Amortization Event. "Distribution Date" shall
mean the [ ] day of each month (or, if
such date is not a business day, the next succeeding
business day). A portion of Certificateholder
Interest
S-1
<PAGE>
Collections and certain other amounts will be
deposited each month into a trust account (the
"Interest Funding Account") and used to make
interest payments to the Series [199_-_]
Certificateholders on each Interest Payment Date
or, during an Early Amortization Period, each
Distribution Date.] Interest will accrue for the
period beginning on and including the most recent
[Distribution Date] [Interest Payment Date] and
ending on and including the day preceding the next
succeeding [Distribution Date] [Interest Payment
Date] (each an "Interest Period"), except that the
first Interest Period will begin on and include the
Series Issuance Date. Interest for any [Interest
Payment Date or] Distribution Date due but not paid
on such [Interest Payment Date or] Distribution
Date will be due on the next [Interest Payment Date
or] Distribution Date, [as applicable,] together
with, to the extent permitted by applicable law,
interest on such amount at the Certificate Rate.
[The Certificate Rate for each [Interest Period]
[other] will be determined on the [ ] day preceding
the first day of such [Interest Period] [other]
(each an "Adjustment Date").] [The Certificate Rate
will equal [ ]% per annum and will be calculated on
the basis of a 360-day year of twelve 30-day
months.] [The Certificate Rate will equal [ ] (the
"Index") for the applicable Adjustment Date,
determined as provided herein, [plus] [minus]
[times] [ %][; provided that, if the Certificate
Rate for any Distribution Date [other than a
Distribution Date [with respect to the Prefunded
Period] [other]] calculated on the basis of the
Index is greater than the Assets Receivables Rate,
then the Certificate Rate for such Distribution
Date will be the Assets Receivables Rate].]
[Interest will be calculated on the basis of the
actual number of days in each Interest Period
divided by [360][other].]
[Yield Supplement
Account ............. On the Series Issuance Date, the Seller will deposit
$[ ] in a trust account which will be
established by the Seller with the Trustee (the
"Yield Supplement Account"). The Yield Supplement
Account will be funded, from time to time as
described herein, by the deposit thereto of certain
amounts otherwise distributable to the Seller. See
"Series Provisions -- Distributions from the
Collection Account; [Reserve Fund;] Yield Supplement
Account -- Yield Supplement Account".]
[Expected Payment Date .. [ ], [ ].]
[Excess Funding
Account ............. Except during any Early Amortization Period [or
Reinvestment Period] or the [Accumulation Period]
[Controlled Amortization Period], the Excess Funded
Amount will be maintained in the Excess Funding
Account.
Upon the earlier of (a) the commencement of any
Early Amortization Period [or Reinvestment Period]
and (b) [ ] [the [ ] Distribution Date] [the
Accumulation Period Commencement Date], funds on
deposit in the Excess Funding Account will be
distributed to the Series [199_-_]
Certificateholders as described herein or deposited
in the Principal Funding Account as described
herein.]
[Excluded Series;
Prefunded Period .... During the Prefunded Period, Series [199_-_] will be
an Excluded
S-2
<PAGE>
Series and an amount equal to the initial principal
amount of the Series [199_-_] Certificates will be
maintained in a trust account which will be
established by the Seller with the Trustee (the
"Prefunding Account"). As funds are accumulated in
the Principal Funding Account for the Paired Series
or distributed to holders of Certificates of such
Series, an equal amount of funds on deposit in the
Prefunding Account will be released (which funds
will be distributed to the Seller). Until payment
in full of the Paired Series, no Interest
Collections, Principal Collections, Defaulted
Amounts or Miscellaneous Payments will be allocated
to Series [199_-_]. During the Prefunded Period
interest on the Series [199_-_] Certificates will
be paid from (i) investment earnings on amounts on
deposit in the Prefunding Account and (ii) amounts
on deposit in the Yield Supplement Account [other].
However, no principal payments will be made with
respect to the Series [199_-_] Certificates until
the invested amount of the Paired Series has been
paid in full.]
[Accumulation Period]
[Controlled
Amortization
Period] .............. [Unless an Early Amortization Event [or Reinvestment
Event] that is not cured as described herein shall
have occurred, the Series [199_-_] Certificates will
have an Accumulation Period of one, two, three, four
or five month(s) long as described in the following
paragraph.
On the [ ] Distribution Date and each Distribution
Date thereafter that occurs prior to the
Accumulation Period Commencement Date, the Servicer
shall calculate the Accumulation Period Length. The
"Accumulation Period Length" will be calculated on
each such date as the lesser of (i) the number of
full Collection Periods between such Distribution
Date and the Expected Payment Date and (ii) the
product, rounded upwards to the nearest integer not
greater than five, of (a) one divided by the lowest
Monthly Payment Rate on the Receivables during the
last [ ] months and (b) a fraction, the numerator
of which is the sum of (i) the Invested Amount as
of such Distribution Date (after giving effect to
all changes therein on such date) and (ii) the
invested amounts of all other Series [(excluding
certain Series)] currently in their amortization or
accumulation periods or expected to be in their
amortization or accumulation periods by the
Expected Payment Date and the denominator of which
is the sum of such Invested Amount and the invested
amounts as of such Distribution Date (after giving
effect to all changes therein on such date) of all
other outstanding Series [(excluding certain
Series)] which are expected to be outstanding on
the Expected Payment Date. The Accumulation Period
Commencement Date (which will be the first day of a
Collection Period) will occur when the number of
full Collection Periods remaining until the
Expected Payment Date first equals the Accumulation
Period Length as calculated above. If the
Accumulation Period Length is one month, two
months, three months, four months or five months in
length, the "Accumulation Period Commencement Date"
shall be the first day of the [ ] Collection
Period, the [ ] Collection Period, the [ ]
Collection Period, the [ ] Collection Period, or
the [ ] Collection Period, respectively. In
addition, if at any time after the
S-3
<PAGE>
[ ] Distribution Date, any other outstanding
Series [(excluding certain Series)] shall have
entered into a reinvestment period or an early
amortization period, the Accumulation Period
Commencement Date shall be the earlier of (i) the
date that such outstanding Series shall have
entered into its reinvestment period or early
amortization period and (ii) the Accumulation
Period Commencement Date as previously determined.
See "Annex I -- Outstanding Series of Investor
Certificates".
The effect of the calculation described above is to
permit the reduction of the length of the
Accumulation Period based on the Invested Amounts
of certain other Series which are scheduled to be
in their revolving periods during the Accumulation
Period and on increases in the principal payment
rate, which, if continued, would result in a
shorter Accumulation Period.]
[Unless an Early Amortization Event [or
Reinvestment Event] that is not cured as described
herein shall have occurred, the Controlled
Amortization Period will commence on [ ].]
[Reinvestment Period ... The Series [199_-_] Certificates will have a
Reinvestment Period if a Reinvestment Event occurs.
[A Reinvestment Period will commence if the Seller
delivers a notice to the Trustee stating that the
Seller will no longer sell Receivables to the Trust
commencing on [ ] or any yearly anniversary thereof
and certain other conditions are satisfied.] See
"Series Provisions -- Reinvestment Events" for a
description of the [other] events that might result
in the commencement of a Reinvestment Period. See
also "Series Provisions -- Distributions from the
Collection Account [;Reserve Fund] [;Yield
Supplement Account] -- Principal Collections".]
[The Seller is required to add Receivables to the
Trust under certain circumstances described under
"Description of the Certificates -- Addition of
Accounts or Participation Interests" in the
Prospectus. The failure of the Seller to add
Receivables when required will result in the
occurrence of a Reinvestment Event. However, if no
other Reinvestment Event has occurred, the
Reinvestment Period resulting from such failure
will terminate and the Revolving Period will
recommence when the Seller would no longer be
required to add Receivables to the Trust, so long
as neither the scheduled termination date of the
Revolving Period nor an Early Amortization Event
that is not cured as described herein has
occurred.]
[Notwithstanding the foregoing, in the event of the
occurrence of any Reinvestment Event, provided that
neither the scheduled termination date of the
Revolving Period nor an Early Amortization Event
that is not cured as described herein has occurred,
the Revolving Period may recommence following
receipt of (i) written confirmation from each
Rating Agency (other than Moody's) that such Rating
Agency's rating of the Series [199_-_] Certificates
will not be withdrawn or lowered as a result of
such recommencement and (ii) the consent of Series
[199_-_] Certificateholders holding Series [199_-_]
Certificates evidencing more than 50% of the
aggregate unpaid principal amount
S-4
<PAGE>
of the Series [199_-_] Certificates to such
recommencement.] [Describe other cures of
Reinvestment Events and partial Reinvestment
Periods, if applicable.]]
Early Amortization
Period .............. The Series [199_-_] Certificates will have an Early
Amortization Period if an Early Amortization Event
occurs. See "Description of the Certificates --
Reinvestment Events and Early Amortization Events" in
the Prospectus and "Series Provisions -- Early
Amortization Events" herein for a description of the
events that might result in the commencement of an
Early Amortization Period. See also "Series
Provisions -- Distributions from the Collection
Account [; Reserve Fund] [; Yield Supplement Account]
-- Principal Collections".
[The Seller is required to add Receivables to the
Trust under certain circumstances described under
"Description of the Certificates -- Addition of
Accounts or Participation Interests" in the
Prospectus. The failure of the Seller to add
Receivables when required will result in the
occurrence of an Early Amortization Event. However,
if no other Early Amortization Event has occurred,
the Early Amortization Period resulting from such
failure will terminate and the Revolving Period
will recommence when the Seller would no longer be
required to add Receivables to the Trust, so long
as [neither] the scheduled termination date of the
Revolving Period [nor a Reinvestment Event that is
not cured as described herein] has [not] occurred.]
[Notwithstanding the foregoing, in the event of the
occurrence of any Early Amortization Event,
provided that [neither] the scheduled termination
date of the Revolving Period [nor a Reinvestment
Event that is not cured as described herein] has
[not] occurred, the Revolving Period may recommence
following receipt of (i) written confirmation from
each Rating Agency (other than Moody's) that such
Rating Agency's rating of the Series [199_-_]
Certificates will not be withdrawn or lowered as a
result of such recommencement and (ii) the consent
of Series [199_-_] Certificateholders holding
Series [199_-_] Certificates evidencing more than
50% of the aggregate unpaid principal amount of the
Series [199_-_] Certificates to such
recommencement.] [Describe other cures of Early
Amortization Events, if applicable.]
Subordination of the
Seller's Interest ... If [on or prior to the Fully Reinvested Date [or
thereafter if the Revolving Period has recommenced]
the Interest Collections, Investment Proceeds[,
certain amounts in the Reserve Fund][, certain
amounts in the Yield Supplement Account] and certain
other amounts allocable to the Series [199_-_]
Certificateholders for any Collection Period[,
including Excess Interest Collections,] are not
sufficient to cover the interest payable with respect
to the Series [199_-_] Certificates on the next
Distribution Date (plus any overdue interest and
interest thereon), the Monthly Servicing Fee for such
Distribution Date, any Investor Default Amount for
such Distribution Date and certain other amounts, the
Available Subordinated Amount will be applied to make
up such deficiency. The Available Subordinated Amount
for a Determination Date is equal to (a) the lesser
of (i) the
S-5
<PAGE>
Available Subordinated Amount for the preceding
Determination Date, minus, with certain
limitations, the Draw Amount for such preceding
Determination Date, [minus funds from the Reserve
Fund applied to cover any portion of the Investor
Default Amount,] plus the excess, if any, of the
Required Subordinated Amount for such Determination
Date over the Required Subordinated Amount for the
immediately preceding Determination Date, plus the
amount of Excess Servicing available to be paid to
the Seller as described under "Series Provisions --
Distributions from the Collection Account [;
Reserve Fund Account] [; Yield Supplement Account]
-- Excess Servicing", and (ii) the product of the
fractional equivalent of the Subordinated
Percentage and the Invested Amount [minus (b) in
the case of clause (a)(i), the Incremental
Subordinated Amount for such preceding
Determination Date, plus (c) the Incremental
Subordinated Amount for the current Determination
Date,] [plus (d) the Subordinated Percentage of
funds to be withdrawn from the Excess Funding
Account on the succeeding Distribution Date and
paid to the Seller or allocated to one or more
Series]; provided, however, that, from and after
the commencement of [the [Accumulation Period]
[Controlled Amortization Period] or] any Early
Amortization Period [that is not cured as described
herein] until the payment in full of the Series
[199_-_], Certificates, the Available Subordinated
Amount shall be calculated based on the Invested
Amount as of the close of business on the day
preceding such [[Accumulation Period] [Controlled
Amortization Period] or] Early Amortization Period
[; and provided further that from and after the
commencement of any Reinvestment Period [that is
not cured as described herein] until the earliest
of the commencement of any Early Amortization
Period [that is not cured as described herein], the
payment in full of the Series [19_-_] Certificates
and the Fully Reinvested Date, the Available
Subordinated Amount shall be calculated based on
the Invested Amount as of the close of business on
the day preceding such Reinvestment Period [less
[describe permitted reductions, e.g., based on
payment rates or amounts on deposit in the
Principal Funding Account]]. The Available
Subordinated Amount for the first Determination
Date is equal to the Required Subordinated Amount.
The "Required Subordinated Amount" shall mean, as
of any date of determination [, the sum of (a)] the
product of the initial Subordinated Percentage [as
adjusted from time to time as described herein
other than as a result of an increase therein at
the option of the Seller,] and the Invested Amount
[and (b) the Incremental Subordinated Amount].(1)
[The "Incremental Subordinated Amount" on any
Determination Date will equal the result obtained
by multiplying (a) a fraction, the numerator of
which is the sum of the Invested Amount on the last
day of the immediately preceding Collection Period
and the Available Subordinated Amount for such
Determination Date (calculated without adding the
Incremental Subordinated Amount for such
Determination Date as described in clause (c)
above), and the denominator of which is the Pool
Balance on such last day by (b) the
[FN]
- ----------------
(1) Modify, as appropriate, if Interest Collections, Investment Proceeds and
Available Sellers' Collections from one Series will be available to cover
interest or other shortfalls for related Series.
S-6
<PAGE>
excess, if any, of (x) the sum of the
Overconcentration Amount, the Installment Balance
Amount and the aggregate amount of Ineligible
Receivables on such Determination Date over (y) the
aggregate amount of Ineligible Receivables,
Receivables in Accounts containing Dealer
Overconcentrations and Receivables in Installment
Balances, in each case that became Defaulted
Receivables during the preceding Collection Period
and are not subject to reassignment from the Trust,
unless certain insolvency events relating to the
Seller or CCC have occurred, as further described
in the Pooling and Servicing Agreement.]
"Dealer Overconcentrations" on any Distribution
Date means, with respect to any Dealer or group of
affiliated Dealers and Series [199_-_ ], the excess
of (x) the aggregate principal amount of
Receivables due from such Dealer or group of
affiliated Dealers on the last day of the
Collection Period immediately preceding such
Distribution Date over (y) [ ]% of the Pool Balance
on the last day of the immediately preceding
Distribution Date.
The "Subordinated Percentage" will initially equal
the percentage equivalent of a fraction, the
numerator of which is the Subordination Factor and
the denominator of which will be the excess of 100%
over the Subordination Factor. The Subordination
Factor will [initially] be [ ]% [, but will be
subject to increase [by [ ]% when the [Floating
Rate] [ %] Auto Loan Asset Backed Certificates,
Series [ ] have been paid in full] [by [ ]% in the
event that the rating of CFC's long-term unsecured
debt is lowered below BBB- by Standard & Poor's or
withdrawn by Standard & Poor's unless the Seller
receives written confirmation from Standard &
Poor's that the failure to so increase the
Subordination Factor would not result in such
Rating Agency lowering or withdrawing its rating of
the Series [199_-_] Certificates] [or if [describe
other events that will require an increase in the
Subordination Factor]] [; provided, however, that
in no event will the Subordination Factor be
greater than [ ]%]. The Seller may, in its sole
discretion, increase at any time the Available
Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser
of (i) $[ ] or (ii) [ ]% of the Invested Amount on
such date. The Seller is not under any obligation
to increase the Available Subordinated Amount at
any time[, except as described herein]. If [the sum
of] the Available Subordinated Amount [and the
Incremental Subordinated Amount] were reduced to
less than [the sum of] the Required Subordinated
Amount [and the Incremental Subordinated Amount], a
[Reinvestment Event] [Early Amortization Event]
would occur. The Seller could elect to increase the
Available Subordinated Amount at the time such a
[Reinvestment Event] [Early Amortization Event]
would otherwise occur, thus preventing or
delaying the occurrence of the [Reinvestment Event]
[Early Amortization Event]. [Describe partial
Reinvestment Periods resulting from a failure to
meet the test described above, if applicable.]
[The Seller's Interest will be further subordinated
to the extent of the Available Negative Carry
Subordinated Amount. In the event of the occurrence
of [a Reinvestment Event,][an Early Amortization
Period][or the Accumulation Period Commencement
Date][the commencement of the Controlled
Amortization Period], certain
S-7
<PAGE>
Interest Collections and Principal Collections
allocated to the Seller, not to exceed the
Available Negative Carry Subordinated Amount, will
be deposited to the Reserve Fund [and other] until
the amounts on deposit therein equal the Negative
Carry Required Amount [and other]. See "Series
Provisions -- Allocation of Collections; Limited
Subordination of Seller's Interest".] [Describe any
other subordination of the Seller's Interest, if
applicable.]
Required Participation
Percentage .......... "Required Participation Percentage" shall mean, with
respect to Series [199_-_], [ ]%; provided,
however, [that if the aggregate amount of Principal
Receivables due from any Dealer or group of
affiliated Dealers at the close of business on the
last day of any Collection Period with respect to
which such determination is being made is greater
than [ ]% of the Pool Balance on such last day, the
Required Participation Percentage shall mean, as of
such last day and with respect to such Collection
Period and the immediately following Collection
Period only, [ ]%; provided, further,] that the
Seller may, upon ten days' prior notice to the
Trustee, the Rating Agencies and any Enhancement
Provider reduce the Required Participation
Percentage to not less than 100%, so long as the
Rating Agencies shall not have notified the Seller
or the Servicer that any such reduction will result
in a reduction or withdrawal of the rating of the
Series [199_-_] Certificates or any other
outstanding Series or Class of Certificates.
Other Series Issuances .. As of the date hereof, [ ] other Series issued by the
Trust are outstanding. See "Annex I -- Outstanding
Series of Investor Certificates" for a summary of
the terms of the outstanding Series.
Allocations ............ Interest Collections, Principal Collections and
Defaulted Receivables allocated to Series 199[_-_] as
described under "Description of the Certificates --
Allocation Percentages -- Allocation among Series" in
the Prospectus will be further allocated between the
Series [199_-_] Certificateholders' Interest and the
Seller's Interest as described below.
Interest Collections and Defaulted Receivables
allocated to Series [199_-_] will be allocated at
all times to the Series [199_-_] Certificate-
holders' Interest based on the Floating Allocation
Percentage applicable during the related Collection
Period [, provided that during any Early
Amortization Period, Interest Collections will be
allocated to the Series [199_-_] Certificate-
holders' Interest based on the Fixed Allocation
Percentage as described below]. The Floating
Allocation Percentage for any Collection Period is
[the percentage obtained by dividing the Invested
Amount on the last day of the immediately preceding
Collection Period by the product of (x) the Pool
Balance on the last day of the immediately
preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in
respect of which the Floating Allocation Percentage
is being calculated] [other]. During the
[Accumulation Period] [Controlled Amortization
Period], any Early Amortization Period [and any
Reinvestment Period], Principal Collections [and,
in the
S-8
<PAGE>
case of any Early Amortization Period, Interest
Collections] allocated to Series 199[_-_] will be
allocated to the Series [199_-_]
Certificateholders' Interest based on the [Fixed
Allocation Percentage] [other]. The Fixed
Allocation Percentage for a Collection Period
during [the Accumulation Period] [the Controlled
Amortization Period], any Early Amortization Period
[and any Reinvestment Period] is [the percentage
equivalent of a fraction, the numerator of which is
the Invested Amount on the last day of the
Revolving Period and the denominator of which is
the product of (x) the Pool Balance on the last day
of the immediately preceding Collection Period and
(y) the Series Allocation Percentage for the
Collection Period in respect of which the Fixed
Allocation Percentage is being calculated] [other].
Excess Principal
Collections ......... [Describe Excess Principal Collection allocations
applicable to Series [199_-_].] See "Series
Provisions -- Allocation Percentages -- Principal
Collections for all Series".
[Excess Finance Charge
Collections .......... Series [199_-_] has been designated as an Excess
Allocation Series. See "Description of the
Certificates -- Allocation Percentages -- Sharing of
Excess Interest Collections" in the Prospectus.]
[Enhancement ........... The Trust will have the benefit of a [letter of
credit] [interest rate swap] [currency swap] [cash
collateral account] [guaranty] [surety bond]
[insurance policy] [spread account] [other
enhancement] [issued by [ ]] for the benefit of
the Series [199_-_] Certificateholders as described
herein. [Describe subordination of another Series,
if applicable.] See "Series Provisions --
Enhancements" herein.]
Registration of
Series [199_-_]
Certificates ........ [The Series [199_-_] Certificates will initially be
represented by one or more Certificates registered
in the name of Cede, as the nominee of DTC. No
person acquiring an interest in the Series [199_-_]
Certificates will be entitled to receive a
definitive certificate representing such person's
interest except under certain limited
circumstances. Series [199_-_] Certificateholders
may elect to hold their Series [199_-_]
Certificates through DTC (in the United States) [or
CEDEL or Euroclear (in Europe)]. See "Description
of the Certificates -- Definitive Certificates" in
the Prospectus.]
Servicing Fee Rate ..... [ ]% or, if the Monthly Servicing Fee has been
waived as discussed under "Description of the
Certificates -- Servicing Compensation and Payment
of Expenses" in the Prospectus, 0% for the
Distribution Date in respect of which the Monthly
Servicing Fee has been waived.
[Optional Repurchase .... The Series [199_-_] Certificateholders' Interest
will be subject to optional repurchase by the
Seller on any Distribution Date after the Invested
Amount is reduced to an amount less than or equal
to $[ ] ([ ]% of the initial outstanding principal
amount of the Series [199_-_] Certificates) or a
pro rata portion thereof, in the case of a purchase
of fewer than all the Series [199_-_] Certificates.
[Series 199_-_] Certificates will also be subject
to repurchase at the option of the Seller or the
Series [199_-_ ] Certificateholders at any time on
or
S-9
<PAGE>
after the [ ] Distribution Date.] The purchase
price will equal the sum of (i) the Invested Amount
on the Determination Date preceding the
Distribution Date on which the purchase is
scheduled to be made, (ii) accrued and unpaid
interest on the Series [199_-_] Certificates to be
repurchased at the Certificate Rate (together with
interest on overdue interest) [and (iii) any
outstanding Carry-over Amount (together with
interest thereon].]
Series [199_-_]
Termination Date .... [ , 199 ]. See "Series Provisions --
Series Termination".
ERISA Considerations ... [Series [199_-_] Certificates may be eligible for
purchase by employee benefit plans. See "ERISA
Considerations" in the Prospectus.] [Other.]
Certificate Ratings .... It is a condition to the issuance of the Series
[199_-_] Certificates that they be rated in the
highest long-term rating category by at least one
nationally recognized rating agency. A security
rating is not a recommendation to buy, sell or hold
securities and is subject to revision or withdrawal
in the future by the assigning rating agency. See
"Special Considerations -- Ratings of the
Certificates" in the Prospectus.
Series Issuance Date ... [ , 199 ].
Series Cut-Off Date .... [ , 199 ].
S-10
<PAGE>
RISK FACTORS
Payments. [The shorter the Accumulation Period Length the greater the
likelihood that payment of the Series [199_-_] Certificates in full by the
Expected Payment Date will be dependent on the reallocation of Principal
Collections which are initially allocated to other Series.] If one or more
other Series from which Principal Collections are expected to be available to
be reallocated to the payment of the Series [199_-_] Certificates enters into
an early amortization period or reinvestment period after [ ] [the [ ]
Distribution Date][the Accumulation Period Commencement Date], Principal
Collections allocated to such Series generally will not be available to be
reallocated to make payments of principal of the Series [199_-_] Certificates
and [the final payment of principal of the Series [199_-_] Certificates may
be later than the Expected Payment Date] [the amount distributed in respect
of principal of the Series [199_-_] Certificates on any Distribution Date
during the Controlled Amortization Period may be less than the Controlled
Amortization Amount]. [In addition, no amounts will be paid in respect of
principal of the Series [199_-_] Certificates until the invested amount of
the Paired Series has been paid in full.] Upon written request, the Seller
will make available to Series [199_-_] Certificateholders Disclosure
Documents relating to the other outstanding Series which describe the events
which could result in the commencement of an early amortization period or
reinvestment period with respect to such outstanding Series. See "Maturity
and Principal Payment Considerations".
[In addition, a significant decline in the amount of Receivables
generated could cause an Early Amortization Event. However, such a decline in
the amount of Receivables generated would initially be absorbed by an
increase in the Excess Funded Amount. The Receivables Purchase Agreement will
provide that CCC will be required to designate additional Accounts, the
Receivables of which will be sold to the Seller, and the Pooling and
Servicing Agreement will provide that the Seller will be required to transfer
such Receivables to the Trust in the event that the amount of the Pool
Balance is not maintained at a certain minimum level. If additional Accounts
are not designated by CCC when required, an Early Amortization Event will
occur and result in the commencement of an Early Amortization Period,
although in certain circumstances the resulting Early Amortization Period may
terminate and the Revolving Period recommence. If an insolvency event
relating to CCC, CFC, the Seller or Chrysler were to occur, then an Early
Amortization Event would occur, additional Receivables would not be
transferred to the Trust and distributions of principal in respect of the
Series [199_-_] Certificates would not be subject to the [Controlled Deposit
Amount][Controlled Amortization Amount]. See "The Dealer Floorplan Financing
Business" in the Prospectus and "Maturity and Principal Payment
Considerations" herein and see also "Series Provisions -- Early Amortization
Events" for a discussion of other events which might lead to the occurrence
of an Early Amortization Period.]
Trust's Relationship to Chrysler and CFC; Financial Condition of
Chrysler. Certain aspects of the Trust's relationship to Chrysler Corporation
and CFC are described in the Prospectus under "Risk Factors -- Trust's
Relationship to Chrysler and CFC". Set forth below is certain financial and
other information with respect to Chrysler and CFC.
Chrysler Corporation and its consolidated subsidiaries ("Chrysler")
reported earnings before income taxes of $[ ] million for the [ ] quarter of
199[ ], compared with $[ ] million for the [ ] quarter of 199[ ]. For the
first [ ] months of 199[ ], Chrysler reported earnings before income taxes of
$[ ] million, compared with $[ ] million for the first [ ] months of 199[ ].
Net earnings for the [ ] quarter of 199[ ] were $[ ] million, or $[ ] per
common share, compared with $[ ] million, or $[ ] per common share, for the [
] quarter of 199[ ]. Net earnings for the first [ ] months of 199[ ] were $[
] million, or $[ ] per common share, compared with $[ ] million, or $[ ] per
common share, for the first [ ] months of 199[ ].
Chrysler reported earnings before taxes, extraordinary item, and the
cumulative effect of a change in accounting principle of $[ ] billion in 199[
], compared with $[ ] billion in 199[ ]. Net earnings for 199[ ] were $[ ]
billion, or $[ ] per common share, compared with $[ ] billion, or $[ ] per
common share, in 199[ ].
S-11
<PAGE>
Chrysler Financial Corporation and its consolidated subsidiaries' net
earnings were $[ ] million and $[ ] million for the [ ] and [ ] months ended
[ ], compared to $[ ] million and $[ ] million for the [ ] and [ ] months
ended [ ].
Chrysler Financial Corporation and its consolidated subsidiaries
achieved net earnings of $[ ] million in 199[ ] compared to $[ ] million and
$[ ] million in 199[ ] and 199[ ], respectively.
Chrysler and CFC are subject to the informational requirements of the
Exchange Act and in accordance therewith file reports and other information
with the Commission. For further information regarding Chrysler and CFC
reference is made to such reports and other information which are available
as described under "Available Information" in the Prospectus.
Credit Enhancement. Credit enhancement of the Series [199_-_]
Certificates will be provided by the subordination of the Seller's Interest
to the extent of the Available Subordinated Amount as described herein [and
amounts in the Reserve Fund]. [Describe other subordination of the Seller's
Interest, if applicable.] [Describe any applicable Enhancements.] The amount
of such credit enhancement is limited and will be reduced from time to time
as described herein. See "Series Provisions -- Allocation of Collections;
Limited Subordination of Seller's Interest" [and " -- Enhancements"].
[Basis Risk. The Receivables bear interest at prime rates announced by
certain banks plus a margin currently ranging from [ ]% to [ ]%. The
Certificate Rate is based on the Index. If, in respect of any Distribution
Date [other than a Distribution Date [with respect to the Prefunded Period]
[other]], there does not exist a positive spread between (a) the Assets
Receivables Rate and (b) the Certificate Rate based on the Index, the
Certificate Rate for such Distribution Date will be the Assets Receivables
Rate. The Certificate Rate based on the Index may exceed the Assets
Receivables Rate as a result of (i) the Index exceeding the applicable prime
rate and (ii) if amounts are deposited in the Excess Funding Account or the
Principal Funding Account, the Index exceeding the investment earnings on
amounts on deposit therein. Any Carry-over Amount will be reduced by the
amounts, if any, on deposit in the Yield Supplement Account. However, there
can be no assurance that sufficient amounts, if any, will be available in the
Yield Supplement Account. In addition, the amount required to be deposited in
the Yield Supplement Account is not designed to include amounts which would
be required to pay any Carry-over Amount resulting from the Index exceeding
the applicable prime rate. See "Series Provisions -- Interest" and " --
Distributions from the Collection Account[; Reserve Fund]; Yield Supplement
Account -- Yield Supplement Account".
In addition, CFC may reduce the rates applicable to any of the
Receivables, so long as CFC does not reasonably expect any such reduction to
result in the creation of a Carry-over Amount. In any event, such a reduction
would have the effect of reducing or possibly eliminating the positive
spread, if any, between the Assets Receivables Rate and the Certificate Rate.
Once amounts deposited from time to time in the Yield Supplement
Account are exhausted, any Carry-over Amount arising as a result of the
Certificate Rate being determined on the basis of the Assets Receivables Rate
will be paid to the extent funds are allocated and available therefor after
making all required distributions and deposits with respect to the Series
[199_-_] Certificates, including payments with respect to principal
[(including payments to the Excess Funding Account)], Monthly Interest, the
Monthly Servicing Fee, [the Reserve Fund Deposit Amount] and the Investor
Default Amount as described under "Series Provisions -- Distributions from
the Collection Account; [Reserve Fund;] Yield Supplement Account". However,
if any Carry-over Amount is outstanding for six consecutive Distribution
Dates, an [Early Amortization Event] [Reinvestment Event] will occur. See
"Series Provisions -- [Early Amortization Events"] [" -- Reinvestment
Event"]. Any Carry-over Amount outstanding on the Final Payment Date, after
making the distributions described in the second preceding sentence, will be
paid on such date from (i) amounts on deposit in the Reserve Fund and (ii)
Available Seller's Collections on deposit in the Collection Account on such
date as described under "Series Provisions -- Distributions from the
Collection Account; Reserve Fund; Yield Supplement Account -- Interest
Collections". The rating of the Series [199_-_] Certificates does not address
the likelihood of payment of any Carry-over Amount.]
S-12
<PAGE>
USE OF PROCEEDS
[After making the deposit of the Excess Funded Amount to the Excess
Funding Account, the balance of the] [The] net proceeds from the sale of the
Series [199_-_] Certificates will be [paid to USA] [deposited in the
Prefunding Account and released to USA from time to time as described
herein]. USA will use such proceeds (together with the subordinated loan from
CFC described under "U.S. Auto Receivables Company and the Trust -- U.S. Auto
Receivables Company" in the Prospectus) to purchase Receivables from CFC or
to repay certain amounts previously borrowed to purchase Receivables. CFC
will use the portion of the proceeds paid to it for [general corporate
purposes] [other].
THE DEALER FLOORPLAN FINANCING BUSINESS
Information regarding the dealer floorplan financing business is set
forth under "The Dealer Floorplan Financing Business" in the Prospectus. In
addition, the Receivables sold to the Trust by the Seller pursuant to the
Pooling and Servicing Agreement were or will be selected from extensions of
credit and advances made by Chrysler and CFC, directly or as successor to
CCC, to approximately [ ] domestic motor "vehicle dealers". CFC, directly or
as successor to CCC, financed [ ]% of the total number of all Chrysler
franchised dealers as of [ ], 199[ ]. Furthermore, CFC, directly or as
successor to CCC, has extended credit lines to [ ] Chrysler-franchised
dealers that also operate non-Chrysler franchises (representing approximately
[ ]% of the aggregate credit lines of dealers in the U.S. Wholesale Portfolio
as of [ ], 199[ ]) and [ ] non-Chrysler dealers (representing approximately [
]% of such aggregate credit lines). As of [ ], 199[ ], the balance of
Principal Receivables in the U.S. Wholesale Portfolio was approximately $[ ]
billion. CFC currently services the U.S. Wholesale Portfolio through its home
office and through a network of [ ] zone offices located throughout the
United States.
As of [ ], 199[ ], the average credit lines per dealer in the U.S.
Wholesale Portfolio for new and used vehicles (which includes Auction
Vehicles) were $[ ] million and $[ ] million, respectively, and the average
balance of principal receivables per dealer was $[ ] million. As of [ ], 199[
], the aggregate total receivables balance as a percentage of the aggregate
total credit line was approximately [ ]%.
The following table sets forth the percentages of dealer account
balances by year of credit line origination for the U.S. Wholesale Portfolio
as of [ ], 199[ ].
Portfolio Percentages by Year of Credit Line Origination
<TABLE>
<CAPTION>
Prior to
199[ ] 1996 1995 1994 1993 1992 1991 1991
------ ---- ---- ---- ---- ---- ---- --------
<C> <C> <C> <C> <C> <C> <C> <C>
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>
As of [ ], 199[ ], the weight average spread over the Prime Rate
charged to dealers in the U.S. Wholesale Portfolio was approximately [ ]%.
As of [ ], 199[ ], approximately [ ]% of all dealers participating in
the installment payment plan were remitting 100% of the Installment Balance
following the sale of the related vehicle. Currently CFC has elected to have
Chrysler absorb credit losses on Installment Balances in an amount equal to [
]% of the aggregate Installment Balances created in each calendar month
(rather than sell Installment Balances to Chrysler) and Chrysler supports
such agreement by maintaining a deposit with CFC in an amount equal to [ ]%
of the aggregate amount of Installment Balances outstanding at the end of
each calendar month.
Used Vehicles (which excludes Auction Vehicles) represented
approximately [ ]% of the aggregate principal amount of receivables in the
U.S. Wholesale Portfolio as of [ ], 199[ ]. As of [ ], 199[ ], Used Vehicles
represented approximately [ ]% of the aggregate principal amount of
Receivables in the Trust (including Excluded Receivables).
The following table provides the percentage of dealers in the U.S.
Wholesale Portfolio that were subject to finance hold as of the dates
indicated.
S-13
<PAGE>
Finance Hold Experience
<TABLE>
<CAPTION>
As of
[ ] As of December 31,
------ -----------------------------------------------------
199[ ] 1996 1995 1994 1993 1992 1991 1990 1989
------ ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of Dealers .... [ ]% 1.1% 1.8% 1.6% 3.2% 6.8% 9.4% 6.8% 4.6%
</TABLE>
The following table provides the number and percentage of dealers in
Dealer Trouble Status in the U.S. Wholesale Portfolio as of the dates
indicated.
Dealer Trouble Experience
<TABLE>
<CAPTION>
As of
[ ] As of December 31,
------ -----------------------------------------------------
199[ ] 1996 1995 1994 1993 1992 1991 1990 1989
------ ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Dealers ........ [ ] 20 6 12 21 56 100 129 106
Percentage of Dealers .... [ ]% 0.6% 0.2% 0.3% 0.6% 1.8% 3.1% 4.2% 3.5%
</TABLE>
THE ACCOUNTS
As of the Series Cut-Off Date, with respect to the Accounts in the
Trust: (a) there were [ ] Accounts and the Principal Receivables balance was
approximately $[ ] million; (b) the average credit lines per Dealer for new
and used vehicles (which include Auction Vehicles) were approximately $[ ]
million and $[ ] million, respectively, and the average balance of Principal
Receivables per Dealer was approximately $[ ] million; and (c) the aggregate
total receivables balance as a percentage of the aggregate total credit line
was approximately [ ]%. Unless otherwise indicated, the statistics included
in this paragraph, in the table below and under "The Accounts -- General" and
" -- Geographic Distribution" with respect to the Accounts and the
Receivables in the Trust gives effect to approximately $[ ] million of
principal receivables balances with respect to certain Dealers (the "Excluded
Receivables" and the "Excluded Dealers", respectively) that are in voluntary
or involuntary bankruptcy proceedings or voluntary or involuntary liquidation
or that, subject to certain limitations, are being voluntarily removed by the
Seller (or the Servicer on its behalf) from the Trust. A portion of such
principal receivables was created after such Dealers entered into such status
or were designated by the Seller (or the Servicer on its behalf) for removal
from the Trust and, as a result thereof, are owned by CFC and not the Trust.
Principal receivables balances created prior to such Dealers entering into
such status or being designated for removal from the Trust are included in
the Principal Receivables balance. See "Description of the Certificates --
Removal of Accounts" in the Prospectus for a description of the manner in
which an Account can be removed from the Trust.
The following table sets forth the percentages of dealer account
balances by year of credit line origination for the accounts in the Trust as
of [ ], 199[ ].
Portfolio Percentage by Year of Credit Line Origination
<TABLE>
<CAPTION>
Prior to
199[ ] 1996 1995 1994 1993 1992 1991 1991
------ ---- ---- ---- ---- ---- ---- --------
<C> <C> <C> <C> <C> <C> <C> <C>
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>
As of [ ], 199[ ], the weighted average spread over the Prime Rate
charged to Dealers was approximately [ ]%.
S-14
<PAGE>
Loss Experience
The following tables set forth the average Principal Receivables
balance and loss experience for each of the periods shown on the U.S.
Wholesale Portfolio. Because the Eligible Accounts will be only a portion of
the entire U.S. Wholesale Portfolio, actual loss experience with respect to
the Eligible Accounts may be different. There can be no assurance that the
loss experience for the Receivables in the future will be similar to the
historical experience set forth below with respect to the U.S. Wholesale
Portfolio. In addition, the historical experience set forth below reflects
financial assistance provided by Chrysler to Chrysler-franchised dealers as
described in the Prospectus under "The Dealer Floorplan Financing Business --
Relationship with Chrysler" in the Prospectus. If Chrysler is not able to or
elects not to provide such assistance, the loss experience in respect of the
U.S. Wholesale Portfolio may be adversely affected. See "Risk Factors --
Trust's Relationship to Chrysler and CFC" in the Prospectus and "Risk Factors
- -- Trust's Relationship to Chrysler and CFC; Financial Condition of Chrysler"
in this Prospectus Supplement.
Loss Experience for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
[
] Year Ended December 31,
----------------- ----------------------------------
199[ ] 199[ ] 1996 1995 1994 1993
------ ------ ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C>
Average
Principal
Receivables
Balance(1) ............. $[ ] $ [ ] $ 8,825 $ 8,256 $ 6,754 $6,271
Net Losses(2) ............ $ [ ] $ [ ] $ (0) $ (1) $ (1) $ 12
Net Losses/Liquidations .. [ ]% [ ]% (0.000)% (0.002)% (0.003)% 0.035%
Net Losses/Average
Principal Receivables
Balance (3) ........... [ ]% [ ]% (0.00)% (0.01)% (0.01)% 0.19%
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Average
Principal
Receivables
Balance(1) ............. $5,344 $4,826 $4,726 $4,933 $4,129 $3,787 $2,991
Net Losses(2) ............ $ 26 $ 36 $ 23 $ 13 $ 3 $ 2 $ 3
Net Losses/Liquidations .. 0.098% 0.163% 0.117% 0.060% 0.015% 0.015% 0.023%
Net Losses/Average
Principal Receivables
Balance (3) ............ 0.49% 0.75% 0.49% 0.26% 0.07% 0.06% 0.10%
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
---- ---- ---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal
Receivables
Balance(1) ............. $2,532 $2,098 $1,461 $1,451 $1,390 $1,622 $1,837
Net Losses(2) ............ $ 1 $ (2) $ 2 $ 14 $ 12 $ 18 $ 11
Net Losses/Liquidations .. 0.004% (.019)% 0.023% 0.239% 0.225% 0.338% 0.163%
Net Losses/Average
Principal Receivables
Balance ................ 0.02% (0.09)% 0.12% 0.95% 0.85% 1.12% 0.58%
<FN>
- ----------------
(1) Average Principal Receivables Balance is the average of the month-end
principal balances for the [ ] months ending on the last day of the
period, except for the [ ] months ended [ ] 199[ ] and [ ], 199[ ], which
are based on a [ ]-month average.
(2) Net losses in any period are gross losses less recoveries for such
period.
(3) Percentages for the [ ] months ended [ ], 199[ ] and 199[ ]
are expressed on an annualized basis.
</TABLE>
S-15
<PAGE>
Aging Experience
The following table provides the age distribution of vehicle inventory
for all dealers in the U.S. Wholesale Portfolio, as a percentage of total
principal outstanding at the date indicated. Because the Eligible Accounts
will only be a portion of the entire U.S. Wholesale Portfolio, actual age
distribution with respect to the Eligible Accounts may be different.
<TABLE>
<CAPTION>
Age Distribution for the U.S. Wholesale Portfolio
[ As of
] December 31,
--------------- --------------------------------------------------------------------------
199[ ] 199[ ] 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1-120 ................ [ ]% [ ]% 80.4% 82.2% 82.5% 82.4% 77.2% 75.9% 72.2% 71.3% 78.8% 73.0% 81.5%
121-180 .............. [ ] [ ] 10.0 9.3 10.1 9.6 13.8 12.9 13.7 14.5 11.0 13.9 9.2
181-270 .............. [ ] [ ] 5.0 3.8 4.0 4.6 4.8 4.8 7.1 6.4 4.7 6.8 4.4
Over 270 ............. [ ] [ ] 4.6 4.7 3.4 3.4 4.2 6.4 7.0 7.8 5.5 6.3 4.9
</TABLE>
Geographic Distribution
The following table provides the geographic distribution of the vehicle
inventory for all dealers in the Trust on the basis of receivables
outstanding
and the number of dealers generating such portfolio.
Geographic Distribution of Accounts in the Trust
As of [ ], 199[ ]
<TABLE>
<CAPTION>
Percentage
Receivables Percentage of Total of
Outstanding Receivables Number Number of
(thousands of Outstanding of Dealers
dollars)(2) (2)(4) Dealers(3) (3)(4)
----------- ----------- ------ ---------
<S> <C> <C> <C> <C>
California ......... % %
Texas .............. % %
New York ........... % %
New Jersey ......... % %
Illinois ........... % %
Pennsylvania ....... % %
Michigan ........... % %
[ ] ............ % %
Other(1) ........... % %
<FN>
- ----------------
(1) No other state includes more than 5% of the outstanding Receivables.
(2) Includes Excluded Receivables.
(3) Includes Excluded Dealers.
(4) May not add to 100.0% due to rounding.
</TABLE>
S-16
<PAGE>
CHRYSLER FINANCIAL CORPORATION
Certain information regarding Chrysler Financial Corporation is set
forth under "Chrysler Financial Corporation" in the Prospectus. In addition,
as of [ ], 199[ ], CFC had nearly [ ] employees and was servicing
$[ ] billion in finance receivables. During the first [ ] months of 199[ ],
CFC financed or leased approximately [ ] vehicles at retail, including
approximately [ ] new Chrysler passenger cars and light duty trucks
representing [ ]% of Chrysler's U.S. retail and fleet deliveries. CFC also
financed at wholesale approximately [ ] new Chrysler passenger cars and light
duty trucks representing [ ]% of Chrysler's U.S. factory unit sales for the
[ ] months ended [ ], 199[ ]. Wholesale vehicle financing accounted for
[ ]% of the total automotive financing volume of CFC in the first [ ] months
of 199[ ] and represented [ ]% of gross automotive finance receivables
outstanding at [ ], 199[ ].
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal with respect to the Series [199_-_] Certificates will be
payable if an Early Amortization Event [that is not cured as described
herein] has occurred. Full amortization of the Series [199_-_] Certificates
by the [ ] Distribution Date (the "Expected Payment Date") depends on, among
other things, repayment by Dealers of the Receivables and may not occur if
Dealer payments are insufficient therefor. Because the Receivables generally
are paid upon retail sale of the underlying Vehicle, the timing of such
payments is uncertain. In addition, there is no assurance that CFC will
generate additional Receivables under the Accounts or that any particular
pattern of Dealer payments will occur. See "Series Provisions -- Interest"
and " -- Principal" herein and "The Dealer Floorplan Financing Business" in
the Prospectus and herein. [In addition, the shorter the Accumulation Period
Length the greater the likelihood that payment of the Series [199_-_]
Certificates in full by the Expected Payment Date will be dependent on the
reallocation of Principal Collections which are initially allocated to other
outstanding Series.] If one or more other Series from which Principal
Collections are expected to be available to be reallocated to the payment of
the Series [199_-_] Certificates enters into an early amortization period or
reinvestment period after [ ] [the [ ] Distribution Date] [the Accumulation
Period Commencement Date], Principal Collections allocated to such Series
generally will not be available to be reallocated to make payments of
principal of the Series [199_-_] Certificates and [the final payment of
principal of the Series [199_-_] Certificates may be later than the Expected
Payment Date] [the amount distributed in respect of principal of the Series
[199_-_] Certificates on any Distribution Date during the Controlled
Amortization Period may be less than the Controlled Amortization Amount]. [In
addition, no amounts will be paid in respect of principal of the Series
[199_-_] Certificates until the invested amount of the Paired Series has been
reduced to zero.] Upon written request, the Seller will make available to
Series [199_-_] Certificateholders Disclosure Documents relating to the other
outstanding Series which describe the events which could result in the
commencement of an early amortization period or reinvestment period with
respect to such outstanding Series.]
Because an Early Amortization Event with respect to the Series [199_-_]
Certificates may occur which would initiate an Early Amortization Period, the
final distribution of principal on the Series [199_-_] Certificates may be
made prior to the scheduled termination of the Revolving Period or prior to
the Expected Payment Date. See "Series Provisions -- Early Amortization
Events".
[Several of the events which constitute Reinvestment Events with
respect to the Series [199_-_] Certificates may constitute early amortization
events with respect to other Series. Should such an event occur, holders of
Certificates of such other Series would receive monthly distribution of
principal, which distributions would not be limited to any controlled
amortization amount, while Certificateholder Principal Collections would be
retained in the Principal Funding Account and would not be distributed to
Series [199_-_] Certificateholders until the Expected Payment Date or, if
earlier, the first Distribution Date following the occurrence of an Early
Amortization Event. See "Series Provisions -- Principal" and " --
Reinvestment Events".]
The amount of new Receivables generated in any month and monthly
payment rates on the Receivables may vary because of seasonal variations in
Vehicle sales and inventory levels, retail incentive
S-17
<PAGE>
programs provided by Vehicle manufacturers and various economic factors
affecting Vehicle sales generally. The following table sets forth the highest
and lowest monthly payment rates for the U.S. Wholesale Portfolio during any
month in the periods shown and the average of the monthly payment rates for
all months during the periods shown, in each case calculated as the
percentage equivalent of a fraction, the numerator of which is the aggregate
of all collections of principal during the period and the denominator of
which is the average aggregate principal balance for such period. Monthly
payment rates reflected in the table include principal credit adjustments.
The monthly payment rates presented for 1980 through 1985 are calculated
using quarterly data while monthly payment rates for 1986 through 1994
reflect actual monthly data. There can be no assurance that the rate of
Principal Collections will be similar to the historical experience set forth
below. Because the Eligible Accounts will be only a portion of the entire
U.S. Wholesale Portfolio, historical actual monthly payment rates with
respect to the Eligible Accounts may be different than those shown below.
Monthly Payment Rates for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
[
] Year Ended December 31,
------------- ------------------------------------------------------------------------------
199[ ] 199[ ] 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month ............ [ ]% [ ]% 58.3% 59.1% 59.7% 54.7% 50.6% 49.0% 42.1% 41.5% 48.7% 40.3% 56.7%
Lowest Month ............. [ ] [ ] 43.2 36.5 34.2 35.9 34.4 30.2 25.3 29.5 29.5 26.8 27.7
Average of the Months in
the Period ............. [ ] [ ] 49.0 45.6 50.3 46.6 41.3 38.4 35.7 35.6 41.2 34.2 37.7
<CAPTION>
Year Ended December 31,
----------------------------------------------
1985 1984 1983 1982 1981 1980 1979
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month ............ 45.9% 43.7% 45.9% 35.5% 34.3% 28.9% 36.5%
Lowest Month ............. 35.8 35.7 37.7 29.0 27.4 26.7 26.0
Average of the Months in
the Period ............. 40.1 39.9 42.2 32.9 32.2 28.1 30.0
</TABLE>
SERIES PROVISIONS
General
The Series [199_-_] Certificates will be issued pursuant to the Pooling
and Servicing Agreement and a Series Supplement relating to the Series
[199_-_] Certificates (the "Series Supplement"). The Series [199_-_]
Certificates will consist of a single Class. The Trustee will make available
for inspection a copy of the Pooling and Servicing Agreement (without
exhibits or schedules) on request. Reference should be made to the Prospectus
for additional information concerning the Series [199_-_] Certificates and
the Pooling and Servicing Agreement.
Interest
Interest on the principal balance of the Series [199_-_] Certificates
will accrue at the Certificate Rate and will be payable to the Series
[199_-_] Certificateholders on each [Interest Payment Date] [Distribution
Date], commencing [ ], 199[ ][, provided that, during any Early Amortization
Period, interest will be distributed to Series [199_-_] Certificateholders on
each Distribution Date, commencing on the first Distribution Date following
the occurrence of an Early Amortization Event]. Interest will accrue from and
including the preceding [Interest Payment Date] [Distribution Date] (or, in
the case of the first [Interest Payment Date] [Distribution Date], from and
including the Series Issuance Date) to but including such [Interest Payment
Date] [Distribution Date]. Interest will be calculated on a basis of [the
actual number of days in each Interest Period divided by [360][other]] [a
360-day year of twelve 30-day months]. Interest due for any [Interest Payment
Date or] Distribution Date but not paid on such [Interest Payment Date or]
Distribution Date will be due on the next [Interest Payment Date or]
Distribution Date [, as applicable], together with interest on such amount at
the Certificate Rate, to the extent permitted by applicable law. Interest
payments on the Series [199_-_] Certificates will generally be
S-18
<PAGE>
derived from Certificateholder Interest Collections for a Collection Period,
[any withdrawals from the Reserve Fund,] [Excess Interest Collections, if
any, allocated to Series [199_-_],] [any withdrawals from the Yield
Supplement Account,] Investment Proceeds and, under certain circumstances,
Available Seller's Collections to the extent of the Available Subordinated
Amount [describe other sources].
[The Certificate Rate for each [Interest Period] [other] will be
determined on the Adjustment Date preceding such [Interest Period] [other].]
The "Certificate Rate" will be [ %] [equal to [the lesser of (a)] the Index
[plus] [minus] [times] [ ]% [and (b) [except with respect to [the Prefunded
Period [other]] the Assets Receivables Rate for the related Distribution
Date].
"Monthly Interest" for any Distribution Date means the amount of interest
accrued in respect of the Series [199_-_] Certificates as described above for
such Distribution Date.
[Describe Index and define Adjustment Date.]
[If the Certificate Rate for a Distribution Date [other than a
Distribution Date [with respect to the Prefunded Period] [other]] calculated
on the basis of the Index as described above is greater than the Assets
Receivable Rate, then the Certificate Rate for such Distribution Date will be
the Assets Receivables Rate.]
[The "Assets Receivables Rate" for any [Interest Period][period from
one Distribution Date to the immediately succeeding Distribution Date] shall
equal [the product of (a) the quotient obtained by dividing (i) 360 by (ii)
the actual number of days elapsed in such period and (b) a percentage,
expressed as a fraction, (i) the numerator of which is the sum of (A)
Certificateholder Interest Collections for the Collection Period immediately
preceding the last day of such period (which for this purpose only is based
on interest amounts billed to the Dealers which are due during such
Collection Period) less, unless waived by the Servicer, the Monthly Servicing
Fee with respect to such immediately preceding Collection Period] and [(B)
the Investment Proceeds to be applied on the Distribution Date related to
such period [and (C) Excess Interest Collections allocated to Series [199_-_]
with respect to such period] and (ii) the denominator of which is [the sum of
(A)] the product of (I) the Floating Allocation Percentage, (II) the Series
Allocation Percentage and (III) the average Pool Balance (after giving effect
to any charge-offs) for such immediately preceding Collection Period, [(B)
the principal balance on deposit in the Excess Funding Account on the first
day of such period (after giving effect to all deposits to and withdrawals
therefrom on such first day)] and [(C) the principal balance on deposit in
the Principal Funding Account on the first day of such period (after giving
effect to all deposits to and withdrawals therefrom on such first day)]
[other].
If the Certificate Rate for any Distribution Date is based on the
Assets Receivables Rate, the excess of (a) the amount of interest on the
Series [199_-_] Certificates that would have accrued in respect of the
related [Interest Period][period from one Distribution Date to the
immediately succeeding Distribution Date] had interest been calculated based
on the Index over (b) the amount of interest on the Series [199_-_]
Certificates actually accrued in respect of such period based on the Assets
Receivables Rate (such excess, together with the unpaid portion of any such
excess from prior Distribution Dates (and interest accrued thereon at the
Certificate Rate calculated on the basis of the Index), is referred to as the
"Carry-over Amount") will be paid on such Distribution Date from amounts on
deposit in the Yield Supplement Account and, if such amounts are depleted, to
the extent funds are allocated and available therefor after making all
required distributions and deposits with respect to the Series [199_-_]
Certificates, including payments with respect to principal [(including
payments to the Excess Funding Account)], Monthly Interest, the Monthly
Servicing Fee[, the Reserve Fund Deposit Amount] and the Investor Default
Amount as described below under "Distributions from the Collection Account;
[Reserve Fund;] Yield Supplement Account". In addition, any Carry-over Amount
outstanding on the Final Payment Date, after making the distributions
described in the preceding sentence, will be paid on such date from (i)
amounts on deposit in the Reserve Fund and (ii) Available Seller's
Collections on deposit in the Collection Account on such date as described
under "Series Provisions -- Distributions from the Collection Account;
Reserve Fund; Yield Supplement Account". The rating of the Series [199_-_]
Certificates does not address the likelihood of payment of any Carry-over
Amount.]
S-19
<PAGE>
Principal
In general, no principal payments will be made to the Series [199_-_]
Certificateholders until the [Expected Payment Date] [Principal Commencement
Date] or, upon the occurrence of an Early Amortization Event [that is not
cured as described herein], until the first Special Payment Date[; provided,
however, that notwithstanding the occurrence of an Early Amortization Event,
no principal payments will be made to the Series [199_-_] Certificateholders
during the Prefunded Period]. On each Distribution Date with respect to the
Revolving Period, collections of Principal Receivables allocable to the
Series [199_-_] Certificateholders' Interest, subject to certain limitations,
will either be (a) allocated to one or more Series which are in amortization,
early amortization or accumulation periods to cover principal payments due to
the Certificateholders of any such Series or which provides for excess
funding accounts or similar arrangements or (b) if no such Series is then
amortizing or accumulating principal or otherwise does not provide for excess
funding accounts or similar arrangements, paid to the Seller to maintain the
Series [199_-_] Certificateholders' Interest or held as Unallocated Principal
Collections. See "Allocation Percentages -- Principal Collections for all
Series" and "Distributions from the Collection Account[; Reserve Fund][;
Yield Supplement Account] -- Principal Collections".
Unless and until an Early Amortization Event [or Reinvestment Event]
[that is not cured as described herein] shall have occurred and until the
outstanding principal balance of the Series [199_-_] Certificates is paid in
full, on each Distribution Date with respect to the [Accumulation Period]
[Controlled Amortization Period], collections of Principal Receivables
allocable to the Series [199_-_] Certificateholders' Interest plus certain
other amounts comprising Monthly Principal will no longer be paid for the
benefit of another Series or to the Seller as described above but instead an
amount thereof up to the [Controlled Deposit Amount] [Controlled Distribution
Amount] for each such Distribution Date will be [deposited in the Principal
Funding Account] [distributed to Series [19_-_] Certificateholders]. [The
funds deposited in the Principal Funding Account and any amounts in the
Excess Funding Account will be used to pay the outstanding principal balance
of the Series [199_-_]Certificates on the Expected Payment Date. If on such
date the sum of the Principal Funding Account Balance and any amounts in the
Excess Funding Account is less than the outstanding principal balance of the
Series [199_-_] Certificates, the Early Amortization Period will commence and
on each Special Payment Date the Series [199_-_] Certificateholders will
receive distributions of Monthly Principal and Monthly Interest until the
outstanding principal balance of the Series [199_-_] Certificates has been
paid in full or the Series Termination Date has occurred. Even if the sum of
the Principal Funding Account Balance and any amounts in the Excess Funding
Account on the Expected Payment Date is insufficient to pay the outstanding
principal balance of the Series [199_-_] Certificates in full, such balances
will be distributed to the Series [199_-_] Certificateholders at such time.]
[Notwithstanding the foregoing, no payments of principal will be made in
respect of the Series [199_-_] Certificates during the Prefunded Period.]
It is expected that the final principal payment with respect to the
Series [199_-_] Certificates will be made on the Expected Payment Date, but
the principal of the Series [199_-_] Certificates may be paid earlier or,
depending on the actual payment rate on the Receivables, later, as described
under "Special Considerations -- Payments" herein and in the Prospectus.
[Excess Funding Account
Unless and until an Early Amortization Event [or Reinvestment Event]
shall have occurred, the Excess Funded Amount will be maintained in the
Excess Funding Account established with the Trustee. The Excess Funded Amount
will initially equal the excess of the initial principal balance of the
Series [199_-_] Certificates, if any, over the Initial Invested Amount. Funds
on deposit in the Excess Funding Account will be invested by the Trustee at
the direction of the Servicer generally in Eligible Investments. Such
investments must mature on or prior to the next Distribution Date.
Funds on deposit in the Excess Funding Account will be withdrawn and
paid to the Seller or allocated to one or more Series which are in
amortization, early amortization or accumulation periods to the extent of any
increases in the Invested Amount as a result of the addition of Receivables
to the Trust, a reduction in the Seller's Interest, or a reduction in the
initial invested amount of any other Series.
S-20
<PAGE>
Additional amounts will be deposited in the Excess Funding Account on a
Distribution Date to the extent that the sum of the Series [199_-_]
Certificateholders' Interest in Principal Receivables and the amount on
deposit in the Excess Funding Account prior to the deposit on such
Distribution Date is less than the outstanding principal balance of the
Series [199_-_] Certificates, but only to the extent that funds are available
therefor as described herein. In the event that other Series issued by the
Trust provide for excess funding accounts or other arrangements similar to
the Excess Funding Account involving fluctuating levels of investment in the
Receivables, the allocation of additional Receivables to increase the
Invested Amount will generally be based on the proportion that the amount on
deposit in the Excess Funding Account bears to the amounts on deposit in the
excess funding accounts of all Series providing for excess funding accounts
or such similar arrangements or to amounts otherwise similarly available; and
the deposit of amounts in the Excess Funding Account will be based on the
proportion that the Adjusted Invested Amount bears to the adjusted invested
amounts of all Series providing for excess funding accounts or such similar
arrangements.
On each Distribution Date, all investment income earned on amounts in
the Excess Funding Account since the preceding Distribution Date will be
withdrawn from the Excess Funding Account and applied as described herein.
Any funds on deposit in the Excess Funding Account on the earlier of (i)
[ ] [the [ ] Distribution Date][the Accumulation Period
Commencement Date] and (ii) the commencement of an Early Amortization Period
[or Reinvestment Period] will be deposited in the Principal Funding Account
on such date. [In addition, on each Distribution Date with respect to the
Controlled Amortization Period an amount equal to the quotient obtained by
dividing the amount on deposit in the Excess Funding Account as of the [ ]
Distribution Date (after giving effect to any withdrawals from or deposits to
such account on such date) by [ ] will be distributed to Series [199_-_]
Certificateholders on such date in respect of principal of the Series
[199_-_] Certificates.] No funds will be deposited in the Excess Funding
Account during any Early Amortization Period [or Reinvestment Period] or with
respect to any Collection Period following [ ] [the [ ]
Distribution Date] [the Accumulation Period Commencement Date].
Allocation Percentages
Allocation between the Series [199_-_] Certificateholders and the
Seller. The Servicer will allocate amounts initially allocated to Series
[199_-_] as described under "Description of the Certificates -- Allocation
Percentages -- Allocations among Series" in the Prospectus between the Series
[199_-_] Certificateholders' Interest and the Seller's Interest for each
Collection Period as follows:
(i) Series Allocable Interest Collections and the Series
Allocable Defaulted Amount will be allocated to Series [199_-_]
Certificateholders based on the Floating Allocation Percentage [,
provided that during any Early Amortization Period, Series Allocable
Interest Collections will be allocated to the Series [199_-_]
Certificateholders based on the Fixed
Allocation Percentage];
(ii) during the Revolving Period, Series Allocable Principal
Collections will be allocated to Series [199_-_] Certificateholders
based on the Floating Allocation Percentage;
(iii) during the [Accumulation Period] [Controlled Amortization
Period] and any Early Amortization Period [or Reinvestment Period],
Series Allocable Principal Collections will be allocated to Series
[199_-_] Certificateholders based on the [Fixed Allocation Percentage]
[other]; and
(iv) Series Allocable Miscellaneous Payments will at all times be
allocated to Series [199_-_] Certificateholders.
Amounts not allocated to the Series [199_-_] Certificateholders as described
above will be allocated to the Seller.
"Floating Allocation Percentage" for any Collection Period means
[the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the Invested Amount as
S-21
<PAGE>
of the last day of the immediately preceding Collection Period and the
denominator of which is the product of (x) the Pool Balance as of such
last day and (y) the Series Allocation Percentage for the Collection
Period in respect of which the Floating Allocation Percentage is being
calculated; provided, however, that, with respect to the first
Collection Period, the Floating Allocation Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the
Initial Invested Amount as of the Series Issuance Date and the
denominator of which is the Series Allocation Percentage of the Pool
Balance as of the Series Cut-Off Date] [other].
"Fixed Allocation Percentage" for any Collection Period generally
means [the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the Invested Amount as of the last
day of the Revolving Period and the denominator of which is the product
of (x) the Pool Balance as of the last day of the immediately preceding
Collection Period and (y) the Series Allocation Percentage for the
Collection Period in respect of which the Fixed Allocation Percentage
is being calculated] [other].
"Invested Amount" means for any date [an amount equal to the
Initial Invested Amount, minus the amount, without duplication, of
principal payments (except principal payments made from the Excess
Funding Account) made to Series [199_-_] Certificateholders or
deposited to the Principal Funding Account prior to such date since the
Series Issuance Date, minus the excess, if any, of the aggregate amount
of Investor Charge-Offs for all Distribution Dates preceding such date,
over the aggregate amount of any reimbursements of Investor Charge-Offs
for all Distribution Dates preceding such date] [other].
"Initial Invested Amount" means [[the portion of the initial
principal amount of the Series [199_-_] Certificates which is invested
in Principal Receivables on the Series Issuance Date, which is expected
to equal approximately $[ ] (based on information as of the Series
Cut-Off Date)] [during the Prefunded Period, zero and thereafter [ ]],
plus (x) the amount of any withdrawals from the Excess Funding Account
in connection with the purchase of an additional interest in Principal
Receivables since the Series Issuance Date, minus (y) the amount of any
additions to the Excess Funding Account in connection with a reduction
in the Principal Receivables in the Trust since the Series Issuance
Date] [other].
The Floating Allocation Percentage and the Fixed Allocation Percentage will
be adjusted for any Collection Period in which Additional Accounts are
designated to reflect the additional Receivables added to the Trust.
Principal Collections for all Series. Principal Collections allocated
to the Series [199_-_] Certificateholders' Interest, for any Collection
Period with respect to the [Accumulation Period] [Controlled Amortization
Period] or any Early Amortization Period [or Reinvestment Period], will first
be allocated [to make required payments of principal [to the Principal
Funding Account during the [Accumulation Period] [or Reinvestment Period]
and] to the Series [199_-_] Certificateholders during [the Controlled
Amortization Period and] any Early Amortization Period][describe other
applications, if applicable]. See "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account] -- Principal
Collections". The Servicer will determine the amount of Available
Certificateholder Principal Collections for any Collection Period remaining
after such required payments, if any, and the amount of any similar excess
for any other Series ("Excess Principal Collections"). The Servicer will
allocate Excess Principal Collections to cover any principal distributions to
Certificateholders for any Series which are either scheduled or permitted and
which have not been covered out of Principal Collections and certain other
amounts allocated to such Series ("Principal Shortfalls"). See "Maturity and
Principal Payment Considerations". Excess Principal Collections will
generally not be used to cover investor charge-offs for any Series. If
Principal Shortfalls exceed Excess Principal Collections for any Collection
Period, Excess Principal Collections will be allocated [pro rata among the
applicable Series based on the relative amounts of Principal Shortfalls]
[describe other method of applying, if applicable].
Allocation of Collections; Limited Subordination of Seller's Interest
[Except as otherwise described herein with respect to Interest
Collections and Principal Collections allocated to the Available Negative
Carry Subordinated Amount, [and [ ]] on] [On] any date on which collections
are deposited in the Collection Account, the Servicer will distribute
directly to the Seller an
S-22
<PAGE>
amount equal to (a) the Excess Seller's Percentage for the related Collection
Period of Series Allocable Interest Collections for such date and (b) the
Excess Seller's Percentage for the related Collection Period of Series
Allocable Principal Collections for such date, if the Seller's Participation
Amount (determined after giving effect to any Principal Receivables
transferred to the Trust on such date) exceeds the Trust Available
Subordinated Amount for the immediately preceding Determination Date (after
giving effect to the allocations, distributions, withdrawals and deposits to
be made on the Distribution Date immediately following such Determination
Date). In addition, during the Revolving Period, subject to certain
limitations, the Servicer will distribute directly to the Seller on each such
date of deposit an amount equal to the Available Seller's Principal
Collections for such date, if the Seller's Participation Amount (determined
after giving effect to any Principal Receivables transferred to the Trust on
such date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date) [describe
exceptions, if any].
"Available Seller's Collections" for any date means the sum of
(a) the Available Seller's Interest Collections for such date and (b)
the Available Seller's Principal Collections for such date; provided,
however, that the Available Seller's Collections will be zero for any
Collection Period with respect to which the Available Subordinated
Amount is zero on the Determination Date immediately following the end
of such Collection Period.
"Available Seller's Interest Collections" for any date means an
amount equal to the result obtained by multiplying (a) the excess of
(i) the Seller's Percentage for the related Collection Period over (ii)
the Excess Seller's Percentage for such Collection Period by (b) Series
Allocable Interest Collections for such date.
"Available Seller's Principal Collections" for any date means an
amount equal to the product of (a) the excess of (i) the Seller's
Percentage for the related Collection Period over (ii) the Excess
Seller's Percentage for such Collection Period and (b) Series Allocable
Principal Collections for such date.
"Seller's Percentage" means 100% minus (a) the Floating
Allocation Percentage, when used with respect to Interest Collections
[(except during any Early Amortization Period)], Defaulted Receivables
and Principal Collections during the Revolving Period, and (b) the
[Fixed Allocation Percentage] [other], when used with respect to
[Interest Collections during any Early Amortization Period and]
PrincipalCollections during the [Accumulation Period] [Controlled
Amortization Period] and any Early Amortization Period [or Reinvestment
Period].
"Excess Seller's Percentage" for any Collection Period means a
percentage (which percentage shall never be less than 0% nor more than
100%) equal to (a) 100% minus, when used with respect to Interest
Collections [(except during any Early Amortization Period)] and
Principal Collections during the Revolving Period, the sum of (i) the
Floating Allocation Percentage with respect to such Collection Period
and (ii) the percentage equivalent of a fraction, the numerator of
which is the Available Subordinated Amount as of the Determination Date
occurring in such Collection Period (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date), and
the denominator of which is the product of (x) the Pool Balance as of
the last day of such immediately preceding Collection Period and (y)
the Series Allocation Percentage for the Collection Period in respect
of which the Excess Seller's Percentage is being calculated or (b) 100%
minus, when used with respect to [Interest Collections during any Early
Amortization Period and] Principal Collections during the [Accumulation
Period] [Controlled Amortization Period] and any Early Amortization
Period [or Reinvestment Period], the sum of (i) the [Fixed Allocation
Percentage] [other] with respect to such Collection Period and (ii) the
percentage described in clause (a)(ii) above for such Collection
Period.
Deficiency Amount. [On each Determination Date [with respect to a
Distribution Date that occurs on or prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Revolving
S-23
<PAGE>
Period, if the Revolving Period has recommenced]], the Servicer will
determine for the Series [199_-_] Certificates the amount (the "Deficiency
Amount"), if any, by which (a) the sum of (i) Monthly Interest for the
following Distribution Date, (ii) Monthly Interest accrued but not paid with
respect to prior Distribution Dates (and interest thereon), (iii) the Monthly
Servicing Fee for such Distribution Date, (iv) the Investor Default Amount
for such Distribution Date and (v) the amount of any Adjustment Payment
allocated to the Series [199_-_] Certificates for such Distribution Date that
has not been deposited in the Collection Account as required under the
Pooling and Servicing Agreement and (vi) if such Distribution Date is the
Final Payment Date, any Carry-over Amount on such Distribution Date that will
not be satisfied on such date by the application of amounts on deposit in the
Yield Supplement Account as described under "Distributions from the
Collection Account; Reserve Fund; Yield Supplement Account -- Yield
Supplement Account", exceeds (b) the sum of [(i)] Certificateholder Interest
Collections and Investment Proceeds for such Distribution Date [(ii) Excess
Interest collections allocated to Series [199_-_] with respect to such
Distribution Date] [and (iii) the amount of funds in the Reserve Fund on such
Determination Date available to fund any portion of the Deficiency Amount as
described under "Distributions from the Collection Account; Reserve Fund[;
Yield Supplement Account] -- Interest Collections"]. The lesser of the
Deficiency Amount and the Available Subordinated Amount is the "Draw
Amount".] [Include other sources of funds and applications of the Draw
Amount, as appropriate.](2)
"Final Payment Date" means the first Distribution Date on which, after
giving effect to all payments to be made on such Distribution Date, the
outstanding principal balance of the Series [199_-_ ] Certificates will be
paid in full.
Available Subordinated Amount. The "Required Subordinated Amount" shall
mean, as of any date of determination, [the sum of (i)] the product of the
initial Subordinated Percentage [, as adjusted from time to time as described
herein other than as a result of an increase therein at the option of the
Seller,] and the Invested Amount [and (ii) the Incremental Subordinated
Amount]. Assuming that the Initial Invested Amount of the Series [199_-_]
Certificates is equal to the initial principal amount of the Series [199_-_]
Certificates, such amount would initially be $[ ].
The Available Subordinated Amount for a Determination Date is equal to
(a) the lesser of (i) the Available Subordinated Amount for the preceding
Determination Date, minus, with certain limitations, the Draw Amount for such
preceding Determination Date, [minus funds from the Reserve Fund applied to
cover any portion of the Investor Default Amount,] plus the excess, if any,
of the Required Subordinated Amount for such Determination Date over the
Required Subordinated Amount for the immediately preceding Determination
Date, plus amount of Excess Servicing available to be paid to the Seller as
described under "Distributions from the Collection Account[; Reserve Fund][;
Yield Supplement Account] -- Excess Servicing", and (ii) the product of the
fractional equivalent of the Subordinated Percentage and the Invested
Amount[, minus (b) in the case of clause (a) (i) the Incremental Subordinated
Amount for such preceding Determination Date, plus (c) the Incremental
Subordinated Amount for the current Determination Date,] [plus (d) the
Subordinated Percentage of funds to be withdrawn from the Excess Funding
Account on the succeeding Distribution Date and paid to the Seller or
allocated to one or more Series]; provided, however, that, once [the
[Accumulation Period] [Controlled Amortization Period] or] any Early
Amortization Period [that is not cured as described herein] shall have
commenced, the Available Subordinated Amount shall be calculated based on the
Invested Amount as of the close of business on the day preceding such
[[Accumulation Period] [Controlled Amortization Period] or] Early
Amortization Period [; and provided further that from and after the
commencement of any Reinvestment Period [that is not cured as described
herein] until the earliest of the commencement of any Early Amortization
Period that is not cured, as described herein, the payment in full of the
Series [199_-_] Certificates and the Fully Reinvested Date, the Available
Subordinated Amount shall be calculated based on the Invested Amount as of
the close of business on the day preceding such Reinvestment Period [less
[describe permitted reductions, e.g., based on payment rates or amounts on
deposit in the Principal Funding Account]]. The Available Subordinated Amount
[FN]
- ----------------
(2) Modify, as appropriate, if Interest Collections, Investment Proceeds and
Available Sellers' Collections from one Series will be available to cover
interest or other shortfalls for a related Series.
S-24
<PAGE>
for the first Determination Date is equal to the Required Subordinated
Amount. [The "Incremental Subordinated Amount" on any the Determination Date
will equal the result obtained by multiplying (a) a fraction, the numerator
of which is the sum of the Invested Amount on the last day of the immediately
preceding Collection Period and the Available Subordinated Amount for such
Determination Date (calculated without adding the Incremental Subordinated
Amount for such Determination Date as described in clause (c) above), and the
denominator of which is the Pool Balance on such last day by (b) the excess,
if any, of (x) the sum of the Overconcentration Amount, the Instalment
Balance Amount and the aggregate amount of Ineligible Receivables on such
Determination Date over (y) the aggregate amount of Ineligible Receivables,
Receivables in Accounts containing Dealer Overconcentrations and Receivables
in Instalment Balances, in each case that became Defaulted Receivables during
the preceding Collection Period and are not subject to reassignment from the
Trust, unless certain insolvency events relating to the Seller or CFC have
occurred, as further described in the Pooling and Servicing Agreement].
The "Subordinated Percentage" will initially equal the percentage
equivalent of a fraction, the numerator of which is the Subordination Factor
and the denominator of which will be the excess of 100% over the
Subordination Factor. The Seller may, in its sole discretion, at any time
increase the Available Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser of (i) $[ ] or (ii) [ ]%
of the Invested Amount. The Seller is not under any obligation to increase
the Available Subordinated Amount at any time. If [the sum of] the Available
Subordinated Amount [and the Incremental Subordinated Amount] were reduced to
less than the sum of the Required Subordinated Amount [and the Incremental
Subordinated Amount], a [Reinvestment Event] [Early Amortization Event] would
occur. The Seller could elect to increase the Available Subordinated Amount
at the time such a [Reinvestment Event] [Early Amortization Event] would
otherwise occur, thus preventing or delaying the occurrence of the
[Reinvestment Event] [Early Amortization Event]. [Describe partial
Reinvestment Periods resulting from a failure to meet the test described
above, if applicable.]
[Negative Carry Subordinated Amount. In the event of the occurrence of
[a Reinvestment Event,] [an Early Amortization Event] [or the commencement of
the Accumulation Period] [or the commencement of the Controlled Amortization
Period], Interest Collections and Principal Collections otherwise distributed
to the Seller in respect of the Excess Seller's Percentage, in an amount not
to exceed the Available Negative Carry Subordinated Amount, will be deposited
to the Reserve Fund [and other] until the amounts on deposit therein equal
the Negative Carry Required Amount [and [ ]].
[Available Negative Carry Subordinated Amount means, initially, the
Required Negative Carry Subordinated Amount and, on any subsequent date, the
Available Negative Carry Subordinated Amount at the open of business on the
immediately preceding date less the amount of Seller's Collections deposited
on such immediately preceding date to the Reserve Fund [and other] in
accordance with the preceding paragraph.]
[Required Negative Carry Subordinated Amount means [ ].]
[Negative Carry Required Amount means [ ].]
[Describe other subordination of the Seller's Interest, if applicable.]
Distributions from the Collection Account[; Reserve Fund] [;Yield
Supplement Account]
Interest Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Invested Date [and each
Collection Period thereafter during the Revolving Period]], commencing with
the initial Distribution Date, the Servicer shall instruct the Trustee to
apply Certificateholder Interest Collections and Investment Proceeds, if any,
[Excess Interest Collections allocated to Series [199_-_] [other amounts] in
respect of the related Collection Period to make the following distributions
in the following priority:
S-25
<PAGE>
[(i) first, an amount equal to Monthly Interest for such
Distribution Date, plus the amount of any Monthly Interest previously
due but not [deposited to the Interest Funding Account or] distributed
on a prior Distribution Date (plus, but only to the extent permitted
under applicable law, interest at the Certificate Rate on Monthly
Interest previously due but not so [deposited or] distributed), shall
be [deposited to the Interest Funding Account] [distributed to the
Series [199_-_] Certificateholders];
[(ii) second, describe application, if any, to cover interest or
other shortfalls with respect to related Series;]
(iii) third, an amount equal to the Monthly Servicing Fee for
such Distribution Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection Account
as described in the Prospectus under "Description of the Certificates
-- Allocation of Collections; Deposits in Collection Account" or waived
by the Servicer);
[(iv) fourth, an amount equal to the Reserve Fund Deposit Amount,
if any, for such Distribution Date shall be deposited in the Reserve
Fund;]
(v) fifth, an amount equal to the Investor Default Amount, if
any, for such Distribution Date shall be treated as a portion of
Available Certificateholder Principal Collections for such Distribution
Date;
[(vi) sixth, an amount equal to any outstanding Carry-over Amount
(after giving effect to any withdrawals from the Yield Supplement
Account) shall be distributed to the Series [199_-_]
Certificateholders;]
[(vii) seventh, an amount equal to the Yield Supplement Account
Deposit Amount, if any, for such Distribution Date shall be deposited
in the Yield Supplement Account;]
[(viii) eighth, describe other applications, if any]; and
(ix) ninth, the balance shall constitute Excess Servicing].
[Describe application of Interest Collections, Investment Proceeds and
other amounts allocated to related Series to cover distributions pursuant to
clause (i), if applicable.]
[If, during the Prefunded Period, such Investment Proceeds [describe
other funds] are not sufficient to make the entire distributions required by
clause [(i)] above, the Trustee shall withdraw funds from the Yield
Supplement Account and apply such funds to complete the distributions
pursuant to such clause.]
[If such Certificateholder Interest Collections and Investment Proceeds
[Excess Interest Collections allocated to Series [199_-_] [describe other
funds] are not sufficient to make the entire distributions required by
clauses [(i), (ii), (iii) and (v)], the Trustee [after applying amounts on
deposit in the Yield Supplement Account and [describe other funds]]shall
withdraw funds from the Reserve Fund and apply such funds to complete the
distributions pursuant to such clauses; provided, however, that during any
Early Amortization Period [or Reinvestment Period] funds shall not be
withdrawn from the Reserve Fund to make distributions required by clause
[(v)] to the extent that, after giving effect to such withdrawal, the amount
on deposit in the Reserve Fund shall be less than $[ ].]
If there is a Draw Amount for such Distribution Date, the Trustee shall
apply the amount of Available Seller's Collections for the related Collection
Period on deposit in the Collection Account on such Distribution Date, but
only up to the Draw Amount, to make the distributions required by clauses
[(i), (ii), (iii) and (v)] above [that have not been made through the
application of funds from the Reserve Fund [or the Yield Supplement Account]
[or describe other funds] as described in the preceding paragraph].
Additionally, Available Seller's Collections will be applied to any
unpaid Adjustment Payments. The Available Subordinated Amount will be reduced
by the amount of Available Seller's Collections so applied. If the Draw
Amount exceeds such Available Seller's Collections, the Available
Subordinated Amount will be reduced by the amount of such excess, but not by
more than the sum of
S-26
<PAGE>
the Investor Default Amount and the portion of Adjustment Payments not paid
by the Seller, in order to maintain the Invested Amount, but not generally by
more than the Investor Default Amount for such Distribution Date.
"Certificateholder Interest Collections" for any Distribution
Date means the portion of Series Allocable Interest Collections for the
related Collection Period allocated to the Series [199_-_]
Certificateholders' Interest as described under "Allocation Percentages
-- Allocation Between the Series [199_-_] Certificateholders and the
Seller".
"Investment Proceeds" for any Distribution Date means an amount
equal to the sum of (a) [the investment earnings on the related
Determination Date with respect to funds held in the Reserve Fund,] (b)
the Series Allocation Percentage of investment earnings on the related
Determination Date with respect to funds held in the Collection Account
and (c) all investment income on amounts in [the Excess Funding
Account,] [the Principal Funding Account,] [the Prefunding Account,]
[the Interest Funding Account,] [the Yield Supplement Account] [other
accounts] since the preceding Distribution Date.
[Investment Proceeds. On each Distribution Date with respect to a
Collection Period that ends after the Fully Reinvested Date [other than any
such Collection Period during the Revolving Period], the Servicer shall
instruct the Trustee to apply Investment Proceeds [Excess Interest
Collections allocated to Series [199_-_]] [describe other funds], in respect
of the related Collection Period to make the following distributions in the
following priority:
(i) first, (x) an amount equal to Monthly Interest for such
Distribution Date, plus, the amount of any Monthly Interest previously
due but not [deposited in the Interest Funding Account or] distributed
on a prior Distribution Date (plus, but only to the extent permitted
under applicable law, interest at the Certificate Rate plus [ ]% on
Monthly Interest previously due but not so [deposited or] distributed),
shall be [deposited to the Interest Funding Account] [distributed to
Series [199_-_] Certificateholders;
[(ii) second, describe other applications, including, if
applicable, to cover interest or other shortfalls with respect to
related Series; and]
(iii) third, the balance shall be distributed to the Seller.]
[Describe application of Interest Collections, Investment Proceeds and
other amounts allocated to related Series to cover distributions pursuant to
clause (i), if applicable.]
[If, on any Distribution Date, Investment Proceeds [Excess Interest
Collections allocated to Series [199_-_]] [describe other funds] are not
sufficient to make the entire distribution required in clause (i) above
[after applying [describe other funds]], the Trustee shall withdraw funds
from the Reserve Fund and apply such funds to complete the distribution
pursuant to such clause.]
[Reserve Fund. The "Reserve Fund" will be an Eligible Deposit Account
established and maintained in the name of the Trustee for the benefit of the
Series [199_-_] Certificateholders. On the Series Issuance Date, the Seller
will deposit $[ ] ([ ]% of the principal balance of the Series [199_-_]
Certificates) into the Reserve Fund. The "Reserve Fund Required Amount" for
any Distribution Date will equal []% of the outstanding principal balance of
the Series [19_-_] Certificates for such Distribution Date (after giving
effect to any change therein on such Distribution Date). [Describe any
increases in the Reserve Fund Required Amount, e.g., as a result of the
long-term rating of CFC falling below BBB- or to cover any negative carry
during a principal accumulation period.] The "Reserve Fund Deposit Amount" is
the amount, if any, by which the Reserve Fund Required Amount exceeds the
amount on deposit in the Reserve Fund. Funds in the Reserve Fund will be
invested in Eligible Investments that will mature on or prior to the next
Distribution Date. On each Determination Date, the Servicer will apply any
investment earnings (net of losses and investment expenses) with respect to
the Reserve Fund as set forth under "Distributions from the Collection
Account; Reserve Fund[; Yield Supplement Account]". After the earlier of the
payment in full of the outstanding principal balance of the Series [199_-_]
Certificates and the Series Termination Date, any funds remaining on deposit
in the Reserve Fund will be paid to the Seller. [Describe other
applications, if any.]
S-27
<PAGE>
If, after giving effect to the allocations, distributions and deposits
in the Reserve Fund described above under "Interest Collections", the amount
in the Reserve Fund is less than the Reserve Fund Required Amount for the
next following Distribution Date, the Trustee shall deposit any remaining
Available Seller's Collections for the related Collection Period into the
Reserve Fund until the amount in the Reserve Fund is equal to such Reserve
Fund Required Amount.
If, for any Distribution Date with respect to an Early Amortization
Period [or Reinvestment Period], after giving effect to the allocations,
distributions and deposits described in the preceding paragraph, the amount
in the Reserve Fund is less than the Excess Reserve Fund Required Amount for
such Distribution Date, the Trustee shall deposit the remaining Available
Seller's Collections for the related Collection Period into the Reserve Fund
until the amount in the Reserve Fund is equal to such Excess Reserve Fund
Required Amount. The "Excess Reserve Fund Required Amount" for any such
Distribution Date means an amount equal to the greater of (a) [ ]% of the
initial principal balance of the Series [199_-_] Certificates and (b) the
excess of (i) the sum of (x) the Available Subordinated Amount on the
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution Date)
and (y) an amount equal to (A) the excess of the Required Participation
Percentage over 100%, multiplied by (B) the outstanding principal balance of
the Series [199_-_] Certificates on such Distribution Date (after giving
effect to any changes therein on such Distribution Date) over (ii) the excess
of (x) the Series Allocation Percentage of the Pool Balance on the last day
of the immediately preceding Collection Period over (y) the Invested Amount
on such Distribution Date (after giving effect to changes therein on such
Distribution Date); provided that the Excess Reserve Fund Required Amount
shall not exceed such Available Subordinated Amount. [Describe adjustments,
if applicable.]]
[Yield Supplement Account. The Yield Supplement Account will be an
Eligible Deposit Account established and maintained in the name of the
Trustee for the benefit of the Series [199_-_] Certificateholders. On the
Series Issuance Date, the Seller will deposit $[ ] ([ ]% of the principal
balance of the Series [199_-_] Certificates) into the Yield Supplement
Account. The "Yield Supplement Account Required Amount" for any Distribution
Date [(i) that occurs during the Prefunded Period will equal [ ],] [(ii) that
occurs [thereafter and] prior to the Fully Reinvested Date [or any
Distribution Date thereafter during the Revolving Period]] will equal [ ]% of
the outstanding principal balance of the Series [199_-_] Certificates for
such Distribution Date (after giving effect to any change therein on such
Distribution Date) [and (iii) for any [other] Distribution Date that occurs
on or after the Fully Reinvested Date, zero]. [On any Distribution Date with
respect to the Prefunded Period on which Investment Proceeds [describe other
funds] are insufficient to make the entire distributions required by clause
[(i)] under "Interest Collections" above, the amount on deposit in the Yield
Supplement Account on such Distribution Date shall be applied by the Trustee
up to the amount of such insufficiency to satisfy such insufficiency.] [On
any Distribution Date on which there is a Carry-over Amount, the amount on
deposit in the Yield Supplement Account on such Distribution Date shall be
applied by the Trustee up to the amount of such Carry-over Amount to satisfy
such Carry-over Amount.] [Describe other applications, e.g., to pay Monthly
Interest [other than during a Prefunded Period].] The "Yield Supplement
Account Deposit Amount" is the amount, if any, by which the Yield Supplement
Account Required Amount exceeds the amount on deposit in the Yield Supplement
Account. Funds in the Yield Supplement Account will be invested [in Eligible
Investments that mature on or prior to the next Distribution Date] [in any
investments consisting of financial assets that by their terms convert to
cash within a finite period of time that mature on or prior to the next
Distribution Date]. On each Determination Date, the Servicer will apply any
investment earnings (net of losses and investment expenses) with respect to
the Yield Supplement Account as set forth under "Distributions from the
Collection Account; [Reserve Fund;] Yield Supplement Account". After the
earlier of the payment in full of the outstanding principal balance of the
Series [199_-_] Certificates and the Series Termination Date, any funds
remaining on deposit in the Yield Supplement Account will be paid to the
Seller. [Describe other applications.]]
Excess Servicing. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any such
Collection Period thereafter during the Revolving Period]],
S-28
<PAGE>
the Servicer will allocate Excess Servicing with respect to the Collection
Period immediately preceding such Distribution Date, in the following
priority:
[(a) first, an amount equal to the aggregate amount of Investor
Charge-Offs which have not been previously reimbursed (after giving
effect to the allocation on such Distribution Date of Series Allocable
Miscellaneous Payments with respect to such Distribution Date) will be
allocated in the same manner as Available Certificateholder Principal
Collections for such Distribution Date;
(b) second, an amount equal to the aggregate outstanding amounts
of the Monthly Servicing Fee which have been previously waived as
described under "Servicing Compensation and Payment of Expenses" in the
Prospectus will be distributed to the Servicer;
[(c) third, describe other applications; and]
(d) fourth, the balance, if any, shall be distributed to the
Seller and shall increase the Available Subordinated Amount as
described in the definition thereof].
Principal Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any such
Collection Period thereafter during the Revolving Period]], the Servicer will
allocate Available Certificateholder Principal Collections as follows:
(a) for each Distribution Date with respect to the Revolving
Period, all Available Certificateholder Principal Collections will be
allocated [first, to make a deposit to the Excess Funding Account if
the sum of (i) the Series [199_-_] Certificateholders' Interest in
Principal Receivables and (ii) the amount on deposit in the Excess
Funding Account prior to the allocation on such Distribution Date is
less than the outstanding principal balance of the Series [199_-_]
Certificates and second] to Excess Principal Collections as described
under "Allocation Percentages -- Principal Collections for all Series";
and
(b) for each Distribution Date with respect to the [Accumulation
Period] [Controlled Amortization Period] or any Early Amortization
Period [or Reinvestment Period]:
(i) an amount equal to Monthly Principal for such
Distribution Date will be [deposited to the Principal Funding
Account, in the case of the Accumulation Period or any
Reinvestment Period, or] distributed to Series [199_-_]
Certificateholders; and
(ii) the balance, if any, will be allocated to Excess
Principal Collections.
[In the event that the aggregate Invested Amount is greater than zero
on the Series Termination Date, any funds remaining in the Reserve Fund
(after the application of funds in the Reserve Fund as described above under
"Interest Collections") will be treated as a portion of Available
Certificateholder Principal Collections for the Distribution Date occurring
on the Series Termination Date.]
"Available Certificateholder Principal Collections" for any
Distribution Date means the sum of (a) the product of (i) the Floating
Allocation Percentage, with respect to the Revolving Period, or the
Fixed Allocation Percentage, with respect to the [Accumulation Period]
[Controlled Amortization Period] or any Early Amortization Period [or
Reinvestment Period], for the related Collection Period and (ii) Series
Allocable Principal Collections deposited in the Collection Account for
the related Collection Period, (b) the amount, if any, of Interest
Collections, [funds in the Reserve Fund,] Available Seller's
Collections and Excess Servicing allocated to cover the Investor
Default Amount or reimburse Investor Charge-Offs, (c) Series Allocable
Miscellaneous Payments on deposit in the Collection Account for such
Distribution Date and (d) Excess Principal Collections, if any, from
other Series allocated to Series [199_-_].
"Monthly Principal" with respect to any Distribution Date
relating to the [Accumulation Period] [Controlled Amortization Period]
or any Early Amortization Period [or Reinvestment Period] will equal
Available Certificateholder Principal Collections for such Distribution
Date; provided, however, that for each Distribution Date [with respect
to the Accumulation Period, Monthly Principal may not exceed the
Controlled Deposit Amount] [with respect to the Controlled Amortization
Period,
S-29
<PAGE>
Monthly Principal may not exceed the Controlled Distribution Amount]
for such Distribution Date; and provided, further, that Monthly
Principal shall not exceed the Invested Amount of the Series [199_-_]
Certificates.
["Controlled Deposit Amount" for a Distribution Date means the
excess, if any, of (a) [the sum of (i)] the product of the Controlled
Accumulation Amount and the number of Distribution Dates from and
including the first Distribution Date with respect to the Accumulation
Period through and including such Distribution Date (but not in excess
of the Accumulation Period Length) [and (ii) the amount on deposit in
the Excess Funding Account as of the [ ] Distribution Date (after
giving effect to any withdrawals from or deposits to such account on
such date (other than the transfer to the Principal Funding Account of
the amounts on deposit therein on such date))] over (b) the sum of
amounts on deposit in [the Excess Funding Account and] the Principal
Funding Account, in each case before giving effect to any withdrawals
from or deposits to such accounts on such Distribution Date.]
["Controlled Accumulation Amount" means an amount equal to the
Invested Amount as of the [ ] Distribution Date (after giving effect to
any changes therein on such date) divided by [the Accumulation Period
Length].]
["Controlled Distribution Amount" for a Distribution Date means
the sum of (a) [the excess, if any, of (i)] the Controlled Amortization
Amount for such Distribution Date [over (ii) the quotient obtained by
dividing the amount on deposit in the Excess Funding Account as of the
[ ] Distribution Date (after giving effect to any withdrawals from or
deposits to such account on such date) by [ ],] plus (b) any Controlled
Distribution Amount for a prior Distribution Date not previously
distributed to Series [199_-_] Certificateholders.]
["Controlled Amortization Amount" for a Distribution Date means
an amount equal to the Invested Amount as of the [ ] Distribution Date
(after giving effect to any changes therein on such date) divided by [
].]
[Enhancements
The Series [199_-_] Certificates will have the benefit of the [Letter
of Credit] [Interest Rate Swap] [Currency Swap] [Cash Collateral Account]
[Guaranty] [Surety Bond] [Insurance Policy] [Spread Account] [other] [issued
by [ ] (the "Enhancement Provider")] in the initial amount of $[ ].
With respect to any Distribution Date, the amount available to be drawn
under the [Letter of Credit] [Interest Rate Swap] [Currency Swap] [Cash
Collateral Account] [Guaranty] [Surety Bond] [Insurance Policy] [Spread
Account] [other] (the "Available Credit Enhancement Amount") will equal [ ].]
[Describe subordination of other Series of Certificates to the Series
[199_-_] Certificates, if applicable.]
[Information with respect to Enhancement.]
[Enhancement Provider
Information to be provided by Enhancement Provider.]
[Interest Funding Account
The Servicer will establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account for the benefit of the
Series [199_-_] Certificateholders (the "Interest Funding Account"). On each
Distribution Date Monthly Interest will be deposited in the Interest Funding
Account as provided above under "Distributions from the Collection Account[;
Reserve Fund] [; Yield
S-30
<PAGE>
Supplement Account]; provided that if an Early Amortization Event [that is
not cured as described herein] shall have occurred, interest will be
distributed to the Series [199_-_] Certificateholders on the first
Distribution Date following such Early Amortization Event.
All amounts on deposit in the Interest Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Interest Funding Account Balance") will be invested
from the date of their deposit by the Trustee at the direction of the
Servicer in Eligible Investments that will mature on or prior to the next
succeeding Distribution Date. The Servicer may select an appropriate agent as
representative of the Servicer for the purpose of designating such
investments. On each Distribution Date, the interest and other investment
income on the Interest Funding Account Balance will be applied as provided
above under "Distributions from the Collection Account[; Reserve Fund][;
Yield Supplement Account].]
[Principal Funding Account
The Servicer will establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account for the benefit of the
Series [199_-_] Certificateholders (the "Principal Funding Account"). On each
Distribution Date with respect to the [Accumulation Period] [or any
Reinvestment Period], Monthly Principal will be deposited in the Principal
Funding Account as provided above under "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account] -- Principal
Collections"; provided, that, if an Early Amortization Event [that is not
cured as described herein] occurs during the [Accumulation Period] [or any
Reinvestment Period], the Principal Funding Account Balance shall be paid to
the Series [199_-_] Certificateholders on the first Special Payment Date.
All amounts on deposit in the Principal Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Principal Funding Account Balance") will be invested
from the date of their deposit to on or prior to the Expected Payment Date by
the Trustee at the direction of the Servicer in Eligible Investments that
will mature on or prior to the following Distribution Date. The Servicer may
select an appropriate agent as representative of the Servicer for the purpose
of designating such investments. On each Distribution Date, the interest and
other investment income on the Principal Funding Account Balance will be
applied as provided above under "Distributions from the Collection Account[;
Reserve Fund][; Yield Supplement Account]".]
[Prefunding Account
The Servicer will establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account for the benefit of the
Series [199_-_] Certificateholders (the "Prefunding Account"). On the Series
Issuance Date an amount equal to the initial principal amount of the Series
[199_-_] Certificates will be deposited in the Prefunding Account. As funds
are accumulated in the Principal Funding Account for the Paired Series or
distributed to holders of Certificates of such Series, an equal amount of
funds on deposit in the Prefunding Account will be released (which funds will
be distributed to the Seller).
All amounts on deposit in the Prefunding Account on any Distribution
Date (after giving effect to distributions to be made on such Distribution
Date) (the "Prefunding Account Balance") will be invested from the date of
their deposit by the Trustee at the direction of the Servicer in Eligible
Investments that will mature on or prior to the following Distribution Date.
The Servicer may select an appropriate agent as representative of the
Servicer for the purpose of designating such investments. On each
Distribution Date, the interest and other investment income on the Prefunding
Account Balance will be applied as provided above under "Distributions from
the Collection Account[; Reserve Fund][; Yield Supplement Account]".]
[Describe other Series [199_-_] Accounts, if applicable.]
Distributions
Payments to Series [199_-_] Certificateholders will be made from the
Collection Account, [the Reserve Fund,] [the Principal Funding Account,] [the
Interest Funding Account,] [the Yield Supplement Account,] [other] and [the
Excess Funding Account].
S-31
<PAGE>
(a) The Servicer shall instruct the Trustee to apply funds on
deposit in the Collection Account, [the Reserve Fund,] [the Interest
Funding Account,] [the Yield Supplement Account,] [other] and shall
instruct the Trustee to make the following distributions at the
following times:
(i) on each [Distribution Date] [Interest Payment Date or
Special Payment Date] all amounts on deposit in the Collection
Account, [the Reserve Fund,] [the Interest Funding Account,] [the
Yield Supplement Account] [other] as are payable to the Series
[199_-_] Certificateholders with respect to accrued interest will
be distributed to the Series [199_-_] Certificateholders.
(b) The Servicer shall instruct the Trustee to apply the funds on
deposit in the [Collection Account,] [the Principal Funding Account,]
[other] and [the Excess Funding Account] and shall instruct the Trustee
to make, without duplication, the following distributions at the
following times:
[(i) on each Distribution Date during the Controlled
Amortization Period all amounts on deposit in the Collection
Account [and the Excess Funding Account] [other] as are payable
to the Series [199_-_] Certificateholders with respect to
principal will be distributed to the Series [199_-_]
Certificateholders; and]
[(ii) on each Special Payment Date and on the Expected
Payment Date, the Principal Funding Account Balance [and the
amount on deposit in the Excess Funding Account] [other] shall be
distributed to the Series [199_-_] Certificateholders up to a
maximum amount on any such date equal to the excess of the
outstanding principal amount of the Series [199_-_] Certificates
over unreimbursed Investor Charge-Offs, each on such date].
[(c) On each Distribution Date on which there is an unpaid
Carry-over Amount (or unpaid interest thereon), the Servicer shall
instruct the Trustee to distribute to the Series [199_-_]
Certificateholders such Carry-over Amount (or unpaid interest thereon)
to the extent funds are available therefor first from amounts on
deposit in the Yield Supplement Account and second to the extent funds
are available therefor after making all required distributions and
deposits with respect to the Series [199_-_] Certificates as provided
above under "Distributions from the Collection Account[; Reserve Fund];
Yield Supplement Account".]
[(d) If, on the Final Payment Date, there is any Class A-1
Carry-over Amount or Class A-2 Carry-over Amount (after giving effect
to any distributions on such date pursuant to (a) through (c) above),
the Trustee shall distribute to the Class A-1 Certificateholders or
Class A-2 Certificateholders, as applicable (i) the amount on deposit
in the Reserve Fund and (ii) Available Seller's Collections on deposit
in the Collection Account which are available to satisfy such
Carry-over Amount on the Final Payment Date as described above under
"Distributions from the Collection Account; Reserve Fund; Yield
Supplement Account -- Interest Collections".]
All distributions shall be made to the Series [199_-_ ]
Certificateholders of record at the close of business on the day immediately
preceding the related Distribution Date (each such day a "Record Date"),
except that the final distribution with respect to any Series [199_-_ ]
Certificate will be made only upon surrender of such Series [199_-_ ]
Certificate.
Investor Charge-Offs
If the Available Subordinated Amount is reduced to zero and on any
Distribution Date the Deficiency Amount is greater than zero, the outstanding
principal balance of the Series [199_-_] Certificates will be reduced by the
Deficiency Amount, but not by more than the Investor Default Amount for such
Distribution Date (an "Investor Charge-Off"). Any reduction in the
outstanding principal balance of the Series [199_-_] Certificates will have
the effect of slowing or reducing the return of principal to the Series
[199_-_] Certificateholders. If the outstanding principal balance of the
Series [199_-_] Certificates has been reduced by any Investor Charge-Offs, it
will thereafter be increased on any
S-32
<PAGE>
Distribution Date (but not by an amount in excess of the aggregate
unreimbursed Investor Charge-Offs) by the sum of (a) Series Allocable
Miscellaneous Payments for such Distribution Date and (b) the amount of
Excess Servicing allocated and available for such purpose as described above.
[Reinvestment Events
The Reinvestment Events with respect to the Series [199_-_]
Certificates are the following:
[1. failure on the part of USA, the Servicer or CFC, as
applicable, (i) to make any payment or deposit required by the Pooling
and Servicing Agreement or the Receivables Purchase Agreement,
including but not limited to any Transfer Deposit Amount or Adjustment
Payment, on or before the date occurring two business days after the
date such payment or deposit is required to be made therein; or (ii) to
deliver a Distribution Date Statement on the date required under the
Pooling and Servicing Agreement (or within the applicable grace period
which will not exceed five business days); (iii) to comply with its
covenant not to create any lien on a Receivable; or (iv) to observe or
perform in any material respect any other covenants or agreements set
forth in the Pooling and Servicing Agreement or the Receivables
Purchase Agreement, which failure continues unremedied for a period of
45 days after written notice of such failure;
2. any representation or warranty made by the RPA Seller in the
Receivables Purchase Agreement or by USA in the Pooling and Servicing
Agreement or any information required to be given by USA to the Trustee
to identify the Accounts proves to have been incorrect in any material
respect when made and continues to be incorrect in any material respect
for a period of 60 days after written notice and as a result the
interests of the Certificateholders are materially and adversely
affected; provided, however, that a Reinvestment Event shall not be
deemed to occur thereunder if USA has repurchased the related
Receivables or all such Receivables, if applicable, during such period
in accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency or
receivership relating to any of CFC, or Chrysler;
4. a failure by USA to convey Receivables in Additional Accounts
to the Trust within five business days after the day on which it is
required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
5. on any Determination Date, the Available Subordinated Amount
for the next Distribution Date will be reduced to an amount less than
the Required Subordinated Amount on such Determination Date after
giving effect to the distributions to be made on the next Distribution
Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on such last
day;
8. on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods, is less than [ ]%;
9. the delivery by the Seller to the Trustee, of a notice stating
that the Seller will no longer continue to sell Receivables to the
Trust commencing on [ ] or any yearly anniversary thereof; provided,
however, that the Seller shall have delivered to the Trustee an opinion
of counsel to the effect that, following such discontinuation of sales
of Receivables, the Trust shall not become an investment company within
the meaning of the Investment Company Act of 1940, as amended;
10. on any Determination Date, the quotient obtained by dividing
(i) the sum of (x) the amount on deposit in the Yield Supplement
Account on the next Distribution Date, after giving effect to the
distribution to be made on such Distribution Date, and (y) the amount
on deposit in
S-33
<PAGE>
the Yield Supplement Account on the immediately preceding Distribution
Date, after giving effect to the distributions made on such
Distribution Date, by (ii) the sum of (A) the outstanding principal
balance of the Series [199_-_] Certificates on the next Distribution
Date, after giving effect to all distributions and payments to be made
on such Distribution Date, and (B) the outstanding principal balance of
the Series [199_-_] Certificates on the immediately preceding
Distribution Date, after giving effect to all distributions and
payments made on such Distribution Date, is less than [ ]%;
11. interest at the Certificate Rate is not paid on the Series
[199_-_] Certificate on any Interest Payment Date;
12. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
13. [other].](3)
[In the case of any event described in clause [1, 2 or 6] above, a
Reinvestment Event with respect to Series [199_-_] will be deemed to have
occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given by
Certificateholders) declare that a Reinvestment Event has occurred as of the
date of such notice. In the case of any event described in clause [3, 4, 5,
7, 8, 9, 10, 11, 12 or 13] above, a Reinvestment Event with respect to Series
[199_-_] will be deemed to have occurred without any notice or other action
on the part of the Trustee or the Series [199_-_] Certificateholders
immediately upon the occurrence of such event.]
[Under certain limited circumstances, a Reinvestment Period which
commences prior to the scheduled end of the Revolving Period may terminate
and the Revolving Period recommence. If a Reinvestment Period results from
the failure by USA to convey Receivables in Additional Accounts to the Trust,
as described in paragraph 4 above, during the Revolving Period and no other
Reinvestment Event or Early Amortization Event [that has not been cured as
described herein] has occurred, the Reinvestment Period resulting from such
failure will terminate and the Revolving Period will recommence (unless the
scheduled termination date of the Revolving Period has occurred) as of the
end of the first Collection Period during which the Seller would no longer be
required to convey Receivables to the Trust. The Seller may no longer be
required to convey Receivables as described above as a result of a reduction
in the Invested Amount occurring due to principal payments made in respect of
the Series [199_-_] Certificates and the Certificates of other outstanding
Series during the Reinvestment Period or as a result of the subsequent
addition of Receivables to the Trust. Notwithstanding the foregoing, if any
Reinvestment Event occurs, the Revolving Period will recommence following the
receipt of (i) written confirmation by each Rating Agency (other than
Moody's) that its rating of the Series [199_-_] Certificates will not be
withdrawn or lowered as a result of such recommencement and (ii) the consent
of Series [199_-_] Certificateholders holding Series [199_-_] Certificates
evidencing more than 50% of the aggregate unpaid principal amount of the
Series [199_-_] Certificates to such recommencement, provided that no other
Reinvestment Event or Early Amortization Event [that has not been cured as
described herein] has occurred and the scheduled termination of the Revolving
Period has not occurred.]
[Describe other cures of Reinvestment Events and partial Reinvestment
Periods, if applicable.]
Early Amortization Events
[The Early Amortization Events with respect to the Series [199_-_]
Certificates will include each of the events so defined in the Prospectus,
plus the following:
1. failure on the part of USA, the Servicer or CFC, as
applicable, (i) to make any payment or deposit required by the Pooling
and Servicing Agreement or the Receivables Purchase Agreement,
including but not limited to any Transfer Deposit Amount or Adjustment
Payment, on
[FN]
- ----------------
(3) Delete or modify, as appropriate.
S-34
<PAGE>
or before the date occurring two business days after the date such
payment or deposit is required to be made therein; or (ii) to deliver a
Distribution Date Statement on the date required under the Pooling and
Servicing Agreement (or within the applicable grace period which will
not exceed five business days); (iii) to comply with its covenant not
to create any lien on a Receivable; or (iv) to observe or perform in
any material respect any other covenants or agreements set forth in the
Pooling and Servicing Agreement or the Receivables Purchase Agreement,
which failure continues unremedied for a period of 45 days after
written notice of such failure;
2. any representation or warranty made by the RPA Seller in the
Receivables Purchase Agreement or by USA in the Pooling and Servicing
Agreement or any information required to be given by USA to the Trustee
to identify the Accounts proves to have been incorrect in any material
respect when made and continues to be incorrect in any material respect
for a period of 60 days after written notice and as a result the
interests of the Certificateholders are materially and adversely
affected; provided, however, that an Early Amortization Event shall not
be deemed to occur thereunder if USA has repurchased the related
Receivables or all such Receivables, if applicable, during such period
in accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency or
receivership relating to any of CFC, or Chrysler;
4. a failure by USA to convey Receivables in Additional Accounts
to the Trust within five business days after the day on which it is
required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
5. on any Determination Date, the Available Subordinated Amount
for the next Distribution Date will be reduced to an amount less than
the Required Subordinated Amount on such Determination Date after
giving effect to the distributions to be made on the next Distribution
Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on such last
day;
8. on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods, is less than [ ]%;
9. on any Determination Date, the quotient obtained by dividing
(i) the sum of (x) the amount on deposit in the Yield Supplement
Account on the next Distribution Date, after giving effect to the
distributions to be made on such Distribution Date, and (y) the amount
on deposit in the Yield Supplement Account on the immediately preceding
Distribution Date, after giving effect to the distributions made on
such Distribution Date, by (ii) the sum of (A) the outstanding
principal balance of the Series [199_-_] Certificates on the next
Distribution Date, after giving effect to all distributions and
payments to be made on such Distribution Date and (B) the outstanding
principal balance of the Series [199_-_] Certificates on the
immediately preceding Distribution Date, after giving effect to all
distributions and payments made on such Distribution Date, is less than
[ ];
10. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
11. [other].](4)
[In the case of any event described in clause [1, 2 or 6] above, an
Early Amortization Event with respect to Series [199_-_] will be deemed to
have occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series
</FN>
- ----------------
(4) Delete or modify, as appropriate.
S-35
<PAGE>
[199_-_] Certificates evidencing more than 50% of the aggregate unpaid
principal amount of the Series [199_-_] Certificates by written notice to the
Seller and the Servicer (and the Trustee, if given by Certificateholders)
declare that an Early Amortization Event has occurred as of the date of such
notice. In the case of any Early Amortization Event described in the
Prospectus or any event described in clause [3, 4, 5, 7, 8, 9, 10 or 11]
above, an Early Amortization Event with respect to Series [199_-_] will be
deemed to have occurred without any notice or other action on the part of the
Trustee or the Series [199_-_] Certificateholders immediately upon the
occurrence of such event.]
[Under certain limited circumstances, an Early Amortization Period
which commences prior to the scheduled end of the Revolving Period may
terminate and the Revolving Period recommence. If an Early Amortization
Period results from the failure by USA to convey Receivables in Additional
Accounts to the Trust, as described in paragraph 4 above, during the
Revolving Period and no other [Reinvestment Event or] Early Amortization
Event [that has not been cured as described herein] has occurred, the Early
Amortization Period resulting from such failure will terminate and the
Revolving Period will recommence (unless the scheduled termination date of
the Revolving Period has occurred) as of the end of the first Collection
Period during which the Seller would no longer be required to convey
Receivables to the Trust. The Seller may no longer be required to convey
Receivables as described above as a result of a reduction in the Invested
Amount occurring due to principal payments made in respect of the Series
[199_-_] Certificates and the Certificates of other outstanding Series during
the Early Amortization Period or as a result of the subsequent addition of
Receivables to the Trust. Notwithstanding the foregoing, if any Early
Amortization Event occurs, the Revolving Period will recommence following
receipt of (i) written confirmation by each Rating Agency (other than
Moody's) that its rating of the Series [199_-_] Certificates will not be
withdrawn or lowered as a result of such recommencement and (ii) the consent
of Series [199_-_] Certificateholders holding Series [199_-_] Certificates
evidencing more than 50% of the aggregate unpaid principal amount of the
Series [199_-_] Certificates to such recommencement, provided that no other
[Reinvestment Event or] Early Amortization Event [that has not been cured as
described herein] has occurred and the scheduled termination of the Revolving
Period has not occurred.]
[Describe other cures of Early Amortization Events, if applicable.]
Series Termination
The last payment of principal and interest on the Series [199_-_]
Certificates will be due and payable no later than the [ ]
Distribution Date (the "Series Termination Date"). In the event that the
aggregate Invested Amount is greater than zero on the Series Termination Date
(after giving effect to deposits and distributions otherwise to be made on
such Series Termination Date), the Trustee will sell or cause to be sold (and
apply the proceeds to the extent necessary to pay such remaining amounts to
all Series [199_-_] Certificateholders) an interest in the Receivables or
certain Receivables, as specified in the Pooling and Servicing Agreement, in
an amount equal to (a) 110% of the aggregate Invested Amount on such Series
Termination Date (after giving effect to such deposits and distributions) and
(b) the Available Subordinated Amount on the preceding Determination Date
(after giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date following such Determination
Date); provided, however, that in no event shall such amount exceed the
Series Allocation Percentage (for the Collection Period in which such Series
Termination Date occurs) of Receivables on such Series Termination Date. The
net proceeds of such sale and any collections on the Receivables will be paid
pro rata to Series [199_-_] Certificateholders on the Series Termination Date
as the final payment of the Series [199_-_] Certificates.
Reports
On each Distribution Date (including each Distribution Date that
corresponds to the Expected Payment Date or any Special Payment Date),
commencing with the initial Distribution Date, the Trustee will forward to
each Series [199_-_] Certificateholder of record a statement (the
"Distribution Date Statement") prepared by the Servicer setting forth the
following information (which, in the case of (c), (d) and (e) below, will be
stated on the basis of an original principal amount of $1,000 per Series
[199_-_]
S-36
<PAGE>
Certificate if the [Accumulation Period] [Controlled Amortization Period] or
an Early Amortization Period [or Reinvestment Period] has commenced): (a) the
aggregate amount of collections, the aggregate amount of Interest Collections
and the aggregate amount of Principal Collections processed during the
immediately preceding Collection Period; (b) the Series Allocation
Percentage, the Floating Allocation Percentage and the Fixed Allocation
Percentage for such Collection Period; (c) the total amount, if any,
distributed on the Series [199_-_] Certificates; (d) the amount of such
distribution allocable to principal on the Series [199_-_] Certificates; (e)
the amount of such distribution allocable to interest on the Series [199_-_]
Certificates; (f) the Investor Default Amount for such Distribution Date; (g)
the Draw Amount, if any, for such Collection Period; (h) the amount of the
Investor Charge-Offs and the amounts of reimbursements thereof for such
Collection Period; (i) the amount of the Monthly Servicing Fee for such
Collection Period; (j) the [Controlled Distribution Amount] [Controlled
Deposit Amount] for the following Distribution Date; (k) the Invested
Amount[, the Excess Funding Amount] and the outstanding principal balance of
the Series [199_-_] Certificates for such Distribution Date (after giving
effect to all distributions which will occur on such Distribution Date); (1)
the "pool factor" for the Series [199_-_] Certificates as of the
Determination Date with respect to such Distribution Date (consisting of an
eleven-digit decimal expressing the Invested Amount as of such Determination
Date (determined after taking into account any reduction in the Invested
Amount which will occur on such Distribution Date) as a proportion of the
Initial Invested Amount); (m) the Available Subordinated Amount for such
Determination Date; [(n) the Reserve Fund balance for such date;] (o) [the
Principal Funding Account Balance,] [the Interest Funding Account Balance,]
[the Prefunding Account Balance] and [the Yield Supplement Account balance]
with respect to such date; [(p) during any Reinvestment Period, information
with respect to the Eligible Investments in the accounts for the Series
[199_-_] Certificates;] and (q) [other] [; provided, that after the Fully
Reinvested Date, [unless the Revolving Period has recommenced,] such
statement will not include the information in clauses [(a), (b), (f), (g),
(h), (i), (k) or (m) above].
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement"), the Seller has agreed to sell to
the underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Seller, the principal
amount of the Series [199_-_] Certificates set forth opposite its name:
<TABLE>
<CAPTION>
Series [199_-_]
Underwriters Certificates
------------ --------------
<S> <C>
[ ] ........................................ $[ ]
[ ] ........................................ [ ]
--------
Total ......................................... $[ ]
========
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all the Series
[199_-_] Certificates offered hereby if any of the Series [199_-_]
Certificates are purchased.
The Seller has been advised by the Underwriters that the Underwriters
propose to initially offer the Series [199_-_] Certificates to the public at
the price set forth on the cover page of this Prospectus Supplement, and to
certain dealers at such price less a concession not in excess of [ ]% of the
Certificate denominations. The Underwriters may allow and such dealers may
reallow a concession not in excess of [ ]% of the Certificate denominations
to certain other dealers. After the initial public offering, the public
offering price and such concessions may be changed.
The Underwriting Agreement provides that USA and CFC will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or contribute to payments which the Underwriters may be
required to make in respect thereof.
[In the ordinary course of their businesses, the Underwriters and their
respective affiliates have engaged and may engage in investment banking
transactions with the Seller and its affiliates.]
S-37
<PAGE>
The Underwriter intends to make a secondary market in the Series
[199_-_ ] Certificates, but has no obligation to do so. There can be no
assurance that a secondary market for the Series [199_-_ ] Certificates will
develop or, if it does develop, that it will continue or that it will provide
holders of the Series [199 - ] Certificates with a sufficient level of
liquidity of, or trading markets for, the Series [199_-_ ] Certificates.
In order to facilitate the offering of the Series [199_-_ ]
Certificates, the Underwriter may engage in transactions that stabilize,
maintain or otherwise affect the price of the Series [199_-_ ] Certificates.
Specifically, the Underwriter may overallot in connection with the offering,
creating a short position in the Series [199_-_ ] Certificates for its own
account. In addition, to cover overallotments or to stabilize the price of
the Series [199_-_ ] Certificates, the Underwriter may bid for, and purchase,
the Series [199_-_ ] Certificates in the open market. Any of these activities
may stabilize or maintain the market price of the [199_-_ ] Certificates
above independent market levels. The Underwriter is not required to engage in
these activities, and may end any of these activities at any time.
LEGAL MATTERS
Certain legal matters relating to the Series [199_-_ ] Certificates
will be passed upon for USA by Christopher A. Taravella, Esq., Vice President
and General Counsel of Chrysler Financial Corporation, and for the Underwriter
by Cravath, Swaine & Moore, New York, New York. Certain Federal income tax and
ERISA matters will be passed upon for USA and the Trust by Cravath, Swaine &
Moore. In addition to representing the Underwriter, Cravath, Swaine & Moore
from time to time represents Chrysler Financial Corporation and its
affiliates. See "Legal Matters" in the Prospectus.
S-38
<PAGE>
INDEX OF PRINCIPAL TERMS
Term Page
---- ----
Accounts .......................................................... 1
Accumulation Period Commencement Date ............................. 3
Accumulation Period Length ........................................ 3
Adjustment Date ................................................... 1
Assets Receivables Rate ........................................... 19
Available Certificateholder Principal Collections ................. 29
Available Credit Enhancement Amount ............................... 30
Available Negative Carry Subordinated Amount ...................... 25
Available Seller's Collections .................................... 23
Available Seller's Interest Collections ........................... 23
Available Seller's Principal Collections .......................... 23
Carry-over Amount ................................................. 19
Certificate Rate .................................................. 1
Certificateholder Interest Collections ............................ 27
Controlled Accumulation Amount .................................... 30
Controlled Amortization Amount .................................... 30
Controlled Deposit Amount ......................................... 30
Controlled Distribution Amount .................................... 30
Deficiency Amount ................................................. 24
Distribution Date ................................................. 1
Distribution Date Statement ....................................... 36
Draw Amount ....................................................... 24
Early Amortization Period ......................................... 5
Enhancement Provider .............................................. 30
Excess Funding Account ............................................ 4
Excess Principal Collections ...................................... 22
Excess Reserve Fund Required Amount ............................... 28
Excess Seller's Percentage ........................................ 23
Excluded Dealers .................................................. 14
Excluded Receivables .............................................. 14
Expected Payment Date ............................................. 17
Fixed Allocation Percentage ....................................... 22
Floating Allocation Percentage .................................... 21
Incremental Subordinated Amount ................................... 6
Index ............................................................. 1
Initial Invested Amount ........................................... 22
Interest Funding Account .......................................... 1
Interest Funding Account Balance .................................. 31
Interest Payment Date ............................................. 1
Interest Period ................................................... 1
Invested Amount ................................................... 22
Investment Proceeds ............................................... 27
Investor Charge-Off ............................................... 32
Monthly Interest .................................................. 19
Monthly Principal ................................................. 29
Negative Carry Required Amount .................................... 25
Paired Series ..................................................... 1
Prefunded Period .................................................. 1
S-39
<PAGE>
Term Page
---- ----
Prefunding Account ................................................ 3
Prefunding Account Balance ........................................ 31
Principal Funding Account ......................................... 31
Principal Funding Account Balance ................................. 31
Principal Shortfalls .............................................. 22
Receivables ....................................................... 1
Registration of Series 199_-_ Certificates ........................ 9
Required Negative Carry Subordinated Amount ....................... 25
Required Participation Percentage ................................. 8
Required Subordinated Amount ...................................... 25
Reserve Fund ...................................................... 27
Reserve Fund Deposit Amount ....................................... 27
Reserve Fund Required Amount ...................................... 27
Seller ............................................................ 1
Seller's Interest ................................................. 1
Seller's Percentage ............................................... 23
Series ............................................................ 1
Series 199_-_ Certificates ........................................ 1
Series 199_-_ Termination Date .................................... 10
Series Cut-Off Date ............................................... 10
Series Issuance Date .............................................. 10
Series Supplement ................................................. 18
Series Termination Date ........................................... 10
Servicer .......................................................... 1
Servicing Fee Rate ................................................ 9
Subordinated Percentage ........................................... 7
Trust ............................................................. 1
Underwriters ...................................................... 37
Underwriting Agreement ............................................ 37
USA ............................................................... 1
Yield Supplement Account .......................................... 1
Yield Supplement Account Deposit Amount ........................... 28
Yield Supplement Account Required Amount .......................... 28
S-40
<PAGE>
ANNEX I
OUTSTANDING SERIES OF INVESTOR CERTIFICATES
[to be provided]
A-1
<PAGE>
[Backcover - left]
=============================================================
No dealer, salesman or other person has been authorized to
give any information or to make any representations not
contained or incorporated by reference in this Prospectus
Supplement or the accompanying Prospectus and, if given or
made, such information or representations must not be relied
upon as having been authorized by the Seller or the
Underwriters. Neither this Prospectus Supplement nor the
accompanying Prospectus constitutes an offer or solicitation
by anyone in any state in which such offer or solicitation is
not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it
is unlawful to make such offer or solicitation. Neither the
delivery of this Prospectus Supplement or the accompanying
Prospectus, nor any sale made hereunder or thereunder shall,
under any circumstances, create any implication that there has
been no change in the affairs of the Seller since the date
hereof or thereof or that the information contained or
incorporated by reference herein or therein is correct as of
any time subsequent to its date.
TABLE OF CONTENTS
Page
----
Prospectus Supplement
Summary of Series Terms ............................. S-1
Risk Factors ........................................ S-11
Use of Proceeds ..................................... S-13
The Dealer Floorplan Financing Business ............. S-13
The Accounts ........................................ S-14
Chrysler Financial Corporation....................... S-17
Maturity and Principal Payment Considerations ....... S-17
Series Provisions ................................... S-18
Underwriting ........................................ S-37
Legal Matters ....................................... S-38
Index of Principal Terms ............................ S-39
Annex I ............................................. A-1
Prospectus
Available Information ............................... 2
Reports to Certificateholders ....................... 2
Incorporation of Certain Documents by Reference ..... 2
Prospectus Summary .................................. 3
Risk Factors ........................................ 16
U.S. Auto Receivables Company and the Trust ......... 19
Use of Proceeds ..................................... 21
The Dealer Floorplan Financing Business ............. 21
The Accounts ........................................ 25
Chrysler Financial Corporation and Chrysler Credit
Corporation ....................................... 26
Description of the Certificates ..................... 27
Description of the Receivables Purchase Agreement ... 57
Certain Legal Aspects of the Receivables ............ 58
Certain Tax Matters ................................. 61
ERISA Considerations ................................ 65
Experts ............................................. 66
Plan of Distribution ................................ 66
Legal Matters ....................................... 67
Index of Principal Terms ............................ 68
Annex I .............................................
Until [ ], 199[ ] (90 days after the date of this
Prospectus Supplement), all dealers effecting transactions in
the Series [199_-_] 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.
=============================================================
<PAGE>
[Backcover - right]
=============================================================
CARCO
Auto Loan Master Trust
$[ ]
[Floating Rate] [ %] Auto Loan Asset
Backed Certificates, Series [199_-_]
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER FINANCIAL CORPORATION
Servicer
---------------------
PROSPECTUS SUPPLEMENT
---------------------
[Underwriters]
=============================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
[Dual Class -- Money Market]
Subject to Completion Dated [ ], 1997
PROSPECTUS SUPPLEMENT
- ---------------------
To Prospectus dated , 1997
$
CARCO Auto Loan Master Trust
Auto Loan
Asset Backed Certificates, Series [199_-_]
$[ ] Floating Rate Class A-1 Money Market Extendible Certificates,
Series [199_-_]
$[ ] [Floating Rate] [ %] Class A-2 [Medium Term] [ ]
Certificates,
Series [199_-_]
---------
U.S. AUTO RECEIVABLES COMPANY, Seller
CHRYSLER FINANCIAL CORPORATION, Servicer
The Auto Loan Asset Backed Certificates, Series [199_-_] (the "Series
[199_-_] Certificates") offered hereby evidence undivided interests in
certain assets of the CARCO Auto Loan Master Trust (the "Trust") created
pursuant to a Pooling and Servicing Agreement among U.S. Auto Receivables
Company ("USA" or the "Seller"), Chrysler Financial Corporation, as servicer
("CFC" or the "Servicer"), and The Bank of New York, as trustee. The Series
[199_-_] Certificates will be issued in two Classes, the Floating Rate Class
A-1 Money Market Extendible Certificates, Series [199_-_] (the "Class A-1
Certificates"), and the [Floating Rate] [ %] Class A-2 [Medium Term] [ ]
Certificates, Series [199_-_] (the "Class A-2 Certificates"). The Trust
assets include wholesale receivables (the "Receivables") generated from time
to time in a portfolio of revolving financing arrangements (the "Accounts")
with automobile dealers to finance their automobile and light duty truck
inventory and collections on the Receivables. Certain assets of the Trust
will be allocated to Series [199_-_] Certificateholders, including the right
to receive a varying percentage of each month's collections with respect to
the Receivables at the times and in the manner described herein. The Seller
will own the remaining interest in the Trust not represented by the Series
[199_-_] Certificates or the Certificates of any other Series issued by the
Trust (the "Seller's Interest"). The Trust previously has issued [ ] other
Series of Certificates (each, a "Series"). From time to time, subject to
certain conditions, the Seller may offer other Series of Certificates, which
may have terms significantly different from the terms of the Series [199_-_]
Certificates. The issuance of additional Series of Certificates may impact
the timing of payments received by Series [199_-_] Certificateholders.
Interest will accrue on the Class A-1 Certificates at the rate of [ ]%
per annum [above] [below] [times] [ ] (the "Class A-1 Index") prevailing on
the Class A-1 Adjustment Date (as defined herein) [, subject to certain
limitations described herein] (the "Class A-1 Certificate Rate"), and on the
Class A-2 Certificates at the rate of [[ ]% per annum] [[ ]% [above] [below]
[times] [ ] (the "Class A-2 Index") prevailing on the Class A-2 Adjustment
Date (as defined herein) [, subject to certain limitations described
herein]](the "Class A-2 Certificate Rate"). Interest with respect to the
Class A-1 Certificates is payable on the [ ] day of each month (or, if such
day is not a business day, on the next succeeding business day) (each, [a
"Distribution Date" and]a "[Class A-1] Interest Payment Date"), commencing on
[ ,] 199[ ], and interest with respect to the Class A-2 Certificates is
payable on [each Interest Payment Date] [the [ ] day of each [quarter]
[other] (or, if such day is not a business day, on the next succeeding
business day) (each, a "Class A-2 Interest Payment Date")].
Principal is payable on each Class A-1 Certificate monthly on each
Distribution Date commencing on the [ ], 199[ ] Distribution Date unless the
Class A-1 Revolving Period with respect to such Class A-1 Certificate is
automatically extended. The holder of each Class A-1 Certificate will have
the option to elect not to extend the Class A-1 Revolving Period with respect
to such Certificate by delivering an election notice during a specified
period in each month prior to the month preceding the month in which the
[Accumulation Period Commencement Date] [Principal Commencement Date] occurs.
If the Class A-1 Certificateholder does not so elect, the Class A-1 Revolving
Period for such Certificate will automatically be extended from month to
month, but not beyond the day immediately preceding the [Accumulation Period
Commencement Date] [Principal Commencement Date]. [ ] ([an "Underwriter" and]
the "Remarketing Broker-Dealer") will have the right but not the obligation
to remarket any Class A-1 Certificate for which an election notice has been
delivered and the right to purchase any such Certificate in the manner
described herein. If the Remarketing Broker-Dealer chooses not to exercise
such right, principal will be payable monthly with respect to such Class A-1
Certificate commencing on the second Distribution Date after the election
notice is given. If the Class A-1 Revolving Period for a Class A-1
Certificate does not end in or prior to the month that is two months prior to
the month in which the [Accumulation Period Commencement Date] [Principal
Commencement Date] occurs, the principal of such Certificate will be payable
on [[ ] (the "Expected Payment Date")] [each Distribution Date, commencing on
the Distribution Date in [ ] and ending on the Distribution Date in [ ]], but
may be paid earlier or later as described herein.
Principal with respect to the Class A-2 Certificates [is scheduled to
be paid on the Expected Payment Date] [is scheduled to be distributed on each
Distribution Date commencing on the Distribution Date in [ , ] and ending on
the Distribution Date in [ ] but may be paid earlier or later under certain
circumstances described herein. In addition, no principal will be paid with
respect to the Class A-2 Certificates until principal of the Class A-1
Certificates has been paid in full, except in certain limited circumstances
described herein.
The Seller's Interest will be subordinated to the rights of the Series
[199_-_] Certificateholders to the limited extent of the Available
Subordinated Amount as described herein. [Describe other Enhancement, if any,
and any additional subordination of the Seller's Interest, if applicable.]
Prospective investors should consider the factors set forth under "Risk
Factors" commencing on page [ ] herein and on page [ ] and in the Prospectus.
THE SERIES [199_-_] CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE TRUST
ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF THE SELLER, THE
SERVICER OR ANY AFFILIATE THEREOF. NEITHER THE SERIES [199_-_]
CERTIFICATES NOR THE RECEIVABLES ARE INSURED OR GUARANTEED
BY ANY GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
===============================================================================
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to the
Public(1) Discount Seller(1)(2)
<S> <C> <C> <C>
Per Class A-1 Certificate ........................... % % %
Per Class A-2 Certificate ........................... % % %
Total ............................................... $ $ $
===============================================================================
<FN>
(1) Plus accrued interest, if any, at the applicable Certificate Rate from [
], 199[ ].
(2) Before deducting expenses, estimated to be $[ ].
</TABLE>
The Series [199_-_] Certificates are offered subject to prior sale, and
subject to the Underwriters' right to reject orders in whole or in part. It
is expected that delivery of the Series [199_-_] Certificates will be made in
book-entry form only through the Same Day Funds Settlement System of The
Depository Trust Company [, CEDEL S.A. and the Euroclear System] on or about
, 199 .
[Underwriters]
The date of this Prospectus Supplement is , 199 .
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
SERIES [199_-_] CERTIFICATES. SPECIFICALLY, THE UNDERWRITER MAY OVERALLOT IN
CONNECTION WITH THE OFFERING, AND MAY BID FOR, AND PURCHASE, THE SERIES [199
- - ] CERTIFICATES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "UNDERWRITING".
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION WITH
RESPECT TO THE OFFERING OF THE SERIES [199 - ] CERTIFICATES. ADDITIONAL
INFORMATION IS CONTAINED IN THE PROSPECTUS AND PURCHASERS ARE URGED TO READ
BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE
SERIES [199 - ] CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS
RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
<PAGE>
SUMMARY OF SERIES TERMS
This summary of Series Terms sets forth and defines specific terms of
the Series [199_-_] Certificates offered in this Prospectus Supplement and
the Prospectus, but is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus Supplement and in the
Prospectus. Reference is made to the Index of Principal Terms in each of this
Prospectus Supplement and the Prospectus for the location herein and therein
of the definitions of certain capitalized terms used herein. Certain
capitalized terms used but not defined herein have the meanings assigned to
such terms in the Prospectus.
Title of Securities .... Auto Loan Asset Backed Certificates, Series [199_-_]
(the "Series [199_-_] Certificates"). The Series
[199_-_] Certificates will be issued in two Classes:
the Floating Rate Class A-1 Money Market Extendible
Certificates, Series [199_-_] (the "Class A-1
Certificates"), and the [Floating Rate] [ %] Class
A-2 [Medium Term] [ ] Certificates, Series
[199_-_] (the "Class A-2 Certificates").
Remarketing
Broker-Dealer ....... [ ]
The Series [199_-_]
Invested Amount ..... The aggregate Series [199_-_] Invested Amount is
expected to be approximately $[ ] on the Series
Issuance Date (based on information as of the Series
Cut-Off Date) and represents the principal amount of
the Series [199_-_] Certificates invested in
Receivables as of the Series Issuance Date. [The
Invested Amount is subject to increase to the extent
amounts are withdrawn from the Excess Funding Account
and paid to the Seller. The Seller expects, although
there can be no assurance, that the Invested Amount
of the Series [199_-_] Certificates will equal the
outstanding principal balance of the Series [199_-_]
Certificates within [ ] months of the Series
Issuance Date.] [The Invested Amount is subject to
decrease to the extent funds are deposited in the
Excess Funding Account and, subsequently, to increase
to the extent amounts are withdrawn from the Excess
Funding Account and paid to the Seller. The Invested
Amount is also subject to reduction during the
[Accumulation Period] [Controlled Amortization
Period], any Early Amortization Period [and any
Reinvestment/Early Payoff Period] and at such other
times as deposits are made to the Excess Funding
Account in connection with the payment of
Receivables.] Any such increases or decreases in the
aggregate Invested Amount will be allocated to the
Class A-1 Certificates and the Class A-2 Certificates
pro rata based on the Class A-1 Allocation Percentage
and the Class A-2 Allocation Percentage,
respectively, for the related Collection Period. The
Class A-1 Allocation Percentage for any Collection
Period is the percentage obtained by dividing the
outstanding principal amount of the Class A-1
Certificates as of the last day of the immediately
preceding Collection Period (after giving effect to
any reduction thereof to occur on the immediately
following Distribution Date) by the aggregate
outstanding principal amount of all the Series
[199_-_] Certificates as of such last day (after
giving effect to any reduction thereof to occur on
the immediately following Distribution Date); and the
Class A-2 Allocation Percentage for any Collection
Period is the percentage obtained by subtracting from
100% the Class A-1 Allocation Percentage.
S-1
<PAGE>
Interest ............... Interest on the principal balance of the Class A-1
Certificates will accrue at the Class A-1 Certificate
Rate and will be payable to Class A-1
Certificateholders on the [ ] day of each month
(or, if such day is not a business day, on the next
succeeding business day) (each, [a "Distribution
Date" and] a "[Class A-1] Interest Payment Date")
commencing [ ], 19[ ]. Interest on the
principal balance of the Class A-2 Certificates
will accrue at the Class A-2 Certificate Rate and
will be payable to Class A-2 Certificateholders on
[each Interest Payment Date] [the day of each
[quarter] [other] (or, if such day is not a
business day, on the next succeeding business day)
(each, a "Class A-2 Interest Payment Date"),
provided that, during any Early Amortization
Period, interest will be distributed to Class A-2
Certificateholders on each Distribution Date,
commencing on the first Distribution Date following
the occurrence of an Early Amortization Event. A
portion of Certificateholder Interest Collections
and certain other amounts will be deposited each
month into a trust account (the "Interest Funding
Account") and used to make interest payments to the
Class A-2 Certificateholders on each Class A-2
Interest Payment Date or, during an Early
Amortization Period, each Distribution Date].
Interest [on the Class A-1 Certificates] will
accrue for the period beginning on and including
the most recent [Class A-1] Interest Payment Date
and ending on and including the day preceding the
next succeeding [Class A-1] Interest Date (each, a
"[Class A-1] Interest Period"), except that the
first [Class A-1] Interest Period will begin on and
include the Series Issuance Date. [Interest on the
Class A-2 Certificates will accrue for the period
beginning on and including the most recent Class
A-2 Interest Payment Date and ending on and
including the day preceding the next succeeding
Class A-2 Interest Payment Date (each, a "Class A-2
Interest Period"), except that the first Class A-2
Interest Period will begin on and include the
Series Issuance Date.] Interest for any [Class A-1]
Interest Payment Date [or Class A-2 Interest
Payment Date] due but not paid on such [Class A-1]
Interest Payment Date [or Class A-2 Interest
Payment Date] will be due on the next [Class A-1]
Interest Payment Date [or Class A-2 Interest
Payment Date, as applicable], together with, to the
extent permitted by applicable law, interest on
such amount at the applicable Certificate Rate. The
Class A-1 Certificate Rate for each [[Class A-1]
Interest Period] [other] will be determined on the
[ ] day preceding the first day of such [[Class
A-1] Interest Period] [other] (each, a "Class A-1
Adjustment Date"); [and the Class A-2 Certificate
Rate for each [[Class A-2] Interest Period] [other]
will be determined on the [ ] day preceding the
first day of such [[Class A-2] Interest Period]]
[other] (each, a "Class A-2 Adjustment Date")]. The
Class A-1 Certificate Rate will equal [ ] (the
"Class A-1 Index") for the applicable Class A-1
Adjustment Date, determined as provided herein,
[plus] [minus] [times] [__%][; provided that, if
the Class A-1 Certificate
S-2
<PAGE>
Rate for any Distribution Date calculated on the
basis of the Class A-1 Index is greater than the
Assets Receivables Rate, then the Class A-1
Certificate Rate for such Distribution Date will be
the Assets Receivables Rate]. The Class A-2
Certificate Rate will equal [[ ]% per annum][ ]
(the "Class A-2 Index") for the applicable Class
A-2 Adjustment Date, determined as provided herein,
[plus] [minus] [times] [ %][; provided that, if the
Class A-2 Certificate Rate for any Distribution
Date calculated on the basis of the Class A-2 Index
is greater than the Assets Receivables Rate, then
the Class A-2 Certificate Rate for such
Distribution Date will be the Assets Receivables
Rate]. Interest on the Class A-1 Certificates will
be calculated on the basis of the actual number of
days in each [Class A-1] Interest Period divided by
[360] [other]. Interest on the Class A-2
Certificates will be calculated on the basis of [a
360-day year of twelve 30-day months] [the actual
number of days in each [Class A-2] Interest Period
divided by [360] [other]].
[Yield Supplement
Account ............. On the Series Issuance Date, the Seller will
deposit $[ ] in a trust account which will be
established by the Seller with the Trustee (the
"Yield Supplement Account"). The Yield Supplement
Account will be funded, from time to time as
described herein, by the deposit thereto of certain
amounts otherwise distributable to the Seller. See
"Series Provisions -- Distributions from the
Collection Account; [Reserve Fund;] Yield
Supplement Account -- Yield Supplement Account".]
[[Class A-1] Expected
Payment Date ........ [ ], [ ].]
[Class A-2 Expected
Payment Date ........ [ ], [ ].]
[Excess Funding
Account ............. Unless and until a Special Payoff Period with respect
to any Class A-1 Certificate, any Early Amortization
Period [or Reinvestment/Early Payoff Period] or the
[Accumulation Period] [Controlled Amortization
Period] shall have commenced, the Excess Funded
Amount will be maintained in the Excess Funding
Account.
Upon the earliest of (a) the commencement of a
Special Payoff Period with respect to any Class A-1
Certificate, (b) the commencement of any Early
Amortization Period [or Reinvestment/ Early Payoff
Period] and (c) [ ] [the [ ] Distribution Date]
[the Accumulation Period Commencement Date], some
or all of the funds on deposit in the Excess
Funding Account will be distributed to the Series
[199_-_] Certificateholders as described herein or
deposited into the Principal Funding Account as
described herein.]
Class A-1 Revolving
Periods; Automatic
Extension of Class
A-1 Revolving
Periods .............. Principal will be payable monthly to the holder of
each Class A-1 Certificate commencing not later
than the second Distribution Date following the end
of the Class A-1 Revolving Period with respect to
such Class A-1 Certificate. During the Class A-1
Revolving Period with respect to a Class A-1
Certificate, Principal Collections otherwise
allocable to such Certificate will, subject to
certain limitations, be paid to the holders of
Class A-1 Certificates that are in their Special
Payoff Periods or paid to the Seller[, deposited to
the Excess Funding Account] or allocated to another
Series (in effect, in exchange for the allocation
to the interest of such Certificateholder of an
equal interest
S-3
<PAGE>
in the Receivables balances that are new or would
otherwise be part of the Seller's Interest or the
interest of such other Certificateholders) in order
to maintain [the sum of] the Invested Amount of
such Certificateholder's Certificate [and such
Certificateholder's pro rata share of the Excess
Funded Amount] at a constant level. The "Class A-1
Revolving Period" for each Class A-1 Certificate
shall be the period beginning on the Series Cut-Off
Date and ending on the last day of the Collection
Period ending in [ ], 199[ ], unless such Revolving
Period is automatically extended. The holder of
each Class A-1 Certificate will have the option of
electing not to extend the Revolving Period with
respect to such Certificate in each Collection
Period, commencing with the Collection Period
ending in [ ], 199[ ], by delivering an election
notice at the time and in the manner described
below. If the holder does not so elect, the Class
A-1 Revolving Period with respect to such
Certificate will be automatically extended from
each Collection Period to the next succeeding
Collection Period. The Revolving Periods for all
Class A-1 Certificates will in any event end upon
the termination of the Series Revolving Period.
Election Not to Extend
Class A-1 Revolving
Period .............. During the period beginning on and including the
[ ] business day of each month and ending on and
including the [ ] business day of such month
(each, an "Election Period"), commencing in
[ ], 199[ ], each Class A-1 Certificateholder
may deliver to its Indirect Participant or its
Participant, as applicable, with copies to the
Remarketing Coordinator and the Remarketing
Broker-Dealer, a notice in which the Class A-1
Certificateholder elects not to extend the Revolving
Period with respect to its Class A-1 Certificate
effective as of the beginning of the next succeeding
Collection Period (an "Election Notice"). Delivery of
an Election Notice by a Class A-1 Certificateholder
(each an "Electing Certificateholder") will be
irrevocable and the Electing Certificateholder will
either (x) receive payment in full of the unpaid
principal amount of the related Class A-1 Certificate
on the next succeeding Distribution Date if the
Remarketing Broker-Dealer chooses to purchase such
Class A-1 Certificate as described below or (y) begin
receiving monthly payments of principal as described
below. If the Remarketing Broker-Dealer chooses to
purchase the Class A-1 Certificate subject to an
Election Notice and the purchase price with respect
thereto is paid, the Class A-1 Revolving Period for
such Class A-1 Certificate (which would then be held
by a new Class A-1 Certificateholder) will be
automatically extended as if an election not to
extend such Revolving Period had not been made.
Remarketing; Purchase of
Class A-1
Certificates Subject
to an Election
Notice ............... During the period beginning on and including the
first day of any Election Period and ending on and
including the [ ] business day of the month in
which such Election Period occurs (the "Remarketing
Period"), the Remarketing Broker-Dealer will be
entitled to remarket any Class A-1 Certificates as to
which an Election Notice has been delivered during
such Election Period and the Remarketing
Broker-Dealer will be entitled, but will not be
obligated,
S-4
<PAGE>
to purchase any or all of the Class A-1
Certificates which are the subject of an Election
Notice by notifying the Remarketing Coordinator of
such purchase by the last day of the related
Remarketing Period with respect to such
Certificates. If the Remarketing Broker-Dealer
chooses to acquire a Class A-1 Certificate subject
to an Election Notice, such Certificate will be
automatically transferred to or upon the order of
the Remarketing Broker-Dealer for settlement on the
Distribution Date following the Remarketing Period.
The purchase price for any Class A-1 Certificate so
purchased will be equal to the unpaid principal
amount of the subject Certificate. The Electing
Certificateholder will be entitled to receive the
applicable interest payment on the Class A-1
Certificate on the Distribution Date on which such
Certificate is purchased. Following the delivery of
an Election Notice, the Electing Certificateholder
may not transfer the Class A-1 Certificates to
which such Election Notice applies, except (i)
pursuant to the remarketing procedures or (ii)
after receipt of notice that such Certificates will
not be purchased by the Remarketing Broker-Dealer.
Class A-1 Special
Payoff Period ...... During the period beginning on the day immediately
following the last day of the Class A-1 Revolving
Period with respect to a Class A-1 Certificate as
to which the Class A-1 Revolving Period ends in or
prior to the month that is [ ] months prior to the
month in which the [Accumulation Period
Commencement Date] [Principal Commencement Date]
occurs and prior to the commencement of an Early
Amortization Period [or Reinvestment/Early Payoff
Period] [that is not terminated as described
herein] and ending on the earlier of the payment in
full of the outstanding principal balance of such
Certificate and the Termination Date (a "Special
Payoff Period"), the holder of such Class A-1
Certificate will receive principal payments on its
Certificate monthly on each Distribution Date,
commencing not later than the [ ] Distribution Date
following the commencement of such Special Payoff
Period in an amount equal to the Special Class A-1
Monthly Principal with respect to such Certificate
for such Distribution Date plus, in certain
circumstances, certain additional amounts. The
amount of such principal will not be subject to any
controlled amortization amount. In the event that
principal of such Class A-1 Certificate will not be
paid in full by the eleventh Distribution Date
after the commencement of the Special Payoff Period
with respect thereto, the holder thereof will have
the option to direct the Trustee to sell on such
eleventh Distribution Date such Certificateholder's
pro rata share of the Receivables and apply the
proceeds thereof to pay principal of such holder's
Class A-1 Certificate on such Distribution Date.
The holders of any Class A-1 Certificate the
principal of which will not be paid in full by the
eleventh Distribution Date following the
commencement of the [Accumulation Period]
[Controlled Amortization Period] or any Early
Amortization Period [or Reinvestment/Early Payoff
Period] will have the same option on such
Distribution Date. Principal of a Class A-1
Certificate is payable in full (provided that the
holder exercises, if necessary, its right to direct
the Trustee to sell a portion of the Receivables
corresponding to such holder's interest in the
Trust and the proceeds of such sale are sufficient)
by not later than the eleventh Distribution
S-5
<PAGE>
Date after the end of the Class A-1 Revolving
Period with respect to such Class A-1 Certificate.
Series Revolving
Period .............. During the Series Revolving Period, Principal
Collections allocable to the Series [199_-_]
Certificateholders' Interest generally will be paid
to the holders of Class A-1 Certificates that are
in their Special Payoff Periods or paid to the
Seller[, deposited in the Excess Funding Account]
or allocated to another Series (in effect, in
exchange for the allocation to the Series [199_-_]
Certificateholders' Interest of an equal interest
in the Receivables balances that are new or that
would otherwise be part of the Seller's Interest or
the interest of the Certificateholders of such
other Series) in order to maintain [the sum of] the
aggregate Invested Amount [and the Excess Funded
Amount] at a constant level, subject to reduction
to reflect payment of principal of Class A-1
Certificates that are in their Special Payoff
Periods. The "Series Revolving Period" shall be the
period beginning on the Series Cut-Off Date and
ending on the earlier of (a) the day immediately
preceding the [Accumulation Period Commencement
Date] [Principal Commencement Date] and (b) the
business day immediately preceding the day on which
an Early Amortization Event [or Reinvestment/Early
Payoff Event] occurs. See "Series Provisions --
Early Amortization Events" and " --
Reinvestment/Early Payoff Events" for a discussion
of certain events which might lead to the early
termination of the Series Revolving Period and, in
certain limited circumstances, the recommencement
of the Series Revolving Period.
[Accumulation Period]
[Controlled
Amortization
Period] .............. [Unless an Early Amortization Event [or
Reinvestment/Early Payoff Event] that is not cured
as described herein shall have occurred, the
Regular Payoff Certificates will have an
Accumulation Period of one, two, three, four or
five month(s) as described in the following
paragraph.
On the [ ] Distribution Date and each
Distribution Date thereafter that occurs prior to
the Accumulation Period Commencement Date, the
Servicer shall calculate the Accumulation Period
Length. The "Accumulation Period Length" will be
calculated on each such date as the lesser of (i)
the number of full Collection Periods between such
Distribution Date and the Expected Payment Date and
(ii)the product, rounded upwards to the nearest
integer not greater than five, of (a) one divided
by the lowest Monthly Payment Rate on the
Receivables during the last [ ] months and (b) a
fraction, the numerator of which is the sum of (i)
the Invested Amount as of such Distribution Date
(after giving effect to all changes therein on such
date) and (ii) the invested amounts of all other
Series [(excluding certain Series)] currently in
their amortization or accumulation periods or
expected to be in their amortization or
accumulation periods by the Expected Payment Date
and the denominator of which is the sum of such
Invested Amount and the invested amounts as of such
Distribution Date (after giving effect to all
changes therein on such date) of all other
outstanding Series [(excluding certain Series)]
which are expected to be outstanding on
S-6
<PAGE>
the Expected Payment Date. The Accumulation Period
Commencement Date (which will be the first day of a
Collection Period) will occur when the number of
full Collection Periods remaining until the
Expected Payment Date first equals the Accumulation
Period Length as calculated above. If the
Accumulation Period Length is one month, two
months, three months, four months or five months in
length, the "Accumulation Period Commencement Date"
shall be the first day of the [ ] Collection
Period, the [ ] Collection Period, the [ ]
Collection Period, the [ ] Collection Period, or
the [ ] Collection Period, respectively. In
addition, if at any time after the [ ] Distribution
Date, any other outstanding Series [(excluding
certain Series)] shall have entered into a
reinvestment period or an early amortization
period, the Accumulation Period Commencement Date
shall be the earlier of (i) the date that such
outstanding Series shall have entered into its
reinvestment period or early amortization period
and (ii) the Accumulation Period Commencement Date
as previously determined. See "Annex I --
Outstanding Series of Investor Certificates".
The effect of the calculation described above is to
permit the reduction of the length of the
Accumulation Period based on the Invested Amounts
of certain other Series which are scheduled to be
in their revolving periods during the Accumulation
Period and on increases in the principal payment
rate, which, if continued, would result in a
shorter Accumulation Period.]
[Unless an Early Amortization Event [or
Reinvestment/Early Payoff Event] that is not cured
as described herein shall have occurred, the
Controlled Amortization Period will commence on [ ]
(the "Principal Commencement Date").]
[Reinvestment/Early
Payoff Period ....... If a Reinvestment Event (referred to herein as a
"Reinvestment/Early Payoff Event") occurs the Class
A-1 Certificates that are Regular Payoff Certificates
will have an early payoff period, during which
principal will be paid to the holders of such
Certificates monthly on each Distribution Date, and
the Class A-2 Certificates will have a Reinvestment
Period (such periods being referred to herein
collectively as a "Reinvestment/Early Payoff
Period"). [A Reinvestment/Early Payoff Period will
commence if the Seller delivers a notice to the
Trustee stating that the Seller will no longer sell
Receivables to the Trust commencing on [ ] or any
yearly anniversary thereof and certain other
conditions are satisfied.] See "Series Provisions
-- Reinvestment/Early Payoff Events" for a
description of the [other] events that might result
in the commencement of a Reinvestment/Early Payoff
Period. See also "Series Provisions --
Distributions from the Collection Account [;
Reserve Fund] [; Yield Supplement Account] --
Principal Collections".]
[The Seller is required to add Receivables to the
Trust under certain circumstances described under
"Description of the Certificates -- Addition of
Accounts or Participating Interests" in the
Prospectus. The failure of the Seller to add
Receivables when required will result in the
occurrence of a Reinvestment/Early Payoff Event.
However, if
S-7
<PAGE>
no other Reinvestment/Early Payoff Event has
occurred, the Reinvestment/Early Payoff Period
resulting from such failure will terminate and the
Series Revolving Period and any Class A-1 Revolving
Period that terminated as a result of such
Reinvestment/Early Payoff Event will recommence
when the Seller would no longer be required to add
Receivables to the Trust, so long as neither the
scheduled termination date of the Series Revolving
Period nor an Early Amortization Event that is not
cured as described herein has occurred.]
[Notwithstanding the foregoing, in the event of the
occurrence of any Reinvestment/Early Payoff Event,
provided that neither the scheduled termination
date of the Series Revolving Period nor an Early
Amortization Event that is not cured as described
herein has occurred, the Series Revolving Period
and any Class A-1 Revolving Period that terminated
as a result of such Reinvestment/Early Payoff Event
may recommence following receipt of (i) written
confirmation from each Rating Agency (other than
Moody's) that such Rating Agency's rating of either
Class of the Series [199_-_] Certificates will not
be withdrawn or lowered as a result of such
recommencement and (ii) the consent of the Series
[199_-_] Certificateholders holding Series [199_-_]
Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series
[199_-_] Certificates to such recommencement.]
[Describe other cures of Reinvestment/Early Payoff
Events and partial Reinvestment/Early Payoff
Periods, if applicable.]]
Early Amortization
Period .............. Upon the commencement of any Early Amortization
Period that is not cured as described herein, any
Class A-1 Revolving Period and the Series Revolving
Period or the [Accumulation Period] [Controlled
Amortization Period], as the case may be, will
terminate and Principal Collections and certain
other amounts allocable to the Series [199_-_]
Certificateholders' Interest will no longer be paid
to the Seller or the holders of any other
outstanding Series as described above but instead
will be distributed monthly on each Distribution
Date beginning with the Distribution Date following
the Collection Period in which an Early
Amortization Period commences. Any such amounts
allocable to the interest of holders of the Regular
Payoff Certificates will be paid first to the
holders of Class A-1 Certificates until such
Certificates have been paid in full and then to the
holders of Class A-2 Certificates. See "Description
of the Certificates -- Reinvestment Events and
Early Amortization Events" in the Prospectus and
"Series Provisions -- Early Amortization Events"
herein for a description of the events that might
result in the commencement of an Early Amortization
Period. See also "Series Provisions --
Distributions from the Collection Account [;Reserve
Fund] [; Yield Supplement Account] -- Principal
Collections". In addition, on the first Special
Payment Date any amounts on deposit in the
Principal Funding Account [and any amounts on
deposit in the Excess Funding Account not allocable
to the Special Payoff Class A-1 Certificates], up
to the outstanding principal balance of the Regular
Payoff Certificates, will be paid in the same
manner.
[The Seller is required to add Receivables to the
Trust under certain
S-8
<PAGE>
circumstances described under "Description of the
Certificates -- Addition of Accounts or
Participation Interests" in the Prospectus. The
failure of the Seller to add Receivables when
required will result in the occurrence of an Early
Amortization Event. However, if no other Early
Amortization Event has occurred, the Early
Amortization Period resulting from such failure
will terminate and the Series Revolving Period and
any Class A-1 Revolving Period that terminated as a
result of such Early Amortization Event will
recommence when the Seller would no longer be
required to add Receivables to the Trust, so long
as [neither] the scheduled termination date of the
Series Revolving Period [nor a Reinvestment/Early
Payoff Event that is not cured as described herein]
has [not] occurred.]
[Notwithstanding the foregoing, in the event of the
occurrence of any Early Amortization Event,
provided that [neither] the scheduled termination
date of the Series Revolving Period [nor a
Reinvestment/Early Payoff Event that is not cured
as described herein] has [not] occurred, the Series
Revolving Period and any Class A-1 Revolving Period
that terminated as a result of such Early
Amortization Event may recommence following receipt
of (i) written confirmation from each Rating Agency
(other than Moody's) that such Rating Agency's
rating of the Series [199_-_] Certificates will not
be withdrawn or lowered as a result of such
recommencement and (ii) the consent of the Series
[199_-_] Certificateholders holding Series [199_-_]
Certificates evidencing more than 50% of the
aggregate principal amount of the Series [199_-_]
Certificates to such recommencement.].] [Describe
other cures of Early Amortization Events, if
applicable.]
Subordination of the
Seller's Interest ... If [on or prior to the Fully Reinvested Date [or
thereafter if the Series Revolving Period has
recommenced] the Interest Collections, Investment
Proceeds[, certain amounts in the Reserve Fund] and
certain other amounts allocable to the Series
[199_-_] Certificateholders for any Collection
Period[, including Excess Interest Collections,] are
not sufficient to cover the interest payable with
respect to the Series [199_-_] Certificates on the
next Distribution Date (plus any overdue interest and
interest thereon), the Monthly Servicing Fee for such
Distribution Date, any Investor Default Amount for
such Distribution Date and certain other amounts, the
Available Subordinated Amount will be applied to make
up such deficiency. The Available Subordinated Amount
for a Determination Date is equal to (a) the lesser
of (i) the Available Subordinated Amount for the
preceding Determination Date, minus, with certain
limitations, the Draw Amount for such preceding
Determination Date, [minus funds from the Reserve
Fund applied to cover any portion of the Investor
Default Amount,] plus the excess, if any, of the
Required Subordinated Amount for such Determination
Date over the Required Subordinated Amount for the
immediately preceding Determination Date, plus the
amount of Excess Servicing available to be paid to
the Seller as described under "Series Provisions --
Distributions from the Collection Account [; Reserve
Fund Account] [; Yield Supplement Account] -- Excess
Servicing", and (ii) the product of the fractional
equivalent of the
S-9
<PAGE>
Subordinated Percentage and the Invested Amount
[minus (b) in the case of clause (a)(i), the
Incremental Subordinated Amount for such preceding
Determination Date, plus (c) the Incremental
Subordinated Amount for the current Determination
Date,] [plus (d) the Subordinated Percentage of
funds to be withdrawn from the Excess Funding
Account on the succeeding Distribution Date and
paid to the Seller or allocated to one or more
Series]; provided, however, that, from and after
the commencement of [the [Accumulation Period]
[Controlled Amortization Period] or] any Early
Amortization Period [that is not cured as described
herein] until the payment in full of the Series
[199_-_] Certificates, the Available Subordinated
Amount shall be calculated based on the Invested
Amount as of the close of business on the day
preceding such [[Accumulation Period] [Controlled
Amortization Period] or] Early Amortization Period
[; and provided further that from and after the
commencement of any Reinvestment/ Early Payoff
Period [that is not cured as described herein]
until the earliest of the commencement of any Early
Amortization Period [that is not cured as described
herein], the payment in full of the Series [19_-_]
Certificates and the Fully Reinvested Date, the
Available Subordinated Amount shall be calculated
based on the Invested Amount as of the close of
business on the day preceding such
Reinvestment/Early Payoff Period [less [describe
permitted reductions, e.g., based on payment rates
and amounts on deposit in the Principal Funding
Account]]. The Available Subordinated Amount for
the first Determination Date is equal to the
Required Subordinated Amount. The "Required
Subordinated Amount" shall mean, as of any date of
determination [, the sum of (a)] the product of the
initial Subordinated Percentage [as adjusted from
time to time as described herein other than as a
result of an increase therein at the option of the
Seller,] and the Invested Amount [and (b) the
Incremental Subordinated Amount].
[The "Incremental Subordinated Amount" on any
Determination Date will equal the result obtained
by multiplying (a) a fraction, the numerator of
which is the sum of the Invested Amount on the last
day of the immediately preceding Collection Period
and the Available Subordinated Amount for such
Determination Date (calculated without adding the
Incremental Subordinated Amount for such
Determination Date as described in clause (c)
above), and the denominator of which is the Pool
Balance on such last day by (b) the excess, if any,
of (x) the sum of the Overconcentration Amount, the
Installment Balance Amount and the aggregate amount
of Ineligible Receivables on such Determination
Date over (y) the aggregate amount of Ineligible
Receivables, Receivables in Accounts containing
Dealer Overconcentrations and Receivables in
Installment Balances, in each case that became
Defaulted Receivables during the preceding
Collection Period and are not subject to
reassignment from the Trust, unless certain
insolvency events relating to the Seller or CCC
have occurred, as further described in the Pooling
and Servicing Agreement.] "Dealer
Overconcentrations" on any Distribution Date means,
with respect to any Dealer or group of affiliated
Dealers and Series [199_-_], the excess of (x) the
aggregate principal amount of Receivables due from
such Dealer or group of affiliated Dealers on the
last day of the Collection Period immediately
preceding such
S-10
<PAGE>
Distribution Date over (y) [ ]% of the Pool Balance
on the last day of the immediately preceding
Distribution Date.
The "Subordinated Percentage" will initially equal
the percentage equivalent of a fraction, the
numerator of which is the Subordination Factor and
the denominator of which will be the excess of 100%
over the Subordination Factor. The Subordination
Factor will [initially] be [ ]% [, but will be
subject to increase [by [ ]% when the [Floating
Rate] [ %] Auto Loan Asset Backed Certificates,
Series [ ] have been paid in full] [by [ ]% in the
event that the rating of CFC's long-term unsecured
debt is lowered below BBB- by Standard & Poor's or
withdrawn by Standard & Poor's unless the Seller
receives written confirmation from Standard &
Poor's that the failure to so increase the
Subordination Factor would not result in such
Rating Agency lowering or withdrawing its rating of
the Series [199_-_] Certificates] [or if [describe
other events that will require an increase in the
Subordination Factor]] [; provided, however, that
in no event will the Subordination Factor be
greater than [ ]%]. The Seller may, in its sole
discretion, increase at any time the Available
Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser
of (i) $[ ] or (ii) [ ]% of the Invested Amount on
such date. The Seller is not under any obligation
to increase the Available Subordinated Amount at
any time[, except as described herein]. If [the sum
of] the Available Subordinated Amount [and the
Incremental Subordinated Amount] were reduced to
less than [the sum of] the Required Subordinated
Amount [and the Incremental Subordinated Amount], a
[Reinvestment/Early Payoff Event] [Early
Amortization Event] would occur. The Seller could
elect to increase the Available Subordinated Amount
at the time such a [Reinvestment/Early Payoff
Event] [Early Amortization Event] would otherwise
occur, thus preventing or delaying the occurrence
of the [Reinvestment/Early Payoff Event] [Early
Amortization Event]. [Describe partial
Reinvestment/Early Payoff Periods resulting from a
failure to meet the test described above, if
applicable.]
[The Seller's Interest will be further subordinated
to the extent of the Available Negative Carry
Subordinated Amount. In the event of the occurrence
of [a Reinvestment/Early Payoff Event,] [an Early
Amortization Event] or the [Accumulation Period
Commencement Date] [commencement of the Controlled
Amortization Period], certain Interest Collections
and Principal Collections allocated to the Seller,
not to exceed the Available Negative Carry
Subordinated Amount, will be deposited to the
Reserve Fund [and other] until the amounts on
deposit therein equal the Negative Carry Required
Amount [and other]. See "Series Provisions --
Allocation of Collections; Limited Subordination of
Seller's Interest".] [Describe any other
subordination of the Seller's Interest, if
applicable.]
Required Participation
Percentage .......... "Required Participation Percentage" shall mean, with
respect to Series [199_-_], [ ]%; provided, however,
[that if the aggregate amount of Principal
Receivables due from any Dealer or group of
affiliated Dealers at the close of business on the
last day of any Collection
S-11
<PAGE>
Period with respect to which such determination is
being made is greater than [ ]% of the Pool Balance
on such last day, the Required Participation
Percentage shall mean, as of such last day and with
respect to such Collection Period and the
immediately following Collection Period only, [ ]%;
provided, further,] that the Seller may, upon ten
days' prior notice to the Trustee, the Rating
Agencies and any Enhancement Provider reduce the
Required Participation Percentage to not less than
100%, so long as the Rating Agencies shall not have
notified the Seller or the Servicer that any such
reduction will result in a reduction or withdrawal
of the rating of either Class of the Series
[199_-_] Certificates or any other outstanding
Series or Class of Certificates.
Other Series Issuances . As of the date hereof, [ ] other Series issued by
the Trust are out- standing. See "Annex I --
Outstanding Series of Investor Certi- ficates" for
a summary of the terms of the outstanding Series.
Allocations ............ Interest Collections, Principal Collections and
Defaulted Receivables allocated to Series [199_-_]
as described under "Description of the Certificates
-- Allocation Percentages -- Allocation among
Series" in the Prospectus will be further allocated
between the Series [199_-_] Certificateholders'
Interest and the Seller's Interest as described
below.
Interest Collections and Defaulted Receivables
allocated to Series [199_-_] will be allocated at
all times to the Series [199_-_]
Certificateholders' Interest based on the Floating
Allocation Percentage applicable during the related
Collection Period [, provided that during any Early
Amortization Period, Interest Collections will be
allocated to the Series [199_-_]
Certificateholders' Interest based on the Fixed
Allocation Percentage as described below]. The
Floating Allocation Percentage for any Collection
Period is [the percentage obtained by dividing the
Invested Amount on the last day of the immediately
preceding Collection Period by the product of (x)
the Pool Balance on the last day of the immediately
preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in
respect of which the Floating Allocation Percentage
is being calculated] [other]. Principal Collections
will also be allocated to Series [199_-_]
Certificateholders' Interest based on the Floating
Allocation Percentage during any period (a
"Nonprincipal Period") that is not the Special
Payoff Period for any Class A-1 Certificate the
[Accumulation Period] [Controlled Amortization
Period] or an Early Amortization Period [or
Reinvestment/Early Payoff Period].
During the Special Payoff Period for any Class A-1
Certificate, the [Accumulation Period] [Controlled
Amortization Period] and any Early Amortization
Period [or Reinvestment/Early Payoff Period],
Principal Collections allocated to Series [199_-_]
will be allocated to the Series [199_-_]
Certificateholders' Interest based on the [Fixed
Allocation Percentage] [others]. The [Fixed
Allocation Percentage for a Collection Period
during Special Payoff Period for any Class A-1
Certificate, the [Accumulation Period] [Controlled
Amortization Period], any Early Amortization Period
[and any Reinvestment/Early
S-12
<PAGE>
Payoff Period] is [the percentage equivalent of a
fraction, the numerator of which is the sum of (x)
the Invested Amount of each Class A-1 Certificate
that is in its Special Payoff Period as of the last
day of its Class A-1 Revolving Period and (y) the
Invested Amount of each other Class A-1 Certificate
as of the last day of the Series Revolving Period
and the Invested Amount of each Class A-2
Certificate as of the last day of the Series
Revolving Period, if such last day has occurred or,
if such last day has not occurred, the Invested
Amount of each such other Class A-1 Certificate and
Class A-2 Certificate as of the last day of the
immediately preceding Collection Period and the
denominator of which is the product of (x) the Pool
Balance on the last day of the immediately
preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in
respect of which the Fixed Allocation Percentage is
being calculated] [other]].
Principal Collections allocated to the Series
[199_-_] Certificateholders' Interest will be
further allocated between the interest of each
holder of a Class A-1 Certificate that is in a
Special Payoff Period (each, a "Special Payoff
Class A-1 Certificate"), and the interest of
holders of other Series [199_-_] Certificates (the
"Regular Payoff Certificates") based on their
respective Certificate Principal Percentages. The
Certificate Principal Percentage for any Collection
Period and any Special Payoff Class A-1 Certificate
is [the percentage obtained by dividing the
Invested Amount of such Certificate as of the last
day of its Class A-1 Revolving Period by the sum of
(x) the aggregate Invested Amount of all Special
Payoff Certificates as of the last day of their
respective Class A-1 Revolving Periods and (y) the
aggregate Invested Amount of all Regular Payoff
Certificates as of the last day of the Series
Revolving Period, if such last day has occurred or,
if such last day has not occurred, the aggregate
Invested Amount of such Certificates as of the last
day of the immediately preceding Collection Period]
[other]; and the Certificate Principal Percentage
for any Collection Period and all Regular Payoff
Certificates in the aggregate is 100% minus the sum
of the Certificate Principal Percentages for all
Special Payoff Class A-1 Certificates.
During any Special Payoff Period for any Special
Payoff Class A-1 Certificates that does not occur
during the [Accumulation Period] [Controlled
Amortization Period] or any Early Amortization
Period [or Reinvestment/Early Payoff Period]
Principal Collections allocated to the interest of
the Series [199_-_] Certificateholders other than
that of the holders of such Special Payoff Class
A-1 Certificates will be reallocated and paid to
the holders of such Class A-1 Certificates. In
addition, unless an Early Amortization Event [or
Reinvestment/Early Payoff Event] [that is not cured
as described herein] shall have occurred, monthly
[deposits of principal to the Principal Funding
Account with respect to] [payments of principal of]
the Regular Payoff Certificates during the
[Accumulation Period] [Controlled Amortization
Period] will not exceed the [Controlled Deposit
Amount] [Controlled Distribution Amount] and,
subject to certain limitations, any Principal
Collections allocated to such Certificates but not
paid to [the Principal Funding Account] [the
S-13
<PAGE>
holders of such Certificates] will be reallocated
to the Special Payoff Class A-1 Certificates.
Finally, during any Special Payoff Period for any
Special Payoff Class A-1 Certificate, any Principal
Collections allocated to such Certificate and not
needed to pay principal of such Certificate will be
reallocated and paid to holders of other Special
Payoff Class A-1 Certificates or, during the
[Accumulation Period] [Controlled Amortization
Period] or any Early Amortization Period [or
Reinvestment/Early Payoff Period], reallocated to
the Regular Payoff Certificates and paid to the
Principal Funding Account or the holders of other
Series [199_-_] Certificates. Any excess after such
reallocations will be paid to the Seller or
allocated to any other Series. See "Series
Provisions -- Allocation Percentages -- Principal
Collections for All Series [199_-_] Certificates"
and " -- Principal Collections for All Series".
Excess Principal
Collections ......... [Describe Excess Principal Collection allocations
applicable to Series [199_-_]]. See "Series
Provisions -- Allocation Percentages -- Principal
Collections for All Series".
[Excess Finance Charge
Collections .......... Series [199_-_] has been designated as an Excess
Allocation Series. See "Description of the
Certificates -- Allocation Percentages -- Sharing of
Excess Interest Collections" in the Prospectus.]
[Enhancement ........... The Trust will have the benefit of a [letter of
credit] [interest rate swap] [currency swap] [cash
collateral account] [guaranty] [surety bond]
[insurance policy] [spread account] [other
enhancement] [issued by [ ]] for the benefit of
the Series [199_-_] Certificateholders as described
herein. [Describe subordination of another Series, if
applicable.] See "Series Provisions -- Enhancements"
herein.]
Registration of Series
[199_-_]
Certificates ......... [The Series [199_-_] Certificates will initially be
represented by one or more Certificates registered
in the name of Cede, as the nominee of DTC. No
person acquiring an interest in the Series [199_-_]
Certificates will be entitled to receive a
definitive certificate representing such person's
interest except under certain limited
circumstances. Series [199_-_] Certificateholders
may elect to hold their Series [199_-_]
Certificates through DTC (in the United States) [or
CEDEL or Euroclear (in Europe)]. See "Description
of the Certificates -- Definitive Certificates" in
the Prospectus.]
Servicing Fee Rate ..... [ ]% or, if the Monthly Servicing Fee has been
waived as discussed under "Description of the
Certificates -- Servicing Compensation and Payment of
Expenses" in the Prospectus, 0% for the Distribution
Date in respect of which the Monthly Servicing Fee
has been waived.
[Optional Repurchase ... The Series [199_-_] Certificateholders' Interest will
be subject to optional repurchase by the Seller on
any Distribution Date after the aggregate Invested
Amount is reduced to an amount less than or equal to
$[ ] ([ ]% of the initial outstanding principal
amount of the Series [199_-_] Certificates). [Series
[199_-_] Certificates will also
S-14
<PAGE>
be subject to repurchase at the option of the
Seller or the Series [199_-_] Certificateholders at
any time on or after the [ ] Distribution Date.]
The purchase price will equal the sum of (i) the
Invested Amount or a pro rata portion thereof, in
the case of a purchase of fewer than all the Series
[199_-_] Certificates on the Determination Date
preceding the Distribution Date on which the
purchase is scheduled to be made, (ii) accrued and
unpaid interest on the Series [199_-_] Certificates
to be repurchased at the applicable Certificate
Rate (together with interest on overdue interest)
[and (iii) any outstanding Carry-over Amount
(together with interest thereon].]
Series [199_-_]
Termination Date .... [ , 199 ]. See "Series Provisions -- Series
Termination".
Legal Investment ....... The Class A-1 Certificates will be eligible
securities for purchase by money market funds under
Rule 2a-7 under the Investment Company Act of 1940,
as amended. See "Special Considerations -- Legal
Investment".
ERISA Considerations ... [Series [199_-_] Certificates may be eligible for
purchase by employee benefit plans. See "ERISA
Considerations" in the Prospectus.] [Other.]
Certificate Ratings .... It is a condition to the issuance of the Class A-1
Certificates that they be rated in the highest
short-term rating category by at least one nationally
recognized rating agency and a condition to the
issuance of the Class A-2 Certificates that they be
rated in the highest long-term category by at least
one such rating agency. A security rating is not a
recommendation to buy, sell or hold securities and is
subject to revision or withdrawal in the future by
the assigning rating agency. The rating of the Series
[199_-_] Certificates addresses the likelihood of the
ultimate payment of the principal and interest, at
the applicable Certificate Rate, on the Series
[199_-_] Certificates. However, the rating agencies
do not evaluate, and the rating of the Series
[199_-_] Certificates does not address the likelihood
of payment of the outstanding principal of the Series
[199_-_] Certificates by any date, including the
Expected Payment Date, other than (i) in the case of
a Class A-1 Certificate, the eleventh Distribution
Date after the termination of the Class A-1 Revolving
Period with respect thereto or (ii) in the case of
the Class A-2 Certificates, the Series Termination
Date. [The rating of a Class of Certificates also
does not address the likelihood of payment of any
Carry-over Amount.] See "Special Considerations --
Ratings of the Certificates".
Series Issuance Date ... [ , 199 ].
Series Cut-Off Date .... [ , 199 ].
S-15
<PAGE>
RISK FACTORS
Payments. The payment of principal on the Series [199_-_] Certificates
is dependent on Dealer repayments. Accordingly, the Series [199_-_]
Certificates may not be fully amortized by the Expected Payment Date and no
assurances can be given as to the timing of the final principal payment on a
Class A-1 Certificate as to which a Special Payoff Period commences prior to
the [Accumulation Period Commencement Date] [Principal Commencement Date].
[In addition, the shorter the Accumulation Period Length the greater the
likelihood that payment of the Series [199_-_] Certificates in full by the
Expected Payment Date will be dependent on the reallocation of Principal
Collections which are initially allocated to other Series.] If one or more
other Series from which Principal Collections are expected to be available to
be reallocated to the payment of the Series [199_-_] Certificates enters into
an early amortization period or reinvestment period after [ ] [the [ ]
Distribution Date][the Accumulation Period Commencement Date], Principal
Collections allocated to such Series generally will not be available to be
reallocated to make payments of principal of the Series [199_-_] Certificates
and [the final payment of principal of the Series [199_-_] Certificates may
be later than the Expected Payment Date] [the amount distributed in respect
of principal of the Series [199_-_] Certificates on any Distribution Date
during the Controlled Amortization Period may be less than the Controlled
Amortization Amount]. Upon written request, the Seller will make available to
Series [199_-_] Certificateholders Disclosure Documents relating to the other
outstanding Series which describe the events which could result in the
commencement of an early amortization period or reinvestment period with
respect to such outstanding Series. Also, if an Early Amortization Period [or
Reinvestment/Early Payoff Period] [that is not terminated as described
herein] commences with respect to the Series [199_-_] Certificates prior to
the [Accumulation Period Commencement Date] [Principal Commencement Date],
Principal Collections allocated to the interest of holders of Regular Payoff
Certificates generally will not be available to be reallocated to make
payments of principal of the Special Payoff Class A-1 Certificates except as
described herein and the final payment of principal of such Class A-1
Certificates may be later than expected. Although the holder of each Class
A-1 Certificate will have the right to direct the Trustee to sell a portion
of the Receivables corresponding to such holder's interest in the Trust if
principal of such Class A-1 Certificate will not be paid in full by the
eleventh Distribution Date after the commencement of the related Special
Payoff Period or the eleventh Distribution Date following the commencement of
the [Accumulation Period] [Controlled Amortization Period] or an Early
Amortization Period [or Reinvestment/Early Payoff Period], no assurances can
be given as to the price at which such Receivables could be sold. See
"Maturity and Principal Payment Considerations".
[In addition, a significant decline in the amount of Receivables
generated could cause an [Early Amortization Event] [Reinvestment/Early
Payoff Event]. However, such a decline in the amount of Receivables generated
would initially be absorbed by an increase in the Excess Funded Amount. The
Receivables Purchase Agreement will provide that CFC will be required to
designate additional Accounts, the Receivables of which will be sold to the
Seller, and the Pooling and Servicing Agreement will provide that the Seller
will be required to transfer such Receivables to the Trust in the event that
the amount of the Pool Balance is not maintained at a certain minimum level.
If additional Accounts are not designated by CFC when required, an [Early
Amortization Event] [Reinvestment/Early Payoff Event] will occur and result
in the commencement of an [Early Amortization Period] [Reinvestment/Early
Payoff Period], although in certain circumstances the resulting [Early
Amortization Period] [Reinvestment/Early Payoff Period] may terminate and the
Series Revolving Period and any Class A-1 Revolving Period that terminated as
a result of such [Early Amortization Event] [Reinvestment/Early Payoff Event]
recommence. If an insolvency event relating to CFC, the Seller or Chrysler
were to occur, then an Early Amortization Event [or Reinvestment/Early Payoff
Event] would occur, additional Receivables would not be transferred to the
Trust and distributions of principal in respect of the Regular Payoff
Certificates [or the Regular Payoff Certificates that are Class A-1
Certificates, in the case of a Reinvestment/Early Payoff Event,] would not be
subject to the [Controlled Deposit Amount][Controlled Amortization Amount].
See "The Dealer Floorplan Financing Business" in the Prospectus and "Maturity
and Principal Payment Considerations" herein and see also "Series Provisions
- -- Early Amortization Events" [and " -- "Reinvestment/Early Payoff Events"]
for a discussion of other events which might lead to the occurrence of an
Early Amortization Period [or Reinvestment/Early Payoff Period].]
S-16
<PAGE>
Trust's Relationship to Chrysler and CFC; Financial Condition of
Chrysler. Certain aspects of the Trust's relationship to Chrysler Corporation
and CFC are described in the Prospectus under "Risk Factors -- Trust's
Relationship to Chrysler and CFC". Set forth below is certain financial and
other information with respect to Chrysler and CFC.
Chrysler Corporation and its consolidated subsidiaries ("Chrysler")
reported earnings before income taxes of $[ ] million for the [ ] quarter of
199[ ], compared with $[ ] million for the [ ] quarter of 199[ ]. For the
first [ ] months of 199[ ], Chrysler reported earnings before income taxes of
$[ ] million, compared with $[ ] million for the first [ ] months of 199[ ].
Net earnings for the [ ] quarter of 199[ ] were $[ ] million, or $[ ] per
common share, compared with $[ ] million, or $[ ] per common share, for the [
] quarter of 199[ ]. Net earnings for the first [ ] months of 199[ ] were $[
] million, or $[ ] per common share, compared with $[ ] million, or $[ ] per
common share, for the first [ ] months of 199[ ].
Chrysler reported earnings before taxes, extraordinary item, and the
cumulative effect of a change in accounting principle of $[ ] billion in 199[
], compared with $[ ] billion in 199[ ]. Net earnings for 199[ ] were $[ ]
billion, or $[ ] per common share, compared with $[ ] billion, or $[ ] per
common share, in 199[ ].
Chrysler Financial Corporation and its consolidated subsidiaries' net
earnings were $[ ] million and $[ ] million for the [ ] and [ ] months ended
[ ], compared to $[ ] million and $[ ] million for the [ ] and [ ] months
ended [ ].
Chrysler Financial Corporation and its consolidated subsidiaries
achieved net earnings of $[ ] million in 199[ ] compared to $[ ] million and
$[ ] million in 199[ ] and 199[ ], respectively.
Chrysler and CFC are subject to the informational requirements of the
Exchange Act and in accordance therewith file reports and other information
with the Commission. For further information regarding Chrysler and CFC
reference is made to such reports and other information which are available
as described under "Available Information" in the Prospectus.
Credit Enhancement. Credit enhancement of the Series [199_-_]
Certificates will be provided by the subordination of the Seller's Interest
to the extent of the Available Subordinated Amount as described herein [and
amounts in the Reserve Fund]. [Describe other subordination of the Seller's
Interest, if applicable.] [Describe any applicable Enhancements.] The amount
of such credit enhancement is limited and will be reduced from time to time
as described herein. See "Series Provisions -- Allocation of Collections;
Limited Subordination of Seller's Interest" [and " -- Enhancements"].
Timing of Payments of Principal of Class A-2 Certificates. The Class
A-2 Certificateholders will not receive distributions of principal until the
later of (i) the Distribution Date on which the Class A-1 Certificates have
been paid in full and (ii) [the Expected Payment Date] [the [ ] Distribution
Date], except in certain limited circumstances described herein.
[Control. Subject to certain limited circumstances, Series [199_-_]
Certificateholders holding a specified percentage of the aggregate unpaid
principal amount of the Series [199_-_] Certificates may take certain
actions, or direct certain actions to be taken, under the Pooling and
Servicing Agreement or the Series Supplement, including amending the Series
Supplement and declaring certain Early Amortization Events. In such cases
(subject to certain exceptions), when determining whether the required
percentage of Series [199_-_] Certificateholders have given their approval or
consent, the Class A-1 Certificateholders and the Class A-2
Certificateholders will be treated as a single class. Accordingly, the Class
A-[ ] Certificateholders will have the power to determine whether any such
action is taken without regard to the position or interests of the Class A-[
] Certificateholders. The Class A-[ ] Certificateholders will not have
similar power. In order to make such determinations, the Class A-[ ]
Certificateholders will need the approval or consent of the Class A-[ ]
Certificateholders owning a substantial portion of the Class A-[ ]
Certificateholders' Interest.]
S-17
<PAGE>
[Basis Risk. The Receivables bear interest at prime rates announced by
certain banks plus a margin currently ranging from [ ]% to [ ]%. [The Class
A-1 Certificate Rate is based on the Class A-1 Index. [The Class A-2
Certificate Rate is based on the Class A-2 Index.] If, in respect of any
Distribution Date, there does not exist a positive spread between (a) the
Assets Receivables Rate and (b) the Class A-1 Certificate Rate based on the
Class A-1 Index [or the Class A-2 Certificate Rate based on the Class A-2
Index], the Class A-1 Certificate Rate for such Distribution Date [or the
Class A-2 Certificate Rate for such Distribution Date, as the case may be,]
will be the Assets Receivables Rate. The Class A-1 Certificate Rate based on
the Class A-1 Index [or the Class A-2 Certificate Rate based on the Class A-2
Index] may exceed the Assets Receivables Rate as a result of (i) the Class
A-1 Index [or the Class A-2 Index, as the case may be,] exceeding the
applicable prime rate [and (ii) if amounts are deposited in [the Excess
Funding Account or] the Principal Funding Account, the Class A-1 Index [or
the Class A-2 Index, as the case may be,] exceeding the investment earnings
on amounts on deposit therein]. [Any Carry-over Amount will be reduced by the
amounts, if any, on deposit in the Yield Supplement Account. However, there
can be no assurance that sufficient amounts, if any, will be available in the
Yield Supplement Account. In addition, the amount required to be deposited in
the Yield Supplement Account is not designed to include amounts which would
be required to pay any Class A-1 Carry-over Amount resulting from the Class
A-1 Index exceeding the applicable prime rate [or any Class A-2 Carry-over
Amount resulting from the Class A-2 Index exceeding such prime rate]. See
"Series Provisions -- Interest" and " -- Distributions from the Collection
Account[; Reserve Fund]; Yield Supplement Account -- Yield Supplement
Account".
In addition, CFC may reduce the rates applicable to any of the
Receivables, so long as CFC does not reasonably expect any such reduction to
result in the creation of a Carry-over Amount. In any event, such a reduction
would have the effect of reducing or possibly eliminating the positive
spread, if any, between the Assets Receivables Rate and the [related] [Class
A-1] Certificate Rate.
Once amounts deposited from time to time in the Yield Supplement
Account are exhausted, any Carry-over Amount arising as a result of the
[Class A-1] Certificate Rate [for either Class of Series [199_-_]
Certificates] being determined on the basis of the Assets Receivables Rate
will be paid to the extent funds are allocated and available therefor after
making all required distributions and deposits with respect to the Series
[199_-_] Certificates, including payments with respect to principal
[(including payments to the Excess Funding Account)], Monthly Interest, the
Monthly Servicing Fee, [the Reserve Fund Deposit Amount] and the Investor
Default Amount as described under "Series Provisions -- Distributions from
the Collection Account; [Reserve Fund;] Yield Supplement Account". However,
if any Carry-over Amount is outstanding for six consecutive Distribution
Dates an [Early Amortization Event] [Reinvestment/Early Payoff Event] will
occur. See "Series Provisions -- [Early Amortization Events"] [" --
Reinvestment/Early Payoff Event"]. Any Carry-over Amount outstanding on the
Final Payment Date, after making the distributions described in the second
preceding sentence, will be paid on such date from (i) amounts on deposit in
the Reserve Fund and (ii) Available Seller's Collections on deposit in the
Collection Account on such date as described under "Series Provisions --
Distributions from the Collection Account; Reserve Fund; Yield Supplement
Account -- Interest Collections". The ratings of the Series [199_-_]
Certificates do not address the likelihood of payment of any Carry-over
Amount.]
Legal Investment. The Class A-1 Certificates will be eligible
securities for purchase by money market funds under Rule 2a-7 under the
Investment Company Act of 1940, as amended, for so long as they are rated in
one of the two highest short-term rating categories by each of two nationally
recognized statistical rating organizations. Money market funds should note
that the Class A-1 Certificates satisfy the requirement of Rule 2a-7 because
the holder has the right (a) to give an Election Notice, thereby terminating
the Class A-1 Revolving Period with respect thereto, and (b) to direct the
Trustee to sell a portion of the Receivables corresponding to such holder's
interest in the Trust, if the principal of a Class A-1 Certificate would not
otherwise be paid in full on or before the eleventh Distribution Date after
the end of the Class A-1 Revolving Period with respect thereto. Money market
funds should be prepared at all times to take these steps.
S-18
<PAGE>
Ratings of the Certificates. It is a condition of the Class A-1
Certificates that they be rated in the highest short-term rating category by
at least one Rating Agency and a condition to issuance of the Class A-2
Certificates that they be rated in the highest long-term rating category by
at least one Rating Agency. A rating is not a recommendation to buy, sell or
hold securities, inasmuch as such rating does not comment as to the market
price or the suitability for a particular investor. There is no assurance
that a rating will remain for any given period of time or that a rating will
not be lowered or withdrawn entirely by a Rating Agency if in its judgment
circumstances in the future so warrant. The rating of the Series [199_-_]
Certificates addresses the likelihood of the ultimate payment of principal
and interest, at the applicable Certificate Rate, on the Series [199_-_]
Certificates. However, a Rating Agency does not evaluate, and the rating of
the Series [199_-_] Certificates does not address, the likelihood that the
outstanding principal amount of the Series [199_-_] Certificates will be paid
by any date, including the Expected Payment Date, other than (1) in the case
of a Class A-1 Certificate, the eleventh Distribution Date after the
termination of the Class A-1 Revolving Period with respect thereto or (ii) in
the case of the Class A-2 Certificates, the Series Termination Date. [In
addition, a Rating Agency does not evaluate, and the rating of a Class of
Series [199_-_] Certificates does not address, the likelihood that any
Carry-over amount will be paid.]
S-19
<PAGE>
USE OF PROCEEDS
[After making the deposit of the Excess Funded Amount to the Excess
Funding Account, the balance of the] [The] net proceeds from the sale of the
Series [199_-_] Certificates will be paid to USA. USA will use such proceeds
(together with the subordinated loan from CFC described under "U.S. Auto
Receivables Company and the Trust -- U.S. Auto Receivables Company" in the
Prospectus) to purchase Receivables from CFC or to repay certain amounts
previously borrowed to purchase Receivables. CFC will use the portion of the
proceeds paid to it for [general corporate purposes] [other].
THE DEALER FLOORPLAN FINANCING BUSINESS
Information regarding the dealer floorplan financing business is set
forth under "The Dealer Floorplan Financing Business" in the Prospectus. In
addition, the Receivables sold to the Trust by the Seller pursuant to the
Pooling and Servicing Agreement were or will be selected from extensions of
credit and advances made by Chrysler and CFC, directly or as successor to
CCC, to approximately [ ] domestic motor "vehicle dealers". CFC, directly or
as successor to CCC, financed [ ]% of the total number of all Chrysler
franchised dealers as of [ ], 199[ ]. Furthermore, CFC, directly or as
successor to CCC, has extended credit lines to [ ] Chrysler-franchised
dealers that also operate non-Chrysler franchises (representing approximately
[ ]% of the aggregate credit lines of dealers in the U.S. Wholesale Portfolio
as of [ ], 199[ ]) and [ ] non-Chrysler dealers (representing approximately [
]% of such aggregate credit lines). As of [ ], 199[ ], the balance of
Principal Receivables in the U.S. Wholesale Portfolio was approximately $[ ]
billion. CFC currently services the U.S. Wholesale Portfolio through its home
office and through a network of [ ] zone offices located throughout the United
States.
As of [ ], 199[ ], the average credit lines per dealer in the U.S.
Wholesale Portfolio for new and used vehicles (which includes Auction
Vehicles) were $[ ] million and $[ ] million, respectively, and the average
balance of principal receivables per dealer was $[ ] million. As of [ ], 199[
], the aggregate total receivables balance as a percentage of the aggregate
total credit line was approximately [ ]%.
The following table sets forth the percentages of dealer account
balances by year of credit line origination for the U.S. Wholesale Portfolio
as of [ ], 199[ ].
Portfolio Percentages by Year of Credit Line Origination
<TABLE>
<CAPTION>
Prior
to
199[ ] 1996 1995 1994 1993 1992 1991 1991
------ ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>
As of [ ], 199[ ], the weight average spread over the Prime Rate
charged to dealers in the U.S. Wholesale Portfolio was approximately [ ]%.
As of [ ], 199[ ], approximately [ ]% of all dealers participating in
the installment payment plan were remitting 100% of the Installment Balance
following the sale of the related vehicle. Currently CFC has elected to have
Chrysler absorb credit losses on Installment Balances in an amount equal to
[ ]% of the aggregate Installment Balances created in each calendar month
(rather than sell Installment Balances to Chrysler) and Chrysler supports
such agreement by maintaining a deposit with CFC in an amount equal to [ ]%
of the aggregate amount of Installment Balances outstanding at the end of
each calendar month.
Used Vehicles (which excludes Auction Vehicles) represented
approximately [ ]% of the aggregate principal amount of receivables in the
U.S. Wholesale Portfolio as of [ ], 199[ ]. As of [ ], 199[ ], Used Vehicles
represented approximately [ ]% of the aggregate principal amount of
Receivables in the Trust (including Excluded Receivables).
S-20
<PAGE>
The following table provides the percentage of dealers in the U.S.
Wholesale Portfolio that were subject to finance hold as of the dates
indicated.
Finance Hold Experience
<TABLE>
<CAPTION>
As of
[ ] As of December 31,
------------ -----------------------------------------------------
199[ ] 1996 1995 1994 1993 1992 1991 1990 1989
------ ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of Dealers [ ]% 1.1% 1.8% 1.6% 3.2% 6.8% 9.4% 6.8% 4.6%
</TABLE>
The following table provides the number and percentage of dealers in
Dealer Trouble Status in the U.S. Wholesale Portfolio as of the dates
indicated.
Dealer Trouble Experience
<TABLE>
<CAPTION>
As of
[ ] As of December 31,
------------ -----------------------------------------------------
199[ ] 1996 1995 1994 1993 1992 1991 1990 1989
------ ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Dealers .... [ ] 20 6 12 21 56 100 129 106
Percentage of Dealers [ ]% 0.6% 0.2% 0.3% 0.6% 1.8% 3.1% 4.2% 3.5%
</TABLE>
THE ACCOUNTS
As of the Series Cut-Off Date, with respect to the Accounts in the
Trust: (a) there were [ ] Accounts and the Principal Receivables balance was
approximately $[ ] million; (b) the average credit lines per Dealer for new
and used vehicles (which include Auction Vehicles) were approximately $[ ]
million and $[ ] million, respectively, and the average balance of Principal
Receivables per Dealer was approximately $[ ] million; and (c) the aggregate
total receivables balance as a percentage of the aggregate total credit line
was approximately [ ]%. Unless otherwise indicated, the statistics included
in this paragraph, in the table below and under "The Accounts -- General" and
" -- Geographic Distribution" with respect to the Accounts and the
Receivables in the Trust gives effect to approximately $[ ] million of
principal receivables balances with respect to certain Dealers (the "Excluded
Receivables" and the "Excluded Dealers", respectively) that are in voluntary
or involuntary bankruptcy proceedings or voluntary or involuntary liquidation
or that, subject to certain limitations, are being voluntarily removed by the
Seller (or the Servicer on its behalf) from the Trust. A portion of such
principal receivables was created after such Dealers entered into such status
or were designated by the Seller (or the Servicer on its behalf) for removal
from the Trust and, as a result thereof, are owned by CFC and not the Trust.
Principal receivables balances created prior to such Dealers entering into
such status or being designated for removal from the Trust are included in
the Principal Receivables balance. See "Description of the Certificates --
Removal of Accounts" in the Prospectus for a description of the manner in
which an Account can be removed from the Trust.
The following table sets forth the percentages of dealer account
balances by year of credit line origination for the accounts in the Trust as
of [ ], 199[ ].
Portfolio Percentage by Year of Credit Line Origination
<TABLE>
<CAPTION>
Prior
to
199[ ] 1996 1995 1994 1993 1992 1991 1991
------ ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>
As of [ ], 199[ ], the weighted average spread over the Prime Rate
charged to Dealers was approximately [ ]%.
S-21
<PAGE>
Loss Experience
The following tables set forth the average Principal Receivables
balance and loss experience for each of the periods shown on the U.S.
Wholesale Portfolio. Because the Eligible Accounts will be only a portion of
the entire U.S. Wholesale Portfolio, actual loss experience with respect to
the Eligible Accounts may be different. There can be no assurance that the
loss experience for the Receivables in the future will be similar to the
historical experience set forth below with respect to the U.S. Wholesale
Portfolio. In addition, the historical experience set forth below reflects
financial assistance provided by Chrysler to Chrysler-franchised dealers as
described in the Prospectus under "The Dealer Floorplan Financing Business --
Relationship with Chrysler" in the Prospectus. If Chrysler is not able to or
elects not to provide such assistance, the loss experience in respect of the
U.S. Wholesale Portfolio may be adversely affected. See "Risk Factors --
Trust's Relationship to Chrysler and CFC" in the Prospectus and "Risk Factors
- -- Trust's Relationship to Chrysler and CFC; Financial Condition of Chrysler"
in this Prospectus Supplement.
Loss Experience for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
[
] Year Ended December 31,
-------------------------------------------------------
199[ ] 199[ ] 1996 1995 1994 1993
------ ------ ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C>
Average Principal
Receivables Balance(1) ............................ $[ ] $[ ] $ 8,825 $ 8,256 $ 6,754 $6,271
Net Losses(2) ....................................... [ ] $ [ ] $ (0) $ (1) $ (1) $ 12
Net Losses/
Liquidations ...................................... [ ]% [ ]% (0.000)% (0.002)% (0.003)% 0.035%
Net Losses/
Average Principal Receivables Balance(3) .......... [ ]% [ ]% (0.00)% (0.01)% (0.01)% 0.19%
<CAPTION>
1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal
Receivables Balance(1) ............................ $5,344 $4,826 $4,726 $4,933 $4,129 $3,787 $2,991
Net Losses(2) ....................................... $ 26 $ 36 $ 23 $ 13 $ 3 $ 2 $ 3
Net Losses/
Liquidations ...................................... 0.098% 0.163% 0.117% 0.060% 0.015% 0.015% 0.023%
Net Losses/
Average Principal Receivables Balance(3) .......... 0.49% 0.75% 0.49% 0.26% 0.07% 0.06% 0.10%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
---- ---- ---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal Receivables Balance(1) ............ $2,532 $2,098 $1,461 $1,451 $1,390 $1,622 $1,837
Net Losses(2) ....................................... $ 1 $ (2) $ 2 $ 14 $ 12 $ 18 $ 11
Net Losses/
Liquidations ...................................... 0.004% (.019)% 0.023% 0.239% 0.225% 0.338% 0.163%
Net Losses/Average Principal Receivables Balance .... 0.02% (0.09)% 0.12% 0.95% 0.85% 1.12% 0.58%
<FN>
- ----------------
(1) Average Principal Receivables Balance is the average of the month-end
principal balances for the [ ] months ending on the last day of the
period, except for the [ ] months ended [ ], 199[ ] and [ ], 199[ ],
which are based on a [ ]-month average.
(2) Net losses in any period are gross losses less recoveries for such
period.
(3) Percentages for the [ ] months ended [ ], 199[ ] and
199[ ] are expressed on an annualized basis.
</TABLE>
S-22
<PAGE>
Aging Experience
The following table provides the age distribution of vehicle inventory
for all dealers in the U.S. Wholesale Portfolio, as a percentage of total
principal outstanding at the date indicated. Because the Eligible Accounts
will only be a portion of the entire U.S. Wholesale Portfolio, actual age
distribution with respect to the Eligible Accounts may be different.
Age Distribution for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
[ As of
] December 31,
--------------- --------------------------------------------------------------------------
199[ ] 199[ ] 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1-120 ........... [ ]% [ ]% 80.4% 82.2% 82.5% 82.4% 77.2% 75.9% 72.2% 71.3% 78.8% 73.0% 81.5%
121-180 ......... [ ] [ ] 10.0 9.3 10.1 9.6 13.8 12.9 13.7 14.5 11.0 13.9 9.2
181-270 ......... [ ] [ ] 5.0 3.8 4.0 4.6 4.8 4.8 7.1 6.4 4.7 6.8 4.4
Over 270 ........ [ ] [ ] 4.6 4.7 3.4 3.4 4.2 6.4 7.0 7.8 5.5 6.3 4.9
</TABLE>
Geographic Distribution
The following table provides the geographic distribution of the vehicle
inventory for all dealers in the Trust on the basis of receivables
outstanding and the number of dealers generating such portfolio.
Geographic Distribution of Accounts in the Trust As of [ ], 199[ ]
<TABLE>
<CAPTION>
Percentage
Receivables Percentage of Total of
Outstanding Receivables Number Number of
(thousands of Outstanding of Dealers
dollars)(2) (2)(4) Dealers(3) (3)(4)
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
California ...... % %
Texas ........... % %
New York ........ % %
New Jersey ...... % %
Illinois ........ % %
Pennsylvania .... % %
Michigan ........ % %
[ ] ......... % %
Other(1) ........ % %
<FN>
- ----------------
(1) No other state includes more than 5% of the outstanding Receivables.
(2) Includes Excluded Receivables.
(3) Includes Excluded Dealers.
(4) May not add to 100.0% due to rounding.
</TABLE>
S-23
<PAGE>
CHRYSLER FINANCIAL CORPORATION
Certain information regarding Chrysler Financial Corporation is set
forth under "Chrysler Financial Corporation" in the Prospectus. In addition,
as of [ ], 199[ ], CFC had nearly [ ] employees and was servicing $[ ] million
in finance receivables. During the first [ ] months of 199[ ], CFC financed or
leased approximately [ ] vehicles at retail, including approximately [ ] new
Chrysler passenger cars and light duty trucks representing [ ]% of Chrysler's
U.S. retail and fleet deliveries. CFC also financed at wholesale
approximately [ ] new Chrysler passenger cars and light duty trucks
representing [ ]% of Chrysler's U.S. factory unit sales for the [ ] months
ended [ ], 199[ ]. Wholesale vehicle financing accounted for [ ]% of the total
automotive financing volume of CFC in the first six months of 199[ ] and
represented [ ]% of gross automotive finance receivables outstanding at [ ],
199[ ].
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal with respect to the Series [199_-_] Certificates will be
payable if an Early Amortization Event [that is not cured as described
herein] has occurred and, in the case of a Class A-1 Certificate, will be
payable if [a Reinvestment/Early Payoff Event [that is not cured as described
herein] occurs or] the Class A-1 Revolving Period with respect thereto
terminates prior to the [Accumulation Period Commencement Date] [Principal
Commencement Date]. Full amortization of the Series [199_-_] Certificates by
the [ ] Distribution Date (the "Expected Payment Date") and of any Class A-1
Certificate as to which a Special Payoff Period commences by the eleventh
Distribution Date after such commencement depends on, among other things,
repayment by Dealers of the Receivables and may not occur if Dealer payments
are insufficient therefor. Because the Receivables generally are paid upon
retail sale of the underlying Vehicle, the timing of such payments is
uncertain. In addition, there is no assurance that CFC will generate
additional Receivables under the Accounts or that any particular pattern of
Dealer payments will occur. See "Series Provisions -- Interest" and "--
Principal" herein and "The Dealer Floorplan Financing Business" in the
Prospectus and herein. [In addition, the shorter the Accumulation Period
Length the greater the likelihood that payment of the Series [199_-_]
Certificates in full by the Expected Payment Date will be dependent on the
reallocation of Principal Collections which are initially allocated to other
outstanding Series.] If one or more other Series from which Principal
Collections are expected to be available to be reallocated to the payment of
the Series [199_-_] Certificates enters into an early amortization period or
reinvestment period after [ ] [the [ ] Distribution Date] [the Accumulation
Period Commencement Date], Principal Collections allocated to such Series
generally will not be available to be reallocated to make payments of
principal of the Series [199_-_] Certificates and [the final payment of
principal of the Series [199_-_] Certificates may be later than the Expected
Payment Date] [the amount distributed in respect of principal of the Series
[199_-_] Certificates on any Distribution Date during the Controlled
Amortization Period may be less than the Controlled Amortization Amount].
Upon written request, the Seller will make available to Series [199_-_]
Certificateholders Disclosure Documents relating to the other outstanding
Series which describe the events which could result in the commencement of an
early amortization period or reinvestment period with respect to such
outstanding Series.] Also, if an Early Amortization Period [or
Reinvestment/Early Payoff Period] commences with respect to the Series
[199_-_] Certificates prior to the [Accumulation Period Commencement Date]
[Principal Commencement Date], Principal Collections allocated to the
interest of holders of Regular Payoff Certificates generally will not be
available to be reallocated to make payments of principal of Special Payoff
Class A-1 Certificates except as described herein and the final payment of
principal of such Class A-1 Certificates may be later than expected. Although
the holder of each Class A-1 Certificate will have the right to direct the
Trustee to sell a portion of the Receivables corresponding to such holder's
interest in the Trust if the principal of such Class A-1 Certificate is not
paid in full by the eleventh Distribution Date after the commencement of the
[Accumulation Period] [Controlled Amortization Period] or an Early
Amortization Period [or Reinvestment/Early Payoff Period], no assurances can
be given as the price at which such Receivables could be sold.
S-24
<PAGE>
Because an Early Amortization Event [or Reinvestment/Early Payoff
Event] with respect to the Series [199_-_] Certificates may occur which would
initiate an Early Amortization Period [or Reinvestment/Early Payoff Period],
the final distribution of principal on the Series [199_-_] Certificates [or,
in the case of a Reinvestment/Early Payoff Period, the Class A-1
Certificates] may be made prior to the scheduled termination of the Series
Revolving Period or prior to the Expected Payment Date. See "Series
Provisions -- Early Amortization Events" [and "-- Reinvestment/Early Payoff
Events"].
[Several of the events which constitute Reinvestment/Early Payoff
Events with respect to the Series [199_-_] Certificates may constitute early
amortization events with respect to other Series. Should such an event occur,
holders of Certificates of such other Series and holders of Class A-1
Certificates would receive monthly distribution of principal, which
distributions would not be limited to any controlled amortization amount,
while no distributions in respect of principal would be made to the Class A-2
Certificateholders until the Expected Payment Date or, if earlier, the first
Distribution Date following the occurrence of an Early Amortization Event.
See "Series Provisions -- Principal" and "-- Reinvestment/Early Payoff
Events".]
The amount of new Receivables generated in any month and monthly
payment rates on the Receivables may vary because of seasonal variations in
Vehicle sales and inventory levels, retail incentive programs provided by
Vehicle manufacturers and various economic factors affecting Vehicle sales
generally. The following table sets forth the highest and lowest monthly
payment rates for the U.S. Wholesale Portfolio during any month in the
periods shown and the average of the monthly payment rates for all months
during the periods shown, in each case calculated as the percentage
equivalent of a fraction, the numerator of which is the aggregate of all
collections of principal during the period and the denominator of which is
the average aggregate principal balance for such period. Monthly payment
rates reflected in the table include principal credit adjustments. The
monthly payment rates presented for 1980 through 1985 are calculated using
quarterly data while monthly payment rates for 1986 through 1994 reflect
actual monthly data. There can be no assurance that the rate of Principal
Collections will be similar to the historical experience set forth below.
Because the Eligible Accounts will be only a portion of the entire U.S.
Wholesale Portfolio, historical actual monthly payment rates with respect to
the Eligible Accounts may be different than those shown below.
Monthly Payment Rates for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
[
] Year Ended December 31,
------------- ---------------------------------------------------------------------------
199[ ] 199[ ] 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month ........ [ ]% [ ]% 58.35% 59.1% 59.7% 54.7% 50.6% 49.0% 42.1% 41.5% 48.7% 40.3% 56.7%
Lowest Month ......... [ ] [ ] 43.2 36.5 34.2 35.9 34.4 30.2 25.3 29.5 29.5 26.8 27.7
Average of the Months
in the Period ...... [ ] [ ] 49.0 45.6 50.3 46.6 41.3 38.4 35.7 35.6 41.2 34.2 37.7
<CAPTION>
Year Ended December 31,
----------------------------------------------
1985 1984 1983 1982 1981 1980 1979
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month ........ 45.9% 43.7% 45.9% 35.5% 34.3% 28.9% 36.5%
Lowest Month ......... 35.8 35.7 37.7 29.0 27.4 26.7 26.0
Average of the Months
in the Period ...... 40.1 39.9 42.2 32.9 32.2 28.1 30.0
</TABLE>
SERIES PROVISIONS
General
The Series [199_-_] Certificates will be issued pursuant to the Pooling
and Servicing Agreement and a Series Supplement relating to the Series
[199_-_] Certificates (the "Series Supplement"). The Series [199_-_]
Certificates will consist of two Classes. The Trustee will enter into a
Remarketing Agreement with respect to the Class A-1 Certificates with the
Remarketing Broker-Dealer, the Remarketing
S-25
<PAGE>
Coordinator, the Seller, and CFC (the "Remarketing Agreement") which
provides, among other things, that the Trustee and the Remarketing
Broker-Dealer will follow certain procedures for remarketing and purchasing
Class A-1 Certificates. The Remarketing Agreement will be substantially in
the form filed as an exhibit to the Registration Statement of which this
Prospectus Supplement is a part. The Trustee will make available for
inspection a copy of the Pooling and Servicing Agreement (without exhibits or
schedules) and the Remarketing Agreement to Series [199_-_]
Certificateholders on written request. Reference should be made to the
Prospectus for additional information concerning the Series [199_-_]
Certificates and the Pooling and Servicing Agreement.
The Class A-1 Certificates and the Class A-2 Certificates will evidence
undivided beneficial interests in certain assets of the Trust allocated to
the Class A-1 Certificateholders' Interest and the Class A-2
Certificateholders' Interest, respectively, representing the right to receive
from such Trust assets funds up to (but not in excess of) the amounts
required to make payments of interest on and principal of the Class A-1
Certificates and the Class A-2 Certificates, respectively, pursuant to the
Pooling and Servicing Agreement.
Interest
Interest on the principal balance of the Class A-1 Certificates will
accrue at the Class A-1 Certificate Rate and will be payable to the Class A-1
Certificateholders on each [Class A-1] Interest Payment Date, commencing [ ],
199[ ]. Interest on the principal balance of the Class A-2 Certificates will
accrue at the Class A-2 Certificate Rate and will be payable to the Class A-2
Certificateholders on each [Class A-2] Interest Payment Date, commencing [ ]
199[ ] [; provided that, during any Early Amortization Period, interest will
be distributed to Class A-2 Certificateholders on each Distribution Date,
commencing on the first Distribution Date following the occurrence of an
Early Amortization Event]. Interest [on the Class A-1 Certificates] will
accrue from and including the preceding [Class A-1] Interest Payment Date
(or, in the case of the first [Class A-1] Interest Payment Date, from and
including the Series Issuance Date) to but including such [Class A-1]
Interest Payment Date. [Interest on the Class A-2 Certificates will accrue
from and including the preceding Class A-2 Interest Payment Date (or in the
case of the first Class A-2 Interest Payment Date, from and including the
Series Issuance Date) to but including such Class A-2 Interest Payment Date.]
Interest on the Class A-1 Certificates will be calculated on a basis of [the
actual number of days in each [Class A-1] Interest Period divided by
[360][other]]. Interest on the Class A-2 Certificates will be calculated on a
basis of [a 360-day year of twelve 30-day months] [the actual number of days
in each [Class A-2] Interest Period divided by [360] [other]]. Interest due
for any [Class A-1] Interest Payment Date [or Class A-2 Interest Payment
Date] but not paid on such [Class A-1] Interest Payment Date [or Class A-2
Interest Payment Date] will be due on the next [Class A-1] Interest Payment
Date [or Class A-2 Interest Payment Date, as applicable], together with
interest on such amount at the applicable Certificate Rate, to the extent
permitted by applicable law. Interest payments on the Series [199_-_]
Certificates will generally be derived from Certificateholder Interest
Collections for a Collection Period, [any withdrawals from the Reserve Fund,]
[Excess Interest Collections, if any, allocated to Series [199_-_],]
Investment Proceeds and, under certain circumstances, Available Seller's
Collections to the extent of the Available Subordinated Amount [describe
other sources].
The Class A-1 Certificate Rate for each [[Class A-1] Interest Period]
[other] will be determined on the Class A-1 Adjustment Date preceding such
[[Class A-1] Interest Period] [other]. The "Class A-1 Certificate Rate" will
be equal to [the lesser of (a)] the Class A-1 Index [plus] [minus] [times] [
]% [and (b) the Assets Receivables Rate for the related Distribution Date].
[The Class A-2 Certificate Rate for each [[Class A-2] Interest Period]
[other] will be determined on the Class A-2 Adjustment Date preceding such
[[Class A-2] Interest Period] [other].] The "Class A-2 Certificate Rate" will
be [ %] [equal to [the lesser of (a)] the Class A-2 Index [plus] [minus]
[times] [ ]% [and (b) the Assets Receivables Rate for the related
Distribution Date].
"Class A-1 Monthly Interest" for any Distribution Date means the amount
of interest accrued in respect of the Class A-1 Certificates as described
above for such Distribution Date; and "Class A-2 Monthly Interest" for any
Distribution Date means the amount of interest accrued in respect of the
Class
S-26
<PAGE>
A-2 Certificates as described above for such Distribution Date. Class A-1
Monthly Interest and Class A-2 Monthly Interest are referred to collectively
as "Monthly Interest".
[Describe Class A-1 Index [and Class A-2 Index] and define Class A-1
Adjustment Date [and Class A-2 Adjustment Date].]
[If the Class A-1 Certificate Rate for a Distribution Date calculated
on the basis of the Class A-1 Index as described above is greater than the
Assets Receivable Rate, then the Class A-1 Certificate Rate for such
Distribution Date will be the Assets Receivables Rate; and if the Class A-2
Certificate Rate for a Distribution Date as calculated on the basis of the
Class A-2 Index as described above is greater than the Assets Receivables
Rate, then the Class A-2 Certificate Rate for such Distribution Date will be
the Assets Receivables Rate.]
[The "Assets Receivables Rate" for any [Interest Period][period from
one Distribution Date to the immediately succeeding Distribution Date] shall
equal [the product of (a) the quotient obtained by dividing (i) 360 by (ii)
the actual number of days elapsed in such period and (b) a percentage,
expressed as a fraction, (i) the numerator of which is the sum of (A)
Certificateholder Interest Collections for the Collection Period immediately
preceding the last day of such period (which for this purpose only is based
on interest amounts billed to the Dealers which are due during such
Collection Period) less, unless waived by the Servicer, the Monthly Servicing
Fee with respect to such immediately preceding Collection Period [and] (B)
the Investment Proceeds to be applied on the Distribution Date related to
such period [and (c) Excess Interest Collections allocated to Series
[199_-_-] with respect to such period] and (ii) the denominator of which is
[the sum of (A)] the product of (I) the Floating Allocation Percentage, (II)
the Series Allocation Percentage and (III) the average Pool Balance (after
giving effect to any charge-offs) for such immediately preceding Collection
Period, [(B) the principal balance on deposit in the Excess Funding Account
on the first day of such period (after giving effect to all deposits to and
withdrawals therefrom on such first day)] and [(C) the principal balance on
deposit in the Principal Funding Account on the first day of such period
(after giving effect to all deposits to and withdrawals therefrom on such
first day)] [other].
If the Class A-1 Certificate Rate [or the Class A-2 Certificate Rate]
for any Distribution Date is based on the Assets Receivables Rate, the excess
of (a) the amount of interest on the Class A-1 Certificates [or the Class A-2
Certificates] that would have accrued in respect of the related [[Class A-1]
Interest Period [or Class A-2 Interest Period] [period from one Distribution
Date to the immediately succeeding Distribution Date] had interest been
calculated based on the Class A-1 Index [or the Class A-2 Index, as the case
may be,] over (b) the amount of interest on the Class A-1 Certificates [or
the Class A-2 Certificates, as the case may be,] actually accrued in respect
of such period based on the Assets Receivables Rate (such excess, together
with the unpaid portion of any such excess from prior Distribution Dates (and
interest accrued thereon at the [applicable] [Class A-1] Certificate Rate
calculated on the basis of the Class A-1 Index [or the Class A-2 Index, as
the case may be,] is referred to as the "Class A-1 Carry-over Amount" [or the
"Class A-2 Carry-over Amount", as applicable]) will be paid on such
Distribution Date from amounts on deposit in the Yield Supplement Account
and, if such amounts are depleted, to the extent funds are allocated and
available therefor after making all required distributions and deposits with
respect to the Series [199_-_] Certificates, including payments with respect
to principal [(including payments to the Excess Funding Account)], Monthly
Interest, the Monthly Servicing Fee[, the Reserve Fund Deposit Amount] and
the Investor Default Amount as described below under "Distributions from the
Collection Account; [Reserve Fund;] Yield Supplement Account". In addition,
any Carry-over Amount outstanding on the Final Payment Date, after making the
distributions described in the preceding sentence, will be paid on such date
from (i) amounts on deposit in the Reserve Fund and (ii) Available Seller's
Collections on deposit in the Collection Account on such date as described
under "Series Provisions -- Distributions from the Collection Account;
Reserve Fund; Yield Supplement Account". The rating of the Series [199_-_]
Certificates does not address the likelihood of payment of any Carry-over
Amount.]
S-27
<PAGE>
Principal
Principal on each Class A-1 Certificate is payable monthly on each
Distribution Date commencing on the [ ] 199[ ] Distribution Date unless the
Class A-1 Revolving Period with respect to such Class A-1 Certificate is
automatically extended. The holder of each Class A-1 Certificate shall have
the option to elect not to extend the Revolving Period with respect to such
Certificate by delivering a notice in the form of Exhibit A hereto to its
Indirect Participant or its Participant, as applicable, with copies to the
Remarketing Coordinator and the Remarketing Broker-Dealer (an "Election
Notice") during the period commencing on the [ ] business day of each month
prior to the month preceding the month in which the [Accumulation Period
Commencement Date] [Principal Commencement Date] occurs or, if earlier, the
commencement of an Early Amortization Period [or Reinvestment/Early Payoff
Period] and ending on and including the [ ] day of such month (each an
"Election Period"), commencing in [ ] 199[ ]. If such Class A-1
Certificateholder does not so elect, the Class A-1 Revolving Period for such
Certificate will be automatically extended from month to month, but not
beyond the end of the Series Revolving Period. If the holder of a Class A-1
Certificate delivers an Election Notice (each, an "Electing
Certificateholder"), the Remarketing Broker-Dealer will have the right to
remarket such Class A-1 Certificate during the period beginning on and
including the first day of any Election Period and ending on and including
the [ ] business day of the month in which such Election Period occurs (each
a "Remarketing Period") and the right but not the obligation to purchase any
such Certificate in the manner described herein. See "Remarketing; Purchase
of Class A-1 Certificates Subject to an Election Notice". Any Class A-1
Certificate which the Remarketing Broker-Dealer chooses to purchase will be
purchased on the Distribution Date following the Remarketing Period. If the
Remarketing Broker-Dealer does not purchase a Class A-1 Certificate which is
the subject of an Election Notice, the Special Payoff Period with respect to
such Certificate will commence and principal with respect to such Certificate
will be payable monthly commencing on the second Distribution Date following
the Election Period in which the Election Notice is given. In the event that
the entire principal amount of such Certificate will not be paid in full by
the eleventh Distribution Date after the commencement of the related Special
Payoff Period, the holder thereof will have the right to direct the Trustee
to sell on such eleventh Distribution Date a portion of the Receivables
corresponding to such holder's interest in the Trust. The Revolving Period
for all Class A-1 Certificates will in any event end, however, on the earlier
(x) the day immediately preceding the [Accumulation Period Commencement Date]
[Principal Commencement Date] and (y) the business day preceding the day on
which an Early Amortization Event [or Reinvestment/Early Payoff Event] [that
is not cured as described herein] occurs. See "Early Amortization Events"
[and "Reinvestment/Early Payoff Events"] for a discussion of certain events
which might lead to the early termination of the Revolving Period for all
Series [199_-_] Certificates. Principal of any Class A-1 Certificate the
Revolving Period for which does not end in or prior to the month that is two
months prior to the month in which the [Accumulation Period Commencement
Date][Controlled Amortization Period] occurs will be payable on [the Expected
Payment Date][each Distribution Date, commencing on the [ ] Distribution
Date], but may be paid earlier or later in certain circumstances described
herein. The holder of any such Class A-1 Certificate principal of which will
not be paid in full by the eleventh Distribution Date following the
commencement of the [Accumulation Period][Controlled Amortization Period] or
an Early Amortization Period [or Reinvestment/Early Payoff Period] will have
the right to direct the Trustee to sell on such Distribution Date a portion
of the Receivables corresponding to such holder's interest in the Trust.
Principal of a Class A-1 Certificate is payable in full (provided that the
holder exercises, if necessary, its right to direct the Trustee to sell a
portion of the Receivables corresponding to such holder's interest in the
Trust and the proceeds of such sale are sufficient) by no later than the
eleventh Distribution Date after the end of the Class A-1 Revolving Period
with respect to such Class A-1 Certificate.
The following sets forth an example of the application of the foregoing
provisions to a hypothetical Class A-1 Certificate. The example would be
applicable to any Class A-1 Certificate issued during any month. For purposes
of the example, it is assumed that every date is a business day.
[ ] ...... The Election Period and Remarketing Period Commence.
Class A-1 Certificateholders may elect to deliver an
Election Notice with respect
S-28
<PAGE>
to one or more of their Class A-1 Certificates and
the Remarketing Broker-Dealer may acquire the Class
A-1 Certificates as to which Election Notices have
been delivered.
[ ] ...... Election Period ends. Class A-1 Certificateholders
may no longer elect not to extend the Class A-1
Revolving Period with respect to their Class A-1
Certificates after this date.
[ ] ...... Remarketing Period ends. Any Class A-1 Certificates
with respect to which Election Notices have been
delivered and which the Remarketing Broker-Dealer has
decided to purchase will be purchased on the
[ ] Distribution Date. Any Class A-1
Certificates which the Remarketing Broker-Dealer has
decided not to purchase will begin to receive
principal payments on the [ ] Distribution
Date.
[ ] ...... Class A-1 Adjustment Date. The Class A-1 Certificate
Rate (calculated on the assumption that the Class A-1
Index formula will apply) for the [Class A-1]
Interest Period which is to begin on the [ ]
Distribution Date is determined by the Trustee as of
this date.
[ ] ...... Record Date. Distributions on [ ] will be
made to Series [199_-_] Certificateholders of record
as of the close of business on this Record Date.
[ ] ...... Distribution Date. The Servicer distributes the
allocable portion of collections to the Series
[199_-_] Certificateholders pursuant to the Pooling
and Servicing Agreement. The [Class A-1] Interest
Period for the [ ] Distribution Date commences
on this date. Any Class A-1 Certificates subject to
an Election Notice which the Remarketing
Broker-Dealer has chosen to purchase during the
Remarketing Period which began on [ ] will be
purchased on this date.
[ ] ...... Distribution Date. Any Class A-1 Certificates subject
to an Election Notice which the Remarketing
Broker-Dealer has chosen not to purchase during the
Remarketing Period which began on [ ] will
receive principal payments on this date.
In general, except as described above with respect to Class A-1
Certificates as to which a Special Payoff Period has begun ("Special Payoff
Class A-1 Certificates") no principal payments will be made to the Series
[199_-_] Certificateholders until the [Expected Payment Date] [Principal
Commencement Date] or, upon the occurrence of an Early Amortization Event
[that is not cured as described herein] [or, in the case of the Class A-1
Certificates, the occurrence of a Reinvestment/Early Payoff Event [that is
not cured as described herein]], until the first [Distribution Date with
respect to the Early Amortization Period or Reinvestment/Early Payoff Period
(a "Special Payment Date")] [Special Payment Date]. On each Distribution Date
with respect to the Series Revolving Period, collections of Principal
Receivables allocable to the interest of holders of Class A-1 Certificates
that are not Special Payoff Class A-1 Certificates and Class A-2 Certificates
(collectively, "Regular Payoff Certificates"), subject to certain
limitations, will either be (a) allocated to one or more Special Payoff Class
A-1 Certificates, (b) allocated to one or more Series which are in
amortization, early amortization or accumulation periods to cover principal
payments due to the Certificateholders of any such Series or which provides
for excess funding accounts or similar arrangements or (c) if no such Class
A-1 Certificate is in its Special Payoff Period and no such Series is then
amortizing or accumulating principal or otherwise does not provide for excess
funding accounts or similar arrangements, paid to the Seller to maintain the
Series [199_-_]
S-29
<PAGE>
Certificateholders' Interest or held as Unallocated Principal Collections.
See "Allocation Percentages -- Principal Collections for all Series [199_-_]
Certificates", "Principal Collections for all Series" and "Distributions from
the Collection Account[; Reserve Fund][; Yield Supplement Account] --
Principal Collections".
Unless and until an Early Amortization Event [or Reinvestment/Early
Payoff Event] [that is not cured as described herein] shall have occurred and
until the outstanding principal balance of the Series [199_-_] Certificates
is paid in full, on each Distribution Date with respect to the [Accumulation
Period] [Controlled Amortization Period], collections of Principal
Receivables allocable to the interest of holders of Regular Payoff
Certificates plus certain other amounts comprising Regular Class A-1/A-2
Monthly Principal will no longer be paid for the benefit of Special Payoff
Class A-1 Certificates or another Series or to the Seller as described above
but instead an amount thereof up to the [Controlled Deposit Amount]
[Controlled Distribution Amount] for each such Distribution Date will be
[deposited in the Principal Funding Account] [distributed to Series [19_-_]
Certificateholders]. [The funds deposited in the Principal Funding Account
and any amounts in the Excess Funding Account not allocable to any Special
Payoff Class A-1 Certificate will be used to pay the outstanding principal
balance of the Series [199_-_] Certificates on the Expected Payment Date with
such amounts being applied first to pay principal of the Class A-1
Certificates until such Certificates have been paid in full and then to pay
principal of the Class A-2 Certificates. If on such date the sum of the
Principal Funding Account Balance, any such amounts in the Excess Funding
Account and other amounts available to pay principal of the Special Payoff
Class A-1 Certificates is less than the outstanding principal balance of the
Series [199_-_] Certificates, the Early Amortization Period will commence and
on each Special Payment Date the holders of Regular Payoff Certificates will
receive distributions of principal and interest until the outstanding
principal balance of such Certificates has been paid in full or the Series
Termination Date has occurred. Even if the sum of the Principal Funding
Account Balance, any such amounts in the Excess Funding Account and other
amounts available to pay principal of the Special Payoff Class A-1
Certificates on the Expected Payment Date is insufficient to pay the
outstanding principal balance of the Series [199_-_] Certificates in full,
such balances will be distributed to the Series [199_-_] Certificateholders
at such time. Any such distribution of amounts on deposit in the Principal
Funding Account and the Excess Funding Account will be made first to the
holders of the Class A-1 Certificates until the Class A-1 Certificates have
been paid in full and then to the Class A-2 Certificateholders.]
It is expected that the final principal payment with respect to the
Series [199_-_] Certificates will be made on the Expected Payment Date, but
the principal of the Series [199_-_] Certificates may be paid earlier or,
depending on the actual payment rate on the Receivables, later, as described
under "Special Considerations -- Payments" herein and in the Prospectus.
Remarketing; Purchase of Class A-1 Certificates Subject to an Election Notice
General. If a Class A-1 Certificateholder delivers an Election Notice
during any Election Period, the Remarketing Broker-Dealer will be entitled to
remarket the Class A-1 Certificates to which the Election Notice has been
delivered during the related Remarketing Period. While the Remarketing
Broker-Dealer has no obligation to remarket Class A-1 Certificates, the
Remarking Broker-Dealer will be required to make a payment to the Seller with
respect to Class A-1 Certificates which enter into a Special Payoff Period
prior to [ ] on account of the delivery of an Election Notice. [See
Underwriting".] The Remarketing Broker-Dealer may purchase Class A-1
Certificates for its own account either pursuant to the Remarketing Agreement
or otherwise and may sell Class A-1 Certificates which it owns without giving
preference to Class A-1 Certificates which are subject to Election Notices.
The delivery of an Election Notice by a Class A-1 Certificateholder
shall be irrevocable (unless waived by the Remarketing Broker-Dealer) and
shall be made by written notice to its Indirect Participant or its
Participant, as applicable, with a copy to the Remarketing Coordinator, prior
to the end of the related Election Period. Each Class A-1 Certificateholder
will agree by accepting its Class A-1 Certificate that the Remarketing
Broker-Dealer may purchase any Class A-1 Certificate which is the subject of
an Election Notice on the Distribution Date following the Election Period in
which the Election Notice is given. The Remarketing Broker-Dealer may choose
to purchase any or all of the Class
S-30
<PAGE>
A-1 Certificates which are the subject of an Election Notice. The
Remarketing Broker-Dealer may purchase the Class A-1 Certificates of some
Electing Certificateholders and not others without regard to the time at
which the Election Notices are delivered, the amount of Class A-1
Certificates which are subject to the Election Notices or any other factors.
The Remarketing Broker-Dealer may choose to purchase a Class A-1 Certificate
which is the subject of an Election Notice by notifying the Remarketing
Coordinator in writing on or before the last day of the related Remarketing
Period.
Each Election Notice will specifically authorize the Remarketing
Coordinator, DTC and all Participants and Indirect Participants in the DTC
system to transfer any Class A-1 Certificate which is the subject of an
Election Notice. If the Remarketing Broker-Dealer does not choose to purchase
any such Certificate, monthly payments of principal will commence with
respect to such Certificate on the second Distribution Date following the end
of the related Remarketing Period.
Settlement Procedures. If the Remarketing Broker-Dealer notifies the
Remarketing Coordinator of its desire to purchase a Class A-1 Certificate
which is the subject of an Election Notice (each a "Purchased Class A-1
Certificate") on or before the last day of the Remarketing Period, the
Remarketing Coordinator will notify the Electing Certificateholder of such
exercise by written notice on or about the business day following such last
day. The Election Notice from an Electing Certificateholder will irrevocably
instruct and authorize the Remarketing Coordinator, DTC and all Participants
and Indirect Participants in the DTC system to deliver any Purchased Class
A-1 Certificates, by book entry against payment therefor through DTC on the
Distribution Date following the Remarketing Period, at the election of the
Remarketing Broker-Dealer (the "Settlement Date"). The Remarketing
Broker-Dealer will pay the purchase price against delivery of the Purchased
Class A-1 Certificates received by DTC. The purchase price for any Class A-1
Certificate so purchased will be equal to the unpaid principal amount of the
Purchased Class A-1 Certificate. The Electing Certificateholder will be
entitled to receive the applicable monthly interest payment on the Purchased
Class A-1 Certificate on the Distribution Date on which such Certificate is
purchased.
In accordance with DTC's normal procedures, the transactions described
above will be executed on each Settlement Date through DTC and the accounts
of the respective Participants will be debited and credited and Class A-1
Certificates delivered by book entry as necessary to effect the purchases and
sales of Class A-1 Certificates in the remarketing. Purchasers of the Class
A-1 Certificates will be required to make payment in same-day funds to DTC,
DTC is required to make payment to the Electing Certificateholder in same-day
funds. [Modify as appropriate for CEDEL and Euroclear settlement, if
applicable.]
The Remarketing Broker-Dealer. The Remarketing Broker-Dealer will be [
]. The Remarketing Broker-Dealer may resign at any time by delivering written
notice to the Remarketing Coordinator. If the Remarketing Broker-Dealer
resigns, an Electing Certificateholder will receive monthly payments of
principal commencing on the second Distribution Date following the end of the
related Election Period unless a replacement Remarketing Broker-Dealer is
appointed.
CFC and the Seller have agreed to indemnify the Remarketing
Broker-Dealer against certain liabilities arising out of or in connection
with its activities under the Remarketing Agreement.
The Remarketing Coordinator. The "Remarketing Coordinator" will be [the
corporate trust department of the Trustee][other].
[Excess Funding Account
Unless and until an Early Amortization Event [or Reinvestment/Early
Payoff Event] shall have occurred, the Excess Funded Amount will be
maintained in the Excess Funding Account established with the Trustee. The
Excess Funded Amount will initially equal the excess of the initial principal
balance of the Series [199_-_] Certificates, if any, over the Initial
Invested Amount. Funds on deposit in the Excess Funding Account will be
invested by the Trustee at the direction of the Servicer generally in
Eligible Investments. Such investments must mature on or prior to the next
Distribution Date.
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<PAGE>
Funds on deposit in the Excess Funding Account will be withdrawn and
paid to the Seller or allocated to one or more Series which are in
amortization, early amortization or accumulation periods to the extent of any
increases in the Invested Amount as a result of the addition of Receivables
to the Trust, a reduction in the Seller's Interest, or a reduction in the
initial invested amount of any other Series. Additional amounts will be
deposited in the Excess Funding Account on a Distribution Date to the extent
that the sum of the Series [199_-_] Certificateholders' Interest in Principal
Receivables and the amount on deposit in the Excess Funding Account prior to
the deposit on such Distribution Date is less than the outstanding principal
balance of the Series [199_-_] Certificates, but only to the extent that
funds are available therefor as described herein. In the event that other
Series issued by the Trust provide for excess funding accounts or other
arrangements similar to the Excess Funding Account involving fluctuating
levels of investment in the Receivables, the allocation of additional
Receivables to increase the Invested Amount will generally be based on the
proportion that the amount on deposit in the Excess Funding Account bears to
the amounts on deposit in the excess funding accounts of all Series providing
for excess funding accounts or such similar arrangements or to amounts
otherwise similarly available; and the deposit of amounts in the Excess
Funding Account will be based on the proportion that the Adjusted Invested
Amount bears to the adjusted invested amounts of all Series providing for
excess funding accounts or such similar arrangements.
On each Distribution Date, all investment income earned on amounts in
the Excess Funding Account since the preceding Distribution Date will be
withdrawn from the Excess Funding Account and applied as described herein.
Any funds on deposit in the Excess Funding Account on the earlier of
(i) [ ] [the [ ] Distribution Date] [the Accumulation Period Commencement
Date] and (ii) the commencement of an Early Amortization Period [or
Reinvestment/Early Payoff Period] and not allocable to the holders of Special
Payoff Class A-1 Certificates [or the holders of other Class A-1
Certificates, in the case of a Reinvestment/Early Payoff Period,] will be
deposited in the Principal Funding Account on such date. In addition, on the
second Distribution Date during the Special Payoff Period for any Class A-1
Certificate [and on the first Special Payment Date with respect to any
Reinvestment/Early Payoff Period] the portion of the amount on deposit in the
Excess Funding Account allocable to that Certificate [or each Class A-1
Certificate, in the case of a Reinvestment/Early Payoff Period] (based on a
fraction the numerator of which is the initial principal amount of such
Certificate [or each such Certificate] and the denominator of which is the
aggregate initial principal amount of the Series [199_-_] Certificates (other
than any Special Payoff Class A-1 Certificate that was entitled to begin
receiving principal on a prior Distribution Date)), up to the amount
necessary to pay the principal balance of that Certificate [or each such
Certificate] taking into account Principal Collections available for such
payment, will be applied to pay principal of that Certificate [or each such
Certificate]. [In addition, on each Distribution Date with respect to the
Controlled Amortization Period an amount equal to the quotient obtained by
dividing the amount on deposit in the Excess Funding Account as of the [ ]
Distribution Date (after giving effect to any withdrawals from or deposits to
such account on such date) and not allocable to the holders of Special Payoff
Class A-1 Certificates by [ ] will be distributed to Series [199_-_]
Certificateholders on such date in respect of principal of the Series
[199_-_] Certificates.] No funds will be deposited in the Excess Funding
Account during any Early Amortization Period [or Reinvestment/Early Payoff
Period] or with respect to any Collection Period following [ ] [the [ ]
Distribution Date] [the Accumulation Period Commencement Date].
Allocation Percentages
Allocation between the Series [199_-_] Certificateholders and the
Seller. The Servicer will allocate amounts initially allocated to Series
[199_-_] as described under "Description of the Certificates -- Allocation
Percentages -- Allocations among Series" in the Prospectus between the Series
[199_-_] Certificateholders' Interest and the Seller's Interest for each
Collection Period as follows:
(i) Series Allocable Interest Collections and the Series
Allocable Defaulted Amount will be allocated to Series [199_-_]
Certificateholders based on the Floating Allocation Percentage [,
provided that during any Early Amortization Period, Series Allocable
Interest Collections will be allocated to the Series [199_-_]
Certificateholders based on the Fixed
Allocation Percentage];
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<PAGE>
(ii) during any period that is not a Special Payoff Period with
respect to any Class A-1 Certificate, the [Accumulation Period]
[Controlled Amortization Period] or an Early Amortization Period [or
Reinvestment/Early Payoff Period] (a "Nonprincipal Period"), Series
Allocable Principal Collections will be allocated to Certificateholders
based on the Floating Allocation Percentage;
(iii) during the Special Payoff Period with respect to any Class
A-1 Certificate, the [Accumulation Period] [Controlled Amortization
Period] and any Early Amortization Period [or Reinvestment/Early Payoff
Period], Series Allocable Principal Collections will be allocated to
Series [199_-_] Certificateholders based on the [Fixed Allocation
Percentage] [other]; and
(iv) Series Allocable Miscellaneous Payments will at all times be
allocated to Series [199_-_] Certificateholders.
Amounts not allocated to the Series [199_-_] Certificateholders as described
above will be allocated to the Seller.
"Floating Allocation Percentage" for any Collection Period means
[the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the Invested Amount as of the last
day of the immediately preceding Collection Period and the denominator
of which is the product of (x) the Pool Balance as of such last day and
(y) the Series Allocation Percentage for the Collection Period in
respect of which the Floating Allocation Percentage is being
calculated; provided, however, that, with respect to the first
Collection Period, the Floating Allocation Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the
Initial Invested Amount as of the Series Issuance Date and the
denominator of which is the Series Allocation Percentage of the Pool
Balance as of the Series Cut-Off Date] [other].
"Fixed Allocation Percentage" for any Collection Period generally
means [the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the sum of (x) the Invested Amount
of each Special Payoff Class A-1 Certificate as of the last term of its
Class A-1 Revolving Period, and (y) the Invested Amount of each Regular
Payoff Certificate as of the last day of the Series Revolving Period,
if such last day has occurred or, if such last day has not occurred,
the Invested Amount of each Regular Payoff Certificate as of the last
day of the immediately preceding Collection Period and the denominator
of which is the product of (x) the Pool Balance as of the last day of
the immediately preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in respect of which the
Fixed Allocation Percentage is being calculated] [other].
"Invested Amount" means for any date an amount equal to the sum
of the Class A-1 Invested Amount and the Class A-2 Invested Amount, in
each case for such date.
"Class A-1 Invested Amount" means for any date [an amount equal
to the Initial Class A-1 Invested Amount, minus the amount, without
duplication, of principal payments [(except principal payments made
from the Excess Funding Account)] made to Class A-1 Certificateholders
or deposited to the Principal Funding Account in respect of the Class
A-1 Certificates prior to such date since the Series Issuance Date
other than any such payments made to the holders of [Special Payoff]
Class A-1 Certificates that have been paid in full, minus the excess,
if any, of the aggregate amount of Class A-1 Investor Charge-Offs for
all Distribution Dates preceding such date, over the aggregate amount
of any reimbursements of Class A-1 Investor Charge-Offs for all
Distribution Dates preceding such date] [other].
"Class A-2 Invested Amount" means for any date [an amount equal
to the Class A-2 Initial Invested Amount, minus the amount, without
duplication, of principal payments [(except principal payments made
from the Excess Funding Account)] made to Class A-2 Certificateholders
or deposited to the Principal Funding Account in respect of the Class
A-2 Certificates prior to such date since the Series Issuance Date
minus the excess, if any, of the aggregate amount of Class A-2 Investor
Charge-Offs for all Distribution Dates preceding such date, over the
aggregate amount of any reimbursements of Class A-2 Investor
Charge-Offs for all Distribution Dates preceding such date][other].
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<PAGE>
"Initial Invested Amount" means the sum of the Class A-1 Initial
Invested Amount and the Class A-2 Initial Invested Amount.
"Class A-1 Initial Invested Amount" means [the portion of the
initial principal amount of the Class A-1 Certificates which is
invested in Principal Receivables on the Series Issuance Date, which is
expected to equal approximately $[ ] (based on information as of the
Series Cut-Off Date), plus (x) the product of the Class A-1 Allocation
Percentage and the amount of any withdrawals from the Excess Funding
Account in connection with the purchase of an additional interest in
Principal Receivables since the Series Issuance Date, minus (y) the
product of the Class A-1 Allocation Percentage and the amount of any
additions to the Excess Funding Account in connection with a reduction
in the Principal Receivables in the Trust since the Series Issuance
Date, minus (z) principal payments (except principal payments made from
the Excess Funding Account) made to the holders of any [Special Payoff]
Class A-1 Certificates that have been paid in full][other].
"Class A-2 Initial Invested Amount" means [the portion of the
initial principal amount of the Class A-2 Certificates which is
invested in Principal Receivables on the Series Issuance Date, which is
expected to equal approximately $[ ] (based on information as of the
Series Cut-off Date), plus (x) the product of the Class A-2 Allocation
Percentage and the amount of any withdrawals from the Excess Funding
Account in connection with the purchase of an additional interest in
Principal Receivables since the Series Issuance Date, minus (y) the
product of the Class A-2 Allocation Percentage and the amount of any
additions to the Excess Funding Account in connection with a reduction
in the Principal Receivables in the Trust since the Series Issuance
Date] [other].
The Floating Allocation Percentage and the Fixed Allocation Percentage will
be adjusted for any Collection Period in which Additional Accounts are
designated to reflect the additional Receivables added to the Trust.
Allocation Between the Class A-1 Certificateholders and the Class A-2
Certificateholders. The Servicer will allocate Available Certificateholder
Principal Collections between the interest of holders of each Special Payoff
Class A-1 Certificate and the interest of holders of Regular Payoff
Certificates for each Collection Period based on their respective Certificate
Principal Percentages.
"Available Certificateholder Principal Collections" for any
Distribution Date means the sum of (a) the product of (i) the Floating
Allocation Percentage, with respect to any Nonprincipal Period, or the
[Fixed Allocation Percentage] [other], with respect to the Special
Payoff Period with respect to any Class A-1 Certificate, the
[Accumulation Period][Controlled Amortization Period] or any Early
Amortization Period [or Reinvestment/Early Payoff Period], for the
related Collection Period and (ii) Series Allocable Principal
Collections deposited in the Collection Account for the related
Collection Period, (b) the amount, if any, of Interest Collections,
[funds in the Reserve Fund,] Available Seller's Collections and Excess
Servicing allocated to cover the Investor Default Amount or reimburse
Investor Charge-Offs, (c) Series Allocable Miscellaneous Payments on
deposit in the Collection Account for such Distribution Date and (d)
Excess Principal Collections, if any, from other Series allocated to
Series [199_-_].
"Certificate Principal Percentage" means (a) for any Collection
Period and any Special Payoff Class A-1 Certificate, the percentage
equivalent (which shall never exceed 100%) of a fraction, the numerator
of which is the Invested Amount of such Certificate as of the last day
of its Class A-1 Revolving Period and the denominator of which is the
sum of (i) the aggregate Invested Amount of all Special Payoff Class
A-1 Certificates as of the last day of their respective Class A-1
Revolving Periods and (ii) the aggregate Invested Amount of all Regular
Payoff Certificates as of the last day of the Series Revolving Period,
if such last day has occurred, or if such last day has not occurred,
the aggregate Invested Amount of such Certificates as of the last day
of the immediately preceding Collection Period; and (b) for any
Collection Period and all Regular Payoff Certificates in the aggregate,
100% minus the sum of the Certificate Principal Percentages for all
Special Payoff Class A-1 Certificates.
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<PAGE>
Principal Collections for All Series [199_-_] Certificates. Principal
Collections allocated to any Special Payoff Class A-1 Certificate, for any
Collection Period, will first be allocated to make required payments of
principal of such Certificate; and all Available Certificateholder Principal
Collections allocated to the Regular Payoff Certificates for any Collection
Period with respect to the [Accumulation Period] [Controlled Amortization
Period] or any Early Amortization Period [or Reinvestment/Early Payoff
Period] will first be allocated to make required payments of principal to the
Principal Funding Account [during the Accumulation Period], [to make required
payments of principal to the Principal Funding Account and to the holders of
Regular Payoff Certificates that are Class A-1 Certificates during any
Reinvestment/Early Payoff Period] and to the holders of Series [199_-_]
Certificates during the [Controlled Amortization Period or] Early
Amortization Period, in each case as described herein. The Servicer will
determine the amount of Available Certificateholder Principal Collections for
any Collection Period remaining after such required payments, if any ("Series
Excess Principal Collections"). The Servicer will allocate Series Excess
Principal Collections first to cover any principal distributions to the
holder of any Special Payoff Class A-1 Certificate which have not been
covered out of Principal Collections and certain other amounts allocated or
reallocated to such Class A-1 Certificate ("Class A-1 Principal Shortfalls")
and second, during the [Accumulation Period] [Controlled Amortization Period]
or any Early Amortization Period [or Reinvestment/Early Payoff Period], to
make any required payment of principal in respect of the Regular Payoff
Certificates to the Principal Funding Account or any required payment of
principal to the holders of Series [199_-_] Certificates as described herein
which have not been covered out of Principal Collections and certain other
amounts allocated to the Series [199_-_] Certificates ("Regular Class A-1/A-2
Principal Shortfalls"). See "Maturity and Principal Payment Considerations".
Series Excess Principal Collections will generally not be used to cover
Investor Chart-Offs for any Series [199_-_] Certificate. If Class A-1
Principal Shortfalls exceed Series Excess Principal Collections for any
Collection Period, Series Excess Principal Collections will be allocated pro
rata among the applicable Special Payoff Class A-1 Certificates based on the
relative amounts of Class A-1 Principal Shortfalls. To the extent that Series
Excess Principal Collections exceed the sum of (a) Class A-1 Principal
Shortfalls and (b) Regular Class A-1/A-2 Principal Shortfalls, the balance
will be applied first to make any required deposit to the Excess Funding
Account and then treated as Excess Principal Collections for all Series as
described below.
Principal Collections for All Series. Principal Collections allocated
to the interest of the holder of any Special Payoff Class A-1 Certificate,
for any Collection Period with respect to the Special Payoff Period for such
Certificate, will first be allocated to make required payments of principal
in respect of such Class A-1 Certificate or reallocated to make payments in
respect of other Special Payoff Class A-1 Certificates or Regular Payoff
Certificates as described above. Principal Collections allocated to the
interest of holders of Regular Payoff Certificates, for any Collection Period
with respect to the [Accumulation Period] [Controlled Amortization Period] or
the Early Amortization Period [or Reinvestment/Early Payoff Period], will
first be allocated to make required payments of principal to the Principal
Funding Account during the Accumulation Period[, to make required payments of
principal to the Principal Funding Account and to the holders of Regular
Payoff Certificates that are Class A-1 Certificates during any
Reinvestment/Early Payoff Period] and to the holders of Series [199_-_]
Certificates during the Early Amortization Period [or Controlled Amortization
Period] or reallocated to make payments in respect of Special Payoff Class
A-1 Certificates as described above. See "Distributions from the Collection
Account; [Reserve Fund;] [Yield Supplement Account] -- Principal
Collections". The Servicer will determine the amount of Available
Certificateholder Principal Collections for any Collection Period remaining
after such required payments, if any, and the amount of any similar excess
for any other Series ("Excess Principal Collections"). The Servicer will
allocate Excess Principal Collections to cover any principal distributions to
Certificateholders for any Series which are either scheduled or permitted and
which have not been covered out of Principal Collections and certain other
amounts allocated to such Series ("Principal Shortfalls"). See "Maturity and
Principal Payment Considerations". Excess Principal Collections will
generally not be used to cover investor charge-offs for any Series. If
Principal Shortfalls exceed Excess Principal Collections for any Collection
Period, Excess Principal Collections will be allocated [pro rata among the
applicable Series based on the relative amounts of Principal Shortfalls]
[describe other method of applying, if applicable].
S-35
<PAGE>
Allocation of Collections; Limited Subordination of Seller's Interest
[Except as otherwise described herein with respect to Interest
Collections and Principal Collections allocated to the Available Negative
Carry Subordinated Amount, [and [ ]] on] [On] any date on which collections
are deposited in the Collection Account, the Servicer will distribute
directly to the Seller an amount equal to (a) the Excess Seller's Percentage
for the related Collection Period of Series Allocable Interest Collections
for such date and (b) the Excess Seller's Percentage for the related
Collection Period of Series Allocable Principal Collections for such date, if
the Seller's Participation Amount (determined after giving effect to any
Principal Receivables transferred to the Trust on such date) exceeds the
Trust Available Subordinated Amount for the immediately preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date immediately
following such Determination Date). In addition, during any Nonprincipal
Period, subject to certain limitations, the Servicer will distribute directly
to the Seller on each such date of deposit an amount equal to the Available
Seller's Principal Collections for such date, if the Seller's Participation
Amount (determined after giving effect to any Principal Receivables
transferred to the Trust on such date) exceeds the Trust Available
Subordinated Amount for the immediately preceding Determination Date (after
giving effect to the allocations, distributions, withdrawals and deposits to
be made on the Distribution Date immediately following such Determination
Date) [describe exceptions, if any].
"Available Seller's Collections" for any date means the sum of
(a) the Available Seller's Interest Collections for such date and (b)
the Available Seller's Principal Collections for such date; provided,
however, that the Available Seller's Collections will be zero for any
Collection Period with respect to which the Available Subordinated
Amount is zero on the Determination Date immediately following the end
of such Collection Period.
"Available Seller's Interest Collections" for any date means an
amount equal to the result obtained by multiplying (a) the excess of
(i) the Seller's Percentage for the related Collection Period over (ii)
the Excess Seller's Percentage for such Collection Period by (b) Series
Allocable Interest Collections for such date.
"Available Seller's Principal Collections" for any date means an
amount equal to the product of (a) the excess of (i) the Seller's
Percentage for the related Collection Period over (ii) the Excess
Seller's Percentage for such Collection Period and (b) Series Allocable
Principal Collections for such date.
"Seller's Percentage" means 100% minus (a) the Floating
Allocation Percentage, when used with respect to Interest Collections
[(except during any Early Amortization Period)], Defaulted Receivables
and Principal Collections during a Nonprincipal Period, and (b) the
[Fixed Allocation Percentage] [other], when used with respect to
[Interest Collections during any Early Amortization Period and]
Principal Collections during the Special Payoff Period with respect to
any Class A-1 Certificate, the [Accumulation Period] [Controlled
Amortization Period] and any Early Amortization Period [or
Reinvestment/Early Payoff Period].
"Excess Seller's Percentage" for any Collection Period means a
percentage (which percentage shall never be less than 0% nor more than
100%) equal to (a) 100% minus, when used with respect to Interest
Collections [(except during any Early Amortization Period)] and
Principal Collections during a Nonprincipal Period, the sum of (i) the
Floating Allocation Percentage with respect to such Collection Period
and (ii) the percentage equivalent of a fraction, the numerator of
which is the Available Subordinated Amount as of the Determination Date
occurring in such Collection Period (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date), and
the denominator of which is the product of (x) the Pool Balance as of
the last day of such immediately preceding Collection Period and (y)
the Series Allocation Percentage for the Collection Period in respect
of which the Excess Seller's Percentage is being calculated or (b) 100%
minus, when used with respect to [Interest Collections during any Early
Amortization Period and] Principal Collections during the Special
Payoff Period with respect to any Class A-1 Certificate, the
[Accumulation Period]
S-36
<PAGE>
[Controlled Amortization Period] and any Early Amortization Period [or
Reinvestment/Early Payoff Period], the sum of (i) the [Fixed Allocation
Percentage] [other] with respect to such Collection Period and (ii) the
percentage described in clause (a)(ii) above for such Collection
Period.
Deficiency Amount. [On each Determination Date [with respect to a
Distribution Date that occurs on or prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Series Revolving Period, if the
Series Revolving Period has recommenced,]], the Servicer will determine for
the Series [199_-_] Certificates the amount (the "Deficiency Amount"), if
any, by which (a) the sum of (i) Class A-1 Monthly Interest and Class A-2
Monthly Interest for the following Distribution Date, (ii) Class A-1 Monthly
Interest and Class A-2 Monthly Interest accrued but not paid with respect to
prior Distribution Dates (and interest thereon), (iii) the Monthly Servicing
Fee for such Distribution Date, (iv) the Investor Default Amount for such
Distribution Date, (v) the amount of any Adjustment Payment allocated to the
Series [199_-_] Certificates for such Distribution Date that has not been
deposited in the Collection Account as required under the Pooling and
Servicing Agreement and (vi) if such Distribution Date is the Final Payment
Date, any Carry-over Amount on such Distribution Date that will not be
satisfied on such date by the application of amounts on deposit in the Yield
Supplement Account as described under "Distributions from the Collection
Account; Reserve Fund; Yield Supplement Account -- Yield Supplement Account",
exceeds (b) the sum of [(i)] Certificateholder Interest Collections and
Investment Proceeds for such Distribution Date [(ii) Excess Interest
Collections allocated to Series [199_-_] with respect to such Distribution]
[and (iii) the amount of funds in the Reserve Fund on such Determination Date
available to fund any portion of the Deficiency Amount or described under
"Distributions from the Collection Account; Reserve Fund[; Yield Supplement
Account] -- Interest Collections"]. The lesser of the Deficiency Amount and
the Available Subordinated Amount is the "Draw Amount".] [Include other
sources of funds and applications of the Draw Amount, as appropriate.]
"Final Payment Date" means the first Distribution Date on which, after
giving effect to all payments to be made on such Distribution Date, the
outstanding principal balance of the Series [199_-_] Certificates will be
paid in full.
Available Subordinated Amount. The "Required Subordinated Amount" shall
mean, as of any date of determination, [the sum of (i)] the product of the
initial Subordinated Percentage [, as adjusted from time to time as described
herein other than as a result of an increase therein at the option of the
Seller,] and the Invested Amount [and (ii) the Incremental Subordinated
Amount]. Assuming that the Initial Invested Amount of the Series [199_-_]
Certificates is equal to the initial principal amount of the Series [199_-_]
Certificates, such amount would initially be $[ ].
The Available Subordinated Amount for a Determination Date is equal to
(a) the lesser of (i) the Available Subordinated Amount for the preceding
Determination Date, minus, with certain limitations, the Draw Amount for such
preceding Determination Date, [minus funds from the Reserve Fund applied to
cover any portion of the Investor Default Amount,] plus the excess, if any,
of the Required Subordinated Amount for such Determination Date over the
Required Subordinated Amount for the immediately preceding Determination
Date, plus the amount of Excess Servicing available to be paid to the Seller
as described under "Distributions from the Collection Account[; Reserve
Fund][; Yield Supplement Account] -- Excess Servicing", and (ii) the product
of the fractional equivalent of the Subordinated Percentage and the Invested
Amount, [minus (b) in the case of clause (a) (i) the Incremental Subordinated
Amount for such preceding Determination Date, plus (c) the Incremental
Subordinated Amount for the current Determination Date,] [plus (d) the
Subordinated Percentage of funds to be withdrawn from the Excess Funding
Account on the succeeding Distribution Date and paid to the Seller or
allocated to one or more Series]; provided, however, that, once [the
[Accumulation Period] [Controlled Amortization Period] or] any Early
Amortization Period [that is not cured as described herein] shall have
commenced, the Available Subordinated Amount shall be calculated based on the
Invested Amount as of the close of business on the day preceding such
[[Accumulation Period] [Controlled Amortization Period] or] Early
Amortization Period[; and provided further that from and after the
commencement of any Reinvestment/Early Payoff Period [that is not cured as
described herein] until the earliest of the commencement of any Early
Amortization Period [that is not cured, as described
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<PAGE>
herein,] the payment in full of the Series [199_-_] Certificates and the
Fully Reinvested Date, the Available Subordinated Amount shall be calculated
based on the Invested Amount as of the close of business on the day preceding
such Reinvestment/Early Payoff Period [less [describe permitted reductions,
e.g., based on payment rates or amounts on deposit in the Principal Funding
Account]]. The Available Subordinated Amount for the first Determination Date
is equal to the Required Subordinated Amount. [The "Incremental Subordinated
Amount" on any Determination Date will equal the result obtained by
multiplying (a) a fraction, the numerator of which is the sum of the Invested
Amount on the last day of the immediately preceding Collection Period and the
Available Subordinated Amount for such Determination Date (calculated without
adding the Incremental Subordinated Amount for such Determination Date as
described in clause (c) above), and the denominator of which is the Pool
Balance on such last day by (b) the excess, if any, of (x) the sum of the
Overconcentration Amount, the Instalment Balance Amount and the aggregate
amount of Ineligible Receivables on such Determination Date over (y) the
aggregate amount of Ineligible Receivables, Receivables in Accounts
containing Dealer Overconcentrations and Receivables in Instalment Balances,
in each case that became Defaulted Receivables during the preceding
Collection Period and are not subject to reassignment from the Trust, unless
certain insolvency events relating to the Seller or CFC have occurred, as
further described in the Pooling and Servicing Agreement].
The "Subordinated Percentage" will initially equal the percentage
equivalent of a fraction, the numerator of which is the Subordination Factor
and the denominator of which will be the excess of 100% over the
Subordination Factor. The Seller may, in its sole discretion, at any time
increase the Available Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser of (i) $[ ] or (ii) [ ]%
of the Invested Amount. The Seller is not under any obligation to increase
the Available Subordinated Amount at any time. If [the sum of] the Available
Subordinated Amount [and the Incremental Subordinated Amount] were reduced to
less than the sum of the Required Subordinated Amount [and the Incremental
Subordinated Amount], a [Reinvestment/Early Payoff Event] [Early Amortization
Event] would occur. The Seller could elect to increase the Available
Subordinated Amount at the time such a [Reinvestment/Early Payoff Event]
[Early Amortization Event] would otherwise occur, thus preventing or delaying
the occurrence of the [Reinvestment/Early Payoff Event] [Early Amortization
Event]. [Describe partial Reinvestment/Early Payoff Periods resulting from a
failure to meet the test described above, if applicable.]
[Negative Carry Subordinated Amount. In the event of the occurrence of
[a Reinvestment/Early Payoff Event,] [an Early Amortization Event] [or the
commencement of the Accumulation Period] [or the commencement of the
Controlled Amortization Period], Interest Collections and Principal
Collections otherwise distributed to the Seller in respect of the Excess
Seller's Percentage, in an amount not to exceed the Available Negative Carry
Subordinated Amount, will be deposited to the Reserve Fund [and other] until
the amounts on deposit therein equal the Negative Carry Required Amount [and
[ ]].
["Available Negative Carry Subordinated Amount" means, initially, the
Required Negative Carry Subordinated Amount and, on any subsequent date, the
Available Negative Carry Subordinated Amount at the open of business on the
immediately preceding date less the amount of Seller's Collections deposited
on such immediately preceding date to the Reserve Fund [and other] in
accordance with the preceding paragraph.]
"Required Negative Carry Subordinated Amount" means [ ].
"Negative Carry Required Amount" means [ ].]
[Describe other subordination of the Seller's Interest, if applicable.]
Distributions from the Collection Account[; Reserve Fund] [;Yield Supplement
Account]
Interest Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Invested Date [and each
Collection Period thereafter during the Series Revolving Period]], commencing
with the initial Distribution Date, the Servicer shall instruct the Trustee
to apply
S-38
<PAGE>
Certificateholder Interest Collections and Investment Proceeds, if any,
[Excess Interest Collections allocated to Series [199_-_] [other amounts] in
respect of the related Collection Period to make the following distributions
in the following priority:
[(i) first, an amount equal to Class A-1 Monthly Interest for
such Distribution Date, plus the amount of any Class A-1 Monthly
Interest previously due but not distributed on a prior Distribution
Date (plus, but only to the extent permitted under applicable law,
interest at the Class A-1 Certificate Rate on Class A-1 Monthly
Interest previously due but not so distributed), shall be distributed
to the Class A-1 Certificateholders, and an amount equal to Class A-2
Monthly Interest for such Distribution Date, plus the amount of any
Class A-2 Monthly Interest previously due but not [deposited to the
Interest Funding Account or] distributed on a prior Distribution Date
(plus, but only to the extent permitted under applicable law, interest
at the Class A-2 Certificate Rate on Class A-2 Monthly Interest
previously due but not so [deposited or] distributed), shall be
[deposited to the Interest Funding Account] [distributed to the Class
A-2 Certificateholders];
(ii) second, an amount equal to the Monthly Servicing Fee for
such Distribution Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection Account
as described in the Prospectus under "Description of the Certificates
-- Allocation of Collections; Deposits in Collection Account" or waived
by the Servicer);
[(iii) third, an amount equal to the Reserve Fund Deposit Amount,
if any, for such Distribution Date shall be deposited in the Reserve
Fund;]
(iv) fourth, an amount equal to the Investor Default Amount, if
any, for such Distribution Date shall be treated as a portion of
Available Certificateholder Principal Collections for such Distribution
Date;
[(v) fifth, an amount equal to any outstanding Class A-1
Carry-over Amount (after giving effect to any withdrawals from the
Yield Supplement Account) shall be distributed to the Class A-1
Certificateholders and, an amount equal to any outstanding Class A-2
Carry-over Amount (after giving effect to any withdrawals from the
Yield Supplement Account) shall be distributed to the Class A-2
Certificateholders;]
[(vi) sixth, an amount equal to the Yield Supplement Account
Deposit Amount, if any, for such Distribution Date shall be deposited
in the Yield Supplement Account;]
[(vii) seventh, describe other applications, if any;] and
(viii) eighth, the balance shall constitute Excess Servicing.]
In the event Certificateholder Interest Collections and Investment
Proceeds [describe other funds] are insufficient to make the entire amount of
any distribution described in clause [(i) or (v)] above, funds available for
such distribution will be applied to make such distribution to the Class A-1
Certificateholders and the Class A-2 Certificateholders pro rata based on the
Class A-1 Allocation Percentage and the Class A-2 Allocation Percentage,
respectively, for the related Collection Period. Any excess in the amount
allocated to make distributions to the holders of either Class of Series
[199_-_] Certificates pursuant to either such clause over the amount required
to make such distribution will be applied to cover any shortfalls in the
amount available to make distributions to holders of Series [199_-_]
Certificates of the other Class pursuant to such clause.
[If, on any Distribution Date, Certificateholder Interest Collections
and Investment Proceeds [Excess Interest Collections allocated to Series
[199_-_] [describe other funds] are not sufficient to make the entire
distributions required by clauses [(i), (ii) and (iv)] above, the Trustee
shall withdraw funds from the Reserve Fund and apply such funds to complete
the distributions pursuant to such clauses; provided, however, that during
any Early Amortization Period [or Reinvestment/Early Payoff Period] funds
shall not be withdrawn from the Reserve Fund to make distributions required
by clause [(iv)] to the extent that, after giving effect to such withdrawal,
the amount on deposit in the Reserve Fund shall be less than $[ ].]
S-39
<PAGE>
If there is a Draw Amount for such Distribution Date, the Trustee shall
apply the amount of Available Seller's Collections for the related Collection
Period on deposit in the Collection Account on such Distribution Date, but
only up to the Draw Amount, to make the distributions required by clauses
[(i), (ii) and (iv)] above [that have not been made through the application
of funds from the Reserve Fund as described in the preceding paragraph].
Additionally, Available Seller's Collections will be applied to any unpaid
Adjustment Payments. The Available Subordinated Amount will be reduced by the
amount of Available Seller's Collections so applied. If the Draw Amount
exceeds such Available Seller's Collections, the Available Subordinated
Amount will be reduced by the amount of such excess, but not by more than the
sum of the Investor Default Amount and the portion of Adjustment Payments not
paid by the Seller, in order to maintain the Invested Amount, but not
generally by more than the Investor Default Amount for such Distribution
Date.
"Certificateholder Interest Collections" for any Distribution
Date means the portion of Series Allocable Interest Collections for the
related Collection Period allocated to the Series [199_-_]
Certificateholders' Interest as described under "Allocation Percentages
-- Allocation Between the Series [199_-_] Certificateholders and the
Seller".
"Investment Proceeds" for any Distribution Date means an amount
equal to the sum of (a) [the investment earnings on the related
Determination Date with respect to funds held in the Reserve Fund,] (b)
the Series Allocation Percentage of investment earnings on the related
Determination Date with respect to funds held in the Collection Account
and (c) all investment income on amounts in [the Excess Funding
Account,] [the Principal Funding Account,] [the Interest Funding
Account,] [the Yield Supplement Account] [other accounts] since the
preceding Distribution Date.
"Class A-1 Allocation Percentage" for any Collection Period means
the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the outstanding principal amount of
the Class A-1 Certificates as of the last day of the immediately
preceding Collection Period (after giving effect to any reduction
thereof to occur on the immediately following Distribution Date) and
the denominator of which is the aggregate outstanding principal amount
of all the Series [199_-_] Certificates as of such last day (after
giving effect to any reduction thereof to occur on the immediately
following Distribution Date).
"Class A-2 Allocation Percentage" for any Collection Period means
the percentage obtained by subtracting from 100% the Class A-1
Allocation Percentage for such Collection Period.
[Investment Proceeds. On each Distribution Date with respect to a
Collection Period that ends after the Fully Reinvested Date [other than any
such Collection Period during the Series Revolving Period], the Servicer
shall instruct the Trustee to apply Investment Proceeds [Excess Interest
Collections allocated to Series [199_-_] [describe other funds], in respect
of the related Collection Period to make the following distributions in the
following priority:
(i) first, an amount equal to Class A-1 Monthly Interest for such
Distribution Date, plus, the amount of any Class A-1 Monthly Interest
previously due but not distributed on a prior Distribution Date (plus,
but only to the extent permitted under applicable law, interest at the
Class A-1 Certificate Rate on Class A-1 Monthly Interest previously due
but not so distributed), shall be distributed to Class A-1
Certificateholders, and an amount equal to Class A-2 Monthly Interest
for such Distribution Date, plus the amount of any Class A-2 Monthly
Interest previously due but not [deposited in the Interest Funding
Account or] distributed on a prior Distribution Date (plus, but only to
the extent permitted under applicable law, interest at the Class A-2
Certificate Rate on Class A-2 Monthly Interest previously due but not
so deposited or distributed shall be [deposited to the Interest Funding
Account][distributed to Class A-2 Certificateholders];
[(ii) second, describe other applications; and]
(iii) third, the balance shall be distributed to the Seller.]
S-40
<PAGE>
In the event Investment Proceeds [Excess Interest Collections allocated
to Series [199_-_] [and describe other funds] are insufficient to make the
entire amount of any distribution described in clause (i) above, funds
available for such distribution will be applied to make such distribution to
the Class A-1 Certificateholders and the Class A-2 Certificateholders pro
rata based on the Class A-1 Allocation Percentage and the Class A-2
Allocation Percentage, respectively, for the related Collection Period. Any
excess in the amount allocated to make distributions to the holders of either
Class of Series [199_-_] Certificates pursuant to such clause over the amount
required to make such distributions will be applied to cover any shortfalls
in the amount available to make distributions to holders of Series [199_-_]
Certificateholders of the other Class pursuant to such clause.
[If, on any Distribution Date, Investment Proceeds [Excess Interest
Collections allocated to Series [199_-_] [describe other funds] are not
sufficient to make the entire distributions required in clause (i) above, the
Trustee shall withdraw funds from the Reserve Fund and apply such funds to
complete the distributions pursuant to such clause.]
[Reserve Fund. The "Reserve Fund" will be an Eligible Deposit Account
established and maintained in the name of the Trustee for the benefit of the
Series [199_-_] Certificateholders. On the Series Issuance Date, the Seller
will deposit $[ ] ([ ]% of the principal balance of the Series [199_-_]
Certificates) into the Reserve Fund. The "Reserve Fund Required Amount" for
any Distribution Date will equal [ ]% of the outstanding principal balance of
the Series [19_-_] Certificates for such Distribution Date (after giving
effect to any change therein on such Distribution Date). [Describe any
increases in the Reserve Fund Required Amount, e.g., as a result of the
long-term rating of CFC falling below BBB- or to cover any negative carry
during a principal accumulation period.] The "Reserve Fund Deposit Amount" is
the amount, if any, by which the Reserve Fund Required Amount exceeds the
amount on deposit in the Reserve Fund. Funds in the Reserve Fund will be
invested in Eligible Investments that will mature on or prior to the next
Distribution Date. On each Determination Date, the Servicer will apply any
investment earnings (net of losses and investment expenses) with respect to
the Reserve Fund as set forth under "Distributions from the Collection
Account; Reserve Fund[; Yield Supplement Account]". After the earlier of the
payment in full of the outstanding principal balance of the Series [199_-_]
Certificates and the Series Termination Date, any funds remaining on deposit
in the Reserve Fund will be paid to the Seller. [Describe other applications,
if any.]
If, after giving effect to the allocations, distributions and deposits
in the Reserve Fund described above under "Interest Collections", the amount
in the Reserve Fund is less than the Reserve Fund Required Amount for the
next following Distribution Date, the Trustee shall deposit any remaining
Available Seller's Collections for the related Collection Period into the
Reserve Fund until the amount in the Reserve Fund is equal to such Reserve
Fund Required Amount.
If, for any Distribution Date with respect to an Early Amortization
Period [or Reinvestment/Early Payoff Period], after giving effect to the
allocations, distributions and deposits described in the preceding paragraph,
the amount in the Reserve Fund is less than the Excess Reserve Fund
Required Amount for such Distribution Date, the Trustee shall deposit the
remaining Available Seller's Collections for the related Collection Period
into the Reserve Fund until the amount in the Reserve Fund is equal to such
Excess Reserve Fund Required Amount. The "Excess Reserve Fund Required
Amount" for any such Distribution Date means an amount equal to the greater
of (a) [ ]% of the initial principal balance of the Series [199_-_]
Certificates and (b) the excess of (i) the sum of (x) the Available
Subordinated Amount on the preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on
such Distribution Date) and (y) an amount equal to (A) the excess of the
Required Participation Percentage over 100%, multiplied by (B) the
outstanding principal balance of the Series [199_-_] Certificates on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date) over (ii) the excess of (x) the Series Allocation
Percentage of the Pool Balance on the last day of the immediately preceding
Collection Period over (y) the Invested Amount on such Distribution Date
(after giving effect to changes therein on such Distribution Date); provided
that the Excess Reserve Fund Required Amount shall not exceed such Available
Subordinated Amount. [Describe adjustments, if applicable.]]
S-41
<PAGE>
[Yield Supplement Account. The Yield Supplement Account will be an
Eligible Deposit Account established and maintained in the name of the
Trustee for the benefit of the Series [199_-_] Certificateholders. On the
Series Issuance Date, the Seller will deposit $[ ] ([ ]% of the principal
balance of the Series [199_-_] Certificates) into the Yield Supplement
Account. The "Yield Supplement Account Required Amount" for any Distribution
Date [(i) that occurs prior to the Fully Reinvested Date [or any Distribution
Date thereafter during the Series Revolving Period]] will equal [ ]% of the
outstanding principal balance of the Series [199_-_] Certificates for such
Distribution Date (after giving effect to any change therein on such
Distribution Date) [and (ii) for any [other] Distribution Date that occurs on
or after the Fully Reinvested Date, zero]. [On any Distribution Date on which
there is a Class A-1 Carry-over Amount or a Class A-2 Carry-over Amount, the
amount on deposit in the Yield Supplement Account on such Distribution Date
shall be applied by the Trustee up to the amount of such Carry-over Amount to
satisfy such Carry-over Amount. In the event of any insufficiency of funds on
deposit in the Yield Supplement Account to satisfy all such Carry-over
Amounts, such funds shall be applied to the Class A-1 Carry-over Amount and
the Class A-2 Carry-over Amount pro rata based on the Class A-1 Allocation
Percentage and the Class A-2 Allocation Percentage, respectively, for the
related Collection Period. Any excess in the amount so allocated to pay a
Class A-1 Carry-over Amount or a Class A-2 Carry-over Amount over the amount
of such Carry-over Amount will be applied to cover any shortfall in the
amount available to pay a Carry-over Amount with respect to the other Class
of Series [199_-_] Certificates.] [Describe other applications, e.g., to pay
Monthly Interest.] The "Yield Supplement Account Deposit Amount" is the
amount, if any, by which the Yield Supplement Account Required Amount exceeds
the amount on deposit in the Yield Supplement Account. Funds in the Yield
Supplement Account will be invested [in Eligible Investments that mature on
or prior to the next Distribution Date] [in any investments consisting of
financial assets that by their terms convert to cash within a finite period
of time that mature on or prior to the next Distribution Date]. On each
Determination Date, the Servicer will apply any investment earnings (net of
losses and investment expenses) with respect to the Yield Supplement Account
as set forth under "Distributions from the Collection Account; [Reserve
Fund;] Yield Supplement Account". After the earlier of the payment in full of
the outstanding principal balance of the Series [199_-_] Certificates and the
Series Termination Date, any funds remaining on deposit in the Yield
Supplement Account will be paid to the Seller. [Describe other
applications.]]
Excess Servicing. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any such
Collection Period thereafter during the Series Revolving Period]], the
Servicer will allocate Excess Servicing with respect to the Collection Period
immediately preceding such Distribution Date, in the following priority:
[(a) first, an amount equal to the aggregate amount of Investor
Charge-Offs which have not been previously reimbursed (after giving
effect to the allocation on such Distribution Date of Series Allocable
Miscellaneous Payments with respect to such Distribution Date) will be
allocated in the same manner as Available Certificateholder Principal
Collections for such Distribution Date;
(b) second, an amount equal to the aggregate outstanding amounts
of the Monthly Servicing Fee which have been previously waived as
described under "Servicing Compensation and Payment of Expenses" in the
Prospectus will be distributed to the Servicer;
[(c) third, describe other applications; and]
(d) fourth, the balance, if any, shall be distributed to the
Seller and shall increase the Available Subordinated Amount as
described in the definition thereof].
Principal Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any such
Collection Period thereafter during the Series Revolving Period]], the
Servicer will allocate Available Certificateholder Principal Collections as
follows:
(a) Special Class A-1 Available Principal Collections with
respect to any Special Payoff Class A-1 Certificate in its Special
Payoff Period shall be distributed as follows:
S-42
<PAGE>
(i) first, an amount equal to the Special Class A-1 Monthly
Principal for such Distribution Date and such Class A-1
Certificate shall be distributed to the holder of such
Certificate;
(ii) second, to cover any Class A-1 Principal Shortfalls
for other Special Payoff Class A-1 Certificates;
(iii) third, if such Distribution Date relates to the
Series Revolving Period, to make any required deposit to the
Excess Funding Account or, if such Distribution Date relates to
the [Accumulation Period] [controlled Amortization Period] or any
Early Amortization Period [or Reinvestment/Early Payoff Period],
to cover any Regular Class A-1/A-2 Principal Shortfalls; and
(iv) fourth, to Excess Principal Collections as described
under "Allocation Percentages -- Principal Collections for All
Series";
(b) for each Distribution Date with respect to the Series
Revolving Period, all Regular Class A-1/A-2 Available Principal
Collections will be allocated as follows:
(i) first, to cover any Class A-1 Principal Shortfalls for
Special Payoff Class A-1 Certificates;
(ii) second, to make any required deposit to the Excess
Funding Account; and
(iii) third, to Excess Principal Collections;
(c) for each Distribution Date with respect to the [Accumulation
Period] [Controlled Amortization Period] or any Early Amortization
Period all Regular Class A-1/A-2 Available Principal Collections shall
be distributed as follows:
(i) first, an amount equal to the Regular Class A-1/A-2
Monthly Principal for such Distribution Date will be [deposited
to the Principal Funding Account, in the case of the Accumulation
Period or] distributed to Series [199_-_] Certificateholders[, in
the case of the Controlled Amortization Period or Early
Amortization Period];
(ii) second, to cover any Class A-1 Principal Shortfalls
for Special Payoff Class A-1 Certificates; and
(iii) third, the balance, if any, will be allocated to
Excess Principal Collections; and
[(d) for each Distribution Date with respect to the
Reinvestment/Early Payoff Period all Regular Class A-1/A-2 Available
Principal Collections shall be distributed as follows:
(i) first, an amount equal to the Regular Class A-1 Monthly
Principal for such Distribution Date will be distributed to
holders of Regular Payoff Certificates that are Class
A-1-Certificates;
(ii) second, an amount equal to the Regular Class A-2
Monthly Principal for such Distribution Date will be deposited to
the Principal Funding Account;
(iii) third, to cover any Class A-1 Principal Shortfalls
for Special Payoff Class A-1 Certificates; and
(iv) fourth, the balance if any will be allocated to Excess
Principal Collections].
[In the event that the aggregate Invested Amount is greater than zero
on the Series Termination Date, any funds remaining in the Reserve Fund
(after the application of funds in the Reserve Fund as described above under
"Interest Collections") will be treated as a portion of Available
Certificateholder Principal Collections for the Distribution Date occurring
on the Series Termination Date.]
S-43
<PAGE>
"Special Class A-1 Available Principal Collections" for any
Distribution Date and any Special Payoff Class A-1 Certificate means
the sum of (a) the amount of Available Certificateholder Principal
Collections allocated to such Certificate with respect to such
Distribution Date as described under "Allocation Percentages --
Allocation Between the Class A-1 Certificateholders and the Class A-2
Certificateholders" and (b) Series Excess Principal Collections, if
any, allocated to such Certificate.
"Special Class A-1 Monthly Principal" with respect to any
Distribution Date and Special Payoff Class A-1 Certificate will equal
the Special Class A-1 Available Principal Collection for such
Certificate and Distribution Date; provided, however, that Special
Class A-1 Monthly Principal for such Certificate shall not exceed the
Invested Amount of such Certificate.
"Regular Class A-1/A-2 Available Principal Collections" for any
Distribution Date means the sum of (a) the amount of Available
Certificateholder Principal Collections allocated to the Regular Payoff
Certificates with respect to such Distribution Date as described under
"Allocation Percentages -- Allocation Between the Class A-1
Certificateholders and the Class A-2 Certificateholders" and (b) Series
Excess Principal Collections, if any, allocated to the Regular Payoff
Certificates.
"Regular Class A-1/A-2 Monthly Principal" with respect to any
Distribution Date relating to the [Accumulation Period][Controlled
Amortization Period] or any Early Amortization Period will equal
Regular Class A-1/A-2 Available Principal Collections for such
Distribution Date; provided, however, that for each Distribution Date
[with respect to the Accumulation Period, Regular Class A-1/A-2 Monthly
Principal may not exceed the Controlled Deposit Amount][with respect to
the Controlled Amortization Period, Regular Class A-1/A-2 Monthly
Principal may not exceed the Controlled Distribution Amount] for such
Distribution Date; and provided, further, that Regular Class A-1/A-2
Monthly Principal shall not exceed the aggregate Invested Amount of the
Regular Payoff Certificates.
["Controlled Deposit Amount" for a Distribution Date means the
excess, if any, of (a) [the sum of (i)] the product of the Controlled
Accumulation Amount and the number of Distribution Dates from and
including the first Distribution Date with respect to the Accumulation
Period through and including such Distribution Date (but not in excess
of the Accumulation Period Length) [and (ii) the amount on deposit in
the Excess Funding Account as of [ ] [the [ ] Distribution Date] (after
giving effect to any withdrawals from or deposits to such account on
such date (other than the transfer to the Principal Funding Account of
the amounts on deposit therein on such date))] over (b) the sum of
amounts on deposit in [the Excess Funding Account and] the Principal
Funding Account, in each case before giving effect to any withdrawals
from or deposits to such accounts on such Distribution Date other than
any such withdrawal with respect to a Special Payoff Class A-1
Certificate.]
["Controlled Accumulation Amount" means an amount equal to the
Invested Amount of the Regular Payoff Certificates as of [ ] [the [ ]
Distribution Date] (after giving effect to any changes therein on such
date) divided by the Accumulation Period Length.]
["Controlled Distribution Amount" for a Distribution Date means
the sum of (a) [the excess, if any, of (i)] the Controlled Amortization
Amount for such Distribution Date [over (ii) the quotient obtained by
dividing the amount on deposit in the Excess Funding Account as of the
[ ] Distribution Date (after giving effect to any withdrawals from or
deposits to such account on such date) by [ ],] plus (b) any Controlled
Distribution Amount for a prior Distribution Date not previously
distributed to Series [199_-_] Certificateholders.]
["Controlled Amortization Amount" for a Distribution Date means
an amount equal to the Invested Amount of the Regular Payoff
Certificates as of the [ ] Distribution Date (after giving effect to
any changes therein on such date) divided by [ ].]
["Regular Class A-1 Monthly Principal" with respect to any
Distribution Date relating to any Reinvestment/Early Payoff Period will
equal Regular Class A-1/A-2 Available Principal Collections
S-44
<PAGE>
for such Distribution Date; provided, however, that Regular Class A-1
Monthly Principal shall not exceed the aggregate Invested Amount of the
Regular Payoff Certificates that are Class A-1 Certificates.]
["Regular Class A-2 Monthly Principal" with respect to any
Distribution Date relating to any Reinvestment/Early Payoff Period will
equal the excess, if any, of Regular Class A-1/A-2 Available Principal
Collections for such Distribution Date over Regular Class A-1 Monthly
Principal for such Distribution Date; provided, however, that Regular
Class A-2 Monthly Principal shall not exceed the aggregate Invested
Amount of the Class A-2 Certificates.]
[Enhancements
The Series [199_-_] Certificates will have the benefit of the [Letter
of Credit] [Interest Rate Swap] [Currency Swap] [Cash Collateral Account]
[Guaranty] [Surety Bond] [Insurance Policy] [Spread Account] [other] [issued
by [ ] (the "Enhancement Provider")] in the initial amount of $[ ].
With respect to any Distribution Date, the amount available to be drawn
under the [Letter of Credit] [Interest Rate Swap] [Currency Swap] [Cash
Collateral Account] [Guaranty] [Surety Bond] [Insurance Policy] [Spread
Account] [other] (the "Available Credit Enhancement Amount") will equal [ ].]
[Describe subordination of other Series of Certificates to the Series
[199_-_] Certificates, if applicable.]
[Information with respect to Enhancement.]
[Enhancement Provider
Information to be provided by Enhancement Provider.]
[Interest Funding Account
The Servicer will establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account for the benefit of the Class
A-2 Certificateholders (the "Interest Funding Account"). On each Distribution
Date Class A-2 Monthly Interest will be deposited in the Interest Funding
Account as provided above under "Distributions from the Collection Account[;
Reserve Fund] [; Yield Supplement Account]; provided that if an Early
Amortization Event [that is not cured as described herein] shall have
occurred, interest will be distributed to the Class A-2 Certificateholders on
the first Distribution Date following such Early Amortization Event.
All amounts on deposit in the Interest Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Interest Funding Account Balance") will be invested
from the date of their deposit by the Trustee at the direction of the
Servicer in Eligible Investments that will mature on or prior to the next
succeeding Distribution Date. The Servicer may select an appropriate agent as
representative of the Servicer for the purpose of designating such
investments. On each Distribution Date, the interest and other investment
income on the Interest Funding Account Balance will be applied as provided
above under "Distributions from the Collection Account[; Reserve Fund][;
Yield Supplement Account].]
[Principal Funding Account
The Servicer will establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account for the benefit of the
holders of Regular Payoff Certificates (the "Principal Funding Account"). [On
each Distribution Date with respect to the Accumulation Period, Regular Class
A-1/A-2 Monthly Principal will be deposited in the Principal Funding Account]
[and on each Distribution Date with respect to any Reinvestment/Early Payoff
Period, Regular Class A-2 Monthly Principal will be deposited in the
Principal Funding Account, in each case] as provided above under
"Distributions
S-45
<PAGE>
from the Collection Account[; Reserve Fund][; Yield Supplement Account] --
Principal Collections"; provided that, if an Early Amortization Event [that
is not cured as described herein] occurs during the [Accumulation Period] [or
any Reinvestment/Early Payoff Period], the Principal Funding Account Balance
shall be paid to the Series [199_-_] Certificateholders on the first Special
Payment Date [and, if a Reinvestment/Early Payoff Event [that is not cured as
described herein] occurs during the Accumulation Period, funds on deposit in
the Principal Funding Account in an amount equal to the Invested Amount of
the Class A-1 Certificates that are Regular Payoff Certificates shall be paid
to the holders of such Certificates on the first Special Payment Date].
All amounts on deposit in the Principal Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Principal Funding Account Balance") will be invested
from the date of their deposit to on or prior to the Expected Payment Date by
the Trustee at the direction of the Servicer in Eligible Investments that
will mature on or prior to the following Distribution Date. The Servicer may
select an appropriate agent as representative of the Servicer for the purpose
of designating such investments. On each Distribution Date, the interest and
other investment income on the Principal Funding Account Balance will be
applied as provided above under "Distributions from the Collection Account[;
Reserve Fund][; Yield Supplement Account]".]
[Describe other Series [199_-_] Accounts, if applicable.]
Distributions
Payments to Series [199_-_] Certificateholders will be made from the
Collection Account, [the Reserve Fund,] [the Principal Funding Account,] [the
Interest Funding Account,] [other] and [the Excess Funding Account].
(a) The Servicer shall instruct the Trustee to apply funds on
deposit in the Collection Account, [the Reserve Fund,] [the Interest
Funding Account,] [other] and shall instruct the Trustee to make the
following distributions at the following times:
(i) on each Interest Payment Date[, Class A-2 Interest
Payment Date] or Special Payment Date] all amounts on deposit in
the Collection Account[, Reserve Fund] [Interest Funding Account]
[other] as are payable to the Class A-1 Certificateholders or
Class A-2 Certificateholders with respect to accrued interest
will be distributed to such Certificateholders.
(b) The Servicer shall instruct the Trustee to apply the funds on
deposit in the [Collection Account,] [the Principal Funding Account,]
[other] and [the Excess Funding Account] and shall instruct the Trustee
to make, without duplication, the following distributions at the
following times:
(i) on each Distribution Date all amounts on deposit in the
Collection Account [other] as are payable to the holder of any
Special Payoff Class A-1 Certificate with respect to principal of
such Certificate will be distributed to such Certificateholder;
[(ii) on each Distribution Date during the Controlled
Amortization Period all amounts on deposit in the Collection
Account [and the Excess Funding Account (other than amounts to be
distributed to holders of Special Payoff Class A-1 Certificates
as described in clause [(iv)] below)] as are payable to Regular
Payoff Certificates with respect to principal will be distributed
first to the holders of Regular Payoff Certificates that are
Class A-1 Certificates up to a maximum amount equal to the excess
of the outstanding principal amount of such Certificates over
unreimbursed Investor Charge-Offs allocated to such Certificates,
each on such date, and then to the holders of Class A-2
Certificates up to a maximum amount equal to the excess of the
outstanding principal amount of such Certificates over
unreimbursed Investor Charge-Offs allocated to such Certificates,
each on such date;]
[(iii) on each Special Payment Date and on the Expected
Payment Date the Principal Funding Account Balance[, the amount
on deposit in the Excess Funding Account (other than amounts to
be distributed to holders of [Special Payoff] Class A-1
Certificates as
S-46
<PAGE>
described in clause (iv) below)] and all amounts on deposit in
the Collection Account as are payable to Regular Payoff
Certificateholders with respect to principal shall be distributed
first to the holders of the Class A-1 Certificates up to a
maximum amount equal to the excess of the outstanding principal
amount of such Certificates over unreimbursed Investor
Charge-Offs allocated to such Certificates, each on such date,
and then[, except in the case of a Special Payment Date with
respect to a Reinvestment/Early Payoff Period,] to the holders of
Class A-2 Certificates up to a maximum amount equal to the excess
of the outstanding principal amount of such Certificates over
unreimbursed Investor Charge-Offs allocated to such Certificates,
each on such date;]
(iv) on the second Distribution Date in the Special Payoff
Period with respect to any Special Payoff Class A-1 Certificate
[and on the first Special Payment Date with respect to any
Reinvestment/Early Payoff Period], amounts on deposit in the
Excess Funding Account and allocable to that Certificate [or each
Regular Payoff Certificate that is a Class A-1 Certificate] will
be distributed to the holder thereof up to a maximum amount
(taking into account any distribution with respect to that
Certificate pursuant to clause (a) (i) or (iii) above) equal to
the excess of the outstanding principal amount of such
Certificate over unreimbursed Investor Charge-offs allocated to
such Certificate, each on such date;)
[(c) On each Distribution Date on which there is an unpaid Class
A-1 Carry-over Amount or Class A-2 Carry-over Amount (or unpaid
interest thereon), the Servicer shall instruct the Trustee to
distribute to the Class A-1 Certificateholders or Class A-2
Certificateholders, as the case may be, such Carry-over Amount (or
unpaid interest thereon) to the extent funds are available therefor
first from amounts on deposit in the Yield Supplement Account and
second to the extent funds are available therefor after making all
required distributions and deposits with respect to the Series [199_-_]
Certificates as provided above under "Distributions from the Collection
Account[; Reserve Fund]; Yield Supplement Account".]
[(d) If, on the Final Payment Date, there is any Class A-1
Carry-over Amount or Class A-2 Carry-over Amount (after giving effect
to any distributions on such date pursuant to (a) through (c) above),
the Trustee shall distribute to the Class A-1 Certificateholders or
Class A-2 Certificateholders, as applicable (i) the amount on deposit
in the Reserve Fund and (ii) Available Seller's Collections on deposit
in the Collection Account which are available to satisfy such
Carry-over Amount on the Final Payment Date as described above under
"Distributions from the Collection Account; Reserve Fund; Yield
Supplement Account -- Interest Collections".]
All distributions shall be made to the Series [199 - ]
Certificateholders of record at the close of business on the day immediately
preceding the related Distribution Date (each such day a "Record Date"),
except that the final distribution with respect to any Series [199 - ]
Certificate will be made only upon surrender of such Series [199 - ]
Certificate.
Investor Charge-Offs
If the Available Subordinated Amount is reduced to zero and on any
Distribution Date the Deficiency Amount is greater than zero, the outstanding
principal balance of the Series [199_-_] Certificates will be reduced by the
Deficiency Amount, but not by more than the Investor Default Amount for such
Distribution Date (an "Investor Charge-Off"). Any such reduction shall be
applied to reduce the outstanding principal balance of the Class A-1
Certificates (a "Class A-1 Investor Charge-Off") and the Class A-2
Certificates (a "Class A-2 Investor Charge Off") pro rata based on the Class
A-1 Allocation Percentage and the Class A-2 Allocation Percentage,
respectively, in each case for the related Collection Period. Any reduction
in the outstanding principal balance of the Series [199_-_] Certificates will
have the effect of slowing or reducing the return of principal to the Series
[199_-_] Certificateholders. If the outstanding principal balance of the
Series [199_-_] Certificates has been reduced by any Investor Charge-Offs, it
will thereafter be increased on any Distribution Date (but not by an amount
in excess of the aggregate unreimbursed Investor Charge-Offs) by the sum of
(a) Series Allocable Miscellaneous Payments for such Distribution Date and
(b) the amount of Excess Servicing allocated and available for
S-47
<PAGE>
such purpose as described above. Any such increase shall be applied pro rata
between the Class A-1 Certificates and the Class A-2 Certificates as
described above.
[Reinvestment/Early Payoff Events
The Reinvestment/Early Payoff Events with respect to the Series
[199_-_] Certificates are the following:
[1. failure on the part of USA, the Servicer or CFC, as
applicable, (i) to make any payment or deposit required by the Pooling
and Servicing Agreement or the Receivables Purchase Agreement,
including but not limited to any Transfer Deposit Amount or Adjustment
Payment, on or before the date occurring two business days after the
date such payment or deposit is required to be made therein; or (ii) to
deliver a Distribution Date Statement on the date required under the
Pooling and Servicing Agreement (or within the applicable grace period
which will not exceed five business days); (iii) to comply with its
covenant not to create any lien on a Receivable; or (iv) to observe or
perform in any material respect any other covenants or agreements set
forth in the Pooling and Servicing Agreement or the Receivables
Purchase Agreement, which failure continues unremedied for a period of
45 days after written notice of such failure;
2. any representation or warranty made by the RPA Seller in the
Receivables Purchase Agreement or by USA in the Pooling and Servicing
Agreement or any information required to be given by USA to the Trustee
to identify the Accounts proves to have been incorrect in any material
respect when made and continues to be incorrect in any material respect
for a period of 60 days after written notice and as a result the
interests of the Certificateholders are materially and adversely
affected; provided, however, that a Reinvestment Event shall not be
deemed to occur thereunder if USA has repurchased the related
Receivables or all such Receivables, if applicable, during such period
in accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency or
receivership relating to any of CFC, or Chrysler;
4. a failure by USA to convey Receivables in Additional Accounts
to the Trust within five business days after the day on which it is
required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
5. on any Determination Date, the Available Subordinated Amount
for the next Distribution Date will be reduced to an amount less than
the Required Subordinated Amount on such Determination Date after
giving effect to the distributions to be made on the next Distribution
Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on such last
day;
8. on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods, is less than [ ]%;
9. the delivery by the Seller to the Trustee, of a notice stating
that the Seller will no longer continue to sell Receivables to the
Trust commencing on [ ] or any yearly anniversary thereof; provided,
however, that the Seller shall have delivered to the Trustee an opinion
of counsel to the effect that, following such discontinuation of sales
of Receivables, the Trust shall not become an investment company within
the meaning of the Investment Company Act of 1940, as amended;
10. on any Determination Date, the quotient obtained by dividing
(i) the sum of (x) the amount on deposit in the Yield Supplement
Account on the next Distribution Date, after giving effect to the
distribution to be made on such Distribution Date, and (y) the amount
on deposit in
S-48
<PAGE>
the Yield Supplement Account on the immediately preceding Distribution
Date, after giving effect to the distributions made on such
Distribution Date, by (ii) the sum of (A) the outstanding principal
balance of the Series [199_-_] Certificates on the next Distribution
Date, after giving effect to all distributions and payments to be made
on such Distribution Date, and (B) the outstanding principal balance of
the Series [199_-_] Certificates on the immediately preceding
Distribution Date, after giving effect to all distributions and
payments made on such Distribution Date, is less than [ ]%;
11. interest at the Class A-1 Certificate Rate is not paid on the
Class A-1 Certificates on any Distribution Date or interest at the
Class A-2 Certificate Rate is not paid on the Class A-2 Certificates on
any [Class A-2] Interest Payment Date;
12. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
13. [other].](1)
[In the case of any event described in clause [1, 2 or 6] above, a
Reinvestment/Early Payoff Event with respect to Series [199_-_] will be
deemed to have occurred only if, after the applicable grace period described
in such clauses, if any, either the Trustee or Series [199_-_]
Certificateholders holding Series [199_-_] Certificates evidencing more than
50% of the aggregate unpaid principal amount of the Series [199_-_]
Certificates by written notice to the Seller and the Servicer (and the
Trustee, if given by Certificateholders) declare that a Reinvestment/Early
Payoff Event has occurred as of the date of such notice. In the case of any
event described in clause [3, 4, 5, 7, 8, 9, 10, 11, 12 or 13] above, a
Reinvestment/Early Payoff Event with respect to Series [199_-_] will be
deemed to have occurred without any notice or other action on the part of the
Trustee or the Series [199_-_] Certificateholders immediately upon the
occurrence of such event.]
[Under certain limited circumstances, a Reinvestment/Early Payoff
Period which commences prior to the scheduled end of the Revolving Period may
terminate and the Series Revolving Period recommence. If a Reinvestment/Early
Payoff Period results from the failure by USA to convey Receivables in
Additional Accounts to the Trust, as described in paragraph 4 above, during
the Series Revolving Period and no other Reinvestment/Early Payoff Event or
Early Amortization Event [that has not been cured as described herein] has
occurred, the Reinvestment/Early Payoff Period resulting from such failure
will terminate and the Series Revolving Period will recommence (unless the
scheduled termination date of the Series Revolving Period has occurred) as of
the end of the first Collection Period during which the Seller would no
longer be required to convey Receivables to the Trust. In addition, the Class
A-1 Revolving Period with respect to any Class A-1 Certificate that
terminated as a result of such Reinvestment/Payoff Event will recommence. The
Seller may no longer be required to convey Receivables as described above as
a result of a reduction in the Invested Amount occurring due to principal
payments made in respect of the Series [199_-_] Certificates and the
Certificates of other outstanding Series during the Reinvestment/Early Payoff
Period or as a result of the subsequent addition of Receivables to the Trust.
Notwithstanding the foregoing, if any Reinvestment/Early Payoff Event occurs,
the Series Revolving Period and any Class A-1 Revolving Period that
terminated as a result of such Reinvestment/Payoff Event will recommence
following receipt of (i) written confirmation by each Rating Agency (other
than Moody's) that its rating of the Series [199_-_] Certificates will not be
withdrawn or lowered as a result of such recommencement and (ii) the consent
of Series [199_-_] Certificateholders holding Series [199_-_] Certificates
evidencing more than 50% of the aggregate unpaid principal amount of the
Series [199_-_] Certificates to such recommencement, provided that no other
Reinvestment/Early Payoff Event or Early Amortization Event [that has not
been cured as described herein] has occurred and the scheduled termination of
the Series Revolving Period has not occurred.]
[Describe other cures of Reinvestment/Early Payoff Events and partial
Reinvestment/Early Payoff Periods, if applicable.]
- ----------------
(1) Delete or modify, as appropriate.
S-49
<PAGE>
Early Amortization Events
[The Early Amortization Events with respect to the Series [199_-_]
Certificates will include each of the events so defined in the Prospectus,
plus the following:
1. failure on the part of USA, the Servicer or CFC, as
applicable, (i) to make any payment or deposit required by the Pooling
and Servicing Agreement or the Receivables Purchase Agreement,
including but not limited to any Transfer Deposit Amount or Adjustment
Payment, on or before the date occurring two business days after the
date such payment or deposit is required to be made therein; or (ii) to
deliver a Distribution Date Statement on the date required under the
Pooling and Servicing Agreement (or within the applicable grace period
which will not exceed five business days); (iii) to comply with its
covenant not to create any lien on a Receivable; or (iv) to observe or
perform in any material respect any other covenants or agreements set
forth in the Pooling and Servicing Agreement or the Receivables
Purchase Agreement, which failure continues unremedied for a period of
45 days after written notice of such failure;
2. any representation or warranty made by the RPA Seller in the
Receivables Purchase Agreement or by USA in the Pooling and Servicing
Agreement or any information required to be given by USA to the Trustee
to identify the Accounts proves to have been incorrect in any material
respect when made and continues to be incorrect in any material respect
for a period of 60 days after written notice and as a result the
interests of the Certificateholders are materially and adversely
affected; provided, however, that an Early Amortization Event shall not
be deemed to occur thereunder if USA has repurchased the related
Receivables or all such Receivables, if applicable, during such period
in accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency or
receivership relating to any of CFC or Chrysler;
4. a failure by USA to convey Receivables in Additional Accounts
to the Trust within five business days after the day on which it is
required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
5. on any Determination Date, the Available Subordinated Amount
for the next Distribution Date will be reduced to an amount less than
the Required Subordinated Amount on such Determination Date after
giving effect to the distributions to be made on the next Distribution
Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on such last
day;
8. on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods, is less than [ ]%
9. on any Determination Date, the quotient obtained by dividing
(i) the sum of (x) the amount on deposit in the Yield Supplement
Account on the next Distribution Date, after giving effect to the
distributions to be made on such Distribution Date, and (y) the amount
on deposit in the Yield Supplement Account on the immediately preceding
Distribution Date, after giving effect to the distributions made on
such Distribution Date, by (ii) the sum of (A) the outstanding
principal balance of the Series [199_-_] Certificates on the next
Distribution Date, after giving effect to all distributions and
payments to be made on such Distribution Date and (B) the outstanding
principal balance of the Series [199_-_] Certificates on the
immediately preceding Distribution Date, after giving effect to all
distributions and payments made on such Distribution Date, is less than
[ ];
10. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
S-50
<PAGE>
11. [other].](2)
[In the case of any event described in clause [1, 2 or 6] above, an
Early Amortization Event with respect to Series [199_-_] will be deemed to
have occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given by
Certificateholders) declare that an Early Amortization Event has occurred as
of the date of such notice. In the case of any Early Amortization Event
described in the Prospectus or any event described in clause [3, 4, 5, 7, 8,
9, 10 or 11] above, an Early Amortization Event with respect to Series
[199_-_] will be deemed to have occurred without any notice or other action
on the part of the Trustee or the Series [199_-_] Certificateholders
immediately upon the occurrence of such event.]
[Under certain limited circumstances, an Early Amortization Period
which commences prior to the scheduled end of the Series Revolving Period may
terminate and the Series Revolving Period recommence. If an Early
Amortization Period results from the failure by USA to convey Receivables in
Additional Accounts to the Trust, as described in paragraph 4 above, during
the Series Revolving Period and no other [Reinvestment/Early Payoff Event or]
Early Amortization Event [that has not been cured as described herein] has
occurred, the Early Amortization Period resulting from such failure will
terminate and the Series Revolving Period will recommence (unless the
scheduled termination date of the Series Revolving Period has occurred) as of
the end of the first Collection Period during which the Seller would no
longer be required to convey Receivables to the Trust. In addition, the Class
A-1 Revolving Period with respect to any Class A-1 Certificate that
terminated as a result of such Early Amortization Event will recommence. The
Seller may no longer be required to convey Receivables as described above as
a result of a reduction in the Invested Amount occurring due to principal
payments made in respect of the Series [199_-_] Certificates and the
Certificates of other outstanding Series during the Early Amortization Period
or as a result of the subsequent addition of Receivables to the Trust.
Notwithstanding the foregoing, if any Early Amortization Event occurs, the
Series Revolving Period and any Class A-1 Revolving Period that terminated as
a result of such Early Amortization Event will recommence following receipt
of (i) written confirmation by each Rating Agency (other than Moody') that
its rating of the Series [199_-_] Certificates will not be withdrawn or
lowered as a result of such recommencement and (ii) the consent of Series
[199_-_] Certificateholders holding Series [199_-_] Certificates evidencing
more than 50% of the aggregate unpaid principal amount of the Series [199_-_]
Certificates to such recommencement, provided that no other Early
Amortization Event [or Reinvestment/Early Payoff Event] [that has not been
cured as described herein] has occurred and the scheduled termination of the
Series Revolving Period has not occurred.]
[Describe other cures of Early Amortization Events, if applicable.]
If the portion of proceeds of the sale of the Receivables following the
occurrence of an insolvency event with respect to USA or a breach by USA of
its covenant not to create any lien on any Receivable, as described in the
Prospectus under "Description of the Certificates -- Reinvestment Events and
Early Amortization Events", allocated to the Series [199_-_]
Certificateholders' Interest and proceeds of any collections on the
Receivables in the Collection Account allocable to the Series [199_-_]
Certificateholders' Interest are not sufficient to pay the aggregate unpaid
principal amount of the Series [199_-_] Certificates in full plus accrued and
unpaid interest thereon, such amounts will be paid to the holders of the
Class A-1 Certificates and the Class A-2 Certificates pro rata based on the
Class A-1 Allocation Percentage and the Class A-2 Percentage, respectively,
and the Series [199_-_] Certificateholders will incur a loss.
Series Termination
The last payment of principal and interest on the Series [199_-_]
Certificates will be due and payable no later than the [ ] Distribution Date
(the "Series Termination Date"). In the event that the aggregate Invested
Amount is greater than zero on the Series Termination Date (after
- ----------------
(2) Delete or modify, as appropriate.
S-51
<PAGE>
giving effect to deposits and distributions otherwise to be made on such
Termination Date), the Trustee will sell or cause to be sold (and apply the
proceeds to the extent necessary to pay such remaining amounts to all Series
[199_-_] Certificateholders) an interest in the Receivables or certain
Receivables, as specified in the Pooling and Servicing Agreement, in an
amount equal to (a) 110% of the aggregate Invested Amount on such Series
Termination Date (after giving effect to such deposits and distributions) and
(b) the Available Subordinated Amount on the preceding Determination Date
(after giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date following such Determination
Date); provided, however, that in no event shall such amount exceed the
Series Allocation Percentage (for the Collection Period in which such Series
Termination Date occurs) of Receivables on such Series Termination Date. The
net proceeds of such sale and any collections on the Receivables will be paid
pro rata to Class A-1 Certificateholders and the Class A-2 Certificateholders
based on the Class A-1 Allocation Percentage and the Class A-2 Allocation
Percentage, respectively, on the Series Termination Date as the final payment
of the Series [199_-_] Certificates.
In the event that principal of any Class A-1 Certificate will not be
paid in full by the eleventh Distribution Date after the commencement of the
related Special Payoff Period or the eleventh Distribution Date following the
commencement of the [Accumulation Period] [Controlled Amortization Period] or
an Early Amortization Period [or Reinvestment/Early Payoff Period], the
holder of such Class A-1 Certificate will have the option to direct the
Trustee to sell on such Distribution Date such Certificateholder's pro rata
share of the Receivables and apply proceeds thereof to pay principal of such
holder's Class A-1 Certificate on such Distribution Date.
Reports
On each Distribution Date (including each Distribution Date that
corresponds to the Expected Payment Date or any Special Payment Date),
commencing with the initial Distribution Date, the Trustee will forward to
each Series [199_-_] Certificateholder of record a statement (the
"Distribution Date Statement") prepared by the Servicer setting forth the
following information (which, in the case of (c), (d) and (e) below, will be
stated on the basis of an original principal amount of $1,000 per Series
[199_-_] Certificate if the [Accumulation Period] [Controlled Amortization
Period] or an Early Amortization Period [or Reinvestment/Early Payoff Period]
has commenced): (a) the aggregate amount of collections, the aggregate amount
of Interest Collections and the aggregate amount of Principal Collections
processed during the immediately preceding Collection Period; (b) the Series
Allocation Percentage, the Floating Allocation Percentage, the Fixed
Allocation Percentage, the Certificate Principal Percentages, the Class A-1
Allocation Percentage and the Class A-2 Allocation Percentage for such
Collection Period; (c) the total amount, if any, distributed on the Class A-1
Certificates and the Class A-2 Certificates; (d) the amount of such
distribution allocable to principal on each Class of Series
[199_-_] Certificates; (e) the amount of such distribution allocable to
interest on each Class of the Series [199_-_] Certificates; (f) the Investor
Default Amount for such Distribution Date; (g) the Draw Amount, if any, for
such Collection Period; (h) the amount of the Class A-1 Investor Charge-Offs
and the Class A-2 Investor Charge-Offs and the amounts of reimbursements
thereof for such Collection Period; (i) the amount of the Monthly Servicing
Fee for such Collection Period; [(j) the Controlled Distribution Amount for
the following Distribution Date;] (k) the Class A-1 Invested Amount and the
Class A-2 Invested Amount[, the Excess Funding Amount] and the outstanding
principal balance of the Series [199_-_] Certificates for such Distribution
Date (after giving effect to all distributions which will occur on such
Distribution Date); (1) the "pool factor" for the Series [199_-_]
Certificates as of the Determination Date with respect to such Distribution
Date (consisting of an eleven-digit decimal expressing the Invested Amount as
of such Determination Date (determined after taking into account any
reduction in the Invested Amount which will occur on such Distribution Date)
as a proportion of the Initial Invested Amount); (m) the Available
Subordinated Amount for such Determination Date; [(n) the Reserve Fund
balance for such date;] (o) [the Principal Funding Account Balance,] [the
Interest Funding Account Balance] and [the Yield Supplement Account balance]
with respect to such date; [(p) during any Reinvestment/Early Payoff
S-52
<PAGE>
Period, information with respect to the Eligible Investments in the accounts
for the Series [199_-_] Certificates;] and (q) [other] [; provided, that
after the Fully Reinvested Date, [unless the Series Revolving Period has
recommenced,] such statement will not include the information in clauses
[(a), (b), (f), (g), (h), (i), (k) or (m) above].
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement"), the Seller has agreed to sell to
the underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Seller, the principal
amount of the Class A-1 Certificates and the Class A-2 Certificates set forth
opposite its name:
<TABLE>
<CAPTION>
Class A-1 Class A-2
Underwriters Certificates Certificates
------------ ------------ ------------
<S> <C> <C>
[ ] ........................................ $[ ] $[ ]
[ ] ........................................ [ ] [ ]
--------- ---------
Total ......................................... $[ ] $[ ]
========= =========
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all the Series
[199_-_] Certificates offered hereby if any of the Series [199_-_]
Certificates are purchased.
The Seller has been advised by the Underwriters that the Underwriters
propose to initially offer the Class A-1 Certificates to the public at the
price set forth on the cover page of this Prospectus Supplement, and to
certain dealers at such price less a concession not in excess of [ ]% of the
Class A-1 Certificate denominations. The Underwriters may allow and such
dealers may reallow a concession not in excess of [ ]% of the Class A-1
Certificate denominations to certain other dealers. After the initial public
offering, the public offering price and such concessions may be changed.
The Seller has been advised by the Underwriters that the Underwriters
propose to initially offer the Class A-2 Certificates to the public at the
price set forth on the cover page of this Prospectus Supplement, and to
certain dealers at such price less a concession not in excess of [ ]% of the
Class A-2 Certificate denominations. The Underwriters may allow and such
dealers may reallow a concession not in excess of [ ]% of the Class A-2
Certificate denominations to certain other dealers. After the initial public
offering, the public offering price and such concessions may be changed.
[Under the Remarketing Agreement, the Underwriters have agreed to pay
the Seller, on the first business day in The City of New York following the
Distribution Dates occurring in [ ], [ ] and [ ] an amount equal to [ ]%, [
]% and [ ]%, respectively, of the aggregate initial principal amount of the
Class A-1 Certificates, if any, in respect of which the automatic extension
of the Class A-1 Revolving Period has been terminated since the Distribution
Date occurring in [ ] of the immediately preceding year. No amount shall be
payable in respect of a Class A-1 Certificate for which the first
distribution of principal is due on the Distribution Date occurring in [ ] or
after an Early Amortization Event [or Reinvestment/Early Payoff Event].]
The Underwriting Agreement provides that USA and CFC will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or contribute to payments which the Underwriters may be
required to make in respect thereof.
[In the ordinary course of their businesses, the Underwriters and their
respective affiliates have engaged and may engage in investment banking
transactions with the Seller and its affiliates.]
The Underwriter intends to make a secondary market in the Series [199 -
] Certificates, but has no obligation to do so. There can be no assurance
that a secondary market for the Series [199 - ] Certificates will develop or,
if it does develop, that it will continue or that it will provide holders of
the Series [199 - ] Certificates with a sufficient level of liquidity of, or
trading markets for, the Series [199 - ] Certificates.
S-53
<PAGE>
In order to facilitate the offering of the Series [199_-_]
Certificates, the Underwriter may engage in transactions that stabilize,
maintain or otherwise affect the price of the Series [199__-_] Certificates.
Specifically, the Underwriter may overallot in connection with the offering,
creating a short position in the Series [199_-_] Certificates for its own
account. In addition, to cover overallotments or to stabilize the price of
the Series [199_-_] Certificates, the Underwriter may bid for, and purchase,
the Series [199_-_] Certificates in the open market. Any of these activities
may stabilize or maintain the market price of the [199_-_ ] Certificates
above independent market levels. The Underwriter is not required to engage in
these activities, and may end any of these activities at any time.
LEGAL MATTERS
Certain legal matters relating to the Series [199_-_] Certificates will
be passed upon for USA by Christopher A. Taravella, Esq., Vice President and
General Counsel of Chrysler Financial Corporation, and for the Underwriter by
Cravath, Swaine & Moore, New York, New York. Certain Federal income tax and
ERISA matters will be passed upon for USA and the Trust by Cravath, Swaine &
Moore. In addition to representing the Underwriter, Cravath, Swaine & Moore
from time to time represents Chrysler Financial Corporation and its
affiliates. See "Legal Matters" in the Prospectus.
S-54
<PAGE>
INDEX OF PRINCIPAL TERMS
<TABLE>
<CAPTION>
Term Page
---- ----
<S> <C>
Accounts .......................................................... 1
Accumulation Period Commencement Date ............................. 7
Accumulation Period Length ........................................ 6
Assets Receivables Rate ........................................... 27
Available Certificateholder Principal Collections ................. 34
Available Credit Enhancement Amount ............................... 45
Available Negative Carry Subordinated Amount ...................... 38
Available Seller's Collections .................................... 36
Available Seller's Interest Collections ........................... 36
Available Seller's Principal Collections .......................... 36
Certificate Principal Percentage .................................. 34
Certificateholder Interest Collections ............................ 40
Class A-1 Adjustment Date ......................................... 2
Class A-1 Allocation Percentage ................................... 40
Class A-1 Carry-over Amount ....................................... 27
Class A-1 Certificate Rate ........................................ 1
Class A-1 Certificates ............................................ 1
Class A-1 Expected Payment Date ................................... 3
Class A-1 Index ................................................... 1
Class A-1 Initial Invested Amount ................................. 34
Class A-1 Interest Payment Date ................................... 1
Class A-1 Interest Period ......................................... 2
Class A-1 Invested Amount ......................................... 33
Class A-1 Investor Charge-Off ..................................... 47
Class A-1 Monthly Interest ........................................ 26
Class A-1 Principal Shortfalls .................................... 35
Class A-1 Revolving Period ........................................ 4
Class A-2 Adjustment Date ......................................... 2
Class A-2 Allocation Percentage ................................... 40
Class A-2 Carry-over Amount ....................................... 27
Class A-2 Certificate Rate ........................................ 1
Class A-2 Certificates ............................................ 1
Class A-2 Expected Payment Date ................................... 3
Class A-2 Invested Amount ......................................... 33
Class A-2 Index ................................................... 1
Class A-2 Initial Invested Amount ................................. 34
Class A-2 Interest Payment Date ................................... 1
Class A-2 Interest Period ......................................... 2
Class A-2 Investor Charge-Off ..................................... 47
Class A-2 Monthly Interest ........................................ 26
Controlled Accumulation Amount .................................... 44
Controlled Amortization Amount .................................... 44
Controlled Deposit Amount ......................................... 44
Controlled Distribution Amount .................................... 44
Deficiency Amount ................................................. 37
Distribution Date ................................................. 1
Distribution Date Statement ....................................... 52
Draw Amount ....................................................... 40
S-55
<PAGE>
<CAPTION>
Term Page
---- ----
<S> <C>
Early Amortization Period ......................................... 8
Electing Certificateholder ........................................ 4
Election Notice ................................................... 4
Election Period ................................................... 4
Enhancement ....................................................... 14
Enhancement Provider .............................................. 45
Excess Funding Account ............................................ 3
Excess Principal Collections ...................................... 35
Excess Reserve Fund Required Amount ............................... 41
Excess Seller's Percentage ........................................ 36
Excluded Dealers .................................................. 21
Excluded Receivables .............................................. 21
Expected Payment Date ............................................. 1
Final Payment Date ................................................ 37
Fixed Allocation Percentage ....................................... 33
Floating Allocation Percentage .................................... 33
Incremental Subordinated Amount ................................... 10
Initial Invested Amount ........................................... 34
Interest Funding Account .......................................... 4
Interest Funding Account Balance .................................. 45
Invested Amount ................................................... 33
Investment Proceeds ............................................... 40
Investor Charge-Off ............................................... 47
Monthly Interest .................................................. 27
Negative Carry Required Amount .................................... 38
Nonprincipal Period ............................................... 12
Principal Commencement Date ....................................... 7
Principal Funding Account ......................................... 45
Principal Funding Account Balance ................................. 46
Principal Shortfalls .............................................. 35
Purchased Class A-1 Certificate ................................... 81
Regular Class A-1/A-2 Available Principal Collections ............. 44
Receivables ....................................................... 1
Regular Class A-1/A-2 Monthly Principal ........................... 44
Regular Class A-1/A-2 Principal Shortfalls ........................ 35
Regular Class A-1 Monthly Principal ............................... 44
Regular Class A-2 Monthly Principal ............................... 44
Regular Payoff Certificates ....................................... 13
Reinvestment/Early Payoff Event ................................... 7
Reinvestment/Early Payoff Period .................................. 7
Remarketing Agreement ............................................. 25
Remarketing Broker -- Dealer ...................................... 1
Remarketing Coordinator ........................................... 31
Remarketing Period ................................................ 4
Required Negative Carry Subordinated Amount ....................... 38
Required Participation Percentage ................................. 11
Required Subordinated Amount ...................................... 10
Reserve Fund ...................................................... 41
Reserve Fund Deposit Amount ....................................... 41
Reserve Fund Required Amount ...................................... 41
Seller ............................................................ 1
S-56
<PAGE>
<CAPTION>
Term Page
---- ----
<S> <C>
Seller's Interest ................................................. 1
Seller's Percentage ............................................... 36
Series ............................................................ 1
Series 199_-_ Certificates ........................................ 1
Series 199_-_ Termination Date .................................... 15
Series Cut-Off Date ............................................... 15
Series Excess Principal Collections ............................... 35
Series Issuance Date .............................................. 15
Series Revolving Period ........................................... 6
Series Supplement ................................................. 25
Series Termination Date ........................................... 51
Servicer .......................................................... 1
Servicing Fee Rate ................................................ 14
Settlement Date ................................................... 31
Special Class A-1 Available Principal Collections ................. 44
Special Class A-1 Monthly Principal ............................... 44
Special Class A-1/A-2 Monthly Available Principal Collections ..... 44
Special Payment Date .............................................. 29
Special Payoff Class A-1 Certificate .............................. 13
Special Payoff Period ............................................. 5
Subordinated Percentage ........................................... 11
Trust ............................................................. 1
Underwriters ...................................................... 53
Underwriting Agreement ............................................ 53
USA ............................................................... 1
Yield Supplement Account .......................................... 3
Yield Supplement Account Deposit Amount ........................... 42
Yield Supplement Account Required Amount .......................... 42
</TABLE>
S-57
<PAGE>
ANNEX I
OUTSTANDING SERIES OF INVESTOR CERTIFICATES
[to be provided]
A-1
<PAGE>
EXHIBIT A
ELECTION NOTICE
[Part A. To be completed by the Class A-1 Certificateholder and
delivered to its Participant or Indirect Participant, as applicable, with a
copy to the Remarketing Coordinator.] [Revise, as necessary to reflect CEDEL
and Euroclear settlement]
[Name and address of Participant or Indirect Participant] with a copy to:
[ ]
[ ]
[ ]
Attention: CARCO Auto Loan Master Trust Series [199_-_], Class A-1 Remarketing
Coordinator
(Facsimile: [ ])
(Telephone: [ ])
Gentlemen:
Reference is made to the Pooling and Servicing Agreement dated as of
May 31, 1991, as assigned by Chrysler Auto Receivables Company ("CARCO") to
U.S. Auto Receivables Company (the "Seller") on August 8, 1991 (as assigned
and as supplemented and amended from time to time, the "P&S"), among CARCO,
the Seller, Chrysler Credit Corporation, which has been succeeded by Chrysler
Financial Corporation, as Servicer, and Manufacturers and Traders Trust
Company, which has been succeeded by The Bank of New York, as Trustee and the
Series [199_-_] Supplement to the P&S dated as of [ , 199_] (the
"Supplement"), among the Seller, the Servicer and the Trustee (the P&S and
the Supplement taken together referred to herein as the "Pooling and
Servicing Agreement") pursuant to which $[ ] aggregate principal amount of
Class A-1 Floating Rate Money Market Extendible Certificates, Series [199_-_]
(the "Certificates") have been issued. Capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Pooling and
Servicing Agreement.
The undersigned, the beneficial owner of $ principal amount of
Certificates (bearing CUSIP Number ) (the "Subject Certificates") hereby
notifies you that it desires to terminate the Class A-1 Revolving Period with
respect to the Subject Certificates in accordance with
the terms of the Pooling and Servicing Agreement.
The undersigned hereby irrevocably authorizes and instructs you, The
Depository Trust Company ("DTC"), Cede & Co., the Remarketing Coordinator,
the Trustee and all DTC's participating organizations ("Participants") or
other persons that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants"), to
transfer any or all of the Subject Certificates to the Remarketing
Broker-Dealer in the event the Remarketing Broker-Dealer elects, at its
option, to purchase such Subject Certificates against delivery of the
purchase price for such Subject Certificates, which purchase price shall be
equal to the unpaid principal amount thereof.
The undersigned hereby irrevocably authorizes and instructs you, DTC,
Cede & Co., the Remarketing Coordinator, the Trustee and all Participants or
Indirect Participants in the DTC system on receipt of notice from the
Remarketing Coordinator that any or all of the Subject Certificates will not
be purchased by the Remarketing Broker-Dealer, to take or cause to be taken
any and all actions necessary to cause the Class A-1 Revolving Period for the
Subject Certificates to be terminated in accordance with DTC's procedures.
We agree that, during the applicable period as described in the Pooling
and Servicing Agreement, ownership of Certificates shall be represented by
one or more global certificates registered in the name of the applicable
securities depository or its nominee, that we will not be entitled to receive
any certificate representing the Certificates and that our ownership of any
Certificates will be maintained in book entry form by the securities
depository for the account of our agent member, which in turn will
E-1
<PAGE>
maintain records of our beneficial ownership. We further agree that we will
not sell, assign, transfer, convey or otherwise dispose of the subject
Certificates at any time following the transmittal of this Election Notice,
except (i) pursuant to the Remarketing Procedures or (ii) following receipt
by us of notice that the Subject Certificates will not be purchased by the
Remarketing Broker-Dealer. We authorize and instruct our agent member to
disclose to the applicable securities depository such information concerning
our beneficial ownership of Certificates as such securities depository shall
request.
Very truly yours,
[Name of Certificate Owner]
[Part B. To be completed by the Participant or Indirect Participant, as
applicable, and delivered to the Remarketing Coordinator.]
On behalf of the above-signed Certificate Owner, we hereby certify that
at the time this Election Notice is delivered to you we hold in our name on
behalf of such Certificate Owner a settled position in the Subject
Certificates. We acknowledge that this Election Notice, completed as required
by the Certificate Owner must be received by you at 3:00 p.m. New York City
time on the Business Day following the receipt of this Election Notice by us.
We hereby certify that we are a Participant or an Indirect Participant
of DTC with, in the case of a Participant, the present right to use and
receive DTC's services or, in the case of an Indirect Participant, to
exercise such rights through a Participant.
We hereby agree that: (i) if notified by you that any or all of the
Subject Certificates will be remarketed by the Remarketing Broker-Dealer, we
will take or cause to be taken all actions necessary to cause the transfer of
any or all of the Subject Certificates through DTC to the Remarketing
Broker-Dealer against delivery of the purchase price for such Subject
Certificates, which purchase price shall be equal to the unpaid principal
amount thereof, and (ii) if we receive notice from you that such Subject
Certificates will not be purchased, we will promptly take all actions
necessary, in accordance with DTC's procedures to cause the Class A-1
Revolving Period with respect to such Subject Certificates to be terminated.
We hereby certify that the beneficial holder of the Subject Certificates
is: [Name and address of Certificate Owner].
Any notice from you to us regarding this matter should be delivered to:
[Name of Contact]
Facsimile No.: [Facsimile No.]
Telephone Number: [Telephone No.]
Dated: , 19
[Name of DTC Participant or
Indirect Participant] DTC
Number:
by _____________________________
Authorized Signature
[Address]
Telephone Number: [ ]
Facsimile Number: [ ]
With a copy to:
E-2
<PAGE>
[ ]
Attention: CARCO Auto Loan Master Trust, Series [199_-_]
(Facsimile: [ ])
(Telephone: [ ])
E-3
<PAGE>
============================================================================
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus and,
if given or made, such information or representations must not be relied upon
as having been authorized by the Seller or the Underwriters. Neither this
Prospectus Supplement nor the accompanying Prospectus constitutes an offer or
solicitation by anyone in any state in which such offer or solicitation is
not authorized or in which the person making such offer or solicitation is
not qualified to do so or to anyone to whom it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus Supplement or the
accompanying Prospectus, nor any sale made hereunder or thereunder shall,
under any circumstances, create any implication that there has been no change
in the affairs of the Seller since the date hereof or thereof or that the
information contained or incorporated by reference herein or therein is
correct as of any time subsequent to its date.
---------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
Prospectus Supplement
<S> <C>
Summary of Series Terms ............................. S-1
Risk Factors ........................................ S-16
Use of Proceeds ..................................... S-20
The Dealer Floorplan Financing Business ............. S-20
The Accounts ........................................ S-21
Chrysler Financial Corporation ...................... S-24
Maturity and Principal Payment Considerations ....... S-24
Series Provisions ................................... S-25
Underwriting ........................................ S-53
Legal Matters ....................................... S-54
Index of Principal Terms ............................ S-55
Annex I ............................................. A-1
Exhibit A ........................................... E-1
Prospectus
Available Information ............................... 2
Reports to Certificateholders ....................... 2
Incorporation of Certain Documents by Reference ..... 2
Prospectus Summary .................................. 3
Risk Factors ........................................ 16
U.S. Auto Receivables Company and the Trust ......... 19
Use of Proceeds ..................................... 21
The Dealer Floorplan Financing Business ............. 21
The Accounts ........................................ 25
Chrysler Financial Corporation and Chrysler Credit
Corporation ....................................... 26
Description of the Certificates ..................... 27
Description of the Receivables Purchase Agreement ... 57
Certain Legal Aspects of the Receivables ............ 58
Certain Tax Matters ................................. 61
ERISA Considerations ................................ 65
Experts ............................................. 66
Plan of Distribution ................................ 66
Legal Matters ....................................... 67
Index of Principal Terms ............................ 68
Annex I .............................................
</TABLE>
---------
Until [ ], 199[ ] (90 days after the date of this Prospectus Supplement),
all dealers effecting transactions in the Series [199_-_] 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.
============================================================================
<PAGE>
====================================
CARCO
Auto Loan Master Trust
$[ ]
Auto Loan Asset
Backed Certificates, Series
[199_-_]
$[ ] Floating Rate Class A-1
Money Market Extendible
Certificates,
Series [199_-_]
$[ ] [Floating Rate] [ %]
Class A-2
[Medium Term] Certificates,
Series [199_-_]
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER FINANCIAL CORPORATION
Servicer
PROSPECTUS SUPPLEMENT
[Underwriters]
====================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
[Senior/Subordinated Series]
Subject to Completion
Dated [ ], 1997
PROSPECTUS SUPPLEMENT
To Prospectus dated , 1997
$
CARCO Auto Loan Master Trust
Auto Loan
Asset Backed Certificates, Series [199_-_]
$[ ] [Floating Rate] [ %] Class A Certificates,
Series [199_-_]
$[ ] [Floating Rate] [ %] Class B Certificates,
Series [199_-_]
U.S. AUTO RECEIVABLES COMPANY, Seller
CHRYSLER FINANCIAL CORPORATION, Servicer
The Auto Loan Asset Backed Certificates, Series [199_-_] (the "Series
[199_-_] Certificates") offered hereby evidence undivided interests in
certain assets of the CARCO Auto Loan Master Trust (the "Trust") created
pursuant to a Pooling and Servicing Agreement among U.S. Auto Receivables
Company ("USA" or the "Seller"), Chrysler Financial Corporation, as servicer
("CFC" or the "Servicer"), and The Bank of New York, as trustee. The Series
[199_-_] Certificates will be issued in two Classes, the [Floating Rate] [ %]
Class A Certificates, Series [199_-_] (the "Class A Certificates"), and the
[Floating Rate] [ %] Class B Certificates, Series [199_-_] (the "Class B
Certificates"). The Trust assets include wholesale receivables (the
"Receivables") generated from time to time in a portfolio of revolving
financing arrangements (the "Accounts") with automobile dealers to finance
their automobile and light duty truck inventory and collections on the
Receivables. Certain assets of the Trust will be allocated to Series [199_-_]
Certificateholders, including the right to receive a varying percentage of
each month's collections with respect to the Receivables at the times and in
the manner described herein. The Seller will own the remaining interest in
the Trust not represented by the Series [199_-_] Certificates or the
Certificates of any other Series issued by the Trust (the "Seller's
Interest"). The Trust previously has issued [ ] other Series of Certificates
(each a "Series"). From time to time, subject to certain conditions, the
Seller may offer other Series of Certificates, which may have terms
significantly different from the terms of the Series [199_-_] Certificates.
The issuance of additional Series of Certificates may impact the timing of
payments received by Series [199_-_] Certificateholders.
Interest will accrue on the Class A Certificates at the rate of [[ ]%
per annum] [[ ]% [above] [below] [times] [ ] (the "Class A Index") prevailing
on the Class A Adjustment Date (as defined herein) [, subject to certain
limitations described herein]] (the "Class A Certificate Rate"), and on the
Class B Certificates at the rate of [[ ]% per annum] [[ ]% [above] [below]
[times] [ ] (the "Class B Index") prevailing on the Class B Adjustment Date
(as defined herein) [, subject to certain limitations described herein]](the
"Class B Certificate Rate"). Interest with respect to the Class A
Certificates is payable on the [ ] day of each [month] [quarter] [other] (or,
if such day is not a business day, on the next succeeding business day)
(each, [a "Distribution Date" and] a "[Class A] Interest Payment Date"),
commencing on [ ,] 199[ ], and interest with respect to the Class B
Certificates is payable on [each Interest Payment Date] [the [ ] day of each
[month] [quarter] [other] (or, if such day is not a business day, on the next
succeeding business day) (each, [a "Distribution Date" and] a "Class B
Interest Payment Date")].
Principal with respect to the Class A Certificates [is scheduled to be
paid on [ ]] [is scheduled to be distributed on each Distribution Date
commencing on the [ ] Distribution Date and ending on the Distribution
Date in [ ]] but may be paid earlier or later under certain
circumstances described herein. Principal with respect to the Class B
Certificates [is scheduled to be paid on [ ]] [is scheduled to be distributed
on each Distribution Date [commencing on the Distribution Date in [ , ]]
[commencing with the Distribution Date following the Distribution Date on
which the Class A Certificates have been paid in full] [other] and ending on
the Distribution Date in [ ]] but may be paid earlier or later under certain
circumstances described herein. [In addition, no principal will be paid with
respect to the Class B Certificates until [principal of the Class A
Certificates has been paid in full] [principal payments then due in respect
of the Class A Certificates have been made].]
The fractional undivided interest in the Trust represented by the Class
B Certificates will be subordinated to the extent necessary to fund payments
with respect to the Class A Certificates to the extent described herein.
The Seller's Interest will be subordinated to the rights of the Series
[199_-_] Certificateholders to the limited extent of the Available
Subordinated Amount as described herein. [Describe other Enhancement, if any,
and any additional subordination of the Seller's Interest, if applicable.]
Prospective investors should consider the factors set forth under "Risk
Factors" commencing on page [ ] herein and on page [ ] in the Prospectus.
THE SERIES [199_-_] CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE TRUST
ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF THE SELLER, THE
SERVICER OR ANY AFFILIATE THEREOF. NEITHER THE SERIES [199_-_]
CERTIFICATES NOR THE RECEIVABLES ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=====================================================================================================
Price to Underwriting Proceeds to the
Public(1) Discount Seller(1)(2)
-------- ------------ ---------------
<S> <C> <C> <C>
Per Class A Certificate ........................... % % %
Per Class B Certificate ........................... % % %
Total ............................................. $ $ $
<FN>
==============================================================================
(1) Plus accrued interest, if any, at the applicable Certificate Rate from
[ ], 199[ ].
(2) Before deducting expenses, estimated to be $[ ].
</TABLE>
The Series [199_-_] Certificates are offered subject to prior sale, and
subject to the Underwriters' right to reject orders in whole or in part. It
is expected that delivery of the Series [199_-_] Certificates will be made in
book-entry form only through the Same Day Funds Settlement System of The
Depository Trust Company [, CEDEL S.A. and the Euroclear System] on or about
, 199 .
[Underwriters]
The date of this Prospectus Supplement is , 199 .
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
SERIES [199 - ] CERTIFICATES. SPECIFICALLY, THE UNDERWRITER MAY OVERALLOT IN
CONNECTION WITH THE OFFERING, AND MAY BID FOR, AND PURCHASE, THE SERIES
[199 - ] CERTIFICATES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING".
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION WITH
RESPECT TO THE OFFERING OF THE SERIES [199 - ] CERTIFICATES. ADDITIONAL
INFORMATION IS CONTAINED IN THE PROSPECTUS AND PURCHASERS ARE URGED TO READ
BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF THE
SERIES [199 - ] CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER HAS
RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
<PAGE>
SUMMARY OF SERIES TERMS
This summary of Series Terms sets forth and defines specific terms of
the Series [199_-_] Certificates offered in this Prospectus Supplement and
the Prospectus, but is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus Supplement and in the
Prospectus. Reference is made to the Index of Principal Terms in each of this
Prospectus Supplement and the Prospectus for the location herein and therein
of the definitions of certain capitalized terms used herein. Certain
capitalized terms used but not defined herein have the meanings assigned to
such terms in the Prospectus.
Title of Securities .... Auto Loan Asset Backed Certificates, Series [199_-_]
(the "Series [199_-_] Certificates"). The [Series
[199_-_] Certificates will be issued in two
Classes: the [Floating Rate] [ %] Class A
Certificates, Series [199_-_] (the "Class A
Certificates"), and the [Floating Rate] [ %] Class
B Certificates, Series [199_-_] (the "Class B
Certificates").
The Series [199_-_]
Invested Amount ..... The aggregate Series [199_-_] Invested Amount is
expected to be approximately $[ ] on the Series
Issuance Date (based on information as of the
Series Cut-Off Date) and represents the principal
amount of the Series [199_-_] Certificates invested
in Receivables as of the Series Issuance Date. [The
Invested Amount is subject to increase to the
extent amounts are withdrawn from the Excess
Funding Account and paid to the Seller. The Seller
expects, although there can be no assurance, that
the Invested Amount of the Series [199_-_]
Certificates will equal the outstanding principal
balance of the Series [199_-_] Certificates within
[ ] months of the Series Issuance Date.] [The
Invested Amount is subject to decrease to the
extent funds are deposited in the Excess Funding
Account and, subsequently, to increase to the
extent amounts are withdrawn from the Excess
Funding Account and paid to the Seller. The
Invested Amount is also subject to reduction during
[the [Class A] [Class B] Accumulation Period] [,
the [Class A] [Class B] Controlled Amortization
Period], any Early Amortization Period [and any
Reinvestment Period] and at such other times as
deposits are made to the Excess Funding Account in
connection with the payment of Receivables.] Any
such increases or decreases in the aggregate
Invested Amount will be allocated between the Class
A Certificates and the Class B [ ] Certificates
[pro rata based on the Class A Allocation
Percentage and the Class B Allocation Percentage,
respectively, for the related Collection Period]
[other].
The Class B Invested Amount will [also] be reduced
in certain circumstances as a result of (i) the
allocation to the Class B Certificates of Defaulted
Amounts otherwise allocable to the Class A
Certificates and (ii) the reallocation of Principal
Collections otherwise allocable to the Class B
Certificates to fund certain payments in respect of
the Class A Certificates. Any such reductions in
the Class B Invested Amount may be reimbursed out
of Excess Servicing and certain other amounts as
described herein.
Interest ............... Interest on the principal balance of the Class A
Certificates will accrue at the Class A Certificate
Rate and will be payable to Class A
Certificateholders on the [ ] day of each [month]
[quarter] [other] (or, if such day is not a
business day, on the next succeeding business
S-1
<PAGE>
day) (each, [a "Distribution Date" and] [a "[Class
A] Interest Payment Date"), commencing [ ],
19[ ][, provided that, during any Early
Amortization Period, interest will be distributed
to the Class A Certificateholders on each
Distribution Date, commencing on the first
Distribution Date following the occurrence of an
Early Amortization Event. "Distribution Date" shall
mean the [ ] day of each month (or, if such
date is not a business day, the next succeeding
business day). A portion of Class A
Certificateholder Interest Collections and certain
other amounts will be deposited each month into a
trust account (the "Class A Interest Funding
Account") and used to make interest payments to the
Class A Certificateholders on each [Class A]
Interest Payment Date or, during Early Amortization
Period, each Distribution Date. Interest on the
principal balance of the Class B Certificates will
accrue at the Class B Certificate Rate and will be
payable to Class B Certificateholders on [each
Interest Payment Date] [the [ ] day of each [month]
[quarter] [other] (or, if such day is not a
business day, on the next succeeding business day)
(each, a ["Distribution Date" and a] "Class B
Interest Payment Date")[, provided that, during any
Early Amortization Period, interest will be
distributed to the Class B Certificateholders on
each Distribution Date, commencing on the first
Distribution Date following the occurrence of an
Early Amortization Event. A portion of Class B
Certificateholder Interest Collections and certain
other amounts will be deposited each month into a
trust account (the "Class B Interest Funding
Account") and used to make interest payments to the
Class B Certificateholders on each Class B Interest
Payment Date or, during an Early Amortization
Period, each Distribution Date]. Interest [on the
Class A Certificates] will accrue for the period
beginning on and including the most recent [Class
A] Interest Payment Date and ending on and
including the day preceding the next succeeding
[Class A] Interest Payment Date (each, a "[Class A]
Interest Period"), except that the first [Class A]
Interest Period will begin on and include the
Series Issuance Date. [Interest on the Class B
Certificates will accrue for the period beginning
on and including the most recent Class B Interest
Payment Date and ending on and including the day
preceding the next succeeding Class B Interest
Payment Date (each, a "Class B Interest Period"),
except that the first Class B Interest Period will
begin on and include the Series Issuance Date.]
Interest for any [Class A] Interest Payment Date
[or Class B Interest Payment Date] due but not paid
on such [Class A] Interest Payment Date [or Class B
Interest Payment Date] will be due on the next
[Class A] Interest Payment Date [or Class B
Interest Payment Date, as applicable], together
with, to the extent permitted by applicable law,
interest on such amount at the applicable
Certificate Rate. [The Class A Certificate Rate for
each [[Class A] Interest Period] [other] will be
determined on the [ ] day preceding the first day
of such [[Class A] Interest Period] [other] (each,
a "Class A Adjustment Date"); [and the Class B
Certificate Rate for each [[Class B] Interest
Period] [other] will be determined on the [ ] day
preceding the first day of such [[Class B] Interest
Period]] [other] (each, a "Class B Adjustment
Date")].] The Class A Certificate Rate will equal
[[ ]% per annum] [[ ] (the "Class A Index") for the
applicable Class A Adjustment Date, determined as
provided herein, [plus] [minus] [times]
S-2
<PAGE>
[ %][; provided that, if the Class A Certificate
Rate for any Distribution Date calculated on the
basis of the Class A Index is greater than the
Assets Receivables Rate, then the Class A
Certificate Rate for such Distribution Date will be
the Assets Receivables Rate]]. The Class B
Certificate Rate will equal [[ ]% per annum][[ ]
(the "Class B Index") for the applicable Class B
Adjustment Date, determined as provided herein,
[plus] [minus] [times] [ %][; provided that, if the
Class B Certificate Rate for any Distribution Date
calculated on the basis of the Class B Index is
greater than the Assets Receivables Rate, then the
Class B Certificate Rate for such Distribution Date
will be the Assets Receivables Rate]]. Interest on
the Class A Certificates will be calculated on the
basis of [a 360-day year of twelve 30-day months]
[the actual number of days in each [Class A]
Interest Period divided by [360] [other]]. Interest
on the Class B Certificates will be calculated on
the basis of [a 360-day year of twelve 30-day
months] [the actual number of days in each [Class
B] Interest Period divided by [360] [other]].
[Yield Supplement
Account ............. On the Series Issuance Date, the Seller will deposit
$[ ] in a trust account which will be
established by the Seller with the Trustee (the
"Yield Supplement Account"). The Yield Supplement
Account will be funded, from time to time as
described herein, by the deposit thereto of certain
amounts otherwise distributable to the Seller. See
"Series Provisions -- Distributions from the
Collection Account; [Reserve Fund;] Yield Supplement
Account -- Yield Supplement Account".]
[Class A Expected
Payment Date ........ [ ], [ ].]
[Class B Expected
Payment Date ........ [ ], [ ].]
[Excess Funding Account
..................... Unless and until any Early Amortization Period [or
Reinvestment Period] or the [Class A] [Accumulation
Period] [Class A] [Controlled Amortization Period]
shall have commenced, the Excess Funded Amount will
be maintained in the Excess Funding Account.
Upon the earliest of (a) the commencement of any
Early Amortization Period [or Reinvestment Period]
and (b) [ ] [the [ ] Distribution Date] [the [Class
A] Accumulation Period Commencement Date], some or
all of the funds on deposit in the Excess Funding
Account will be distributed to the Series [199_-_]
Certificateholders as described herein or deposited
into the Principal Funding Account as described
herein.]
Revolving Period ....... The Revolving Period with respect to Series [199_-_]
will commence on the Series Cut-Off Date and end on
the earlier of (a) the day immediately preceding
[the [Class A] Accumulation Period Commencement
Date] [the [Class A] Principal Commencement Date]
and (b) the business day immediately preceding the
day on which an Early Amortization Event [or
Reinvestment Event] occurs. See "Series Provisions
-- Early Amortization Events" [and "-- Reinvestment
Events"] for a discussion of certain events which
might lead to the
S-3
<PAGE>
early termination of the Revolving Period and, in
certain circumstances, the recommencement of the
Revolving Period. During the Revolving Period,
Principal Collections (other than Principal
Collections allocated to the Class B Certificates
("Reallocated Principal Collections") that are used
to pay any deficiency in the Class A Required
Amount) generally will be paid to the Seller[,
deposited, to the Excess Funding Account] or
allocated to another Series.
[Class A][Class B]
Accumulation Period]
[Class A] [Class B]
Controlled
Amortization Period]
..................... [Unless an Early Amortization Event [or Reinvestment
Event] that is not cured as described herein shall
have occurred, the [Class A] [Class B] [Series
[199_-_]] Certificates will have an Accumulation
Period (the "[Class A] [Class B] Accumulation
Period") of one, two, three, four or five month(s)
as described in the following paragraph [, which
will include separate Accumulation Periods for the
Class A Certificates (the "Class A Accumulation
Period") and the Class B Certificates (the "Class B
Accumulation Period")].
On the [ ] Distribution Date and each Distribution
Date thereafter that occurs prior to the [Class A]
Accumulation Period Commencement Date, the Servicer
shall calculate the [Class A] Accumulation Period
Length. The "[Class A] Accumulation Period Length"
will be calculated on each such date as the lesser
of (i) the number of full Collection Periods
between such Distribution Date and the [ ]
Distribution Date and (ii) the product, rounded
upwards to the nearest integer not greater than
five, of (a) one divided by the lowest Monthly
Payment Rate on the Receivables during the last [ ]
months and (b) a fraction, the numerator of which
is the sum of (i) the [Class A] Invested Amount as
of such Distribution Date (after giving effect to
all changes therein on such date) and (ii) the
invested amounts of all other Series [(excluding
certain Series)] currently in their amortization or
accumulation periods or expected to be in their
amortization or accumulation periods by the [ ]
Distribution Date and the denominator of which is
the sum of such [Class A] Invested Amount and the
invested amounts as of such Distribution Date
(after giving effect to all changes therein on such
date) of all other outstanding Series [(excluding
certain Series)] which are expected to be
outstanding on the [ ] Distribution Date. The
[Class A] Accumulation Period Commencement Date
(which will be the first day of a Collection
Period) will occur when the number of full
Collection Periods remaining until the [ ]
Distribution Date first equals the Accumulation
Period Length as calculated above. If the [Class A]
Accumulation Period Length is one month, two
months, three months, four months or five months in
length, the "Accumulation Period Commencement Date"
shall be the first day of the [ ] Collection
Period, the [ ] Collection Period, the [ ]
Collection Period, the [ ] Collection Period, or
the [ ] Collection Period, respectively. In
addition, if at any time after the [ ]
Distribution Date, any other outstanding Series
[(excluding certain Series)] shall have entered
into a reinvestment period or an early amortization
period, the [Class A]
S-4
<PAGE>
Accumulation Period Commencement Date shall be the
earlier of (i) the date that such outstanding
Series shall have entered into its reinvestment
period or early amortization period and (ii) the
[Class A] Accumulation Period Commencement Date as
previously determined. See "Annex I -- Outstanding
Series of Investor Certificates".
The effect of the calculation described above is to
permit the reduction of the length of the [Class A]
Accumulation Period based on the invested amounts
of certain other Series which are scheduled to be
in their revolving periods during the [Class A]
Accumulation Period and on increases in the
principal payment rate, which, if continued, would
result in a shorter [Class A] Accumulation Period.
[The Class A Accumulation Period [and the Class B
Accumulation Period] will commence on the
Accumulation Period Commencement Date.] [The Class
B Accumulation Period will commence on the date on
which [principal of the Class A Certificates has
been [paid in full] [deposited to the Principal
Funding Account].]
[Unless an Early Amortization Event [or
Reinvestment Event] that is not cured as described
herein shall have occurred, the [Series [199_-_]
Certificates] [Class A Certificates] [Class B
Certificates] will have a Controlled Amortization
Period (the "[Class A] [Class B] Controlled
Amortization Period") [, which will include
separate Controlled Amortization Periods for the
Class A Certificates (the "Class A Controlled
Amortization Period") and the Class B Certificates
(the "Class B Controlled Amortization Period")].
[The [Class A] Controlled Amortization Period will
commence on [ ] (the "[Class A] Principal
Commencement Date") and] [the Class B Controlled
Amortization Period will commence on [ ] [the date
on which principal of the Class A Certificates has
been [paid in full] [deposited to the Principal
Funding Account]].]
[Reinvestment Period ... The Series [199_-_] Certificates will have a
Reinvestment Period if a Reinvestment Event occurs.
[A Reinvestment Period will commence if the Seller
delivers a notice to the Trustee stating that the
Seller will no longer sell Receivables to the Trust
commencing on [ ] or any yearly anniversary
thereof and certain other conditions are satisfied.]
See "Series Provisions -- Reinvestment Events" for a
description of the [other] events that might result
in the commencement of a Reinvestment Period. See
also "Series Provisions -- Distributions from the
Collection Account [;Reserve Fund] [;Yield
Supplement Account] -- Principal Collections".]
[The Seller is required to add Receivables to the
Trust under certain circumstances described under
"Description of the Certificates -- Addition of
Accounts or Participation Interests" in the
Prospectus. The failure of the Seller to add
Receivables when required will result in the
occurrence of a Reinvestment Event. However, if no
other Reinvestment Event has occurred, the
Reinvestment Period resulting from such failure
will terminate and the Revolving Period will
recommence when the Seller would no longer be
required to add Receivables to the Trust, or so
long as neither the scheduled
S-5
<PAGE>
termination date of the Revolving Period nor an
Early Amortization Event that is not cured as
described herein has occurred.]
[Notwithstanding the foregoing, in the event of the
occurrence of any Reinvestment Event, provided that
neither the scheduled termination date of the
Revolving Period nor an Early Amortization Event
that is not cured as described herein has occurred,
the Revolving Period may recommence following
receipt of (i) written confirmation from each
Rating Agency (other than Moody's) that such Rating
Agency's rating of the Series [199_-_] Certificates
will not be withdrawn or lowered as a result of
such recommencement and (ii) the consent of Series
[199_-_] Certificateholders holding Series [199_-_]
Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series
[199_-_] Certificates to such recommencement.
[Describe other cures of Reinvestment Events and
partial Reinvestment Periods, if applicable.]]
Early Amortization
Period .............. The Series [199_-_] Certificates will have an Early
Amortization Period if an Early Amortization Event
occurs. See "Description of the Certificates --
Reinvestment Events and Early Amortization Events"
in the Prospectus and "Series Provisions -- Early
Amortization Events" herein for a description of
the events that might result in the commencement of
an Early Amortization Period. See also "Series
Provisions -- Distributions from the Collection
Account [;Reserve Fund] [;Yield Supplement Account]
-- Principal Collections". During any Early
Amortization Period no principal payments will be
made to Class B Certificateholders until the
principal amount of the Class A Certificates has
been paid in full.
[The Seller is required to add Receivables to the
Trust under certain circumstances described under
"Description of the Certificates -- Addition of
Accounts or Participation Interests" in the
Prospectus. The failure of the Seller to add
Receivables when required will result in the
occurrence of an Early Amortization Event. However,
if no other Early Amortization Event has occurred,
the Early Amortization Period resulting from such
failure will terminate and the Revolving Period
will recommence when the Seller would no longer be
required to add Receivables to the Trust, so long
as [neither] the scheduled termination date of the
Revolving Period [nor a Reinvestment Event that is
not cured as described herein] has [not] occurred.]
[Notwithstanding the foregoing, in the event of the
occurrence of any Early Amortization Event,
provided that [neither] the scheduled termination
date of the Revolving Period [nor a Reinvestment
Event that is not cured as described herein] has
[not] occurred, the Revolving Period may recommence
following receipt of (i) written confirmation from
each Rating Agency (other than Moody's) that such
Rating Agency's rating of the Series [199_-_]
Certificates will not be withdrawn or lowered as a
result of such recommencement and (ii) the consent
of Series [199_-_] Certificateholders holding
Series [199_-_] Certificates evidencing more than
50% of the aggregate unpaid principal amount of the
Series [199_-_] Certificates to such
recommencement.] [Describe other cures of Early
Amortization Events, if applicable.]
S-6
<PAGE>
Subordination of the
Seller's Interest ... If [on or prior to the Fully Reinvested Date [or
thereafter if the Revolving Period has recommenced]
the Interest Collections, Investment Proceeds,
Excess Servicing[, certain amounts in the Reserve
Fund] and certain other amounts allocable to the
[Series [199_-_] Certificateholders for any
Collection Period [, including Excess Interest
Collecting] are not sufficient to cover the
interest payable with respect to the Class A
Certificates and the Class B Certificates on the
next Distribution Date (plus any overdue interest
and interest thereon), the Class A Monthly
Servicing Fee and the Class B Monthly Servicing Fee
for such Distribution Date, any Class A Investor
Default Amount and Class B Investor Default Amount
for such Distribution Date and certain other
amounts, the Available Subordinated Amount will be
applied to make up such deficiency, with such
amount being applied first to cover any such
deficiency with respect to the Class A Certificates
and second to cover any such deficiency with
respect to the Class B Certificates. The Available
Subordinated Amount for a Determination Date is
equal to (a) the lesser of (i) the Available
Subordinated Amount for the preceding Determination
Date, minus, with certain limitations, the Class A
Draw Amount and the Class B Draw Amount for such
preceding Determination Date, [minus funds from the
Reserve Fund applied to cover any portion of the
Class A Investor Default Amount or Class B Investor
Default Amount,] plus the excess, if any, of the
Required Subordinated Amount for such Determination
Date over the Required Subordinated Amount for the
immediately preceding Determination Date plus the
amount of Excess Servicing available to be paid to
the Seller as described under "Series Provisions --
Distributions from the Collection Account [;
Reserve Fund Account] [; Yield Supplement Account]
-- Excess Servicing and Excess Interest
Collections", and (ii) the product of the
fractional equivalent of the Subordinated
Percentage and the Invested Amount [minus (b) in
the case of clause (a)(i), the Incremental
Subordinated Amount for such preceding
Determination Date, plus (c) the Incremental
Subordinated Amount for the current Determination
Date,] [plus (d) the Subordinated Percentage of
funds to be withdrawn from the Excess Funding
Account on the succeeding Distribution Date and
paid to the Seller or allocated to one or more
Series]; provided, however, that, from and after
the commencement of [the [Class A] Accumulation
Period] [the [Class A] Controlled Amortization
Period] or] any Early Amortization Period [that is
not cured as described herein] until the payment in
full of the Series [199_-_] Certificates, the
Available Subordinated Amount shall be calculated
based on the Invested Amount as of the close of
business on the day preceding such [[[Class A]
Accumulation Period] [[Class A] Controlled
Amortization Period] or] Early Amortization Period
[; and provided further that from and after the
commencement of any Reinvestment Period [that is
not cured as described herein] until the earliest
of the commencement of any Early Amortization
Period [that is not cured as described herein], the
payment in full of the Series [19_-_] Certificates
and the Fully Reinvested Date, the Available
Subordinated Amount shall be calculated based on
the Invested Amount as of the close of business on
the day preceding such Reinvestment Period [less
[describe permitted reductions, e.g., based
S-7
<PAGE>
on payment rates or amounts or deposit in the
Principal Funding Account]]. The Available
Subordinated Amount for the first Determination
Date is equal to the Required Subordinated Amount.
The "Required Subordinated Amount" shall mean, as
of any date of determination [, the sum of (a)] the
product of the initial Subordinated Percentage [as
adjusted from time to time as described herein
other than as a result of an increase therein at
the option of the Seller,] and the Invested Amount
[and (b) the Incremental Subordinated Amount].
[The "Incremental Subordinated Amount" on any
Determination Date will equal the result obtained
by multiplying (a) a fraction, the numerator of
which is the sum of the Invested Amount on the last
day of the immediately preceding Collection Period
and the Available Subordinated Amount for such
Determination Date (calculated without adding the
Incremental Subordinated Amount for such
Determination Date as described in clause (c)
above), and the denominator of which is the Pool
Balance on such last day by (b) the excess, if any,
of (x) the sum of the Overconcentration Amount, the
Installment Balance Amount and the aggregate amount
of Ineligible Receivables on such Determination
Date over (y) the aggregate amount of Ineligible
Receivables, Receivables in Accounts containing
Dealer Overconcentrations and Receivables in
Installment Balances, in each case that became
Defaulted Receivables during the preceding
Collection Period and are not subject to
reassignment from the Trust, unless certain
insolvency events relating to the Seller or CCC
have occurred, as further described in the Pooling
and Servicing Agreement.]
"Dealer Overconcentrations" on any Distribution
Date means, with respect to any Dealer or group of
affiliated Dealers and Series [199_-_], the excess
of (x) the aggregate principal amount of
Receivables due from such Dealer or group of
affiliated Dealers on the last day of the
Collection Period immediately preceding such
Distribution Date over (y) [ ]% of the Pool Balance
on the last day of the immediately preceding
Distribution Date.
The "Subordinated Percentage" will initially equal
the percentage equivalent of a fraction, the
numerator of which is the Subordination Factor and
the denominator of which will be the excess of 100%
over the Subordination Factor. The Subordination
Factor will [initially] be [ ]% [, but will be
subject to increase [by [ ]% when the [Floating
Rate] [ %] Auto Loan Asset Backed Certificates,
Series [ ] have been paid in full] [by [ ]% in the
event that the rating of CFC's long-term unsecured
debt is lowered below BBB- by Standard & Poor's or
withdrawn by Standard & Poor's unless the Seller
receives written confirmation from Standard &
Poor's that the failure to so increase the
Subordination Factor would not result in such
Rating Agency lowering or withdrawing its rating of
the Series [199_-_] Certificates] [or if [describe
other events that will require an increase in the
Subordination Factor]] [; provided, however, that
in no event will the Subordination Factor be
greater than [ ]%]. The Seller may, in its sole
discretion, increase at any time the Available
Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser
of (i) $[ ] or (ii) [ ]% of the Invested Amount
on such date. The Seller is not under any
obligation to
S-8
<PAGE>
increase the Available Subordinated Amount at any
time[, except as described herein]. If [the sum of]
the Available Subordinated Amount [and the
Incremental Subordinated Amount] were reduced to
less than [the sum of] the Required Subordinated
Amount [and the Incremental Subordinated Amount], a
[Reinvestment Event] [Early Amortization Event]
would occur. The Seller could elect to increase the
Available Subordinated Amount at the time such a
[Reinvestment Event] [Early Amortization Event]
would otherwise occur, thus preventing or delaying
the occurrence of the [Reinvestment Event] [Early
Amortization Event]. [Describe partial Reinvestment
Periods resulting from a failure to meet the test
described above, if applicable.]
[The Seller's Interest will be further subordinated
to the extent of the Available Negative Carry
Subordinated Amount. In the event of the occurrence
of [a Reinvestment Event,] [an Early Amortization
Event] or the [[Class A] Accumulation Period
Commencement Date] [commencement of the [Class A]
Controlled Amortization Period], certain Interest
Collections and Principal Collections allocated to
the Seller, not to exceed the Available Negative
Carry Subordinated Amount, will be deposited to the
Reserve Fund [and other] until the amounts on
deposit therein equal the Negative Carry Required
Amount [and other]. See "Series Provisions --
Allocation of Collections; Limited Subordination of
Seller's Interest and Class B Certificateholders'
Interest".] [Describe any other subordination of
the Seller's Interest, if applicable.]
Required Participation
Percentage .......... "Required Participation Percentage" shall mean, with
respect to Series [199_-_], [ ]%; provided, however,
[that if the aggregate amount of Principal
Receivables due from any Dealer or group of
affiliated Dealers at the close of business on the
last day of any Collection Period with respect to
which such determination is being made is greater
than [ ]% of the Pool Balance on such last day, the
Required Participation Percentage shall mean, as of
such last day and with respect to such Collection
Period and the immediately following Collection
Period only, [ ]%; provided, further,] that the
Seller may, upon ten days' prior notice to the
Trustee, the Rating Agencies and any Enhancement
Provider reduce the Required Participation
Percentage to not less than 100%, so long as the
Rating Agencies shall not have notified the Seller
or the Servicer that any such reduction will result
in a reduction or withdrawal of the rating of
either Class of the Series [199_-_] Certificates or
any other outstanding Series or Class of
Certificates.
Other Series Issuances . As of the date hereof, [ ] other Series issued
by the Trust are outstanding. See "Annex I --
Outstanding Series of Investor Certificates" for a
summary of the terms of the outstanding Series.
Allocations ............ Interest Collections, Principal Collections and
Defaulted Receivables allocated to Series 199[_-_]
as described under "Description of the Certificates
-- Allocation Percentages -- Allocation among
Series" in the Prospectus will be further allocated
between the Series [199_-_] Certificateholders'
Interest and the Seller's Interest as described
below.
S-9
<PAGE>
Interest Collections and Defaulted Receivables
allocated to Series [199_-_] will be allocated at
all times to the Series [199_-_]
Certificateholders' Interest based on the Floating
Allocation Percentage applicable during the related
Collection Period [, provided that during any Early
Amortization Period, Interest Collections will be
allocated to the Series [199_-_]
Certificateholders' Interest based on the Fixed
Allocation Percentage as described below]. The
Floating Allocation Percentage for any Collection
Period is [the percentage obtained by dividing the
Invested Amount on the last day of the immediately
preceding Collection Period by the product of (x)
the Pool Balance on the last day of the immediately
preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in
respect of which the Floating Allocation Percentage
is being calculated] [other]. During the [Class A]
[Class B] [Accumulation Period] [Class A] [Class B]
[Controlled Amortization Period], any Early
Amortization Period [and any Reinvestment Period],
Principal Collections [and, in the case of any
Early Amortization Period, Interest Collections]
allocated to Series 199[_-_] will be allocated to
the Series [199_-_] Certificateholders' Interest
based on the [Fixed Allocation Percentage][other].
The Fixed Allocation Percentage for a Collection
Period during the [Class A] [Class B] [Accumulation
Period] [Class A] [Class B] [Controlled
Amortization Period], any Early Amortization Period
[and any Reinvestment Period] is [the percentage
equivalent of a fraction, the numerator of which is
the Invested Amount on the last day of the
Revolving Period and the denominator of which is
the product of (x) the Pool Balance on the last day
of the immediately preceding Collection Period and
(y) the Series Allocation Percentage for the
Collection Period in respect of which the Fixed
Allocation Percentage is being calculated] [other].
Interest Collections, Principal Collections and
Defaulted Receivables allocated to the Series
[199_-_] Certificateholders' Interest will be
further allocated between the interest of holders
of Class A Certificates (the "Class A
Certificateholders") and the interest of holders of
Class B Certificates (the "Class B
Certificateholders") based on the Class A
Allocation Percentage and the Class B Allocation
Percentage, respectively, for the related
Collection Period. The Class A Allocation
Percentage for any Collection Period is the
percentage obtained by dividing the Class A
Invested Amount as of the last day of the
immediately preceding Collection Period (after
giving effect to any reduction thereof to occur on
the immediately following Distribution Date) by the
aggregate Invested Amount of the Series [199_-_]
Certificates as of such last day (after giving
effect to any reduction thereof to occur on the
immediately following Distribution Date); and the
Class B Allocation Percentage for any Collection
Period is the percentage obtained by subtracting
from 100% the Class A Allocation Percentage.
[Additional Amounts
Available to Class A
Certificateholders .. If [on or prior to the Fully Reinvested Date [or
thereafter if the Revolving Period has recommenced]]
the Interest Collections and Investment Proceeds
allocable to the Class A Certificates for any
Collection Period, Excess Servicing for such
Collection Period[, certain
S-10
<PAGE>
amounts in the Reserve Fund], the Available
Subordinated Amount and certain other amounts
allocable to the Class A Certificateholders for
such Collection Period [including Excess Interest
Collections allocated to Series [199_-_]] are not
sufficient to cover the interest payable with
respect to the Class A Certificates on the next
Distribution Date (plus overdue interest and
interest thereon), the Class A Monthly Servicing
Fee for such Distribution Date, any Class A
Investor Default Amount for such Distribution Date
and certain other amounts, Reallocated Principal
Collections with respect to the related Collection
Period will be applied to cover such deficiency. If
Reallocated Principal Collections with respect to
such Collection Period are insufficient to fund
such deficiency, then a portion of the Class B
Invested Amount will be reduced by the amount of
such deficiency (but not by more than the Class A
Investor Default Amount for such Collection
Period). If such reduction would cause the Class B
Invested Amount to be reduced below zero, the Class
A Invested Amount will be reduced by the amount by
which the Class B Invested Amount would have been
reduced below zero (but not by more than the excess
of the Class A Investor Default Amount for such
Collection Period over the amount of such reduction
in the Class B Invested Amount) and the Class A
Certificateholders will bear directly the credit
and other risks associated with their undivided
interest in the Trust. See "Series Provisions --
Allocation of Collections; Limited Subordination of
Seller's Interest and Class B Certificateholders'
Interest" and "-- Investor Charge-Offs".]
Subordination of the
Class B
Certificates ........ The Class B Certificates will be subordinated to the
extent necessary to fund payments with respect to the
Class A Certificates as described herein. To the
extent the Class B Invested Amount is reduced, the
percentage of Interest Collections and Principal
Collections allocable to the Class B
Certificateholders with respect to subsequent
Collection Periods will be reduced. Moreover, to the
extent the amount of such reduction in the Class B
Invested Amount is not reimbursed, the amount of
principal distributable to the Class B
Certificateholders will be reduced. See "Series
Provisions -- Allocation of Collections; Limited
Subordination of Seller's Interest and Class B
Certificateholders' Interest".
Excess Principal
Collections ......... [Describe Excess Principal Collection allocations
applicable to Series [199_-_].] See "Series
Provisions -- Allocation Percentages -- Principal
Collections for all Series".
[Excess Finance Charge
Collections ......... Series [199_-_] has been designated as an Excess
Allocation Series. See "Description of the
Certificates -- Allocation Percentages -- Sharing of
Excess Interest Collections" in the Prospectus.]
[Enhancement ........... The Trust will have the benefit of a [letter of
credit] [interest rate swap] [currency swap] [cash
collateral account] [guaranty] [surety bond]
[insurance policy] [spread account] [other
enhancement] [issued by [ ]] for the benefit of
the [Class A] [Class B] [Series [199_-_]]
Certificateholders as described herein. [Describe
subordination of
S-11
<PAGE>
another Series, if applicable.] See "Series
Provisions -- Enhancements" herein.]
Registration of Series
[199_-_]
Certificates ....... [The Series [199_-_] Certificates will initially be
represented by one or more Certificates registered
in the name of Cede, as the nominee of DTC. No
person acquiring an interest in the Series [199_-_]
Certificates will be entitled to receive a
definitive certificate representing such person's
interest except under certain limited
circumstances. Series [199_-_] Certificateholders
may elect to hold their Series [199_-_]
Certificates through DTC (in the United States) [or
CEDEL or Euroclear (in Europe)]. See "Description
of the Certificates -- Definitive Certificates" in
the Prospectus.]
Servicing Fee Rate ..... [ ]% or, if the Monthly Servicing Fee has been
waived as discussed under "Description of the
Certificates -- Servicing Compensation and Payment
of Expenses" in the Prospectus, 0% for the
Distribution Date in respect of which the Monthly
Servicing Fee has been waived. The share of the
Monthly Servicing Fee allocable to the Class A
Certificateholders with respect to any Distribution
Date (the "Class A Monthly Servicing Fee") shall
generally be equal to one-twelfth of the product of
(i) the Servicing Fee Rate, (ii) the Invested
Amount as of the last day of the second preceding
Collection Period and (iii) the Class A Allocation
Percentage; and the share of the Monthly Servicing
Fee allocable to the Class B Certificateholders
with respect to any Distribution Date (the "Class B
Monthly Servicing Fee") shall generally be equal to
one-twelfth of the product of (i) the Servicing Fee
Rate, (ii) the Invested Amount as of the last day
of the second preceding Collection Period and (iii)
the Class B Allocation Percentage.
[Optional Repurchase ... The Series [199_-_] Certificateholders' Interest
will be subject to optional repurchase by the
Seller on any Distribution Date after the aggregate
Invested Amount is reduced to an amount less than
or equal to $[ ] ([ ]% of the initial outstanding
principal amount of the Series [199_-_]
Certificates). Series [199_-_] Certificates will
also be subject to repurchase at the option of the
Seller or the Series [199_-_] Certificateholders at
any time on or after the [ ] Distribution Date.]
The purchase price will equal the sum of (i) the
Invested Amount or a pro rata portion thereof, in
the case of a purchase of fewer than all the Series
[199_-_] Certificates, on the Determination Date
preceding the Distribution Date on which the
purchase is scheduled to be made, (ii) accrued and
unpaid interest on the Series [199_-_] Certificates
to be re-purchased at the applicable Certificate
Rate (together with interest on overdue interest)
[and (iii) any outstanding Carry-over Amount
(together with interest thereon].]
Series [199_-_]
Termination
Date ................ [ , 199 ]. See "Series Provisions --
Series Termination".
ERISA Considerations ... [Class A] [Class B] Certificates may be eligible for
purchase by employee benefit plans. See "ERISA
Considerations" in the Prospectus.] [Other.]
S-12
<PAGE>
Certificate Ratings .... It is a condition to the issuance of the Class A
Certificates that they be rated in the highest
long-term rating category by at least one nationally
recognized rating agency and a condition to the
issuance of the Class B Certificates that they be
rated in one of the [three] highest long-term rating
categories by at least one such rating agency. A
security rating is not a recommendation to buy, sell
or hold securities and is subject to revision or
withdrawal in the future by the assigning rating
agency. The rating of the Series [199_-_]
Certificates addresses the likelihood of the
ultimate payment of the principal and interest, at
the applicable Certificate Rate, on the Series
[199_-_] Certificates. However, the rating agencies
do not evaluate, and the rating of the Series
[199_-_] Certificates does not address the
likelihood of payment of the outstanding principal
of the Series [199_-_] Certificates by any date,
including the [Class A] Expected Payment Date [or
Class B Expected Payment Date], other than the
Series Termination Date. [The rating of a Class of
Certificates also does not address the likelihood
of payment of any Carry-over Amount.] See "Special
Considerations -- Ratings of the Certificates".
Series Issuance Date ... [ , 199 ].
Series Cut-Off Date .... [ , 199 ].
S-13
<PAGE>
RISK FACTORS
Payments. [The shorter the [Class A] Accumulation Period Length the
greater the likelihood that payment of the Class A Certificates [and the
Class B Certificates] in full by [the] [their respective] Expected Payment
Date[s] will be dependent on the reallocation of Principal Collections which
are initially allocated to other Series.] If one or more other Series from
which Principal Collections are expected to be available to be reallocated to
the payment of the Series [199_-_] Certificates enters into an early
amortization period or reinvestment period after [ ] [the [ ] Distribution
Date][the [Class A] Accumulation Period Commencement Date], Principal
Collections allocated to such Series generally will not be available to be
reallocated to make payments of principal of the [Series [199_-_]
Certificates and [the final payment of principal of the [Series [199_-_]]
[Class A and Class B] Certificates may be later than the [Class A Expected
Payment Date and Class B] Expected Payment Date [, respectively]] [the amount
distributed in respect of principal of the [Series [199_-_]] [Class A] [Class
B] Certificates on any Distribution Date during the [Class A] [Class B]
Controlled Amortization Period may be less than the [applicable] Controlled
Amortization Amount]. Upon written request, the Seller will make available to
Series [199_-_] Certificateholders Disclosure Documents relating to the other
outstanding Series which describe the events which could result in the
commencement of an early amortization period or reinvestment period with
respect to such outstanding Series. See "Maturity and Principal Payment
Considerations".
[In addition, a significant decline in the amount of Receivables
generated could cause an Early Amortization Event. However, such a decline in
the amount of Receivables generated would initially be absorbed by an
increase in the Excess Funded Amount. The Receivables Purchase Agreement will
provide that CFC will be required to designate additional Accounts, the
Receivables of which will be sold to the Seller, and the Pooling and
Servicing Agreement will provide that the Seller will be required to transfer
such Receivables to the Trust in the event that the amount of the Pool
Balance is not maintained at a certain minimum level. If additional Accounts
are not designated by CFC when required, an [Early Amortization Event]
[Reinvestment Event] will occur and result in the commencement of an [Early
Amortization Period] [Reinvestment Period], although in certain circumstances
the resulting [Early Amortization Period] [Reinvestment Period] may terminate
and the Revolving Period recommence. If an insolvency event relating to CFC,
the Seller or Chrysler were to occur, then an [Early Amortization Event]
[Reinvestment Event] would occur, additional Receivables would not be
transferred to the Trust and distributions of principal in respect of the
Series [199_-_] Certificates would not be subject to any [Controlled Deposit
Amount][Controlled Amortization Amount]. See "The Dealer Floorplan Financing
Business" in the Prospectus and "Maturity and Principal Payment
Considerations" herein and see also "Series Provisions -- [Early Amortization
Events"] [and "-- Reinvestment Events"] for a discussion of other events
which might lead to the occurrence of an Early Amortization Period [or
Reinvestment Period].]
Trust's Relationship to Chrysler and CFC; Financial Condition of
Chrysler. Certain aspects of the Trust's relationship to Chrysler Corporation
and CFC are described in the Prospectus under "Special Considerations --
Trust's Relationship to Chrysler and CFC". Set forth below is certain
financial information with respect to Chrysler and CFC.
Trust's Relationship to Chrysler and CFC; Financial Condition of
Chrysler. Certain aspects of the Trust's relationship to Chrysler Corporation
and CFC are described in the Prospectus under "Risk Factors -- Trust's
Relationship to Chrysler and CFC". Set forth below is certain financial and
other information with respect to Chrysler and CFC.
Chrysler Corporation and its consolidated subsidiaries ("Chrysler")
reported earnings before income taxes of $[ ] million for the [ ]
quarter of 199[ ], compared with $[ ] million for the [ ] quarter of
199[ ]. For the first [ ] months of 199[ ], Chrysler reported earnings
before income taxes of $[ ] million, compared with $[ ] million for the first
[ ] months of 199[ ].
S-14
<PAGE>
Net earnings for the [ ] quarter of 199[ ] were $[ ] million,
or $[ ] per common share, compared with $[ ] million, or $[ ]
per common share, for the [ ] quarter of 199[ ]. Net earnings for the
first [ ] months of 199[ ] were $[ ] million, or $[ ] per common share,
compared with $[ ] million, or $[ ] per common share, for the first [ ]
months of 199[ ].
Chrysler reported earnings before taxes, extraordinary item, and the
cumulative effect of a change in accounting principle of $[ ] billion in
199[ ], compared with $[ ] billion in 199[ ]. Net earnings for 199[ ] were
$[ ] billion, or $[ ] per common share, compared with $[ ] billion, or
$[ ] per common share, in 199[ ].
Chrysler Financial Corporation and its consolidated subsidiaries' net
earnings were $[ ] million and $[ ] million for the [ ] and [ ] months ended
[ ], compared to $[ ] million and $[ ] million for the [ ] and [ ] months
ended [ ].
Chrysler Financial Corporation and its consolidated subsidiaries
achieved net earnings of $[ ] million in 199[ ] compared to $[ ] million and
$[ ] million in 199[ ] and 199[ ], respectively.
Chrysler and CFC are subject to the informational requirements of the
Exchange Act and in accordance therewith file reports and other information
with the Commission. For further information regarding Chrysler and CFC
reference is made to such reports and other information which are available
as described under "Available Information" in the Prospectus.
Credit Enhancement. Credit enhancement of the Series [199_-_]
Certificates will be provided by the subordination of the Seller's Interest
to the extent of the Available Subordinated Amount as described herein [and
amounts in the Reserve Fund]. Additional credit enhancement of the Class A
Certificates will be provided by the subordination of the interests of the
Class B Certificateholders. [Describe other subordination of the Seller's
Interest, if applicable.] [Describe any applicable Enhancements.] The amount
of such credit enhancement is limited and will be reduced from time to time
as described herein. See "Series Provisions -- Allocation of Collections;
Limited Subordination of Seller's Interest and Class B Certificateholders'
Interest" [and " -- Enhancements"].
Effect of Subordination of Class B Certificates; Principal Payments.
The Class B Certificates are subordinated in right of payment of principal to
the Class A Certificates to the extent described herein. [Payments of
principal in respect of the Class B Certificates will not commence until
after the final principal payment with respect to the Class A Certificates
has been made as described herein.] [No principal payments will be made in
respect of the Class B Certificates unless all principal payments then due
with respect to the Class A Certificates have been made.] Moreover, the Class
B Invested Amount is subject to reduction if the Class A Required Amount for
any Collection Period is not funded from Interest Collections and Investment
Proceeds allocable to the Class A Certificates, Excess Servicing, [amounts on
deposit in the Reserve Fund] [Excess Interest Collections allocated to Series
[199_-_]]or Available Seller's Collections. To the extent the Class B
Invested Amount is reduced, the percentage of Interest Collections and
Principal Collections allocable to the Class B Certificateholders' Interest
in future Collection Periods will be reduced. Moreover, to the extent the
amount of such reduction in the Class B Invested Amount is not reimbursed,
the amount of principal distributable to the Class B Certificateholders will
be reduced. See "Series Provisions -- Allocation of Collections; Limited
Subordination of Seller's Interest and Class B Certificateholders' Interest"
herein. If the Class B Invested Amount is reduced to zero, the Class A
Certificateholders will bear directly the credit and other risks associated
with their undivided interest in the Trust.
S-15
<PAGE>
[Control. Subject to certain limited circumstances, Series [199_-_]
Certificateholders holding a specified percentage of the aggregate unpaid
principal amount of the Series [199_-_] Certificates may take certain
actions, or direct certain actions to be taken, under the Pooling and
Servicing Agreement or the Series Supplement, including amending the Series
Supplement and declaring certain Early Amortization Events. In such cases
(subject to certain exceptions), when determining whether the required
percentage of Series [199_-_] Certificateholders have given their approval or
consent, the Class A Certificateholders and the Class B Certificateholders
will be treated as a single class. Accordingly, the Class [ ]
Certificateholders will have the power to determine whether any such action
is taken without regard to the position or interests of the Class [ ]
Certificateholders. The Class [ ] Certificateholders will not have similar
power. In order to make such determinations, the Class [ ] Certificateholders
will need the approval or consent of the Class [ ] Certificateholders owning
a substantial portion of the Class [ ] Certificateholders' Interest.]
[Basis Risk. The Receivables bear interest at prime rates announced by
certain banks plus a margin currently ranging from [ ]% to [ ]%. [The Class A
Certificate Rate is based on the Class A Index.] [The Class B Certificate
Rate is based on the Class B Index.] If, in respect of any Distribution Date,
there does not exist a positive spread between (a) the Assets Receivables
Rate and (b) [the Class A Certificate Rate based on the Class A Index] [or
the Class B Certificate Rate based on the Class B Index], [the Class A
Certificate Rate for such Distribution Date] [or the Class B Certificate Rate
for such Distribution Date, as the case may be,] will be the Assets
Receivables Rate. [The Class A Certificate Rate based on the Class A Index]
[or the Class B Certificate Rate based on the Class B Index] may exceed the
Assets Receivables Rate as a result of (i) [the Class A Index] [or the Class
B Index, as the case may be,] exceeding the applicable prime rate [and (ii)
if amounts are deposited in [the Excess Funding Account or] the Principal
Funding Account, [the Class A Index] [or the Class B Index, as the case may
be,] exceeding the investment earnings on amounts on deposit therein]. [Any
Carry-over Amount will be reduced by the amounts, if any, on deposit in the
Yield Supplement Account. However, there can be no assurance that sufficient
amounts, if any, will be available in the Yield Supplement Account. In
addition, the amount required to be deposited in the Yield Supplement Account
is not designed to include amounts which would be required to pay [any Class
A Carry-over Amount resulting from the Class A Index exceeding the applicable
prime rate] [or any Class B Carry-over Amount resulting from the Class B
Index exceeding such prime rate]. See "Series Provisions -- Interest" and
"Distributions from the Collection Account[; Reserve Fund]; Yield Supplement
Account -- Yield Supplement Account".
In addition, CFC may reduce the rates applicable to any of the
Receivables, so long as CFC does not reasonably expect any such reduction to
result in the creation of a Carry-over Amount. In any event, such a reduction
would have the effect of reducing or possibly eliminating the positive
spread, if any, between the Assets Receivables Rate and the [related] [Class
A] [Class B] Certificate Rate.
Once amounts deposited from time to time in the Yield Supplement
Account are exhausted, any Carry-over Amount arising as a result of [the
Class A Certificate Rate] [or the Class B Certificate Rate] being determined
on the basis of the Assets Receivables Rate will be paid to the extent funds
are allocated and available therefor after making certain required
distributions and deposits with respect to the Series [199_-_] Certificates,
including payments with respect to principal [(including payments to the
Excess Funding Account)], Class A Monthly Interest, Class B Monthly Interest,
the Class A Monthly Servicing Fee, the Class B Servicing Fee, [the Reserve
Fund Deposit Amount], the Class A Investor Default Amount and the Class B
Investor Default Amount as described under "Series Provisions --
Distributions from the Collection Account; [Reserve Fund;] Yield Supplement
Account". However, if any Carry-over Amount is outstanding for six
consecutive Distribution Dates an [Early Amortization
S-16
<PAGE>
Event] [Reinvestment Event] will occur. See "Series Provisions -- [Early
Amortization Events"] [ -- Reinvestment Events"]. Any Carry-over Amount
outstanding on the Final Payment Date, after making the distributions
described in the second preceding sentence, will be paid on such date from
(i) amounts on deposit in the Reserve Fund and (ii) Available Seller's
Collections on deposit in the Collection Account on such date as described
under "Series Provisions -- Distributions from the Collection Account;
Reserve Fund; Yield Supplement Account -- Interest Collections". The ratings
of the Series [199_-_] Certificates do not address the likelihood of payment
of any Carry-over Amount.](1)<F1>
Ratings of the Certificates. It is a condition of the Class A
Certificates that they be rated in the highest long-term rating category by
at least one Rating Agency and a condition to issuance of the Class B
Certificates that they be rated in one of the [three] highest long-term
rating categories by at least one Rating Agency. A rating is not a
recommendation to buy, sell or hold securities, inasmuch as such rating does
not comment as to the market price or the suitability for a particular
investor. There is no assurance that a rating will remain for any given
period of time or that a rating will not be lowered or withdrawn entirely by
a Rating Agency if in its judgment circumstances in the future so warrant.
The rating of the Series [199_-_] Certificates addresses the likelihood of
the ultimate payment of principal and interest, at the applicable Certificate
Rate, on the Series [199_-_] Certificates. However, a Rating Agency does
not evaluate, and the rating of the Series [199_-_] Certificates does not
address, the likelihood that the outstanding principal amount of the Series
[199_-_] Certificates will be paid by any date, including the [Class A]
Expected Payment Date [or the Class B Expected Payment Date], other than
the Series Termination Date. [In addition, a Rating Agency does not
evaluate, and the rating of a Class of Series [199_-_] Certificates does
not address, the likelihood that any Carry-over Amount will be paid.]
<F1>
- ----------
(1) Modify to reflect other sources, if any, for payment of Carry-over
Amounts.
S-17
<PAGE>
USE OF PROCEEDS
[After making the deposit of the Excess Funded Amount to the Excess
Funding Account, the balance of the] [The] net proceeds from the sale of the
Series [199_-_] Certificates will be paid to USA. USA will use such proceeds
(together with the subordinated loan from CFC described under "U.S. Auto
Receivables Company and the Trust -- U.S. Auto Receivables Company" in the
Prospectus) to purchase Receivables from CFC or to repay certain amounts
previously borrowed to purchase Receivables. CFC will use the portion of the
proceeds paid to it for [general corporate purposes] [other].
THE DEALER FLOORPLAN FINANCING BUSINESS
Information regarding the dealer floorplan financing business is set
forth under "The Dealer Floorplan Financing Business" in the Prospectus. In
addition, the Receivables sold to the Trust by the Seller pursuant to the
Pooling and Servicing Agreement were or will be selected from extensions of
credit and advances made by Chrysler and CFC, directly or as successor to
CCC, to approximately [ ] domestic motor "vehicle dealers". CFC, directly or
as successor to CCC, financed [ ]% of the total number of all Chrysler
franchised dealers as of [ ], 199[ ]. Furthermore, CFC, directly or as
successor to CCC, has extended credit lines to [ ] Chrysler-franchised
dealers that also operate non-Chrysler franchises (representing approximately
[ ]% of the aggregate credit lines of dealers in the U.S. Wholesale Portfolio
as of [ ], 199[ ]) and [ ] non-Chrysler dealers (representing approximately
[ ]% of such aggregate credit lines). As of [ ], 199[ ], the balance of
Principal Receivables in the U.S. Wholesale Portfolio was approximately
$[ ] billion. CFC currently services the U.S. Wholesale Portfolio
through its home office and through a network of [ ] zone offices located
throughout the United States.
As of [ ], 199[ ], the average credit lines per dealer in the U.S.
Wholesale Portfolio for new and used vehicles (which includes Auction
Vehicles) were $[ ] million and $[ ] million, respectively, and the average
balance of principal receivables per dealer was $[ ] million. As of [ ],
199[ ], the aggregate total receivables balance as a percentage of the
aggregate total credit line was approximately [ ]%.
The following table sets forth the percentages of dealer account
balances by year of credit line origination for the U.S. Wholesale Portfolio
as of [ ], 199[ ].
Portfolio Percentages by Year of Credit Line Origination
<TABLE>
<CAPTION>
199[ ] 1996 1995 1994 1993 1992 1991 Prior to 1991
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>
As of [ ], 199[ ], the weight average spread over the Prime Rate
charged to dealers in the U.S. Wholesale Portfolio was approximately [ ]%.
As of [ ], 199[ ], approximately [ ]% of all dealers participating in
the installment payment plan were remitting 100% of the Installment Balance
following the sale of the related vehicle. Currently CFC has elected to have
Chrysler absorb credit losses on Installment Balances in an amount equal to
[ ]% of the aggregate Installment Balances created in each calendar month
(rather than sell Installment Balances to Chrysler) and Chrysler supports
such agreement by maintaining a deposit with CFC in an amount equal to [ ]%
of the aggregate amount of Installment Balances outstanding at the end of
each calendar month.
Used Vehicles (which excludes Auction Vehicles) represented
approximately [ ]% of the aggregate principal amount of receivables in the
U.S. Wholesale Portfolio as of [ ], 199[ ]. As of [ ], 199[ ], Used Vehicles
represented approximately [ ]% of the aggregate principal amount of
Receivables in the Trust (including Excluded Receivables).
The following table provides the percentage of dealers in the U.S.
Wholesale Portfolio that were subject to finance hold as of the dates
indicated.
S-18
<PAGE>
Finance Hold Experience
<TABLE>
<CAPTION>
As of
[ ] As of December 31,
--------------------------------------------------------------
199[ ] 1996 1995 1994 1993 1992 1991 1990 1989
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of Dealers .... [ ]% 1.1% 1.8% 1.6% 3.2% 6.8% 9.4% 6.8% 4.6%
</TABLE>
The following table provides the number and percentage of dealers in
Dealer Trouble Status in the U.S. Wholesale Portfolio as of the dates
indicated.
Dealer Trouble Experience
<TABLE>
<CAPTION>
As of
[ ] As of December 31,
--------------------------------------------------------------
199[ ] 1996 1995 1994 1993 1992 1991 1990 1989
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Dealers ........ [ ] 20 6 12 21 56 100 129 106
Percentage of Dealers .... [ ]% 0.6% 0.2% 0.3% 0.6% 1.8% 3.1% 4.2% 3.5%
</TABLE>
THE ACCOUNTS
As of the Series Cut-Off Date, with respect to the Accounts in the
Trust: (a) there were [ ] Accounts and the Principal Receivables balance was
approximately $[ ] million; (b) the average credit lines per Dealer for new
and used vehicles (which include Auction Vehicles) were approximately $[ ]
million and $[ ] million, respectively, and the average balance of Principal
Receivables per Dealer was approximately $[ ] million; and (c) the aggregate
total receivables balance as a percentage of the aggregate total credit line
was approximately [ ]% . Unless otherwise indicated, the statistics included
in this paragraph, in the table below and under "The Accounts -- General" and
" -- Geographic Distribution" with respect to the Accounts and the
Receivables in the Trust gives effect to approximately $[ ] million of
principal receivables balances with respect to certain Dealers (the "Excluded
Receivables" and the "Excluded Dealers", respectively) that are in voluntary
or involuntary bankruptcy proceedings or voluntary or involuntary liquidation
or that, subject to certain limitations, are being voluntarily removed by the
Seller (or the Servicer on its behalf) from the Trust. A portion of such
principal receivables was created after such Dealers entered into such status
or were designated by the Seller (or the Servicer on its behalf) for removal
from the Trust and, as a result thereof, are owned by CFC and not the Trust.
Principal receivables balances created prior to such Dealers entering into
such status or being designated for removal from the Trust are included in
the Principal Receivables balance. See "Description of the Certificates --
Removal of Accounts" in the Prospectus for a description of the manner in
which an Account can be removed from the Trust.
The following table sets forth the percentage of dealer account
balances by year of credit line origination for the accounts in the Trust as
of [ ], 199[ ].
Portfolio Percentage by Year of Credit Line Origination
<TABLE>
<CAPTION>
199[ ] 1996 1995 1994 1993 1992 1991 Prior to 1991
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>
As of [ ], 199[ ], the weighted average spread over the Prime Rate
charged to Dealers was approximately [ ]%.
Loss Experience
The following tables set forth the average Principal Receivables
balance and loss experience for each of the periods shown on the U.S.
Wholesale Portfolio. Because the Eligible Accounts will be only a portion of
the entire U.S. Wholesale Portfolio, actual loss experience with respect to
the Eligible
S-19
<PAGE>
Accounts may be different. There can be no assurance that the loss experience
for the Receivables in the future will be similar to the historical
experience set forth below with respect to the U.S. Wholesale Portfolio. In
addition, the historical experience set forth below reflects financial
assistance provided by Chrysler to Chrysler-franchised dealers as described
in the Prospectus under "The Dealer Floorplan Financing Business --
Relationship with Chrysler" in the Prospectus. If Chrysler is not able to or
elects not to provide such assistance, the loss experience in respect of the
U.S. Wholesale Portfolio may be adversely affected. See "Risk Factors --
Trust's Relationship to Chrysler and CFC" in the Prospectus and "Risk Factors
- -- Trust's Relationship to Chrysler and CFC; Financial Condition of Chrysler"
in this Prospectus Supplement.
Loss Experience for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
[
] Year Ended December 31,
-------------------------------------------------------------
199[ ] 199[ ] 1996 1995 1994 1993
------ ------ ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C>
Average Principal Receivables Balance(1) ............ $[ ] $ [ ] $ 8,825 $ 8,256 $ 6,754 $6,271
Net Losses(2) ....................................... $ [ ] $ [ ] $ (0) $ (1) $ (1) $ 12
Net Losses/Liquidations ............................. [ ]% [ ]% (0.000)% (0.002)% (0.003)% 0.035%
Net Losses/Average Principal Receivables Balance (3) [ ]% [ ]% (0.00)% (0.01)% (0.01)% 0.19%
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal Receivables Balance(1) ............ $5,344 $4,826 $4,726 $4,933 $4,129 $3,787 $2,991
Net Losses(2) ....................................... $ 26 $ 36 $ 23 $ 13 $ 3 $ 2 $ 3
Net Losses/Liquidations ............................. 0.098% 0.163% 0.117% 0.060% 0.015% 0.015% 0.023%
Net Losses/Average Principal Receivables Balance (3) 0.49% 0.75% 0.49% 0.26% 0.07% 0.06% 0.10%
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
---- ---- ---- ---- ---- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Principal Receivables Balance(1) ............ $2,532 $2,098 $1,461 $1,451 $1,390 $1,622 $1,837
Net Losses(2) ....................................... $ 1 $ (2) $ 2 $ 14 $ 12 $ 18 $ 11
Net Losses/Liquidations ............................. 0.004% (.019)% 0.023% 0.239% 0.225% 0.338% 0.163%
Net Losses/Average Principal Receivables Balance .... 0.02% (0.09)% 0.12% 0.95% 0.85% 1.12% 0.58%
<FN>
- ----------------
(1) Average Principal Receivables Balance is the average of the month-end
principal balances for the [ ] months ending on the last day of the
period, except for the [ ] months ended [ ], 199[ ] and [ ], 199[ ],
which are based on a [ ]-month average.
(2) Net losses in any period are gross losses less recoveries for such
period.
(3) Percentages for the [ ] months ended [ ], 199[ ] and 199[ ] are
expressed on an annualized basis.
</TABLE>
S-20
<PAGE>
Aging Experience
The following table provides the age distribution of vehicle inventory
for all dealers in the U.S. Wholesale Portfolio, as a percentage of total
principal outstanding at the date indicated. Because the Eligible Accounts
will only be a portion of the entire U.S. Wholesale Portfolio, actual age
distribution with respect to the Eligible Accounts may be different.
Age Distribution for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
[ As of
] December 31,
---------------------------------------------------------------------------------------------
199[ ] 199[ ] 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1-120 ................ [ ] [ ]% 80.4% 82.2% 82.5% 82.4% 77.2% 75.9% 72.2% 71.3% 78.8% 73.0% 81.5%
121-180 .............. [ ] [ ] 10.0 9.3 10.1 9.6 13.8 12.9 13.7 14.5 11.0 13.9 9.2
181-270 .............. [ ] [ ] 5.0 3.8 4.0 4.6 4.8 4.8 7.1 6.4 4.7 6.8 4.4
Over 270 ............. [ ] [ ] 4.6 4.7 3.4 3.4 4.2 6.4 7.0 7.8 5.5 6.3 4.9
</TABLE>
Geographic Distribution
The following table provides the geographic distribution of the vehicle
inventory for all dealers in the Trust on the basis of receivables
outstanding and the number of dealers generating such portfolio.
Geographic Distribution of Accounts in the Trust as of [ ], 199[ ]
<TABLE>
<CAPTION>
Percentage
Receivables Percentage of Total of
Outstanding Receivables Number Number of
(thousands of Outstanding of Dealers
dollars)(2) (2)(4) Dealers(3) (3)(4)
------------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
California ........... % %
Texas ................ % %
New York ............. % %
New Jersey ........... % %
Illinois ............. % %
Pennsylvania ......... % %
Michigan ............. % %
[ ] .............. % %
Other(1) ............. % %
<FN>
- ----------------
(1) No other state includes more than 5% of the outstanding Receivables.
(2) Includes Excluded Receivables.
(3) Includes Excluded Dealers.
(4) May not add to 100.0% due to rounding.
</TABLE>
S-21
<PAGE>
CHRYSLER FINANCIAL CORPORATION
Certain information regarding Chrysler Financial Corporation is set
forth under "Chrysler Financial Corporation" in the Prospectus. In addition,
as of [ ], 199[ ], CFC had nearly [ ] employees and was servicing $[ ]
billion in finance receivables. During the first [ ] months of 199[ ], CFC
financed or leased approximately [ ] vehicles at retail, including
approximately [ ] new Chrysler passenger cars and light duty trucks
representing [ ]% of Chrysler's U.S. retail and fleet deliveries.
CFC also financed at wholesale approximately [ ] new Chrysler passenger
cars and light duty trucks representing [ ]% of Chrysler's U.S. factory
unit sales for the [ ] months ended [ ], 199[ ]. Wholesale vehicle
financing accounted for [ ]% of the total automotive financing volume of
CFC in the first [ ] months of 199[ ] and represented [ ]% of gross
automotive finance receivables outstanding at [ ], 199[ ].
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal with respect to the Series [199_-_] Certificates will be
payable if an Early Amortization Event [that is not cured as described
herein] has occurred. Full amortization of [the Swiss [199_-_] Certificates
by the [ ] Distribution Date (the "Expected Payment Date")] [the Class A
Certificates by the [ ] Distribution Date (the "Class A Expected Payment
Date") and the Class B Certificates by the [ ] Distribution Date (the "Class
B Expected Payment Date")] depends on, among other things, repayment by
Dealers of the Receivables and may not occur if Dealer payments are
insufficient therefor. Because the Receivables generally are paid upon retail
sale of the underlying Vehicle, the timing of such payments is uncertain. In
addition, there is no assurance that CFC will generate additional Receivables
under the Accounts or that any particular pattern of Dealer payments will
occur. See "Series Provisions -- Interest" and " -- Principal" herein and
"The Dealer Floorplan Financing Business" in the Prospectus and herein. [In
addition, the shorter the [Class A] Accumulation Period Length the greater
the likelihood that payment of [the Series [199_-_] Certificates by the
Expected Payment Date] [the Class A Certificates [and the Class B
Certificates] in full by [their respective] [the Class A] Expected Payment
Date[s]] will be dependent on the reallocation of Principal Collections which
are initially allocated to other outstanding Series.] If one or more other
Series from which Principal Collections are expected to be available to be
reallocated to the payment of the Series [199_-_] Certificates enters into an
early amortization period or reinvestment period after [ ] [the [ ]
Distribution Date] [the [Class A] Accumulation Period Commencement Date],
Principal Collections allocated to such Series generally will not be
available to be reallocated to make payments of principal of the Series
[199_-_] Certificates and [the final payment of principal of the Series
[199_-_] Certificates may be later than the Expected Payment Date] [the final
payment of principal of the Class A Certificates and the Class B Certificates
may be later than the Class A Expected Payment Date and the Class B Expected
Payment Date, respectively] [the amount distributed in respect of principal
of the Class A Certificates on any Distribution Date during the Class A
Controlled Amortization Period may be less than the Class A Controlled
Amortization Amount] [the amount distributed in respect of principal of the
Class B Certificates on any Distribution Date with respect to the Class B
Controlled Amortization Period may be less than the Class B Controlled
Amortization Amount]. Upon written request, the Seller will make available to
Series [199_-_] Certificateholders Disclosure Documents relating to the other
outstanding Series which describe the events which could result in the
commencement of an early amortization period or reinvestment period with
respect to such outstanding Series.]
Because an Early Amortization Event with respect to the Series [199_-_]
Certificates may occur which would initiate an Early Amortization Period, the
final distribution of principal on the Series [199_-_] Certificates may be
made prior to the scheduled termination of the Revolving Period or prior to
the Expected Payment Date[s] [for the Class A Certificates and the Class B
Certificates, respectively]. See "Series Provisions -- Early Amortization
Events".
[Several of the events which constitute Reinvestment Events with
respect to the Series [199_-_] Certificates may constitute early amortization
events with respect to other Series. Should such an event occur, holders of
Certificates of such other Series would receive monthly distribution of
principal, which
S-22
<PAGE>
distributions would not be limited to any controlled amortization amount,
while Certificateholder Principal Collections would be retained in the
Principal Funding Account and would not be distributed to Series [199_-_]
Certificateholders until [the Expected Payment Date] [the Class A Expected
Payment Date, in the case of the Class A Certificates, and the Class B
Expected Payment Date, in the case of the Class B Certificates] or, if
earlier, the first Distribution Date following the occurrence of an Early
Amortization Event. See "Series Provisions -- Principal" and " --
Reinvestment Events".]
The amount of new Receivables generated in any month and monthly
payment rates on the Receivables may vary because of seasonal variations in
Vehicle sales and inventory levels, retail incentive programs provided by
Vehicle manufacturers and various economic factors affecting Vehicle sales
generally. The following table sets forth the highest and lowest monthly
payment rates for the U.S. Wholesale Portfolio during any month in the
periods shown and the average of the monthly payment rates for all months
during the periods shown, in each case calculated as the percentage
equivalent of a fraction, the numerator of which is the aggregate of all
collections of principal during the period and the denominator of which is
the average aggregate principal balance for such period. Monthly payment
rates reflected in the table include principal credit adjustments. The
monthly payment rates presented for 1980 through 1985 are calculated using
quarterly data while monthly payment rates for 1986 through 1994 reflect
actual monthly data. There can be no assurance that the rate of Principal
Collections will be similar to the historical experience set forth below.
Because the Eligible Accounts will be only a portion of the entire U.S.
Wholesale Portfolio, historical actual monthly payment rates with respect to
the Eligible Accounts may be different than those shown below.
Monthly Payment Rates for the U.S. Wholesale Portfolio
<TABLE>
<CAPTION>
[
] Year Ended December 31,
---------------------------------------------------------------------------------------------
199[ ] 199[ ] 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month ............ [ ]% [ ]% 58.3% 59.1% 59.7% 54.7% 50.6% 49.0% 42.1% 41.5% 48.7% 40.3% 56.7%
Lowest Month ............. [ ] [ ] 43.2 36.5 34.2 35.9 34.4 30.2 25.3 29.5 29.5 26.8 27.7
Average of the Months in
the Period ............. [ ] [ ] 49.0 45.6 50.3 46.6 41.3 38.4 35.7 35.6 41.2 34.2 37.7
<CAPTION>
Year Ended December 31,
----------------------------------------------
1985 1984 1983 1982 1981 1980 1979
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month ............ 45.9% 43.7% 45.9% 35.5% 34.3% 28.9% 36.5%
Lowest Month ............. 35.8 35.7 37.7 29.0 27.4 26.7 26.0
Average of the Months in
the Period ............. 40.1 39.9 42.2 32.9 32.2 28.1 30.0
</TABLE>
SERIES PROVISIONS
General
The Series [199_-_] Certificates will be issued pursuant to the Pooling
and Servicing Agreement and a Series Supplement relating to the Series
[199_-_] Certificates (the "Series Supplement"). The Series [199_-_]
Certificates will consist of two Classes. The Trustee will make available for
inspection a copy of the Pooling and Servicing Agreement (without exhibits or
schedules) on written request. Reference should be made to the Prospectus for
additional information concerning the Series [199_-_] Certificates and the
Pooling and Servicing Agreement.
The Class A Certificates and the Class B Certificates will evidence
undivided beneficial interests in certain assets of the Trust allocated to
the Class A Certificateholders' Interest and the Class B Certificateholders'
Interest, respectively, representing the right to receive from such Trust
assets funds up to (but not in excess of) the amounts required to make
payments of interest on and principal of the Class A Certificates and the
Class B Certificates, respectively, pursuant to the Pooling and Servicing
Agreement.
S-23
<PAGE>
Interest
Interest on the principal balance of the Class A Certificates will
accrue at the Class A Certificate Rate and will be payable to the Class A
Certificateholders on each [Class A] Interest Payment Date, commencing [ ],
199[ ] [, provided that, during any Early Amortization Period, interest will
be distributed to Class A Certificateholders on each Distribution Date,
commencing on the first Distribution Date following the occurrence of an
Early Amortization Event]. Interest on the principal balance of the Class B
Certificates will accrue at the Class B Certificate Rate and will be payable
to the Class B Certificateholders on each [Class B] Interest Payment Date,
commencing [ ], 199[ ][, provided that, during any Early Amortization Period,
interest will be distributed to Class B Certificateholders on each
Distribution Date, commencing on the first Distribution Date following the
occurrence of an Early Amortization Event]. Interest on the [Class A]
Certificates will accrue from and including the preceding [Class A] Interest
Payment Date (or, in the case of the first [Class A] Interest Payment
Date, from and including the Series Issuance Date) to but including such
[Class A] Interest Payment Date. [Interest on the Class B Certificates
will accrue from and including the preceding Class B Interest Payment Date
(or, in the case of the first Class B Interest Payment Date, from and
including the Series Issuance Date) to but including such Class B Interest
Payment Date.] Interest on the Class A Certificates will be calculated on a
basis of [a 360-day year of twelve 30-day months] [the actual number of days
in each [Class A] Interest Period divided by [360] [other]]. Interest on the
Class B Certificates will be calculated on a basis of [a 360-day year of
twelve 30-day months] [the actual number of days in each [Class B] Interest
Period divided by [360] [other]]. Interest due for any [Class A] Interest
Payment Date [or Class B Interest Payment Date] but not paid on such [Class
A] Interest Payment Date [or Class B Interest Payment Date] will be due on
the next [Class A] Interest Payment Date [or Class B Interest Payment Date,
as applicable], together with interest on such amount at the applicable
Certificate Rate, to the extent permitted by applicable law. Interest
payments on the Series [199_-_] Certificates will generally be derived from
Certificateholder Interest Collections for a Collection Period, [any
withdrawals from the Reserve Fund,] [Excess Interest Collections, if any,
allocated to Series [199_-_],] Investment Proceeds, and, under certain
circumstances, Available Seller's Collections to the extent of the Available
Subordinated Amount and, in the case of the Class A Certificates, Reallocated
Principal Collections [describe other sources].
[The Class A Certificate Rate for each [[Class A] Interest Period]
[other] will be determined on the Class A Adjustment Date preceding such
[[Class A] Interest Period] [other].] The "Class A Certificate Rate" will be
[ %] [equal to [the lesser of (a)] the Class A Index [plus] [minus] [times]
[ ]% [and (b) the Assets Receivables Rate for the related Distribution Date].
[The Class B Certificate Rate for each [[Class B] Interest Period]
[other] will be determined on the Class B Adjustment Date preceding such
Class B Interest Period] [other].] The "Class B Certificate Rate" will be
[ %] [equal to [the lesser of (a)] the Class B Index [plus] [minus] [times]
[ ]% [and (b) the Assets Receivables Rate for the related Distribution Date].
"Class A Monthly Interest" for any Distribution Date means the amount
of interest accrued in respect of the Class A Certificates as described above
for such Distribution Date; and "Class B Monthly Interest" for any
Distribution Date means the amount of interest accrued in respect of the
Class B Certificates as described above for such Distribution Date. Class A
Monthly Interest and Class B Monthly Interest are referred to collectively as
"Monthly Interest".
[Describe [Class A Index] [and Class B Index] and define [Class A
Adjustment Date] [and Class B Adjustment Date].]
[If the Class A Certificate Rate for a Distribution Date calculated on
the basis of the Class A Index as described above is greater than the Assets
Receivable Rate, then the Class A Certificate Rate for such Distribution Date
will be the Assets Receivables Rate; and if the Class B Certificate Rate for
a Distribution Date as calculated on the basis of the Class B Index as
described above is greater than the Assets Receivables Rate, then the Class B
Certificate Rate for such Distribution Date will be the Assets Receivables
Rate.]
S-24
<PAGE>
[The "Assets Receivables Rate" for any [Interest Period][period from
one Distribution Date to the immediately succeeding Distribution Date] shall
equal [the product of (a) the quotient obtained by dividing (i) 360 by (ii)
the actual number of days elapsed in such period and (b) a percentage,
expressed as a fraction, (i) the numerator of which is the sum of (A)
Certificateholder Interest Collections for the Collection Period immediately
preceding the last day of such period (which for this purpose only is based
on interest amounts billed to the Dealers which are due during such
Collection Period) less, unless waived by the Servicer, the Monthly Servicing
Fee with respect to such immediately preceding Collection Period [and] (B)
the Investment Proceeds to be applied on the Distribution Date related to
such period [and (C) Excess Interest Collections allocated to Series [199_-_]
with respect to such period] and (ii) the denominator of which is the sum of
(A) the product of (I) the Floating Allocation Percentage, (II) the Series
Allocation Percentage and (III) the average Pool Balance (after giving effect
to any charge-offs) for such immediately preceding Collection Period, [(B)
the principal balance on deposit in the Excess Funding Account on the first
day of such period (after giving effect to all deposits to and withdrawals
therefrom on such first day)] and [(C) the principal balance on deposit in
the Principal Funding Account on the first day of such period (after giving
effect to all deposits to and withdrawals therefrom on such first day)]
[other].
[If [the Class A Certificate Rate] [or the Class B Certificate Rate]
for any Distribution Date is based on the Assets Receivables Rate, the excess
of (a) the amount of interest on [the Class A Certificates] [or the Class B
Certificates] that would have accrued in respect of the related [[Class A]
Interest Period [or Class B Interest Period] [period from one Distribution
Date to the immediately succeeding Distribution Date] had interest
been calculated based on the [Class A Index] [or the Class B Index, as the
case may be,] over (b) the amount of interest on [the Class A Certificates]
[or the Class B Certificates, as the case may be,] actually accrued in
respect of such period based on the Assets Receivables Rate (such excess,
together with the unpaid portion of any such excess from prior Distribution
Dates (and interest accrued thereon at the applicable Certificate Rate
calculated on the basis of [the Class A Index] [or the Class B Index, as the
case may be,]), is referred to as [the "Class A Carry-over Amount"] [or the
"Class B Carry-over Amount", as applicable]) will be paid on such
Distribution Date from amounts on deposit in the Yield Supplement Account
and, if such amounts are depleted, to the extent funds are allocated and
available therefor after making certain required distributions and deposits
with respect to the Series [199_-_] Certificates, including payments with
respect to principal [(including payments to the Excess Funding Account)],
Class A Monthly Interest, Class B Monthly Interest, the Class A Monthly
Servicing Fee, the Class B Monthly Servicing Fee[, the Reserve Fund Deposit
Amount], the Class A Investor Default Amount and the Class B Investor Default
Amount as described below under "Distributions from the Collection Account;
[Reserve Fund;] Yield Supplement Account". In addition, any Carry-over Amount
outstanding on the Final Payment Date, after making the distributions
described in the preceding sentence, will be paid on such date from (i)
amounts on deposit in the Reserve Fund and (ii) Available Seller's
Collections on deposit in the Collection Account on such date as described
under "Series Provisions -- Distributions from the Collection Account;
Reserve Fund; Yield Supplement Account" The rating of the Series [199_-_]
Certificates does not address the likelihood of payment of any Carry-over
Amount.]
Principal
In general, no principal payments will be made to [the Series [199_-_]
Certificateholders until the [Expected Payment Date] [Principal Commencement
Date]] [the Class A Certificateholders until the [Class A Expected Payment
Date] [Class A Principal Commencement Date] or to the Class B
Certificateholders until the [Class B Expected Payment Date] [Class B
Principal Commencement Date]] or, upon the occurrence of an Early
Amortization Event [that is not cured as described herein], until the first
Special Payment Date. On each Distribution Date with respect to the Revolving
Period, collections of Principal Receivables allocable to the Series [199_-_]
Certificateholders' Interest other than Reallocated Principal Collections
applied to the Class A Required Amount, subject to certain limitations, will
either be (a) allocated to one or more Series which are in amortization,
early amortization or accumulation periods to cover principal payments due to
the Certificateholders of any such Series or which provides for excess
funding accounts or similar arrangements or (b) if no such Series is then
amortizing or
S-25
<PAGE>
accumulating principal or otherwise does not provide for excess funding
accounts or similar arrangements, paid to the Seller to maintain the Series
[199_-_] Certificateholders' Interest or held as Unallocated Principal
Collections. See "Allocation Percentages -- Principal Collections for all
Series" and "Distributions from the Collection Account[; Reserve Fund][;
Yield Supplement Account] -- Principal Collections".
Unless and until an Early Amortization Event [or Reinvestment Event]
[that is not cured as described herein] shall have occurred and until the
outstanding principal balance of the Series [199_-_] Certificates is paid in
full, on each Distribution Date with respect to the [Class A] [Class B]
[Accumulation Period] [Class A] [Class B] [Controlled Amortization Period],
collections of Principal Receivables allocable to the Series [199_-_]
Certificateholders' Interest not applied to the Class A Required Amount plus
certain other amounts comprising Class A Monthly Principal and/or Class B
Monthly Period will no longer be paid for the benefit of another Series or to
the Seller as described above but instead an amount thereof up to [the Class
A Controlled Deposit Amount, in the case of the Class A Accumulation Period,]
[and the Class B Controlled Deposit Amount, in the case of the Class B
Accumulation Period] for each such Distribution Date will be [deposited in
the Principal Funding Account [, in respect of the Class A Certificates and
the Class B Certificates, respectively,] [and an amount thereof up to [the
Class A Controlled Distribution Amount, in the case of the Class A Controlled
Amortization Period] [and the Class B Controlled Distribution Amount, in the
case of the Class B Controlled Amortization Period]] distributed to Class A
Certificateholders and Class B Certificateholders, respectively]. [The funds
deposited in the Principal Funding Account and any amounts in the Excess
Funding Account will be used to pay the outstanding principal balance of [the
Series [199_-_] Certificates on the Expected Payment Date], [the Class A
Certificates on the Class A Expected Payment Date and the Class B
Certificates on the Class B Expected Payment Date]. If on [either] such date
the sum of the Principal Funding Account Balance and any amounts in the
Excess Funding Account is less than the outstanding principal balance of
[such Class of] the Series [199_-_] Certificates, the Early Amortization
Period will commence and on each Special Payment Date the Class A
Certificateholders will receive distributions of Class A Monthly Principal
until the outstanding principal balance of the Class A Certificates
has been paid in full or the Series Termination Date has occurred and on each
Special Payment Date after the Class A Certificates have been paid in full
the Class B Certificateholders will receive distributions of Class B Monthly
Principal until the outstanding principal balance of the Class B Certificates
has been paid in full or the Series Termination Date has occurred. Even if
the sum of the Principal Funding Account Balance and any amounts in the
Excess Funding Account on the [Expected Payment Date] [the Class A Expected
Payment Date or Class B Expected Date, as the case may be,] is insufficient
to pay the outstanding principal balance of [such Class of] the Series
[199_-_] Certificates in full, such balances will be distributed to the
Series [199_-_] Certificateholders at such time.]
It is expected that the final principal payment with respect to [the
Series [199_-_] Certificates] [the Class A Certificates and the Class B
Certificates] will be made on the [Class A] Expected Payment Date [and the
Class B Expected Payment Date, respectively], but the principal of the Series
[199_-_] Certificates may be paid earlier or, depending on the actual payment
rate on the Receivables, later, as described under "Special Considerations --
Payments" herein and in the Prospectus.
[Excess Funding Account
Unless and until an Early Amortization Event [or Reinvestment Event]
shall have occurred, the Excess Funded Amount will be maintained in the
Excess Funding Account established with the Trustee. The Excess Funded Amount
will initially equal the excess of the initial principal balance of the
Series [199_-_] Certificates, if any, over the Initial Invested Amount. Funds
on deposit in the Excess Funding Account will be invested by the Trustee at
the direction of the Servicer generally in Eligible Investments. Such
investments must mature on or prior to the next Distribution Date.
Funds on deposit in the Excess Funding Account will be withdrawn and
paid to the Seller or allocated to one or more Series which are in
amortization, early amortization or accumulation periods to the extent of any
increases in the Invested Amount as a result of the addition of Receivables
to the
S-26
<PAGE>
Trust, a reduction in the Seller's Interest, or a reduction in the
initial invested amount of any other Series. Additional amounts will be
deposited in the Excess Funding Account on a Distribution Date to the extent
that the sum of the Series [199_-_] Certificateholders' Interest in Principal
Receivables and the amount on deposit in the Excess Funding Account prior to
the deposit on such Distribution Date is less than the outstanding principal
balance of the Series [199_-_] Certificates, but only to the extent that
funds are available therefor as described herein. In the event that other
Series issued by the Trust provide for excess funding accounts or other
arrangements similar to the Excess Funding Account involving fluctuating
levels of investment in the Receivables, the allocation of additional
Receivables to increase the Invested Amount will generally be based on the
proportion that the amount on deposit in the Excess Funding Account bears to
the amounts on deposit in the excess funding accounts of all Series providing
for excess funding accounts or such similar arrangements or to amounts
otherwise similarly available; and the deposit of amounts in the Excess
Funding Account will be based on the proportion that the Adjusted Invested
Amount bears to the adjusted invested amounts of all Series providing for
excess funding accounts or such similar arrangements.
On each Distribution Date, all investment income earned on amounts in
the Excess Funding Account since the preceding Distribution Date will be
withdrawn from the Excess Funding Account and applied as described herein.
[Describe application of funds on deposit in the Excess Funding Account
during an Accumulation Period for one or both Classes or a Controlled
Amortization Period for one or both Classes.]
No funds will be deposited in the Excess Funding Account during any
Early Amortization Period [or Reinvestment Period] or with respect to any
Collection Period following [ ] [the [ ] Distribution Date] [the Accumulation
Period Commencement Date].
Allocation Percentages
Allocation between the Series [199_-_] Certificateholders and the
Seller. The Servicer will allocate amounts initially allocated to Series
[199_-_] as described under "Description of the Certificates -- Allocation
Percentages -- Allocations among Series" in the Prospectus between the Series
[199_-_] Certificateholders' Interest and the Seller's Interest for each
Collection Period as follows:
(i) Series Allocable Interest Collections and the Series
Allocable Defaulted Amount will be allocated to Series [199_-_]
Certificateholders based on the Floating Allocation Percentage [;
provided that during any Early Amortization Period, Series Allocable
Interest Collections will be allocated to the Series [199_-_]
Certificateholders based on the Fixed Allocation Percentage];
(ii) during the Revolving Period, Series Allocable Principal
Collections will be allocated to Certificateholders based on the
Floating Allocation Percentage;
(iii) during the [Class A] [Class B] [Accumulation Period] [Class
A] [Class B] [Controlled Amortization Period] and any Early
Amortization Period [or Reinvestment Period], Series Allocable
Principal Collections will be allocated to Series [199_-_]
Certificateholders based on the [Fixed Allocation Percentage] [other];
and
(iv) Series Allocable Miscellaneous Payments will at all times be
allocated to Series [199_-_] Certificateholders.
Amounts not allocated to the Series [199_-_] Certificateholders as described
above will be allocated to the Seller.
"Floating Allocation Percentage" for any Collection Period means
[the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the Invested Amount as of the last
day of the immediately preceding Collection Period and the denominator
of which is the product of (x) the Pool Balance as of such last day and
(y) the Series Allocation Percentage for the Collection Period in
respect of which the Floating Allocation Percentage is being
calculated; provided, however, that, with respect to the first
Collection Period, the Floating Allocation
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<PAGE>
Percentage shall mean the percentage equivalent of a fraction, the
numerator of which is the Initial Invested Amount as of the Series
Issuance Date and the denominator of which is the Series Allocation
Percentage of the Pool Balance as of the Series Cut-Off Date] [other].
"Fixed Allocation Percentage" for any Collection Period generally
means [the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the Invested Amount as of the last
day of the Revolving Period and the denominator of which is the product
of (x) the Pool Balance as of the last day of the immediately preceding
Collection Period and (y) the Series Allocation Percentage for the
Collection Period in respect of which the Fixed Allocation Percentage
is being calculated] [other].
"Invested Amount" means for any date an amount equal to the sum
of the Class A Invested Amount and the Class B Invested Amount, in each
case for such date.
"Class A Invested Amount" means for any date [an amount equal to
(i) the Class A Initial Invested Amount, minus (ii) the amount, without
duplication, of principal payments [(except principal payments made
from the Excess Funding Account)] made to Class A Certificateholders or
deposited to the Principal Funding Account in respect of the Class A
Certificates prior to such date since the Series Issuance Date, minus
(iii) the excess, if any, of the aggregate amount of Class A Investor
Charge-Offs for all Distribution Dates preceding such date, over the
aggregate amount of any reimbursements of Class A Investor Charge-Offs
for all Distribution Dates preceding such date] [other].
"Class B Invested Amount" means for any date [an amount equal to
(i) the Class B Initial Invested Amount, minus (ii) the amount, without
duplication, of principal payments [(except principal payments made
from the Excess Funding Account)] made to Class B Certificateholders or
deposited to the Principal Funding Account in respect of the Class B
Certificates prior to such date since the Series Issuance Date (other
than any such amounts applied to pay principal of the Class A
Certificates), minus (iii) the excess, if any, of the aggregate amount
of Class B Investor Charge-Offs for all Distribution Dates preceding
such date over the aggregate amount of any reimbursements of Class B
Investor Charge-Offs for all Distribution Dates preceding such date,
minus (iv) the aggregate amount of Reallocated Principal Collections
for all prior Distribution Dates which have been used to fund the Class
A-1 Required Amount with respect to such Distribution Date, minus (v)
an amount equal to the amount in which the Class B Invested Amount has
been reduced to fund the Class A Investor Default Amount on all prior
Distribution Dates as described under "Investor Charge-Offs" and plus
(vi) the aggregate amount of Excess Spread [other amounts] applied on
prior Distribution Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (iii), (iv) and (v)][other].
"Initial Invested Amount" means the sum of the Class A Initial
Invested Amount and the Class B Initial Invested Amount.
"Class A Initial Invested Amount" means [the portion of the
initial principal amount of the Class A Certificates which is invested
in Principal Receivables on the Series Issuance Date, which is expected
to equal approximately $[ ] (based on information as of the Series
Cut-Off Date), plus (x) the product of the Class A Allocation
Percentage and the amount of any withdrawals from the Excess Funding
Account in connection with the purchase of an additional interest in
Principal Receivables since the Series Issuance Date, minus (y) the
product of the Class A Allocation Percentage and the amount of any
additions to the Excess Funding Account in connection with a reduction
in the Principal Receivables in the Trust since the Series Issuance
Date][other].
"Class B Initial Invested Amount" means [the portion of the
initial principal amount of the Class B Certificates which is invested
in Principal Receivables on the Series Issuance Date, which is expected
to equal approximately $[ ] (based on information as of the Series
Cut-off Date), plus (x) the product of the Class B Allocation
Percentage and the amount of any withdrawals from the Excess Funding
Account in connection with the purchase of an additional interest in
Principal
S-28
<PAGE>
Receivables since the Series Issuance Date, minus (y) the product of
the Class B Allocation Percentage and the amount of any additions to
the Excess Funding Account in connection with a reduction in the
Principal Receivables in the Trust since the Series Issuance Date]
[other].
The Floating Allocation Percentage and the Fixed Allocation Percentage will
be adjusted for any Collection Period in which Additional Accounts are
designated to reflect the additional Receivables added to the Trust.
Allocation Between the Class A Certificateholders and the Class B
Certificateholders. The Servicer will allocate Available Certificateholder
Principal Collections and Available Certificateholder Interest Collections
between the interest of holders of Class A Certificates and the interest of
holders of Class B Certificates for each Collection Period based on the Class
A Allocation Percentage and the Class B Allocation Percentage, respectively.
"Available Certificateholder Principal Collections" for any
Distribution Date means the sum of (a) the product of (i) the Floating
Allocation Percentage, with respect to any Revolving Period, or the
Fixed Allocation Percentage, with respect to the [Class A] [Class B]
[Accumulation Period] [Class A] [Class B] [Controlled Amortization
Period] or any Early Amortization Period [or Reinvestment Period], for
the related Collection Period and (ii) Series Allocable Principal
Collections deposited in the Collection Account for the related
Collection Period, (b) the amount, if any, of Interest Collections,
[funds in the Reserve Fund,] Available Seller's Collections and Excess
Servicing allocated to cover the Investor Default Amount or reimburse
Investor Charge-Offs, (c) Series Allocable Miscellaneous Payments on
deposit in the Collection Account for such Distribution Date and (d)
Excess Principal Collections, if any, from other Series allocated to
Series [199_-_].
"Available Certificateholder Interest Collections" for any
Distribution Date means the portion of Series Allocable Interest
Collections for the related Collection Period allocated to the Series
[199_-_] Certificateholders' Interest as described under "Allocation
Between the Series [199_-_] Certificateholders and the Seller".
"Class A Allocation Percentage" for any Collection Period is the
percentage obtained by dividing the Class A Invested Amount as of the
last day of the immediately preceding Collection Period (after giving
effect to any reduction thereof to occur on the immediately following
Distribution Date) by the aggregate Invested Amount of the Series
[199_-_] Certificates as of such last day (after giving effect to any
reduction thereof to occur on the immediately following Distribution
Date).
"Class B Allocation Percentage" for any Collection Period is the
percentage obtained by subtracting from 100% the Class A Allocation
Percentage.
Principal Collections for All Series. Principal Collections allocated
to the Series [199_-_] Certificateholders' Interest for any Collection Period
with respect to the [Class A] [Class B] [Accumulation Period] [Controlled
Amortization Period] or the Early Amortization Period [or Reinvestment
Period], other than Reallocated Principal Collections applied to the Class A
Required Amount, will first be allocated to make required payments of
principal to the Principal Funding Account during the [Class A] [Class B]
Accumulation Period [or any Reinvestment Period] and to the holders of Series
[199_-_] Certificates during the Early Amortization Period [or [Class A]
[Class B] Controlled Amortization Period]. See "Distributions from the
Collection Account; [Reserve Fund;] [Yield Supplement Account] --
Principal Collections". The Servicer will determine the amount of
Unreallocated Certificateholder Principal Collections for any Collection
Period remaining after such required payments, if any, and the amount of any
similar excess for any other Series ("Excess Principal Collections"). The
Servicer will allocate Excess Principal Collections to cover any principal
distributions to Certificateholders for any Series which are either scheduled
or permitted and which have not been covered out of Principal Collections and
certain other amounts allocated to such Series ("Principal Shortfalls"). See
"Maturity and Principal Payment Considerations". Excess Principal Collections
will generally not be used to cover
S-29
<PAGE>
investor charge-offs for any Series. If Principal Shortfalls exceed Excess
Principal Collections for any Collection Period, Excess Principal Collections
will be allocated [pro rata among the applicable Series based on the relative
amounts of Principal Shortfalls] [describe other method of applying, if
applicable].
Allocation of Collections; Limited Subordination of Seller's Interest and Class
B Certificateholders' Interest
Allocation of Collections. [Except as otherwise described herein with
respect to Interest Collections and Principal Collections allocated to the
Available Negative Carry Subordinated Amount, [and [ ]] on] [On] any date on
which collections are deposited in the Collection Account, the Servicer will
distribute directly to the Seller an amount equal to (a) the Excess Seller's
Percentage for the related Collection Period of Series Allocable Interest
Collections for such date and (b) the Excess Seller's Percentage for the
related Collection Period of Series Allocable Principal Collections for such
date, if the Seller's Participation Amount (determined after giving effect to
any Principal Receivables transferred to the Trust on such date) exceeds the
Trust Available Subordinated Amount for the immediately preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date immediately
following such Determination Date). In addition, during the Revolving Period,
subject to certain limitations, the Servicer will distribute directly to the
Seller on each such date of deposit an amount equal to the Available Seller's
Principal Collections for such date, if the Seller's Participation Amount
(determined after giving effect to any Principal Receivables transferred to
the Trust on such date) exceeds the Trust Available Subordinated Amount for
the immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date) [describe
exceptions, if any].
"Available Seller's Collections" for any date means the sum of
(a) the Available Seller's Interest Collections for such date and (b)
the Available Seller's Principal Collections for such date; provided,
however, that the Available Seller's Collections will be zero for any
Collection Period with respect to which the Available Subordinated
Amount is zero on the Determination Date immediately following the end
of such Collection Period.
"Available Seller's Interest Collections" for any date means an
amount equal to the result obtained by multiplying (a) the excess of
(i) the Seller's Percentage for the related Collection Period over (ii)
the Excess Seller's Percentage for such Collection Period by (b) Series
Allocable Interest Collections for such date.
"Available Seller's Principal Collections" for any date means an
amount equal to the product of (a) the excess of (i) the Seller's
Percentage for the related Collection Period over (ii) the Excess
Seller's Percentage for such Collection Period and (b) Series Allocable
Principal Collections for such date.
"Seller's Percentage" means 100% minus (a) the Floating
Allocation Percentage, when used with respect to Interest Collections
[(except during any Early Amortization Period)], Defaulted Receivables
and Principal Collections during the Revolving Period, and (b) the
[Fixed Allocation Percentage] [other], when used with respect to
[Interest Collections during any Early Amortization Period and]
Principal Collections during the [Class A] [Class B] [Accumulation
Period] [Class A] [Class B] [Controlled Amortization Period] and any
Early Amortization Period [or Reinvestment Period].
"Excess Seller's Percentage" for any Collection Period means a
percentage (which percentage shall never be less than 0% nor more than
100%) equal to (a) 100% minus, when used with respect to Interest
Collections [(except during any Early Amortization Period)] and
Principal Collections during the Revolving Period, the sum of (i) the
Floating Allocation Percentage with respect to such Collection Period
and (ii) the percentage equivalent of a fraction, the numerator of
which is the Available Subordinated Amount as of the Determination Date
occurring in such Collection Period (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
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<PAGE>
Distribution Date immediately following such Determination Date), and
the denominator of which is the product of (x) the Pool Balance as of
the last day of such immediately preceding Collection Period and (y)
the Series Allocation Percentage for the Collection Period in respect
of which the Excess Seller's Percentage is being calculated or (b) 100%
minus, when used with respect to [Interest Collections during any Early
Amortization Period and] Principal Collections during the [Class A]
[Class B] [Accumulation Period] [Class A] [Class B] [Controlled
Amortization Period] and any Early Amortization Period [or Reinvestment
Period], the sum of (i) the [Fixed Allocation Percentage] [other] with
respect to such Collection Period and (ii) the percentage described in
clause (a)(ii) above for such Collection Period.
Deficiency Amounts. [On each Determination Date [with respect to a
Distribution Date that occurs on or prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Revolving Period, if the
Revolving Period has recommenced]], the Servicer will determine for the Class
A Certificates the amount (the "Class A Deficiency Amount"), if any, by which
(a) the sum of (i) Class A Monthly Interest for the following Distribution
Date, (ii) Class A Monthly Interest accrued but not paid with respect to
prior Distribution Dates (and interest thereon), (iii) the Class A Monthly
Servicing Fee for such Distribution Date, (iv) the Class A Investor Default
Amount for such Distribution Date (the sum of the amounts in clauses (i),
(ii), (iii) and (iv) being referred to herein as the "Class A Required
Amount"), (v) the product of the Class A Allocation Percentage and the amount
of any Adjustment Payment allocated to the Series [199_-_] Certificates for
such Distribution Date that has not been deposited in the Collection Account
as required under the Pooling and Servicing Agreement, and (vi) if such
Distribution Date is the Final Payment Date, any Class A Carry-over Amount on
such Distribution Date that will not be satisfied on such date by the
application of amounts on deposit in the Yield Supplement Account as
described under "Distributions from the Collection Account; Reserve Fund;
Yield Supplement Account -- Yield Supplement Account" exceeds (b) the sum of
(i) Class A Certificateholder Interest Collections and Class A Investment
Proceeds for such Distribution Date, (ii) the amount of Excess Servicing [and
Excess Interest Collections] available to fund any portion of the Class A
Deficiency Amount as described under "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account] -- Excess Servicing [and
Excess Interest Collections]" and (iii) the amount of funds in the Reserve
Fund on such Determination Date available to fund any portion of the Class A
Deficiency Amount as described under "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account] -- Interest Collections
- -- Class A"]. The lesser of the Class A Deficiency Amount and the Available
Subordinated Amount is the "Class A Draw Amount".] [Include other sources of
funds and applications of the Class A Draw Amount, as appropriate.]
"Final Payment Date" means the first Distribution Date on which, after
giving effect to all payments to be made on such Distribution Date, the
outstanding principal balance of the Series [199_-_] Certificates will be
paid in full.
[On each Determination Date [with respect to a Distribution Date that
occurs on or prior to the Fully Reinvested Date [or any Distribution Date
thereafter during the Revolving Period, if the Revolving Period has
recommenced]], the Servicer will determine for the Class B Certificates, the
amount (the "Class B Deficiency Amount"), if any, by which (a) the sum of (i)
Class B Monthly Interest for the following Distribution Date, (ii) Class B
Monthly Interest accrued but not paid with respect to prior Distribution
Dates (and interest thereon), (iii) the Class B Monthly Servicing Fee for
such Distribution Date, (iv) the Class B Investor Default Amount for such
Distribution Date (the sum of the amounts in clauses (i), (ii), (iii) and
(iv) being referred to herein as the "Class B Required Amount"), (v) the
product of the Class B Allocation Percentage and the amount of any Adjustment
Payment allocated to the Series [199_-_] Certificates for such Distribution
Date that has not been deposited in the Collection Account as required under
the Pooling and Servicing Agreement, and (vi) if such Distribution Date is
the Final Payment Date, any Class B Carry-over Amount on such Distribution
Date that will not be satisfied on such date by the application of amounts on
deposit in the Yield Supplement Account as described under "Distributions
from the Collection Account; Reserve Fund; Yield Supplement Account -- Yield
Supplement Account", exceeds (b) the sum of (i) Class B Certificateholder
Interest Collections and Class B Investment Proceeds for such Distribution
Date, (ii) the amount of Excess Servicing [and
S-31
<PAGE>
Excess Interest Collections] available to fund any portion of the Class B
Deficiency Amount as described under "Distributions from the Collection
Account[; Reserve Fund][;Yield Supplement Account] -- Excess Servicing [and
Excess Interest Collections]" [and (iii) the amount of funds in the Reserve
Fund on such Determination Date available to fund any portion of the Class B
Deficiency Amount as described under "Distributions from the Collection
Account; Reserve Fund[; Yield Supplement Account] -- Interest Collections --
Class B"]. The lesser of the Class B Deficiency Amount and the excess of the
Available Subordinated Amount over the Class A Draw Amount is the "Class B
Draw Amount".] [Include other sources of funds and applications of the Class
B Draw Amount, as appropriate.]
Available Subordinated Amount. The "Required Subordinated Amount" shall
mean, as of any date of determination, [the sum of (i)] the product of the
initial Subordinated Percentage [, as adjusted from time to time as described
herein other than as a result of an increase therein at the option of the
Seller,] and the Invested Amount [and (ii) the Incremental Subordinated
Amount]. Assuming that the Initial Invested Amount of the Series [199_-_]
Certificates is equal to the initial principal amount of the Series [199_-_]
Certificates, such amount would initially be $[ ].
The Available Subordinated Amount for a Determination Date is equal to
(a) the lesser of (i) the Available Subordinated Amount for the preceding
Determination Date, minus, with certain limitations, the Class A Draw Amount
and the Class B Draw Amount for such preceding Determination Date, [minus
funds from the Reserve Fund applied to cover any portion of the Investor
Default Amount,], plus the excess, if any, of the Required Subordinated
Amount for such Determination Date over the Required Subordinated Amount for
the immediately preceding Determination Date, plus the amount of Excess
Servicing available to be paid to the Seller as described under
"Distributions from the Collection Account[; Reserve Fund][; Yield Supplement
Account] -- Excess Servicing", and (ii) the product of the fractional
equivalent of the Subordinated Percentage and the Invested Amount, [minus (b)
in the case of clause (a) (i) the Incremental Subordinated Amount for such
preceding Determination Date, plus (c) the Incremental Subordinated Amount
for the current Determination Date,] [plus (d) the Subordinated Percentage of
funds to be withdrawn from the Excess Funding Account on the succeeding
Distribution Date and paid to the Seller or allocated to one or more Series];
provided, however, that, once [the [[Class A] Accumulation Period] [[Class A]
Controlled Amortization Period] or] any Early Amortization Period [that is
not cured as described herein] shall have commenced, the Available
Subordinated Amount shall be calculated based on the Invested Amount as of
the close of business on the day preceding such [[[Class A] Accumulation
Period] [[Class A] Controlled Amortization Period] or] Early Amortization
Period[; and provided further that from and after the commencement of any
Reinvestment Period [that is not cured as described herein] until the
earliest of the commencement of any Early Amortization Period [that is not
cured, as described herein,] the payment in full of the Series [199_-_]
Certificates and the Fully Reinvested Date, the Available Subordinated Amount
shall be calculated based on the Invested Amount as of the close of business
on the day preceding such Reinvestment Period [less [describe permitted
reductions, e.g., based on payment rates or amounts on deposit in the
Principal Funding Account]]. The Available Subordinated Amount for the first
Determination Date is equal to the Required Subordinated Amount. [The
"Incremental Subordinated Amount" on any Determination Date will equal the
result obtained by multiplying (a) a fraction, the numerator of which is the
sum of the Invested Amount on the last day of the immediately preceding
Collection Period and the Available Subordinated Amount for such
Determination Date (calculated without adding the Incremental Subordinated
Amount for such Determination Date as described in clause (c) above), and the
denominator of which is the Pool Balance on such last day by (b) the excess,
if any, of (x) the sum of the Overconcentration Amount, the Instalment
Balance Amount and the aggregate amount of Ineligible Receivables on such
Determination Date over (y) the aggregate amount of Ineligible Receivables,
Receivables in Accounts containing Dealer Overconcentrations and Receivables
in Instalment Balances, in each case that became Defaulted Receivables during
the preceding Collection Period and are not subject to reassignment from the
Trust, unless certain insolvency events relating to the Seller or CFC have
occurred, as further described in the Pooling and Servicing Agreement].
The "Subordinated Percentage" will initially equal the percentage
equivalent of a fraction, the numerator of which is the Subordination Factor
and the denominator of which will be the excess of 100%
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<PAGE>
over the Subordination Factor. The Seller may, in its sole discretion, at any
time increase the Available Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser of (i) $[ ] or (ii) [ ]
of the Invested Amount. The Seller is not under any obligation to increase
the Available Subordinated Amount at any time. If [the sum of] the Available
Subordinated Amount [and the Incremental Subordinated Amount] were reduced to
less than the sum of the Required Subordinated Amount [and the Incremental
Subordinated Amount], a [Reinvestment Event] [Early Amortization Event] would
occur. The Seller could elect to increase the Available Subordinated Amount
at the time such a [Reinvestment Event] [Early Amortization Event] would
otherwise occur, thus preventing or delaying the occurrence of the
[Reinvestment Event] [Early Amortization Event]. [Describe partial
Reinvestment Periods resulting from a failure to meet the test described
above, if applicable.]
[Negative Carry Subordinated Amount. In the event of the occurrence of
[a Reinvestment Event,] [an Early Amortization Event] [or the commencement of
the [Class A] Accumulation Period] [or the commencement of the [Class A]
Controlled Amortization Period], Interest Collections and Principal
Collections otherwise distributed to the Seller in respect of the Excess
Seller's Percentage, in an amount not to exceed the Available Negative Carry
Subordinated Amount, will be deposited to the Reserve Fund [and other] until
the amounts on deposit therein equal the Negative Carry Required Amount [and
[ ]].
"Available Negative Carry Subordinated Amount" means, initially, the
Required Negative Carry Subordinated Amount and, on any subsequent date, the
Available Negative Carry Subordinated Amount at the open of business on the
immediately preceding date less the amount of Seller's Collections deposited
on such immediately preceding date to the Reserve Fund [and other] in
accordance with the preceding paragraph.]
"Required Negative Carry Subordinated Amount" means [
].
"Negative Carry Required Amount" means [ ].]
[Describe other subordination of the Seller's Interest, if applicable.]
Subordination of Class B Certificateholders' Interest. The fractional
undivided interest in the Trust represented by the Class B Certificates will
be subordinated to the extent described herein to fund payments with respect
to the Class A Certificates. The Class B Invested Amount represents the Class
B Certificateholders' allocable interest in the Trust assets and represents
the subordinated amount which, in addition to the Available Subordinated
Amount, is available to fund payments with respect to the Class A
Certificates.
[On each Determination Date [with respect to a Distribution Date that
occurs on or prior to the Fully Reinvested Date [or any Distribution Date
thereafter during the Revolving Period, if the Revolving Period has
recommenced]], the Servicer will determine for the Class A Certificates, the
amount (the "Reallocation Deficiency Amount"), if any, by which (a) the Class
A Required Amount exceeds the sum of (i) Class A Certificateholder Interest
Collections and Class A Investment Proceeds for such Distribution Date, (ii)
the amount of Excess Servicing [and Excess Interest Collections] available to
fund any portion of the Reallocation Deficiency Amount as described under
"Distributions from the Collection Account[; Reserve Fund][; Yield Supplement
Account] -- Excess Servicing [and Excess Interest Collections]", [(iii) the
amount of funds in the Reserve Fund on such Determination Date available to
fund any portion of the Reallocation Deficiency Amount as described under
"Distributions from the Collection Account; Reserve Fund[; Yield Supplement
Account] -- Interest Collections -- Class A"] and (iv) the amount of
Available Seller's Collections available to fund any portion of the
Reallocation Deficiency Amount.
On each Distribution Date on which there is a Reallocation Deficiency
Amount, Reallocated Principal Collections will be applied to fund the Class A
Required Amount as described under "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account] -- Interest Collection --
Class A" and the Class B Invested Amount will be reduced by the amount of
Reallocated
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<PAGE>
Principal Collections so applied. If Reallocated Principal Collections with
respect to such Collection Period are insufficient to fund such Reallocation
Deficiency Amount, then a portion of the Class B Invested Amount will be
reduced by the amount of such deficiency (but not by more than the Class A
Investor Default Amount for such Collection Period). If such reduction would
cause the Class B Invested Amount to be reduced below zero, the Class A
Invested Amount will be reduced by the amount by which the Class B Invested
Amount would have been reduced below zero (but not by more than the excess of
the Class A Investor Default Amount for such Collection Period over the
amount of such reduction in the Class B Invested Amount) and the Class A
Certificateholders will bear directly the credit and other risks associated
with their undivided interest in the Trust. To the extent the Class B
Invested Amount is reduced, the percentage of Interest Collections and
Principal Collections allocable to the Class B Certificateholders with
respect to subsequent Collection Periods will be reduced. Moreover, to the
extent the amount of such reduction in the Class B Invested Amount is not
reimbursed, the amount of principal distributable to the Class B
Certificateholders will be reduced.
Distributions from the Collection Account[; Reserve Fund] [; Yield Supplement
Account]
Interest Collections -- Class A. On each Distribution Date [with
respect to a Collection Period that ends prior to the Fully Invested Date
[and each Collection Period thereafter during the Revolving Period]],
commencing with the initial Distribution Date, the Servicer shall instruct
the Trustee to apply Class A Certificateholder Interest Collections and Class
A Investment Proceeds, if any, [other amounts] in respect of the related
Collection Period to make the following distributions in the following
priority:
[(i) first, an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
previously due but not [deposited to the Class A Interest Funding
Account or] distributed on a prior Distribution Date (plus, but only to
the extent permitted under applicable law, interest at the Class A
Certificate Rate on Class A Monthly Interest previously due but not so
[deposited or] distributed), shall be [deposited to the Class A
Interest Funding Account or] distributed to the Class A
Certificateholders;
(ii) second, an amount equal to the Class A Monthly Servicing Fee
for such Distribution Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection Account
as described in the Prospectus under "Description of the Certificates
-- Allocation of Collections; Deposits in Collection Account" or waived
by the Servicer);
[(iii) third, an amount equal to the Reserve Fund Deposit Amount,
if any, for such Distribution Date shall be deposited in the Reserve
Fund;]
(iv) fourth, an amount equal to the Class A Investor Default
Amount, if any, for such Distribution Date shall be treated as a
portion of Available Certificateholder Principal Collections for such
Distribution Date;
[(v) fifth, an amount equal to any outstanding Class A Carry-over
Amount (after giving effect to any withdrawals from the Yield
Supplement Account) shall be distributed to the Class A
Certificateholders;] and
(vi) sixth, the balance shall constitute Excess Servicing.]
If, on any Distribution Date, Class A Certificateholder Interest
Collections and Class A Investment Proceeds [describe other funds] are not
sufficient to make the entire distributions required by clauses [(i), (ii)
and (iv)] above, Excess Servicing [and Excess Interest Collections allocated
to Series [199_-_]] shall be applied to complete such distributions pursuant
to such clauses as described below under "Excess Servicing [and Excess
Interest Collections]".
[If, on any Distribution Date, Class A Certificateholder Interest
Collections, Class A Investment Proceeds [describe other funds] and Excess
Servicing [and Excess Interest Collections allocated to Series [199_-_]] are
not sufficient to make the entire distributions required by clauses [(i),
(ii) and (iv)] above, the Trustee shall withdraw funds from the Reserve Fund
and apply such funds to complete the
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<PAGE>
distributions pursuant to such clauses; provided, however, that during any
Early Amortization Period [or Reinvestment Period] funds shall not be
withdrawn from the Reserve Fund to make distributions required by clause
[(iv)] to the extent that, after giving effect to such withdrawal, the amount
on deposit in the Reserve Fund shall be less than $[ ].]
If there is a Class A Draw Amount for such Distribution Date, the
Trustee shall apply the amount of Available Seller's Collections for the
related Collection Period on deposit in the Collection Account on such
Distribution Date, but only up to the Class A Draw Amount, to make the
distributions required by clauses [(i), (ii) and (iv)] above that have not
been made through the application of Excess Servicing [and Excess Interest
Collections allocated to Series [199_-_]] [or funds from the Reserve Fund] as
described in the preceding [two] paragraph[s]. Additionally, Available
Seller's Collections will be applied to any unpaid Adjustment Payments
allocated to the Class A Certificates. The Available Subordinated Amount will
be reduced by the amount of Available Seller's Collections so applied. If the
Class A Draw Amount exceeds such Available Seller's Collections, the
Available Subordinated Amount will be reduced by the amount of such excess,
but not by more than the sum of the Class A Investor Default Amount and the
portion of such Adjustment Payments not paid by the Seller, in order to
maintain the Class A Invested Amount, but not generally by more than the
Class A Investor Default Amount for such Distribution Date.
If, on any Distribution Date, the Available Subordinated Amount is
zero, any remaining portion of the Class A Required Amount that has not been
funded as described above will be funded through the application of
Reallocated Principal Collections. The Class B Invested Amount will be
reduced by the amount of Reallocated Principal Collections so applied. If the
remaining Class A Required Amount exceeds such Reallocated Principal
Collections the Class B Invested Amount will be reduced by the amount of such
excess, but not by more than the Class A Investor Default Amount.
"Class A Certificateholder Interest Collections" for any
Distribution Date means the portion of Certificateholder Available
Interest Collections allocated to the Class A Certificateholders'
Interest as described under "Allocation Percentages -- Allocation
Between the Class A Certificateholders and the Class B
Certificateholders".
"Class A Investment Proceeds" for any Distribution Date means an
amount equal to the sum of (a) the Class A Allocation Percentage of the
investment earnings on the related Determination Date with respect to
funds held in [the Reserve Fund,] [the Excess Funding Account] [the
Yield Supplement Account] [other accounts], (b) the Class A Allocation
Percentage of the Series Allocation Percentage of investment earnings
on the related Determination Date with respect to funds held in the
Collection Account, (c) all investment income on amounts in [the
Principal Funding Account with respect to the Class A Certificates,]
[the Class A Interest Funding Account,] [other accounts] since the
preceding Distribution Date.
"Excess Servicing" means the amounts referred to in clause [(vi)]
above and clause ([v]) under "Interest Collections -- Class B".
Interest Collections -- Class B. On each Distribution Date [with
respect to a Collection Period that ends prior to the Fully Invested Date
[and each Collection Period thereafter during the Revolving Period]],
commencing with the initial Distribution Date, the Servicer shall instruct
the Trustee to apply Class B Certificateholder Interest Collections and Class
B Investment Proceeds, if any, [other amounts] in respect of the related
Collection Period to make the following distributions in the following
priority:
[(i) first, an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly Interest
previously due but not [deposited to the Class B Interest Funding
Account or] distributed on a prior Distribution Date (plus, but only to
the extent permitted under applicable law, interest at the Class B
Certificate Rate on Class B Monthly Interest previously due but not so
[deposited or] distributed), shall be [deposited to the Class B
Interest Funding Account or] distributed to the Class B
Certificateholders;
S-35
<PAGE>
(ii) second, an amount equal to the Class B Monthly Servicing Fee
for such Distribution Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection Account
as described in the Prospectus under "Description of the Certificates
-- Allocation of Collections; Deposits in Collection Account" or waived
by the Servicer);
(iii) third, an amount equal to the Class B Investor Default
Amount, if any, for such Distribution Date shall be treated as a
portion of Available Certificateholder Principal Collections for such
Distribution Date;
[(iv) fourth, an amount equal to any outstanding Class B
Carry-over Amount (after giving effect to any withdrawals from the
Yield Supplement Account) shall be distributed to the Class B
Certificateholders;] and
(v) fifth, the balance shall constitute Excess Servicing.]
If, on any Distribution Date, Class B Certificateholder Interest
Collections and Class B Investment Proceeds [describe other funds] are not
sufficient to make the entire distributions required by clauses [(i) through
(iii)] above, Excess Servicing [and Excess Interest Collections allocated to
Series [199_-_]] shall be applied to complete such distributions pursuant to
such clauses as described below under "Excess Servicing [and Excess Interest
Collections]".
[If, on any Distribution Date, Class B Certificateholder Interest
Collections, Class B Investment Proceeds [describe other funds] and Excess
Servicing [and Excess Interest Collections allocated to Series [199_-_]] are
not sufficient to make the entire distributions required by clauses [(i)
through (iii)] above, the Trustee shall withdraw funds from the Reserve Fund
not applied to fund the Class A Required Amount and apply such funds to
complete the distributions pursuant to such clauses; provided, however, that
during any Early Amortization Period [or Reinvestment Period] funds shall not
be withdrawn from the Reserve Fund to make distributions required by clause
[(iii)] to the extent that, after giving effect to such withdrawal, the
amount on deposit in the Reserve Fund shall be less than $[ ].]
If there is a Class B Draw Amount for such Distribution Date, the
Trustee shall apply the amount of Available Seller's Collections for the
related Collection Period on deposit in the Collection Account on such
Distribution Date and not applied in respect of the Class A Required
Amount, but only up to the Class B Draw Amount, to make the distributions
required by clauses [(i) through (iii)] above that have not been made through
the application of Excess Servicing [and Excess Interest Collections
allocated to Series [199_-_]] [or funds from the Reserve Fund] as described
in the preceding [two] paragraph[s]. Additionally, Available Seller's
Collections will be applied to any unpaid Adjustment Payments allocated to
the Class B Certificates. The Available Subordinated Amount will be reduced
by the amount of Available Seller's Collections so applied. If the Class B
Draw Amount exceeds such Available Seller's Collections, the Available
Subordinated Amount will be reduced by the amount of such excess, but not by
more than the sum of the Class B Investor Default Amount and the portion of
such Adjustment Payments not paid by the Seller, in order to maintain the
Class B Invested Amount, but not generally by more than the Class B Investor
Default Amount for such Distribution Date.
"Class B Certificateholder Interest Collections" for any Distribution
Date means the portion of Certificateholder Available Interest Collections
allocated to the Class B Certificateholders' Interest as described under
"Allocation Percentages -- Allocation Between the Class A Certificateholders
and the Class B Certificateholders".
"Class B Investment Proceeds" for any Distribution Date means an amount
equal to the sum of (a) the Class B Allocation Percentage of the investment
earnings on the related Determination Date with respect to funds held in [the
Reserve Fund,] [the Excess Funding Account] [the Yield Supplement Account]
[other accounts], (b) the Class B Allocation Percentage of the Series
Allocation Percentage of investment earnings on the related Determination
Date with respect to funds held in the Collection Account, (c) all investment
income on amounts in [the Principal Funding Account with respect to the Class
B Certificates,] [the Class B Interest Funding Account,] [other accounts]
since the preceding Distribution Date.
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<PAGE>
[Investment Proceeds -- Class A. On each Distribution Date with respect
to a Collection Period that ends after the Fully Reinvested Date [other than
any such Collection Period during the Revolving Period], the Servicer shall
instruct the Trustee to apply Class A Investment Proceeds [describe other
funds], in respect of the related Collection Period to make the following
distributions in the following priority:
(i) first, an amount equal to Class A Monthly Interest for such
Distribution Date, plus, the amount of any Class A Monthly Interest
previously due but not [deposited to the Class A Interest Funding
Account or] distributed on a prior Distribution Date (plus, but only to
the extent permitted under applicable law, interest at the Class A
Certificate Rate on Class A Monthly Interest previously due but not so
[deposited or] distributed), shall be [deposited to the Class A
Interest Funding Account or] distributed to the Class A
Certificateholders;
[(ii) second, describe other applications; and]
(iii) third, the balance shall be distributed to the Seller.
[If, on any Distribution Date, Class A Investment Proceeds [and Class A
Excess Interest Collections] [describe other funds] are not sufficient to
make the entire distributions required in clause (i) above, the Trustee shall
withdraw funds from the Reserve Fund and apply such funds to complete the
distributions pursuant to such clause.]
["Class A Excess Interest Collections" for any Distribution Date means
an amount equal to the Class A Allocation Percentage of Excess Interest
Collections allocated to Series [199_-_] with respect to such Distribution
Date.]
Investment Proceeds -- Class B. On each Distribution Date with respect
to a Collection Period that ends after the Fully Reinvested Date [other than
any such Collection Period during the Revolving Period], the Servicer shall
instruct the Trustee to apply Class B Investment Proceeds [and Class B Excess
Interest Collections] [describe other funds], in respect of the related
Collection Period to make the following distributions in the following
priority:
(i) first, an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly Interest
previously due but not [deposited to the Class B Interest Funding
Account or] distributed on a prior Distribution Date (plus, but only to
the extent permitted by applicable law, interest at the Class B
Certificate Rate on Class B Monthly Interest previously due but not so
[deposited or] distributed, shall be [deposited to the Class B Interest
Funding Account or] distributed to the Class B Certificateholders;
[(ii) second, describe other applications; and]
(iii) third, the balance shall be distributed to the Seller.
[If, on any Distribution Date, Class B Investment Proceeds [Class B
Interest Collections] [describe other funds] are not sufficient to make the
entire distributions required in clause (i) above, the Trustee shall withdraw
funds from the Reserve Fund not applied to make distributions in respect of
the Class A Certificates as described above and apply such funds to complete
the distributions pursuant to such clause.]
["Class B Excess Interest Collections" for any Distribution Date means
an amount equal to the Class B Allocation Percentage of Excess Interest
Collections allocated to Series [199_-_] with respect to such Distribution
Date.]
[Reserve Fund. The "Reserve Fund" will be an Eligible Deposit Account
established and maintained in the name of the Trustee for the benefit of the
Series [199_-_] Certificateholders. On the Series Issuance Date, the Seller
will deposit $[ ] ([ ]% of the principal balance of the Series [199_-_]
Certificates) into the Reserve Fund. The "Reserve Fund Required Amount" for
any Distribution Date will equal [ ]% of the outstanding principal balance of
the Series [19_-_] Certificates for such
S-37
<PAGE>
Distribution Date (after giving effect to any change therein on such
Distribution Date). [Describe any increases in the Reserve Fund Required
Amount, e.g., as a result of the long-term rating of CFC by Standard & Poor's
falling below BBB- or to cover any negative carry during a principal
accumulation period.] The "Reserve Fund Deposit Amount" is the amount, if
any, by which the Reserve Fund Required Amount exceeds the amount on deposit
in the Reserve Fund. Funds in the Reserve Fund will be invested in Eligible
Investments that will mature on or prior to the next Distribution Date. On
each Determination Date, the Servicer will apply any investment earnings (net
of losses and investment expenses) with respect to the Reserve Fund as set
forth under "Interest Collections -- Class A", "Interest Collections -- Class
B", "Investment Proceeds -- Class A" and "Investment Proceeds -- Class B".
After the earlier of the payment in full of the outstanding principal balance
of the Series [199_-_] Certificates and the Series Termination Date, any
funds remaining on deposit in the Reserve Fund will be paid to the Seller.
[Describe other applications, if any.]
If, after giving effect to the allocations, distributions and deposits
in the Reserve Fund described above under "Interest Collections -- Class A"
and "Interest Collections -- Class B", the amount in the Reserve Fund is less
than the Reserve Fund Required Amount for the next following Distribution
Date, the Trustee shall deposit any remaining Available Seller's Collections
for the related Collection Period into the Reserve Fund until the amount in
the Reserve Fund is equal to such Reserve Fund Required Amount.
If, for any Distribution Date with respect to an Early Amortization
Period [or Reinvestment Period], after giving effect to the allocations,
distributions and deposits described in the preceding paragraph, the amount
in the Reserve Fund is less than the Excess Reserve Fund Required Amount for
such Distribution Date, the Trustee shall deposit the remaining Available
Seller's Collections for the related Collection Period into the Reserve Fund
until the amount in the Reserve Fund is equal to such Excess Reserve Fund
Required Amount. The "Excess Reserve Fund Required Amount" for any such
Distribution Date means an amount equal to the greater of (a) [ ]% of the
initial principal balance of the Series [199_-_] Certificates and (b) the
excess of (i) the sum of (x) the Available Subordinated Amount on the
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution Date)
and (y) an amount equal to (A) the excess of the Required Participation
Percentage over 100%, multiplied by (B) the outstanding principal balance of
the Series [199_-_] Certificates on such Distribution Date (after giving
effect to any changes therein on such Distribution Date) over (ii) the excess
of (x) the Series Allocation Percentage of the Pool Balance on the last day
of the immediately preceding Collection Period over (y) the Invested Amount
on such Distribution Date (after giving effect to changes therein on such
Distribution Date); provided that the Excess Reserve Fund Required Amount
shall not exceed such Available Subordinated Amount. [Describe adjustments,
if applicable.]]
[Yield Supplement Account. The Yield Supplement Account will be an
Eligible Deposit Account established and maintained in the name of the
Trustee for the benefit of the Series [199_-_] Certificateholders. On the
Series Issuance Date, the Seller will deposit $[ ] ([ ]% of the principal
balance of the Series [199_-_] Certificates) into the Yield Supplement
Account. The "Yield Supplement Account Required Amount" for any Distribution
Date [(i) that occurs prior to the Fully Reinvested Date [or any Distribution
Date thereafter during the Series Revolving Period]] will equal [ ]% of the
outstanding principal balance of the Series [199_-_] Certificates for such
Distribution Date (after giving effect to any change therein on such
Distribution Date) [and (ii) for any [other] Distribution Date that occurs on
or after the Fully Reinvested Date, zero]. [On any Distribution Date on which
there is a Class A Carry-over Amount or a Class B Carry-over Amount, the
amount on deposit in the Yield Supplement Account on such Distribution Date
shall be applied by the Trustee up to the amount of such Carry-over Amount to
satisfy such Carry-over Amount. In the event of any insufficiency of funds on
deposit in the Yield Supplement Account to satisfy all such Carry-over
Amounts, such funds shall be applied first to the Class A Carry-over Amount
until such Carry-over Amount is fully satisfied and then to Class B
Carry-over Amount.] [Describe other applications, e.g., to pay Monthly
Interest.] The "Yield Supplement Account Deposit Amount" is the amount, if
any, by which the Yield Supplement Account Required Amount exceeds the amount
on deposit in the Yield Supplement Account. Funds in the Yield
S-38
<PAGE>
Supplement Account will be invested [in Eligible Investments that mature on
or prior to the next Distribution Date] [in any investments consisting of
financial assets that by their terms convert to cash within a finite period
of time that mature on or prior to the next Distribution Date]. On each
Determination Date, the Servicer will apply any investment earnings (net of
losses and investment expenses) with respect to the Yield Supplement Account
as set forth under "Interest Collections -- Class A" and "Interest
Collections -- Class B". After the earlier of the payment in full of the
outstanding principal balance of the Series [199_-_] Certificates and the
Series Termination Date, any funds remaining on deposit in the Yield
Supplement Account will be paid to the Seller. [Describe other
applications.]]
Excess Servicing [and Excess Interest Collections]. On each
Distribution Date [with respect to a Collection Period that ends prior to the
Fully Reinvested Date [or any such Collection Period thereafter during the
Revolving Period]], the Servicer will allocate Excess Servicing with respect
to the Collection Period immediately preceding such Distribution Date [and
Excess Interest Collections allocated to Series [199_-_] with respect to such
period], in the following priority:
[(a) first, to fund any deficiency in the Class A Required Amount
pursuant to clauses [(i), (ii) and (iv)] under "Interest Collections --
Class A";
(b) second, an amount equal to the Yield Supplement Account
Deposit Amount, if any, for such Distribution Date shall be deposited
in the Yield Supplement Account;
[(c) third, describe other applications, if any;]
[(d) fourth, an amount equal to the aggregate amount of Class A
Investor Charge-Offs which have not been previously reimbursed (after
giving effect to the allocation on such Distribution Date of Series
Allocable Miscellaneous Payments with respect to such Distribution
Date) will be allocated in the same manner as Available
Certificateholder Principal Collections for such Distribution Date;
(e) fifth, to fund any deficiency in the Class B Required Amount
pursuant to clauses [(i) through (iii)] under "Interest Collections --
Class B";
(f) sixth, an amount equal to the aggregate amount by which the
Class B Invested Amount has been reduced pursuant to clauses (iii),
(iv) and (v) of the definition of "Class B Invested Amount" under
"Allocation Percentages -- Allocation between the Series [199_-_]
Certificateholders and the Seller" above (but not in excess of the
aggregate amount of such reductions which have not previously been
reimbursed) will be allocated in the same manner as Available
Certificateholder Principal Collection for such Distribution Date;
(g) seventh, an amount equal to the aggregate outstanding amounts
of the Monthly Servicing Fee which have been previously waived as
described under "Servicing Compensation and Payment of Expenses" in the
Prospectus will be distributed to the Servicer; and
(h) eighth, the balance, if any, shall be distributed to the
Seller and shall increase the Available Subordinated Amount as
described in the definition thereof].
Principal Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any
Collection Period thereafter during the Revolving Period]], the Servicer will
allocate Available Certificateholder Principal Collections not applied to
cover the Class A Required Amount ("Unreallocated Available Certificateholder
Principal Collections") as follows:
(a) for each Distribution Date with respect to the Revolving
Period, all Unreallocated Available Certificateholder Principal
Collections will be allocated as follows:
[(i) first, to make any required deposit to the Excess
Funding Account; and
(ii) second, to Excess Principal Collections;]
S-39
<PAGE>
(b) for each Distribution Date with respect to the [Class A]
[Class B] [Accumulation Period] [Controlled Amortization Period] or any
Early Amortization Period [or Reinvestment Period] all Unreallocated
Available Certificateholder Principal Collections shall be distributed
as follows:
[(i) first, an amount equal to the Class A Monthly
Principal for such Distribution Date will be [deposited to the
Principal Funding Account, in the case of the [Class A]
Accumulation Period [or the Reinvestment Period] or] distributed
to Class A Certificateholders[, in the case of [the [Class A]
Controlled Amortization Period or] any Early Amortization
Period];
(ii) second, an amount equal to the Class B Monthly
Principal for such Distribution Date will be [deposited to the
Principal Funding Account, in the case of the [Class B]
Accumulation Period][or the Reinvestment Period or] distributed
to Class B Certificateholders[, in the case of the [Class B]
Controlled Amortization Period or any Early Amortization Period];
and
(iii) third, the balance, if any, will be allocated to
Excess Principal Collections].
[In the event that the aggregate Invested Amount is greater than zero
on the Series Termination Date, any funds remaining in the Reserve Fund
(after the application of funds in the Reserve Fund as described above under
"Interest Collections -- Class A" and "Interest Collections -- Class B") will
be treated as a portion of Available Certificateholder Principal Collections
for the Distribution Date occurring on the Series Termination Date.]
"Class A Monthly Principal" with respect to any Distribution Date
relating to the [[Class A] Accumulation Period][[Class A] Controlled
Amortization Period] or any Early Amortization Period [or Reinvestment
Period] will equal Unreallocated Available Certificateholder Principal
Collections for such Distribution Date; provided, however, that for
each Distribution Date [with respect to the [Class A] Accumulation
Period, Class A Monthly Principal may not exceed the [Class A]
Controlled Deposit Amount][with respect to the [Class A] Controlled
Amortization Period, Class A Monthly Principal may not exceed the Class
A Controlled Distribution Amount] for such Distribution Date; and
provided, further, that Class A Monthly Principal shall not exceed the
aggregate Invested Amount of the Class A Certificates.
"Class B Monthly Principal" with respect to any Distribution Date
relating to the [[Class B] Accumulation Period] [[Class B] Controlled
Amortization Period] or any Early Amortization Period [or Reinvestment
Period] will equal the excess of Unreallocated Available
Certificateholder Principal Collections over Class A Monthly Principal,
in each case for such Distribution Date; provided, however, that for
each Distribution Date [with respect to the [Class B] Accumulation
Period, Class B Monthly Principal may not exceed the Class B Controlled
Deposit Amount] [with respect to the [Class B] Controlled Amortization
Period, Class B Monthly Principal may not exceed the Class B Controlled
Distribution Amount] for such Distribution Date; and provided, further,
that Class B Monthly Principal shall not exceed the aggregate Invested
Amount of the Class B Certificates.
["Class A Controlled Deposit Amount" for a Distribution Date means
[ ]].
["Class A Controlled Accumulation Amount" means [
].]
["Class A Controlled Distribution Amount" for a Distribution Date
means [ ].]
["Class A Controlled Amortization Amount" for a Distribution Date
means [ ].]
["Class B Controlled Deposit Amount" for a Distribution Date means
[ ].]
["Class B Controlled Accumulation Amount" means [
].]
["Class B Controlled Distribution Amount" for a Distribution Date
means [ ].]
["Class B Controlled Amortization Amount" means [
].]
S-40
<PAGE>
[Enhancements
The [Series [199_-_]] [Class A] [Class B] Certificates will have the
benefit of the [Letter of Credit] [Interest Rate Swap] [Currency Swap] [Cash
Collateral Account] [Guaranty] [Surety Bond] [Insurance Policy] [Spread
Account] [other] [issued by [ ] (the "Enhancement Provider")] in the initial
amount of $[ ].
With respect to any Distribution Date, the amount available to be drawn
under the [Letter of Credit] [Interest Rate Swap] [Currency Swap] [Cash
Collateral Account] [Guaranty] [Surety Bond] [Insurance Policy] [Spread
Account] [other] (the "Available Credit Enhancement Amount") will equal [ ].]
[Describe subordination of other Series of Certificates to the Series
[199_-_] Certificates, if applicable.]
[Information with respect to Enhancement.]
[Enhancement Provider
Information to be provided by Enhancement Provider.]
[Interest Funding Accounts
[The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account for the benefit of the
Class A Certificateholders (the "Class A Interest Funding Account"). On each
Distribution Date Class A Monthly Interest will be deposited in the Class
Interest Funding Account as provided above under "Distributions from the
Collection Account[; Reserve Fund] [; Yield Supplement Account]; provided
that if an Early Amortization Event [that is not cured as described herein]
shall have occurred, interest will be distributed to the Class A
Certificateholders on the first Distribution Date following such Early
Amortization Event.
All amounts on deposit in the Class A Interest Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Class A Interest Funding Account Balance") will be
invested from the date of their deposit by the Trustee at the direction of
the Servicer in Eligible Investments that will mature on or prior to the next
succeeding Distribution Date. The Servicer may select an appropriate agent as
representative of the Servicer for the purpose of designating such
investments. On each Distribution Date, the interest and other investment
income on the Class A Interest Funding Account Balance will be applied as
provided above under "Distributions from the Collection Account[; Reserve
Fund][; Yield Supplement Account].]
[The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account for the benefit of the
Class B Certificateholders (the "Class B Interest Funding Account"). On each
Distribution Date Class B Monthly Interest will be deposited in the Class B
Interest Funding Account as provided above under "Distributions from the
Collection Account[; Reserve Fund] [; Yield Supplement Account]; provided
that if an Early Amortization Event [that is not cured as described herein]
shall have occurred, interest will be distributed to the Class B
Certificateholders on the first Distribution Date following such Early
Amortization Event.
All amounts on deposit in the Class B Interest Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Class B Interest Funding Account Balance") will be
invested from the date of their deposit by the Trustee at the direction of
the Servicer in Eligible Investments that will mature on or prior to the next
succeeding Distribution Date. The Servicer may select an appropriate agent as
representative of the Servicer for the purpose of designating such
investments. On each Distribution Date, the interest and other investment
income on the Class B Interest Funding Account Balance will be applied as
provided above under "Distributions from the Collection Account[; Reserve
Fund][; Yield Supplement Account].]
S-41
<PAGE>
[Principal Funding Account
The Servicer will establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account for the benefit of the
holders of Series [199_-_] Certificates (the "Principal Funding
Account"). [On each Distribution Date with respect to the Class A
Accumulation Period [or any Reinvestment Period], Class A Monthly Principal
will be deposited in the Principal Funding Account] [and on each Distribution
Date with respect to the Class B Accumulation Period [or any Reinvestment
Period], Class B Monthly Principal will be deposited in the Principal Funding
Account, in each case] as provided above under "Distributions from the
Collection Account[; Reserve Fund][; Yield Supplement Account] -- Principal
Collections"; provided, that, if an Early Amortization Event [that is not
cured as described herein] occurs during [the Class A Accumulation Period]
[the Class B Accumulation Period] [or any Reinvestment Period], the Principal
Funding Account Balance shall be paid to the Series [199_-_]
Certificateholders on the first Special Payment Date.
All amounts on deposit in the Principal Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Principal Funding Account Balance") will be invested
from the date of their deposit to on or prior to the Expected Payment Date by
the Trustee at the direction of the Servicer in Eligible Investments that
will mature on or prior to the following Distribution Date. The Servicer may
select an appropriate agent as representative of the Servicer for the purpose
of designating such investments. On each Distribution Date, the interest and
other investment income on the Principal Funding Account Balance will be
applied as provided above under "Distributions from the Collection Account[;
Reserve Fund][; Yield Supplement Account]".]
[Describe other Series [199_-_] Accounts, if applicable.]
Distributions
Payments to Series [199_-_] Certificateholders will be made from the
Collection Account, [the Reserve Fund,] [the Principal Funding Account,] [the
Class A Interest Funding Account,] [the Class B Interest Funding Account]
[other] and [the Excess Funding Account].
(a) The Servicer shall instruct the Trustee to apply funds on
deposit in the Collection Account, [the Reserve Fund,] [the Class A
Interest Funding Account,] [the Class B Interest Funding Account]
[other] and shall instruct the Trustee to make the following
distributions at the following times:
(i) on each [Class A] Interest Payment Date or Special
Payment Date, all amounts on deposit in the Collection Account[,
Reserve Fund] [Class A Interest Funding Account] [other] as are
payable to the Class A Certificateholders with respect to accrued
interest will be distributed to such Certificateholders; and
(ii) on each [Class B] Interest Payment Date or Special
Payment Date, all amounts on deposit in the Collection Account[,
Reserve Fund] [Class B Interest Funding Account] [other] as are
payable to the Class B Certificateholders with respect to accrued
interest will be distributed to such Certificateholders.
(b) The Servicer shall instruct the Trustee to apply the funds on
deposit in the [Collection Account,] [the Principal Funding Account,]
[other] and [the Excess Funding Account] and shall instruct the Trustee
to make, without duplication, the following distributions at the
following times:
[(i) [on each Distribution Date during the [Class A]
Controlled Amortization Period all amounts on deposit in the
Collection Account [and the Excess Funding Account] as are
payable to Class A Certificateholders with respect to principal
will be distributed to the holders of Class A Certificates up to
a maximum amount equal to the excess of the outstanding principal
amount of such Certificates over unreimbursed Investor
Charge-Offs allocated to such Certificates, each on such date;]
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<PAGE>
[(ii) [on each Distribution Date during the Class B
Controlled Amortization Period all amounts on deposit in the
Collection Account [and the Excess Funding Account] as are
payable to Class B Certificateholders with respect to principal
will be distributed to the holders of Class B Certificates up to
a maximum amount equal to the excess of the outstanding principal
amount of such Certificates over unreimbursed Investor
Charge-Offs allocated to such Certificates, each on such date;]
[(iii) on each Special Payment Date and on the Expected
Payment Date the Principal Funding Account Balance[, the amount
on deposit in the Excess Funding Account] and all amounts on
deposit in the Collection Account as are payable to Series
[199_-_] Certificateholders with respect to principal shall be
distributed first to the holders of the Class A Certificates up
to a maximum amount equal to the excess of the outstanding
principal amount of such Certificates over unreimbursed Investor
Charge-Offs allocated to such Certificates, each on such date,
and then to the holders of Class B Certificates up to a maximum
amount equal to the excess of the outstanding principal amount of
such Certificates over unreimbursed Investor Charge-Offs
allocated to such Certificates, each on such date;]
[(iv) on the Class A Expected Payment Date, all amounts on
deposit in the Principal Funding Account[, the Excess Funding
Account] and the Collection Account as are payable to Class A
Certificateholders in respect of principal will be distributed to
the holders of Class A Certificates up to a maximum amount equal
to the excess of the outstanding principal amount of such
Certificates over unreimbursed Investor Charge-offs allocated to
such Certificates, each on such date;]
[(v) on the Class B Expected Payment Date, all amounts on
deposit in the Principal Funding Account[, the Excess Funding
Account] and the Collection Account as are payable to Class B
Certificateholders in respect of principal will be distributed to
the holders of Class B Certificates up to a maximum amount equal
to the excess of the outstanding principal amount of such
Certificates over unreimbursed Investor Charge-Offs allocated to
such Certificates, each on such date].
[(c) On each Distribution Date on which there is an unpaid Class
A Carry-over Amount or Class B Carry-over Amount (or unpaid interest
thereon), the Servicer shall instruct the Trustee to distribute to the
Class A Certificateholders or Class B Certificateholders, as the case
may be, such Carry-over Amount (or unpaid interest thereon) to the
extent funds are available therefor first from amounts on deposit in
the Yield Supplement Account and second to the extent funds are
available therefor after making all required distributions and deposits
with respect to the Series [199_-_] Certificates as provided above
under "Distributions from the Collection Account[; Reserve Fund]; Yield
Supplement Account".]
[(d) If, on the Final Payment Date, there is any Class A
Carry-over Amount or Class B Carry-over Amount (after giving effect to
any distributions on such date pursuant to (a) through (c) above), the
Trustee shall distribute to the Class A Certificateholders or the Class
B Certificateholders, as the case may be, (i) the amount on deposit in
the Reserve Fund and (ii) Available Seller's Collections on deposit in
the Collection Account which are available to satisfy such Carry-over
Amount on the Final Payment Date as described above under
"Distributions from the Collection Account; Reserve Fund; Yield
Supplement Account -- Interest Collections".]
All distributions shall be made to the Series [199_-_]
Certificateholders of record at the close of business on the day immediately
preceding the related Distribution Date (each such day a "Record Date"),
except that the final distribution with respect to any Series [199_-_]
Certificate will be made only upon surrender of such Series [199_-_]
Certificate.
Investor Charge-Offs
If the Available Subordinated Amount is reduced to zero and on any
Distribution Date the Class A Deficiency Amount is greater than zero, the
Class B Invested Amount will be reduced by the Class A Deficiency Amount, but
not by more than the Class A Investor Default Amount for such Distribution
Date. In the event that such reduction would cause the Class B Invested
Amount to be a negative
S-43
<PAGE>
number, the Class B Invested Amount will be reduced to zero and the Class A
Invested Amount will be reduced by the amount by which the Class B Invested
Amount would have been reduced below zero, but not by more than the excess,
if any, of the Class A Investor Default Amount for such Distribution Date
over the amount of the reductions of the Class B Invested Amount with respect
to such Distribution Date as described above (a "Class A Investor
Charge-Off"), which will have the effect of slowing or reducing the return of
principal to the Class A Certificateholders. If the Class A Invested Amount
has been reduced by any Class A Investor Charge-Offs, it will thereafter be
increased on any Distribution Date (but not by an amount in excess of the
aggregate unreimbursed Class A Investor Charge-Offs) by the sum of (a) the
Class A Allocation Percentage of Series Allocable Miscellaneous Payments for
such Distribution Date and (b) the amount of Excess Servicing allocated and
available for such purpose as described above under "Distributions from the
Collection Account[; Reserve Fund][; Yield Supplement Account] -- Excess
Servicing".
If the Available Subordinated Amount is reduced to zero and on any
Distribution Date the Class B Deficiency Amount is greater than zero, the
Class B Invested Amount will be reduced by the Class B Deficiency Amount, but
not by more than the Class B Investor Default Amount for such Distribution
Date (a "Class B Investor Charge-Off"). If on any Distribution Date
Reallocated Principal Collections for such Distribution Date are applied to
fund the Class A Required Amount, the Class B Invested Amount will be reduced
by the amount of such Reallocated Principal Collections. If the Class B
Invested Amount has been reduced as described above, it will thereafter be
increased on any Distribution Date by the sum of (a) the Class B Allocation
Percentage of Series Allocable Miscellaneous Payments for such Distribution
Date and (b) the amount of Excess Servicing available for that purpose as
described above under "Distributions from the Collection Account[; Reserve
Fund][; Yield Supplement Account] -- Excess Servicing".
[Reinvestment Events
The Reinvestment Events with respect to the Series [199_-_]
Certificates are the following:
[1. failure on the part of USA, the Servicer or CFC, as
applicable, (i) to make any payment or deposit required by the Pooling
and Servicing Agreement or the Receivables Purchase Agreement,
including but not limited to any Transfer Deposit Amount or Adjustment
Payment, on or before the date occurring two business days after the
date such payment or deposit is required to be made therein; or (ii) to
deliver a Distribution Date Statement on the date required under the
Pooling and Servicing Agreement (or within the applicable grace period
which will not exceed five business days); (iii) to comply with its
covenant not to create any lien on a Receivable; or (iv) to observe or
perform in any material respect any other covenants or agreements set
forth in the Pooling and Servicing Agreement or the Receivables
Purchase Agreement, which failure continues unremedied for a period of
45 days after written notice of such failure;
2. any representation or warranty made by the RPA Seller in the
Receivables Purchase Agreement or by USA in the Pooling and Servicing
Agreement or any information required to be given by USA to the Trustee
to identify the Accounts proves to have been incorrect in any material
respect when made and continues to be incorrect in any material respect
for a period of 60 days after written notice and as a result the
interests of the Certificateholders are materially and adversely
affected; provided, however, that a Reinvestment Event shall not be
deemed to occur thereunder if USA has repurchased the related
Receivables or all such Receivables, if applicable, during such period
in accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency or
receivership relating to any of CFC or Chrysler;
4. a failure by USA to convey Receivables in Additional Accounts
to the Trust within five business days after the day on which it is
required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
S-44
<PAGE>
5. on any Determination Date, the Available Subordinated Amount
for the next Distribution Date will be reduced to an amount less than
the Required Subordinated Amount on such Determination Date after
giving effect to the distributions to be made on the next Distribution
Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on such last
day;
8. on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods, is less than [ ]%;
9. the delivery by the Seller to the Trustee, of a notice stating
that the Seller will no longer continue to sell Receivables to the
Trust commencing on [ ] or any yearly anniversary thereof; provided,
however, that the Seller shall have delivered to the Trustee an opinion
of counsel to the effect that, following such discontinuation of sales
of Receivables, the Trust shall not become an investment company within
the meaning of the Investment Company Act of 1940, as amended;
10. on any Determination Date, the quotient obtained by dividing
(i) the sum of (x) the amount on deposit in the Yield Supplement
Account on the next Distribution Date, after giving effect to the
distribution to be made on such Distribution Date, and (y) the amount
on deposit in the Yield Supplement Account on the immediately preceding
Distribution Date, after giving effect to the distributions made on
such Distribution Date, by (ii) the sum of (A) the outstanding
principal balance of the Series [199_-_] Certificates on the next
Distribution Date, after giving effect to all distributions and
payments to be made on such Distribution Date, and (B) the outstanding
principal balance of the Series [199_-_] Certificates on the
immediately preceding Distribution Date, after giving effect to all
distributions and payments made on such Distribution Date, is less than
[ ]%;
11. interest at the Class A Certificate Rate is not paid on the
Class A Certificates on any [Class A] Interest Payment Date or interest
at the Class B Certificate Rate is not paid on the Class B Certificates
on any [Class B] Interest Payment Date;
12. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
13. [other].](2) <F2>
[In the case of any event described in clause [1, 2 or 6] above, a
Reinvestment Event with respect to Series [199_-_] will be deemed to have
occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given by
Certificateholders) declare that a Reinvestment Event has occurred as of the
date of such notice. In the case of any event described in clause [3, 4, 5,
7, 8, 9, 10, 11, 12 or 13] above, a Reinvestment Event with respect to Series
[199_-_] will be deemed to have occurred without any notice or other action
on the part of the Trustee or the Series [199_-_] Certificateholders
immediately upon the occurrence of such event.]
[Under certain limited circumstances, a Reinvestment Period which
commences prior to the scheduled end of the Revolving Period may terminate
and the Revolving Period recommence. If a Reinvestment Period results from
the failure by USA to convey Receivables in Additional Accounts to the Trust,
as described in paragraph 4 above, during the Revolving Period and no other
Reinvestment Event or Early Amortization Event [that has not been cured as
described herein] has occurred, the Reinvestment Period resulting from such
failure will terminate and the Revolving Period will recommence
<F2>
- ----------
(2) Delete or modify, as appropriate.
S-45
<PAGE>
(unless the scheduled termination date of the Revolving Period has occurred)
as of the end of the first Collection Period during which the Seller would no
longer be required to convey Receivables to the Trust. The Seller may no
longer be required to convey Receivables as described above as a result of a
reduction in the Invested Amount occurring due to principal payments made in
respect of the Series [199_-_] Certificates and the Certificates of other
outstanding Series during the Reinvestment Period or as a result of the
subsequent addition of Receivables to the Trust. Notwithstanding the
foregoing, if any Reinvestment Event occurs, the Revolving Period will
recommence following the receipt of (i) written confirmation by each Rating
Agency (other than Moody's) that its rating of the Series [199_-_]
Certificates will not be withdrawn or lowered as a result of such
recommencement and (ii) the consent of Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates to such
recommencement, provided that no other Reinvestment Event or Early
Amortization Event [that has not been cured as described herein] has occurred
and the scheduled termination of the Revolving Period has not occurred.]
[Describe other cures of Reinvestment Events and partial Reinvestment
Periods, if applicable.]
Early Amortization Events
[The Early Amortization Events with respect to the Series [199_-_]
Certificates will include each of the events so defined in the Prospectus,
plus the following:
1. failure on the part of USA, the Servicer or CFC, as
applicable, (i) to make any payment or deposit required by the Pooling
and Servicing Agreement or the Receivables Purchase Agreement,
including but not limited to any Transfer Deposit Amount or Adjustment
Payment, on or before the date occurring two business days after the
date such payment or deposit is required to be made therein; or (ii) to
deliver a Distribution Date Statement on the date required under the
Pooling and Servicing Agreement (or within the applicable grace period
which will not exceed five business days); (iii) to comply with its
covenant not to create any lien on a Receivable; or (iv) to observe or
perform in any material respect any other covenants or agreements set
forth in the Pooling and Servicing Agreement or the Receivables
Purchase Agreement, which failure continues unremedied for a period of
45 days after written notice of such failure;
2. any representation or warranty made by the RPA Seller in the
Receivables Purchase Agreement or by USA in the Pooling and Servicing
Agreement or any information required to be given by USA to the Trustee
to identify the Accounts proves to have been incorrect in any material
respect when made and continues to be incorrect in any material respect
for a period of 60 days after written notice and as a result the
interests of the Certificateholders are materially and adversely
affected; provided, however, that an Early Amortization Event shall not
be deemed to occur thereunder if USA has repurchased the related
Receivables or all such Receivables, if applicable, during such period
in accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency or
receivership relating to any of CFC or Chrysler;
4. a failure by USA to convey Receivables in Additional Accounts
to the Trust within five business days after the day on which it is
required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
5. on any Determination Date, the Available Subordinated Amount
for the next Distribution Date will be reduced to an amount less than
the Required Subordinated Amount on such Determination Date after
giving effect to the distributions to be made on the next Distribution
Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
S-46
<PAGE>
7. on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on such last
day;
8. on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods, is less than [ ]%;
9. on any Determination Date, the quotient obtained by dividing
(i) the sum of (x) the amount on deposit in the Yield Supplement
Account on the next Distribution Date, after giving effect to the
distributions to be made on such Distribution Date, and (y) the amount
on deposit in the Yield Supplement Account on the immediately preceding
Distribution Date, after giving effect to the distributions made on
such Distribution Date, by (ii) the sum of (A) the outstanding
principal balance of the Series [199_-_] Certificates on the next
Distribution Date, after giving effect to all distributions and
payments to be made on such Distribution Date and (B) the outstanding
principal balance of the Series [199_-_] Certificates on the
immediately preceding Distribution Date, after giving effect to all
distributions and payments made on such Distribution Date, is less than
[ ];
10. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
11. [other].](3)<F3>
[In the case of any event described in clause [1, 2 or 6] above, an
Early Amortization Event with respect to Series [199_-_] will be deemed to
have occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given by
Certificateholders) declare that an Early Amortization Event has occurred as
of the date of such notice. In the case of any Early Amortization Event
described in the Prospectus or any event described in clause [3, 4, 5, 7, 8,
9, 10 or 11] above, an Early Amortization Event with respect to Series
[199_-_] will be deemed to have occurred without any notice or other action
on the part of the Trustee or the Series [199_-_] Certificateholders
immediately upon the occurrence of such event.]
[Under certain limited circumstances, an Early Amortization Period which
commences prior to the scheduled end of the Revolving Period may terminate
and the Revolving Period recommence. If an Early Amortization Period results
from the failure by USA to convey Receivables in Additional Accounts to the
Trust, as described in paragraph 4 above, during the Revolving Period and no
other [Reinvestment Event or] Early Amortization Event [that has not been
cured as described herein] has occurred, the Early Amortization Period
resulting from such failure will terminate and the Revolving Period will
recommence (unless the scheduled termination date of the Revolving Period has
occurred) as of the end of the first Collection Period during which the
Seller would no longer be required to convey Receivables to the Trust. The
Seller may no longer be required to convey Receivables as described above as
a result of a reduction in the Invested Amount occurring due to principal
payments made in respect of the Series [199_-_] Certificates and the
Certificates of other outstanding Series during the Early Amortization Period
or as a result of the subsequent addition of Receivables to the Trust.
Notwithstanding the foregoing, if any Early Amortization Event occurs, the
Revolving Period will recommence following receipt of (i) written
confirmation by each Rating Agency (other than Moody's) that its rating of
the Series [199_-_] Certificates will not be withdrawn or downgraded as a
result of such recommencement and (ii) the consent of Series [199_-_]
Certificateholders holding Series [199_-_] Certificates holding more than 50%
of the aggregate unpaid principal amount of the Series [199_-_] Certificates
to such recommencement, provided that no other Early Amortization Event [or
Reinvestment Event] [that has not been cured as described herein] has
occurred and the scheduled termination of the Revolving Period has not
occurred.]
<F3>
- ----------------
(3) Delete or modify, as appropriate.
S-47
<PAGE>
[Describe other cures of Early Amortization Events, if applicable.]
If the portion of proceeds of the sale of the Receivables following the
occurrence of an insolvency event with respect to USA or a breach by USA of
its covenant not to create any lien on any Receivable, as described in the
Prospectus under "Description of the Certificates -- Reinvestment Events and
Early Amortization Events", allocated to the Series [199_-_]
Certificateholders' Interest and proceeds of any collections on the
Receivables in the Collection Account allocable to the Series [199_-_]
Certificateholders' Interest are not sufficient to pay the aggregate unpaid
principal amount of the Series [199_-_] Certificates in full plus accrued and
unpaid interest thereon, such amounts will be paid first to the holders of
the Class A Certificates until all amounts due with respect to such
Certificates are paid in full and then to the holders of the Class B
Certificates and the Class B Certificateholders will incur a loss.
Series Termination
The last payment of principal and interest on the Series [199_-_]
Certificates will be due and payable no later than the [
] Distribution Date (the "Series Termination Date"). In the event
that the aggregate Invested Amount is greater than zero on the Series
Termination Date (after giving effect to deposits and distributions otherwise
to be made on such Series Termination Date), the Trustee will sell or cause
to be sold (and apply the proceeds to the extent necessary to pay such
remaining amounts to all Series [199_-_] Certificateholders) an interest in
the Receivables or certain Receivables, as specified in the Pooling and
Servicing Agreement, in an amount equal to (a) 110% of the aggregate Invested
Amount on such Series Termination Date (after giving effect to such deposits
and distributions) and (b) the Available Subordinated Amount on the preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date following such
Determination Date); provided, however, that in no event shall such amount
exceed the Series Allocation Percentage (for the Collection Period in which
such Series Termination Date occurs) of Receivables on such Series
Termination Date. The net proceeds of such sale and any collections on the
Receivables will be paid first to Class A Certificateholders until all
amounts due on the Class A Certificates are paid in full, and then to the
Class B Certificateholders, in each case on the Series Termination Date as
the final payment of the Series [199_-_] Certificates.
Reports
On each Distribution Date (including each Distribution Date that
corresponds to [an] [the] Expected Payment Date or any Special Payment Date),
commencing with the initial Distribution Date, the Trustee will forward to
each Series [199_-_] Certificateholder of record a statement (the
"Distribution Date Statement") prepared by the Servicer setting forth the
following information (which, in the case of (c), (d) and (e) below, will be
stated on the basis of an original principal amount of $1,000 per Series
[199_-_] Certificate if the [Class A] [Class B] [Accumulation Period] [Class
A] [Class B] [Controlled Amortization Period] or an Early Amortization Period
[or Reinvestment Period] has commenced): (a) the aggregate amount of
collections, the aggregate amount of Interest Collections and the aggregate
amount of Principal Collections processed during the immediately preceding
Collection Period; (b) the Series Allocation Percentage, the Floating
Allocation Percentage, the Fixed Allocation Percentage, the Class A
Allocation Percentage and the Class B Allocation Percentage for such
Collection Period; (c) the total amount, if any, distributed on the Class A
Certificates and the Class B Certificates; (d) the amount of such
distribution allocable to principal on each Class of Series [199_-_]
Certificates; (e) the amount of such distribution allocable to interest on
each Class of the Series [199_-_] Certificates; (f) the Class A Investor
Default Amount and the Class B Investor Default Amount for such Distribution
Date; (g) the Class A Draw Amount and the Class B Draw Amount, if any, for
such Collection Period; (h) the amount of the Class A Investor Charge-Offs
and the Class B Investor Charge-Offs and the amounts of reimbursements
thereof for such Collection Period; (i) the amount of the Class A Monthly
Servicing Fee and the Class B Monthly Servicing Fee for such Collection
Period; [(j) the Class A Controlled Distribution Amount and the Class B
Controlled Distribution Amount for the following Distribution Date;] (k) the
Class A Invested Amount and the Class B Invested Amount[, the Excess Funding
Amount] and the outstanding principal balance of the Class A Certificates and
the Class B Certificates
S-48
<PAGE>
for such Distribution Date (after giving effect to all distributions which
will occur on such Distribution Date); (1) the "pool factor" for the Series
[199_-_] Certificates as of the Determination Date with respect to such
Distribution Date (consisting of an eleven-digit decimal expressing the
Invested Amount as of such Determination Date (determined after taking into
account any reduction in the Invested Amount which will occur on such
Distribution Date) as a proportion of the Initial Invested Amount); (m) the
Available Subordinated Amount for such Determination Date; [(n) the Reserve
Fund balance for such date;] (o) [the Principal Funding Account Balance,]
[the Class A Interest Funding Account Balance,] [the Class B Interest Funding
Account Balance] and [the Yield Supplement Account balance] with respect to
such date; [(p) during any Reinvestment Period, information with respect to
the Eligible Investments in the accounts for the Series [199_-_]
Certificates;] and (q) [other] [; provided, that after the Fully Reinvested
Date, [unless the Revolving Period has recommenced,] such statement will not
include the information in clauses [(a), (b), (f), (g), (h), (i), (k) or (m)
above].
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement"), the Seller has agreed to sell to
the underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Seller, the principal
amount of the Class A Certificates and the Class B Certificates set forth
opposite its name:
<TABLE>
<CAPTION>
Class A Class B
Underwriters Certificates Certificates
------------ ------------ ------------
<S> <C> <C>
[ ] ........................................ $[ ] $[ ]
[ ] ........................................ [ ] [ ]
--------- ---------
Total ......................................... $[ ] $[ ]
========= =========
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all the Series
[199_-_] Certificates offered hereby if any of the Series [199_-_]
Certificates are purchased.
The Seller has been advised by the Underwriters that the Underwriters
propose to initially offer the Class A Certificates to the public at the
price set forth on the cover page of this Prospectus Supplement, and to
certain dealers at such price less a concession not in excess of [ ]%
of the Class A Certificate denominations. The Underwriters may allow and such
dealers may reallow a concession not in excess of [ ]% of the Class A
Certificate denominations to certain other dealers. After the initial public
offering, the public offering price and such concessions may be changed.
The Seller has been advised by the Underwriters that the Underwriters
propose to initially offer the Class B Certificates to the public at the
price set forth on the cover page of this Prospectus Supplement, and to
certain dealers at such price less a concession not in excess of [ ]% of the
Class B Certificate denominations. The Underwriters may allow and such
dealers may reallow a concession not in excess of [ ]% of the Class B
Certificate denominations to certain other dealers. After the initial public
offering, the public offering price and such concessions may be changed.
The Underwriting Agreement provides that USA and CFC will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or contribute to payments which the Underwriters may be
required to make in respect thereof.
[In the ordinary course of their businesses, the Underwriters and their
respective affiliates have engaged and may engage in investment banking
transactions with the Seller and its affiliates.]
The Underwriter intends to make a secondary market in the Series
[199_-_] Certificates, but has no obligation to do so. There can be no
assurance that a secondary market for the Series [199_-_] Certificates will
develop or, if it does develop, that it will continue or that it will provide
holders of the Series [199_-_] Certificates with a sufficient level of
liquidity of, or trading markets for, the Series [199_-_] Certificates.
S-49
<PAGE>
In order to facilitate the offering of the Series [199_-_]
Certificates, the Underwriter may engage in transactions that stabilize,
maintain or otherwise affect the price of the Series [199_-_] Certificates.
Specifically, the Underwriter may overallot in connection with the offering,
creating a short position in the Series [199_-_] Certificates for its own
account. In addition, to cover overallotments or to stabilize the price of
the Series [199_-_] Certificates, the Underwriter may bid for, and purchase,
the Series [199_-_] Certificates in the open market. Any of these activities
may stabilize or maintain the market price of the [199_-_] Certificates above
independent market levels. The Underwriter is not required to engage in these
activities, and may end any of these activities at any time.
LEGAL MATTERS
Certain legal matters relating to the Series [199_-_] Certificates will
be passed upon for USA by Christopher A. Taravella, Esq., Vice President and
General Counsel of Chrysler Financial Corporation, and for the Underwriter by
Cravath, Swaine & Moore, New York, New York. Certain Federal income tax and
ERISA matters will be passed upon for USA and the Trust by Cravath, Swaine &
Moore. In addition to representing the Underwriter, Cravath, Swaine & Moore
from time to time represents Chrysler Financial Corporation and its
affiliates. See "Legal Matters" in the Prospectus.
S-50
<PAGE>
INDEX OF PRINCIPAL TERMS
<TABLE>
<CAPTION>
Term Page
---- ----
<S> <C>
Accounts .......................................................... 1
Assets Receivables Rate ........................................... 25
Available Certificateholder Interest Collections .................. 29
Available Certificateholder Principal Collections ................. 29
Available Credit Enhancement Amount ............................... 41
Available Negative Carry Subordinated Amount ...................... 33
Available Seller's Collections .................................... 30
Available Seller's Interest Collections ........................... 30
Available Seller's Principal Collections .......................... 30
Class A Accumulation Period ....................................... 4
Class A Accumulation Period Commencement Date ..................... 4
Class A Accumulation Period Length ................................ 4
Class A Adjustment Date ........................................... 2
Class A Allocation Percentage ..................................... 29
Class A Carry-over Amount ......................................... 25
Class A Certificateholders ........................................ 10
Class A Certificates .............................................. 1
Class A Certificate Rate .......................................... 1
Class A Certificateholder Interest Collections .................... 35
Class A Controlled Accumulation Amount ............................ 40
Class A Controlled Amortization Amount ............................ 40
Class A Controlled Amortization Period ............................ 5
Class A Controlled Deposit Amount ................................. 40
Class A Controlled Distribution Amount ............................ 40
Class A Draw Amount ............................................... 31
Class A Deficiency Amount ......................................... 31
Class A Excess Interest Collections ............................... 37
Class A Expected Payment Date ..................................... 22
Class A Index ..................................................... 1
Class A Initial Invested Amount ................................... 28
Class A Interest Funding Account .................................. 2
Class A Interest Funding Account Balance .......................... 41
Class A Interest Payment Date ..................................... 1
Class A Invested Amount ........................................... 28
Class A Investment Proceeds ....................................... 35
Class A Investor Charge-Off ....................................... 44
Class A Interest Period ........................................... 2
Class A Monthly Interest .......................................... 24
Class A Monthly Principal ......................................... 40
Class A Monthly Servicing Fee ..................................... 12
Class A Principal Commencement Date ............................... 5
Class A Required Amount ........................................... 31
Class B Allocation Percentage ..................................... 29
Class B Accumulation Period Commencement Date ..................... 4
Class B Accumulation Period ....................................... 4
Class B Adjustment Date ........................................... 2
Class B Carry-over Amount ......................................... 25
Class B Certificate Rate .......................................... 1
Class B Certificateholder Interest Collections .................... 36
Class B Certificateholders ........................................ 10
S-51
<PAGE>
<CAPTION>
Term Page
---- ----
<S> <C>
Class B Certificates .............................................. 1
Class B Controlled Accumulation Amount ............................ 40
Class B Controlled Amortization Amount ............................ 40
Class B Controlled Amortization Period ............................ 5
Class B Controlled Deposit Amount ................................. 40
Class B Controlled Distribution Amount ............................ 40
Class B Deficiency Amount ......................................... 31
Class B Draw Amount ............................................... 32
Class B Excess Interest Collections ............................... 37
Class B Expected Payment Date ..................................... 22
Class B Index ..................................................... 1
Class B Initial Invested Amount ................................... 28
Class B Interest Funding Account .................................. 2
Class B Interest Funding Account Balance .......................... 41
Class B Interest Payment Date ..................................... 1
Class B Interest Period ........................................... 2
Class B Invested Amount ........................................... 29
Class B Investment Proceeds ....................................... 36
Class B Investor Charge-Off ....................................... 44
Class B Monthly Interest .......................................... 24
Class B Monthly Principal ......................................... 40
Class B Monthly Servicing Fee ..................................... 12
Class B Required Amount ........................................... 31
Distribution Date ................................................. 1
Distribution Date Statement ....................................... 48
Early Amortization Period .......................................... 6
Enhancement Provider .............................................. 41
Excess Principal Collections ...................................... 29
Excess Reserve Fund Required Amount ............................... 38
Excess Seller's Percentage ........................................ 30
Excess Servicing .................................................. 34
Excluded Dealers .................................................. 19
Excluded Receivables .............................................. 19
Final Payment Date ................................................. 31
Fixed Allocation Percentage ....................................... 28
Floating Allocation Percentage .................................... 27
Incremental Subordinated Amount ................................... 8
Initial Invested Amount ........................................... 28
Invested Amount ................................................... 28
Negative Carry Required Amount .................................... 33
Principal Funding Account ......................................... 42
Principal Funding Account Balance ................................. 42
Principal Shortfalls .............................................. 29
Reallocated Principal Collections ................................. 4
Reallocation Deficiency Amount .................................... 33
Receivables ....................................................... 1
Required Negative Carry Subordinated Amount ....................... 33
Required Participation Percentage ................................. 9
Required Subordinated Amount ...................................... 32
Reserve Fund ...................................................... 37
S-52
<PAGE>
<CAPTION>
Term Page
---- ----
<S> <C>
Reserve Fund Deposit Amount ....................................... 38
Reserve Fund Required Amount ...................................... 37
Seller ............................................................ 1
Seller's Interest ................................................. 1
Seller's Percentage ............................................... 30
Series ............................................................ 1
Series 199_-_ Certificates ........................................ 1
Series 199_-_ Termination Date .................................... 48
Series Cut-Off Date ............................................... 13
Series Issuance Date .............................................. 13
Series Supplement ................................................. 23
Series Termination Date ........................................... 48
Servicer .......................................................... 1
Servicing Fee Rate ................................................ 12
Subordinated Percentage ........................................... 8
Trust ............................................................. 1
Underwriting Agreement ............................................ 49
Underwriters ...................................................... 49
Unreallocated Available Certificateholder Principal Collections ... 39
USA ............................................................... 1
Yield Supplement Account .......................................... 2
Yield Supplement Account Deposit Amount ........................... 38
Yield Supplement Account Required Amount .......................... 38
</TABLE>
S-53
<PAGE>
ANNEX I
OUTSTANDING SERIES OF INVESTOR CERTIFICATES
[to be provided]
A-1
<PAGE>
[ BACK COVER, COLUMN 1 ]
=============================================================================
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus and,
if given or made, such information or representations must not be relied upon
as having been authorized by the Seller or the Underwriters. Neither this
Prospectus Supplement nor the accompanying Prospectus constitutes an offer or
solicitation by anyone in any state in which such offer or solicitation is
not authorized or in which the person making such offer or solicitation is
not qualified to do so or to anyone to whom it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus Supplement or the
accompanying Prospectus, nor any sale made hereunder or thereunder shall,
under any circumstances, create any implication that there has been no change
in the affairs of the Seller since the date hereof or thereof or that the
information contained or incorporated by reference herein or therein is
correct as of any time subsequent to its date.
----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Summary of Series Terms ............................. S-1
Risk Factors ........................................ S-14
Use of Proceeds ..................................... S-18
The Dealer Floorplan Financing Business ............. S-18
The Accounts ........................................ S-19
Chrysler Financial Corporation ...................... S-22
Maturity and Principal Payment Considerations ....... S-22
Series Provisions ................................... S-23
Underwriting ........................................ S-49
Legal Matters ....................................... S-50
Index of Principal Terms ............................ S-51
Annex I ............................................. A-1
Prospectus
Available Information ............................... 2
Reports to Certificateholders ....................... 2
Incorporation of Certain Documents by Reference ..... 2
Prospectus Summary .................................. 3
Risk Factors ........................................ 16
U.S. Auto Receivables Company and the Trust ......... 19
Use of Proceeds ..................................... 21
The Dealer Floorplan Financing Business ............. 21
The Accounts ........................................ 25
Chrysler Financial Corporation and Chrysler Credit
Corporation ....................................... 26
Description of the Certificates ..................... 27
Description of the Receivables Purchase Agreement ... 57
Certain Legal Aspects of the Receivables ............ 58
Certain Tax Matters ................................. 61
ERISA Considerations ................................ 65
Experts ............................................. 66
Plan of Distribution ................................ 66
Legal Matters ....................................... 67
Index of Principal Terms ............................ 68
Annex I .............................................
</TABLE>
Until [ ], 199[ ] (90 days after the date of this Prospectus Supplement),
all dealers effecting transactions in the Series [199_-_] 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.
=============================================================================
<PAGE>
[ BACK COVER, COLUMN 2 ]
=============================================================================
CARCO
Auto Loan Master Trust
$[ ]
Auto Loan Asset
Backed Certificates, Series
[199_-_]
$[ ] [Floating Rate] [ %]
Class A Certificates
Series [199_-_]
$[ ] [Floating Rate] [ %]
Class B Certificates
Series [199_-_]
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER FINANCIAL CORPORATION
Servicer
PROSPECTUS SUPPLEMENT
[Underwriters]
=============================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT 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 , 199
PROSPECTUS
CARCO Auto Loan Master Trust
Auto Loan Asset Backed Certificates
[LOGOTYPE] U.S. AUTO RECEIVABLES COMPANY, Seller
[LOGOTYPE] CHRYSLER FINANCIAL CORPORATION, Servicer
U.S. Auto Receivables Company ("USA" or the "Seller") has previously
sold and may sell from time to time one or more series (each a "Series") of
auto loan asset backed certificates (the "Certificates") evidencing undivided
interests in certain assets of CARCO Auto Loan Master Trust (the "Trust")
created pursuant to a Pooling and Servicing Agreement among USA, Chrysler
Financial Corporation, as servicer ("CFC" or the "Servicer"), and The Bank of
New York, as trustee. The Trust assets include wholesale receivables (the
"Receivables") generated from time to time in a portfolio of revolving
financing arrangements (the "Accounts") with automobile dealers to finance
their automobile and light duty truck inventory and collections on the
Receivables, as more fully described herein and, with respect to any Series,
in an accompanying prospectus supplement (a "Prospectus Supplement") relating
to such Series.
Certificates have previously been sold by the Trust and additional
Certificates will be sold from time to time under this Prospectus on terms
determined for each Series or Class at the time of the sale and described in
the related Prospectus Supplement. Each Series will consist of one or more
classes of Certificates (each a "Class"). Certain assets of the Trust will be
allocated to the Certificateholders of each Series or Class including the
right to receive a varying percentage of each month's collections with
respect to the Receivables at the times and in the manner described herein
and, with respect to any Series offered hereby, in the related Prospectus
Supplement. The Seller will own the remaining interest in the Trust not
represented by the Certificates (the "Seller's Interest"). The Seller's
Interest will be subordinated to the rights of the Certificateholders of each
Series to the limited extent described, with respect to any Series offered
hereby, in the related Prospectus Supplement. In addition, each Series
offered hereby may be entitled to the benefits of a letter of credit, surety
bond, cash collateral account or other form of enhancement as specified in
the Prospectus Supplement relating to such Series.
While the specific terms of any Series in respect of which this
Prospectus is being delivered will be described in the related Prospectus
Supplement, the terms of such Series will not be subject to prior review by,
or consent of, the holders of the Certificates of any previously issued
Series.
Prospective investors should consider, among other things, the
information set forth in "Risk Factors" commencing on page [16] and in the
related Prospectus Supplement.
THE CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE TRUST ONLY AND DO NOT
REPRESENT INTERESTS IN OR OBLIGATIONS OF THE SELLER, THE SERVICER OR ANY
AFFILIATE THEREOF. NEITHER THE CERTIFICATES NOR THE RECEIVABLES ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Certificates may be sold by the Seller directly to purchasers, through
agents designated from time to time, through underwriting syndicates led by
one or more managing underwriters or through one or more underwriters acting
alone. If underwriters or agents are involved in the offering of the
Certificates of any Series offered hereby, the name of the managing
underwriter or underwriters or agents will be set forth in the related
Prospectus Supplement. If an underwriter, agent or dealer is involved in the
offering of the Certificates of any Series offered hereby, the underwriter's
discount, agent's commission or dealer's purchase price will be set forth in,
or may be calculated from, the related Prospectus Supplement, and the net
proceeds to the Seller from such offering will be the public offering price
of such Certificates less such discount in the case of an underwriter, the
purchase price of such Certificates less such commissions in the case of an
agent or the purchase price of such Certificates in the case of a dealer, and
less, in each case, the other expenses of the Seller associated with the
issuance and distribution of such Certificates. See "Plan of Distribution".
This Prospectus may not be used to consummate sales of Certificates of any
Series unless accompanied by the related Prospectus Supplement.
The date of this Prospectus is , 1997.
<PAGE>
AVAILABLE INFORMATION
The Seller has filed a Registration Statement (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with the Securities and Exchange Commission (the "Commission") with
respect to the Certificates offered pursuant to this Prospectus. This
Prospectus, which forms part of the Registration Statement, does not contain
all of the information contained in the Registration Statement and the
exhibits thereto. For further information, reference is made to the
Registration Statement and amendments thereof and exhibits thereto, which are
available for inspection without charge at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549; 7 World Trade Center, New York, New York 10048; and Citicorp Center,
500 West Madison Street, Chicago, Illinois 60661. Copies of the Registration
Statement and amendments thereof and exhibits thereto may be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, any such reports or
other documents filed with the Commission through its Electronic Data
Gathering Analysis and Retrieval system are publicly available through the
Commission's Web site (http://www.sec.gov).
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and annual
unaudited reports, containing information concerning the Trust and prepared
by the Servicer, will be sent on behalf of the Trust to Cede & Co. ("Cede"),
as nominee of The Depository Trust Company ("DTC") and registered holder of
the Certificates, pursuant to the Pooling and Servicing Agreement. Such
reports may be available to holders of interests in the Certificates (the
"Certificateholders") upon request to their respective Participants. See
"Description of the Certificates -- Reports" and " -- Evidence as to
Compliance". The Trust will file with the Commission such periodic reports
with respect to the Trust as are required under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations of
the Commission thereunder.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Servicer, on
behalf of the Trust, are incorporated in this Prospectus by reference: the
Trust's Annual Report on Form 10-K for the year ended December 31, 1996; and
the Trust's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997 and June 30, 1997. All reports and other documents filed by the Seller,
as originator of any Trust, pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Certificates offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be part
hereof. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Seller will provide without charge to each person, including any
beneficial owner of Certificates, to whom a copy of this Prospectus is
delivered, on the written or oral request of any such person, a copy of any
or all of the documents incorporated herein or in any related Prospectus
Supplement by reference, except the exhibits to such documents (unless such
exhibits are specifically incorporated by reference in such documents).
Requests for such copies should be directed to Secretary, Chrysler Financial
Corporation, 27777 Franklin Road, Southfield, Michigan 48034-8286 (telephone:
248-948-3058).
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference
to the information with respect to the Certificates of any Series or Class
offered hereby contained in the related Prospectus Supplement to be prepared
and delivered in connection with the offering of such Certificates. Reference
is made to the Index of Principal Terms for the location herein of the
definitions of certain capitalized terms used herein.
Title of Securities .... Auto Loan Asset Backed Certificates (the
"Certificates").
Issuer ................. CARCO Auto Loan Master Trust (the "Trust").
Seller ................. U.S. Auto Receivables Company ("USA"), a
special-purpose wholly-owned subsidiary of Chrysler
Financial Corporation ("CFC").
Servicer ............... CFC, a wholly-owned subsidiary of Chrysler
Corporation ("Chrysler").
Trustee ................ The Bank of New York (the "Trustee").
The Trust .............. The Trust was formed pursuant to a Pooling and
Servicing Agreement dated as of May 31, 1991, among
Chrysler Auto Receivables Company ("CARCO"), as
seller, Chrysler Credit Corporation ("CCC"), as
servicer, and Manufacturers and Traders Trust
Company, as trustee (as supplemented and amended
from time to time, the "Pooling and Servicing
Agreement"). The assets of the Trust include (a)
certain Receivables existing under the Accounts at
the close of business on May 31, 1991 (the "Initial
Cut-Off Date"), certain Receivables generated under
the Accounts from time to time thereafter during
the term of the Trust as well as certain
Receivables generated under any Accounts added to
the Trust from time to time (but excluding
Receivables generated in any Accounts removed from
the Trust from time to time after the Initial
Cut-Off Date), (b) all funds collected or to be
collected in respect of such Receivables, (c)
subject to the conditions described herein,
Participation Interests, if any, (d) all funds on
deposit in certain accounts of the Trust, (e) any
other Enhancement issued with respect to any
particular Series or Class and (f) a security
interest in certain motor vehicles (the "Vehicles")
and certain parts inventory, equipment, fixtures,
service accounts and, in some cases, realty and/or
a personal guarantee (collectively, the "Collateral
Security") securing the Receivables. The term
"Participation Interests" shall mean participations
representing undivided interests in a pool of
assets primarily consisting of wholesale
receivables generated in portfolios of revolving
financing arrangements with automobile dealers to
finance their automobile and light duty truck
inventory. The term "Enhancement" shall mean, with
respect to any Series or Class, any letter of
credit, surety bond, cash collateral account,
spread account, guaranteed rate agreement, swap
(including, without limitation, any currency swap)
or other interest rate protection agreement,
maturity liquidity facility, tax protection
agreement, or other arrangement for the benefit of
Certificateholders of such Series or Class.
CARCO Transfer ......... On August 8, 1991, CARCO, in accordance with the
terms of the Pooling and Servicing Agreement and
the Receivables Purchase
3
<PAGE>
Agreement, transferred the Seller's Interest and
all its rights and obligations under (a) the
Pooling and Servicing Agreement (including rights
and obligations as seller thereunder) and (b) the
Receivables Purchase Agreement (including rights
and obligations as buyer thereunder) to USA, such
transfer being the "CARCO Transfer". See "U.S. Auto
Receivables Company and the Trust".
CCC Merger into CFC .... On December 31, 1995, CCC, a wholly owned
subsidiary of CFC, merged into CFC. CFC, in
accordance with the terms of the Pooling and
Servicing Agreement and the Receivables Purchase
Agreement, assumed all the rights and obligations
of CCC under (a) the Pooling and Servicing
Agreement (including rights and obligations as
servicer thereunder) and (b) the Receivables
Purchase Agreement (including rights and
obligations as seller thereunder). See "Chrysler
Financial Corporation and Chrysler Credit
Corporation".
Trustee Assignment ..... On August 23, 1996, The Bank of New York, a New
York banking corporation, succeeded Manufacturers
and Traders Trust Company as Trustee, in accordance
with the terms of the Pooling and Servicing
Agreement and pursuant to an Agreement of
Resignation, Appointment and Acceptance dated as of
August 23, 1996 between USA, CFC, Manufacturers and
Traders Trust Company, as resigning trustee, and
The Bank of New York, as successor trustee. See
"Description of the Certificates -- The Trustee".
The Accounts ........... The Accounts pursuant to which the Receivables have
been or will be generated are revolving credit
agreements entered into with CFC, directly or as
successor to CCC, by dealers to finance the
purchase of their automobile and light duty truck
inventory. The Accounts are selected from all such
credit agreements of CFC that meet the criteria
provided in the Pooling and Servicing Agreement
(the "Eligible Accounts"). Under certain
circumstances Accounts may be added to, or removed
from, the Trust. See "The Accounts", "Description
of the Certificates -- Eligible Accounts and
Eligible Receivables", " -- Addition of Accounts or
Participation Interests" and " -- Removal of
Accounts".
The Receivables ........ The Receivables have arisen or will arise in the
Accounts. The Receivables consist of advances made
directly or indirectly by CFC, directly or as
successor to CCC, to domestic automobile dealers
franchised by Chrysler and/or other automobile
manufacturers (the "Dealers"). Such advances are
used by the Dealers to purchase the Vehicles, which
consist primarily of new automobiles, light duty
trucks and certain other vehicles manufactured or
distributed by such automobile manufacturers.
Generally, the principal amount of an advance in
respect of a Vehicle is equal to the wholesale
purchase price of the Vehicle plus destination
charges and, subject to certain exceptions, is due
upon the retail sale of the Vehicle. See "The
Dealer Floorplan Financing Business -- Creation of
Receivables" and " -- Payment Terms". Collections
of principal under the Receivables are herein
referred to as "Principal Collections", and
collections of interest and other nonprincipal
charges (including insurance service fees, amounts
recovered with respect to Defaulted Receivables and
insurance proceeds) are referred to herein as
"Interest
4
<PAGE>
Collections". The Receivables bear interest at a
floating rate generally based on the prime rates of
certain United States banks plus a spread generally
based on the amount of the related Dealer's credit
line. See "The Dealer Floorplan Financing Business
-- Revenue Experience".
USA, as assignee of CARCO, has entered into a
Receivables Purchase Agreement (the "Receivables
Purchase Agreement"), dated as of the date of the
Pooling and Servicing Agreement, between USA, as
purchaser, and CFC, as successor to CCC, as seller
(the "RPA Seller"). Pursuant to the Receivables
Purchase Agreement, the RPA Seller has (a) sold to
USA all of its right, title and interest in and to
all Receivables meeting certain eligibility
criteria contained in the Receivables Purchase
Agreement and the Pooling and Servicing Agreement
("Eligible Receivables") and (b) assigned its
interests in the Vehicles and the Collateral
Security to USA. USA in turn transferred such
Receivables and Collateral Security to the Trust
pursuant to the Pooling and Servicing Agreement.
USA has also assigned to the Trust its rights with
respect to the Receivables under the Receivables
Purchase Agreement. See "Description of the
Receivables Purchase Agreement".
All new Receivables arising under the Accounts
during the term of the Trust will be sold by the
RPA Seller to USA and transferred by USA to the
Trust. Accordingly, the aggregate amount of
Receivables in the Trust will fluctuate from day to
day as new Receivables are generated and as
existing Receivables are collected, charged off as
uncollectible or otherwise adjusted.
The Certificates ....... The Certificates will be issued in Series, each of
which will consist of one or more Classes. While
the specific terms of any Series or Class offered
hereby will be described in the related Prospectus
Supplement, the terms of such Series or Class will
not be subject to prior review by, or consent of,
the holders of the Certificates of any previously
issued Series. There can be no assurance that the
terms of any Series issued from time to time
hereafter might not have an impact on the timing or
amount of payments received by a holder of a
Certificate of any previously issued Series. See
"Description of the Certificates -- New Issuances".
Unless otherwise specified in the related
Prospectus Supplement, the Certificates of a Series
offered hereby will be available for purchase in
minimum denominations of $1,000 and in integral
multiples thereof and will only be available in
book-entry form except in certain limited
circumstances as described herein under
"Description of the Certificates -- Definitive
Certificates". The Trust's assets will be allocated
in part to the Certificateholders of each Series
(with respect to any particular Series or all
Series, the "Certificateholders' Interest"), with
the remainder allocated to the Seller (the
"Seller's Interest"). A portion of the Seller's
Interest will be subordinated to the
Certificateholders' Interest of each Series to the
extent described, with respect to any Series
offered hereby, in the related Prospectus
Supplement. The Certificates of each Series will
evidence an undivided beneficial interest in the
assets of the Trust allocated to the
Certificateholders' Interest of such Series and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of interest on
and principal of
5
<PAGE>
such Series as described, with respect to any
Series offered hereby, in the related Prospectus
Supplement.
The principal amount of the Seller's Interest may
fluctuate as the aggregate amount of the
Receivables balance changes from time to time, as
new Series are issued and as outstanding Series
amortize.
The Certificates will represent beneficial
interests in the Trust only and will not represent
interests in or obligations of CFC or USA or any
affiliate thereof. Neither the Certificates nor the
Receivables are insured or guaranteed by CFC or USA
or any affiliate thereof or any governmental
agency.
Registration of
Certificates ........ Unless otherwise specified in the related
Prospectus Supplement, the Certificates of a Series
offered hereby will initially be represented by one
or more Certificates registered in the name of Cede
& Co., as the nominee of DTC. Unless otherwise
specified in the related Prospectus Supplement,
Certificateholders may elect to hold their
Certificates through DTC (in the United States) or
CEDEL or Euroclear (in Europe) and no person
acquiring an interest in the Certificates will be
entitled to receive a definitive certificate
representing such person's interest except in the
event that Definitive Certificates are issued under
certain limited circumstances. See "Description of
the Certificates -- Definitive Certificates".
Issuances of
New Series ........... The Pooling and Servicing Agreement provides that,
pursuant to any one or more supplements thereto
(each, a "Series Supplement"), the Seller may cause
the Trustee to issue one or more new Series of
Certificates (a "New Issuance"). However, at all
times, the interest in the balance of principal
Receivables ("Principal Receivables") represented
by the Seller's Interest must equal or exceed a
specified amount. The Pooling and Servicing
Agreement also provides that the Seller may
specify, with respect to any Series, the Principal
Terms of the Series. The Seller may offer any
Series to the public or other investors under a
prospectus or other disclosure document in
transactions either registered under the Securities
Act or exempt from registration thereunder,
directly or through one or more underwriters or
placement agents.
Under the Pooling and Servicing Agreement and
pursuant to a Series Supplement, a New Issuance may
only occur upon delivery to the Trustee of, among
other things, the following: (a) a Series
Supplement specifying the Principal Terms of such
Series, (b) an opinion of counsel to the effect
that, for federal income and Michigan income and
single business tax purposes, (x) such issuance
will not adversely affect the characterization of
the Certificates of any outstanding Series or Class
as debt of the Seller, (y) such issuance will not
cause or constitute a taxable event to any
Certificateholders and (z) such new Series will be
characterized as debt of the Seller and (c) letters
from the Rating Agencies confirming that the
issuance of the new Series will not result in the
reduction or withdrawal of the rating of any other
Series or Class of Certificates then outstanding.
See "Description of the Certificates -- New
Issuances".
6
<PAGE>
Allocations ............ The Certificateholders' Interest of each Series
will include the right to receive (but only to the
extent needed to make required payments under the
Pooling and Servicing Agreement) varying
percentages of Interest Collections and Principal
Collections allocated to such Certificates during
each calendar month (a "Collection Period").
Interest Collections, Principal Collections and
Defaulted Receivables for any Collection Period
will be allocated to each Series based on that
Series' Series Allocation Percentage. The Series
Allocation Percentage for any Collection Period and
any Series is the percentage obtained by dividing
(x) the Adjusted Invested Amount for that Series as
of the last day of the immediately preceding
Collection Period by (y) the sum of the aggregate
Adjusted Invested Amounts for all outstanding
Series as of such last day. The Adjusted Invested
Amount for any Collection Period and any Series is
the sum of (x) the Initial Invested Amount of such
Series, minus unreimbursed investor charge-offs
allocated to that Series as of the last day of the
immediately preceding Collection Period and (y) the
Available Subordinated Amount with respect to such
Series on the Determination Date occurring in such
Collection Period (after giving effect to the
allocations, distributions, withdrawals and
deposits to be made on the Distribution Date
following such Determination Date). Interest
Collections, Principal Collections and Defaulted
Receivables allocated to a Series will be further
allocated between the Certificateholders' Interest
of that Series (and, if applicable, of each Class
thereof) and the Seller's Interest as provided in
the related Series Supplement and, with respect to
any Series offered hereby, described in the related
Prospectus Supplement.
Interest................. Interest on the principal balance of Certificates
of a Series or Class offered hereby will accrue at
the per annum rate either specified in or
determined in the manner specified in the related
Prospectus Supplement and will be payable to
Certificateholders of such Series or Class as and
on the dates ("Interest Payment Dates") specified
in the related Prospectus Supplement. If the
Prospectus Supplement for a Series or Class of
Certificates offered hereby so specifies, the
interest rate and Interest Payment Dates applicable
to each Certificate of that Series or Class may be
subject to adjustment from time to time, including
as a result of a decline in the interest rate borne
by the Receivables. Except as otherwise provided
herein or in the related Prospectus Supplement,
Interest Collections and certain other amounts
allocable to the Certificateholders' Interest of a
Series offered hereby will be used to make interest
payments to Certificateholders of such Series on
each Interest Payment Date with respect thereto,
provided that during any Early Amortization Period
with respect to such Series, interest will be
distributed to such Certificateholders monthly on
each Special Payment Date.
If the Interest Payment Dates for a Series or Class
occur less frequently than monthly, such
collections or other amounts (or the portion
thereof allocable to such Class) will be deposited
in one or more trust accounts (each an "Interest
Funding Account") and used to make interest
payments to Certificateholders of such Series or
Class on the following Interest Payment Date with
respect thereto. If a Series has more than one
Class of Certificates, each such Class may have a
separate Interest Funding Account.
7
<PAGE>
Principal................ The principal of the Certificates of each Series
offered hereby will be scheduled to be paid either
in full on an expected date specified in the
related Prospectus Supplement (the "Expected
Payment Date"), in which case such Series will have
an Accumulation Period as described below under
"Accumulation Period", or in installments
commencing on a date specified in the related
Prospectus Supplement (the "Principal Commencement
Date"), in which case such Series will have a
Controlled Amortization Period as described below
under "Controlled Amortization Period". If a Series
has more than one Class of Certificates, a
different method of paying principal, Expected
Payment Date and/or Principal Commencement Date may
be assigned to each Class. The payment of principal
with respect to the Certificates of a Series or
Class offered hereby may commence earlier than the
applicable Expected Payment Date or Principal
Commencement Date, and the final principal payment
with respect to the Certificates of a Series or
Class may be made later than the applicable
Expected Payment Date or other expected date if an
Early Amortization Event occurs with respect to
such Series or Class or under certain other
circumstances described herein or in the related
Prospectus Supplement.
Certificates of a Series or Class offered hereby
may also be subject to purchase from time to time,
generally at their respective principal amounts, in
connection with a remarketing thereof if so
specified in the related Prospectus Supplement. A
purchase of Certificates of such a Series or Class
may result in a decrease in the outstanding
principal amount of such Series or Class prior to
the commencement of the Controlled Amortization
Period or Early Amortization Period with respect
thereto or the Expected Payment Date therefor. The
Prospectus Supplement for any Series subject to
purchase as described above will describe the
conditions to and procedures for any such purchase.
The proceeds of any such purchase would be paid to
the holders of the Certificates so purchased.
Certificates of a Series or Class offered hereby
may also be otherwise subject to purchase from time
to time either at the option of the Seller or the
Certificateholders as described herein and in the
related Prospectus Supplment. See "Description of
the Certificates -- Optional Repurchase."
Excess Funding Account . If and to the extent described in the Prospectus
Supplement relating to a Series offered hereby,
and, except to the extent so described, during any
Early Amortization Period, Reinvestment Period,
Accumulation Period or Controlled Amortization
Period with respect to such Series or any Class
thereof, proceeds of the issuance of the
Certificates of such Series not invested in
Receivables (the "Excess Funded Amount"), if any,
will be maintained in a trust account to be
established with the Trustee for the benefit of
such Series (an "Excess Funding Account"). The
Excess Funded Amount for a Series will initially
equal the excess, if any, of the initial principal
amount of such Series over the Initial Invested
Amount of such Series on the Series Issuance Date
therefor.
Except as provided below, any funds on deposit in
the Excess Funding Account for a Series will be
withdrawn and paid to the Seller or allocated to
one or more other Series which are in amortization,
early
8
<PAGE>
amortization, reinvestment or accumulation periods
to the extent of any increases in the Invested
Amount of the Series in question generally as a
result of the addition of Receivables to the Trust.
Under certain circumstances, a portion of Principal
Collections allocable to a Series will be deposited
into the Excess Funding Account therefor. Upon the
earliest of (a) the commencement of a Reinvestment
Period with respect to a Series, (b) the
commencement of an Early Amortization Period with
respect to a Series and (c) the Distribution Date
or Distribution Dates, if any, specified in or
determined in the manner provided in the Series
Supplement for such Series, funds on deposit in the
Excess Funding Account for such Series will be
distributed to the Certificateholders of such
Series or a Class thereof or deposited into the
Principal Funding Account for such Series or a
Class thereof, if and to the extent the Series
Supplement for such Series so provides.
Revolving Period ....... The Certificates of each Series offered hereby will
have a revolving period (the "Revolving Period").
During the Revolving Period with respect to a
Series, Principal Collections and certain other
amounts otherwise allocable to the
Certificateholders' Interest of such Series
generally will be paid to the Seller, deposited in
the Excess Funding Account, if any, for such Series
or allocated to another Series (in effect, in
exchange for the allocation to the
Certificateholders' Interest of the Series in
question of an equal interest in the Receivables
balances that are new or that would otherwise be
part of the Seller's Interest or the interest of
the Certificateholders of such other Series) in
order to maintain the sum of the Invested Amount of
such Series and the Excess Funded Amount, if any,
with respect to such Series at a constant level.
The "Revolving Period" with respect to a Series
offered hereby shall be the period beginning on the
date specified in the related Prospectus Supplement
(the "Series Cut-off Date") and ending on the
earlier of (a) the day immediately preceding the
Accumulation Period Commencement Date or the
Principal Commencement Date for such Series and (b)
the business day immediately preceding the day on
which an Early Amortization Event or a Reinvestment
Event occurs with respect to such Series. See
"Description of the Certificates -- Reinvestment
Events and Early Amortization Events" for a
discussion of certain events which might lead to
the early termination of the Revolving Period and,
in certain circumstances, the recommencement of the
Revolving Period. If a Series has more than one
Class of Certificates, each such Class may have a
different Revolving Period.
Accumulation Period .... If the related Prospectus Supplement so specifies,
unless an Early Amortization Period or Reinvestment
Period that is not terminated in accordance with
the provisions of the related Series Supplement
commences with respect to a Series offered hereby,
the Certificates of such Series will have an
accumulation period (the "Accumulation Period"),
which will commence at the close of business on the
date specified in or determined in the manner
specified in such Prospectus Supplement and
continue until the earliest of (a) the commencement
of a Reinvestment Period with respect to such
Series, (b) the commencement of an Early
Amortization Period with respect to such Series and
(c) payment in full of the outstanding principal
amount of the Certificates of such Series.
9
<PAGE>
During the Accumulation Period with respect to a
Series, Principal Collections and certain other
amounts allocable to the Certificateholders'
Interest of such Series will be deposited on each
Distribution Date in a trust account established
for the benefit of the Certificateholders of such
Series (a "Principal Funding Account") and,
together, to the extent provided in the related
Series Supplement, with any amounts in the Excess
Funding Account, if any, for such Series, used to
make principal distributions to the
Certificateholders of such Series when due. The
amount to be deposited in the Principal Funding
Account for any Series offered hereby on any
Distribution Date during the Accumulation Period
for such Series may, but will not necessarily, be
limited to an amount (the "Controlled Deposit
Amount") equal to an amount specified in the
related Prospectus Supplement plus, in the case of
the Distribution Date or Distribution Dates
specified in or determined in the manner provided
in the related Series Supplement, amounts in the
Excess Funding Account, if any, for such Series
(after giving effect to any changes therein on such
date), if and to the extent so provided in the
related Series Supplement. If a Series has more
than one Class of Certificates, each Class may have
a different Accumulation Period and a separate
Principal Funding Account and Controlled Deposit
Amount. In addition, the related Prospectus
Supplement may describe certain priorities among
such Classes with respect to deposits of principal
into such Principal Funding Accounts.
Controlled Amortization
Period ............... If the related Prospectus Supplement so specifies,
unless an Early Amortization Period or Reinvestment
Period that is not terminated in accordance with
the provisions of the related Series Supplement
commences with respect to a Series offered hereby,
the Certificates of such Series will have an
amortization period (the "Controlled Amortization
Period"), which will commence at the close of
business on the date specified in or determined in
the manner specified in such Prospectus Supplement
and continue until the earliest of (a) the
commencement of a Reinvestment Period with respect
to such Series, (b) the commencement of an Early
Amortization Period with respect to such Series and
(c) payment in full of the outstanding principal
amount of the Certificates of such Series. During
the Controlled Amortization Period with respect to
a Series, Principal Collections and certain other
amounts allocable to the Certificateholders'
Interest of such Series, together with, to the
extent provided in the related Series Supplement,
amounts in the Excess Funding Account, if any, for
such Series, will be used on each Distribution Date
to make principal distributions to
Certificateholders of such Series or any Class of
such Series then scheduled to receive such
distributions. The amount to be distributed to
Certificateholders of any Series offered hereby on
any Distribution Date may, but will not
necessarily, be limited to an amount (the
"Controlled Amortization Amount") equal to an
amount specified in the related Prospectus
Supplement. If a Series has more than one Class of
Certificates, each Class may have a different
Controlled Amortization Period and a separate
Controlled Amortization Amount. In addition, the
related Prospectus Supplement may describe certain
priorities among such Classes with respect to such
distributions.
10
<PAGE>
Reinvestment Period .... If the related Prospectus Supplement so specifies,
unless an Early Amortization Period that is not
terminated in accordance with the provisions of the
related Series Supplement commences with respect to
a Series, if a Reinvestment Event occurs with
respect to such Series, the Certificates of that
Series will have a reinvestment period (the
"Reinvestment Period") which will commence on the
day (the "Reinvestment Period Commencement Date")
on which such event has occurred and continue until
the earliest of (a) the commencement of an Early
Amortization Period with respect to such Series,
(b) the recommencement of the Revolving Period with
respect to such Series in accordance with the
related Series Supplement and (c) payment of the
outstanding principal amount of the Certificates of
such Series in full. Unless otherwise provided in
the related Series Supplement, during the
Reinvestment Period with respect to a Series,
Principal Collections and certain other amounts
allocable to the Certificateholders' Interest of
that Series will be deposited on each Distribution
Date in the Principal Funding Account for such
Series and, together with, to the extent provided
in the related Series Supplement, amounts in the
Excess Funding Account, if any, for such Series,
will be used to make principal distributions to
Certificateholders of that Series when due. The
amount to be deposited in the Principal Funding
Account for any Series on any Distribution Date
during the Reinvestment Period for such Series will
not be limited to any Controlled Deposit Amount. If
a Series has more than one Class of Certificates,
the related Prospectus Supplement may describe
certain priorities among such Classes with respect
to deposits of principal into the Principal Funding
Accounts therefor.
After the date on which the amount on deposit in the
Principal Funding Account with respect to a Series
equals the outstanding principal amount of the
Certificates of such Series (the "Fully Reinvested
Date"), Certificateholders of such Series will no
longer have any interest in the Receivables and all
the representations and covenants of the Seller and
the Servicer relating to the Receivables, as well as
certain other provisions of the Pooling and Servicing
Agreement and all remedies for breaches thereof, will
no longer accrue to the benefit of the
Certificateholders of such Series, in each case
unless the Revolving Period with respect to such
Series recommences as provided in the related Series
Supplement. In addition, upon the occurrence of the
Fully Reinvested Date with respect to a Series, no
Interest Collections, Principal Collections,
Defaulted Receivables or Miscellaneous Payments will
be allocated to that Series unless the Revolving
Period with respect thereto recommences as described
above. Notwithstanding the foregoing, when the final
distribution has been made with respect to each
Series of Certificates or the Fully Reinvested Date
has occurred with respect thereto, all right, title
and interest in the Receivables will be conveyed and
transferred to USA. See "Description of the
Certificates -- Termination; Fully Reinvested Date".
Early Amortization
Period .............. During the period beginning on the day on which an
Early Amortization Event has occurred with respect to
a Series offered hereby and ending on the earliest of
the payment in full of the outstanding principal
balance of the Certificates of such Series, the
recommencement of the Revolving Period with respect
to such Series
11
<PAGE>
in accordance with the related Series Supplement
and the Termination Date for such Series (the
"Early Amortization Period"), the Revolving Period,
the Reinvestment Period, the Controlled
Amortization Period or the Accumulation Period, as
the case may be, with respect to such Series, will
terminate and Principal Collections and certain
other amounts allocable to the Certificateholders'
Interest of that Series will no longer be paid to
the Seller or the holders of any other outstanding
Series or deposited in a Principal Funding Account
as described above but instead will be distributed
to the Certificateholders of such Series monthly on
each Distribution Date beginning with the
Distribution Date following the Collection Period
in which an Early Amortization Period commences
with respect to such Series. See "Description of
the Certificates -- Reinvestment Events and Early
Amortization Events" for a description of events
that might result in the commencement of an Early
Amortization Period with respect to a Series of
Certificates. During an Early Amortization Period
with respect to a Series, distributions of
principal on the Certificates of that Series will
not be subject to a Controlled Distribution Amount.
In addition, on the first Special Payment Date with
respect to a Series amounts on deposit in the
Excess Funding Account, if any, to the extent
provided in the related Series Supplement, and the
Principal Funding Account with respect to such
Series or a Class thereof will be paid to the
Certificateholders of such Series or Class up to
the outstanding principal balance of the
Certificates of such Series or Class. Each
Distribution Date with respect to any Early
Amortization Period is defined as a "Special
Payment Date".
Subordination of the
Seller's Interest;
Enhancements ........ The Seller's Interest will be subordinated to the
rights of the Certificateholders of each Series
offered hereby to the limited extent described in
the related Prospectus Supplement. If and to the
extent specified in the related Series Supplement,
additional credit enhancement with respect to a
Series or Class of Certificates may include any one
or more of the following: letters of credit, surety
bonds, cash collateral accounts, spread accounts,
guaranteed rate agreements, swaps (including,
without limitation, currency swaps) or other
interest rate protection agreements, repurchase
obligations, other agreements with respect to third
party payments or other support, cash deposits or
other arrangements. Enhancement may also be
provided to a Series or Class of a Series by
subordination provisions which require that
distributions of principal and/or interest be made
with respect to the Certificates of that Series or
Class before distributions are made to another
Series or Class. Unless otherwise specified in the
related Prospectus Supplement, any form of
Enhancement will have certain limitations and
exclusions from coverage thereunder, which will be
described in the related Prospectus Supplement.
Excluded Series ........ A Series of Certificates may be designated as an
excluded series (an "Excluded Series") with respect
to a Series of Certificates previously issued by
the Trust as to which the Accumulation Period or
Controlled Amortization Period has commenced (a
"Paired Series").
Each Excluded Series will be prefunded with an
initial deposit to a prefunding account in an
amount equal to the initial principal balance of
such Excluded Series and primarily from the
proceeds of the
12
<PAGE>
offering of such Excluded Series. Any such
prefunding account will be held for the benefit of
such Excluded Series and not for the benefit of the
Paired Series. As funds are accumulated in the
Principal Funding Account for such Paired Series or
distributed to holders of Certificates of such
Paired Series, an equal amount of funds on deposit
in any prefunding account for such prefunded
Excluded Series will be released (which funds will
be distributed to the Seller). Until payment in
full of the Paired Series, no Interest Collections,
Principal Collections, Defaulted Amounts or
Miscellaneous Payments will be allocated to the
related Excluded Series. In addition, it is
expected that any Excluded Series will be excluded
from the calculation of the Required Participation
Amount as described under "Description of the
Certificates -- Addition of Accounts".
Servicing .............. The Servicer is responsible for servicing, managing
and making collections on the Receivables and will,
in most circumstances, deposit such collections in
the Collection Account within two business days
following the receipt thereof, generally up to the
amount of such collections required to be
distributed to Certificateholders with respect to
the related Collection Period. In certain limited
circumstances, the Servicer will be permitted to
use for its own benefit and not segregate
collections on the Receivables received by it
during each Collection Period until no later than
the business day prior to the related Distribution
Date or, provided that no Series issued prior to
October 20, 1994 is outstanding, no later than such
Distribution Date. See "Description of the
Certificates -- Allocation of Collections; Deposits
in Collection Account".
On the second business day preceding each
Distribution Date with respect to each Series (each
a "Determination Date"), the Servicer will
calculate the amounts to be allocated in respect of
collections on Receivables received with respect to
the related Collection Period to the
Certificateholders of such Series or any Class
thereof or to the Seller in accordance with the
Series Supplements. "Distribution Date" means, with
respect to any Series, the fifteenth day of each
month (or, if any such day is not a business day,
the next business day) or such other day specified
in the Series Supplement for such Series. See
"Description of the Certificates -- Allocation of
Collections; Deposits in Collection Account" and
"Special Considerations -- Certain Legal Aspects".
In certain limited circumstances CFC may resign or
be removed as Servicer, in which event either the
Trustee or, so long as it meets certain eligibility
standards set forth in the Pooling and Servicing
Agreement, a third-party servicer may be appointed
as successor servicer (CFC or any such successor
Servicer is referred to herein as the "Servicer").
CFC is permitted to delegate any of its duties as
Servicer to any of its affiliates, but any such
delegation will not relieve the Servicer of its
obligations under the Pooling and Servicing
Agreement. The Servicer will receive a monthly
servicing fee and certain other amounts as
described herein as servicing compensation from the
Trust. See "Description of the Certificates --
Servicing Compensation and Payment of Expenses".
13
<PAGE>
Mandatory Reassignment
and Transfer of
Certain Receivables . The Seller has made certain representations and
warranties in the Pooling and Servicing Agreement
with respect to the Receivables in its capacity as
Seller and CFC has made certain representations and
warranties in the Pooling and Servicing Agreement
in its capacity as Servicer. Such representations
and warranties will be reaffirmed as of each Series
Cut-Off Date. If the Seller breaches certain of its
representations and warranties with respect to any
Receivables and such breach remains uncured for a
specified period and has a materially adverse
effect on the Certificateholders' Interest, the
Certificateholders' Interest in such Receivables
will, subject to certain conditions specified
herein, be reassigned to the Seller. If CFC, as
Servicer, fails to comply in all material respects
with certain covenants or warranties with respect
to any Receivables and such noncompliance is not
cured within a specified period after CFC becomes
aware or receives notice thereof from the Trustee
and such noncompliance has a materially adverse
effect on the Certificateholders' Interest therein,
the Certificateholders' Interest in all Receivables
affected will be purchased by CFC. In the event of
a transfer of servicing obligations to a successor
Servicer, such successor Servicer, rather than CFC,
would be responsible for any failure to comply with
the Servicer's covenants and warranties arising
thereafter.
Tax Matters ............ In the opinion of special tax counsel for the
Seller and the Trust, the Certificates of each
Series offered hereby will be characterized as debt
of the Seller for federal income tax purposes and,
in the opinion of Michigan counsel for the Seller
and the Trust, the Certificates will be
characterized as debt of the Seller for Michigan
income and single business tax purposes. Each
Certificateholder, by the acceptance of a
Certificate offered hereby, will agree to treat
such Certificates as indebtedness of the Seller for
federal, state and local income and single business
tax purposes. The Certificates might be issued with
original issue discount. See "Certain Tax Matters"
for additional information concerning the
application of federal and Michigan tax laws.
ERISA Considerations ... Under a regulation issued by the Department of Labor,
and unless otherwise specified in the related
Prospectus Supplement, the Trust's assets would not
be deemed "plan assets" of any employee benefit plan
holding interests in the Certificates of any Series
offered hereby or, if such Series has more than one
Class, any such Class if certain conditions are met,
including that interests in the Certificates of such
Series or, in the case of a Series with more than one
Class, such Class be held by at least 100 independent
persons upon completion of the public offering of
such Certificates being made hereby. Based on
information provided by the underwriter or placement
agent for a Series, the Seller will notify the
Trustee as to whether or not Certificates of that
Series or, in the case of a Series with more than one
Class, each such Class will be held by at least 100
separately named persons at the conclusion of the
offering thereof. The Seller will not, however,
determine whether the 100-investor requirement of the
exception for publicly offered securities is
satisfied as to the Certificates of any Series or
Class. If the Trust's assets were deemed to be "plan
assets"
14
<PAGE>
of such a plan, there is uncertainty as to whether
existing exemptions from the "prohibited
transaction" rules of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"),
would apply to all transactions involving the
Trust's assets. Accordingly, employee benefit plans
contemplating purchasing interests in the
Certificates of any Series or Class should consult
their counsel before making a purchase. See "ERISA
Considerations".
Certificate Ratings .... Unless otherwise specified in the related
Prospectus Supplement, it will be a condition to
the issuance of the Certificates of each Series
offered hereby that they be rated in the highest
long-term rating category by at least one
nationally recognized rating agency. A security
rating is not a recommendation to buy, sell or hold
securities and is subject to revision or withdrawal
in the future by the assigning rating agency. See
"Risk Factors -- Ratings of the Certificates".
15
<PAGE>
RISK FACTORS
Limited Liquidity. It is anticipated that, to the extent permitted, the
underwriters of any Series of Certificates offered hereby will make a market
in such Certificates, but will not be under any obligation to do so. There
can be no assurance that a secondary market will develop with respect to the
Certificates of any Series offered hereby or, if such a secondary market does
develop, that it will provide the holders of such Certificates with liquidity
of investment or that it will continue for the life of such Certificates.
Certain Legal Aspects. There are certain limited circumstances under
the Uniform Commercial Code (the "UCC") and applicable federal law in which
prior or subsequent transferees of Receivables could have an interest in such
Receivables with priority over the Trust's interest. See "Certain Legal
Aspects of the Receivables -- Transfer of Receivables". Under the Receivables
Purchase Agreement, the RPA Seller has warranted to the Seller and, under the
Pooling and Servicing Agreement, the Seller has warranted to the Trust that
the Receivables have been or will be transferred free and clear of the lien
of any third party. Each of the RPA Seller and the Seller has also covenanted
that it will not sell, pledge, assign, transfer or grant any lien on any
Receivable or, except as described under "Description of the Certificates --
The Seller's Certificate", the Seller's Certificate (or any interest therein)
other than to the Trust.
The RPA Seller has warranted to the Seller in the Receivables Purchase
Agreement that the sale of the Receivables by it to the Seller is a valid
sale of the Receivables to the Seller. In addition, the RPA Seller and the
Seller have and will treat the transactions described herein as a sale of the
Receivables to the Seller and the RPA Seller has and will take all actions
that are required under Michigan law to perfect the Seller's ownership
interest in the Receivables. See "Certain Legal Aspects of the Receivables --
Transfer of Receivables". Notwithstanding the foregoing, if the RPA Seller
were to become a debtor in a bankruptcy case and a creditor or
trustee-in-bankruptcy of such debtor or such debtor itself were to take the
position that the sale of Receivables to the Seller should be recharacterized
as a pledge of such Receivables to secure a borrowing of such debtor, then
delays in payments of collections of Receivables to the Seller could occur or
(should the court rule in favor of any such trustee, debtor or creditor)
reductions in the amount of such payments could result. If the transfer of
Receivables to the Seller is recharacterized as a pledge, a tax or government
lien on the property of the RPA Seller arising before any Receivables come
into existence may have priority over the Seller's interest in such
Receivables. See "Certain Legal Aspects of the Receivables -- Certain Matters
Relating to Bankruptcy". If the transactions contemplated herein are treated
as a sale, except in certain limited circumstances, the Receivables would not
be part of the RPA Seller's bankruptcy estate and would not be available to
the RPA Seller's creditors.
In addition, if the RPA Seller were to become a debtor in a bankruptcy
case and a creditor or trustee-in-bankruptcy of such debtor or such debtor
itself were to request a bankruptcy court to order that the RPA Seller be
substantively consolidated with the Seller, delays in and reductions in the
amount of distributions on the Certificates could occur.
The Seller has warranted in the Pooling and Servicing Agreement that
the transfer of the Receivables to the Trust is a sale of the Receivables to
the Trust. The Seller has and will take all actions that are required under
Michigan law to perfect the Trust's interest in the Receivables and the
Seller has warranted that the Trust will at all times have a first priority
perfected ownership interest therein and, with certain exceptions, in the
proceeds thereof. However, the transfer of the Receivables to the Trust could
be deemed to create a security interest therein. If the transfer of the
Receivables to the Trust were deemed to create a security interest therein
under the UCC as in effect in Michigan, a tax or statutory lien on property
of the RPA Seller or the Seller arising before a Receivable is transferred to
the Trust may have priority over the Trust's interest in such Receivables. If
the Seller were to become a debtor in a bankruptcy case and a bankruptcy
trustee or the Seller as debtor in possession or a creditor of the Seller
were to take the position that the transfer of the Receivables from the
Seller to the Trust should be recharacterized as a pledge of such
Receivables, then delays in distributions on the Certificates could result
or, should the bankruptcy court rule in favor of any such trustee, debtor
in possession or creditor, reductions in such distributions could result.
16
<PAGE>
A case decided by the United States Court of Appeals for the Tenth
Circuit, Octagon Gas System, Inc. v. Rimmer, contains language to the effect
that accounts sold by an entity that subsequently became bankrupt remained
property of the debtor's bankruptcy estate because the sale of accounts is
treated as a "security interest" that must be perfected under the Uniform
Commercial Code. Although the Receivables are likely to be viewed as chattel
paper rather than accounts under the Uniform Commercial Code, sales of
chattel paper, like sales of accounts, must be perfected under Article 9 of
the Uniform Commercial Code. If CFC were to become a debtor under any
insolvency law and a court were to follow the reasoning of the Tenth Circuit
Court of Appeals and apply such reasoning to chattel paper, the Seller (and
thus the Trust) could experience a delay in or reduction of collections on
the Receivables, and the Certificateholders could incur a loss on their
investment as a result.
If certain events relating to the bankruptcy of Chrysler, the RPA
Seller or the Seller were to occur, then a Reinvestment Event or Early
Amortization Event would occur with respect to each Series and, pursuant to
the terms of the Pooling and Servicing Agreement, additional Receivables
would not be transferred to the Trust. See "Certain Legal Aspects of the
Receivables -- Transfer of Receivables" and " -- Certain Matters Relating to
Bankruptcy".
Payments made in respect of repurchases of Receivables by the RPA
Seller or the Seller pursuant to the Pooling and Servicing Agreement may be
recoverable by the RPA Seller or the Seller as debtor in possession or by a
creditor or a trustee-in-bankruptcy of the RPA Seller or the Seller as a
preferential transfer from the RPA Seller or the Seller if such payments are
made within one year prior to the filing of a bankruptcy case in respect of
the RPA Seller or the Seller.
Application of federal and state bankruptcy and debtor relief laws
could affect the interests of the Certificateholders in the Receivables if
such laws result in any Receivables being written off as uncollectible or
result in delays in or reductions of payments due on such Receivables.
See "Description of the Certificates -- Defaulted Receivables and
Recoveries".
The Seller has represented and warranted in the Pooling and Servicing
Agreement that each Receivable is at the time of creation secured by a first
priority perfected security interest in the related Vehicle. Generally, under
applicable state laws, a security interest in an automobile or light duty
truck that secures wholesale financing obligations may be perfected by the
filing of UCC financing statements. The RPA Seller takes all actions
necessary under applicable state laws to perfect the RPA Seller's security
interest in the Vehicles. However, at the time a Vehicle is sold, the RPA
Seller's security interest in the Vehicle will terminate. Therefore, if a
Dealer fails to remit to the RPA Seller amounts owed with respect to Vehicles
that have been sold, the related Receivables will no longer be secured by
Vehicles.
Payments. Receivables are generally paid by Dealers upon retail sale of
the underlying Vehicle. The timing of such sales is uncertain. In addition,
there is no assurance that there will be additional Receivables created under
the Accounts or that any particular pattern of Dealer repayments will occur.
The payment of principal on the Certificates is dependent on Dealer
repayments. As a result the Certificates of any Series or Class may not be
fully amortized by the Expected Payment Date, if any, with respect to such
Series or Class and the payment to Certificateholders or deposit in a
Principal Funding Account of principal during the Controlled Amortization
Period or Accumulation Period, if any, with respect to a Series of
Certificates or a Class thereof may not equal the Controlled Amortization
Amount or Controlled Deposit Amount, if any, with respect to such Series or
Class.
Social, Economic and Other Factors. Payment of the Receivables is
largely dependent upon the retail sale of the related Vehicles. The level of
retail sales of cars and light duty trucks may change as the result of a
variety of social and economic factors. Economic factors include interest
rates, unemployment levels, the rate of inflation and consumer perception of
economic conditions generally. The use of incentive programs (e.g.,
manufacturers' rebate programs) may affect retail sales. However, the Seller
is unable to determine and has no basis to predict whether or to what extent
economic or social factors will affect the level of Vehicle sales.
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Trust's Relationship to Chrysler and CFC. Neither CFC nor Chrysler is
obligated to make any payments in respect of the Certificates of any Series
or the Receivables (other than the obligation of CFC to purchase certain
Receivables from the Trust due to the failure to comply with certain
covenants, as described under "Description of the Certificates -- Servicer
Covenants"). However, the Trust is completely dependent upon CFC for the
generation of new Receivables. The ability of CFC to generate Receivables is
in turn dependent to a large extent on the sales of automobiles and light
duty trucks manufactured or distributed by Chrysler. There can, therefore, be
no assurance that CFC will continue to generate Receivables at the same rate
as Receivables were generated in prior years. In addition, if CFC were to
cease acting as Servicer, delays in processing payments on the Receivables
and information in respect thereof could occur and result in delays in
payments to the Certificateholders.
In connection with the transfer of Receivables by the RPA Seller to the
Seller and the transfer of such Receivables by the Seller to the Trust, each
of the RPA Seller and the Seller make representations and warranties with
respect to the characteristics of such Receivables. The RPA Seller and the
Seller are required to determine the accuracy of such representations and
warranties and, in certain circumstances, they are required to purchase
Receivables with respect to which such representations and warranties have
been breached. See "Description of the Certificates -- Representations and
Warranties" and "Description of the Receivables Purchase Agreement --
Representations and Warranties". In addition, subject to certain limitations,
CFC has the ability to change the terms of the Accounts, including the rate
and the credit line, as well as change its underwriting procedures.
Under franchise agreements between Chrysler and Chrysler-franchised
dealers, Chrysler is committed to purchase unmiled vehicles from such dealers
upon dealership termination. In addition, Chrysler has historically provided
certain financial assistance to Chrysler-franchised dealers, but has no
obligation to do so. If Chrysler is unable, or elects not, to provide any
such financial assistance to Dealers or is unable to fulfill the terms of the
franchise agreements with Dealers, losses with respect to the Receivables may
increase. See "The Dealer Floorplan Financing Business -- Relationship with
Chrysler". In addition, because a substantial number of the Vehicles to be
sold by the Dealers are manufactured or distributed by Chrysler, if Chrysler
were temporarily or permanently no longer manufacturing or distributing
vehicles, the rate of sales of Chrysler-manufactured Vehicles owned by the
Dealers would decrease, adversely affecting payment rates with respect to the
Receivables, and the loss experience with respect to the Receivables will be
adversely affected. See "The Dealer Floorplan Financing Business".
The Prospectus Supplement for any Series offered hereby may set forth
certain additional information regarding CFC and Chrysler. In addition,
Chrysler and CFC are subject to the informational requirements of the
Exchange Act and in accordance therewith file reports and other information
with the Commission. For further information regarding Chrysler and CFC
reference is made to such reports and other information which are available
as described under "Available Information".
Credit Enhancement. Credit enhancement of each Series of Certificates
offered hereby will be provided by the subordination of the Seller's Interest
to the extent of the Available Subordinated Amount for such Series as
described in the related Prospectus Supplement. The amount of such credit
enhancement is limited and will be reduced from time to time as described in
the related Prospectus Supplement. In addition, any Enhancement provided with
respect to a Series or Class of Certificates is expected to be limited. See
"Limited Subordination of Seller's Interest; Enhancements".
Control. Under certain circumstances, the consent or approval of the
holders of a specified percentage of the aggregate unpaid principal amount of
all outstanding Certificates of all outstanding Series will be required to
direct certain actions, including amending the Pooling and Servicing
Agreement in certain circumstances and directing a reassignment of the entire
portfolio of Receivables. In addition, following the occurrence of an
insolvency event with respect to the Seller, the holders of Certificates
evidencing more than 50% of the aggregate unpaid principal amount of each
Series or each Class of each Series (and any holder of a Supplemental
Certificate) will be required to direct the Trustee not to sell or otherwise
liquidate the Receivables.
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Additional Series. The Trust, as a master trust, previously issued
Series and is expected to issue additional Series (which may be represented
by different Classes within a Series) from time to time. A Series Supplement
delivered in connection with the issuance of other Series will specify
certain Principal Terms applicable to such Series. Such Principal Terms may
include methods for determining applicable allocation percentages and
allocating collections, provisions creating different or additional security
or other credit enhancement, different Classes of Certificates (including
subordinated Classes of Certificates) and any other amendment or supplement
to the Pooling and Servicing Agreement which is made applicable only to such
Series. No Series Supplement, however, may change the terms of the
Certificates of another Series or the terms of the Pooling and Servicing
Agreement as applied to the Certificate of another Series. See "Description
of the Certificates -- New Issuances". As long as the Certificates of any
Series are outstanding, a condition to the execution of any Series Supplement
will be that the Rating Agencies shall have advised the Trustee that the
issuance of such Additional Series will not result in the reduction or
withdrawal of their rating of the Certificates of any outstanding Series or
Class of Certificates. There can be no assurance, however, that the terms of
any one Series might not have an impact on the timing or amount of payments
received by a Certificateholder of any other Series. The issuance of an
additional Series does not require the consent of any Certificateholders.
Ratings of the Certificates. Unless otherwise specified in the related
Prospectus Supplement, it will be a condition to the issuance of the
Certificates of each Series offered hereby that they be rated in the highest
long-term rating category by at least one nationally recognized rating agency
(such rating agency and each other rating agency designated by the Seller in
the related Series Supplement in respect of any outstanding Series or Class,
a "Rating Agency"). Any rating assigned to the Certificates of a Series or a
Class by a Rating Agency will reflect such Rating Agency's assessment of the
likelihood that Certificateholders of such Series or Class will receive the
payments of interest and principal required to be made under the Pooling and
Servicing Agreement and will be based primarily on the value of the
Receivables in the Trust, the level of subordination of the Seller's Interest
and the availability of any Enhancement with respect to such Series or Class.
However, any such rating will not, unless otherwise specified in the related
Prospectus Supplement with respect to any Series or Class offered hereby,
address the likelihood that the principal of, or interest on, any
Certificates of such Series or Class will be paid on a scheduled date. The
rating will not be a recommendation to buy, hold or sell Certificates of such
Series or Class, inasmuch as such rating will not comment as to the market
price or suitability for a particular investor. There is no assurance that a
rating will remain for any given period of time or that a rating will not be
lowered or withdrawn by a Rating Agency if in its judgment circumstances in
the future so warrant.
Book-Entry Registration. Unless otherwise specified in the Prospectus
Supplement relating to a Series of Certificates offered hereby, the
Certificates of each such Series will be initially represented by one or more
certificates registered in the name of Cede, the nominee for DTC, and will
not be registered in the names of the Certificateholders or their nominees.
Accordingly, unless and until Definitive Certificates are issued
Certificateholders will not be recognized by the Trustee as
"Certificateholders" (as that term is used in the Pooling and Servicing
Agreement) and will only be able to exercise the rights of Certificateholders
indirectly through DTC and its participating organizations, and unless the
Prospectus Supplement for a Series offered hereby provides otherwise, through
Euroclear or CEDEL and their respective participating organizations. See
"Description of the Certificates -- General", " -- Book-Entry Registration"
and " -- Definitive Certificates".
U.S. AUTO RECEIVABLES COMPANY AND THE TRUST
U.S. Auto Receivables Company
USA was incorporated in the State of Delaware on June 18, 1991, as a
wholly owned subsidiary of CFC, for the limited purpose of purchasing
wholesale, retail and other receivables from either CFC, CCC or CARCO and
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transferring such receivables to third parties or issuing indebtedness
secured by receivables to third parties. Similarly, CARCO was incorporated in
the State of Delaware on May 30, 1986, for the limited purpose of purchasing
wholesale and retail receivables from either CFC or CCC and transferring such
receivables to third parties. On August 8, 1991, CARCO transferred the
Seller's Interest and all its rights and obligations under the Pooling and
Servicing Agreement and the Receivables Purchase Agreement to USA. Such
transfer (the "CARCO Transfer") was made in accordance with the terms of the
Pooling and Servicing Agreement and the Receivables Purchase Agreement and
was subject to certain conditions, including, among others that (a) CARCO,
USA and the Trustee execute and deliver an assignment and assumption
agreement; (b) CARCO deliver certain required opinions of counsel (including
an opinion of counsel that the CARCO Transfer would not adversely affect the
characterization of any outstanding Series or Class of Certificates as debt
of USA); (c) the CARCO Transfer would not result in a reduction or withdrawal
of the rating of any outstanding Series or Class of Certificates; and (d) all
filings required to continue the perfected interest of the Trustee in the
Receivables and the Collateral Security be made.
On August 8, 1991, USA was deemed to have made all representations and
warranties of the Seller in the Pooling and Servicing Agreement and any
Series Supplement with respect to any Series or Class of Certificates
outstanding at such time. In addition, upon such transfer, USA assumed the
obligations of CARCO under the Certificates with respect to any outstanding
Series, the Pooling and Servicing Agreement and the Receivables Purchase
Agreement and agreed to hold CARCO harmless from any liability related to
such obligations. Obligations transferred to and assumed by USA include
CARCO's obligation with respect to the subordinated note issued to CFC (the
owner of all the common stock of CARCO), the proceeds of which note were used
to fund a portion of the purchase price of Receivables from CCC on the
Initial Closing Date. CFC has made additional subordinated loans to USA to
fund a portion of the purchase price of the Receivables arising in the
Additional Accounts added to the Trust on Addition Dates subsequent to the
Initial Closing Date and may make additional subordinated loans to USA in the
future.
In addition to purchasing the Receivables in connection with the
offering of the Certificates, the Seller has also purchased other receivables
from CFC and CCC in connection with other financings.
The Seller has taken steps in structuring the transactions contemplated
hereby that are intended to insure that the voluntary or involuntary
application for relief by CFC under the United States Bankruptcy Code or
similar applicable state laws ("Insolvency Laws") will not result in the
consolidation of the assets and liabilities of the Seller with those of CFC.
These steps include the creation of the Seller as a separate, limited-purpose
subsidiary pursuant to a certificate of incorporation containing certain
limitations (including restrictions on the nature of the Seller's business,
as described above, and restrictions on the Seller's ability to commence a
voluntary case or proceeding under any Insolvency Law without the unanimous
affirmative vote of all its directors). However, there can be no assurance
that the activities of the Seller would not result in a court concluding that
the assets and liabilities of the Seller should be consolidated with those of
CFC in a proceeding under any Insolvency Law. See "Risk Factors -- Certain
Legal Aspects" and "Certain Legal Aspects of the Receivables -- Certain
Matters Relating to Bankruptcy".
In addition, tax and certain other statutory liabilities, such as
liabilities to the Pension Benefit Guaranty Corporation relating to the
underfunding of pension plans, of Chrysler or CFC can be asserted against the
Seller. To the extent that any such liabilities arise after the transfer of
Receivables to the Trust, the Trust's interest in the Receivables would be
prior to the interest of the claimant with respect to any such liabilities.
However, the existence of a claim against the Seller could permit the
claimant to subject the Seller to an involuntary proceeding under the
Bankruptcy Code or other Insolvency Law. See "Special Considerations --
Certain Legal Aspects" and "Certain Legal Aspects of the Receivables --
Certain Matters Relating to Bankruptcy" and "Risk Factors -- Trust's
Relationship to Chrysler and CFC".
USA's executive offices are located at 27777 Franklin Road, Southfield,
Michigan 48034-8286, and its telephone number is (248) 948-3031.
The Trust
The Trust was formed in accordance with the laws of the State of New
York pursuant to the Pooling and Servicing Agreement. CARCO, as the initial
Seller, and USA, as CARCO's assignee, have conveyed to the Trust, without
recourse, the Receivables arising under the Accounts. The property of the
Trust
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consists of the Receivables existing in the Accounts on the Initial Cut-Off
Date, all Receivables generated in the Accounts from time to time thereafter
during the term of the Trust as well as Receivables generated in any Accounts
added to the Trust from time to time (but excluding Receivables in any
Accounts that are removed from the Trust from time to time after the Initial
Cut-Off Date), Participation Interests (subject to the conditions described
herein), if any, an assignment of all the Seller's rights and remedies
under the Receivables Purchase Agreement, all funds collected or to be
collected in respect of the Receivables, all funds on deposit in certain
accounts of the Trust, any Enhancement issued with respect to any particular
Series or Class of Certificates and a security interest in the Vehicles and
any other Collateral Security. See "Description of the Certificates --
Addition of Accounts or Participation Interests". See "Description of the
Receivables Purchase Agreement" for a summary of certain terms of the
Receivables Purchase Agreement.
CFC will generally not convey to the Trust receivables ("Fleet
Receivables") originated in connection with multiple new vehicle orders of at
least five vehicles by certain specified Dealers. The terms Receivables and
Principal Receivables as used herein will not refer to Fleet Receivables.
The property of the Trust may also include Enhancements for the benefit
of Certificateholders of a particular Series or Class. The Certificateholders
of a particular Series or Class will not have any interest in any
Enhancements provided for the benefit of the Certificateholders of another
Series or Class, unless so provided in the related Series Supplement or
Series Supplements. Pursuant to the Pooling and Servicing Agreement, the
Seller will be allowed (subject to certain limitations and conditions), and
in some circumstances will be obligated, to designate from time to time
Additional Accounts to be included as Accounts and to convey to the Trust the
Receivables of such Additional Accounts, and to designate from time to time
certain Accounts to be removed and to require the Trustee to convey
receivables in such Removed Accounts to the Seller.
The Trust was formed for this and like transactions pursuant to the
Pooling and Servicing Agreement and prior to formation had no assets or
obligations. The Trust will not engage in any business activity other than
acquiring and holding the Receivables and the other assets of the Trust and
proceeds therefrom, issuing the Certificates and the Seller's Certificate
(and any Supplemental Certificates) and making payments thereon and related
activities. As a consequence, the Trust is not expected to have any need for,
or source of, capital resources other than the assets of the Trust.
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement: (i) the
net proceeds from the sale of the Certificates of a given Series offered hereby
will be paid to USA and used to make the deposit of the Excess Funded Amount,
if any, for such Series, to the Excess Funding Account for such Series; (ii)
USA will use the portion of such proceeds paid to it (together with the
subordinated loan from CFC described under "U.S. Auto Receivables Company and
the Trust -- U.S. Auto Receivables Company") to purchase Receivables from CFC
or to repay certain amounts previously borrowed to purchase Receivables; and
(iii) CFC will use the portion of the proceeds paid to it for general corporate
purposes.
THE DEALER FLOORPLAN FINANCING BUSINESS
General
The Receivables sold to the Trust by the Seller pursuant to the Pooling
and Servicing Agreement were or will be selected from extensions of credit
and advances (known generally as "wholesale" or "floorplan" financing) made
by Chrysler and CFC, directly or as successor to CCC, to domestic motor
"vehicle dealers". Funds so advanced are used by dealers to purchase new and
used vehicles manufactured or distributed by Chrysler and other manufacturers
pending sale to retail buyers. As described herein, receivables sold to the
Trust are secured by the Vehicles and, in many cases, certain parts
inventory, equipment, fixtures and service accounts of the vehicle dealers.
In some cases, the Receivables are also secured by realty owned by, and/or a
personal guarantee of, a vehicle dealer.
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CFC, as successor to CCC, is the primary wholesale financing source for
Chrysler-franchised dealers in the United States. Chrysler vehicles for which
CFC provides wholesale financing include vehicles manufactured under the
CHRYSLER, PLYMOUTH, DODGE, JEEP and EAGLE trademarks. CFC, directly or as
successor to CCC, has extended credit lines to Chrysler-franchised dealers
that also operate non-Chrysler franchises and non-Chrysler dealers. CFC
services the accounts of domestic dealers financed by it (the "U.S. Wholesale
Portfolio") through its Southfield Support office located in Southfield,
Michigan and through a network of zone offices located throughout the United
States.
Vehicles financed by any dealer under the floor plan program are
categorized by CFC, under its policies and procedures, as New Vehicles or
Used Vehicles based on whether such vehicles qualify for the new or used
wholesale and retail interest rate chargeable to such dealer in connection
with the vehicles financed. Currently, (a) "New Vehicles" consist of (i)
current and prior model year unmiled vehicles and (ii) current model year
miled vehicles purchased at a closed auction conducted by Chrysler and (b)
"Used Vehicles" consist of previously owned vehicles (other than current
model year miled vehicles purchased at a closed auction conducted by
Chrysler). Vehicles purchased by a dealer at a closed auction conducted by
Chrysler are referred to, collectively, as "Auction Vehicles". The
categorization of New Vehicles and Used Vehicles may change in the future
based on CFC's practices and policies.
Creation of Receivables
CFC finances 100% of the wholesale invoice price of New Vehicles,
including destination charges. Receivables in respect of
Chrysler-manufactured or distributed vehicles are originated by Chrysler
concurrently with the shipment of such vehicles to the financed dealer. Such
receivables are sold by Chrysler to CFC on a daily basis. In the case of New
Vehicles not manufactured by Chrysler, CFC advances funds directly to the
manufacturer on behalf of the dealer.
Once a dealer has commenced the floorplanning of a manufacturer's
vehicles through CFC, CFC will finance all purchases of vehicles by such
dealer from such manufacturer. CFC will cancel this arrangement, however, if
a dealer's inventory is considered by CFC to be seriously overstocked, if a
dealer is experiencing financial difficulties or if a dealer requests
controlled vehicle releases. In such circumstances, a dealer is placed in
a disciplinary category known as "Finance Hold" and the zone or
Southfield Support office of CFC assumes control of vehicle releases
to the dealer. Special arrangements are made by CFC to finance
inter-dealer sales of vehicles.
Credit Underwriting Process
CFC extends credit to dealers from time to time based upon established
credit lines. Lines of credit may be established by dealers to finance
purchases of New Vehicles, Used Vehicles and Auction Vehicles. All Chrysler-
franchised dealers that have a New Vehicle line of credit in place are
also eligible for a Used Vehicle and an Auction Vehicle credit line.
A New Vehicle credit line relates to New Vehicles (other than Auction
Vehicles); a Used Vehicle credit line relates to Used Vehicles; and
an Auction Vehicle credit line relates to Auction Vehicles.
A newly franchised dealer requesting the establishment of a New Vehicle
credit line must submit an application to a CFC zone office. After receipt of
such application, the local zone office investigates the prospective dealer
by reviewing the prospective dealer's credit reports and bank references and
evaluating the dealer's marketing capabilities and start-up financial
resources and credit requirements. When an existing dealer requests the
establishment of a wholesale New Vehicle credit line, the local zone office
reviews the dealer's credit reports (including the experience of the dealer's
current financing source) and bank references and investigates the dealer's
current state of operations and management (including evaluating a factory
reference) and marketing capabilities. The local zone office prepares a
written recommendation either approving or disapproving the dealer's request
and transmits such recommendation with the requisite documentation to the
Southfield Support Dealer Credit Department for final approval or
disapproval. CFC applies the same underwriting standards for dealers
franchised by other manufacturers.
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Upon approval, dealers execute a series of financing agreements with
CFC and, in the case of Chrysler-franchised dealers, Chrysler. Such
agreements provide CFC a first priority security interest in the vehicles and
certain other collateral and a demand master promissory note in favor of CFC.
Pursuant to such agreements, all dealers are required by CFC to maintain
insurance coverage for each vehicle for which Chrysler provides floorplan
financing, with CFC designated as loss payee.
The size of a credit line initially offered to a dealer is based upon
the dealer's sales record (or, in the case of a prospective dealer, expected
annual sales) and the dealer's effective net worth. The amount of a dealer's
credit line for New Vehicles is adjusted quarterly by CFC based upon such
dealer's average New Vehicle sales during the prior 180 days and is,
generally, in an amount sufficient to finance a 75-day supply of vehicles.
The amount of a dealer's credit line for Used Vehicles is also adjusted
periodically based upon such dealer's average Used Vehicle sales for the
prior 180 days and is, generally, in an amount sufficient to finance 50% of a
30 to 45-day supply of vehicles. The size of a dealer's Auction Vehicle
credit line is determined on a case by case basis and is adjusted
periodically based on CFC's practices and procedures.
The aggregate amount advanced for each Used Vehicle is equal to the
National Automotive Dealers Association's Official Wholesale Used Car
Trade-in Guide wholesale book value for such vehicle. However, the aggregate
amount of the credit line for such Used Vehicles may not exceed 50% of the
value of such dealer's total inventory of Used Vehicles. The amount advanced
for New Vehicles and all Auction Vehicles is equal to the amount invoiced
with respect to such vehicles and the auction purchase price (including
auction fees) of such Auction Vehicles, respectively.
Payment Terms
Upon the sale of a vehicle for which it has provided floorplan
financing, CFC generally is entitled to receive payment in full of the
related advance. Under an available installment payment plan for New
Vehicles manufactured by Chrysler, eligible Chrysler-franchised
dealers are obligated to remit to CFC only 90% of the amount of the
related advance upon retail sale of the related vehicle. Payment of
the remaining 10% balance (the "Installment Balance") is due in the
second month following the date of sale of such related vehicles. The
security interest in the vehicle is terminated at the time of its sale. A
dealer has the option to pay the Installment Balance to CFC at the time of
sale of the related vehicle. In such case, CFC credits such amount to a cash
management account maintained for such dealer and automatically applies such
credit to the payment of the Installment Balance on the due date thereof.
Pursuant to an agreement with Chrysler, CFC has two options with respect to
the Installment Balances. CFC may elect to sell to Chrysler, without
recourse, the Installment Balance of each such receivable when the related
vehicle is sold at retail. Alternatively, CFC may elect not to sell the
Installment Balances to Chrysler and to retain a portion of the credit risk
associated therewith. In the latter case, Chrysler has agreed to absorb the
credit losses on Installment Balances in each month in an amount equal to 15%
of the aggregate Installment Balances created in such calendar month.
Billing and Collection Procedures
A statement setting forth billing and related account information is
prepared by CFC and distributed on a monthly basis to each dealer. Each
dealer's bills are generated and mailed on the sixth or seventh calendar day
of the month. Interest and other nonprincipal charges are required to be paid
by the end of the month in which they are billed. Interest and handling fees
are billed by CFC in arrears, while insurance costs are billed in advance.
Dealers remit payments by check directly to CFC's local zone offices.
Revenue Experience
CFC charges dealers interest at a floating rate based on the rate (the
"Prime Rate") designated as the "prime rate" from time to time by certain
financial institutions selected by CFC, plus a designated spread ranging from
0.25% to 1.25% on New Vehicles. The Prime Rate is reset by CFC on the first
and sixteenth days of every month and is applied to all balances outstanding
during the applicable period.
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The actual spread for each dealer is determined according to the total amount
of such dealer's credit lines. CFC generally increases the spreads charged on
Used Vehicle balances by an additional 0.75%; however, previously owned
vehicles purchased at a Chrysler closed auction are financed at the
applicable New Vehicle rate. In the case of a few larger dealers, CFC charges
such dealers interest at a floating rate based on LIBOR plus 2.75% up to the
Prime Rate plus 0.50%.
Relationship with Chrysler
Chrysler provides to certain Chrysler-franchised dealers financial
assistance in the form of working capital loans and other loans. In addition,
Chrysler provides floorplan assistance to all Chrysler-franchised dealers
through a number of formal and informal programs. On all New Vehicle
financings, Chrysler reimburses dealers directly for the finance costs for a
specified period from the date of shipment. Chrysler also has a supplemental
floorplan assistance program, whereby dealers are reimbursed, at the time of
retail sale, for a specified amount depending upon the vehicle model.
Under an agreement between Chrysler and each Chrysler-franchised
dealer, Chrysler commits to repurchase unsold New Vehicles in inventory upon
dealership termination, at such vehicles' wholesale prices less a specified
margin. Chrysler only repurchases current model year vehicles that are new,
undamaged and unused. Chrysler also agrees to repurchase from dealers, at the
time of franchise termination, parts inventory at specified percentages of
the invoice price. If CFC takes possession of a dealer's parts inventory,
Chrysler is only obligated to pay CFC 55% of the invoice price of such
inventory. All of such assistance, however, is provided by Chrysler for the
benefit of its dealers, and does not relieve such dealers of any of their
obligations to CFC.
Much of such assistance is provided at the option of Chrysler, which
may terminate any of such optional programs in whole or in part at any time.
If Chrysler is unable to or elects not to provide such assistance, the loss
experience of CFC in respect of the U.S. Wholesale Portfolio may be adversely
affected. In addition, because a substantial number of the vehicles sold by
the dealers are manufactured or distributed by Chrysler, if Chrysler were
temporarily or permanently no longer in such business, the rate of sales of
Chrysler-manufactured vehicles would decrease, adversely affecting payment
rates and the loss experience of the U.S. Wholesale Portfolio. See "Payment
Terms" for a discussion of an instalment payment plan made available to
dealers. See also "Risk Factors -- Trust's Relationship to Chrysler and CFC".
Dealer Monitoring
The level of each dealer's wholesale credit line is monitored on a
periodic basis by CFC's local zone offices. Dealers are permitted to exceed
such lines on a temporary basis. For example, a dealer may, immediately prior
to a seasonal sales peak, purchase more vehicles than it is otherwise
permitted to finance under its existing credit lines. As another example,
because of slow inventory turnover, a dealer's credit lines may be reduced
prior to its liquidating a sufficient portion of its vehicle inventory. If at
any time CFC learns that a dealer's balance exceeds its approved credit
lines, CFC will evaluate such dealer's financial position and may temporarily
increase such dealer's credit lines or place such dealer in "Finance Hold".
See "Creation of Receivables".
Audits of dealer vehicle inventories are conducted on a regular basis
by zone office personnel. The timing of each visit is varied and no advance
notice is given to the audited dealer. Auditors review dealers' financial
records and conduct a physical inventory of the vehicles on the dealers'
premises. Through the audit process, CFC reconciles each dealer's physical
inventory with its records of financed vehicles. Audits are intended to
identify instances where a dealer sold vehicles but did not immediately repay
the related advances. The audit process also aids CFC in determining in such
instance whether a dealer received sale proceeds but diverted such proceeds
to uses other than the repayment of the obligations to CFC.
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"Dealer Trouble" Status and CFC's Write-Off Policy
Under certain circumstances, CFC will classify a dealer in "Dealer
Trouble" status. Such circumstances include failure to remit any principal or
interest payment when due, notification of any liens, levies or attachments
and a general deterioration of financial condition. Once a dealer is
assigned to Dealer Trouble status, any further extension of credit is
determined by CFC on a case-by-case basis.
CFC attempts to work with dealers to resolve instances of Dealer
Trouble status. If, however, a dealer remains in such status, it can result
in one of the following: (a) an orderly liquidation in which the dealer
voluntarily liquidates its inventory through normal sales to retail
customers, (b) a forced liquidation in which the dealer's inventory is
repossessed and, in the case of Chrysler-franchised dealers, the franchise is
closed, (c) a voluntary surrender of the dealer's inventory and, in the case
of Chrysler-franchised dealers, franchise closure, or (d) a forced sale of
the dealership. Generally, CFC works with franchised dealers to find third
parties to purchase a troubled dealership. The proceeds of such sales are
used to repay amounts due to CFC. Once liquidation has commenced, CFC
performs an analysis of its position, writes off any amounts identified at
such time as uncollectible and attempts to liquidate all possible collateral
remaining. During the course of a liquidation, CFC may recognize additional
losses or recoveries.
Additional Information
The Prospectus Supplement for each Series offered hereby will set forth
additional information with respect to the Dealer Floorplan Financing
Business.
THE ACCOUNTS
General
The Receivables arise in the Accounts. The Accounts were selected from
all the wholesale accounts in the U.S. Wholesale Portfolio that are Eligible
Accounts (the "Eligible Portfolio"). In order to be included in the Eligible
Portfolio, each Account must be an account established by CFC, directly or as
successor to CCC, in the ordinary course of business and must meet certain
other criteria provided in the Pooling and Servicing Agreement. See
"Description of the Certificates -- Representations and Warranties". CFC
and the Seller have represented that each believes that the Accounts will
be representative of the accounts in the Eligible Portfolio and that the
inclusion of the Accounts, as a whole, will not represent an adverse
selection from the Eligible Portfolio.
From time to time, Dealers deposit funds with CFC in cash management
accounts, limited in amount to the amount of the wholesale accounts. Funds
deposited by a Dealer in its cash management account are applied to reduce
the Dealer's outstanding Principal Receivables balance and may, under certain
circumstances, be reborrowed by the Dealer.
Pursuant to the Pooling and Servicing Agreement, the Seller, and
pursuant to the Receivables Purchase Agreement, the RPA Seller has the
right (subject to certain limitations and conditions), and in some
circumstances is obligated, to designate from time to time additional
qualifying wholesale accounts to be included as Accounts and to convey to
the Trust certain of the Receivables of such Additional Accounts, including
Receivables thereafter created. These accounts must meet the eligibility
criteria set forth above as of the date such accounts are designated as
Additional Accounts. The RPA Seller will convey the Receivables then
existing, with certain exceptions, or thereafter created under such
Additional Accounts to the Seller, which will in turn convey them
to the Trust. See "Description of the Certificates - Addition of
Accounts or Participation Interests". In addition, as of any Additional
Cut-off Date in respect of Additional Accounts and the date any new
Receivables are generated, the RPA Seller will represent and warrant to
the Seller, and the Seller will represent and warrant to the Trust, that the
Receivables meet the eligibility requirements set forth in the Pooling and
Servicing Agreement. See "Description of the Certificates -- Conveyance of
Receivables". Under certain circumstances specified
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in the Pooling and Servicing Agreement, the Seller has the right to remove
Accounts, and the Receivables arising therefrom, from the Trust. See
"Description of the Certificates -- Removal of Accounts". Throughout the term
of the Trust, the Accounts from which the Receivables arise will be the same
Accounts designated by the Seller on the Initial Cut-Off Date plus any
Additional Accounts, minus any Accounts removed from the Trust.
Information with respect to the Accounts will be set forth in each
Prospectus Supplement.
CHRYSLER FINANCIAL CORPORATION AND
CHRYSLER CREDIT CORPORATION
CFC is a financial services organization, all of the common stock of
which is owned by Chrysler. CFC, a Michigan corporation, is the continuing
corporation resulting from a merger on June 1, 1967, of a financial services
subsidiary of Chrysler into a newly acquired, previously nonaffiliated
finance company incorporated in 1926. CFC is engaged in automotive retail,
wholesale and fleet financing, servicing commercial leases and loans,
property, casualty and other insurance and automotive dealership facility
development and management. CFC's business is substantially dependent upon
the operations of Chrysler. In particular, lower levels of production and
sale of Chrysler's automotive products could result in a reduction in the
level of finance and insurance operations of CFC. See "Risk Factors --
Trust's Relationship to Chrysler and CFC". CFC's executive offices are
located at 27777 Franklin Road, Southfield, Michigan 48034-8286 and its
telephone number is (248) 948-3067.
CCC, a wholly owned subsidiary of CFC, provided retail, wholesale and
lease financing services to automobile dealers and their customers throughout
the United States. On December 31, 1995, CCC merged into CFC. CFC, in
accordance with the terms of the Pooling and Servicing Agreement and the
Receivables Purchase Agreement, assumed all the rights and obligations of CCC
under (a) the Pooling and Servicing (including rights and obligations as
servicer thereunder) and (b) the Receivables Purchase Agreement (including
rights and obligations as seller thereunder).
The Prospectus Supplement for each Series offered hereby will set forth
certain additional information with respect to CFC.
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DESCRIPTION OF THE CERTIFICATES
General
The Certificates of a Series will be issued pursuant to a Pooling and
Servicing Agreement (as supplemented and amended from time to time, the
"Pooling and Servicing Agreement"), among USA, as seller of the Receivables,
CFC, as servicer of the Receivables, and the Trustee, substantially in the
form filed as an exhibit to the Registration Statement of which this
Prospectus is a part. The Trustee will make available for inspection a copy
of the Pooling and Servicing Agreement (without exhibits or schedules) to
Certificateholders of a Series offered hereby on written request. The
following summary describes certain terms generally applicable to the
Certificates of each Series, does not purport to be complete and is qualified
in its entirety by reference to the Pooling and Servicing Agreement and the
applicable Series Supplement.
The Certificates of each Series offered hereby will evidence undivided
beneficial interests in certain assets of the Trust allocated to the
Certificateholders' Interest of such Series, representing the right to
receive from such Trust assets funds up to (but not in excess of) the amounts
required to make payments of interest on and principal of the Certificates of
such Series pursuant to the Pooling and Servicing Agreement as described in
the related Prospectus Supplement.
The Certificates of each Series offered hereby will initially be
represented by Certificates registered in the name of the nominee of DTC
(together with any successor depository selected by the Seller, the
"Depository"), except as set forth below. Unless otherwise specified in the
related Prospectus Supplement, the Certificates of each Series offered hereby
will be available for purchase in minimum denominations of $1,000 and
integral multiples thereof in book-entry form only. The Seller has been
informed by DTC that DTC's nominee will be Cede. Accordingly, Cede is
expected to be the holder of record of the Certificates. Unless and until
Definitive Certificates are issued under the limited circumstances described
herein, no Certificateholder will be entitled to receive a physical
certificate representing a Certificate. All references herein to actions by
Certificateholders shall refer to actions taken by DTC upon instructions from
Participants and all references herein to distributions, notices, reports and
statements to Certificateholders shall refer to distributions, notices,
reports and statements to DTC or Cede, as the registered holder of the
Certificates, as the case may be. See "Book-Entry Registration" and
"Definitive Certificates".
Interest
Interest on the principal balance of the Certificates of a Series or
Class offered hereby will accrue at the per annum rate either specified in or
determined in the manner specified in the related Prospectus Supplement and
will be payable to the Certificateholders of such Series or Class as and on
the Interest Payment Dates specified in the related Prospectus Supplement. If
the Prospectus Supplement for a Series or Class of Certificates so provides,
the interest rate and the Interest Payment Dates applicable to each
Certificate of that Series or Class may be subject to adjustment from time to
time, including as a result of a decline in the interest rate borne by the
Receivables.
Except as otherwise provided herein or in the related Prospectus
Supplement, Interest Collections and certain other amounts allocable to the
Certificateholders' Interest of a Series offered hereby will be used to make
interest payments to Certificateholders of such Series on each Interest
Payment Date with respect thereto, provided that during any Early
Amortization Period with respect to such Series, interest will be distributed
to such Certificateholders monthly on each Special Payment Date.
If the Interest Payment Dates for a Series or Class occur less
frequently than monthly, such collections or other amounts (or the portion
thereof allocable to such Class) will be deposited in one or more trust
accounts (each an "Interest Funding Account") and used to make interest
payments to Certificateholders of such Series or Class on the following
Interest Payment Date with respect thereto. If a Series has more than one
Class of Certificates, each such Class may have a separate Interest Funding
Account.
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Principal
The Certificates of each Series and Class will have a Revolving Period
during which Principal Collections and certain other amounts otherwise
allocable to the Certificateholders' Interest of such Series or Class will be
paid to the Seller, deposited to the Excess Funding Account, if any, for such
Series or distributed to, or for the benefit of, the Certificateholders of
other Classes or Series. Unless a Reinvestment Period or an Early
Amortization Period, in each case that is not terminated in accordance with
the provisions of the related Series Supplement, commences with respect to a
Series, following the Revolving Period with respect to such Series or a Class
thereof, such Series or Class will have either an Accumulation Period or a
Controlled Amortization Period.
During the Accumulation Period, if any, with respect to a Series,
Principal Collections and certain other amounts allocable to the
Certificateholders' Interest of such Series (including, if and to the extent
the Series Supplement therefor so provides, Excess Principal Collections, if
any, allocable to such Series) will be deposited on each Distribution Date in
a Principal Funding Account and, together, to the extent provided in the
related Series Supplement, with any amounts in the Excess Funding Account, if
any, for such Series, used to make principal distributions to the
Certificateholders of such Series when due. The amount to be deposited in a
Principal Funding Account for any Series offered hereby on any Distribution
Date may, but will not necessarily, be limited to the Controlled Deposit
Amount specified in the related Prospectus Supplement. If a Series has more
than one Class of Certificates, each Class may have a different Accumulation
Period and a separate Principal Funding Account and Controlled Deposit
Amount. In addition, the related Prospectus Supplement may describe certain
priorities among such Classes with respect to deposits of principal into such
Principal Funding Accounts.
During the Controlled Amortization Period, if any, with respect to a
Series, Principal Collections and certain other amounts allocable to the
Certificateholders' Interest of such Series (including, if and to the extent
the Supplement for such Series so provides, Excess Principal Collections, if
any, allocable to such Series) will be used, together, to the extent provided
in the related Series Supplement, with any amounts in the Excess Funding
Account, if any, for such Series, on each Distribution Date to make principal
distributions to any Class of Certificateholders of such Series then
scheduled to receive such distributions. The amount to be distributed to
Certificateholders of any Series offered hereby on any Distribution Date may,
but will not necessarily, be limited to the Controlled Amortization Amount
for such Series specified in the related Prospectus Supplement. If a Series
has more than one Class of Certificates, each Class may have a different
Controlled Amortization Period and a separate Controlled Amortization Amount.
In addition, the related Prospectus Supplement may describe certain
priorities among such Classes with respect to such distributions.
During the Reinvestment Period, if any, with respect to a Series,
Principal Collections and certain other amounts allocable to the
Certificateholders' Interest of such Series (including, if and to the extent
the Series Supplement for such Series so provides, Excess Principal
Collections, if any, allocable to such Series) will be deposited on each
Distribution Date in a Principal Funding Account and, together, to the extent
provided in the related Series Supplement, with any amounts in the Excess
Funding Account, if any, for such Series, used to make principal
distributions to the Certificateholders of such Series when due, in each case
unless the related Series Supplement provides otherwise. The amount to be
deposited in a Principal Funding Account for any Series offered hereby on any
Distribution Date will not be limited to any Controlled Deposit Amount or
Controlled Amortization Amount. If a Series has more than one Class of
Certificates, each Class may have a separate Principal Funding Account and
the related Prospectus Supplement may describe certain priorities among such
Classes with respect to deposits of principal into such Principal Funding
Accounts.
During the Early Amortization Period, if any, with respect to a Series,
Principal Collections and certain other amounts allocable to the
Certificateholders' Interest of such Series (including, if and to the extent
the Series Supplement for such Series so provides, Excess Principal
Collections, if any, allocable to such Series) will be distributed as
principal payments to the applicable Certificateholders monthly on each
Distribution Date beginning with the first Special Payment Date. During the
Early Amortization Period with respect to a Series, distributions of
principal to Certificateholders of such Series will not be
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limited to any Controlled Deposit Amount or Controlled Amortization Amount.
In addition, with respect to any Series, to the extent provided in the
related Series Supplement, any funds on deposit in the Excess Funding
Account, if any, with respect to such Series and any funds on deposit in the
Principal Funding Account with respect to such Series will be paid to the
Certificateholders of the relevant Class or Series. See "Reinvestment Events
and Early Amortization Events" for a discussion of the events which might
lead to the commencement of the Early Amortization Period with respect to a
Series.
Funds on deposit in any Principal Funding Account established with
respect to a Class or Series offered hereby will be invested in Eligible
Investments, and may be subject to a guarantee or guaranteed investment
contract or other mechanism specified in the related Prospectus Supplement
intended to assure a minimum rate of return on the investment of such funds.
In order to enhance the likelihood of the payment in full of the principal
amount of a Series or Class of Certificates offered hereby at the end of an
Accumulation Period with respect thereto, such Series or Class may be subject
to a maturity liquidity facility or other similar mechanism specified in the
relevant Prospectus Supplement. A maturity liquidity facility is a financial
contract that generally provides that sufficient principal will be available
to retire the Certificates at a certain date.
Certificates of a Series or Class offered hereby may also be subject to
purchase from time to time, generally at their respective principal amounts,
in connection with a remarketing thereof if so specified in the related
Prospectus Supplement. A purchase of Certificates of such a Series or Class
may result in a decrease in the outstanding principal amount of such Series
or Class prior to the commencement of any Controlled Amortization Period or
Early Amortization Period with respect thereto. The Prospectus Supplement for
any Series offered hereby subject to purchase as described in this paragraph
will describe the conditions to and procedures for any such purchase. The
proceeds of any such purchase would be paid to the holders of the
Certificates so purchased.
Certificates of a Series or Class offered hereby may also be otherwise
subject to purchase from time to time either at the option of the Seller or
the Certificateholders as described herein under "Optional Repurchase" and in
the related Prospectus Supplement.
Book-Entry Registration
Unless otherwise specified in the related Prospectus Supplement,
Certificateholders may hold Certificates of a Series offered hereby through
DTC (in the United States) or CEDEL or Euroclear (in Europe) if they are
participants of such systems, or indirectly through organizations which are
participants in such systems.
Cede, as nominee for DTC, will be the registered holder of the global
Certificates. Except as described herein, no Certificateholder will be
entitled to receive a certificate representing such person's interest in the
Certificates. Unless and until Definitive Certificates are issued under the
limited circumstances described below, all references herein to actions by
Certificateholders shall refer to actions taken by DTC upon instructions from
its Participants, and all references herein to distributions, notices,
reports and statements to Certificateholders shall refer to distributions,
notices, reports and statements to Cede, as the registered holder of the
Certificates, for distribution to the Certificateholders in accordance with
DTC procedures.
CEDEL and Euroclear will hold omnibus positions on behalf of their
participants through customers' securities accounts in CEDEL's and
Euroclear's 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. Citibank, N.A. ("Citibank") will act
as depositary for CEDEL and Morgan Guaranty Trust Company of New York
("Morgan") will act as depositary for Euroclear (in such capacities, the
"Foreign Agency Depositaries").
Transfers between DTC participants will occur in the ordinary way in
accordance with DTC rules. Transfers between CEDEL Participants and Euroclear
Participants will occur in the ordinary way in accordance with their
applicable rules and operating procedures.
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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 Foreign Agency Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to
its Foreign Agency 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 Foreign Agency Depositaries.
Because of time-zone difference, 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. For additional information regarding clearance
and settlement procedures for the Certificates, see Annex I hereto and for
information with respect to tax documentation procedures relating to the
Certificates, see Annex I hereto and "Tax Matters -- Certain Federal Income
Tax Consequences -- Foreign Investors".
DTC is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the UCC 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 organizations
("Participants") and facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entry changes in
their accounts, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and may include certain other
organizations. Indirect access to the DTC system also is available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants").
Certificateholders that are not Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Certificates may do so only through Participants and Indirect
Participants. In addition, Certificateholders will receive all distributions
of principal of and interest on the Certificates from the Trustee through DTC
and its Participants. Under a book-entry format, Certificateholders will
receive payments after the related Distribution Date because, while payments
are required to be forwarded to Cede, as nominee for DTC, on each such date,
DTC will forward such payments to its Participants which thereafter will be
required to forward them to Indirect Participants or Certificateholders. It
is anticipated that the only "Certificateholder" (as such term is used in the
Pooling and Servicing Agreement) will be Cede, as nominee of DTC, and that
Certificateholders will not be recognized by the Trustee as
Certificateholders under the Pooling and Servicing Agreement.
Certificateholders will only be permitted to exercise the rights of
Certificateholders under the Pooling and Servicing Agreement indirectly
through DTC and its Participants who in turn will exercise their rights
through DTC.
Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers among
Participants on whose behalf it acts with respect to the Certificates and is
required to receive and transmit distributions of principal of and interest
on the Certificates. Participants and Indirect Participants with which
Certificateholders have accounts with respect to the Certificates similarly
are required to make book-entry transfers and receive and transmit such
payments on behalf of their respective Certificateholders.
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Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a
Certificateholder to pledge Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Certificates, may be limited due to the lack of a physical certificate for
such Certificates.
DTC has advised the Seller that it will take any action permitted to be
taken by a Certificateholder under the Pooling and Servicing Agreement only
at the direction of one or more Participants to whose account with DTC the
Certificates are credited.
CEDEL, societe anonyme ("CEDEL"), 67 Bd Grande-Duchesse Charlotte,
L-1420, Luxembourg (R.C. Luxembourg B9248) was incorporated in 1970 as a
limited company under Luxembourg law. CEDEL is owned by banks, securities
dealers and financial institutions and currently has over 100 shareholders,
including U.S. financial institutions or their subsidiaries. No single entity
may own more than five percent of CEDEL's stock.
CEDEL is registered as a "Depositaire professional de titre" in
Luxembourg, and as such is subject to regulation by the Luxembourg Monetary
Authority ("IML"), which also supervises Luxembourg's banks.
CEDEL provides clearance and settlement services for its customers and
currently accepts over 40,000 securities issues for clearance, settlement,
and custody. CEDEL's customers consist of broker- dealers, financial
institutions, and other securities professionals involved in the movement
and/or custody of securities. CEDEL's U.S. customers are limited to brokers,
dealers, and banks. Currently, CEDEL has approximately 3,000 customers
located in over 60 countries, including all major European countries, Canada,
and the United States.
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 Morgan Guaranty Trust Company of New York,
Brussels, Belgium office (the "Euroclear Operator" or "Euroclear"), under
contract with Euroclear S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and
all Euroclear securities clearance accounts and Euroclear Clearance System
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
involved in the distribution of the Certificates. Indirect access to the
Euroclear System is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear Participant, either
directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operative 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
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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 Certificates 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 Foreign Agency Depositary. Such
distributions will be subject to tax reporting in accordance with relevant
United States tax laws and regulations. See "Certain Tax Matters". CEDEL or
the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by a Certificateholder under the Pooling and Servicing
Agreement or the applicable Series Supplement on behalf of a CEDEL
Participant or Euroclear Participant only in accordance with its relevant
rules and procedures and subject to its Foreign Agency Depositary's ability
to effect such actions on its behalf through DTC.
Although DTC, CEDEL and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Certificates among
participants of DTC, CEDEL and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such procedures may be
discontinued at any time.
Definitive Certificates
Unless otherwise stated in the related Prospectus Supplement, the
Certificates of a Series or Class offered hereby will be issued in fully
registered, certificated form to Certificateholders or their nominees
("Definitive Certificates"), rather than to DTC or its nominee only if (i)
the Seller advises the Trustee in writing that DTC is no longer willing or
able to properly discharge its responsibilities as Depository with respect to
the Certificates of such Series or Class and the Seller is unable to locate a
qualified successor, (ii) the Seller, at its option, elects to terminate the
book-entry system through DTC with respect to such Series or Class or (iii)
after the occurrence of a Service Default, Certificateholders representing
not less than 50% of the aggregate unpaid principal amount of the
Certificates of such Series or Class advise the Trustee and DTC through
Participants in writing that the continuation of a book-entry system through
DTC (or a successor thereto) is no longer in the best interests of such
Certificateholders.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all Participants of the
availability through DTC of Definitive Certificates for such Certificates.
Upon surrender by DTC of the certificate or certificates representing such
Certificates and instructions for re-registration, the Trustee will issue
such Certificates in the form of Definitive Certificates, and thereafter the
Trustee will recognize the holders of such Definitive Certificates as
Certificateholders under the Pooling and Servicing Agreement ("Holders"). In
the event that Definitive Certificates are issued or DTC ceases to be the
clearing agency for any Series or Class of Certificates, the Pooling and
Servicing Agreement provides that the applicable Certificateholders will be
notified of such event.
Distributions of principal of and interest on the Certificates will be
made by the Trustee directly to Holders in accordance with the procedures set
forth herein and in the Pooling and Servicing Agreement. Distributions on
each Distribution Date will be made to Holders in whose names the Definitive
Certificates were registered at the close of business on the related record
date. Distributions will be made by check mailed to the address of such
Holder as it appears on the register maintained by the Trustee. The final
distribution on any Certificate (whether Definitive Certificates or the
certificate or certificates registered in the name of Cede representing the
Certificates), however, will be made only upon presentation and surrender of
such Certificate on the final payment date at such office or agency as is
specified in the notice of final distribution to Certificateholders. The
Trustee will provide such notice to registered Certificateholders not later
than the fifth day of the month of the final distribution.
Definitive Certificates will be transferable and exchangeable at the
offices of the Trustee, which shall initially be 101 Barclay Street, New
York, New York 10286. No service charge will be imposed for
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any registration of transfer or exchange, but the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith.
The Seller's Certificate
The Pooling and Servicing Agreement provides that the Seller may
exchange a portion of the certificate evidencing the Seller's Interest (the
"Seller's Certificate") for another certificate (a "Supplemental
Certificate") for transfer or assignment to a person designated by the Seller
upon the execution and delivery of a supplement to the Pooling and Servicing
Agreement (which supplement shall be subject to the amendment section of the
Pooling and Servicing Agreement to the extent that it amends any of the terms
of the Pooling and Servicing Agreement); provided that (a) the Seller shall
at the time of such exchange and after giving effect thereto have an interest
in the Pool Balance of not less than 2% of the aggregate amount of the
principal balances of the Receivables (the "Pool Balance"), (b) the Seller
shall have delivered to the Trustee, the Rating Agencies and any Enhancement
Provider a Tax Opinion with respect to such exchange and (c) the Seller shall
have delivered to the Trustee written confirmation from the applicable Rating
Agencies that such exchange will not result in a reduction or withdrawal of
the rating of any outstanding Series or Class of Certificates. Any subsequent
transfer or assignment of a Supplemental Certificate is also subject to the
conditions described in clauses (b) and (c) in the preceding sentence.
New Issuances
The Pooling and Servicing Agreement provides that pursuant to any one
or more Supplements, the Trustee may issue two types of certificates: (i) one
or more Series of Certificates which are transferable and have the
characteristics described below and (ii) the Seller's Certificate (and any
Supplemental Certificate) which will evidence the Seller's Interest and will
be transferable only upon the satisfaction of certain conditions described
under "The Seller's Certificate". The Pooling and Servicing Agreement also
provides that, pursuant to one or more Supplements, the Seller may cause the
Trustee to issue one or more new Series. Under the Pooling and Servicing
Agreement, the Seller may specify, among other things, with respect to any
Series: (a) its name or designation, (b) its initial principal amount (or
method for calculating such amount), (c) its certificate rate (or the method
for determining its certificate rate), (d) a date on which it will begin its
Accumulation Period or Controlled Amortization Period, if any, (e) the method
for allocating principal and interest to Certificateholders of such Series,
(f) the percentage used to calculate monthly servicing fees, (g) the issuer
and terms of any Enhancement with respect thereto or the level of
subordination provided by the Seller's Interest, (h) the terms on which the
Certificates of such Series may be exchanged for Certificates of another
Series, be subject to repurchase, optional redemption or mandatory redemption
by the Seller or be remarketed by any remarketing agent, (i) the Series
Termination Date and (j) any other terms permitted by the Pooling and
Servicing Agreement, including, without limitation, the currency in which
such Series will be denominated (all such terms, the "Principal Terms" of
such Series). The Seller may offer any Series to the public under a
prospectus or other disclosure document (a "Disclosure Document") in
transactions either registered under the Securities Act or exempt from
registration thereunder, directly or through one or more underwriters or
placement agents. There is no limit to the number of Series that may be
issued under the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement provides that the Seller may
specify Principal Terms of a new Series such that each Series has a
Controlled Amortization Period or Accumulation Period which may have a
different length and begin on a different date than the Controlled
Amortization Period or Accumulation Period for any other Series. Further, one
or more Series may be in their Reinvestment Periods, Early Amortization
Periods, Controlled Amortization Periods or Accumulation Periods while other
Series are not. Thus, certain Series may be amortizing or accumulating
principal, while other Series are not. Moreover, different Series may have
the benefits of different forms of Enhancement issued by different entities.
Under the Pooling and Servicing Agreement, the Trustee will hold each form of
Enhancement only on behalf of the Series (or a particular Class within a
Series) with respect to which it relates, unless otherwise provided in the
related Series Supplement or Series Supplements. The
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Pooling and Servicing Agreement also provides that the Seller may specify
different certificate rates and Monthly Servicing Fees with respect to each
Series (or a particular Class within a Series). In addition, the Seller has
the option under the Pooling and Servicing Agreement to vary among Series (or
Classes within a Series) the terms upon which a Series (or Classes within a
Series) may be repurchased by the Seller.
Under the Pooling and Servicing Agreement and pursuant to a Series
Supplement, a new Series may be issued only upon the satisfaction of certain
specified conditions. The Seller may cause the issuance of a new Series by
notifying the Trustee at least five business days in advance of the
applicable Series Issuance Date. The notice shall state the designation of
any Series (and Classes within a Series, if any). The Pooling and Servicing
Agreement provides that the Trustee will issue any such Series only upon
delivery to it of the following: (i) a Series Supplement in form satisfactory
to the Trustee signed by the Seller and the Servicer and specifying the
Principal Terms of such Series, (ii) the form of any Enhancement and any
related agreement, (iii) an opinion of counsel to the effect that, for
federal income and Michigan income and single business tax purposes, (x) such
issuance will not adversely affect the characterization of the Certificates
of any outstanding Series or Class as debt of the Seller, (y) such issuance
will not cause a taxable event to any Certificateholders (an opinion of
counsel to the effect referred to in clauses (x) and (y) with respect to any
action is referred to herein as a "Tax Opinion") and (z) such new Series will
be characterized as debt of the Seller, and (iv) written confirmation from
the applicable Rating Agencies that such issuance will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class of
Certificates. Such issuance is also subject to the conditions that (a) the
Seller shall have represented and warranted that such issuance shall not, in
the reasonable belief of the Seller, cause an Early Amortization Event or
Reinvestment Event to occur with respect to any outstanding Series and (b)
after giving effect to such issuance, the Seller's interest in the Pool
Balance shall not be less than 2% of the Pool Balance. Upon satisfaction of
all such conditions, the Trustee will issue such Series.
Conveyance of Receivables and Collateral Security
On the date on which the Certificates related to the Series 1991-1 were
originally issued (the "Initial Closing Date"), CARCO sold and assigned to
the Trust all of its right, title and interest in and to the Receivables and
the related Collateral Security as of the Initial Cut-Off Date, all
Receivables thereafter created in the Accounts and its interests in the
related Collateral Security and the Receivables Purchase Agreement, and the
proceeds of all of the foregoing. On August 8, 1991, CARCO, in accordance
with the terms of the Pooling and Servicing Agreement and the Receivables
Purchase Agreement, transferred the Seller's Interest and all its rights and
obligations under the Pooling and Servicing Agreement and the Receivables
Purchase Agreement to USA. See "U.S. Auto Receivables Company and the Trust".
In addition, the Seller has previously designated Additional Accounts to be
added to the Accounts and has previously conveyed to the Trust the
Receivables in such Additional Accounts (together with the related Collateral
Security) as of the applicable Additional Cut-Off Date and all Receivables
(and related Collateral Security) created thereafter.
In connection with the sale of the Receivables to the Seller by the RPA
Seller and the transfer of the Receivables to the Trust, USA and CFC are
required to indicate in their computer records that the Receivables in the
Accounts and the related Collateral Security have been conveyed to the Trust.
In addition, the Seller is required to provide to the Trustee a computer file
or microfiche or written list containing a true and complete list showing for
each Account, as of the Initial Cut-Off Date and the applicable Additional
Cut-Off Date, (i) its account number, (ii) the outstanding balance of the
Receivables in such Account and (iii) the outstanding balance of Principal
Receivables in such Account. CFC will retain and will not deliver to the
Trustee any other records or agreements relating to the Receivables. Except
as set forth above, the records and agreements relating to the Receivables
have not and will not be segregated from those relating to other accounts of
CFC, and the physical documentation relating to the Receivables has not and
will not be stamped or marked to reflect the transfer of the
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Receivables to the Trust. The Seller will file one or more financing
statements in accordance with applicable state law to perfect the Trust's
interest in the Receivables, the Collateral Security, the Receivables
Purchase Agreement and the proceeds thereof. See "Risk Factors" and "Certain
Legal Aspects of the Receivables".
As contemplated above and as described below under "Addition of Accounts
or Participation Interests", the Seller has the right (subject to certain
limitations and conditions), and in some circumstances is obligated, to
designate from time to time additional accounts to be included as Additional
Accounts, to purchase from the RPA Seller the Receivables then existing or
thereafter created in such Additional Accounts and to convey such Receivables
to the Trust. Each such Additional Account must be an Eligible Account. In
respect of any conveyance of Receivables in Additional Accounts, the Seller
will follow the procedures set forth in the preceding paragraph, except the
list will show information for such Additional Accounts as of the date such
Additional Accounts are identified and selected (the "Additional Cut-Off
Date").
Representations and Warranties
The Seller will make representations and warranties to the Trust
relating to the Accounts, the Receivables and the Collateral Security to the
effect, among other things, that (a) as of each Series Cut-Off Date, and the
date of issuance of any Series (a "Series Issuance Date") (or, in the case of
the Additional Accounts, as of the Additional Cut-Off Date and the date the
related Receivables are transferred to the Trust (an "Addition Date")), each
Account or Additional Account was an Eligible Account, (b) as of the Series
Cut-Off Date (or as of the Additional Cut-Off Date, in the case of any
Additional Accounts) or as of the date any future Receivable is generated (a
"Transfer Date"), each Receivable is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed to the
Trust as described below under "Ineligible Receivables, the Instalment
Balance Amount and the Overconcentration Amount", (c) each Receivable and all
Collateral Security conveyed to the Trust on the Transfer Date or, in the
case of Additional Accounts, on the Addition Date, and all of the Seller's
right, title and interest in the Receivables Purchase Agreement, have been
conveyed to the Trust free and clear of any liens and (d) all appropriate
consents and governmental authorizations required to be obtained by the
Seller in connection with the conveyance of each such Receivable or
Collateral Security have been duly obtained. If the Seller breaches any
representation and warranty described in this paragraph and such breach
remains uncured for 30 days or such longer period as may be agreed to by the
Trustee, after the earlier to occur of the discovery of such breach by the
Seller or the Servicer or receipt of written notice of such breach by the
Seller or the Servicer, and such breach has a materially adverse effect on
the Certificateholders' Interest in any Receivable or Account, the
Certificateholders' Interest in such Receivable or, in the case of a breach
relating to an Account, all Receivables in the related Account ("Ineligible
Receivables") will be reassigned to the Seller on the terms and conditions
set forth below and such Account shall no longer be included as an Account.
Each such Receivable shall be reassigned to the Seller on or before the
end of the Collection Period in which such reassignment obligation arises by
the Seller directing the Servicer to deduct the principal balance of such
Receivable from the Pool Balance. In the event that such deduction would
cause the Seller's Participation Amount, which is an amount equal to the Pool
Balance minus the aggregate Invested Amounts for all outstanding Series, to
be less than the aggregate Available Subordinated Amounts for all Outstanding
Series (the "Trust Available Subordinated Amount") on the preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on such Distribution Date), on the date
on which such reassignment is to occur the Seller will be obligated to make a
deposit into the Collection Account in immediately available funds in an
amount equal to the amount by which the Seller's Participation Amount would
be less than the Trust Available Subordinated Amount (the amount of any such
deposit being referred to herein as a "Transfer Deposit Amount"), provided
that if the Transfer Deposit Amount is not so deposited, the principal
balance of the related Receivables will be deducted from the Pool Balance
only to the extent the Seller's Participation Amount is not reduced below the
Trust Available Subordinated Amount and any principal balance not so deducted
will not be reassigned and will remain part of the Trust. The reassignment of
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any such Receivable to the Seller and the payment of any related Transfer
Deposit Amount will be the sole remedy respecting any breach of the
representations and warranties described in the preceding paragraph with
respect to such Receivable available to Certificateholders or the Trustee on
behalf of Certificateholders.
The Seller will also make representations and warranties to the Trust
to the effect, among other things, that as of each Series Issuance Date (a)
it is duly incorporated and in good standing, it has the authority to
consummate the transactions contemplated by the Pooling and Servicing
Agreement and the Pooling and Servicing Agreement constitutes a valid,
binding and enforceable agreement of the Seller and (b) the Pooling and
Servicing Agreement constitutes a valid sale, transfer and assignment to the
Trust of all right, title and interest of the Seller in the Receivables and
the Collateral Security, whether then existing or thereafter created, the
Receivables Purchase Agreement, and the proceeds thereof (including proceeds
in any of the accounts established for the benefit of the Certificateholders
of any Series), subject to the rights of the Purchasers with respect to
certain of the Collateral Security, under the UCC as then in effect in the
State of Michigan, which is effective as to each Receivable existing on the
Initial Closing Date (or as of the Addition Date, if applicable) or, as to
each Receivable arising thereafter, upon the creation thereof and until
termination of the Trust. In the event that the breach of any of the
representations and warranties described in this paragraph has a materially
adverse effect on the Certificateholders' Interest in the Receivables, either
the Trustee or the holders of Certificates of all outstanding Series
evidencing not less than a majority of the aggregate unpaid principal amount
of all outstanding Series, by written notice to the Seller and the Servicer
(and to the Trustee and the issuer or provider of any Enhancement (an
"Enhancement Provider") if given by Certificateholders), may direct the
Seller to accept the reassignment of the Certificateholders' Interest of all
Series within 60 days of such notice, or within such longer period specified
in such notice. The Seller will be obligated to accept the reassignment of
the Certificateholders' Interest on a Distribution Date occurring within such
60-day period. Such reassignment will not be required to be made, however, if
at the end of such applicable period, the representations and warranties
shall then be true and correct in all material respects and any materially
adverse effect caused by such breach shall have been cured. The price for
such reassignment will generally be equal to the aggregate "Invested Amounts"
(as specified in the related Series Supplements) of all Series on the
Determination Date preceding the Distribution Date on which the purchase is
scheduled to be made plus accrued and unpaid interest on the unpaid principal
amount of the Certificates at the applicable certificate rate (together with
interest on overdue interest) plus, with respect to any particular Series,
any other amounts specified in the Series Supplement therefor. The payment of
the reassignment price for all outstanding Series, in immediately available
funds, will be considered a payment in full of the Certificateholders'
Interest. Such funds will be distributed to the Certificateholders entitled
thereto upon presentation and surrender of the Certificates. If the Trustee
or the Certificateholders give a notice as provided above, the obligation of
the Seller to make any such deposit will constitute the sole remedy
respecting a breach of the representations and warranties available to
Certificateholders or the Trustee on behalf of the Certificateholders.
As of the effective date of the CARCO Transfer, USA was deemed to have
made all the representations and warranties of the Seller (including the
Seller's representations and warranties set forth above) in the Pooling and
Servicing Agreement and in any Series Supplement with respect to any Series
or Class of Certificates.
Eligible Accounts and Eligible Receivables
An "Eligible Account" is defined to mean each wholesale financing line of
credit extended by CFC, directly or as successor to CCC, to a Dealer, which
line of credit, as of the date of determination thereof: (a) is established by
CFC, directly or as successor to CCC, in the ordinary course of business
pursuant to a floorplan financing agreement, (b) is in favor of an Eligible
Dealer, (c) is in existence and maintained and serviced by CFC, directly or as
successor to CCC, and (d) in respect of which no amounts have been charged off
as uncollectible or are classified as past due or delinquent. An "Eligible
Dealer" is a Dealer: (a) which is located in the United States of America
(including its territories and possessions), (b) which has not been identified
by the Servicer as being the subject of any voluntary or involuntary bankruptcy
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proceeding or in voluntary or involuntary liquidation, (c) in which Chrysler
or any affiliate thereof does not have an equity investment and (d) which has
not been classified by the Servicer as being in Dealer Trouble status.
An "Eligible Receivable" is defined to mean each Receivable: (a) which
was originated or acquired by CFC, directly or as successor to CCC, in the
ordinary course of business, (b) which has arisen under an Eligible Account
and is payable in United States dollars, (c) which is owned by CFC or CCC at
the time of sale to the Seller, (d) which represents the obligation of a
Dealer to repay an advance made to such Dealer to finance the acquisition of
Vehicles, (e) which at the time of creation and at the time of transfer to
the Trust is secured by a perfected first priority security interest in the
Vehicle relating thereto, (f) which was created in compliance in all respects
with all requirements of law applicable thereto and pursuant to a floorplan
financing agreement which complies in all respects with all requirements of
law applicable to any party thereto, (g) with respect to which all consents
and governmental authorizations required to be obtained by Chrysler, CCC, CFC
or the Seller in connection with the creation of such Receivable or the
transfer thereof to the Trust or the performance by CCC or CFC of the
floorplan financing agreement pursuant to which such Receivable was created,
have been duly obtained, (h) as to which at all times following the transfer
of such Receivable to the Trust, the Trust will have good and marketable
title thereto free and clear of all liens arising prior to the transfer or
arising at any time, other than liens permitted pursuant to the Pooling and
Servicing Agreement, (i) which has been the subject of a valid transfer and
assignment from the Seller to the Trust of all the Seller's interest therein
(including any proceeds thereof), (j) which will at all times be the legal
and assignable payment obligation of the Dealer relating thereto, enforceable
against such Dealer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy or other similar laws,
(k) which at the time of transfer to the Trust is not subject to any right of
rescission, setoff, or any other defense (including defenses arising out of
violations of usury laws) of the Dealer, (1) as to which, at the time of
transfer of such Receivable to the Trust, Chrysler, CCC, CFC and the Seller
have satisfied all their respective obligations with respect to such
Receivable required to be satisfied at such time, (m) as to which, at the
time of transfer of such Receivable to the Trust, neither Chrysler, CCC or
CFC nor the Seller has taken or failed to take any action which would impair
the rights of the Trust or the Certificateholders therein, (n) which
constitutes "chattel paper" as defined in Article 9 of the UCC as then in
effect in the State of Michigan and (o) which was transferred to the Trust
with all applicable governmental authorization.
The Trustee did not and it is not required or anticipated that the
Trustee will make any initial or periodic general examination of the
Receivables or any records relating to the Receivables for the purpose of
establishing the presence or absence of defects, compliance with
representations and warranties of the Seller or for any other purpose. In
addition, it is not required or anticipated that the Trustee will make any
initial or periodic general examination of the Servicer for the purpose of
establishing the compliance by the Servicer with its representations or
warranties, the observation of its obligations under the Pooling and
Servicing Agreement or for any other purpose. The Servicer, however, will
deliver to the Trustee on or before March 31 of each calendar year, an
opinion of counsel with respect to the validity of the interest of the Trust
in and to the Receivables and certain other components of the Trust.
Ineligible Receivables, the Installment Balance Amount and the
Overconcentration Amount
For the purpose of facilitating the administration and reporting
requirements of the Servicer under the Pooling and Servicing Agreement, all
Ineligible Receivables arising in an Eligible Account shall be transferred to
the Trust, provided that, if the Series Supplement for a Series so provides,
the Incremental Subordinated Amount for such Series will be adjusted by the
portion of the aggregate principal amount of Receivables included therein
allocable to the Certificateholders' Interest of such Series. In addition, if
the Series Supplement for a Series so provides, the Incremental Subordinated
Amount for such Series shall be adjusted to reflect, on each Distribution
Date, the aggregate principal amount of Receivables in the Trust on such
Distribution Date which are Dealer Overconcentrations (the "Overconcentration
Amount") allocable to the Certificateholders' Interest of such Series and the
portion of the aggregate
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amount of Installment Balances in respect of which CFC has not received an
offsetting payment from the related Dealer on such Distribution Date (the
"Installment Balance Amount") allocable to the Certificateholders' Interest
of such Series. As used herein, "Dealer Overconcentrations" on any
Distribution Date means, with respect to any Dealer or group of affiliated
Dealers and any Series, the excess of (x) the aggregate principal amount of
Receivables due from such Dealer or group of affiliated Dealers on the last
day of the Collection Period immediately preceding such Distribution Date
over (y) the percentage specified in the Series Supplement for such Series of
the Pool Balance on the last day of such immediately preceding Collection
Period.
Addition of Accounts or Participation Interests
Subject to the conditions described below, the Seller has the right to
designate from time to time additional accounts to be included as Accounts
(the "Additional Accounts"). In addition, the Seller is required to add the
Receivables of Additional Accounts if the Pool Balance on the last day of any
Collection Period is less than the Required Participation Amount as of the
following Distribution Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution
Date). In that case, unless certain insolvency events have occurred with
respect to the Seller, CFC or Chrysler, CFC under the Receivables Purchase
Agreement will be required to sell to the Seller, and the Seller under the
Pooling and Servicing Agreement will be required to transfer and assign to
the Trust, within 10 business days after the end of such Collection Period,
interests in all Receivables arising in such Additional Accounts, whether
such Receivables are then existing or thereafter created. Any designation of
Additional Accounts is subject to the following conditions, among others: (i)
each such Additional Account must be an Eligible Account; (ii) the Seller
shall represent and warrant that the addition of such Additional Accounts
shall not, in the reasonable belief of the Seller, cause an Early
Amortization Event or Reinvestment Event to occur with respect to any Series;
(iii) the Seller shall not select such Additional Accounts in a manner that
it believes is adverse to the interests of the Certificateholders or any
Enhancement Provider; (iv) the Seller shall deliver a Tax Opinion, other than
in the case of a required addition, and certain other opinions of counsel
with respect to the addition of such Additional Accounts to the Trustee, the
Rating Agencies and any Enhancement Provider; and (v) the applicable Rating
Agencies shall have provided written confirmation that such addition will not
result in a reduction or withdrawal of the rating of any outstanding Series
or Class of Certificates.
Notwithstanding the foregoing, from and after the date on which no
Series issued prior to October 20, 1994 is outstanding the Seller may from
time to time, at its discretion, and subject only to the limitations
specified in this paragraph, designate Additional Accounts. (Additional
Accounts designated in accordance with the provisions described in this
paragraph are referred to herein as "Automatic Additional Accounts".) Unless
each Rating Agency otherwise consents, the number of Automatic Additional
Accounts designated with respect to any of the three consecutive Collection
Periods beginning in January, April, July and October of each calendar year
shall not exceed 8% of the number of Accounts as of the first day of the
calendar year during which such Collection Periods commence and the number of
Automatic Additional Accounts designated during any such calendar year shall
not exceed 20% of the number of Accounts as of the first day of such calendar
year. On or before the first business day of each Collection Period beginning
in January, April, July and October of each calendar year, the Seller shall
have requested and obtained notification from each Rating Agency of any
limitations to the right of the Seller to designate Eligible Accounts as
Automatic Additional Accounts during any period which includes such
Collection Period. On or before January 31, April 30, July 31, October 31 of
each calendar year, the Trustee shall have received confirmation from each
Rating Agency that the addition of all Automatic Additional Accounts included
as Accounts during the three consecutive Collection Periods ending in the
calendar month prior to such date shall not have resulted in any applicable
Rating Agency reducing or withdrawing its rating of any outstanding Series or
Class of Certificates. On or before January 31 and July 31 of each calendar
year (or on or before the last day of each month in certain circumstances),
the Seller shall have delivered to the Trustee, each Rating Agency and any
Enhancement Provider an opinion of counsel with respect to the Automatic
Additional Accounts included as Accounts during the preceding calendar year
confirming the validity and perfection of each transfer of such Automatic
Additional Accounts. If such Rating Agency confirmation or opinion
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of counsel with respect to any Automatic Additional Accounts is not so
received, such Automatic Additional Accounts will be removed from the Trust.
From and after the date on which no Series issued prior to August 19,
1997 is outstanding, the Seller, in lieu of adding Additional Accounts, may
convey Participation Interests to the Trust.
Each Additional Account (including each Automatic Additional Account)
must be an Eligible Account at the time of its addition. However, since
Additional Accounts or Participation Interests may not have been a part of
the initial portfolio of CCC or CFC, they may not be of the same credit
quality as the initial Accounts. Additional Accounts or Participation
Interests may have been originated by CCC or CFC at a later date using credit
criteria different from those which were applied to the initial Accounts or
may have been acquired by CCC or CFC from another wholesale lender that had
different credit criteria. In addition, the Seller will be permitted to
designate as Additional Accounts accounts which contain receivables that have
been sold or pledged to third parties; however, following the applicable
Additional Cut-Off Date, no Receivables thereafter arising in any such
accounts shall be sold or pledged to any third parties.
"Required Participation Amount" for any date means an amount
equal to (a) the sum of the amounts for each Series (other than any
Series or portion thereof which is designated in the relevant Series
Supplement as being an Excluded Series until the Invested Amount of the
Series relating to such Excluded Series is reduced to $0) obtained by
multiplying the Required Participation Percentage for such Series by
the Initial Invested Amount for such Series at such time, plus (b) the
Trust Available Subordinated Amount on the immediately preceding
Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution
Date following such Determination Date).
"Required Participation Percentage" shall mean, with respect to a
particular Series, the percentage provided in the related Series
Supplement.
Removal of Accounts
The Seller shall have the right at any time to require the removal from
the Trust of Eligible Accounts. To remove any Eligible Account, the Seller
(or the Servicer on its behalf) shall, among other things, (a) furnish to the
Trustee, any Enhancement Provider and the Rating Agencies a written notice
(the "Removal Notice") specifying the Determination Date on which removal of
one or more Accounts will commence (a "Removal Commencement Date") and the
Accounts to be removed from the Trust (the "Designated Accounts"), (b)
determine on the Removal Commencement Date the aggregate principal balance of
Receivables in respect of each such Designated Account (the "Designated
Balance"), (c) from and after such Removal Commencement Date, cease to
transfer to the Trust all Receivables arising in the Designated Accounts, (d)
from and after such Removal Commencement Date, allocate all Principal
Collections in respect of each Designated Account, first to the oldest
outstanding principal balance of such Designated Account, until the
Determination Date on which the Designated Balance in such Designated Account
is reduced to zero (the "Removal Date"), (e) on each business day from and
after such Removal Commencement Date to and until the related Removal Date,
allocate (i) to the Trust (to be further allocated pursuant to the Pooling
and Servicing Agreement), Interest Collections in respect of each Designated
Account with respect to Receivables in all Designated Accounts sold to the
Trust and (ii) to the Seller the remainder of the Interest Collections in all
such Designated Accounts, (f) represent and warrant that the removal of any
such Eligible Account on any Removal Date shall not, in the reasonable belief
of the Seller, cause an Early Amortization Event or Reinvestment Event to
occur with respect to any Series or cause the Pool Balance to be less than
the Required Participation Amount, (g) represent and warrant that no
selection procedures believed by the Seller to be adverse to the interests of
the Certificateholders were utilized in selecting the Designated Accounts,
(h) represent and warrant that such removal will not result in a reduction or
withdrawal of the rating of any outstanding Series or Class of Certificates
and (i) on or before the related Removal Date,
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deliver to the Trustee and any Enhancement Provider an officers' certificate
confirming the items set forth in clauses (f), (g) and (h) above and a Tax
Opinion with respect to such removal. No Designated Accounts shall be removed
if such removal will result in a reduction or withdrawal of the rating of any
outstanding Series or Class of Certificates.
On any date on which an Account becomes an Ineligible Account (which
date will be deemed the Removal Commencement Date for such Account), the
Seller will commence the removal of such Account from the Trust by taking
each of the actions specified in clauses (a) through (e) of the preceding
paragraph with respect to such Ineligible Account.
Upon satisfaction of the above conditions, on the Removal Date with
respect to any such Designated Account, the Seller will cease such allocation
of collections of Receivables therefrom and such Designated Account shall be
deemed removed from the Trust for all purposes (a "Removed Account").
In addition to the removal rights described above, the Seller shall
have the right at any time to remove Accounts from the Trust and, in
connection therewith, repurchase the then existing Receivables in such
Accounts. To remove Accounts and repurchase the then existing Receivables in
such Accounts, the Seller (or the Servicer on its behalf) shall, among other
things: (a) furnish to the Trust, each Enhancement Provider and the Rating
Agencies a Removal Notice specifying the Designated Accounts which are to be
removed, and the then existing Receivables in such Designated Accounts (the
"Designated Receivables") which are to be repurchased from the Trust and the
Determination Date on which the removal of such Designated Accounts and the
purchase of such Designated Receivables will occur (a "Removal and Repurchase
Date"), (b) deliver to the Trustee on the Removal and Repurchase Date a
computer file or microfiche or written list containing a true and complete
list of the Removed Accounts specifying for each such Account its account
number and the aggregate amount of Receivables outstanding in such Account,
(c) if any Series issued prior to October 20, 1994 is then outstanding,
deposit into the Collection Account on the Removal and Repurchase Date funds
in an amount equal to the aggregate outstanding balance of the Designated
Receivables on such date (the "Repurchased Receivables Purchase Price"), (d)
represent and warrant that the removal of any such Eligible Account and the
repurchase of the Receivables then existing in such Account on any Removal
and Repurchase Date shall not, in the reasonable belief of the Seller, cause
an Early Amortization Event or Reinvestment Event to occur with respect to
any Series or cause the Pool Balance to be less than the Required
Participation Amount, (e) represent and warrant that no selection procedures
believed by the Seller to be adverse to the interests of the
Certificateholders were utilized in selecting the Designated Accounts, (f)
represent and warrant as of the Removal and Repurchase Date that the list of
Removed Accounts delivered pursuant to clause (b) above, as of the Removal
and Repurchase Date, is true and complete in all material respects, (g)
represent and warrant that such removal and repurchase will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class of
Certificates by the applicable Rating Agency, (h) deliver to the Trustee,
each Rating Agency and any Enhancement Providers a Tax Opinion, dated the
Removal and Repurchase Date, with respect to such removal and repurchase, and
(i) deliver to the Trustee and any Enhancement Providers an officers'
certificate confirming the items set forth in clauses (d) through (g) above.
No Designated Accounts shall be removed and no Designated Receivables shall
be repurchased unless each Rating Agency shall have notified the Seller, the
Servicer and the Trustee in writing that such removal and repurchase will not
result in a reduction or withdrawal of such Rating Agency's rating of any
outstanding Series or Class of Certificates.
Upon satisfaction of the above conditions, on the Removal and Repurchase
Date with respect to any such Designated Account and Designated Receivables,
such Designated Account shall be deemed removed, and such Designated
Receivables ("Repurchased Receivables") shall be deemed repurchased, from the
Trust for all purposes.
On each Distribution Date, any amounts on deposit in the Collection
Account on such Distribution Date resulting from payment by the Seller of the
Repurchased Receivables Purchase Price will be applied first, to fund any
unpaid Miscellaneous Payment due on or prior to such Distribution Date and
second, an amount equal to the product of (i) the amount of any Repurchased
Receivables Purchase
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Price initially deposited by the Seller in the Collection Account pursuant to
such repurchase and (ii) the Monthly Payment Rate for the immediately
preceding Collection Period, which is the percentage obtained by dividing
Principal Collections for such Collection Period by the daily average Pool
Balance for such Collection Period, shall be treated as Principal Collections
collected in the immediately preceding Collection Period.
Notwithstanding the provisions described above, from and after the date
on which no Series issued prior to October 20, 1994 is outstanding, the
Seller shall have the right to require the reassignment to it of all the
Trust's right, title and interest in, to and under the Receivables then
existing and thereafter created, all monies due or to become due and all
amounts received with respect thereto and all proceeds thereof in or with
respect to the Accounts ("Automatic Removed Accounts") designated by the
Seller, upon satisfaction of the following conditions: (a) on or before the
fifth business day immediately preceding the date upon which such Accounts
are to be removed, the Seller shall have given the Trust, each Enhancement
Provider and the Rating Agencies a Removal Notice specifying the date for
removal of the Automatic Removed Accounts (the "Automatic Removal Date"); (b)
on or prior to the date that is five business days after the Automatic
Removal Date, the Seller shall have delivered to the Trustee a computer file
or microfiche or written list containing a true and complete list of the
Automatic Removed Accounts specifying for each such Account, as of the
removal notice date, its account number and the aggregate amount of
Receivables outstanding in such Account; (c) the Seller shall have
represented and warranted as of each Automatic Removal Date that the list of
Automatic Removed Accounts delivered pursuant to clause (b) above, as of the
Automatic Removal Date, is true and complete in all material respects; (d)
the Trustee shall have received confirmation from each Rating Agency that
such removal will not result in a reduction or withdrawal of such Ratings
Agency's rating of any outstanding Series or Class of Certificates; (e) the
Seller shall have delivered to the Trustee, each Rating Agency and any
Enhancement Providers an officers' certificate, dated the Automatic Removal
Date, to the effect that the Seller reasonably believes that such removal
will not cause an Early Amortization Event or Reinvestment Event to occur
with respect to any Series; and (f) the Seller shall have delivered to the
Trustee, each Rating Agency and any Enhancement Providers a Tax Opinion,
dated the Automatic Removal Date, with respect to such removal.
Upon satisfaction of the above conditions, on the Automatic Removal
Date all the right, title and interest of the Trust in and to the Receivables
arising in the Automatic Removed Accounts, all monies due and to become due
and all amounts received with respect thereto and all proceeds thereof shall
be deemed removed from the Trust for all purposes.
Discount Option
From and after the date on which no Series issued prior to August 19,
1997 is outstanding, the Seller may at any time and from time to time, but
without any obligation to do so, designate a specified fixed or variable
percentage based on a formula (the "Discount Percentage") of the amount of
Receivables arising in all or any specified portion of the Accounts on and
after the date such designation becomes effective that otherwise would have
been treated as Principal Receivables to be treated as interest Receivables
(the "Discount Option Receivables"). Although there can be no assurance that
the Seller will do so, such designation may occur because the Seller
determines that the exercise of the discount option is needed to provide a
sufficient yield on the Receivables to cover interest and other amounts due
and payable from Interest Collections or to avoid the occurrence of an Early
Amortization Event or Reinvestment Event relating to the reduction of the
average yield on the portfolio of Accounts in the Trust, if the related
Series Supplement provides for such an Early Amortization Event or
Reinvestment Event. After any such designation the Seller may, without notice
to or consent of the Certificateholders, from time to time reduce or withdraw
the Discount Percentage; provided, however, that such reduction or withdrawal
will occur only if the Seller delivers to the Trustee a certificate of an
authorized representative to the effect that, in the reasonable belief of the
Seller, such reduction or withdrawal would not have adverse regulatory or
other accounting implications for the Seller. The Seller must provide 30
days' prior written notice to the Servicer, the Trustee and each Rating
Agency of any such designation or reduction or withdrawal, and such
designation or reduction or withdrawal will
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become effective on the date specified therein only if (a) the Seller has
delivered to the Trustee a certificate of an authorized representative to the
effect that, based on the facts known to such representative at the time, the
Seller reasonably believes that such designation or reduction or withdrawal
will not cause an Early Amortization Event or Reinvestment Event or an event
that, with notice or the lapse of time or both, would constitute an Early
Amortization Event or Reinvestment Event, to occur with respect to any Series
and (b) the Seller has received written notice from each Rating Agency that
such designation or reduction or withdrawal will not result in a reduction or
withdrawal of the rating of any outstanding Series or Class of Certificates.
On the date of processing of any collections on or after the date the
exercise of the discount option takes effect, the product of (i) a fraction
the numerator of which is the amount of Discount Option Receivables and the
denominator of which is the amount of all of the Principal Receivables
(including Discount Option Receivables) at the end of the prior Collection
Period and (ii) collections of Receivables that arise in the Accounts on such
day on or after the date such option is exercised that otherwise would be
Principal Receivables will be deemed collections of interest Receivables and
will be applied accordingly, unless otherwise provided in the related
Prospectus Supplement. Any such designation would result in an increase in
the amount of collections of interest Receivables, a reduction in the balance
of Principal Receivables and a reduction in the Seller's interest in the Pool
Balance.
Excluded Series
A Series of Certificates may be designated as an excluded series (an
"Excluded Series") with respect to a Series of Certificates previously issued
by the Trust as to which the Accumulation Period or Controlled Amortization
Period has commenced (a "Paired Series").
Each Excluded Series will be prefunded with an initial deposit to a
prefunding account in an amount equal to the initial principal balance of such
Excluded Series and primarily from the proceeds of the offering of such
Excluded Series. Any such prefunding account will be held for the benefit of
such Excluded Series and not for the benefit of the Paired Series. As funds are
accumulated in the Principal Funding Account for such Paired Series or
distributed to holders of Certificates of such Paired Series, an equal amount
of funds on deposit in any prefunding account for such prefunded Excluded
Series will be released (which funds will be distributed to the Seller). Until
payment in full of the Paired Series, no Interest Collections, Principal
Collections, Defaulted Amounts or Miscellaneous Payments will be allocated to
the related Excluded Series. In addition, it is expected that any Excluded
Series will be excluded from the calculation of the Required Participation
Amount as described under " -- Addition of Accounts or Participation
Interests".
Collection Account
The Servicer has established and will maintain an Eligible Deposit
Account for the benefit of the Certificateholders in the name of the Trustee,
on behalf of the Trust (the "Collection Account"). "Eligible Deposit Account"
means either (a) a segregated account with an Eligible Institution or (b) a
segregated trust account with the corporate trust department of a depository
institution organized under the laws of the United States or any one of the
states thereof (or any domestic branch of a foreign bank), having corporate
trust powers and acting as trustee for funds deposited in such account, so
long as any of the securities of such depository institution has a credit
rating from each Rating Agency in one of its generic rating categories which
signifies investment grade. "Eligible Institution" means (a) the corporate
trust department of the Trustee or (b) a depository institution organized
under the laws of the United States or any one of the states thereof, or the
District of Columbia (or a domestic branch of a foreign bank), which at all
times (i) has either (x) a long-term unsecured debt rating of A2 or better by
Moody's Investors Service, Inc. ("Moody's") and of AAA or better by Standard
& Poor's Ratings Group ("Standard & Poor's") or (y) a certificate of deposit
rating of P-1 by Moody's or A-1+ by Standard & Poor's and (ii) is a member of
the FDIC. Funds in the Collection Account generally will be invested in
Eligible Investments. "Eligible Investments" are:
(a) book-entry securities, negotiable instruments or securities
represented by instruments in bearer or registered form having original
or remaining maturities of 30 days or less, but in no event
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occurring later than the Distribution Date next succeeding the
Trustee's acquisition thereof, except as otherwise provided, with
respect to any Series offered hereby, in the related Series Supplement,
which evidence:
(i) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(ii) demand deposits, time deposits or certificates of deposit
of any depositary institution or trust company incorporated under the
laws of the United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution
authorities; provided, however, that at the time of the Trust's
investment or contractual commitment to invest therein, the commercial
paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a person or
entity other than such depository institution or trust company) thereof
shall have a credit rating from each of the Rating Agencies in the
highest investment category granted thereby;
(iii) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating from
each of the Rating Agencies in the highest investment category granted
thereby;
(iv) except during a Reinvestment Period with respect to any
Series, investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
or otherwise approved in writing thereby;
(v) bankers' acceptances issued by any depository institution
or trust company referred to in clause (ii) above; and
(vi) certain repurchase obligations, including those of
appropriately rated broker-dealers and financial institutions; and
(b) any other investment consisting of a financial asset that by
its terms converts to cash within a finite period of time, provided that
each Rating Agency shall have notified the Seller, the Servicer and the
Trustee that the Trust's investment therein will not result in a
reduction or withdrawal of the rating of any outstanding Class or Series
with respect to which it is a Rating Agency.
The foregoing notwithstanding, so long as any Series issued by the
Trust prior to October 20, 1994 remains outstanding, funds in the Collection
Account will be invested only in (i) obligations fully guaranteed by the
United States, (ii) demand deposits, time deposits or certificates of deposit
of depository institutions or trust companies, the commercial paper of which
has the highest rating from the applicable Rating Agency, (iii) commercial
paper having at the time of the Trust's investment, a rating in the highest
rating category from the applicable Rating Agency, (iv) demand deposits, time
deposits and certificates of deposit which are fully insured by the FDIC, (v)
bankers' acceptances issued by any depository institution or trust company
described in (ii) above, (vi) except during a Reinvestment Period with
respect to any Series, investments in money market funds which have the
highest rating from, or have otherwise been approved in writing by, each
Rating Agency and (vii) certain repurchase obligations (collectively,
"Eligible Investments"). Any earnings (net of losses and investment expenses)
on funds in the Collection Account will be credited to the Collection
Account. The Servicer will have the revocable power to instruct the Trustee
to make withdrawals and payments from the Collection Account for the purpose
of carrying out its duties under the Pooling and Servicing Agreement. The
Servicer may select an appropriate agent as representative of the Servicer
for the purpose of designating such investments.
Excess Funding Account
Except, to the extent provided in the related Series Supplement, during
an Early Amortization Period or Reinvestment Period with respect to a Series,
the Excess Funded Amount, if any, for such Series will be maintained in the
Excess Funding Account established with the Trustee with respect to
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such Series. The Excess Funded Amount with respect to a Series will initially
equal the excess, if any, of the initial principal balance of the
Certificates of such Series over the Initial Invested Amount thereof. Funds
on deposit in the Excess Funding Account for a Series will be invested by the
Trustee at the direction of the Servicer generally in Eligible Investments.
Such investments must mature on or prior to the next Distribution Date. The
Servicer may select an appropriate agent as representative of the Servicer
for the purpose of designating such investments.
Funds on deposit in the Excess Funding Account for a Series will be
withdrawn and paid to the Seller or allocated to one or more other Series
which are in Controlled Amortization, Early Amortization, Reinvestment or
Accumulation Periods to the extent of any increases in the Invested Amount of
the Series in question as a result of the addition of Receivables to the
Trust, a reduction in the Seller's Interest, or a reduction in the Initial
Invested Amount of any other Series. Additional amounts will be deposited in
the Excess Funding Account for a Series on a Distribution Date to the extent
that the sum of the Certificateholders' Interest of such Series in Principal
Receivables and the amount on deposit in the Excess Funding Account, if any,
for such Series prior to the deposit on such Distribution Date is less than
the outstanding principal balance of the Certificates of such Series, but
only to the extent that funds are available therefor as provided in the
related Series Supplement. The allocation of additional Receivables to
increase the Invested Amount of each Series that provides for an Excess
Funding Account or similar arrangement involving fluctuating levels of
investment in the Receivables will generally be based on the proportion that
the amount on deposit in the Excess Funding Account for that Series bears to
the amounts on deposit in the Excess Funding Accounts of all Series providing
for Excess Funding Accounts or such similar arrangements or to amounts
otherwise similarly available; and the deposit of amounts in the Excess
Funding Accounts for each such Series will be based on the proportion that
the Adjusted Invested Amount of that Series bears to the Adjusted Invested
Amounts of all Series providing for Excess Funding Accounts or such similar
arrangements.
On each Distribution Date, all investment income earned on amounts in
the Excess Funding Account for any Series since the preceding Distribution
Date will be withdrawn from such Excess Funding Account and applied as
described herein and in the related Prospectus Supplement.
Funds on deposit in the Excess Funding Account for a Series on the
earliest of (i) the commencement of a Reinvestment Period with respect to
such Series, (ii) the commencement of an Early Amortization Period with
respect to such Series and (iii) the Distribution Date or Distribution Dates
specified in or determined in the manner provided in the Series Supplement
for such Series will be distributed to the Certificateholders of such Series
or a Class thereof or deposited in the Principal Funding Account for such
Series or a Class thereof, in each case if and to the extent the related
Series Supplement so provides. In addition, except as otherwise provided in
the related Series Supplement, no funds will be deposited in the Excess
Funding Account for a Series during any Early Amortization Period or
Reinvestment Period with respect to such Series or with respect to any
Collection Period following the Collection Period specified in or determined
in the manner provided in the Series Supplement for such Series.
Allocation Percentages
Allocations among Series. Pursuant to the Pooling and Servicing
Agreement, during each Collection Period the Servicer will allocate to each
outstanding Series its share of Interest Collections, Principal Collections,
Defaulted Receivables and Miscellaneous Payments based on the applicable
Series Allocable Interest Collections, Series Allocable Principal
Collections, Series Allocable Defaulted Amount and Series Allocable
Miscellaneous Payments.
"Series Allocable Interest Collections", "Series Allocable
Principal Collections", "Series Allocable Defaulted Amount" and "Series
Allocable Miscellaneous Payments" mean, with respect to any Series of
Certificates for any Collection Period, the product of the Series
Allocation Percentage for such Series and the amount of Interest
Collections and Principal Collections, the Defaulted Amount and
Miscellaneous Payments, respectively, with respect to such Collection
Period.
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"Miscellaneous Payments" for any Collection Period means the sum
of (a) Adjustment Payments and Transfer Deposit Amounts received with
respect to such Collection Period and (b) Unallocated Principal
Collections on such Distribution Date available to be treated as
Miscellaneous Payments as described below under "Principal Collections
for all Series".
"Series Allocation Percentage" means, with respect to a Series of
Certificates for any Collection Period, the percentage equivalent of a
fraction, the numerator of which is the Adjusted Invested Amount of
such Series as of the last day of the immediately preceding Collection
Period and the denominator of which is the Trust Adjusted Invested
Amount as of such last day.
"Adjusted Invested Amount" means, with respect to a Series for
any date, an amount equal to the sum of (a) the Initial Invested Amount
of such Series, minus unreimbursed Investor Charge-Offs for such Series
and (b) the Available Subordinated Amount with respect to such Series
(after giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date during the Collection
Period in which such date occurs).
"Trust Adjusted Invested Amount" means, with respect to any
Collection Period, the sum of the Adjusted Invested Amounts for all
outstanding Series.
"Initial Invested Amount" means, with respect to any Series and for
any date, the amount specified in the related Series Supplement. The
Initial Invested Amount for any Series may be increased or decreased from
time to time as specified in the related Series Supplement, including as
a result of deposits to or withdrawals from the Excess Funding Account,
if any, for such Series.
Allocation Between the Certificateholders and the Seller. The Servicer
will allocate amounts initially allocated to each Series between the
Certificateholders' Interest and the Seller's Interest for each Collection
Period as provided in the related Series Supplement and, with respect to a
Series offered hereby, described in the related Prospectus Supplement. If a
Series consists of more than one Class, such amounts allocated to the
Certificateholders' Interest of such Series will be further allocated between
such Classes as provided in the related Series Supplement and, with respect
to a Series offered hereby, as described in the related Prospectus
Supplement.
Principal Collections for all Series. Principal Collections allocated
to the Certificateholders' Interest of any Series, for any Collection Period
with respect to any Accumulation Period, Controlled Amortization Period,
Reinvestment Period or Early Amortization Period with respect to such Series
or a Class thereof, will first be allocated to make required payments of
principal to the Principal Funding Account or to the Certificateholders of
such Series or a Class thereof, in each case if and to the extent specified
in the Series Supplement for such Series. The Servicer will determine the
amount of available certificateholder principal collections for each Series
and any Collection Period remaining after such required payments, if any
("Excess Principal Collections"). The Servicer will allocate Excess Principal
Collections to cover any principal distributions to Certificateholders of any
Series which are either scheduled or permitted and which have not been
covered out of Principal Collections and certain other amounts allocated to
such Series ("Principal Shortfalls"). Excess Principal Collections will
generally not be used to cover Investor Charge-Offs for any Series. If
Principal Shortfalls exceed Excess Principal Collections for any Collection
Period, Excess Principal Collections will be allocated pro rata among the
applicable Series based on the relative amounts of Principal Shortfalls,
unless otherwise provided in the applicable Series Supplements. To the extent
that Excess Principal Collections exceed Principal Shortfalls, the balance
will be paid to the Seller if the Seller's Participation Amount (determined
after giving effect to any Principal Receivables transferred to the Trust on
such date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date). Any amount
not allocated to the Seller because the Seller's Participation Amount does
not exceed the Trust Available Subordinated Amount will be held unallocated
("Unallocated Principal Collections") until the Seller's Participation Amount
exceeds the Trust Available Subordinated Amount, at which time such amount
will be allocated to the Seller, or until
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an Early Amortization Period, Accumulation Period, Controlled Amortization
Period or Reinvestment Period commences for any Series, after which such
amount will be treated as a Series Allocable Miscellaneous Payment.
Sharing of Excess Interest Collections. Any Series offered hereby may
be designated as an "Excess Allocation Series". Interest Collections and
certain other amounts allocable to the Certificateholders' Interest of any
Excess Allocation Series in excess of the amounts necessary to make required
payments with respect to such Series (including payments to any related
Enhancement Provider) that are payable out of Interest Collections (any such
excess, the Excess Interest Collections") may be applied to cover any
shortfalls with respect to amounts payable from Interest Collections
allocable to any other Excess Allocation Series, pro rata based upon the
amount of the shortfall, if any, with respect to each other Excess Allocation
Series; provided, however, that the sharing of Excess Interest Collections
among Excess Allocation Series will cease if the Seller shall deliver to the
Trustee a certificate of an authorized representative to the effect that, in
the reasonable belief of the Seller, the continued sharing of Excess Interest
Collections among Excess Allocation Series would have adverse regulatory
implications with respect to the Seller. Following the delivery by the Seller
of any such certificate to the Trustee there will not be any further sharing
of Excess Interest Collections. In all cases, any Excess Interest Collections
remaining after covering shortfalls with respect to all outstanding Excess
Allocation Series will be paid to the Seller.
Allocation of Collections; Deposits in Collection Account
The Servicer, no later than two business days after the processing
date, will deposit all collections received with respect to the Receivables
(excluding, with certain exceptions, certain portions thereof allocable to
the Seller) in each Collection Period into the Collection Account.
Notwithstanding the foregoing requirement for daily deposits, for so long as
(i) CFC remains the Servicer under the Pooling and Servicing Agreement, (ii)
no Service Default has occurred and is continuing and (iii) (x) CFC has and
maintains a short-term debt rating of at least A-1 by Standard & Poor's and
P-1 by Moody's, (y) CFC arranges for and maintains a letter of credit or
other form of Enhancement in respect of the Servicer's obligation to make
deposits of collections on the Receivables in the Collection Account that is
acceptable in form and substance to each Rating Agency or (z) CFC otherwise
obtains the Rating Agency confirmations described below, then, subject to any
limitations in the confirmations referred to below, CFC need not deposit
collections into the Collection Account on the day indicated in the preceding
sentence but may use for its own benefit all such collections until the
business day immediately preceding the related Distribution Date or, provided
that no Series issued prior to October 20, 1994 is outstanding, until such
Distribution Date, at which time CFC will make such deposits in an amount
equal to the net amount of such deposits and withdrawals which would have
been made had the conditions of this sentence not applied; provided, however,
that prior to ceasing daily deposits as described above the Seller shall have
delivered to the Trustee written confirmation from the applicable Rating
Agencies that the failure by CFC to make daily deposits will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class of
Certificates. In addition, during any Collection Period the Servicer will
generally be required to deposit Interest Collections and Principal
Collections into the Collection Account only to the extent of the
distributions required to be made to Certificateholders, the amounts required
to be deposited into any deposit, trust, reserve or similar account
maintained for the benefit of Certificateholders of any Series and certain
other parties and the amounts required to be paid to any Enhancement Provider
on the Distribution Date relating to such Collection Period and if, at any
time prior to such Distribution Date, the amount of collections deposited in
the Collection Account exceeds the amount required to be deposited, the
Servicer will be permitted to withdraw such excess from the Collection
Account.
On any date on which collections are deposited in the Collection
Account, the Servicer will distribute directly to the Seller the amount of
such Interest Collections allocable to each Series specified in the related
Series Supplement and, with respect to a Series offered hereby, described in
the related Prospectus Supplement if the Seller's Participation Amount
(determined after giving effect to any Principal Receivables transferred to
the Trust on such date) exceeds the Trust Available Subordinated
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Amount for the immediately preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date). In
addition, during the Revolving Period for any Series, subject to certain
limitations, the Servicer will distribute directly to the Seller on each such
date of deposit the amount of Principal Collections allocable to each Series
specified in the related Series Supplement and, with respect to a Series
offered hereby, described in the related Prospectus Supplement if the
Seller's Participation Amount (determined after giving effect to any
Principal Receivables transferred to the Trust on such date) exceeds the
Trust Available Subordinated Amount for the immediately preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the Distribution Date immediately
following such Determination Date).
Limited Subordination of Seller's Interest; Enhancements.
Subordination of Seller's Interest. Credit enhancement with respect to
any Series of Certificates offered hereby will be provided by subordination
of the Seller's Interest to the rights of Certificateholders of such Series
to the extent described in the related Prospectus Supplement. The amount of
such subordination with respect to any Series is referred to herein as the
Available Subordinated Amount for such Series. The Available Subordinated
Amount for any Series offered hereby will be subject to decrease and increase
from time to time if and to the extent described in the related Prospectus
Supplement. The Prospectus Supplement for each Series offered hereby will
describe the manner in which collections attributable to the Available
Subordinated Amount for such Series may be drawn upon to make payments to or
for the benefit of the holders of Certificates of such Series. If so provided
in the related Series Supplements, the Available Subordinated Amount for a
Series may be structured so as to be available to more than one Series of
Certificates.
Enhancements. In addition to the subordination described above, for any
Series, Enhancements may be provided with respect to one or more Classes
thereof. Enhancements with respect to one or more Classes of a Series offered
hereby may include a letter of credit, surety bond, cash collateral account,
spread account, guaranteed rate agreement, swap (including, without
limitation, any currency swap) or other interest protection agreement,
repurchase obligation, cash deposit or another form of credit enhancement
described in the related Prospectus Supplement or any combination of the
foregoing. In connection with any such Enhancement, CFC may enter into a
back-to-back arrangement with the provider thereof. Enhancements may also be
provided to a Series or Class or Classes of a Series by subordination
provisions which require that distributions of principal and/or interest be
made with respect to the Certificates of such Series or such Class or Classes
before distributions are made to one or more Series or one or more Classes of
such Series, if the Series Supplements with respect thereto so provide. If so
specified in the related Prospectus Supplement, any form of Enhancement may
be structured so as to be available to more than one Class or Series to the
extent described therein.
If Enhancement is provided with respect to a Series offered hereby, the
related Prospectus Supplement will include a description of (a) the amount
payable under such Enhancement, (b) any conditions to payment thereunder not
otherwise described herein, (c) the conditions (if any) under which the
amount payable under such Enhancement may be reduced and under which such
Enhancement may be terminated or replaced and (d) any material provisions of
any agreement applicable relating to such Credit Enhancement. Additionally,
in certain cases, the related Prospectus Supplement may set forth certain
information with respect to the applicable Enhancement Provider, including
(i) a brief description of its principal business activities, (ii) its
principal place of business, place of incorporation and the jurisdiction
under which it is chartered or licensed to do business, (iii) if applicable,
the identity of regulatory agencies which exercise primary jurisdiction over
the conduct of its business and (iv) its total assets, and its stockholders'
equity or policyholders' surplus, if applicable, as of a date specified in
the Prospectus Supplement.
Limitations on Subordination and Enhancements. The presence of an
Available Subordinated Amount and/or Enhancement with respect to a Series or
Class is intended to enhance the likelihood of receipt by Certificateholders of
such Series or Class of the full amount of principal and interest with
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respect thereto and to decrease the likelihood that such Certificateholders
will experience losses. However, unless otherwise specified in the Prospectus
Supplement for a Series offered hereby, neither subordination of the Seller's
Interest nor the Enhancement, if any, with respect thereto will provide
protection against all risks of loss or will guarantee repayment of the
entire principal balance of the Certificates and interest thereon. If losses
occur which exceed the amount covered by such subordination or Enhancement or
which are not covered by such subordination or Enhancement,
Certificateholders will bear their allocable share of deficiencies. In
addition, if specific Enhancement is provided for the benefit of more than
one Class or Series, Certificateholders of any such Class or Series will be
subject to the risk that such Enhancement will be exhausted by the claims of
Certificateholders of other Classes or Series.
Distributions
Payments to Certificateholders of a Series offered hereby or a Class
thereof will be made from the Collection Account and any accounts established
for the benefit of such Certificateholders as described in the related
Prospectus Supplement.
Defaulted Receivables and Recoveries
"Defaulted Receivables" on any Determination Date are (i) all
Receivables which were charged off as uncollectible in respect of the
immediately preceding Collection Period and (ii) all Receivables which were
Eligible Receivables when transferred to the Trust, which arose in an Account
which became an Ineligible Account after the date of transfer of such
Receivables to the Trust and which were not Eligible Receivables for any six
consecutive Determination Dates thereafter. The "Defaulted Amount" for any
Collection Period will be an amount (which shall not be less than zero) equal
to (a) the principal amount of Receivables that became Defaulted Receivables
during the preceding Collection Period minus (b) the sum of (i) the full
amount of any Defaulted Receivables subject to reassignment to the Seller or
purchase by the Servicer for such Collection Period unless certain events of
bankruptcy, insolvency or receivership have occurred with respect to either
of the Seller or the Servicer, in which event the Defaulted Amount will not
be reduced for those Defaulted Receivables and (ii) the excess, if any, for
the immediately preceding Determination Date of the amount determined
pursuant to this clause (b) for such Determination Date over the amount
determined pursuant to clause (a) for such Determination Date. Receivables
will be charged off as uncollectible in accordance with the Servicer's
customary and usual policies and procedures for servicing its own comparable
revolving dealer wholesale loan accounts. A portion of the Series Allocable
Defaulted Amount for each Series and Collection Period will be allocated
between the Certificateholders of such Series and the Seller as provided in
the related Series Supplement. The portion of the Defaulted Amount allocated
to the Certificateholders of a Series is referred to as the "Investor Default
Amount" for such Series. The Investor Default Amount for any Series that
consists of more than one Class will be further allocated between such
Classes as provided in the related Series Supplement.
If the Servicer adjusts the amount of any Receivable because of a
rebate, billing error or certain other noncash items to a Dealer, or because
such Receivable was created in respect of inventory which was refused or
returned by a Dealer, the principal amount of each of the Seller's Interest
and the Pool Balance will be reduced by the amount of the adjustment or
charge-off. Furthermore, to the extent that the reduction in the Seller's
Interest would reduce the Seller's Participation Amount below the Trust
Available Subordinated Amount for the immediately preceding Determination
Date (after giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date immediately following such
Determination Date), the Seller will deposit a cash amount equal to such
deficiency into the Collection Account in immediately available funds (an
"Adjustment Payment") on the day on which such adjustment occurs.
Optional Repurchase
If so provided in a Prospectus Supplement relating to a Series of
Certificates offered hereby, on any Distribution Date occurring after the
Invested Amount of the Certificates of such Series is reduced to the
percentage of the initial outstanding principal amount of the Certificates of
such Series specified
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therein or such other Distribution Date or Distribution Dates as may
be specified in such Prospectus Supplement, the Seller will have the option,
subject to certain conditions, to repurchase all or a portion of the
Certificateholders' Interest of such Series. Additionally, if so provided in a
Prospectus Supplement relating to a Series of Certificates offered hereby, on
the Distribution Date or Distribution Dates as may be specified in such
Prospectus Supplement, the Certificateholders of such Series will have the
option, subject to certain conditions, to have the Seller repurchase the
Certificates owned by them. The purchase price will generally be equal to the
Invested Amount of such Series or a pro rata portion thereof, in the case of a
purchase of fewer than all the Certificates of such Series, on the
Determination Date preceding the Distribution Date on which such repurchase
will be made plus accrued and unpaid interest on the unpaid principal amount of
such Certificates at the applicable certificate rate (together with interest on
overdue interest), plus any other amounts specified in the related Series
Supplement. The purchase price will be deposited in the Collection Account in
immediately available funds on the Distribution Date on which the Seller
exercises such option. Following any such purchase, the holders of the
Certificates of such Series to be repurchased will have no further rights with
respect to the Certificateholders' Interest of such Series, other than the
right to receive the final distribution on such Certificates. In the event that
the Seller fails for any reason to deposit such purchase price, payments will
continue to be made to the holders of Certificates of such Series as described
in the related Prospectus Supplement.
Reinvestment Events and Early Amortization Events
Commencing on the first Distribution Date following the Collection
Period in which a Reinvestment Event has occurred with respect to any Series,
Principal Collections allocable to the Certificateholders' Interest of such
Series will no longer be paid to USA or allocated to any other Series but
instead will be deposited to the Principal Funding Account for such Series
monthly on each Distribution Date, and the Controlled Deposit Amount or
Controlled Amortization Amount, if any, will no longer apply to distributions
of principal in respect of the Certificates of such Series, in each case
except as described below or provided in the related Series Supplement. A
"Reinvestment Event" refers to, for any Series, any of the events so defined
in the Series Supplement relating to that Series and, with respect to any
Series offered hereby, described in the related Prospectus Supplement.
Upon the occurrence of any event so defined, a Reinvestment Event will
be deemed to have occurred with respect to such Series without any notice or
other action on the part of any other party immediately upon the occurrence
of such event. The Reinvestment Period with respect to such Series will
commence as of the close of business on the business day immediately
preceding the day on which the Reinvestment Event is deemed to have occurred.
Monthly deposits of principal to the Principal Funding Account for such
Series will, except as described below or provided in the related Series
Supplement, begin on the first Distribution Date following the Collection
Period in which a Reinvestment Period has commenced with respect to such
Series.
Commencing on the first Distribution Date following the Collection
Period in which an Early Amortization Event has occurred with respect to any
Series, Principal Collections allocable to the Certificateholders' Interest
of such Series will no longer be paid to USA, allocated to any other Series
or retained in the Principal Funding Account for such Series but instead will
be distributed to Certificateholders of such Series monthly on each
Distribution Date and the Controlled Deposit Amount or Controlled
Amortization Amount, if any, will no longer apply to distributions of
principal on the Certificates of such Series, in each case except as
described below or provided in the related Series Supplement. An "Early
Amortization Event" refers to, for any Series, any of the events so defined
in the Series Supplement relating to the Series and, with respect to any
Series offered hereby, described in the related Prospectus Supplement, as
well as either of the following events:
1. the occurrence of certain events of bankruptcy, insolvency or
receivership relating to the Trust or the Seller; and
2. the Trust or USA becomes an investment company within the
meaning of the Investment Company Act of 1940, as amended.
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Upon the occurrence of any event described above or in the Prospectus
Supplement for a Series offered hereby, an Early Amortization Event will be
deemed to have occurred with respect to such Series without any notice or
other action on the part of any other party immediately upon the occurrence
of such event. The Early Amortization Period with respect to such Series will
commence as of the close of business on the business day immediately
preceding the day on which the Early Amortization Event is deemed to have
occurred. Monthly distributions of principal to the Certificateholders of
such Series will begin on the first Distribution Date following the
Collection Period in which an Early Amortization Period has commenced with
respect to such Series, except as described below. The failure of the Trust
to pay the outstanding principal amount of the Certificates of any Series or
Class by the Expected Payment Date therefor will have the same consequences
as the occurrence of an Early Amortization Event with respect to such Series
or Class; and all references herein to Early Amortization Events shall be
deemed to include such a failure.
Notwithstanding the commencement of a Reinvestment Period or an Early
Amortization Period with respect to a Series of Certificates, such period may
terminate and the Revolving Period with respect to such Series and any Class
thereof may commence when the event giving rise to the commencement of such
Reinvestment Period or Early Amortization Period no longer exists, whether as
a result of the distribution of principal to Certificateholders of such
Series or otherwise, in each case if and to the extent provided in the Series
Supplement for such Series.
In addition to the consequences of a Reinvestment Event or an Early
Amortization Event with respect to any Series discussed above, if an
insolvency event occurs with respect to USA, or USA violates its covenant not
to create any lien on any Receivable, in each case as provided in the Pooling
and Servicing Agreement, on the day of such insolvency event or such
violation, as applicable, USA will (subject to the actions of the
Certificateholders) immediately cease to transfer Receivables to the Trust
and promptly give notice to the Trustee of such insolvency event or
violation, as applicable. Under the terms of the Pooling and Servicing
Agreement, within 15 days the Trustee will publish a notice of such
insolvency event or violation stating that the Trustee intends to sell,
liquidate or otherwise dispose of the Receivables in a commercially
reasonable manner and on commercially reasonable terms, unless within a
specified period of time holders of Certificates of each outstanding Series
representing more than 50% of the aggregate unpaid principal amount of the
Certificates of each such Series (or, with respect to any Series with two or
more Classes, the Certificates of each such Class) and each person holding a
Supplemental Certificate, instruct the Trustee not to sell, dispose of or
otherwise liquidate the Receivables and to continue transferring Receivables
as before such insolvency event or violation, as applicable. If the portion
of such proceeds allocated to the Certificateholders' Interest and the
proceeds of any collections on the Receivables in the Collection Account
allocable to the Certificateholders' Interest are not sufficient to pay the
aggregate unpaid principal balance of the Certificates in full plus accrued
and unpaid interest thereon, Certificateholders will incur a loss.
Termination; Fully Reinvested Date
Termination. The Trust will terminate on the earlier to occur of (a)
the day following the Distribution Date on which the aggregate Invested
Amounts for all Series is zero, (b) May 31, 2012, subject to extension as
described below (the "Final Maturity Date"), and (c) the date on which
proceeds from the sale, disposal or other liquidation of the Receivables are
distributed to the Certificateholders following an insolvency event with
respect to USA or any violation by USA of its covenant not to create any lien
on any Receivable, in each case as provided in the Pooling and Servicing
Agreement and as described above under "Reinvestment Events and Early
Amortization Events". From and after the date on which no Series issued prior
to August 19, 1997 is outstanding, the Seller shall have the right to extend
the Final Maturity Date from time to time to any later date designated by it.
Upon termination of the Trust, all right, title and interest in the
Receivables and other funds of the Trust (other than amounts in the
Collection Account, any Principal Funding Account, Interest Funding Account,
Excess Funding Account or other account for the final distribution of
principal and interest to Certificateholders) will be conveyed and
transferred to USA.
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In any event, the last payment of principal and interest on any Series
of Certificates will be due and payable no later than the date specified in
the related Prospectus Supplement (the "Series Termination Date").
Fully Reinvested Date. Following the occurrence of the Fully Reinvested
Date with respect to any Series, Certificateholders of that Series will no
longer have any interest in the Receivables and all the representations and
covenants of the Seller and the Servicer relating to the Receivables, as well
as certain other provisions of the Pooling and Servicing Agreement and all
remedies for breaches thereof, will no longer accrue to the benefit of the
Certificateholders of that Series, in each case unless the Revolving Period
with respect to such Series recommences as provided in the related Series
Supplement. Those representations, covenants and other provisions include the
conditions to the exchange of the Seller's Certificate described under "The
Seller's Certificate", the conditions to the issuance of a new Series
described under "New Issuances", the representations described under
"Representations and Warranties" to the extent they relate to the Receivables
and the Collateral Security, the limitations on additions and removals of
Accounts described under "Addition of Accounts or Participation Interests"
and "Removal of Accounts", respectively, and the obligations of the Servicer
with respect to servicing the Receivables described under "Collection and
Other Servicing Procedures" and "Servicer Covenants". In addition, upon the
occurrence of the Fully Reinvested Date with respect to any Series, no
Interest Collections, Principal Collections, Defaulted Receivables or
Miscellaneous Payments will be allocated to that Series, unless the Revolving
Period with respect thereto recommences as described above. Notwithstanding
the foregoing, when the final distribution has been made with respect to each
Series of Certificates or the Fully Reinvested Date has occurred with respect
thereto, all right, title and interest in the Receivables will be conveyed
and transferred to USA.
Indemnification
The Pooling and Servicing Agreement provides that the Servicer will
indemnify the Trust and the Trustee from and against any loss, liability,
expense, damage or injury suffered or sustained arising out of any acts,
omissions or alleged acts or omissions arising out of activities of the
Trust, the Trustee or the Servicer pursuant to the Pooling and Servicing
Agreement; provided, that, the Trust or the Trustee will not be so
indemnified if such acts, omissions or alleged acts or omissions constitute
fraud, gross negligence, breach of fiduciary duty or willful misconduct by
the Trustee. However, the Servicer will not indemnify the Trust, the Trustee
or the Certificateholders for any act taken by the Trustee at the request of
the Certificateholders or for any tax required to be paid by the Trust or the
Certificateholders.
The Pooling and Servicing Agreement provides that, except as described
above and with certain other exceptions, neither the Seller, the Servicer nor
any of their directors, officers, employees or agents will be under any
liability to the Trust, the Trustee, the Certificateholders or any other
person for taking any action, or for refraining from taking any action,
pursuant to the Pooling and Servicing Agreement. However, neither the Seller,
the Servicer nor any of their directors, officers, employees or agents will
be protected against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or gross negligence of any such person in
the performance of their duties or by reason of reckless disregard of their
obligations and duties thereunder.
In addition, the Pooling and Servicing Agreement provides that the
Servicer is not under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its servicing responsibilities under
the Pooling and Servicing Agreement. The Servicer may, in its sole
discretion, undertake any such legal action which it may deem necessary or
desirable for the benefit of the Certificateholders with respect to the
Pooling and Servicing Agreement and the rights and duties of the parties
thereto and the interest of the Certificateholders thereunder.
Collection and Other Servicing Procedures
Pursuant to the Pooling and Servicing Agreement, the Servicer is
responsible for servicing, collecting, enforcing and administering the
Receivables in accordance with customary and usual procedures for servicing
its own revolving credit line dealer wholesale loans, except where the
failure to so act would not materially and adversely affect the rights of the
Trust.
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CFC covenants that it may only change the terms relating to the
Accounts if (i) in the Servicer's reasonable judgment, no Early Amortization
Event or Reinvestment Event will occur with respect to any Series as a result
of the change and (ii) the change is made applicable to the comparable
segment of the portfolio of revolving credit line dealer wholesale loan
accounts with similar characteristics owned or serviced by CFC and not only
to the Accounts.
Servicing activities to be performed by the Servicer include collecting
and recording payments, communicating with dealers, investigating payment
delinquencies, evaluating the increase of credit limits, and maintaining
internal records with respect to each Account. Managerial and custodial
services performed by the Servicer on behalf of the Trust include providing
assistance in any inspections of the documents and records relating to the
Accounts and Receivables by the Trustee pursuant to the Pooling and Servicing
Agreement, maintaining the agreements, documents and files relating to the
Accounts and Receivables as custodian for the Trust and providing related
data processing and reporting services for Certificateholders and on behalf
of the Trustee.
Servicer Covenants
In the Pooling and Servicing Agreement the Servicer covenants that: (a)
it will duly satisfy all obligations on its part to be fulfilled under or in
connection with the Receivables and the Accounts, will maintain in effect all
qualifications required in order to service the Receivables and the Accounts
and will comply in all material respects with all requirements of law in
connection with servicing the Receivables and the Accounts, the failure to
comply with which would have a materially adverse effect on the
Certificateholders of any outstanding Series; (b) it will not permit any
rescission or cancellation of a Receivable except as ordered by a court of
competent jurisdiction or other government authority; (c) it will do nothing
to impair the rights of the Certificateholders in the Receivables or the
Accounts; and (d) it will not reschedule, revise or defer payments due on any
Receivable except in accordance with its guidelines for servicing revolving
credit line dealer wholesale loans.
Under the terms of the Pooling and Servicing Agreement, if the Seller
or the Servicer discovers, or receives written notice, that any covenant of
the Servicer set forth above has not been complied with in all material
respects and such noncompliance has not been cured within 30 days thereafter
(or such longer period as the Trustee may agree to) and has a materially
adverse effect on the interests of all Certificateholders in any Receivable
or Account, CFC, as Servicer, will purchase such Receivable or all
Receivables in such Account, as applicable. If CFC is the Servicer, such
purchase will be made on the Determination Date following the expiration of
the 30-day cure period and the Servicer will be obligated to deposit into the
Collection Account an amount equal to the amount of such Receivable plus
accrued and unpaid interest thereon. The amount of such deposit shall be
deemed a Transfer Deposit Amount. The purchase by the Servicer constitutes
the sole remedy available to the Certificateholders if such covenant or
warranty of the Servicer is not satisfied and the Trust's interest in any
such purchased Receivables shall be automatically assigned to the Servicer.
Servicing Compensation and Payment of Expenses
Unless otherwise provided in the related Series Supplement and, with
respect to a Series offered hereby, described in the related Prospectus
Supplement, the Servicer's compensation with respect to the Certificates of a
Series for its servicing activities and reimbursement for its expenses will
be a monthly servicing fee (the "Servicing Fee") in an amount payable in
arrears on each Distribution Date on or before the Series Termination Date of
that Series and the Fully Reinvested Date, if any, of that Series (and
thereafter during the Revolving Period with respect to such Series, if such
Revolving Period recommences) generally equal to one-twelfth of the product
of (a) the "Servicing Fee Rate" set forth in such Series Supplement, (b) the
Pool Balance as of the last day of the second preceding Collection Period and
(c) the Series Allocation Percentage for such Series for the immediately
preceding Collection Period. Unless otherwise specified in a related Series
Supplement and, with respect to a Series offered hereby, described in the
related Prospectus Supplement, the share of the Servicing Fee allocable to
Certificateholders of any Series with respect to any Distribution Date (the
"Monthly Servicing Fee") shall generally be equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the Invested
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Amount of such Series as of the last day of the second preceding Collection
Period. The remainder of the Servicing Fee with respect to any Series shall
be paid by the Seller. The Monthly Servicing Fee with respect to any Series
shall be payable to the Servicer solely to the extent amounts are available
for distribution therefor in accordance with the terms of the Pooling and
Servicing Agreement.
The Servicer will be permitted to waive its right to receive the
Servicing Fee with respect to any Series on any Distribution Date, so long as
it believes that sufficient Interest Collections will be available on a
future Distribution Date to pay the Monthly Servicing Fee relating to such
waived Servicing Fee, in which case the Servicing Fee and the Monthly
Servicing Fee for such Series and such Distribution Date shall be deemed to
be zero.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Accounts and the Receivables
including, without limitation, payment of fees and disbursements of the
Trustee and independent accountants and all other fees and expenses which are
not expressly stated in the Pooling and Servicing Agreement to be payable by
the Trust or the Certificateholders other than federal, state and local
income and franchise taxes, if any, of the Trust or the Certificateholders.
Certain Matters Regarding the Servicer
The Servicer may not resign from its obligations and duties under the
Pooling and Servicing Agreement, except upon determination that such duties
are no longer permissible under applicable law. No such resignation will
become effective until the Trustee or a successor to the Servicer has assumed
the Servicer's responsibilities and obligations under the Pooling and
Servicing Agreement.
Any person into which, in accordance with the Pooling and Servicing
Agreement, the Servicer may be merged or consolidated or any person resulting
from any merger or consolidation to which the Servicer is a party, or any
person succeeding to the business of the Servicer, will be the successor to
the Servicer under the Pooling and Servicing Agreement.
Service Default
In the event of any Service Default (as defined below), the Trustee, by
written notice to the Servicer, may terminate all of the rights and
obligations of the Servicer, as servicer, under the Pooling and Servicing
Agreement and in and to the Receivables and the proceeds thereof and appoint
a new Servicer (a "Service Transfer"). The rights and interest of the Seller
under the Pooling and Servicing Agreement in the Seller's Interest will not
be affected by any Service Transfer. The Trustee shall as promptly as
possible appoint a successor Servicer and if no successor Servicer has been
appointed by the Trustee and has accepted such appointment by the time the
Servicer ceases to act as Servicer, all rights, authority, power and
obligations of the Servicer under the Pooling and Servicing Agreement shall
pass to and be vested in the Trustee. Prior to any Service Transfer, the
Trustee will review any bids obtained from potential servicers meeting
certain eligibility requirements set forth in the Pooling and Servicing
Agreement to serve as successor Servicer for servicing compensation not in
excess of the Servicing Fee, plus certain excess amounts payable to the
Seller.
A "Service Default" refers to any of the following events:
1. failure by the Servicer to make any payment, transfer or
deposit, or to give instructions to the Trustee to make any payment,
transfer or deposit, on the date the Servicer is required to do so
under the Pooling and Servicing Agreement, which is not cured within a
five business day grace period;
2. failure on the part of the Servicer duly to observe or perform
any other covenants or agreements of the Servicer in the Pooling and
Servicing Agreement which failure has a materially adverse effect on
the Certificateholders of any outstanding Series and which continues
unremedied for a period of 30 days after the date written notice of
such failure shall have been given to the Servicer by the Trustee, or
the Servicer delegates its duties under the Pooling and Servicing
Agreement, except as specifically permitted thereunder;
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3. any representation, warranty or certification made by the
Servicer in the Pooling and Servicing Agreement or in any certificate
delivered pursuant to the Pooling and Servicing Agreement proves to
have been incorrect in any material respect when made, has a materially
adverse effect on the rights of the Certificateholders of any
outstanding Series, and which materially adverse effect continues for a
period of 60 days after written notice thereof shall have been given to
the Servicer by the Trustee; or
4. the occurrence of certain events of bankruptcy, insolvency or
receivership with respect to the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (1) above for a period of ten business days or
referred to under clauses (2) or (3) for a period of 60 business days, shall
not constitute a Service Default if such delay or failure was caused by an
act of God or other similar occurrence. Upon the occurrence of any such
event, the Servicer shall not be relieved from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of
the Pooling and Servicing Agreement and the Servicer shall provide the
Trustee, any Enhancement Provider, the Seller and the Certificateholders
prompt notice of such failure or delay by it, together with a description of
its efforts to so perform its obligations. The Servicer shall immediately
notify the Trustee in writing of any Service Default.
Reports
On each Distribution Date (including each Distribution Date that
corresponds to an Interest Payment Date or any Special Payment Date), the
Trustee will forward to each Certificateholder of record of any Series a
statement (the "Distribution Date Statement") prepared by the Servicer
setting forth certain information with respect to the Trust and the
Certificates of such Series, as specified in the related Series Supplement
and, with respect to any Series offered hereby, described in the related
Prospectus Supplement.
With respect to each Interest Payment Date or Special Payment Date, the
Distribution Date Statement with respect to any Series will include the
following information with respect to the Certificates of such Series: (a)
the total amount distributed on the Certificates of such Series; (b) the
amount of such distribution allocable to principal on the Certificates of
such Series; and (c) the amount of such distribution allocable to interest on
the Certificates of such Series.
On or before January 31 of each calendar year, the Trustee will furnish
(or cause to be furnished) to each person who at any time during the
preceding calendar year was a Certificateholder of record a statement
containing the information required to be provided by an issuer of
indebtedness under the Code for such preceding calendar year or the
applicable portion thereof during which such person was a Certificateholder,
together with such other customary information as is required to be provided
by an issuer of indebtedness under the Code and such other customary
information as is necessary to enable the Certificateholders to prepare their
tax returns. See "Certain Tax Matters".
Evidence as to Compliance
The Pooling and Servicing Agreement provides that on or before March 31
of each calendar year, the Servicer will cause a firm of nationally
recognized independent public accountants (who will also render other
services to the Servicer or the Seller) to furnish a report relating to
certain matters in connection with the servicing of CFC's portfolio of
wholesale receivables.
The Pooling and Servicing Agreement provides for delivery to the
Trustee on or before March 31 of each calendar year, of a statement signed by
an officer of the Servicer to the effect that the Servicer has fully
performed, or caused to be fully performed its obligations in all material
respects under the Pooling and Servicing Agreement throughout the preceding
year or, if there has been a default in the performance of any such
obligation, specifying the nature and status of the default.
Copies of all statements, certificates and reports furnished to the
Trustee may be obtained by a request in writing delivered to the Trustee.
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Amendments
The Pooling and Servicing Agreement and any Series Supplement may be
amended by the Seller, the Servicer and the Trustee, without
Certificateholder consent, so long as any such action shall not, as evidenced
by an opinion of counsel, adversely affect in any material respect the
interests of the Certificateholders.
The Pooling and Servicing Agreement and any Series Supplement may be
amended by the Seller, the Servicer and the Trustee with the consent of the
holders of Certificates evidencing not less than 66-2/3% of the aggregate
unpaid principal amount of the Certificates of all adversely affected Series
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Pooling and Servicing Agreement or
of modifying in any manner the rights of Certificateholders. No such
amendment, however, may (a) reduce in any manner the amount of or delay the
timing of distributions required to be made to Certificateholders or deposits
of amounts to be so distributed without the consent of each affected
Certificateholder, (b) change the definition or the manner of calculating any
Certificateholders' Interest without the consent of each affected
Certificateholder, (c) reduce the amount available under any Enhancement
without the consent of each affected Certificateholder, (d) adversely affect
the rating of any Series or Class by each Rating Agency without the consent
of the holders of Certificates of such Series or Class evidencing not less
than 66-2/3% of the aggregate unpaid principal amount of the Certificates of
such Series or Class or (e) reduce the aforesaid percentage of the unpaid
principal amount of Certificates the holders of which are required to consent
to any such amendment without the consent of each Certificateholder. Promptly
following the execution of any amendment to the Pooling and Servicing
Agreement (other than an amendment described in the preceding paragraph), the
Trustee will furnish written notice of the substance of such amendment to
each Certificateholder.
The foregoing notwithstanding, each holder of a Certificate offered
hereby, by its acceptance thereof, will be deemed to have consented to an
amendment to the Pooling and Servicing Agreement that (i) provides that funds
in the Collection Account may be invested in any Eligible Investments, (ii)
provides that the Seller need not make any deposit to the Collection Account
in respect of the Repurchased Receivables Price of any Designated Receivables
repurchased from the Trust, (iii) otherwise changes the procedures for
removing Receivables from the Trust as described under "Removal of Accounts",
(iv) provides that, subject to the limitations described herein, CFC need not
deposit collections with respect to any Collection Period in the Collection
Account until the related Distribution Date (v) permits the designation of
Automatic Additional Accounts as described herein, (vi) permits the extension
of the Final Maturity Date, (vii) permits the conveyance of Participation
Interests to the Trust and (viii) permits the exercise of the discount option
as described herein.
The Pooling and Servicing Agreement may not be amended in any manner
which materially adversely affects the interests of any Enhancement Provider
without its prior consent.
List of Certificateholders
Upon written request of any three or more Certificateholders of record
the Trustee will afford such Certificateholders access during business hours
to the current list of Certificateholders of a Series or all outstanding
Series, as applicable, for purposes of communicating with other
Certificateholders of such Series or all outstanding Series, as applicable,
with respect to their rights under the Pooling and Servicing Agreement. See
"Book-Entry Registration" and "Definitive Certificates".
The Pooling and Servicing Agreement will not provide for any annual or
other meetings of Certificateholders.
The Trustee
The Bank of New York, a New York banking corporation, will act as
Trustee under the Pooling and Servicing Agreement. On August 23, 1996, The
Bank of New York, a New York banking corporation, succeeded Manufacturers and
Traders Trust Company, as Trustee, in accordance with the terms of the
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Pooling and Servicing Agreement and pursuant to an Agreement of Resignation,
Appointment and Acceptance dated as of August 23, 1996 between USA, CFC,
Manufacturers and Traders Trust Company, as resigning trustee, and The Bank
of New York, as successor trustee. The Corporate Trust Office of the Bank of
New York is located at 101 Barclay Street, New York, New York 10286. The
Seller, the Servicer and their respective affiliates may from time to time
enter into normal banking and trustee relationships with the Trustee and its
affiliates. The Trustee may hold Certificates in its own name with the same
rights it would have if it were not the Trustee. In addition, for purposes of
meeting the legal requirements of certain local jurisdictions, the Trustee
shall have the power to appoint a co-trustee or separate trustees of all or a
part of the Trust. In the event of such appointments, all rights, powers,
duties and obligations shall be conferred or imposed upon the Trustee and
such separate trustee or co-trustee jointly, or, in any jurisdiction in which
the Trustee shall be incompetent or unqualified to perform certain acts,
singly upon such separate trustee or co-trustee, who shall exercise and
perform such rights, powers, duties and obligations solely at the direction
of the Trustee.
The Trustee may resign at any time, in which event the Seller will be
obligated to appoint a successor Trustee. The Servicer may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement or if the Trustee becomes insolvent. In such
circumstances, the Servicer may appoint a successor Trustee. Any resignation
or removal of the Trustee and appointment of a successor Trustee does not
become effective until the acceptance of the appointment by the successor
Trustee.
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DESCRIPTION OF THE RECEIVABLES PURCHASE AGREEMENT
The Receivables initially transferred to the Trust by CARCO were
acquired by CARCO, and subsequent to the CARCO Transfer, were acquired by
USA, from CCC pursuant to the Receivables Purchase Agreement. Upon the merger
of CCC (a wholly owned subsidiary of CFC) into CFC, CFC in accordance with
the terms of the Receivables Purchase Agreement assumed CCC's obligations
under the Receivables Purchase Agreement as the RPA Seller. The following
summary describes certain terms of the Receivables Purchase Agreement and is
qualified in its entirety by reference to the Receivables Purchase Agreement.
Sale or Transfer of Receivables
Pursuant to the Receivables Purchase Agreement, the RPA Seller sold or
transferred to the Seller all of its right, title and interest in and to all
of the Receivables and the Collateral Security as of the Initial Cut-Off Date
and all of the Receivables thereafter created. In addition, the RPA Seller
has previously designated Additional Accounts, and has previously conveyed to
the Seller the Principal Receivables in such Additional Accounts (together
with the related Collateral Security) as of the applicable Additional Cut-Off
Date and all Receivables (and related Collateral Security) created
thereafter. As described herein, pursuant to the Pooling and Servicing
Agreement, the Seller has transferred to the Trust all of its right, title
and interest in and to the Receivables Purchase Agreement.
In connection with the sale or transfer of the Receivables to the
Seller, the RPA Seller is required to indicate in its computer files that the
Receivables have been sold or transferred to the Seller, and that such
Receivables have been transferred by the Seller to the Trust. In addition,
the RPA Seller is required to provide to the Seller a computer file or
microfiche or written list containing a true and complete list of all such
Receivables. The records and agreements relating to the Accounts and
Receivables have not and will not be segregated by the RPA Seller from other
documents and agreements relating to other accounts and receivables and are
not and will not be stamped or marked to reflect the sale or transfer of the
Receivables to the Seller, but the computer records of the RPA Seller have
been and will be marked to evidence such sale or transfer. The RPA Seller has
filed UCC financing statements with respect to the Receivables meeting the
requirements of Michigan state law. See "Risk Factors -- Certain Legal
Aspects" and "Certain Legal Aspects of the Receivables -- Transfer of
Receivables".
Representations and Warranties
The RPA Seller has or will make certain representations and warranties
to the Seller to the effect, among other things, that as of the Initial
Closing Date and each Series Issuance Date, it was duly incorporated and in
good standing and that it has the authority to consummate the transactions
contemplated by the Receivables Purchase Agreement.
The RPA Seller has or will also make representations and warranties to
the Seller relating to the Receivables to the effect, among other things,
that (a) as of the Initial Closing Date and each Series Issuance Date, each
of the Accounts is an Eligible Account and (b) as of the date any new
Receivable is created, such Receivable is an Eligible Receivable. In the
event of a breach of any representation and warranty set forth in this
paragraph which results in an Ineligible Receivable and the requirement that
the Seller accept retransfer of such Ineligible Receivable pursuant to the
Pooling and Servicing Agreement, the RPA Seller shall repurchase such
Ineligible Receivable from the Seller on the date of such retransfer. The
purchase price for such Ineligible Receivable shall be the face amount
thereof, of which at least the amount of any cash deposit required to be made
by the Seller under the Pooling and Servicing Agreement in respect of the
retransfer of such Ineligible Receivable shall be paid in cash.
The RPA Seller has or will also make representations and warranties to
the Seller to the effect, among other things, that as of the Initial Closing
Date and each Series Issuance Date (a) the Receivables Purchase Agreement
constitutes a legal, valid and binding obligation of the RPA Seller and (b) the
Receivables Purchase Agreement constitutes a valid sale or transfer to the
Seller of all right, title and interest of the RPA Seller in and to the
Receivables, whether then existing or thereafter created in the Accounts, the
Collateral Security and the proceeds thereof which is effective as to each
Receivable upon
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the creation thereof. If the breach of any of the representations and
warranties described in this paragraph results in the obligation of the
Seller under the Pooling and Servicing Agreement to accept retransfer of the
Receivables, the RPA Seller will repurchase the Receivables retransferred to
the RPA Seller for an amount of cash equal to the amount of cash the Seller
is required to deposit under the Pooling and Servicing Agreement in connection
with such retransfer.
The RPA Seller has agreed to indemnify the Seller and to hold the
Seller harmless from and against any and all losses, damages and expenses
(including reasonable attorneys' fees) suffered or incurred by the Seller if
the foregoing representations and warranties are materially false.
Certain Covenants
In the Receivables Purchase Agreement, the RPA Seller has covenanted
that it will perform its obligations under the agreements relating to the
Receivables and the Accounts in conformity with its current policies and
procedures relating to the Receivables and the Accounts.
The RPA Seller has covenanted further that, except for the sale and
conveyances under the Receivables Purchase Agreement and the interests
created under the Pooling and Servicing Agreement, the RPA Seller will not
sell, pledge, assign or transfer any interest in the Receivables to any other
person. The RPA Seller also has covenanted to defend and indemnify the Seller
for any loss, liability or expense incurred by the Seller in connection with
a breach by the RPA Seller of any of its representations, warranties or
covenants contained in the Receivables Purchase Agreement.
In addition, the RPA Seller has expressly acknowledged and consented to
the Seller's assignment of its rights relating to the Receivables under the
Receivables Purchase Agreement to the Trustee.
Termination
The Receivables Purchase Agreement will terminate immediately after the
Trust terminates. In addition, if pursuant to certain provisions of federal
law the RPA Seller becomes party to any bankruptcy or similar proceeding
(other than as a claimant) and, if such proceeding is not voluntary and is
not dismissed within 60 days of its institution, the RPA Seller will
immediately cease to sell or transfer Receivables to the Seller and will
promptly give notice of such event to the Seller and to the Trustee.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
Transfer of Receivables
On the Initial Closing Date, the RPA Seller sold and assigned the
Receivables to the Seller, which Receivables were immediately sold and
assigned to the Trust. The Seller has represented and warranted and will
represent and warranty on the Series Issuance Date with respect to each
Series that such sale to the Trust constituted a valid transfer and
assignment to the Trust of all right, title and interest of the Seller in and
to the Receivables and that, under the UCC (as in effect in Michigan), there
exists a valid, subsisting and enforceable first-priority perfected ownership
interest in the Receivables, in existence at the time of the formation of the
Trust or at the date of addition of any Additional Accounts, in favor of the
Trust and a valid, subsisting and enforceable first-priority perfected
ownership interest in the Receivables created thereafter in favor of the
Trust on and after their creation. However, the transfer of Receivables by
the Seller to the Trust could be deemed to create a security interest under
the UCC. For a discussion of the Trust's rights arising from these
representations and warranties not being satisfied, see "Description of the
Certificates -- Representations and Warranties".
Each of the RPA Seller and the Seller has represented that the
Receivables are "chattel paper" for purposes of the UCC as in effect in
Michigan. If the Receivables are deemed to be chattel paper and the transfer
thereof by either the RPA Seller to the Seller or by the Seller to the Trust is
deemed either to be a sale or to create a security interest, the UCC as in
effect in Michigan applies and the transferee must either take possession of
the chattel paper or file an appropriate financing statement or statements in
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order to perfect its interest therein. Financing statements covering the
Receivables have been filed under the UCC as in effect in Michigan by both
the Seller and the Trust to perfect their respective interests in the
Receivables and continuation statements will be filed as required to continue
the perfection of such interests. The Receivables have not and will not be
stamped to indicate the interest of the Seller or the Trustee.
There are certain limited circumstances under the UCC and applicable
federal law in which prior or subsequent transferees of Receivables could
have an interest in such Receivables with priority over the Trust's interest.
A purchaser of the Receivables who gives new value and takes possession of
the instruments which evidence the Receivables (i.e., the chattel paper) in
the ordinary course of such purchaser's business may, under certain
circumstances, have priority over the interest of the Trust in the
Receivables. A tax or other government lien on property of the RPA Seller or
the Seller arising prior to the time a Receivable is conveyed to the Trust
may also have priority over the interest of the Trust in such Receivable.
Under the Receivables Purchase Agreement, the RPA Seller will warrant to the
Seller, and under the Pooling and Servicing Agreement, the Seller has
warranted to the Trust, that the Receivables have been transferred free and
clear of the lien of any third party. Each of the RPA Seller and the Seller
has also covenanted that it will not sell, pledge, assign, transfer or grant
any lien on any Receivable or, except as described under "Description of the
Certificates -- The Seller's Certificate", the Seller's Certificate (or any
interest therein) other than to the Trust. In addition, while CFC is the
Servicer, cash collections on the Receivables may, under certain
circumstances, be commingled with the funds of CFC prior to each Distribution
Date and, in the event of the bankruptcy of CFC, the Trust may not have a
perfected interest in such collections.
Certain Matters Relating to Bankruptcy
The RPA Seller has warranted to the Seller in the Receivables Purchase
Agreement that the sale of the Receivables by it to the Seller is a valid
sale of the Receivables to the Seller. In addition, the RPA Seller and the
Seller have agreed to treat the transactions described herein as a sale of
the Receivables to the Seller, and the RPA Seller has or will take all
actions that are required under Michigan law to perfect the Seller's
ownership interest in the Receivables. Notwithstanding the foregoing, if the
RPA Seller were to become a debtor in a bankruptcy case and a creditor or
trustee-in-bankruptcy of such debtor or such debtor itself were to take the
position that the sale of Receivables from such debtor to the Seller should
be recharacterized as a pledge of such Receivables to secure a borrowing from
such debtor, then delays in payments of collections of Receivables to the
Seller could occur or (should the court rule in favor of any such trustee,
debtor in possession or creditor) reductions in the amount of such payments
could result. See "Special Considerations -- Certain Legal Aspects".
A case decided by the United States Court of Appeals for the Tenth
Circuit, Octagon Gas System, Inc. v. Rimmer, contains language to the effect
that accounts sold by an entity that subsequently became bankrupt remained
property of the debtor's bankruptcy estate because the sale of accounts is
treated as a "security interest" that must be perfected under the Uniform
Commercial Code. Although the Receivables are likely to be viewed as chattel
paper rather than accounts under the Uniform Commercial Code, sales of
chattel paper, like sales of accounts, must be perfected under Article 9 of
the Uniform Commercial Code. If CFC were to become a debtor under any
insolvency law and a court were to follow the reasoning of the Tenth Circuit
Court of Appeals and apply such reasoning to chattel paper, the Seller (and
thus the Trust) could experience a delay in or reduction of collections on
the Receivables, and the Certificateholders could incur a loss on their
investment as a result.
In addition, if the RPA Seller were to become a debtor in a bankruptcy
case and a creditor or trustee-in-bankruptcy of such debtor or such debtor
itself were to request a court to order that CFC should be substantively
consolidated with the Seller, delays in payments on the Certificates could
result. Should the bankruptcy court rule in favor of any such creditor,
trustee-in-bankruptcy or such debtor, reductions in such payments could
result.
The Seller has warranted to the Trust that the transfer of the
Receivables to the Trust is a sale of the Receivables to the Trust. The Seller
has or will take all actions that are required under Michigan law
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to perfect the Trust's ownership interest in the Receivables and the Seller
has warranted to the Trust that the Trust will at all times have a first
priority perfected ownership interest therein and, with certain exceptions,
in proceeds thereof. Nevertheless, a tax or government lien on property of
CFC or the Seller arising prior to the time a Receivable is conveyed to the
Trust may have priority over the interest of the Trust in such Receivable.
Each of CARCO's and USA's certificate of incorporation provides that it shall
not file a voluntary application for relief under Title 11 of the United
States Code (the "Bankruptcy Code") without the affirmative vote of its two
independent directors. Pursuant to the Pooling and Servicing Agreement, the
Trustee, all Certificateholders and any Enhancement Provider will covenant
that they will not at any time institute against the Seller any bankruptcy,
reorganization or other proceedings under any federal or state bankruptcy or
similar law. In addition, certain other steps will be taken to avoid the
Seller's becoming a debtor in a bankruptcy case. Notwithstanding such steps,
if the Seller were to become a debtor in a bankruptcy case, and a bankruptcy
trustee for the Seller or the Seller as debtor in possession or a creditor of
the Seller were to take the position that the transfer of the Receivables
from the Seller to the Trust should be recharacterized as a pledge of such
Receivables, then delays in payments on the Certificates or (should the court
rule in favor of any such trustee, debtor in possession or creditor)
reductions in the amount of such payments could result.
The Seller does not intend to file, and CFC has agreed that it will not
cause the Seller to file, a voluntary application for relief under the
Bankruptcy Code or any similar applicable state law with respect to the
Seller so long as the Seller is solvent and does not foresee becoming
insolvent.
If the RPA Seller or the Seller were to become a debtor in a bankruptcy
case causing a Reinvestment Event or an Early Amortization Event to occur
with respect to the Certificates of each Series, then, pursuant to the
Receivables Purchase Agreement, new Receivables would no longer be
transferred to the Seller and, pursuant to the Pooling and Servicing
Agreement, only collections on Receivables theretofore sold to the Seller and
transferred to the Trust would be available to be applied to pay interest
accruing on the Certificates and to pay the principal amount of the
Certificates. Under such circumstances, the Servicer is obligated to allocate
all collections on Principal Receivables to the oldest principal balance
first. If such allocation method were to be altered by the bankruptcy court,
the rate of payment on the Certificates might be adversely affected. In
addition, distributions in respect of principal on each Certificate would not
be subject to any applicable Controlled Distribution Amount.
The occurrence of certain events of bankruptcy, insolvency or
receivership with respect to the Servicer will result in a Service Default,
which Service Default, in turn, may result in a Reinvestment Event or an
Early Amortization Event with respect to a Series. If no other Service
Default other than the commencement of such bankruptcy or similar event
exists, a trustee-in-bankruptcy of the Servicer may have the power to prevent
either the Trustee or the Certificateholders from appointing a successor
Servicer.
Payments made in respect of repurchases of Receivables by CFC or the
Seller pursuant to the Pooling and Servicing Agreement may be recoverable by
CFC or the Seller, as debtor in possession, or by a creditor or a
trustee-in-bankruptcy of CFC or the Seller as a preferential transfer from
CFC or the Seller if such payments are made within one year prior to the
filing of a bankruptcy case in respect of CFC.
CARCO does not intend to file, and CFC has agreed that it will not
cause CARCO to file, a voluntary application for relief under the Bankruptcy
Code or any similar applicable state law with respect to CARCO so long as
CARCO is solvent and does not foresee becoming insolvent.
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CERTAIN TAX MATTERS
Federal Income Tax Consequences
Set forth below is a discussion of federal income tax consequences to
holders of the Certificates. This discussion does not purport to deal with
all aspects of federal income taxation that may be relevant to holders of the
Certificates in light of their personal investment circumstances, nor to
certain types of holders subject to special treatment under the federal
income tax laws (for example, banks, life insurance companies and tax-exempt
organizations). Prospective investors are advised to consult their own tax
advisors with regard to the federal income tax consequences of holding and
disposing of the Certificates, as well as the tax consequences arising under
the laws of any state, foreign country or other jurisdiction. This discussion
is based upon present provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), the regulations promulgated thereunder, and 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 Internal Revenue Service (the "IRS").
The discussion assumes that a Certificate is issued in registered form,
has all payments denominated in U.S. dollars, has a term that exceeds one
year, and does not bear "contingent interest" as defined in Section 871(h)(4)
of the Code. Moreover, except as provided below, the discussion assumes that
the interest on the Certificate meets the requirements for "qualified stated
interest" under Treasury regulations (the "OID regulations") relating to
original issue discount ("OID"), and that any OID on the Certificate (i.e.,
any excess of the principal amount of the Certificate over its issue price)
is de minimis (i.e., less than 1/4% of its principal amount multiplied
by the number of full years until its maturity date), all within the meaning
of the OID regulations. If those conditions are not satisfied, additional tax
considerations will be disclosed in the applicable Prospectus Supplement.
Treatment of the Certificates as Indebtedness of the Seller. The Seller
and the holders of Certificates offered hereby will express in the Pooling
and Servicing Agreement the intent that, for federal, state and local income
and franchise tax purposes and Michigan single business tax purposes, the
Certificates will be indebtedness of the Seller secured by the Receivables
and any other Trust assets allocable to the Certificates. USA, by the
acceptance of the assignment of the Pooling and Servicing Agreement agreed,
and each Certificateholder, by the acceptance of a Certificate will agree, to
treat the Certificates as indebtedness of the Seller for federal, state and
local income and franchise tax purposes and Michigan single business tax
purposes. However, the Pooling and Servicing Agreement generally refers to
the transfer of the Receivables as a "sale", and because different criteria
are used in determining the nontax accounting treatment of the transaction,
the Seller will treat the Pooling and Servicing Agreement, for certain nontax
purposes, as effecting a transfer of an ownership interest in the Receivables
and not as creating a debt obligation of the Seller.
A basic premise of federal income tax law is that the economic
substance of a transaction generally determines the tax consequences. The
form of a transaction, while a relevant factor, is not conclusive evidence of
its economic substance. In appropriate circumstances, the courts have allowed
taxpayers, as well as the IRS, to treat a transaction in accordance with its
economic substance, as determined under federal income tax law, even though
the participants in the transaction have characterized it differently for
nontax purposes.
The determination of whether the economic substance of a property
transfer is a sale or a loan secured by the transferred property has been
made by the IRS and the courts on the basis of numerous factors designed to
determine whether the transferor has relinquished (and the transferee has
obtained) substantial incidents of ownership in the property. Among those
factors, the primary factors examined are whether the transferee has the
opportunity to gain if the property increases in value, and has the risk of
loss if the property decreases in value. Based upon its analysis of such
factors, Cravath, Swaine & Moore, special tax counsel to the Seller and the
Trust ("Tax Counsel"), is of the opinion that for federal income tax purposes
the Seller will properly be treated as the owner of the Receivables and any
other Trust assets allocable to the Certificates and, accordingly, the
Certificates will properly be characterized as indebtedness of the Seller
that is secured by the Receivables and such other assets.
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Interest Income to Certificateholders. Assuming the Certificates are
debt obligations for federal income tax purposes, they will not be considered
issued with OID (except as discussed below or in the applicable Prospectus
Supplement). Interest thereon will be taxable as ordinary interest income
when received by Certificateholders utilizing the cash-basis method of
accounting and when accrued by Certificateholders utilizing the accrual
method of accounting. Under the OID regulations, a holder of a Certificate
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 Certificate. It is
believed that any Asset Composition Premium paid as a result of an Asset
Composition Event will be taxable as contingent interest when it becomes
fixed and unconditionally payable. A Certificateholder who buys a Certificate
for less than its principal amount will be subject to the "market discount"
rules of the Code, and a Certificateholder who buys a Certificate for more
than its principal amount will be subject to the premium amortization rules
of the Code.
However, if any interest due on a Series or Class of Certificates is
not paid in full on its scheduled payment date, or if the amount of interest
payable currently on a Series or Class is reduced because of a limitation
based on the average interest rate currently payable on the Receivables,
Certificates of that Series or Class will thereafter be considered to be
issued with OID. Moreover, even before such an event, the Certificates of a
Series or Class would be considered to have OID from their date of issuance
unless, at the time of issuance, the likelihood of a late payment or
nonpayment of interest (or reduction in the amount of interest payable based
on the interest rate currently payable on the Receivables) on such Series or
Class was considered a "remote contingency" under applicable Treasury
regulations.
The Seller intends to take the position, based on the exception for
remote contingencies, that OID does not arise on a Series or Class of
Certificates unless and until an event described in the first sentence of the
preceding paragraph occurs. However, if the Investor Certificates of a Series
or Class were considered to have OID, either initially or subsequently, all
holders of Certificates of that Series or Class would thereafter be required
to accrue OID into income at a rate equal to the full interest rate payable
on the Certificates (probably determined without regard to any limitation
based upon the interest payable on the Receivables), whether or not all or
part of the interest on the Certificates was paid currently. Moreover, the
holders would be required to accrue any de minimis discount into income over
the life of the Certificates rather than when principal is paid. As a result,
holders might be required to report taxable income prior to the receipt of
cash attributable to such income.
The Trustee will be required to report annually to the IRS, and to each
Certificateholder of record, the amount of interest paid on the Certificates
(and the amount of interest withheld for federal income taxes, if any) for
each calendar year, except as to exempt holders (generally, holders that are
corporations, tax-exempt organizations, qualified pension and profit-sharing
trusts, individual retirement accounts, or nonresident aliens who provide
certification as to their status as nonresidents). Accordingly, each
nonexempt Certificateholder will be required to provide, under penalties of
perjury, a certificate on IRS Form W-9 containing such holder's name,
address, federal taxpayer identification number and a statement that such
holder is not subject to backup withholding. Should a nonexempt
Certificateholder fail to provide the required certification, the Trustee (or
the Participants or Indirect Participants) will be required to withhold (or
cause to be withheld) 31% of the interest (and principal) otherwise payable
to the holder, and remit the withheld amounts to the IRS as a credit against
the holder's federal income tax liability.
Possible Classification of the Trust as a Partnership or Association.
As described above, it is the opinion of Tax Counsel that the Certificates
offered hereby will properly be characterized as debt of the Seller for
federal income tax purposes. However, such opinion is not binding on the IRS
and thus no assurance can be given that such a characterization will prevail.
For example, if the IRS were to contend successfully that the
Certificates offered hereby were not debt of the Seller for federal income
tax purposes, the Trust might be classified for federal income tax purposes
as a partnership, an association taxable as a corporation or a "publicly
traded partnership" taxable as a corporation. If the Certificates are treated
as interests in such a partnership, the partnership would in all likelihood
be treated as a "publicly traded partnership". A publicly traded partnership
is, in
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general, taxable as a corporation. If the partnership were nevertheless not
taxable as a corporation (because of an exception for an entity whose income
is interest income that is not derived in the conduct of a financial
business) it would not be subject to federal income tax. Rather, each item of
income, gain, loss, deduction and credit generated through the ownership of
the Receivables by the partnership would be passed through to the partners in
the partnership (including the Certificateholders) according to their
respective interests therein.
The income reportable by the Certificateholders as partners in such a
partnership could differ from the income reportable by the Certificateholders
as holders of debt. However, except as provided below, it is not expected
that such differences would be material. If the Certificateholders were
treated as partners, a cash basis Certificateholder might be required to
report income when it accrues to the partnership rather than when it is
received by the Certificateholder. Moreover, if the Certificates are
interests in a partnership, an individual's share of expenses of the
partnership would be miscellaneous itemized deductions that in the aggregate
are allowed only to the extent they exceed two percent of the individual's
adjusted gross income (and are subject to certain other limitations), meaning
that the individual might be taxed on a greater amount of income than the
stated interest on the Certificates. Finally, if any Certificates are treated
as equity interests in a partnership in which other Certificates are debt,
all or part of a tax-exempt investor's share of income from the Certificates
that are treated as equity would be treated as unrelated debt-financed income
under the Code taxable to the investor.
If, alternatively, the Trust were treated as either an association
taxable as a corporation or a "publicly traded partnership" taxable as a
corporation, the resulting entity would be subject to federal income taxes at
corporate tax rates on its taxable income generated by ownership of the
Receivables. Moreover, distributions by the entity would probably not be
deductible in computing the entity's taxable income and all or part of
distributions to Certificateholders would probably be treated as dividend
income to the Certificateholders. Such an entity-level tax could result in
reduced distributions to Certificateholders and the Certificateholders could
be liable for a share of such a tax.
Because the Seller will treat the Certificates offered hereby as
indebtedness for federal income tax purposes, the Trustee (and Participants
and Indirect Participants) will not comply with the tax reporting
requirements that would apply under these alternative characterizations of
the Certificates.
Tax legislation recently enacted into law will permit the Trust to make
an election to be a Financial Asset Securitization Investment Trust. The
Trust is permitted to make such an election if, prior to making such
election, the Seller delivers an opinion of counsel acceptable to the Trustee
that (1) following such election the Trust will not be an association (or
publicly traded partnership) taxable as a corporation, and (2) the election
will not have a significant adverse effect on the federal income tax
treatment of holders of any then-outstanding Certificates.
Foreign Investors. Tax Counsel has given its opinion that the
Certificates will properly be classified as debt of the Seller for federal
income tax purposes. If the Certificates are so treated:
(a) interest paid or accrued to a nonresident alien or foreign
corporation or partnership would be exempt from U.S. withholding taxes
(including backup withholding taxes); provided that the holder complies
with applicable identification requirements (and does not actually or
constructively own 10% or more of the voting stock of the Seller and is
not a controlled foreign corporation with respect to the Seller).
Applicable identification requirements will be satisfied if there is
delivered to a securities clearing organization (or bank or other
financial institution that holds the Certificates on behalf of the
customer in the ordinary course of its trade or business) (i) IRS Form
W-8 signed under penalties of perjury by the beneficial owner of such
Certificates stating that the holder is not a U.S. person and providing
such holder's name and address, (ii) IRS Form 1001 signed by the
beneficial owner of such Certificates or such owner's agent claiming
exemption from withholding under an applicable tax treaty, or (iii) IRS
Form 4224 signed by the beneficial owner of such Certificates or such
owner's agent claiming exemption from withholding of tax on income
connected with the conduct of a trade or business in the United States;
provided that in any such case (x) the applicable form is delivered
pursuant to applicable procedures and is properly
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transmitted to the United States entity otherwise required to withhold
tax and (y) none of the entities receiving the form has actual
knowledge that the holder is a U.S. person or that any certification on
the form is false;
(b) a holder of a Certificate who is a nonresident alien or foreign
corporation will not be subject to United States federal income tax on
gain realized on the sale, exchange or redemption of such Certificate,
provided that (i) such gain is not effectively connected to a trade or
business carried on by the holder in the United States, (ii) in the case
of a holder that is an individual, such holder is not present in the
United States for 183 days or more during the taxable year in which such
sale, exchange or redemption occurs and (iii) in the case of gain
representing accrued interest, the conditions described in clause (a) are
satisfied; and
(c) a Certificate held by an individual who at the time of death is
a nonresident alien will not be subject to United States federal estate
tax as a result of such individual's death if, immediately before his
death, (i) the individual did not actually or constructively own 10% or
more of the voting stock of the Seller and (ii) the holding of such
Certificate was not effectively connected with the conduct by the
decedent of a trade or business in the United States.
If the IRS were to contend successfully that the Certificates are
interests in a partnership (not taxable as a corporation), a
Certificateholder that is a nonresident alien or foreign corporation might be
required to file a U.S. individual or corporate income tax return and pay tax
on its share of partnership income at regular U.S. rates, including, in the
case of a corporation, the branch profits tax (and would be subject to
withholding tax on its share of partnership income). If the Certificates are
recharacterized as interests in an association taxable as a corporation or a
"publicly traded partnership" taxable as a corporation, to the extent
distributions on the Certificates were treated as dividends, a nonresident
alien individual or foreign corporation would generally be taxed on the gross
amount of such dividends (and subject to withholding) at a rate of 30% unless
such rate were reduced by an applicable treaty.
State and Local Tax Consequences
The activities to be undertaken by the Servicer in servicing and
collecting the Receivables will take place in Michigan. The State of Michigan
imposes a state individual income tax and a single business tax which is
based partially upon the net income of corporations, partnerships and other
entities doing business in the State of Michigan. This discussion is based
upon present provisions of Michigan 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 Michigan Department of
Treasury.
If the Certificates are treated as debt of the Seller for federal
income tax purposes, in the opinion of Christopher A. Taravella, Esq., Vice
President and General Counsel of the Seller, Michigan tax counsel to the
Seller and the Trust ("Michigan Tax Counsel"), this treatment will also apply
for Michigan tax purposes. Pursuant to this treatment, the Trust will not be
subject to the Michigan single business tax and Certificateholders not
otherwise subject to Michigan tax would not become subject to such tax solely
because of their ownership of the Certificates. Certificateholders already
subject to taxation in Michigan, however, could be required to pay tax on the
income generated from ownership of these Certificates.
In the alternative, if the Trust is treated as a partnership (not
taxable as a corporation) for federal income tax purposes, in the opinion of
Michigan Tax Counsel, the same treatment should also apply for Michigan tax
purposes. In such case, the resulting constructive partnership should not be
treated as doing business in Michigan but rather should be treated as a
passive holder of investments and, as a result, should not be subject to the
Michigan single business tax (which, if applicable, could result in reduced
distributions to Certificateholders). The Certificateholders also should not
be subject to Michigan single business tax on the income received through the
partnership.
Under current law, Certificateholders that are nonresidents of Michigan
and that are not otherwise subject to Michigan income tax should not be subject
to Michigan income tax on the income from the constructive partnership. Under
current law corporate Certificateholders are not subject to Michigan
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income tax. In any event, classification of the arrangement as a
"partnership" would not cause a Certificateholder not otherwise subject to
taxation in Michigan to pay Michigan tax on income beyond that derived from
the Certificates.
If the Certificates are instead treated as ownership interests in an
association or "publicly traded partnership", the hypothetical entity should
not be subject to the Michigan single business tax (which, if applicable,
could result in reduced distributions to Certificateholders). A
Certificateholder not otherwise subject to tax in Michigan would not become
subject to Michigan tax as a result of its mere ownership of such an
interest.
Because each state's income tax laws vary, it is impossible to predict
the income tax consequences to the Certificateholders in all of the state
taxing jurisdictions in which they are already subject to tax.
Certificateholders are urged to consult their own tax advisors with respect
to state income and franchise taxes.
ERISA CONSIDERATIONS
General
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit-sharing or other employee benefit 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. A violation of these "prohibited transaction" rules may generate
excise tax and other liabilities under ERISA and the Code for such person.
For example, a prohibited transaction would arise, unless an exemption were
available, if the Certificates of a Series or Class were viewed as debt of
the Seller and the Seller were a disqualified person or party in interest
with respect to a plan that acquired Certificates of such Series or Class.
Moreover, additional prohibited transactions could arise if the assets
of the Trust were deemed to constitute assets of any plan that owned
Certificates. The Department of Labor ("DOL") has issued a final regulation
(the "Plan Assets Regulation") concerning the definition of what constitutes
the "plan assets" of an employee benefit plan subject to ERISA, the Code or
an individual retirement account ("IRA") (collectively referred to as
"Benefit Plans"). Under the Plan Assets Regulation the assets and properties
of certain corporations, partnerships and certain other entities in which a
Benefit Plan acquires an "equity interest" could be deemed to be assets of
the Benefit Plan in certain circumstances. Accordingly, if Benefit Plans
purchase Certificates, the Trust could be deemed to hold plan assets of such
Benefit Plan unless one of the exceptions under the Plan Assets Regulation is
applicable to the Trust.
The Plan Assets Regulation only applies to the purchase by a Benefit
Plan of an "equity interest" in an entity. Assuming that the Certificates of
a Series or Class are equity interests, the Plan Assets Regulation contains
an exception that provides that if a Benefit Plan acquires a
"publicly-offered security", the issuer of the security is not deemed to hold
plan assets. A publicly-offered security is a security that is (i) freely
transferable, (ii) part of a class of securities that is owned by 100 or more
investors independent of the issuer and of one another and (iii) either is
(A) part of a class of securities registered under Section 12(b) or 12(g) of
the Exchange Act or (B) sold to the plan as part of an offering of securities
to the public pursuant to an effective registration statement under the
Securities Act and the class of securities of which such security is a part
is registered under the Exchange Act within 120 days (or such later time as
may be allowed by the Securities and Exchange Commission) after the end of
the fiscal year of the issuer during which the offering of such securities to
the public occurred.
The Certificates of each Series and Class must be separately tested
under, and may each meet, the criteria of publicly-offered securities as
described above. There are no restrictions imposed on the transfer of the
Certificates offered hereby; and such Certificates will be sold as part of an
offering pursuant to an effective registration statement under the Securities
Act, and may or may not be timely registered under the Exchange Act. Based on
information provided by the underwriter or placement agent for Certificates of
any Series or Class offered hereby that will be registered under the Exchange
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Act, the Seller will notify the Trustee as to whether or not Certificates of
such Series or, if such Series consists of more than one Class, each such Class
will be held by at least 100 separately named persons at the conclusion of the
offering, unless the related Prospectus Supplement otherwise provides. The
Seller will not determine whether the 100-investor requirement of the exception
for publicly offered securities is satisfied as to the Certificates of any
Series or Class. Prospective purchasers may obtain a copy of the notification
described in the third preceding sentence from the Trustee at 101 Barclay
Street, New York, New York 10286.
If the Certificates of any Series or Class offered hereby fail to meet
the criteria of publicly-offered securities and the Trust's assets are deemed
to include assets of Benefit Plans that are holders of such Certificates,
transactions involving the Trust and "parties in interest" or "disqualified
persons" with respect to such plans might be prohibited under Section 406 of
ERISA and Section 4975 of the Code unless an exemption is applicable. Thus,
for example, if a participant in any Benefit Plan is an obligor or guarantor
of one of the Receivables, under DOL interpretations the purchase of such
Certificates by such plan could constitute a prohibited transaction. There
are a number of class exemptions issued by the DOL that may apply in such
event. However, even if all of the conditions specified in the exemptions are
satisfied, they would probably not apply to all transactions involving the
Trust's assets.
In light of the foregoing, fiduciaries of a Benefit Plan considering
the purchase of Certificates of any Series or Class offered hereby should
consult their own counsel as to whether the assets of the Trust which are
represented by such Certificates would be considered plan assets, and the
consequences that would apply if the Trust's assets were considered plan
assets.
In addition, based on the reasoning of the United States Supreme
Court's decision in John Hancock Life Ins. Co. v. Harris Trust and Sav. Bank,
510 U.S. 86 (1993), under certain circumstances assets in the general account
of an insurance company may be deemed to be plan assets for certain purposes,
and under such reasoning a purchase of Certificates with assets of an
insurance company's general account might be subject to the prohibited
transaction rules described above. Insurance companies investing assets of
their general accounts should also consider the potential effects of Section
401 of ERISA.
Unless otherwise provided in the applicable Prospectus Supplement, if
the Certificates will not be timely registered under the Exchange Act, or if
the Seller does not notify the Trustee, as described above, that the
Certificates of any particular Series or Class will be expected to be held by
at least 100 persons, the Certificates of such Series or Class, as the case
may be, may not be acquired by any Benefit Plan or by any entity investing
assets that are treated as assets of a Benefit Plan. Furthermore, in that
case, the Pooling and Servicing Agreement, the Series Supplement and each
such Certificate will provide that each holder of such Certificate shall be
deemed to have represented and warranted that it is not a Benefit Plan and is
not purchasing such Certificate on behalf of a Benefit Plan or with assets
that are treated as assets of a Benefit Plan.
EXPERTS
The financial statements of the Trust as of December 31, 1996 and 1995
and for each of the three years in the period ended December 31, 1996
incorporated in this Prospectus by reference from the Trust's Annual Report
on Form 10-K for the year ended December 31, 1996, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
PLAN OF DISTRIBUTION
The Seller may sell Certificates offered hereby in any of three ways:
(i) through underwriters or dealers; (ii) directly to one or more purchasers;
or (iii) through agents. The related Prospectus Supplement will set forth the
terms of the offering of any Series Certificates offered hereby, including,
without limitation, the names of any underwriters, the purchase price of such
Certificates and the
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proceeds to the Seller from such sale, any underwriting discounts and other
items constituting underwriter's compensation, any initial public offering
price and any discounts or concessions allowed or reallowed or paid to
dealers.
If underwriters are used in a sale of any Certificates of a Series
offered hereby, such Certificates will be acquired by the underwriters for
their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices to be determined at the time of sale or at the
time of commitment therefor. Such Certificates may be offered to the public
either through underwriting syndicates represented by managing underwriters
or by underwriters without a syndicate. Unless otherwise set forth in the
related Prospectus Supplement, the obligations of the underwriters to
purchase such Certificates will be subject to certain conditions precedent,
and the underwriters will be obligated to purchase all of such Certificates
if any of such Certificates are purchased. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may
be changed from time to time.
Certificates of a Series offered hereby may also be offered and sold,
if so indicated in the related Prospectus Supplement, in connection with a
remarketing upon their purchase, in accordance with a redemption or repayment
pursuant to their terms, by one or more firms ("remarketing firms") acting as
principals for their own accounts or as agents for the seller. Any
remarketing firm will be identified and the terms of its agreement, if any,
with the Seller and its compensation will be described in the related
Prospectus Supplement. Remarketing firms may be deemed to be underwriters in
connection with the Certificates remarketed thereby.
Certificates may also be sold directly by the Seller or through agents
designated by the Seller from time to time. Any agent involved in the offer
or sale of Certificates will be named, and any commissions payable by the
Seller to such agent will be set forth, in the related Prospectus Supplement.
Unless otherwise indicated in the related Prospectus Supplement, any such
agent will act on a best efforts basis for the period of its appointment.
Any underwriters, agents or dealers participating in the distribution
of Certificates may be deemed to be underwriters, and any discounts or
commissions received by them on the sale or resale of Certificates may be
deemed to be underwriting discounts and commissions, under the Securities
Act. Agents and underwriters may be entitled under agreements entered into
with the Seller and CFC to indemnification by the Seller and CFC against
certain civil liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments that the agents or underwriters may
be required to make in respect thereof. Agents and underwriters may be
customers of, engage in transactions with, or perform services for, the
Seller or its affiliates in the ordinary course of business.
LEGAL MATTERS
Certain legal matters relating to the Certificates offered hereby will
be passed upon for USA by Christopher A. Taravella, Esq., Vice President and
General Counsel of Chrysler Financial Corporation, and for any underwriters,
agents or dealers by the counsel named in the applicable Prospectus
Supplement. Certain federal income tax and ERISA matters will be passed upon
for USA and the Trust by the counsel named in the applicable Prospectus
Supplement.
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INDEX OF PRINCIPAL TERMS
<TABLE>
<CAPTION>
Term Page
---- ----
<S> <C>
Accounts .......................................................... 1
Accumulation Period ............................................... 8
Addition Date ..................................................... 35
Additional Accounts ............................................... 38
Additional Cut-Off Date ........................................... 34
Adjusted Invested Amount .......................................... 45
Adjustment Payment ................................................ 48
Auction Vehicles .................................................. 22
Automatic Additional Accounts ..................................... 38
Automatic Removal Date ............................................ 41
Automatic Removed Accounts ........................................ 41
Bankruptcy Code ................................................... 60
Benefit Plans ..................................................... 65
CARCO ............................................................. 3
CARCO Transfer .................................................... 4
CCC ............................................................... 3
Cede .............................................................. 2
CEDEL ............................................................. 31
Certificateholder ................................................. 30
Certificateholders ................................................ 2
Certificateholders' Interest ...................................... 5
Certificates ...................................................... 1
CFC ............................................................... 1
Chrysler .......................................................... 3
Citibank .......................................................... 29
Class ............................................................. 1
Code .............................................................. 61
Collateral Security ............................................... 3
Collection Account ................................................ 42
Collection Period ................................................. 7
Commission ........................................................ 2
Controlled Amortization Amount .................................... 10
Controlled Amortization Period .................................... 8
Controlled Deposit Amount ......................................... 10
Cooperative ....................................................... 31
Dealer Overconcentrations ......................................... 38
Dealer Trouble .................................................... 25
Dealers ........................................................... 4
Defaulted Amount .................................................. 48
Defaulted Receivables ............................................. 48
Definitive Certificates ........................................... 32
Depository ........................................................ 27
Designated Accounts ............................................... 39
Designated Balance ................................................ 39
Designated Receivables ............................................ 40
Determination Date ................................................ 13
Disclosure Document ............................................... 33
Discount Option Receivables ........................................ 41
Discount Percentage ................................................ 41
Distribution Date .................................................. 13
Distribution Date Statement ....................................... 54
68
<PAGE>
<CAPTION>
Term Page
---- ----
<S> <C>
DOL ............................................................... 65
DTC ............................................................... 2
Early Amortization Event .......................................... 49
Early Amortization Period ......................................... 12
Eligible Account .................................................. 36
Eligible Accounts ................................................. 4
Eligible Dealer ................................................... 36
Eligible Deposit Account .......................................... 42
Eligible Institution .............................................. 42
Eligible Investments .............................................. 42
Eligible Portfolio ................................................ 25
Eligible Receivable ............................................... 37
Eligible Receivables .............................................. 5
Enhancement ....................................................... 3
Enhancement Provider .............................................. 36
ERISA ............................................................. 15
Euroclear ......................................................... 31
Euroclear Operator ................................................ 31
Euroclear Participants ............................................ 31
Excess Allocation Series ........................................... 46
Excess Funded Amount .............................................. 8
Excess Funding Account ............................................ 8
Excess Interest Collections ........................................ 46
Excess Principal Collections ...................................... 45
Exchange Act ...................................................... 2
Excluded Series ................................................... 12
Expected Payment Date ............................................. 8
Final Maturity Date ................................................ 50
Finance Hold ...................................................... 22
Fleet Receivables ................................................. 21
Foreign Agency Depositaries ....................................... 29
Fully Reinvested Date ............................................. 11
Holders ........................................................... 32
IML ............................................................... 31
Indirect Participants ............................................. 30
Ineligible Receivables ............................................ 35
Initial Closing Date .............................................. 34
Initial Cut-Off Date .............................................. 3
Initial Invested Amount ........................................... 45
Insolvency Laws ................................................... 20
Installment Balance ............................................... 23
Installment Balance Amount ........................................ 38
Interest Collections .............................................. 4
Interest Funding Account .......................................... 7
Interest Payment Dates ............................................ 7
Invested Amounts .................................................. 36
Investor Default Amount ........................................... 48
IRA ............................................................... 65
IRS ............................................................... 62
Michigan Tax Counsel .............................................. 64
Miscellaneous Payments ............................................ 45
Monthly Servicing Fee ............................................. 52
69
<PAGE>
<CAPTION>
Term Page
---- ----
<S> <C>
Moody's ........................................................... 42
Morgan ............................................................ 29
New Issuance ...................................................... 6
New Vehicles ...................................................... 22
OID ............................................................... 61
OID Regulations ................................................... 61
Overconcentration Amount .......................................... 37
Paired Series ..................................................... 12
Participants ...................................................... 30
Participation Interests ............................................ 3
Plan Assets Regulation ............................................ 65
Pool Balance ...................................................... 33
Pooling and Servicing Agreement ................................... 3
Prime Rate ........................................................ 23
Principal Shortfalls .............................................. 45
Principal Collections ............................................. 4
Principal Commencement Date ....................................... 8
Principal Funding Account ......................................... 10
Principal Receivables ............................................. 6
Principal Terms ................................................... 33
Prospectus Supplement ............................................. 1
Rating Agency ..................................................... 19
Receivables ....................................................... 1
Receivables Purchase Agreement .................................... 5
Registration Statement ............................................ 2
Reinvestment Event ................................................ 49
Reinvestment Period ............................................... 11
Reinvestment Period Commencement Date ............................. 11
remarketing firms ................................................. 67
Removal and Repurchase Date ....................................... 40
Removal Commencement Date ......................................... 39
Removal Date ...................................................... 39
Removal Notice .................................................... 39
Removed Account ................................................... 40
Repurchased Receivables ........................................... 40
Repurchased Receivables Purchase Price ............................ 40
Required Participation Amount ..................................... 39
Required Participation Percentage ................................. 39
Revolving Period .................................................. 9
RPA Seller ........................................................ 5
Securities Act .................................................... 2
Seller ............................................................ 1
Seller's Certificate .............................................. 33
Seller's Interest ................................................. 1
Series ............................................................ 1
Series Allocable Defaulted Amount ................................. 44
Series Allocable Interest Collections ............................. 44
Series Allocable Miscellaneous Payments ........................... 44
Series Allocable Principal Collections ............................ 44
Series Allocation Percentage ...................................... 45
Series Cut-off Date ............................................... 9
Series Issuance Date .............................................. 35
70
<PAGE>
<CAPTION>
Term Page
---- ----
<S> <C>
Series Supplement ................................................. 6
Series Termination Date ........................................... 51
Service Default ................................................... 53
Service Transfer .................................................. 53
Servicer .......................................................... 1
Servicing Fee ..................................................... 52
Servicing Fee Rate ................................................ 52
Special Payment Date .............................................. 12
Standard & Poor's ................................................. 42
Supplemental Certificate .......................................... 33
Tax Counsel ....................................................... 61
Tax Opinion ....................................................... 34
Terms and Conditions .............................................. 31
Transfer Date ..................................................... 35
Transfer Deposit Amount ........................................... 35
Trust ............................................................. 1
Trust Adjusted Invested Amount .................................... 45
Trust Available Subordinated Amount ............................... 35
Trustee ........................................................... 3
U.S. Wholesale Portfolio .......................................... 22
UCC ............................................................... 16
Unallocated Principal Collections ................................. 45
USA ............................................................... 1
Used Vehicles ..................................................... 22
Vehicles .......................................................... 3
</TABLE>
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ANNEX I
GLOBAL CLEARANCE, SETTLEMENT
AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered
Certificates (the "Global Securities") will be available only in book-entry
form. Unless otherwise specified in a Prospectus Supplement for a Series,
investors in the Global Securities may hold such Global Securities through
any of The Depository Trust Company ("DTC"), CEDEL or Euroclear. The Global
Securities will be tradeable as home market instruments in both the European
and U.S. domestic markets. Initial settlement and all secondary trades will
settle in same-day funds.
Secondary market trading between investors holding Global Securities
through CEDEL and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures
applicable to U.S. corporate debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
participants holding Global Securities will be effected on a
delivery-against-payment basis through Citibank, N.A. ("Citibank") and Morgan
Guaranty Trust Company of New York ("Morgan") as the respective depositaries
of CEDEL and Euroclear and as participants in DTC.
Non-U.S. holders of Global Securities will be exempt from U.S.
withholding taxes, provided that such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing
organizations or their participants.
Initial Settlement
All Global Securities will be held in book-entry form by DTC in the
name of Cede Co. as nominee of DTC. Investors' interests in the Global
Securities will be represented through financial institutions acting on their
behalf as direct and indirect participants in DTC. As a result, CEDEL and
Euroclear will hold positions on behalf of their participants through their
respective depositaries, Citibank and Morgan, which in turn will hold such
positions in accounts as participants of DTC.
Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable to securities previously issued by
the Trust. Investor securities custody accounts will be credited with their
holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through CEDEL or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global
security and no "lock-up" or restricted period. Global Securities will be
credited to the securities custody accounts on the settlement date against
payment in same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired
value date.
Trading between DTC participants. Secondary market trading between DTC
participants will be settled using the procedures applicable to securities
previously issued by the Trust in same-day funds.
Trading between CEDEL and/or participants. Secondary market trading
between CEDEL participants and/or Euroclear participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
A-1
<PAGE>
Trading between DTC seller and CEDEL or Euroclear purchaser. When
Global Securities are to be transferred from the account of a DTC participant
to the account of a CEDEL participant or a Euroclear participant the
purchaser will send instructions to CEDEL or Euroclear through a participant
at least one business day prior to settlement. CEDEL or Euroclear will
instruct Citibank or Morgan, respectively, as the case may be, to receive the
Global Securities against payment. Payment will include interest accrued on
the Global Securities from and including the last coupon payment date to and
excluding the settlement date. For transactions settling on the 31st day of
the month, payment will include interest accrued to and excluding the first
day of the following month. Payment will then be made by Citibank or Morgan
to the DTC participant's account against delivery of the Global Securities.
After settlement has been completed, the Global Securities will be credited
to the respective clearing system and by the clearing system, in accordance
with its usual procedures, to the CEDEL participant's or Euroclear
participant's account. The Global Securities credit will appear the next day
(European time) and the cash debit will be back-valued to, and the interest
on the Global Securities will accrue from, the value date (which would be the
preceding day when settlement occurred in New York). If settlement is not
completed on the intended value date (i.e., the trade fails), the CEDEL or
Euroclear cash debit will be valued instead as of the actual settlement date.
CEDEL participants and Euroclear participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to
preposition funds for settlement, either from cash on hand or existing lines
of credit, as they would for any settlement occurring within CEDEL or
Euroclear. Under this approach, they may take on credit exposure to CEDEL or
Euroclear until the Global Securities are credited to their accounts one day
later.
As an alternative, if CEDEL or Euroclear has extended a line of credit
to them, participants can elect not to preposition funds and allow that
credit line to be drawn upon to finance settlement. Under this procedure,
CEDEL participants or Euroclear participants purchasing Global Securities
would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts.
However, interest on the Global Securities would accrue from the value date.
Therefore, in many cases the investment income on the Global Securities
earned during that one-day period may substantially reduce or offset the
amount of such overdraft charges, although this result will depend on each
participant's particular cost of funds.
Since the settlement is taking place during New York business hours,
DTC participants can employ their usual procedures for sending Global
Securities to Citibank or Morgan for the benefit of CEDEL participants or
Euroclear participants. The sale proceeds will be available to the DTC seller
on the settlement date. Thus, to the DTC participant a cross-market
transaction will settle no differently than a trade between two DTC
participants.
Trading between CEDEL or Euroclear seller and DTC purchaser. Due to
time zone differences in their favor, CEDEL and Euroclear participants may
employ their customary procedures for transactions in which Global Securities
are to be transferred by the respective clearing system, through Citibank or
Morgan, to a DTC participant. The seller will send instructions to CEDEL or
Euroclear through a participant at least one business day prior to
settlement. In these cases, CEDEL or Euroclear will instruct Citibank or
Morgan, as appropriate, to deliver the bonds to the DTC participant's account
against payment. Payment will include interest accrued on the Global
Securities from and including the last coupon payment date to and excluding
the settlement date. For transactions settling on the 31st day of the month,
payment will include interest accrued to and excluding the first day of the
following month. The payment will then be reflected in the account of the
CEDEL participant or Euroclear participant the following day, and receipt of
the cash proceeds in the CEDEL or Euroclear participant's account would be
back-valued to the value date (which would be the preceding day, when
settlement occurred in New York). Should the CEDEL or Euroclear participant
have a line of credit with its respective clearing system and elect to be in
debit in anticipation of receipt of the sale proceeds in its account, the
back-valuation will extinguish any overdraft charges incurred over that
one-day period. If settlement is not completed on the intended value date
(i.e., the trade fails), receipt of the cash proceeds in the CEDEL or
Euroclear participant's account would instead be valued as of the actual
settlement date.
A-2
<PAGE>
Finally, day traders that use CEDEL or Euroclear and that purchase
Global Securities from DTC participants for delivery to CEDEL participants or
Euroclear participants should note that these trades would automatically fail
on the sale side unless affirmative action were taken. At least three
techniques should be readily available to eliminate this potential problem:
(1) borrowing through CEDEL or Euroclear for one day (until the
purchase side of the day trade is reflected in their CEDEL or Euroclear
accounts) in accordance with the clearing system's customary procedures;
(2) borrowing the Global Securities in the U.S. from a DTC
participant no later than one day prior to settlement, which would give
the Global Securities sufficient time to be reflected in their CEDEL or
Euroclear account in order to settle the sale side of the trade; or
(3) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC participant is
at least one day prior to the value date for the sale to the CEDEL
participant or Euroclear participant.
Certain U.S. Federal Income Tax Documentation Requirements
A holder of Global Securities holding securities through CEDEL or
Euroclear (or through DTC if the holder has an address outside the U.S.) will
be subject to the 30% U.S. withholding tax that generally applies to payments
of interest (including original issue discount) on registered debt issued by
U.S. persons, unless such holder takes one of the following steps to obtain
an exemption or reduced tax rate:
Exemption for non-U.S. persons (Form W-8). Non-U.S. persons that are
beneficial owners can obtain a complete exemption from the withholding tax by
filing a signed Form W-8 (Certificate of Foreign Status).
Exemption for non-U.S. persons with effectively connected income (Form
4224). A non-U.S. person, including a non-U.S. corporation or bank with a
U.S. branch, for which the interest income is effectively connected with its
conduct of a trade or business in the United States, can obtain an exemption
from the withholding tax by filing Form 4224 (Exemption from Withholding of
Tax on Income Effectively Connected with the Conduct of a Trade or Business
in the United States).
Exemption or reduced rate for non-U.S. persons resident in treaty
countries (Form 1001). Non-U.S. persons that are beneficial owners residing
in a country that has a tax treaty with the United States can obtain an
exemption or reduced tax rate (depending on the treaty terms) by filing Form
1001 (Ownership, Exemption or Reduced Rate Certificate). If the treaty
provides only for a reduced rate, withholding tax will be imposed at that
rate unless the filer alternatively files Form W-8. Form 1001 may be filed by
the beneficial owner or his agent.
Exemption for U.S. persons (Form W-9). U.S. persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Global Security
holder, or in the case of a Form 1001 or a Form 4224 filer, his agent, files
by submitting the appropriate form to the person through whom he holds (the
clearing agency, in the case of persons holding directly on the books of the
clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
This summary does not deal with all aspects of federal income tax
withholding that may be relevant to foreign holders of these Global Securities.
Investors are advised to consult their own tax advisors for specific tax advice
concerning their holding and disposing of these Global Securities.
A-3
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate of the amount of fees and expenses (other
than underwriting discounts and commissions) to be incurred in connection with
the issuance and distribution of the Certificates.
<TABLE>
<CAPTION>
<S> <C>
SEC Filing Fee ...................................... $1,818,182
Trustee's Fees and Expenses (including counsel fees) 180,000
Accounting Fees and Expenses ........................ 250,000
Legal Fees and Expenses ............................. 500,000
Printing and Engraving Expenses ..................... 220,000
Rating Agency Fees .................................. 2,700,000
Miscellaneous ....................................... 31,818
----------
Total ........................................... $5,700,000
==========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Chrysler Corporation (parent of Chrysler Financial Corporation and
therefore the indirect parent of the Registrant) and U.S. Auto Receivables
Company are incorporated under Delaware law. Section 145 of the Delaware
General Corporation Law provides that a Delaware corporation may indemnify
any persons, including officers and directors, who are, or are threatened to
be made, parties to any threatened, pending or completed legal action, suit
or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of
the fact that such person was an officer or director of such corporation, or
is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such officer or
director acted in good faith and in a manner he reasonably believed to be in
or not opposed to the corporation's best interests and, for criminal
proceedings, had no reasonable cause to believe that his conduct was illegal.
A Delaware corporation may indemnify officers and directors in an action by
or in the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any
action referred to above, the corporation must indemnify him against the
expenses which such officer or director actually and reasonably incurred.
Section B of Article VIII of the Certificate of Incorporation of
Chrysler Corporation, the indirect parent of the Registrant, provides, in
effect, that, subject to certain limited exceptions, Chrysler Corporation
will indemnify the officers and directors of Chrysler Corporation or its
subsidiaries to the extent permitted by Delaware law. In addition, Chrysler
Corporation maintains insurance providing for payment, subject to certain
exceptions, on behalf of officers and directors of Chrysler Corporation and
its subsidiaries of money damages incurred as a result of legal actions
instituted against them in their capacities as such officers or directors.
Chrysler Financial Corporation is incorporated under Michigan law.
Sections 561 to 565, inclusive, and Sections 567 and 569 of the Michigan
Business Corporation Act provide, in effect, that a Michigan corporation may
indemnify any persons, including officers and directors, who are, or are
threatened to be made, parties to any threatened, pending or completed legal
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation),
by reason of the fact that such person was an officer or director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, partner, trustee, employee or agent of another corporation
or enterprise. The indemnity may include expenses (including attorneys'
fees), judgments,
II-1
<PAGE>
penalties, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
provided such officer or director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation or its shareholders and, for criminal proceedings, had no
reasonable cause to believe that his conduct was illegal. A Michigan
corporation may indemnify officers and directors in an action by or in the
right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any
action referred to above, the corporation must indemnify him against the
expenses which such officer or director actually and reasonably incurred.
Article VII of the By-Laws of the Registrant provides, in effect, that,
subject to certain exceptions, such Registrant will indemnify its officers
and directors to the extent that they acted in good faith and in a manner
reasonably believed to be in the best interests of the Registrant.
Item 16. Exhibits:
<TABLE>
<CAPTION>
<S> <C> <C>
1.1 -- Form of Underwriting Agreement with respect to the
Certificates.
3.1 -- Certificate of Incorporation of the Registrant is
incorporated by reference from Exhibit 3.1 of the
Registrant's Registration Statement on Form S-1 (File
No. 33-41177).
3.2 -- By-Laws of the Registrant are incorporated by
reference from Exhibit 3.2 of the Registrant's
Registration Statement on Form S-1 (File No.
33-41177).
4.1 -- Form of Pooling and Servicing Agreement among the
Registrant, the Servicer and the Trustee is
incorporated by reference from Exhibit 4.1 of the
Registrant's Registration Statement on Form S-1 (File
No. 33-41177).
4.2 -- First Amendment to the Pooling and Servicing
Agreement is incorporated by reference from Exhibit
4.2 of the Registrant's Registration Statement on
Form S-1 (File No. 33-52990).
4.3 -- Second Amendment to the Pooling and Servicing
Agreement is incorporated by reference from Exhibit
4.3 of the Registrant's Registration Statement on
Form S-1 (File No. 33-70144).
4.4 -- Form of Series Supplement to the Pooling and
Servicing Agreement, including the form of the
Certificates and the Form of Servicing Report.
4.5 -- Form of Remarketing Agreement, including the Form
of Remarketing and Settlement Procedures.
5.1 -- Opinion of Christopher A. Taravella, Esq. with
respect to certain matters involving the
Certificates.
8.1 -- Opinion of Cravath, Swaine & Moore with respect to
federal tax matters.
8.2 -- Opinion of Christopher A. Taravella, Esq. with
respect to tax matters under Michigan law and the
Certificates.
23.1 -- Consent of Christopher A. Taravella, Esq. with
respect to the Certificates (included in opinions
filed as Exhibits 5.1 and 8.2).
23.2 -- Consent of Cravath, Swaine & Moore with respect to
the Certificates (included in opinion filed as
Exhibit 8.1).
23.3 -- Consent of Deloitte & Touche LLP
24.1 -- Power of Attorney.
</TABLE>
II-2
<PAGE>
Item 17. Undertakings.
(a) As to Rule 415: The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to
this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended, that are incorporated by reference
in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(3) 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.
(b) As to indemnification: Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended, may be permitted to
directors, officers and controlling persons of the registrant pursuant to the
provisions described in Item 15 herein, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
of 1933, as amended, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the 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 of 1933, as amended, and will be governed by
the final adjudication of such issue.
(c) As to documents subsequently filed that are incorporated by
reference: The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, as amended, that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(d) As to information omitted in reliance on Rule 430A: The
undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, as amended, the information omitted from the form of
prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to
II-3
<PAGE>
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as
amended, shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, as amended, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Southfield, State of Michigan, on
the 23rd day of October, 1997.
U.S. AUTO RECEIVABLES COMPANY
By /s/ D.L. Davis
----------------------
D.L. Davis
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Principal executive officer:
/S/ D.L. DAVIS President October 23, 1997
- -----------------------------
D.L. Davis
Principal financial officer:
/S/ DENNIS M. CANTWELL Vice President October 23, 1997
- ----------------------------- and Treasurer
Dennis M. Cantwell
Principal accounting officer:
/S/ T.F. GILMAN Vice President and October 23, 1997
- ----------------------------- Controller
T.F. Gilman
II-5
<PAGE>
Board of Directors:
/S/ DENNIS M. CANTWELL* Director October 23, 1997
- -----------------------------
Dennis M. Cantwell
/S/ D.L. DAVIS* Director October 23, 1997
- -----------------------------
D.L. Davis
/S/ M.A. KICKHAM* Director October 23, 1997
- -----------------------------
M.A. Kickham
/S/ J.A. SELLGREN* Director October 23, 1997
- -----------------------------
J.A. Sellgren
*By /S/ B.C. BABBISH
- -----------------------------
B.C. Babbish
Attorney-in-Fact
October 23, 1997
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C> <C>
1.1 -- Form of Underwriting Agreement with respect to the
Certificates.
3.1 -- Certificate of Incorporation of the Registrant is
incorporated by reference from Exhibit 3.1 of the
Registrant's Registration Statement on Form S-1 (File
No. 33-41177).
3.2 -- By-Laws of the Registrant are incorporated by
reference from Exhibit 3.2 of the Registrant's
Registration Statement on Form S-1 (File No.
33-41177).
4.1 -- Form of Pooling and Servicing Agreement among the
Registrant, the Servicer and the Trustee is
incorporated by reference from Exhibit 4.1 of the
Registrant's Registration Statement on Form S-1 (File
No. 33-41177).
4.2 -- First Amendment to the Pooling and Servicing
Agreement is incorporated by reference from Exhibit
4.2 of the Registrant's Registration Statement on
Form S-1 (File No. 33-52990).
4.3 -- Second Amendment to the Pooling and Servicing
Agreement is incorporated by reference from Exhibit
4.3 of the Registrant's Registration Statement on
Form S-1 (File No. 33-70144).
4.4 -- Form of Series Supplement to the Pooling and
Servicing Agreement, including the form of the
Certificates and the Form of Servicing Report.
4.5 -- Form of Remarketing Agreement, including the Form
of Remarketing and Settlement Procedures.
5.1 -- Opinion of Christopher A. Taravella, Esq. with
respect to certain matters involving the
Certificates.
8.1 -- Opinion of Cravath, Swaine & Moore with respect to
federal tax matters.
8.2 -- Opinion of Christopher A. Taravella, Esq. with
respect to tax matters under Michigan law and the
Certificates.
23.1 -- Consent of Christopher A. Taravella, Esq. with
respect to the Certificates (included in opinions
filed as Exhibits 5.1 and 8.2).
23.2 -- Consent of Cravath, Swaine & Moore with respect to
the Certificates (included in opinion filed as
Exhibit 8.1).
23.3 -- Consent of Deloitte & Touche LLP
24.1 -- Power of Attorney.
</TABLE>
E-1
EXHIBIT 1.1
CARCO AUTO LOAN MASTER TRUST
[ %][FLOATING RATE] AUTO LOAN ASSET BACKED CERTIFICATES,
SERIES 199[_-_]
U.S. AUTO RECEIVABLES COMPANY
(SELLER)
FORM OF UNDERWRITING AGREEMENT
[ ], 199[ ]
[ ]
As Representatives of the
Several Underwriters
Dear Sirs:
1. Introductory. U.S. Auto Receivables Company, a Delaware
corporation (the "Seller"), proposes to cause CARCO Auto Loan Master Trust
(the "Trust") to sell $[ ] principal amount of its [Floating Rate][ %] Auto
Loan Asset Backed Certificates, Series 199[_-_] (the "Certificates"), to the
several underwriters set forth on Schedule I hereto (the "Underwriters"), for
whom you are acting as representative (the "Representative"). Each
Certificate will represent a fractional undivided ownership interest in the
Trust. The assets of the Trust include, among other things, a pool of
receivables (the "Receivables") generated from time to time pursuant to
wholesale automobile loan revolving credit agreements of Chrysler Financial
Corporation (the "Company"), directly or as successor to Chrysler Credit
Corporation, a Delaware corporation ("CCC"), and the related Collateral
Security. The Receivables were sold to the Trust by the Seller and are
serviced for the Trust by the Company, as successor to CCC. The Certificates
will be issued pursuant to a pooling and servicing agreement dated as of May
31, 1991, as assigned by Chrysler Auto Receivables Company ("CARCO") to the
Seller on August 8, 1991 (as assigned and as supplemented and amended from
time to time, the "P&S"), among CARCO, the Seller, CCC, which has been
succeeded by the Company, as Servicer, and Manufacturers and Traders Trust
Company, which has been succeeded by The Bank of New York, as trustee (the
"Trustee"), and the Series 199[_-_] Supplement to the P&S to be dated as of [
], 199[ ] (the "Supplement"), among the Seller, the Company and the Trustee.
The P&S and the Supplement are collectively referred to as the "Pooling and
Servicing Agreement".
<PAGE>
2
Capitalized terms used and not otherwise defined herein
shall have the meanings given them in the Pooling and Servicing Agreement.
2. Representations and Warranties of the Seller. The Seller
represents and warrants to, and agrees with, you that:
(a) The Seller meets the requirements for use of Form S-3
under the Securities Act and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration No. [
]), including a related preliminary prospectus, on such Form for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Certificates. The Seller may have filed one or more amendments
thereto, including the related preliminary prospectus, each of which has
previously been furnished to you. The Seller will next file with the
Commission either (i) prior to the effectiveness of such registration
statement, a further amendment thereto (including the form of final
prospectus) or (ii) a final prospectus in accordance with Rules 430A and
424(b)(1) or (4) or (iii) a final prospectus in accordance with Rules 415 and
424(b)(2) or (5). In the case of clause (ii), the Seller has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Securities Act and the
rules thereunder to be included in the prospectus with respect to the
Certificates and the offering thereof. As filed, such amendment and form of
final prospectus, or such final prospectus, shall include all Rule 430A
Information, together with all other such required information, with respect
to the Certificates and, except to the extent that you shall agree in writing
to a modification, shall be in all substantive respects in the form furnished
to you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest preliminary prospectus
which has previously been furnished to you) as the Seller has advised you,
prior to the Execution Time, will be included or made therein. If the
Registration Statement contains the undertaking specified by Regulation S-k
Item 512(2), the Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
<PAGE>
3
For purposes of this Agreement, "Effective Time" means the
date and time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission, and "Effective Date" means the date of the Effective Time. Such
registration statement, as amended at the Effective Time, including all
information deemed to be a part of such registration statement as of the
Effective Time pursuant to Rule 430A(b) under the Securities Act, and
including the exhibits thereto and any material incorporated by reference
therein, is hereinafter referred to as the "Registration Statement", and the
form of prospectus relating to the Certificates as first filed with the
Commission pursuant to and in accordance with Rule 424(b) under the
Securities Act or, if no filing pursuant to Rule 424(b) is required, the form
of final prospectus included in the Registration Statement at the Effective
Date, is hereinafter referred to as the "Prospectus". "Execution Time" shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto. "Preliminary Prospectus" shall mean any preliminary
prospectus referred to above and any preliminary prospectus included in the
Registration Statement which at the Effective Date omits Rule 430A
Information. "Rule 430A Information" means information with respect to the
Certificates and the offering of the Certificates permitted to be omitted
from the Registration Statement when it becomes effective pursuant to Rule
430A. "Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to such
rules or regulations under the Securities Act. Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration
Statement, or the issue date of any Preliminary Prospectus or the Prospectus,
as the case may be, deemed to be incorporated therein by reference.
<PAGE>
4
(b) On the Effective Date and on the date of this
Agreement, the Registration Statement did or will, and, when the Prospectus
is first filed (if required) in accordance with Rule 424(b) and on the
Closing Date, the Prospectus (and any supplements thereto) will, comply in
all material respects with the applicable requirements of the Securities Act
and the rules and regulations of the Commission (the "Rules and
Regulations"); on the Effective Date, the Registration Statement did not or
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; and, on the
Effective Date, the Prospectus, if not filed pursuant to Rule 424(b), did not
or will not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus (together with any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Seller makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Seller by any Underwriter specifically for use in
connection with preparation of the Registration Statement or the Prospectus
(or any supplement thereto). As of the Closing Date (as defined below), the
Seller's representations and warranties in the Pooling and Servicing
Agreement will be true and correct.
(c) This Agreement has been duly authorized, executed and
delivered by the Seller and the Company.
(d) None of the Seller, the Company or anyone acting on its
behalf has taken any action that would require qualification of the Pooling
and Servicing Agreement under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), or require registration of the Seller or the
Trust under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), nor will the Seller or the Company act, nor has either of them
authorized or will any of them authorize any person to act, in such manner
with respect to any Certificate.
<PAGE>
5
3. Purchase, Sale, and Delivery of Certificates. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Seller agrees to
cause the Trust to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Trust the respective
principal amount of the Certificates set forth opposite the name of such
Underwriter on Schedule I hereto, at a purchase price of [ ] of the aggregate
principal amount thereof. Delivery of and payment for the Certificates shall
be made at the office of [ ], [ ], on [ ], 199[ ] (the "Closing Date").
Delivery of one or more global certificates representing the Certificates
shall be made against payment of the purchase price in immediately available
funds drawn to the order of the Seller. The global certificates to be so
delivered shall be registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of the
Certificates will be represented by book entries on the records of DTC and
participating members thereof. Definitive Certificates representing the
Certificates will be available only under limited circumstances.
4. Offering by Underwriters. It is understood that, after
the Registration Statement becomes effective, the Underwriters propose to
offer the Certificates for sale to the public (which may include selected
dealers), as set forth in the Prospectus.
5. Covenants of the Seller. The Seller covenants and agrees
with the Underwriters that:
(a) The Seller will use its best efforts to cause the
Registration Statement, and any amendment thereto, if not effective at the
Execution Time, to become effective. If the Registration Statement has become
or becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Seller will file the Prospectus,
properly completed, and any supplement thereto, with the Commission pursuant
to and in accordance with the applicable subparagraph within the time period
prescribed. The Seller will advise you promptly of any such filing pursuant
to Rule 424(b).
(b) The Seller will advise you promptly of any proposal to
amend or supplement the registration statement
<PAGE>
6
as filed, or the related prospectus, and will not effect such amendment or
supplement without your consent, which consent will not unreasonably be
withheld; the Seller will also advise you promptly of any request by the
Commission for any amendment of or supplement to the Registration Statement
or the Prospectus or for any additional information; and the Seller will also
advise you promptly of the effectiveness of the Registration Statement, of
any amendment or supplement of the Registration Statement or the Prospectus
and of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threat of
any proceeding for that purpose and the Seller will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as possible
the lifting of any issued stop order.
(c) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Securities Act, any event
occurs as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Prospectus to comply with
the Securities Act, the Seller promptly will prepare and file, or cause to be
prepared and filed, with the Commission an amendment or supplement which will
correct such statement or omission, or an amendment or supplement which will
effect such compliance. Any such filing shall not operate as a waiver or
limitation on any rights of the Underwriters hereunder.
(d) As soon as practicable, but not later than sixteen
months after the original effective date of the Registration Statement, the
Seller will cause the Trust to make generally available to Series 199[_-_]
Certificateholders an earnings statement of the Trust covering a period of at
least twelve months beginning after the Effective Date of the Registration
Statement which will satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 under the Securities Act.
(e) The Seller will furnish to the Underwriters copies of
the Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus, the Prospectus and all
amendments
<PAGE>
7
and supplements to such documents, in each case as soon as available and in
such quantities as you request.
(f) The Seller will arrange for the qualification of the
Certificates for sale under the laws of such jurisdictions in the United
States as you may reasonably designate and will continue such qualifications
in effect so long as required for the distribution.
(g) For a period from the date of this Agreement until the
retirement of the Certificates, or until such time as the Underwriters shall
cease to maintain a secondary market in the Certificates, whichever occurs
first, the Seller will deliver to the Underwriters the annual statement of
compliance and the annual independent certified public accountants' report
furnished to the Trustee pursuant to the Pooling and Servicing Agreement, as
soon as such statements and reports are furnished to the Trustee.
(h) So long as any of the Certificates are outstanding, the
Seller will furnish to the Underwriters (i) as soon as practicable after the
end of the fiscal year all documents required to be distributed to Series
199[_-_] Certificateholders or filed with the Commission pursuant to the
Exchange Act, or any order of the Commission thereunder and (ii) from time to
time, any information concerning the Seller filed with any government or
regulatory authority which is otherwise publicly available, as the
Underwriters may reasonably request.
(i) On or before the Closing Date, the Seller shall cause
the computer records of the Seller and the Company relating to the
Receivables to be marked to show the Trustee's absolute ownership of the
Receivables, and from and after the Closing Date neither the Company nor the
Seller shall take any action inconsistent with the Trustee's ownership of
such Receivables, other than as permitted by the Pooling and Servicing
Agreement.
(j) To the extent, if any, that the rating provided with
respect to the Certificates by the rating agency or agencies that initially
rate the Certificates is conditional upon the furnishing of documents or the
taking of any other actions by the Seller, the Seller shall furnish such
documents and take any such other actions.
<PAGE>
8
[(k) For the period beginning on the date of this Agreement
and ending seven days after the Closing Date, unless waived by the
Underwriters, none of the Seller, the Company or any trust originated,
directly or indirectly, by the Seller or the Company will offer to sell or
sell certificates substantially similar to the Certificates, which are
collateralized by, or evidencing an ownership interest in, receivables
generated pursuant to wholesale automobile loan revolving credit agreements
without the prior written consent of the Underwriters.]
6. Payment of Expenses. The Seller will pay all expenses
incident to the performance of its obligations under this Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation of this
Agreement, (iii) the preparation, issuance and delivery of the Certificates
to the Underwriters, (iv) the fees and disbursements of the Seller's counsel
and accountants, (v) the qualification of the Certificates under state
securities laws in accordance with the provisions of Section 5(f), including
filing fees and the fees and disbursements of counsel for you in connection
therewith and in connection with the preparation of any blue sky survey, (vi)
the printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, (vii) the
printing and delivery to the Underwriters of copies of any blue sky survey
prepared in connection with the Certificates, (viii) any fees charged by
rating agencies for the rating of the Certificates, (ix) the fees and
expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc., and (x) the fees and expenses of
Cravath, Swaine & Moore in its role as special counsel to the Underwriters or
the Seller, as the case may be, incurred as a result of providing the
opinions required by Sections 7(g) and 7(h) hereof.
7. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase and pay for the Certificates will
be subject to the accuracy of the representations and warranties on the part
of the Seller herein, to the accuracy of the statements of officers of the
Seller made pursuant to the provisions hereof, to the performance by the
Seller of its obligations hereunder and to the following additional
conditions precedent:
<PAGE>
9
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Underwriters agree in writing to a
later time, the Registration Statement shall have become effective not later
than (i) 6:00 p.m. New York City time on the date of determination of the
public offering price, if such determination occurred at or prior to 3:00
p.m. New York City time on such date or (ii) 12:00 noon on the business day
following the day on which the public offering price was determined, if such
determination occurred after 3:00 p.m. New York City time on such date.
(b) The Prospectus and any supplements thereto shall have
been filed (if required) with the Commission in accordance with the Rules and
Regulations and Section 2 hereof, and prior to the Closing Date, no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or, to the knowledge of the Seller or the Underwriters, shall be contemplated
by the Commission or by any authority administering any state securities or
blue sky law.
(c) On or prior to the date of this Agreement and on or
prior to the Closing Date, you shall have received a letter or letters, dated
as of the date of this Agreement and as of the Closing Date, respectively, of
Deloitte & Touche, Certified Public Accountants, substantially in the form of
the drafts to which you have previously agreed and otherwise in form and
substance satisfactory to you and your counsel.
(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Trust, the Seller, the Company or Chrysler Corporation
which, in the judgment of the Underwriters, materially impairs the investment
quality of the Certificates or makes it impractical or inadvisable to market
the Certificates; (ii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any securities
of Chrysler Corporation or the Company on any exchange or in the
over-the-counter market; (iii) any banking moratorium declared by Federal or
New York authorities; or (iv) any outbreak or
<PAGE>
10
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress, or any other substantial national or
international calamity or emergency if, in the judgment of the Underwriters,
the effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with completion of
the sale of and payment for the Certificates.
(e) You shall have received an opinion of Christopher A.
Taravella, Vice President and General Counsel of the Company and the Seller,
addressed to you and the Trustee, dated the Closing Date and satisfactory in
form and substance to you and your counsel, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Michigan with full power and authority (corporate and
other) to own its properties and conduct its business, as presently
conducted by it, and to enter into and perform its obligations under
this Agreement, the Pooling and Servicing Agreement and the
Receivables Sale Agreement, and had at all relevant times, and now
has, the power, authority and legal right to acquire, own, sell and
service the Receivables.
(ii) The Seller has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware with full power and authority (corporate and
other) to own its properties and conduct its business, as presently
conducted by it, and to enter into and perform its obligations under
this Agreement, the Receivables Purchase Agreement and the Pooling
and Servicing Agreement and had at all times, and now has, the
power, authority and legal right to acquire, own and sell the
Receivables.
(iii) Each of the Company and the Seller is duly qualified to
do business and is in good standing, and has obtained all necessary
licenses and approvals in each jurisdiction in which failure to
qualify or to obtain such licenses or approvals would render any
Receivable unenforceable by the Seller or the Trustee on behalf of
any Certificateholder.
<PAGE>
11
(iv) The direction by the Seller to the Trustee to
authenticate the Certificates has been duly authorized by the
Seller, the Certificates have been duly executed and delivered by
the Seller and, when authenticated by the Trustee in accordance with
the Pooling and Servicing Agreement and delivered and paid for
pursuant to this Agreement, will be duly issued and entitled to the
benefits and security afforded by the Pooling and Servicing
Agreement, subject as to the enforcement of remedies (x) to
applicable bankruptcy, insolvency, reorganization, moratorium, and
other similar laws affecting creditors' rights generally, (y) to
general principles of equity (regardless of whether the enforcement
of such remedies is considered in a proceeding in equity or at law),
and (z) to the further qualification that certain of the remedial
provisions in the Pooling and Servicing Agreement may be limited or
rendered unenforceable under the laws of the State of New York (but
such laws do not, in such counsel's opinion, make the remedies
provided by the Pooling and Servicing Agreement unsatisfactory for
the realization of the benefits provided thereby).
(v) The Receivables Purchase Agreement and the Pooling and
Servicing Agreement have been duly authorized, executed and
delivered by the Seller, and are legal, valid and binding
obligations of the Seller enforceable against the Seller in
accordance with their terms, except (x) the enforceability thereof
may be subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect
relating to creditors' rights, and (y) the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(vi) This Agreement has been duly authorized, executed and
delivered by the Seller and the Company.
(vii) The Receivables Sale Agreement and the Pooling and
Servicing Agreement have been duly authorized, executed and
delivered by CCC, the predecessor of the Company, and are the legal,
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except (x) the
enforceability thereof may be subject to
<PAGE>
12
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditors' rights, and
(y) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and
to the discretion of the court before which any proceeding therefor
may be brought.
(viii) Neither the merger of CCC into the Company and the
assumption by the Company of all of CCC's obligations under the
Receivables Purchase Agreement and the Pooling and Servicing
Agreement, nor the transfer of the Receivables from the Company to
the Seller, nor the transfer of the Receivables from the Seller to
the Trustee acting on behalf of the Trust, nor the assignment of the
Collateral Security to the Seller, nor the assignment of the
Collateral Security to the Trustee acting on behalf of the Trust,
nor the assignment of the Receivables Purchase Agreement by the
Seller to the Trustee on behalf of the Trust, nor the execution and
delivery of the Receivables Sale Agreement and the Pooling and
Servicing Agreement by CCC, nor the execution and delivery of this
Agreement, the Receivables Purchase Agreement, the Pooling and
Servicing Agreement and the Certificates by the Seller, nor the
consummation of any transactions contemplated in this Agreement, the
Receivables Purchase Agreement or the Pooling and Servicing
Agreement, nor the fulfillment of the terms of this Agreement, the
Receivables Purchase Agreement, the Pooling and Servicing Agreement
and the Certificates by the Company or the Seller, as the case may
be, will conflict with, or result in a breach, violation or
acceleration of, or constitute a default under, any term or
provision of the articles of incorporation or by-laws of the Company
or the Seller or of any indenture or other agreement or instrument
to which the Company or the Seller is a party or by which either of
them or their respective property is bound, or result in a
violation, or contravene the terms, of any statute, order or
regulation applicable to the Company or the Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over any of them.
(ix) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due
inquiry, threatened
<PAGE>
13
before any court, administrative agency, or other tribunal (1)
asserting the invalidity of this Agreement, the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, (2)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, the Pooling and Servicing Agreement
or the Receivables Purchase Agreement or the execution and delivery
thereof, (3) that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity
or enforceability of, this Agreement, the Receivables Sale Agreement
or the Pooling and Servicing Agreement or (4) that might materially
and adversely affect the performance by the Company of its
obligations under, or the validity or enforceability of, this
Agreement, the Receivables Purchase Agreement or the Pooling and
Servicing Agreement.
(x) To the best knowledge of such counsel and except as set
forth in the Prospectus, no default exists and no event has occurred
which, with notice, lapse of time or both, would constitute a
default in the due performance and observance of any term, covenant
or condition of any agreement to which the Company is a party or by
which it is bound, which default is or would be material for the
financial condition, earnings, prospects, business or properties of
the Company and its subsidiaries, taken as a whole.
(xi) Nothing has come to such counsel's attention that would
lead such counsel to believe that the representations and warranties
of (x) the Company or CCC contained in the Receivables Purchase
Agreement or the Pooling and Servicing Agreement are other than as
stated therein or (y) the Seller contained in this Agreement, the
Receivables Purchase Agreement or the Pooling and Servicing
Agreement are other than as stated therein.
(xii) The Seller is the sole owner of all right, title and
interest in, and has good and marketable title to, the Receivables
and the Collateral Security to be transferred by it to the Trust.
The assignment of the Receivables and the Collateral Security, all
documents and instruments relating thereto and all proceeds thereof
to the Trustee, pursuant to the Pooling and Servicing Agreement,
vest in the Trustee
<PAGE>
14
all interests which are purported to be conveyed thereby, free and
clear of any liens, security interests or encumbrances except as
specifically permitted pursuant to the Pooling and Servicing
Agreement.
(xiii) Immediately prior to the transfer of the Receivables to
the Trustee, the Seller's interest in the Receivables, the
Collateral Security (including the security interests in the
Vehicles securing the Receivables) and the proceeds of each of the
foregoing was perfected upon the filing of the UCC-1 financing
statement with the Secretary of State of the State of Michigan and
the Secretary of State of the State of New York and constituted a
perfected first priority interest therein, subject to the rights of
the Purchased Receivables Owners in the Collateral Security (other
than the Vehicles securing the Receivables). If a court concludes
that the transfer of the Receivables from the Seller to the Trustee
is a sale, the interest of the Trustee in the Receivables, the
Collateral Security (including the security interests in the
Vehicles securing the Receivables) and the proceeds of each of the
foregoing will be perfected upon the filing of the UCC-1 financing
statement, the form of which is attached to such opinion with the
Secretary of State of the State of Michigan and the Secretary of
State of the State of New York and will constitute a first priority
perfected interest therein, subject to the rights of the Purchased
Receivables Owners in the Collateral Security (other than the
Vehicles securing the Receivables). If a court concludes that such
transfer is not a sale, the Pooling and Servicing Agreement
constitutes a grant by the Seller to the Trustee of a valid security
interest in the Receivables, the Collateral Security (including the
security interests in the Vehicles securing the Receivables) and the
proceeds of each of the foregoing, which security interest is
perfected upon the filing of the UCC-1 financing statement the form
of which is attached to such opinion with the Secretary of State of
the State of Michigan and the Secretary of State of the State of New
York and will constitute a first priority perfected security
interest therein, subject to the rights of the Purchased Receivables
Owners in the Collateral Security (other than the Vehicles securing
the Receivables). No filing or other action, other than the filing
of the
<PAGE>
15
UCC-l financing statements with the Secretary of State of the State
of Michigan and the Secretary of State of the State of New York
referred to above, is necessary to perfect and maintain the interest
of the Trustee in the Receivables, the Collateral Security
(including the security interests in the Vehicles securing the
Receivables) and the proceeds of each of the foregoing against third
parties.
(xiv) The Receivables are chattel paper as defined in the
Uniform Commercial Code.
(xv) The Pooling and Servicing Agreement and the Receivables
Purchase Agreement conform in all material respects with the
description thereof contained in the Registration Statement and the
Prospectus and any supplement thereto.
(xvi) The statements in the Registration Statement and the
Prospectus under the heading "Risk Factors-- Certain Legal Aspects"
and "Certain Legal Aspects of the Receivables", to the extent they
constitute matters of law or legal conclusions with respect thereto,
have been reviewed by such counsel and are correct in all material
respects.
(xvii) The statements contained in the Prospectus and any
supplement thereto under the captions "The Certificates" and "Series
Provisions", insofar as such statements constitute a summary of the
Certificates and the Pooling and Servicing Agreement, constitute a
fair summary of such documents.
(xviii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated in this Agreement, the
Receivables Purchase Agreement and the Pooling and Servicing
Agreement, except such filings with respect to the transfer of the
Receivables to the Seller pursuant to the Receivables Purchase
Agreement, and the transfer of the Receivables to the Trustee acting
on behalf of the Trust pursuant to the Pooling and Servicing
Agreement, as have been made and such other approvals as have been
obtained.
(xix) Such counsel is familiar with the Company's standard
operating procedures relating to the Company's
<PAGE>
16
acquisition of a perfected first priority security interest in the
vehicles financed by the Servicer pursuant to wholesale automobile
revolving credit agreements in the ordinary course of the Servicer's
business. Assuming that the Company's standard procedures are
followed with respect to the perfection of security interests in the
Vehicles (and such counsel has no reason to believe that the Company
has not or will not continue to follow its standard procedures in
connection with the perfection of security interests in the
Vehicles), the Company has acquired or will acquire a perfected
first priority security interest in the Vehicles.
(xx) All actions required to be taken and all filings
required to be made under the Securities Act and the Exchange Act
prior to the sale of the Certificates have been duly taken or made.
(xxi) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act, and the Trust is not
required to be registered under the Investment Company Act.
(xxii) The Seller is not, and will not as a result of the
offer and sale of the Certificates as contemplated in the Prospectus
and this Agreement become, an "investment company" as defined in the
Investment Company Act or a company "controlled by" an "investment
company" within the meaning of the Investment Company Act.
(xxiii) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
which are required to be disclosed in the Registration Statement,
other than those disclosed therein.
(xxiv) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to
therein or filed or included or incorporated by reference as
exhibits thereto, in order to make the statements therein not
misleading, the descriptions
<PAGE>
17
thereof or references thereto are correct, and no default exists in
the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
so described, referred to, filed or incorporated by reference.
(xxv) The Registration Statement has become effective under
the Securities Act, any required filing of the Prospectus and any
supplements thereto pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b), and, to
the best of the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending
or contemplated under the Securities Act, and the Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates, complied
as to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations.
(xxvi) Such counsel has examined the Registration Statement and
the Prospectus, and nothing has come to such counsel's attention
that would lead such counsel to believe that the Registration
Statement or the Prospectus or any amendment or supplement thereto
as of the respective dates thereof (other than the financial
statements and other financial and statistical information contained
therein, as to which such counsel need not express any view)
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein not
misleading.
(f) You shall have received an opinion of Christopher A.
Taravella, Vice President and General Counsel of the Company and the Seller,
addressed to you and the Trustee, dated the Closing Date and satisfactory in
form and substance to you and your counsel, to the effect that the statements
in the Registration Statement and the Prospectus under the heading "Certain
Tax Matters--State and Local Tax Consequences" accurately describe the
material Michigan tax consequences to holders of the Certificates.
<PAGE>
18
(g) [ ], special counsel to the Seller, shall have
delivered an opinion, dated the Closing Date, with respect to the
characterization of the transfer of the Receivables.
(h) You shall have received an opinion of [ ],
addressed to you, dated the Closing Date, (i) in its capacity as your special
counsel, with respect to the validity of the Certificates and such other
related matters as you shall require and (ii) in its capacity as Federal tax
and ERISA counsel for the Seller and the Trust, to the effect that the
statements in the Registration Statement and the Prospectus under the heading
"Certain Tax Matters" (other than "State and Local Tax Consequences")
accurately describe the material Federal income tax consequences to holders
of the Certificates, and the statements in the Registration Statement and the
Prospectus under the heading "ERISA Considerations", to the extent that they
constitute statements of matters of law or legal conclusions with respect
thereto, have been prepared or reviewed by such counsel and accurately
describe the material consequences to holders of the Certificates under
ERISA.
(i) You shall have received an opinion addressed to you,
the Seller and the Servicer of [
], counsel to the Trustee, dated the Closing Date and
satisfactory in form and substance to you and your counsel, to the effect
that:
(i) The Trustee is a banking corporation duly incorporated
and validly existing under the laws of the State of New York.
(ii) The Trustee has the full corporate trust power to
accept the office of trustee under the Pooling and Servicing
Agreement and to enter into and perform its obligations under the
Pooling and Servicing Agreement.
(iii) The execution and delivery of the Pooling and
Servicing Agreement and the performance by the Trustee of its
obligations under the Pooling and Servicing Agreement have been duly
authorized by all necessary corporate action of the Trustee.
<PAGE>
19
(iv) The Pooling and Servicing Agreement constitutes a
valid and binding obligation of the Trustee enforceable against the
Trustee in accordance with its terms under the law of the State of
New York and the Federal law of the United States.
(v) The execution and delivery by the Trustee of the
Pooling and Servicing Agreement does not require any consent,
approval or authorization of, or any registration or filing with,
any New York or United States Federal governmental authority.
(vi) Each of the Certificates has been duly executed by the
Trustee as trustee and authenticating agent.
(j) You shall have received certificates dated the Closing
Date of any two of the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the principal financial
officer, or the principal accounting officer of each of the Seller and the
Company in which such officers shall state that, to the best of their
knowledge after reasonable investigation, (i) the representations and
warranties of the Seller, the Company or CCC, as the case may be, contained
in the Receivables Purchase Agreement and the Pooling and Servicing
Agreement, respectively, are true and correct, that the Seller, the Company
or CCC, as the case may be, has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied under such Agreements
at or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by the
Commission and (ii) since December 31, 199[ ], except as may be disclosed in
the Prospectus or, in the case of Chrysler Corporation, as may be disclosed
publicly by Chrysler Corporation prior to the execution of this Agreement, no
material adverse change, or any development involving a prospective material
adverse change, in or affecting particularly the business or properties of
the Trust, the Seller, the Company or Chrysler Corporation has occurred.
(k) You shall have received evidence satisfactory to you
that, on or before the Closing Date, UCC-1 financing statements have been or
are being filed in the office of the Secretary of State of the States of
Michigan and New York
<PAGE>
20
reflecting the transfer of the interest of the Company in the Receivables and
the proceeds thereof to the Seller, and the transfer of the interest of the
Seller in the Receivables and the proceeds thereof to the Trustee.
(l) The Certificates shall have been rated ["[ ]" by
Standard and Poor's Ratings Group, "[ ]" by Moody's Investors Service,
Inc., "[ ]" by Duff & Phelps, Inc., and "[ ]" by Fitch Investors
Service, Inc.]
(m) No Early Amortization Event or Reinvestment Event or
other event or condition, which event or condition with notice, the passage
of time or both would result in an Early Amortization Event or Reinvestment
Event, shall have occurred or shall exist with respect to any outstanding
Series on the Closing Date.
The Seller will provide or cause to be provided to you such
conformed copies of such opinions, certificates, letters and documents as you
reasonably request.
8. Indemnification and Contribution. (a) The Seller and the
Company will, jointly and severally, indemnify and hold each Underwriter
harmless against any losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) ariseout of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment, exhibit or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such indemnified party for
any legal or other expenses reasonably incurred by such party in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that neither the
Seller nor the Company will be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to
<PAGE>
21
the Seller by any Underwriter through you specifically for use therein.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Seller against any losses, claims, damages or
liabilities to which the Seller may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment, exhibit or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Seller by such Underwriter through you
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Seller in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under subsection (a) or (b) above. In
case any such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
<PAGE>
22
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnifying party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Seller on the one hand and the Underwriters on the
other from the offering of the Certificates or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Seller on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Seller on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Seller
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Seller or by any Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which
is the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter (except as may be provided in the agreement
among Underwriters relating to the offering of the Certificates) shall be
required to contribute any amount in excess of the underwriting discount or
commission applicable
<PAGE>
23
to the Certificates purchased by such Underwriter hereunder. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of the Seller and the Company under
this Section 8 shall be in addition to any liability which the Seller or the
Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Securities Act; and the obligations of any Underwriter under
this Section shall be in addition to any liability which such Underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Seller, to each officer of the Seller who has signed the
Registration Statement and to each person, if any, who controls the Seller
within the meaning of the Securities Act.
9. Defaults by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Certificates
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions
which the amount of Certificates set forth opposite their names in Schedule I
hereto bears to the aggregate amount of Certificates set forth opposite the
names of all the remaining Underwriters) the Certificates which the
defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of
Certificates which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate principal amount of
Certificates set forth in Schedule I hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Certificates, and if such nondefaulting Underwriters do
not purchase all the Certificates, this Agreement will terminate without
liability to any nondefaulting Underwriter, the Trust or the Seller. In the
event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Underwriters shall determine in order that the required changes in the
Registration
<PAGE>
24
Statement and the Prospectus or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Seller and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
10. No Bankruptcy Petition. Each Underwriter covenants and
agrees that, prior to the date which is one year and one day after the
payment in full of all securities issued by the Seller or by a trust for
which the Seller was the depositor which securities were rated by any
nationally recognized statistical rating organization, it will not institute
against, or join any other Person in instituting against, the Seller any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under any Federal or state bankruptcy or
similar law.
11. Survival of Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Seller or its officers and the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement or
contained in certificates of officers of the Seller submitted pursuant hereto
shall remain operative and in full force and effect, regardless of any
investigation or statement as to the results thereof, made by or on behalf of
any Underwriter or of the Seller or the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Certificates. If for any reason the
purchase of the Certificates by the Underwriters is not consummated, the
Seller shall remain responsible for the expenses to be paid or reimbursed by
the Seller pursuant to Section 6 and the respective obligations of the Seller
and the Underwriters pursuant to Section 8 shall remain in effect. If for any
reason the purchase of the Certificates by the Underwriters is not
consummated (other than because of a failure to satisfy the conditions set
forth in items (ii), (iii) and (iv) of Section 7(d)), the Seller will
reimburse the Underwriters severally, upon demand, for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
any Underwriter in connection with the offering of the Certificates. Nothing
contained in this Section 11 shall limit the recourse of the Seller against
the Underwriters.
<PAGE>
25
12. Notices. All communications hereunder will be
in writing and, if sent to the Underwriters, will be mailed, delivered or
telegraphed and confirmed to the Representative at [ ],
Attention: [ ]; and, if sent to the Seller, will be mailed,
delivered or telegraphed and confirmed to it at U.S. Auto Receivables Company,
27777 Franklin Road, Southfield, Michigan 48034, Attention: Secretary.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8,
and no other person will have any rights or obligations hereunder.
14. Applicable Law. This Agreement will be governed by,
and construed in accordance with, the laws of the State of New York.
15. Severability of Provisions. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be void
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.
16. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the matters
and transactions contemplated hereby and supersedes all prior agreements and
understandings whatsoever relating to such matters and transactions.
17. Amendment. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
18. Headings. The headings in this Agreement are
for the purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
19. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which
shall together constitute one instrument.
<PAGE>
26
20. Representation. You will act for the several
Underwriters in connection with the transactions contemplated by this
Agreement, and any action under this Agreement taken by you will be binding
upon all the Underwriters.
If the foregoing is in accordance with your understanding
of our agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement among the Seller and the several
Underwriters in accordance with its terms.
Very truly yours,
U.S. AUTO RECEIVABLES COMPANY,
By:
-------------------------------
Name:
Title:
CHRYSLER FINANCIAL CORPORATION,
By:
-------------------------------
Name:
Title:
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of
the date first written above.
[ ],
on behalf of itself and
as Representative of the several
Underwriters
By:
-----------------------------
Name:
Title:
EXHIBIT 4.4
------------------------------------------------------------
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER FINANCIAL CORPORATION
Servicer
and
THE BANK OF NEW YORK
Trustee
----------------------------
SERIES [199_-_] SUPPLEMENT
Dated as of [ ], 199[ ]
to
POOLING AND SERVICING AGREEMENT
Dated as of May 31, 1991
(as assigned, amended and supplemented)
----------------------------
$[ ]
CARCO AUTO LOAN MASTER TRUST
SERIES [199_-_]
------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Creation of the Series [199 - ] Certificates
SECTION 1.01. Designation.................................................. 1
ARTICLE II
Definitions
SECTION 2.01. Definitions ................................................. 2
ARTICLE III
Servicing Fee
SECTION 3.01. Servicing Compensation...................................... 25
ARTICLE IV
Rights of Series [199_-_] Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections....... 26
SECTION 4.02. Monthly Interest............................................ 28
SECTION 4.03. Determination of Monthly Principal.......................... 30
SECTION 4.04. Establishment of [Reserve Fund and] Funding Accounts........ 30
SECTION 4.05. Deficiency Amount........................................... 35
SECTION 4.06. Application of Investor Non-Principal Collections,
Investment Proceeds and Available Investor Principal
Collections.............................................. 35
SECTION 4.07. Distributions to Series [199_-_] Certificateholders......... 38
SECTION 4.08. Application of [Reserve Fund and] Available Subordinated
Amount................................................... 39
SECTION 4.09. Investor Charge-Offs........................................ 42
SECTION 4.10. Excess Servicing............................................ 42
SECTION 4.11. Excess Principal Collections................................ 43
<PAGE>
Page
----
[SECTION 4.12. Excess Interest Collections................................ 43
[SECTION 4.13. Excess Funding Account..................................... 43
[SECTION 4.14. Accumulation Period Length; Accumulation Period
Commencement Date....................................... 45
[SECTION 4.15. Enhancement ............................................... 46
ARTICLE V
Distributions and Reports
SECTION 5.01. Distributions............................................... 46
SECTION 5.02. Reports and Statements to Series [199_-_]
Certificateholders...................................... 46
ARTICLE VI
Amortization Events
SECTION 6.01. Additional Amortization Events.............................. 47
ARTICLE VII
Reinvestment Events
SECTION 7.01. Reinvestment Events......................................... 49
ARTICLE VIII
Optional Repurchase
SECTION 8.01. Optional Repurchase......................................... 53
ARTICLE IX
Final Distributions
SECTION 9.01. Sale of Certificateholders' Interest Pursuant to
Section 2.03 of the Agreement; Distributions Pursuant
to [Section 8.01 of This Series Supplement or]
Section 2.03 or 12.02(c) of the Agreement................ 54
Contents, p. ii
<PAGE>
SECTION 9.02. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables Pursuant to
Section 9 of the Agreement.............................. 55
ARTICLE X
Other Series Provisions
SECTION 10.01. Certain Permitted Actions; Amendments to the Agreement;
Additional Covenants..................................... 56
[SECTION 10.01. Effect of Fully Reinvested Date; Conveyance of
Receivables.............................................. 61
[SECTION 10.01. Tax Treatment............................................. 63
ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Ratification of Agreement.................................. 64
SECTION 11.02. Counterparts............................................... 64
SECTION 11.02. Dealer Concentrations...................................... 64
SECTION 11.04. GOVERNING LAW.............................................. 64
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Distribution Date Statement
SCHEDULES
Schedule 1 Identification of the Series [199_-_] Accounts
Contents, p. ii
<PAGE>
SERIES [199[ ]_-_] SUPPLEMENT
dated as of [ ], 199[ ] (the "Series
Supplement"), among U.S. AUTO RECEIVABLES
COMPANY, a Delaware corporation, as
Seller, CHRYSLER FINANCIAL CORPORATION, a
Delaware corporation, as Servicer, and
THE BANK OF NEW YORK, a New York banking
corporation, as Trustee.
Pursuant to the Pooling and Servicing Agreement
dated as of May 31, 1991, as assigned by Chrysler Auto Receivables Company
("CARCO") to the Seller on August 8, 1991 (as assigned, amended and
supplemented, the "Agreement"), among the Seller, Chrysler Credit
Corporation, which has been succeeded by Chrysler Financial Corporation, as
Servicer, and Manufacturers and Traders Trust Company, which has been
succeeded by the Bank of New York, as Trustee, CARCO has created and assigned
to the Seller the CARCO Auto Loan Master Trust (the "Trust"). Section 6.03 of
the Agreement provides that the Seller may from time to time direct the
Trustee to issue, on behalf of the Trust, one or more new Series of Investor
Certificates representing fractional undivided interests in the Trust. The
Principal Terms of any new Series are to be set forth in a Supplement to the
Agreement.
Pursuant to this Series Supplement, the Seller and
the Trustee shall create a new Series of Investor Certificates and specify
the Principal Terms thereof.
ARTICLE I
Creation of the Series [199 - ] Certificates
SECTION 1.01. Designation. (a) There is hereby
created a Series of Investor Certificates to be issued pursuant to the
Agreement and this Series Supplement to be known as the "[Floating Rate][ %]
Auto Loan Asset Backed Certificates, Series [199_-_]".
(b) In the event that any term or provision
contained herein shall conflict with or be inconsistent with any term or
provision contained in the Agreement, the terms and provisions of this Series
Supplement shall govern.
1
<PAGE>
ARTICLE II
Definitions
SECTION 2.01. Definitions. (a) Whenever used in
this Series Supplement the following words and phrases shall have the
following meanings.
["Accrual Period" shall mean, with respect to any
Distribution Date, the period from and including the Distribution Date
immediately preceding such Distribution Date (or, in the case of the Initial
Distribution Date, the Closing Date) to but excluding such Distribution
Date.]
["Accumulation Period Commencement Date" shall
mean the first day of the Collection Period upon which the number of full
Collection Periods remaining until the Expected Payment Date first equals the
Accumulation Period Length; provided, however, that, if at any time after the
[ ] Distribution Date, any other outstanding Series [(other than any Excluded
Series)] shall have entered into a reinvestment period or an early
amortization period, the Accumulation Period Commencement Date shall be the
earlier of (i) the date that such outstanding Series shall have entered into
its reinvestment period or early amortization period and (ii) the
Accumulation Period Commencement Date as previously determined. If the
Accumulation Period Length is one month, two months, three months, four
months or five months, the Accumulation Period Commencement Date shall mean
the first day of the [ ] Collection Period, the [ ] Collection Period, the [
] Collection Period, the [ ] Collection Period or the [ ] Collection Period,
respectively.]
["Accumulation Period Length" shall mean a period
which is one, two, three, four or five month(s) long and is calculated as of
the [ ] Distribution Date and each Distribution Date thereafter that occurs
prior to the Accumulation Period Commencement Date, as the lesser of (i) the
number of full Collection Periods between such Distribution Date and the
Expected Payment Date and (ii) the product, rounded upwards to the nearest
integer not greater than five, of (a) one divided by the lowest Monthly
Payment Rate during the last [ ] months and (b) a fraction, the numerator of
which is the sum of (i) the Invested Amount as of such Distribution Date
(after giving effect to all changes therein on such date) and (ii) the
invested amounts of all other Series [(other than any Excluded Series)]
currently in their amortization or accumulation periods or scheduled to be in
their amortization or accumulation periods by the Expected Payment Date as of
such Distribution
2
<PAGE>
Date (after giving effect to all changes therein on such date) and the
denominator of which is the sum of such Invested Amount and the invested
amounts as of such Distribution Date (after giving effect to all changes
therein on such date) of all other outstanding Series [(other than any
Excluded Series)] which are scheduled to be outstanding on the Expected
Payment Date.]
[Additional Carry Amount" shall have the meaning
specified in Section 4.02(b).]
"Additional Interest" shall have the meaning
specified in Section 4.02(a).
"Adjusted Invested Amount" shall mean, with
respect to Series [199_-_] for any Collection Period, an amount equal to the
sum of (a) the Initial Invested Amount of the Certificates on the
Determination Date occurring in such Collection Period, minus the excess, if
any, of the aggregate amount of Investor Charge-Offs for all Distribution
Dates preceding such date over the aggregate amount of any reimbursements of
Investor Charge-Offs for all Distribution Dates preceding such date and (b)
the applicable [Aggregate] Available Subordinated Amount, if any, on the
Determination Date occurring in such Collection Period (in each case, after
giving effect to the allocations, distributions, withdrawals and deposits to
be made on the Distribution Date following the Determination Date during the
Collection Period in which such date occurs).
["Adjustment Date" shall mean [ ], ].
["Aggregate Available Subordinated Amount" shall
mean [the sum of] the Available Subordinated Amount [, the
Available Negative Carry Subordinated Amount][and [others].]
"Allocable Defaulted Amount" shall mean, with
respect to any Collection Period, the product of (a) the Series [199_-_]
Allocation Percentage with respect to such Collection Period and (b) the
Defaulted Amount with respect to such Collection Period.
"Allocable Miscellaneous Payments" shall mean,
with respect to any Distribution Date, the product of (a) the Series [199_-_]
Allocation Percentage for the related Collection Period and (b) Miscellaneous
Payments with respect to the related Collection Period.
"Allocable Non-Principal Collections" shall mean,
with respect to any Deposit Date, the product of (a) the
3
<PAGE>
Series [199_-_] Allocation Percentage for the related Collection Period and
(b) the aggregate amount of Collections of Non-Principal Receivables relating
to such Deposit Date.
"Allocable Principal Collections" shall mean, with
respect to any Deposit Date, the product of (a) the Series [199_-_]
Allocation Percentage for the related Collection Period and (b) the aggregate
amount of Collections in respect of Principal Receivables relating to
such Deposit Date.
["Assets Receivables Rate" shall mean, with
respect to any [Interest Period][Accrual Period], an amount equal to the
product of (a) the quotient obtained by dividing (i) 360 by (ii) the actual
number of days elapsed in such [Interest Period][Accrual Period] and (b) a
percentage, expressed as a fraction, (i) the numerator of which is the sum of
(A) Investor Non-Principal Collections for the Collection Period immediately
preceding the last day of such Interest Period [(which, for the purposes of
this definition only, shall be determined based on the interest amounts
billed to the Dealers which are due during such Collection Period)] less,
unless the Monthly Servicing Fee has been waived by the Servicer, the
Certificateholders Monthly Servicing Fee with respect to such immediately
preceding Collection Period and (B) the Investment Proceeds [and Series
[199_-_] Excess Interest Collections] to be applied on the Distribution Date
related to such [Interest Period][Accrual Period] and (ii) the denominator of
which is the sum of (A) the product of (I) the Series [199_-_] Floating
Allocation Percentage, (II) the Series [199_-_] Series Allocation Percentage
and (III) the average Pool Balance (after giving effect to charge-offs) for
such immediately preceding Collection Period, [(B) the principal balance on
deposit in the Excess Funding Account on the first day of such [Interest
Period][Accrual Period] (after giving effect to all deposits to and
withdrawals therefrom on such first day) and [(C) the principal balance on
deposit in the Principal Funding Account on the first day of such [Interest
Period][Accrual Period] (after giving effect to all deposits to and
withdrawals therefrom on such first day).]
"Automatic Additional Accounts" shall have the
meaning specified in Section 10.01(e).
"Automatic Removal Accounts" shall have the
meaning specified in Section 10.01(c).
4
<PAGE>
"Automatic Removal Date" shall have the meaning
specified in Section 10.01(c).
"Available Investor Principal Collections" shall
mean, with respect to any Distribution Date, the sum of (a) an amount equal
to Investor Principal Collections for such Distribution Date, (b) Allocable
Miscellaneous Payments with respect to such Distribution Date, (c) Series
[199_-_] Excess Principal Collections on deposit in the Collection Account
for such Distribution Date [and (d) on the Termination Date, any funds in the
Reserve Fund after giving effect to Section 4.08, except for 4.08(d)].
"Available Negative Carry Subordinated Amount"
shall mean [ ].]
"Available Seller's Collections" shall mean, with
respect to any Deposit Date, the sum of (a) the Available Seller's
Non-Principal Collections for such Deposit Date and (b) the Available
Seller's Principal Collections for such Deposit Date; provided, however, that
the Available Seller's Collections shall be zero for any Collection Period
with respect to which the Available Subordinated Amount is zero on the
Determination Date immediately following the end of such Collection Period.
"Available Seller's Non-Principal Collections"
shall mean, with respect to any Deposit Date, an amount equal to the result
obtained by multiplying (a) the excess of (i) the Seller's Percentage for the
related Collection Period over (ii) the Excess Seller's Percentage for such
Collection Period by (b) Allocable Non-Principal Collections for such Deposit
Date.
"Available Seller's Principal Collections" shall
mean, with respect to any Deposit Date, an amount equal to the result
obtained by multiplying (a) the excess of (i) the Seller's Percentage for the
related Collection Period over (ii) the Excess Seller's Percentage for such
Collection Period by (b) Allocable Principal Collections for such Deposit
Date.
"Available Subordinated Amount" for the first
Determination Date shall mean an amount equal to the Required Subordinated
Amount. The Available Subordinated Amount for any subsequent Determination
Date shall mean an amount equal to (a) the lesser of (i) the Available
Subordinated Amount for the preceding Determination Date, minus (A) the
Required Subordination Draw Amount with respect to the preceding Distribution
Date to the extent provided in Section 4.08, [minus (B) withdrawals from the
5
<PAGE>
Reserve Fund pursuant to Section 4.08 on the preceding Distribution Date to
make distributions pursuant to Section [4.06(a)(iv)] (but excluding any other
withdrawals from the Reserve Fund)], plus (C) the portion of Excess Servicing
for such preceding Distribution Date distributed to the Seller pursuant to
Section 4.10(c), [plus (D) any amounts distributed as a Carry-over Amount or
Additional Carry-over Amount pursuant to Section 4.07(c) on the preceding
Distribution Date] [and (ii) the product of the fractional equivalent of the
Subordinated Percentage and the Invested Amount on such Determination Date,
minus (b) in the case of clause (a)(i), the Incremental Subordinated Amount
for such preceding Determination Date,][plus (c) the Incremental Subordinated
Amount for the current Determination Date,] [plus (d) the Subordinated
Percentage of funds to be withdrawn from the Excess Funding Account on the
succeeding Distribution Date and paid to the Seller or allocated to one or
more Series]; provided, however, that the Available Subordinated Amount may
be increased on any Determination Date by the Seller, in its sole discretion,
by notice to the Trustee on or before such Determination Date, so long as the
cumulative amount of such increases does not exceed the lesser of (x) $[ ] or
(y) [ ]% of the Invested Amount on such date; provided, however, that, once
the [Accumulation Period][Controlled Amortization Period] or any Early
Amortization Period [(other than an Early Amortization Period which has ended
as described in clause [ ] of the definition thereof)] shall have commenced,
the Available Subordinated Amount shall be calculated based on the Invested
Amount as of the close of business on the day preceding such [Accumulation
Period][Controlled Amortization Period] or Early Amortization Period [less
[describe permitted reductions, e.g., based on payment rates or amounts on
deposit in the Principal Funding Account][; and provided further that, during
any Reinvestment Period [(other than a Reinvestment Period which has ended as
described in clause [ ] of the definition thereof) shall have commenced, the
Available Subordinated Amount shall be calculated based on the Invested
Amount as of the close of business on the day preceding such Reinvestment
Period [less [describe permitted reductions, e.g., based on payment rates or
amounts on deposit in the Principal Funding Account]].
["Calculation Agent" shall mean the Trustee or any
other Calculation Agent selected by the Seller which is
reasonably acceptable to the Trustee.]
["Carry-over Amount" shall mean, for any
Distribution Date with respect to which the related Certificate Rate is
calculated on the basis of the Asset Receivables Rate, the excess of (a)
Monthly Interest for
6
<PAGE>
such Distribution Date determined as if such Certificate Rate were calculated
on the basis of the Index formula set forth in clause (a) of the definition
of Certificate Rate over (b) the actual Monthly Interest for such
Distribution Date.]
["Carry-over Shortfall" shall have the meaning
specified in Section 4.02(b).]
"Certificate Rate" shall mean [ % per annum][,
with respect to any [Interest Period][Accrual Period], [the lesser of (a)]
the Index for such [Interest Period][Accrual Period][plus] [minus][times][ %]
[and (b) the Asset Receivables Rate for the immediately preceding [Interest
Period][Accrual Period]].
"Certificateholders Monthly Servicing Fee" shall
have the meaning specified in Section 3.01.
"Closing Date" shall mean [ ], 199[ ].
["Controlled Accumulation Amount" shall mean [an
amount equal to the Invested Amount as of [the [ ] Distribution Date] [ ]
(after giving effect to any changes therein on such date), divided by the
Accumulation Period Length] [other].]
["Controlled Amortization Amount" shall mean [an
amount equal to the Invested Amount as of the [ ] Distribution Date (after
giving effect to any changes therein on such date) divided by [ ]][other].]
["Controlled Amortization Period" shall mean,
unless an Early Amortization Event [(other than an Early Amortization which
has resulted in an Early Amortization Period which has ended as described in
clause [ ] of the definition thereof] [or a Reinvestment Event [other than a
Reinvestment Event which has resulted in a Reinvestment Period which has
ended as described in clause [ ] of the definition thereof)] shall have
occurred prior thereto, the period commencing on the Principal Commencement
Date and ending on the first to occur at (a) the commencement of an Early
Amortization Period [,(b) the commencement of a Reinvestment Period] and (c)
the payment in full to Series [199_-_] Certificateholders of the outstanding
principal amount of the Series [199_-_] Certificates.]
["Controlled Distribution Amount" for a
Distribution Date means the sum of (a) [the excess, if any, of (i)] the
Controlled Amortization Amount for such Distribution Date [over (ii) the
quotient obtained by
7
<PAGE>
dividing the amount on deposit in the Excess Funding Account as of the [ ]
Distribution Date (after giving effect to any withdrawals from or deposits to
such account on such date) by [ ],] plus (b) any Controlled Distribution
Amount for a prior Distribution Date not previously distributed to Series
[199_-_] Certificateholders.]
[Controlled Deposit Amount" shall mean, with
respect to any Distribution Date, the excess, if any, of (a) the sum of (i)
the product of the Controlled Accumulation Amount and the number of
Distribution Dates from and including the first Distribution Date with
respect to the Accumulation Period through and including such Distribution
Date (but not in excess of the Accumulation Period Length) [and (ii) the
amount on deposit in the Excess Funding Account as of [the [ ] Distribution
Date] [ ] (after giving effect to any withdrawals from or deposits to such
account on such date (other than the transfer to the Principal Funding
Account of the amounts on deposit therein on such date))], over (b) the sum
of amounts on deposit in [the Excess Funding Account and the Principal
Funding Account, in each case before giving effect to any withdrawals from or
deposits to such accounts on such Distribution Date.]
"Deficiency Amount" shall have the meaning
specified in Section 4.05.
["Discount Option Date" shall mean each date on
which a Discount Percentage designated by the Seller pursuant to Section
10.01(g) takes effect.]
["Discount Option Receivables" shall have the
meaning specified in Section 10.01(g). The aggregate amount of Discount
Option Receivables outstanding on any Date of Processing occurring on or
after the Discount Option Date shall equal the sum of (a) the aggregate
Discount Option Receivables at the end of the prior Date of Processing (which
amount, prior to the Discount Option Date, shall be zero) plus (b) any new
Discount Option Receivables created on such Date of Processing minus (c) any
Discount Option Receivables Collections received on such Date of Processing.
Discount Option Receivables created on any Date of Processing shall mean the
product of the amount of any Principal Receivables created on such Date of
Processing (without giving effect to the proviso in the Definition of
Principal Receivables) and the Discount Percentage.]
["Discount Option Receivable Collections" shall
mean on any Date of Processing occurring in any Collection
Period succeeding the Collection Period in which the
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<PAGE>
Discount Option Date occurs, the product of (a) a fraction the numerator of
which is the Discount Option Receivables and the denominator of which is the
sum of the Principal Receivables and the Discount Option Receivables in each
case (for both the numerator and the denominator) at the end of the preceding
Collection Period and (b) Collections of Principal Receivables on such Date
of Processing (without giving effect to the proviso in the definition of
Principal Receivables).]
["Discount Percentage" shall mean the percentage,
if any, designated by the Seller pursuant to Section 10.01(g).]
["Distribution Date" shall mean [ ].]
"Early Amortization Event" shall mean any Early
Amortization Event specified in Section 9.01 [ ] of the Agreement, together
with any additional Early Amortization Event specified in Section 6.01 of
this Series Supplement[; provided, however, that (i) for purposes of Section
2.05(d)(vii), 2.07(b)(vi), 2.07(d)(viii), 3.01(d) and 6.03(b)(v) of the
Agreement, Early Amortization Event shall also include any Reinvestment Event
and (ii) for purposes of Section 2.01 of the Agreement, Early Amortization
Events specified in Sections 9.01(b),(c),(d) and (e) of the Agreement shall
also include Reinvestment Events specified in Section 7.01[ ], respectively,
of this Series Supplement].
"Early Amortization Period" shall mean a period
beginning on the day on which an Early Amortization Event specified in
Section 9.01[ ] of the Agreement or Section 6.01 of this Series Supplement
shall have occurred with respect to Series [199_-_] and terminating on the
earliest of (a) the payment in full of the outstanding principal balance of
the Series [199_-_] Certificates, (b) the Termination Date; (c) if such Early
Amortization Period has resulted from the occurrence of an Early Amortization
Event described in Section 9.01[ ] of the Agreement, the end of the first
Collection Period during which an Early Amortization Event would no longer be
deemed to exist pursuant to such Section 9.01[ ], so long as no other Early
Amortization Event (other than an Early Amortization Event which has resulted
in an Early Amortization Period which has terminated as described in this
clause (c) or clause (d) below) shall have occurred and the scheduled
termination of the Revolving Period shall not have occurred; and (d) if such
Early Amortization Period has resulted from the occurrence of an Early
Amortization Event described in Section 9.01[ ] of the Agreement or
9
<PAGE>
Section 6.01, other than Section 6.01[ ] of this Series Supplement, the end
of the first Collection Period after which (i) the Trustee has received
written confirmation from each of [Standard & Poor's, Duff & Phelps, Inc. and
Fitch Investors Service, Inc.] that termination of such Early Amortization
Period will not result in the downgrading or withdrawal of such entity's
rating of the Series [199_-_] Certificates, and (ii) Series [199_-_]
Certificateholders holding Series [199_-_] Certificates evidencing more than
50% of the aggregate unpaid principal amount of the Series [199_-_]
Certificates shall have consented to the termination of such Early
Amortization Period; provided that (X) no other Early Amortization Event
(other than an Early Amortization Event which has resulted in an Early
Amortization Period which has terminated as described in this clause (d) or
clause (c) above) shall have occurred, and (Y) the scheduled termination of
the Revolving Period shall not have occurred[; provided, however, that for
purposes of Section 4.04 of the Agreement, Early Amortization Period shall
also include, prior to the occurrence of the Fully Reinvested Date and the
making of all allocations, distributions, withdrawals and deposits required
to be made on such date [or at any time thereafter following the
recommencement of the Revolving Period], any Reinvestment Period].
"Eligible Investments" shall mean (a) book-entry
securities, negotiable instruments or securities represented by instruments
in bearer or registered form having original or remaining maturities of 30
days or less, but in no event occurring later than the Distribution Date next
succeeding the Trustee's acquisition thereof, which evidence:
(i) direct obligations of, and obligations fully
guaranteed as to timely payment by, the United States of America;
(ii) demand deposits, time deposits or certificates
of deposit of any depository institution or trust company
incorporated under the laws of the United States of America or
any state thereof (or any domestic branch of a foreign bank) and
subject to supervision and examination by Federal or state
banking or depository institution authorities; provided, however,
that at the time of the Trust's investment or contractual
commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a
person or entity other than such depository institution or trust
company) thereof shall have a credit rating from each
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<PAGE>
of the Rating Agencies in the highest investment category
granted thereby;
(iii) commercial paper having, at the time of the
Trust's investment or contractual commitment to invest therein, a
rating from each of the Rating Agencies in the highest investment
category granted thereby;
(iv) [except during a Reinvestment Period,]
investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted
thereby or otherwise approved in writing thereby;
(v) bankers' acceptances issued by any depository
institution or trust company referred to in clause (ii) above;
(vi) repurchase obligations with respect to any
security that is a direct obligation of, or fully guaranteed by,
the United States of America or any agency or instrumentality
thereof the obligations of which are backed by the full faith and
credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as
principal) described in clause (ii);
(vii) repurchase obligations with respect to any
security or whole loan, entered into with (i) a depository
institution or trust company (acting as principal) described in
clause (ii) above (except that the rating referred to in the
proviso in such clause (ii) shall be A-1 or higher in the case of
Standard & Poor's) (such depository institution or trust company
being referred to in this definition as a "Financial
Institution"), (ii) a broker/dealer (acting as principal)
registered as a broker or dealer under Section 15 of the
Securities Exchange Act of 1934, as amended (a "Broker/Dealer")
the unsecured short-term debt obligations of which are rated P-1
by Moody's and at least A-1 by Standard & Poor's at the time of
entering into such repurchase obligation (a "Rated
Broker/Dealer"), (iii) an unrated Broker/Dealer (an "Unrated
Broker/Dealer"), acting as principal, that is a wholly owned
subsidiary of a non-bank holding company the unsecured short-term
debt obligations of which are rated P-1 by Moody's and at least
A-1 by Standard & Poor's at the time of entering into such
repurchase obligation (a "Rated Holding Company") or (iv) an
unrated subsidiary (a "Guaranteed Counterparty"), acting as
principal, that is a wholly owned subsidiary
11
<PAGE>
of a direct or indirect parent Rated Holding Company, which
guarantees such subsidiary's obligations under such repurchase
agreement; provided that the following conditions are satisfied:
(A) the aggregate amount of funds
invested in repurchase obligations of a Financial
Institution, a Rated Broker/Dealer, an Unrated
Broker/Dealer or Guaranteed Counterparty in respect
of which the Standard & Poor's unsecured short-term
ratings are A-1 (in the case of an Unrated
Broker/Dealer or Guaranteed Counterparty, such rating
being that of the related Rated Holding Company)
shall not exceed 20% of the sum of the then
outstanding principal balance of Series [199_-_]
Certificates (there being no limit on the amount of
funds that may be invested in repurchase obligations
in respect of which such Standard & Poor's rating is
A-1+ (in the case of an Unrated Broker/Dealer or
Guaranteed Counterparty, such rating being that of
the related Rated Holding Company));
(B) in the case of any Series [199_-_]
Account (other than the Collection Account), the
rating from Standard & Poor's in respect of the
unsecured short-term debt obligations of the
Financial Institution, Rated Broker/Dealer, Unrated
Broker/Dealer or Guaranteed Counterparty (in the case
of an Unrated Broker/Dealer or Guaranteed
Counterparty, such rating being that of the related
Rated Holding Company) shall be A-1+;
(C) the repurchase obligation must mature
within 30 days of the date on which the Trustee
enters into such repurchase obligation;
(D) the repurchase obligation shall not
be subordinated to any other obligation of the
related Financial Institution, Rated Broker/Dealer
Unrated Broker/Dealer or Guaranteed Counterparty;
(E) the collateral subject to the
repurchase obligation is held, in the appropriate
form, by a custodial bank on behalf of the Trustee;
(F) the repurchase obligation shall
require that the collateral subject thereto shall be
marked-to-market daily;
12
<PAGE>
(G) in the case of a repurchase
obligation of a Guaranteed Counterparty, the
following conditions shall also be satisfied:
(i) the Trustee shall have
received an opinion of counsel (which may
be in house counsel) to the effect that
the guarantee of the related Rated
Holding Company is a legal, valid and
binding agreement of the Rated Holding
Company, enforceable in accordance with
its terms, subject as to enforceability
to bankruptcy, insolvency, reorganization
and moratorium or other similar laws
affecting creditors' rights generally and
to general equitable principles;
(ii) the Trustee shall have
received (x) an incumbency certificate
for the signer of such guarantee,
certified by an officer of such Rated
Holding Company, and (y) a resolution,
certified by an officer of the Rated
Holding Company, of the board of
directors (or applicable committee
thereof) of the Rated Holding Company
authorizing the execution, delivery and
performance of such guarantee by the
Rated Holding Company;
(iii) the only conditions to
the obligation of such Rated Holding
Company to pay on behalf of the
Guaranteed Counterparty shall be that the
Guaranteed Counterparty shall not have
paid under such repurchase obligation
when required (it being understood that
no notice to, demand on or other action
in respect of the Guaranteed Counterparty
is necessary) and that the Trustee shall
make a demand on the Rated Holding
Company to make the payment due under
such guarantee;
(iv) the guarantee of the
Rated Holding Company shall be
irrevocable with respect to such
repurchase obligation and shall not be
subordinate to other obligations of the
Rated Holding Company; and
(v) each of Standard & Poor's
and Moody's has confirmed in writing to
the Trustee that it has reviewed the form
of the guarantee of the Rated Holding
Company and has determined that the
Trust's investment in such repurchase
obligation, taking into
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<PAGE>
account the issuance of such guarantee,
will not result in the downgrade or
withdrawal of the ratings assigned to the
Series [199_-_] Certificates.
(H) the repurchase obligations shall
require that the repurchase obligation be
overcollatera- lized and shall provide that, upon any
failure to maintain such overcollateralization, the
repurchase obligation shall become due and payable,
and unless the repurchase obligation is satisfied
immediately, the collateral subject to the repurchase
agreement shall be liquidated and the proceeds
applied to satisfy the unsatisfied portion of the
repurchase obligation; and
(b) any other investment consisting of a financial
asset that by its terms converts to cash within a finite period of time,
provided that each Rating Agency shall have notified the Seller, the Servicer
and the Trustee that the Trust's investment therein will not result in a
reduction or withdrawal of the rating of any outstanding class or Series with
respect to which it is a Rating Agency.
["Excess Allocation Series" shall mean a Series
that, pursuant to the Supplement therefor, is entitled to receive certain
excess Collections of Non-Principal Receivables, as more specifically set
forth in such Supplement.]
"Excess Reserve Fund Required Amount" shall mean,
for any Distribution Date with respect to an Early Amortization Period [or
any Distribution Date with respect to a Reinvestment Period that occurs prior
to the Fully Reinvested Date], an amount equal to the greater of (a) [ ]% of
the initial principal balance of the Series [199_-_] Certificates and (b) the
excess of (i) the sum of (x) the Available Subordinated Amount on the
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution Date)
and (y) an amount equal to (A) the excess of the Required Participation
Percentage over 100%, multiplied by (B) the outstanding principal balance of
the Series [199_-_] Certificates on such Distribution Date (after giving
effect to any changes therein on such Distribution Date) over (ii) the excess
of (x) the Series [199_-_] Allocation Percentage of the Pool Balance on the
last day of the immediately preceding Collection Period over (y) the Invested
Amount on such Distribution Date (after giving effect to changes therein on
such Distribution
14
<PAGE>
Date); provided that the Excess Reserve Fund Required Amount shall not exceed
such Available Subordinated Amount.
"Excess Seller's Percentage" shall mean, with
respect to any Collection Period, a percentage (which percentage shall never
be less than 0% nor more than 100%) equal to (a) 100% minus, when used with
respect to Non-Principal Receivables [(except during any Early Amortization
Period)] and Defaulted Receivables and Principal Receivables during the
Revolving Period, the sum of (i) the Floating Allocation Percentage with
respect to such Collection Period and (ii) the percentage equivalent of a
fraction, the numerator of which is the Available Subordinated Amount as of
the Determination Date occurring in such Collection Period (after giving
effect to the allocations, distributions, withdrawals and deposits to be made
on the Distribution Date immediately following such Determination Date) and
the denominator of which is the product of (x) the Pool Balance as of the
last day of such immediately preceding Collection Period and (y) the Series
[199_-_] Allocation Percentage for the Collection Period in respect of which
the Excess Seller's Percentage is being calculated or (b) 100% minus, when
used with respect to [Non-Principal Receivables during any Early Amortization
Period and] Principal Receivables during the [Accumulation Period]
[Controlled Amortization Period] and any Early Amortization Period [or
Reinvestment Period], the sum of (i) the [Fixed Allocation Percentage]
[other] with respect to such Collection Period and (ii) the percentage
equivalent of a fraction, the numerator of which is the Available
Subordinated Amount as of the Determination Date occurring in such Collection
Period (after giving effect to the allocations, distributions, withdrawals
and deposits to be made on the Distribution Date immediately following such
Determination Date) and the denominator of which is the product of (x) the
Pool Balance as of the last day of such immediately preceding Collection
Period and (y) the Series [199_-_] Allocation Percentage for the Collection
Period in respect of which the Excess Seller's Percentage is being
calculated.
"Excess Servicing" shall mean, with respect to any
Distribution Date, the amount, if any, specified pursuant to Section
4.06(a)[(viii)] with respect to such Distribution Date.
"Expected Payment Date" shall mean the
[ ] Distribution Date.
"Fixed Allocation Percentage" shall mean, with
respect to any Collection Period, the percentage equivalent
15
<PAGE>
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Invested Amount as of the last day of the Revolving Period and
the denominator of which is the product of (a) the Pool Balance as of the
last day of the immediately preceding Collection Period and (b) the Series
[199_-_] Allocation Percentage with respect to the Collection Period in
respect of which the Principal Allocation Percentage is being calculated;
provided, however, that, with respect to that portion of any Collection
Period that falls after the date on which any Early Amortization Event occurs
[(other than an Early Amortization Event which has resulted in an Early
Amortization Period which has ended as described in clause [ ] thereof] [or
any Reinvestment Event occurs [(other than a Reinvestment Period which has
ended as described in clause [ ] thereof)], the Fixed Allocation Percentage
shall be reset using the Pool Balance as of the close of business on [the
earlier of] the date on which such Early Amortization Event shall have
occurred [and the date on which such Reinvestment Event shall have occurred]
and Principal Collections shall be allocated for such portion of such
Collection Period using such reset Fixed Allocation Percentage.
"Floating Allocation Percentage" shall mean, with
respect to any Collection Period, the percentage equivalent (which percentage
shall never exceed 100%) of a fraction, the numerator of which is the
Invested Amount as of the last day of the immediately preceding Collection
Period (after giving effect to the reinvestment to occur on the next
succeeding Distribution Date) and the denominator of which is the product of
(a) the Pool Balance as of such last day and (b) the Series [199_-_]
Allocation Percentage for the Collection Period in respect of which the
Floating Allocation Percentage is being calculated; provided, however, that,
with respect to the first Collection Period, the Floating Allocation
Percentage shall mean the percentage equivalent of a fraction, the numerator
of which is the Initial Invested Amount and the denominator of which is the
product of (x) the Pool Balance on the Series Cut-Off Date and (y) the Series
[199-_-] Allocation Percentage with respect to the Series Cut-Off Date.
["Incremental Subordinated Amount" shall mean,
with respect to any Determination Date, the result obtained by multiplying
(a) a fraction, the numerator of which is the sum of (i) (A) the Invested
Amount on the last day of the immediately preceding Collection Period or (B)
with respect to the first Determination Date, the Invested Amount on the
Closing Date and (ii) (A) the Available Subordinated Amount for such
Determination Date (calculated without adding the
16
<PAGE>
Incremental Subordinated Amount for such Distribution Date as described in
clause (c) of the definition thereof) or (B) with respect to the first
Determination Date, the product of the Invested Amount on the Closing Date
and the Subordinated Percentage and the denominator of which is the Pool
Balance on such last day by (b) the Trust Incremental Subordinated Amount.]
[Notwithstanding anything to the contrary in the Agreement, for purposes of
calculating the Trust Incremental Subordinated Amount with respect to Series
[199_-_], "Dealer Overconcentration" on any Determination Date shall mean,
with respect to any Dealer or group of affiliated Dealers, the excess of (a)
the aggregate of all amounts of Principal Receivables due from such Dealer or
group of affiliated Dealers on the last day of the Collection Period
immediately preceding such Determination Date over (b) [ ]% of the Pool
Balance on the last day of such immediately preceding Collection Period.]
["Index" shall mean [ ].]
"Initial Distribution Date" shall mean
[ ] , 199[ ].
"Initial Invested Amount" shall mean [the portion
of initial principal amount of the Series [199_-_] Certificates which is
invested in Principal Receivables on the Closing Date, which is $[ ][, plus
(a) the amount of any withdrawals from the Excess Funding Account in
connection with the purchase of an additional interest in Principal
Receivables of the Trust, minus (b) the amount of any additions to the Excess
Funding Account in connection with a reduction in the Principal Receivables
in the Trust or an increase in the Subordination Factor]][other].
"Initial Principal Amount" shall mean
$[ ].
["Initial Reserve Fund Deposit Amount" shall mean
$[ ].
["Initial Yield Supplement Account Deposit Amount"
shall mean $[ ]].
["Interest Funding Account" shall have the meaning
specified in Section 4.04[ ].]
["Interest Payment Date" shall mean [ ].]
["Interest Period" shall mean, with respect to any
Distribution Date, the period from and including the Distribution Date
immediately preceding such Distribution
17
<PAGE>
Date (or, in the case of the Initial Distribution Date, the Closing Date) to
but excluding such Distribution Date. Interest will be calculated on the
basis of the actual number of days in each Interest Period divided by 360
days.]
"Interest Shortfall" shall have the meaning
specified in Section 4.02.
"Invested Amount" shall mean, when used with
respect to any date, an amount equal to (a) the Initial Invested Amount,
minus (b) the amount, without duplication, of principal payments [(except
principal payments made from the Excess Funding Account and any transfers
from the Excess Funding Account to the Principal Funding Account)] made to
Series [199_-_] Certificateholders or deposited to the Principal Funding
Account prior to such date, minus (c) the excess, if any, of the aggregate
amount of Investor Charge- Offs over Investor Charge-Offs reimbursed pursuant
to Section 4.08 prior to such date. In addition, for purposes of the
definitions of "Early Amortization Period" [and Reinvestment Period and
Section 12.01 of the Agreement], the Invested Amount shall be an amount equal
to the outstanding principal amount of the Certificates.
"Investment Proceeds" shall mean, with respect to
any Determination Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Series [199_-_]
Accounts, together with an amount equal to the Series [199_-_] Allocation
Percentage of the interest and other investment earnings on funds held in the
Collection Account credited to the Collection Account pursuant to Section
4.02 of the Agreement.
"Investor Charge-Offs" shall have the meaning
specified in Section 4.09.
"Investor Default Amount" shall mean, with respect
to any Distribution Date, an amount equal to the product of (a) the Allocable
Defaulted Amount for the related Collection Period and (b) the Floating
Allocation Percentage for the related Collection Period.
"Investor Non-Principal Collections" shall mean,
with respect to any Distribution Date, an amount equal to the product of (a)
the Floating Allocation Percentage for the related Collection Period and (b)
Allocable Non- Principal Collections deposited in the Collection Account for
the related Collection Period[; provided, however, that with respect to any
Distribution Date with respect to any Early Amortization Period, Investor
Non-Principal Collections shall mean an amount equal to the product of
18
<PAGE>
(i) the Fixed Allocation Percentage for the related Collection Period and
(ii) Allocable Non-Principal Collections deposited in the Collection Account
for the related Collection Period].
"Investor Principal Collections" shall mean, with
respect to any Distribution Date, the sum of (a) the product of (i) the
Floating Allocation Percentage, with respect to the Revolving Period, or the
[Fixed Allocation Percentage] [other], with respect to the [Accumulation
Period] [Controlled Amortization Period] or an Early Amortization Period [or
a Reinvestment Period] for the related Collection Period (or any partial
Collection Period which occurs as the first Collection Period during an Early
Amortization Period [or a Reinvestment Period]) and (ii) Allocable Principal
Collections deposited in the Collection Account for the related Collection
Period (or any partial Collection Period which occurs as the first Collection
Period during an Early Amortization Period [or a Reinvestment Period]) and
(b) the amount, if any, of Collections of Non-Principal Receivables, Excess
Servicing and Available Seller's Collections to be distributed pursuant to
Section [4.06(a)(iv), 4.08(b) or 4.10(a)] on such Distribution Date.
"Monthly Interest" shall have the meaning specified
in Section 4.02.
"Monthly Payment Rate" shall mean, for any Collection
Period, the percentage derived from dividing the Prin cipal Collections for
such Collection Period by the average daily Pool Balance for such Collection
Period.
"Monthly Principal" shall have the meaning specified
in Section 4.03.
"Monthly Servicing Fee" shall have the meaning specified
in Section 3.01.
"Moody's" shall mean Moody's Investors Service, Inc.
"Pool Factor" shall mean, with respect to any
Determination Date, a number carried out to 11 decimals representing the
ratio of the Invested Amount as of such Determination Date (determined after
taking into account any increases or decreases in the Invested Amount which
will occur on the following Distribution Date) to the Initial Invested
Amount.
"Principal Commencement Date" shall mean
[ ].
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<PAGE>
"Reassignment Amount" shall mean, with respect to
any Distribution Date, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date, the sum of (a) the Invested
Amount on such Distribution Date, (b) accrued and unpaid interest on the
unpaid balance of the Series [199_-_] Certificates (calculated on the basis
of the outstanding principal balance of the Series [199_-_] Certificates at
the Certificate Rate [as in effect during the applicable [Interest Periods]
[Accrual Periods])] through the day preceding such Distribution Date, (c) the
amount of Additional Interest, if any, for such Distribution Date and any
Additional Interest previously due but not [deposited to the Interest Funding
Account or] distributed to the Series [199_-_] Certificateholders on a prior
Distribution Date, [(d) any Carry-over Amount for such Distribution Date and
any Carry-over Amount previously due but not distributed to the Series
[199_-_] Certificateholders on a prior Distribution Date and (e) any
Additional Carry Amount for such Distribution Date and any Additional Carry
Amount previously due but not distributed to the Series [199_-_]
Certificateholders on a prior Distribution Date].
["Reinvestment Event" shall have the meaning
specified in Section 7.01.]
["Reinvestment Period" shall mean the period
beginning at the close of business on the Business Day immediately preceding
the day on which a Reinvestment Event is deemed to have occurred, and in each
case ending upon the earliest to occur of (a) the payment in full to the
Series [199_-_] Certificateholders of the Investment Amount, (b) the
Termination Date, (c) the commencement of an Early Amortization Period, (d)
if such Reinvestment Period has resulted from the occurrence of a
Reinvestment Event described in Section 7.01[ ], the end of the first
Collection Period during which a Reinvestment Event would no longer be deemed
to exist pursuant to Section 7.01[ ], so long as no other Reinvestment Event
shall have occurred (other than a Reinvestment Event which has resulted in a
Reinvestment Period which has terminated as described in this clause (d) or
clause (e) below), and (e) if such Reinvestment Period has resulted from the
occurrence of a Reinvestment Event described in Section 7.01, other than
Section 7.01[ ], of this Series Supplement, the end of the first Collection
Period after which (i) the Trustee has received written confirmation from
each of [Standard & Poor's, Duff & Phelps, Inc. and Fitch Investors Service,
Inc.] that termination of such Reinvestment Period will not result in the
reduction or withdrawal of such entity's rating of the Series [199_-_]
Certificates, and
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<PAGE>
(ii) Series [199_-_] Certificateholders holding Series [199_-_] Certificates
evidencing more than 50% of the aggregate unpaid principal amount of the
Series [199_-_] Certificates shall have consented to the termination of such
Reinvestment Period [and (f) describe other cures, if applicable].]
["Required Negative Carry Subordinated Amount" shall
mean, as of any date, [ ].]
"Required Participation Percentage" shall mean,
with respect to Series [199_-_], [ ]%; provided, however, that if the
aggregate amount of Principal Receivables due from any Dealer or group of
affiliated Dealers at the close of business on the last day of any Collection
Period with respect to which such determination is being made pursuant to
Section 9.03 is greater than [ ]% of the Pool Balance on such last day, the
Required Participation Percentage shall mean, as of such last day and with
respect to such Collection Period and the immediately following Collection
Period only, [ ]%; provided further that the Seller may, upon 10 days' prior
notice to the Trustee, each Rating Agency and any Enhancement Provider,
reduce the Required Participation Percentage to a percentage which shall not
be less than 100%, provided that no Rating Agency shall have notified the
Seller or the Servicer that any such reduction will result in a reduction or
withdrawal of the rating of any outstanding Series or Class with respect to
which it is a Rating Agency.
"Required Subordinated Amount" shall mean, as of any
date of determination, [the sum of (a)] the product of (i) the Subordinated
Percentage and (ii) the Invested Amount on such date [and (b) the Incremental
Subordinated Amount].
"Required Subordination Draw Amount" shall have the
meaning specified in Section 4.05.
["Reserve Fund" shall have the meaning specified in
Section 4.04.]
["Reserve Fund Deposit Amount" shall mean, with
respect to any Distribution Date, the amount, if any, by which (a) the
Reserve Fund Required Amount for such Distribution Date exceeds (b) the
amount of funds in the Reserve Fund after giving effect to any withdrawals
therefrom on such Distribution Date.]
["Reserve Fund Required Amount" shall mean, with
respect to any Distribution Date, an amount equal to the product of (a) [ ]%
and (b) the outstanding principal
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balance of the Series [199_-_] Certificates on such Distribution Date (after
giving effect to any changes therein on such Distribution Date). [other]]
"Revolving Period" shall mean the period beginning
at the close of business on the Business Day immediately preceding the Series
Cut-Off Date and ending on the earlier of (a) the close of business on the
day immediately preceding the [Accumulation Period Commencement Date]
[Principal Commencement Date] (b) the close of business on the day an Early
Amortization Period commences; provided, however, that, if any Early
Amortization Period ends as described in clause [ ] of the definition
thereof, the Revolving Period will recommence as of the close of business on
the day such Early Amortization Period ends [, and (c) the close of business
on the day a Reinvestment Period commences; provided, however, that if any
Reinvestment Period ends as described in clause [ ] of the definition
thereof, the Revolving Period will recommence as of the close of business on
the day such Reinvestment Period ends].
"Seller's Collections" shall mean, with respect to
any Collection Period, the sum of (a) the Seller's Percentage of Allocable
Non-Principal Collections for the related Collection Period, plus (b) the
Seller's Percentage of Allocable Principal Collections for the related
Collection Period.
"Seller's Percentage" shall mean 100% minus
(a) the Floating Allocation Percentage, when used with respect to
Non-Principal Receivables [(except during any Early Amortization Period)] and
Defaulted Receivables and Principal Receivables during the Revolving Period,
and (b) the [Fixed Allocation Percentage] [other], when used with respect to
Principal Receivables during the [Accumulation Period] [Controlled
Amortization Period] and an Early Amortization Period [or Reinvestment
Period] [and Non-Principal Receivables during any Early Amortization Period].
"Series [199_-_]" shall mean the Series of
Investor Certificates, the terms of which are specified in this Series
Supplement.
"Series [199_-_] Accounts" shall have the meaning
specified in Section [4.04(e)(i)].
"Series [199_-_] Allocation Percentage" shall mean
the Series Allocation Percentage with respect to Series [199_-_].
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<PAGE>
"Series [199_-_] Certificateholders" shall mean
the Holders of Series [199_-_] Certificates.
"Series [199_-_] Certificateholders' Interest"
shall mean that portion of the Certificateholders' Interest evidenced by the
Series [199_-_] Certificates.
"Series [199_-_] Certificates" shall mean any one
of the certificates executed by the Seller and authenticated
by the Trustee, substantially in the form of Exhibit A.
["Series [199_-_] Excess Interest Collections"
shall mean [ ].]
"Series [199_-_] Excess Principal Collections"
shall mean that portion of Excess Principal Collections allocated to Series
[199_-_] pursuant to Section 4.11.
"Series [199_-_] Principal Shortfall" shall have
the meaning specified in Section 4.11.
"Series Cut-Off Date" shall mean [ ],
199[ ].
"Servicing Fee Rate" shall mean, with respect to
Series [199_-_], [ ]% or, for any Distribution Date in respect of which the
Monthly Servicing Fee has been waived, 0%.
"Special Payment Date" shall mean each
distribution date with respect to any Early Amortization Period (other than
an Early Amortization Period which has ended as described in clause [ ] of
the definition thereof).
"Standard & Poor's" shall mean Standard & Poor's
Rating Group.
"Subordinated Percentage" shall mean the
percentage equivalent of a fraction, the numerator of which is the
Subordination Factor and the denominator of which will be the excess of 100%
over the Subordination Factor.
"Subordination Factor" means [ ]%; provided,
however, that the Subordination Factor will be [ ]% in the event that the
rating of the long-term unsecured debt of CFC is lowered below BBB- by
Standard & Poor's or withdrawn by Standard & Poor's, unless, in either such
case, the Seller receives written confirmation from Standard & Poor's that
the failure to so increase the Subordination Factor would not result in the
downgrade or withdrawal of Standard &
23
<PAGE>
Poor's rating of the Series [199_-_] Certificates. [Describe other
adjustments, if any.]
"Termination Date" shall mean the [ ]
Distribution Date.
"Termination Proceeds" shall mean any Termination
Proceeds arising out of a sale of Receivables (or interests therein) pursuant
to Section 12.02(c) of the Agreement with respect to Series [199_-_].
"Trust Available Subordinated Amount" means the
sum of the [Aggregate] Available Subordinated Amount and the
sum of the aggregate available subordinated amounts for all
other outstanding Series.
["Yield Supplement Account" shall have the meaning
specified in Section 4.04.]
["Yield Supplement Account Deposit Amount" shall
mean, with respect to any Distribution Date, the amount, if any, by which the
Yield Supplement Account Required Amount exceeds the amount on deposit in the
Yield Supplement Account after giving effect to any deposits thereto and
withdrawals therefrom otherwise to be made on such Distribution Date.]
["Yield Supplement Account Required Amount" shall
mean, with respect to any Distribution Date, an amount equal to the product
of (a) [ ]% and (b) the outstanding principal balance of the Certificates on
such Distribution Date (after giving effect to any changes therein on such
Distribution Date) [other].
(b) Notwithstanding anything to the contrary in
this Series Supplement or the Agreement, the term "Rating Agency" shall mean,
whenever used in this Series Supplement or the Agreement with respect to
Series [199_-_], Moody's and Standard & Poor's. As used in this Series
Supplement and in the Agreement with respect to Series [199_-_], "highest
investment category" shall mean (i) in the case of Standard & Poor's, A-l+ or
AAA, as applicable, and (ii) in the case of Moody's, P-1 or Aaa, as
applicable. [Any notice required to be given to a Rating Agency pursuant to
the Agreement or this Series Supplement shall also be given to Fitch
Investors Service, Inc., and Duff & Phelps, Inc., although neither shall be
deemed to be a Rating Agency for any purposes of the Agreement or this Series
Supplement with respect to Series [199_-_].]
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<PAGE>
[(c) Series [199_-_] shall be an Excess Allocation
Series.]
(d) All capitalized terms used herein and not
otherwise defined herein have the meanings ascribed to them in the Agreement.
The definitions in Section 2.01 are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such terms.
(e) The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Series Supplement shall refer
to this Series Supplement as a whole and not to any particular provision of
this Series Supplement; references to any Article, Section or Exhibit are
references to Articles, Sections and Exhibits in or to this Series Supplement
unless otherwise specified; and the term "including" means "including without
limitation".]
ARTICLE III
Servicing Fee
SECTION 3.01. Servicing Compensation. The
monthly servicing fee (the "Monthly Servicing Fee") shall be payable to the
Servicer, in arrears, on each Distribution Date in respect of any Collection
Period (or portion thereof) occurring prior to the earlier of the first
Distribution Date following the Series [199_-_] Termination Date and the
first Distribution Date on which the Invested Amount is zero, in an amount
equal to one-twelfth of the product of (a) the Servicing Fee Rate, (b) the
Pool Balance as of the last day of the Collection Period second preceding
such Distribution Date and (c) the Series [199_-_] Allocation Percentage with
respect to the immediately preceding Collection Period. The share of the
Monthly Servicing Fee allocable to the Series [199_-_] Certificateholders
with respect to any Distribution Date (the "Certificateholders Monthly
Servicing Fee") shall be equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the Invested Amount as of the last day of the
Collection Period second preceding such Distribution Date. The remainder of
the Monthly Servicing Fee shall be paid by the Seller and in no event shall
the Trust, the Trustee or the Series [199_-_] Certificateholders be liable
for the share of the Monthly Servicing Fee to be paid by the Seller; and the
remainder of the Servicing Fee shall be paid by the Seller and the Investor
Certificateholders of other Series and the Series [199_-_] Certificateholders
shall in no event be liable for the share of the Servicing Fee to be paid by
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<PAGE>
the Seller or the Investor Certificateholders of other Series. The
Certificateholders Monthly Servicing Fee shall be payable to the Servicer
solely to the extent amounts are available for distribution in accordance
with the terms of this Series Supplement.
The Servicer will be permitted, in its sole
discretion, to waive the Monthly Servicing Fee for any Distribution Date by
notice to the Trustee on or before the related Determination Date; provided
that the Servicer believes that sufficient Collections of Non-Principal
Receivables will be available on any future Distribution Date to pay the
Certificateholders Monthly Servicing Fee relating to the waived Monthly
Servicing Fee. If the Servicer so waives the Monthly Servicing Fee for any
Distribution Date, the Monthly Servicing Fee and the Certificateholders
Monthly Servicing Fee for such Distribution Date shall be deemed to be zero
for all purposes of this Series Supplement and the Agreement; provided,
however, that such Certificateholders Monthly Servicing Fee shall be paid on
a future Distribution Date solely to the extent amounts are available
therefor pursuant to Section 4.10(b); provided further that, to the extent
any such waived Certificateholders Monthly Servicing Fee is so paid, the
related portion of the Monthly Servicing Fee to be paid by the Seller shall
be paid by the Seller to the Servicer.
ARTICLE IV
Rights of Series [199_-_] Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Allocations; Payments to Seller; Excess
Principal Collections and Unallocated Principal Collections. (a) Collections
of Non-Principal Receivables and Principal Receivables, Miscellaneous
Payments and Defaulted Amounts allocated to Series [199_-_] pursuant to
Article IV of the Agreement shall be allocated and distributed as set forth
in this Article.
(b) Subject to Sections 4.01(d)[, 4.01(e) and
4.01(f)] below, the Servicer shall instruct the Trustee to withdraw from the
Collection Account and pay to the Seller on the dates set forth below the
following amounts:
(i) on each Deposit Date:
(A) an amount equal to the Excess Seller's
Percentage for the related Collection Period of
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<PAGE>
Allocable Non-Principal Collections deposited in
the Collection Account for such Deposit Date; and
(B) an amount equal to the Excess
Seller's Percentage for the related Collection Period
of Allocable Principal Collections deposited in the
Collection Account for such Deposit Date, if the
Seller's Participation Amount (determined after
giving effect to any Principal Receivables
transferred to the Trust on such Deposit Date)
exceeds the Trust Available Subordinated Amount for
the immediately preceding Determination Date (after
giving effect to the allocations, distributions,
withdrawals and deposits to be made on the
Distribution Date immediately following such
Determination Date); and
(ii) on each Deposit Date with respect to the
Revolving Period, an amount equal to the Available Seller's
Principal Collections for such Deposit Date, if the Seller's
Participation Amount (determined after giving effect to any
Principal Receivables transferred to the Trust on such Deposit
Date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect to
the allocations, distributions, withdrawals and deposits to be
made on the Distribution Date immediately following such
Determination Date); provided, however, that Available Seller's
Principal Collections shall be paid to the Seller with respect to
any Collection Period only after an amount equal to [the sum of
(A)] the Deficiency Amount, if any, relating to the immediately
preceding Collection Period [and (B) the excess, if any, of the
Reserve Fund Required Amount over the amount in the Reserve Fund
on the immediately preceding Distribution Date (after giving
effect to the allocations of, distributions from, and deposits
in, the Reserve Fund on such Distribution Date),] has been
deposited in the Collection Account from such Available Seller's
Principal Collections.
The withdrawals to be made from the Collection
Account pursuant to this Section 4.01(b) do not apply to deposits into the
Collection Account that do not represent Collections, including Miscellaneous
Payments, payment of the purchase price for the Certificateholders' Interest
pursuant to Section 2.03 of the Agreement[, payment of the purchase price for
the Series [199_-_] Certificateholders' Interest [or any portion thereof]
pursuant to Section 8.01 of this Series Supplement] and proceeds from the
sale,
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<PAGE>
disposition or liquidation of Receivables pursuant to Section 9.02 or 12.02
of the Agreement.
[(c) The Servicer shall instruct the Trustee to
withdraw from the Collection Account and deposit into the Reserve Fund on
Deposit Dates with respect to the Revolving Period Available Seller's
Principal Collections for such Deposit Date, up to the amount of the excess,
if any, determined pursuant to Section 4.01(b)(ii)(B).]
[(d) Notwithstanding the provisions of
Section 4.01(b)(1), amounts otherwise distributable to the Seller pursuant to
Section 4.01(b), up to the Available Negative Carry Subordinated Amount,
shall be applied as follows: on each Deposit Date with respect to the
[Accumulation Period] [Controlled Amortization Period], an Early Amortization
Period [or a Reinvestment Period], the Servicer shall instruct the Trustee to
withdraw such amounts from the collection Account and deposit the Negative
Carry Deposit Amount to the Negative Carry Reserve Fund and [describe other
applications, if applicable].]
[(e) Notwithstanding the provisions of
Section 4.01(b)(i), on each Deposit Date during any Collection Period on
which any amount is on deposit in [the Excess Funding Account or] Principal
Funding Account, the Servicer shall instruct the Trustee to withdraw from the
Collection Account and deposit in the Yield Supplement Account the amounts
otherwise distributable to the Seller pursuant to Section 4.01(b)(i) [and not
applied pursuant to Section 4.01(d)] until the amount on deposit in the Yield
Supplement Account is equal to the Yield Supplement Account Required Amount.]
[(f) Describe other applications of Collections
otherwise distributable to the Seller.]
SECTION 4.02. Monthly Interest. [(a)] The
amount of monthly interest ("Monthly Interest") with respect to the Series
[199_-_] Certificates on any Distribution Date shall be [an amount equal to
the product of (i) the Certificate Rate, (ii) the outstanding principal
balance of the Series [199_-_] Certificates as of the close of business on
the preceding Distribution Date (after giving effect to all repayments of
principal made to Series [199_-_] Certificateholders on such preceding
Distribution Date, if any) and (iii) a fraction, the numerator of which is
the actual number of days elapsed in such Interest Period and the denominator
of which is [360] [other]][an amount equal to one twelfth of the product of
(i) the outstanding principal balance of the Series [199_-_] Certificates as
of
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<PAGE>
the close of business on the preceding Distribution Date after giving effect
to all repayments of principal made to the Series [199_-_] Certificateholders
on such preceding Distribution Date, if any, and (ii) the Certificate Rate;
provided, however, that with respect to the first such Distribution Date,
Monthly Interest shall be equal to $____. Monthly Interest shall be
calculated on the basis of a 360- day year of twelve 30-day months].
On the Determination Date preceding each
Distribution Date, the Servicer shall determine the excess, if any (the
"Interest Shortfall"), of (x) the aggregate Monthly Interest for the
[Interest Period] [Accrual Record] applicable to such Distribution Date over
(y) the amount which will be available to be [deposited in the Interest
Funding Account or] distributed to Series [199_-_] Certificateholders on such
Distribution Date in respect thereof pursuant to this Series Supplement. If
the Interest Shortfall with respect to any Distribution Date is greater than
zero, an additional amount ("Additional Interest") equal to [the product of
(i) the Certificate Rate for the [Interest Period] commencing on the related
Distribution Date (or, for subsequent [Interest Periods] [Accrual Periods],
the Certificate Rate for such subsequent [Interest Period] [Accrual Period]),
(ii) such Interest Shortfall (or the portion thereof which has not been
[deposited in the Interest Funding Account or] paid to Series [199_-_]
Certificateholders) and (iii) a fraction, the numerator of which is the
amount of days elapsed in such [Interest Period] [Accrual Period] (or in a
subsequent [Interest Period] [Accrual Period]) and the denominator of which
is [ ] 360 [other]] [one-twelfth of the product of (i) the Certificate Rate
and (ii) such Interest Shortfall (or the portion thereof which has not been
[deposited to the Interest Funding Account or] paid to the Series [199_-_]
Certificateholders], shall be payable as provided herein with respect to the
Series [199_-_] Certificates on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such
Interest Shortfall is paid to Series [199_-_] Certificateholders.
Notwithstanding anything to the contrary herein, Additional Interest shall be
payable or distributed to Series [199_-_] Certificateholders only to the
extent permitted by applicable law.
[(b) On the Determination Date preceding each
Distribution Date, the Servicer shall determine the excess, if any (the
"Carry-over Shortfall"), of (x) the Carry-over Amount, if any, for such
Distribution Date over (y) the amount which will be available to be
distributed to Series [199_-_] Certificateholders in respect thereof on such
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<PAGE>
Distribution Date pursuant to this Series Supplement. If the Carry-over
Shortfall with respect to any Distribution Date is greater than zero, an
additional amount ("Additional Carry-over Amount") equal to the product of
(i) the Certificate Rate (calculated pursuant to clause (a) of the definition
thereof) for the Interest Period commencing on the related Distribution Date
(or, for subsequent Interest Periods, the Certificate Rate (calculated
pursuant to clause (a) of the definition thereof) for such subsequent
Interest Periods), (ii) such Carry-over Shortfall (or the portion thereof
which has not been paid to Series [199_-_] Certificateholders) and (iii) a
fraction, the numerator of which is the amount of days elapsed in such
Interest Period (or in a subsequent Interest Period) and the denominator of
which is 360, shall be payable as provided herein with respect to the Series
[199_-_] Certificates on each Distribution Date following such Distribution
Date to the Distribution Date on which such Carry-over Shortfall is paid to
Series [199_-_] Certificateholders. Notwithstanding anything to the contrary
herein, any Additional Carry Amount shall be payable or distributed to Series
[199_-_] Certificateholders only to the extent permitted by applicable law.]
SECTION 4.03. Determination of Monthly Principal.
The amount of monthly principal ("Monthly Principal") distributable with
respect to the Series [199_-_] Certificates on each Distribution Date with
respect to an Early Amortization Period [, a Reinvestment Period] and the
[Accumulation Period] [Controlled Amortization Period] shall be equal to the
Available Investor Principal Collections with respect to such Distribution
Date; provided, however, that, for each Distribution Date [with respect to
the Accumulation Period, Monthly Principal shall not exceed the Controlled
Deposit Amount] [with respect to the Controlled Amortization Period, Monthly
Principal shall not exceed the Controlled Distribution Amount] for such
Distribution Date; and; provided further that Monthly Principal shall not
exceed the Invested Amount of the Certificates.
SECTION 4.04. Establishment of [Reserve Fund and]
Funding Accounts. [(a) (i) The Servicer, for the benefit of the Series
[199_-_] Certificateholders, shall cause to be established and maintained in
the name of the Trustee, on behalf of the Trust, an Eligible Deposit Account
(the "Reserve Fund") which shall be identified as the "Reserve Fund for the
CARCO Auto Loan Master Trust, Series [199_-_]" and shall bear a designation
clearly indicating that the funds deposited therein are held for the benefit
of the Series [199_-_] Certificateholders. On the Closing Date,
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<PAGE>
the Seller shall cause to be deposited in the Reserve Fund the Initial
Reserve Fund Deposit Amount.
(ii) At the direction of the Servicer, funds on
deposit in the Reserve Fund shall be invested by the Trustee in Eligible
Investments selected by the Servicer that will mature so that such funds will
be available at the close of business on or before the Business Day next
preceding the following Distribution Date. All Eligible Investments shall be
held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Reserve Fund received prior to such Distribution Date shall be
applied as set forth in Section 4.06(a) [or 4.06(b), as applicable,] of this
Series Supplement. Funds deposited in the Reserve Fund on a Business Day
(which immediately precedes a Distribution Date) upon the maturity of any
Eligible Investments are not required to be invested overnight.]
[(b) (i) The Servicer, for the benefit of the
Series [199_-_] Certificateholders, shall establish and maintain in the name
of the Trustee, on behalf of the Trust, an Eligible Deposit Account (the
"Yield Supplement Account"), which shall be identified as the "Yield
Supplement Account for the CARCO Auto Loan Master Trust Series [199_-_]" and
shall bear a designation clearly indicating that the funds deposited therein
are held for the benefit of the Series [199_-_] Certificateholders. On the
Closing Date, the Seller shall cause to be deposited into the Yield
Supplement Account the Initial Yield Supplement Account Deposit Amount.
(ii) At the direction of the Servicer, funds on
deposit in the Yield Supplement Account shall be invested by the Trustee in
investments consisting of financial assets selected by the Servicer;
provided, however, that such assets must, by their terms, convert to cash
within a finite period of time. All such financial assets shall be held by
the Trustee for the benefit of the Series [199_-_] Certificateholders. On
each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Yield Supplement
Account shall be applied as set forth in Section 4.06(a) [or 4.06(b), as
applicable,] of this Series Supplement.
(iii) If on any Distribution Date there is a Carry-
over Amount, the Servicer shall cause the Trustee to apply the amounts on
deposit in the Yield Supplement Account up to the amount of such Carry-over
Amount to satisfy such Carryover Amount. The Trustee shall be authorized to
dispose of
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<PAGE>
investments in the Yield Supplement Account in order to obtain funds with
which to satisfy any Carry-over Amount.
(iv) If on any Distribution Date the amount on
deposit in the Yield Supplement Account (after giving effect to any
withdrawals to be made from the Yield Supplement Account on such Distribution
Date) is greater than the Yield Supplement Account Required Amount, the
Servicer shall cause the Trustee to pay to the Seller on such Distribution
Date the excess of such amount on deposit in the Yield Supplement Account
over the Yield Supplement Account Required Amount.]
[(c) (i) The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account (the "Principal Funding
Account"), which shall be identified as the "Principal Funding Account for
CARCO Auto Loan Master Trust, Series [199_-_]" and shall bear a designation
clearly indicating that the funds deposited therein are held for the benefit
of the Series [199_-_] Certificateholders.
(ii) At the direction of the Servicer, funds on
deposit in the Principal Funding Account shall be invested by the Trustee in
Eligible Investments selected by the Servicer. All such Eligible Investments
shall be held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit therein shall be applied as set forth in Section 4.06(a) [or 4.06(b),
as applicable] of this Series Supplement. Funds on deposit in the Principal
Funding Account shall be invested at the direction of the Servicer in
Eligible Investments that will mature so that such funds will be available on
or before the close of business on the Business Day next preceding the
Expected Payment Date. Funds deposited in the Principal Funding Account on a
Business Day (which immediately precedes the Expected Payment Date) upon the
maturity of any Eligible Investments are not required to be invested
overnight.]
[(d) (i) The Servicer, for the benefit of the
Series [199_-_] Certificateholders, shall establish and maintain in the name
of the Trustee, on behalf of the Trust, an Eligible Deposit Account (the
"Excess Funding Account"), which shall be identified as the "Excess Funding
Account for CARCO Auto Loan Master Trust, Series [199_-_]" and shall bear a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Series [199_-_] Certificateholders. On the Closing Date,
the Seller shall cause to be deposited in the Excess Funding
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<PAGE>
Account an amount equal to the excess of the Initial Principal Amount of the
Series [199_-_] Certificates, if any, over the Initial Invested Amount on the
Closing Date, which excess is equal to [ ].
(ii) At the direction of the Servicer, funds on
deposit in the Excess Funding Account shall be invested by the Trustee in
Eligible Investments selected by the Servicer. All such Eligible Investments
shall be held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Excess Funding Account shall be applied as set forth in
Section 4.06(a) of this Series Supplement.
Funds deposited in the Excess Funding Account on any Distribution Date shall
be invested at the direction of the Servicer in Eligible Investments that
will mature so that such funds will be available on or before the close of
business on the Business Day next preceding the following Distribution Date.
Funds deposited in the Excess Funding Account on a Business Day (which
immediately precedes a Distribution Date) upon the maturity of any Eligible
Investments are not required to be invested overnight.]
[(e) (i) The Servicer, for the benefit of the
Series [199_-_] Certificateholders, shall establish and maintain in the name
of the Trustee, on behalf of the Trust, an Eligible Deposit Account (the
"Interest Funding Account"), which shall be identified as the "Interest
Funding Account for the CARCO Auto Loan Master Trust Series [199_-_]" and
shall bear a designation clearly indicating that the funds deposited therein
are held for the benefit of the Series [199_-_] Certificateholders.
(ii) At the direction of the Servicer, funds on
deposit in the Interest Funding Account shall be invested by the Trustee in
Eligible Investments selected by the Servicer. All such Eligible Investments
shall be held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Interest Funding Account shall be applied as set forth in
Section 4.06(a) [or 4.06(b), as applicable,] of this Series Supplement. Funds
deposited in the Interest Funding Account on any Distribution Date (which are
not distributed to Certificateholders pursuant to Section 4.07 on such
Distribution Date) shall be invested at the direction of the Servicer in
Eligible Investments that will mature so that
33
<PAGE>
such funds will be available on or before the close of business on the
Business Day preceding the next following Distribution Date. Funds deposited
in the Interest Funding Account on a Business Day (which immediately precedes
a Distribution Date) upon the maturity of any Eligible Investments are not
required to be invested overnight.]
(f) (i) The Trustee shall possess all right,
title and interest in and to all funds on deposit from time to time in, and
all Eligible Investments credited to, [the Reserve Fund,] [the Yield
Supplement Account,] [the Principal Funding Account,] [the Excess Funding
Account] [and the Interest Funding Account] (collectively the "Series
[199_-_] Accounts") and in all proceeds thereof. The Series [199_-_] Accounts
shall be under the sole dominion and control of the Trustee for the benefit
of the Certificateholders. If, at any time, any of the Series [199_-_]
Accounts ceases to be an Eligible Deposit Account, the Trustee (or the
Servicer on its behalf) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Series [199_-_] Account meeting the conditions specified in
paragraph [(a)(i), (b)(i), (c)(i), (d)(i) or (e)(i)] above, as applicable, as
an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Series [199_-_] Account. Neither the Seller, the
Servicer nor any person or entity claiming by, through or under the Seller,
the Servicer or any such person or entity shall have any right, title or
interest in, or any right to withdraw any amount from, any Series [199_-_]
Account, except as expressly provided herein. Schedule 1, which is hereby
incorporated into and made part of this Series Supplement, identifies each
Series [199_-_] Account by setting forth the account number of each such
account, the account designation of each such account and the name of the
institution with which such account has been established. If a substitute
Series [199_-_] Account is established pursuant to this Section, the Servicer
shall provide to the Trustee an amended Schedule 1, setting forth the
relevant information for such substitute Series [199_-_] Account.
(ii) Pursuant to the authority granted to the
Servicer in Section 3.01(a) of the Agreement, the Servicer shall have the
power, revocable by the Trustee, to make withdrawals and payments or to
instruct the Trustee to make withdrawals and payments from the Series
[199_-_] Accounts for the purposes of carrying out the Servicer's or
Trustee's duties hereunder.
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SECTION 4.05. Deficiency Amount. With respect to
each Distribution Date [that occurs on or prior to the Fully Reinvested Date
or any Distribution Date thereafter during the Revolving Period], on the
related Determination Date, the Servicer shall determine the amount (the
"Deficiency Amount"), if any, by which (a) the sum of (i) Monthly Interest
for such Distribution Date, (ii) any Monthly Interest previously due but not
[deposited to the Interest Funding Account or] distributed to the Series
[199_-_] Certificateholders on a prior Distribution Date, (iii) Additional
Interest, if any, for such Distribution Date and any Additional Interest
previously due but not [deposited to the Interest Funding Account or]
distributed to the Series [199_-_] Certificateholders on a prior Distribution
Date, (iv) the Certificateholders Monthly Servicing Fee for such Distribution
Date, (v) the Investor Default Amount, if any, for such Distribution Date,
(vi) the Series [199_-_] Allocation Percentage of the amount of any
Adjustment Payment required to be deposited in the Collection Account
pursuant to Section 3.09(a) of the Agreement with respect to the related
Collection Period that has not been so deposited as of such Determination
Date, and (vii) if such Distribution Date constitutes the Final Payment Date
the sum of (A) the amount of any Carry-over Amount for such Distribution
Date, (B) the amount of any Carry-over Amount previously due but not
previously [deposited in the Interest Funding Account or] distributed to
Series [199_-_] Certificateholders on a prior Distribution Date, (C) the
amount of any Additional Carryover Amount for such Distribution Date and (D)
the amount of any Additional Carry-over Amount previously due but not]
previously [deposited in the Interest Funding Account or] paid to Series
[199_-_] Certificateholders on a prior Distribution Date, in each case that
will not be satisfied on such date by application, pursuant to Section
4.04(b)(iii), of amounts on deposit in the Yield Supplement Account, exceeds
(b) the sum of [(i)] Investor Non-Principal Collections for such Distribution
Date plus any Investment Proceeds with respect to such Distribution Date
[plus Series [199_-_] Excess Interest Collections for such Distribution Date]
[and (ii) the amount of funds in the Reserve Fund which are available
pursuant to Section 4.08(a) and Section 4.08(d) to cover any portion of the
Deficiency Amount.] The lesser of the Deficiency Amount and the Available
Subordinated Amount shall be the "Required Subordination Draw Amount".
[Include other sources of funds and applications of the Required
Subordination Draw Amount, as appropriate.]
SECTION 4.06. Application of Investor Non-
Principal Collections, Investment Proceeds and Available Investor
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Principal Collections. The Servicer shall cause the Trustee to apply, on each
Distribution Date, Investor Non-Principal Collections, Investment Proceeds[,
Series [199_-_] Excess Interest Collections] and Available Investor Principal
Collections [other amounts] to make the following distributions:
(a) On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date and each
Collection Period thereafter during the Revolving Period], an amount equal to
the sum of Investor Non-Principal Collections, any Investment Proceeds [and
any Series [199_-_] Excess Interest Collections] with respect to such
Distribution Date [other amounts] will be distributed in the following
priority:
[(i) first, an amount equal to Monthly Interest for
such Distribution Date, plus the amount of any Monthly Interest
previously due but not [deposited to the Interest Funding Account
or] distributed to the Series [199_-_] Certificateholders on a
prior Distribution Date, plus the amount of any Additional
Interest for such Distribution Date and any Additional Interest
previously due but not [deposited to the Interest Funding Account
or] distributed to the Series [199_-_] Certificateholders on a
prior Distribution Date shall be [deposited to the Interest
Funding Account] [distributed to the Series [199_-_]
Certificateholders];
(ii) second, an amount equal to the
Certificateholders Monthly Servicing Fee for such Distribution
Date shall be distributed to the Servicer (unless such amount has
been netted against deposits to the Collection Account or
waived);
[(iii) third, an amount equal to the Reserve Fund
Deposit Amount, if any, for such Distribution Date shall be
deposited in the Reserve Fund;]
(iv) fourth, an amount equal to the Investor Default
Amount for such Distribution Date shall be treated as a portion
of Investor Principal Collections for such Distribution Date;
[(v) fifth, an amount equal to the Carry-over Amount
(after giving effect to any withdrawals from the Yield Supplement
Account on such Distribution Date), if any, for such Distribution
Date, plus the amount of any Carry-over Amount previously due but
not previously [deposited in the Interest Funding Account or]
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distributed to the Series [199_-_] Certificateholders on a prior
Distribution Date, plus the amount of any Additional Carry-over
Amount for such Distribution Date and any Additional Carry-over
Amount previously due but not previously [deposited in the
Interest Funding Account or] distributed to the Series [199_-_]
Certificateholders on a prior Distribution Date shall be
[deposited in the Interest Funding Account] [distributed to the
Series [199_-_] Certificateholders];]
[(vi) sixth, an amount equal to the Yield Supplement
Account Deposit Amount, if any, for such Distribution Date shall
be deposited in the Yield Supplement Account;] and
[(vii) seventh, describe other applications, if any];
and
(viii) eighth, the balance, if any, shall constitute
Excess Servicing and shall be allocated and distributed as set
forth in Section 4.10.]
[(b) On each Distribution Date with respect to a
Collection Period that ends after the Fully Reinvested Date [other than any
such Collection Period during the Revolving Period], any Investment Proceeds
[and Series [199_-_] Excess Interest Collections] [describe other funds] with
respect to such Distribution Date will be distributed in the following
priority:
(i) first, (x) an amount equal to Monthly, Interest
for such Distribution Date, plus the amount of any Monthly
Interest previously due but not [deposited in the Interest
Funding Account or] distributed to the Series [199_-_]
Certificateholders on a prior Distribution Date, plus the amount
of any Additional Interest for such Distribution Date and any
Additional Interest previously due but not [deposited in the
Interest Funding Account or] distributed to Series [199_-_]
Certificateholders on a prior Distribution Date shall be
[deposited in the Interest Funding Account] [distributed to
Series [199_-_] Certificateholders;
[(ii) second, describe other applications; and]
(iii) third, the balance, if any, shall be [distributed to
the Seller] [treated as Excess Interest Collections].]
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(c) On each Distribution Date with respect to the
Revolving Period, an amount equal to Available Investor Principal Collections
deposited in the Collection Account for the related Collection Period shall
be [allocated first to make a deposit to the Excess Funding Account if the
sum of (i) the Invested Amount and (ii) the amount on deposit in the Excess
Funding Account (other than any Investment Proceeds) prior to the allocation
on such Distribution Date is less than the outstanding principal balance of
the Series [199_-_] Certificates and second] treated as Excess Principal
Collections and applied in accordance with Section 4.04 of the Agreement.
(d) On each Distribution Date with respect to the
[Accumulation Period] [Controlled Amortization Period] or an Early
Amortization Period [or Reinvestment Period], an amount equal to Available
Investor Principal Collections will be distributed in the following priority:
(i) first, an amount equal to Monthly Principal for
such Distribution Date, shall be [deposited by the Servicer or
the Trustee into the Principal Funding Account, in the case of
the Accumulation Period or] [any Reinvestment Period, or]
distributed to Series [199_-_] Certificateholders, in the case of
[the Controlled Amortization Period or] and Early Amortization
Period; and
(ii) second, for each Distribution Date with respect
to the [Accumulation Period] [Controlled Amortization Period]
unless an Early Amortization Event [or Reinvestment Event] [that
has not been cured as described herein] has occurred, after
giving effect to the transactions referred to in clause (i)
above, an amount equal to the balance, if any, of such Available
Investor Principal Collections shall be treated as Excess
Principal Collections and applied in accordance with Section 4.04
of the Agreement and Section 4.11 hereof.
SECTION 4.07. Distributions to Series [199_-_]
Certificateholders. (a) The Servicer shall cause the Trustee to make the
following distributions at the following times from the Collection Account,
[the Reserve Fund,] [the Principal Funding Account] [the Interest Funding
Account,] [other] and [the Excess Funding Account]:
(i) on each [Distribution Date] [Interest Payment
Date and Special Payment Date], all amounts on deposit in the
Collection Account, [the Reserve Fund,] [the Interest Funding
Account,] [other] that are payable to
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the Series [199_-_] Certificateholders with respect to
accrued interest will be distributed to the Series
[199_-_] Certificateholders;
[(ii) on each Distribution Date with respect to the
Controlled Amortization Period, all amounts on deposit in the
Collection Account [and the Excess Funding Account] as are
distributable to the Series [199_-_] Certificateholders with
respect to principal will be distributed to the Series [199_-_]
Certificateholders;] and
(iii) on each Special Payment Date and on the
Expected Payment Date, all amounts on deposit in the Principal
Funding Account [and the Excess Funding Account] [other], up to a
maximum amount on any such day equal to the excess of the
outstanding principal balance of the Series [199_-_] Certificates
over the unreimbursed Investor Charge-Offs, shall be distributed
to the Series [199_-_] Certificateholders.
[(b) On each Distribution Date on which there is
any Carry-over Amount or Additional Carry-over Amount, the Servicer shall
instruct the Trustee to distribute to the Certificateholders the amounts
payable with respect thereto pursuant to Section 4.04(b)(iii) and Section
4.06(a).]
(c) If, on the Final Payment Date, there is any
Carry-over Amount or Additional Carry-over Amount (after giving effect to any
distributions on such date pursuant to Section 4.07(b)), the Servicer shall
instruct the Trustee to distribute to the Series 1996-1 Certificateholders
the amounts payable with respect thereto pursuant to Sections 4.08(b) and
4.08(d).
(d) The distributions to be made pursuant to this
Section are subject to the provisions of Sections 2.03, 9.02, 10.01 and 12.02
of the Agreement and Sections 9.01 and 9.02 of this Series Supplement.
SECTION 4.08. Application of [Reserve Fund and]
Available Subordinated Amount. [(a) If the portion of Investor Non-Principal
Collections, [Series [199_-_] Excess Interest Collections] and Investment
Proceeds allocated to Series [199_-_] Certificateholders on any Distribution
Date pursuant to Section 4.06(a) [or 4.06(b)] is not sufficient to make the
entire distributions required on such Distribution Date by Sections
4.06(a)[(i), (ii) and (iv)], [or 4.06(b)(i), respectively], the Servicer
shall cause the Trustee to withdraw funds from the Reserve Fund to the extent
available therein, and apply such funds to complete
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the distributions pursuant to Section 4.06[(a)(i), (ii) and (iv)] [or
4.06(b)(i), as the case may be]; provided, however, that during any Early
Amortization Period (other than an Early Amortization Period which has ended
as described in clause [ ] of the definition thereof) [or Reinvestment Period
(other than a Reinvestment Period that has ended as described in clause [ ]
of the definition thereof) funds shall not be withdrawn from the Reserve Fund
to make distributions otherwise required by Section 4.06(a)(iv) to the extent
that, after giving effect to such withdrawal, the amount on deposit in the
Reserve Fund shall be less than $1,000,000.]
(b) If there is a Required Subordination Draw
Amount for such Distribution Date and such Distribution Date is not the Final
Payment Date, the Servicer shall apply or cause the Trustee to apply the
Available Seller's Collections on deposit in the Collection Account on such
Distribution Date, but only up to the amount of the Required Subordination
Draw Amount, to make the distributions required by Sections 4.06[(a)(i), (ii)
and (iv)] [that have not been made through the application of funds from the
Reserve Fund in accordance with the preceding paragraph]. If there is a
Required Subordination Draw Amount for such Distribution Date and such
Distribution Date is the Final Payment Date, the Servicer shall apply or
cause the Trustee to apply the Available Seller's Collections on deposit in
the Collection Account on such Distribution Date, but only up to the amount
of the Required Subordination Draw Amount, to make the distributions required
by Sections 4.06 [(a)(i), (ii), (iv) and (v)] [that have not been made
through the application of funds from the Reserve Fund in accordance with
Section 4.08(d)]. Any such Available Seller's Collections remaining after the
application thereof pursuant to the first or second preceding sentence, as
applicable, shall be treated as a portion of Investor Principal Collections
for such Distribution Date, but only up to the amount of unpaid Adjustment
Payments allocated to Series [199_-_] as described in Section 4.05(a)(vi).
The amount of the Available Seller's Collections applied in accordance with
the three preceding sentences shall reduce the Available Subordinated Amount
in all other cases as described in clause (A) of the definition thereof. If
the Required Subordination Draw Amount exceeds Available Seller's Collections
for such Distribution Date, the Available Subordinated Amount shall be
further reduced by the amount of such excess, but not by more than the sum of
(x) the Investor Default Amount and (y) the amount of unpaid Adjustment
Payments allocated to Series [199_-_] as described in Section 4.05 (a)(vi).
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[(c) If, after giving effect to the allocations
of, distributions from, and deposits in, the Reserve Fund made pursuant to
Sections 4.01(c), 4.04, 4.06(a), 4.08(a) and 4.08(d), (i) the amount in the
Reserve Fund is greater than the Reserve Fund Required Amount (or, for any
Distribution Date with respect to an Early Amortization Period [or
Reinvestment Period], the Excess Reserve Fund Required Amount) for such
Distribution Date, the Servicer shall cause the Trustee to distribute such
excess amount to the Seller, subject to the proviso contained in paragraph
(e) or (ii) the amount in the Reserve Fund is less than such Reserve Fund
Required Amount, then the Trustee shall deposit any remaining Available
Seller's Collections on deposit in the Collection Account for such
Distribution Date after giving effect to Section 4.09(b) into the Reserve
Fund until the amount in the Reserve Fund is equal to such Reserve Fund
Required Amount. On the Termination Date, any funds in the Reserve Fund will
be treated as Available Investor Principal Collections. Upon payment in full
of the outstanding principal balance of the Series [199_-_] Certificates, any
funds remaining on deposit in the Reserve Fund shall be paid to the Seller.]
[(d) If, on the Final Payment Date, after giving
effect to (c) above, there is a Carry-over Amount or Additional Carry-over
Amount after giving effect to withdrawals from the Yield Supplement Account
on such date, the Servicer shall cause the Trustee to withdraw funds in the
amount of such Carry-over Amount or Additional Carryover Amount from the
Reserve Fund (to the extent available therein), and distribute such funds to
the Series [199_-_] Certificateholders. Any funds remaining on deposit in the
Reserve Fund after the earlier of (i) payment in full of the outstanding
principle balance of the Series [199_-_] Certificates and (ii) the Series
Termination Date shall be paid to the Seller.]
[(e) If, for any Distribution Date with respect
to an Early Amortization Period [or a Reinvestment Period], after giving
effect to the allocations of, distributions from, and deposits in, the
Reserve Fund made pursuant to Sections 4.01(c), 4.04, 4.06(a) and 4.08(a),
the amount in the Reserve Fund is less than the Excess Reserve Fund Required
Amount for such Distribution Date, the Trustee shall deposit any remaining
Available Seller's Collections on deposit in the Collection Account for such
Distribution Date into the Reserve Fund until the amount in the Reserve Fund
is equal to such Excess Reserve Fund Required Amount.]
(f) The balance of Available Seller's Collections
on any Distribution Date, after giving effect to any
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distributions thereof pursuant to Section [4.08(a), (b), (c), (d) or (e),]
shall be distributed to the Seller on such Distribution Date[; provided that,
in the case of any remaining Available Seller's Principal Collections, if the
Trust Available Subordinated Amount for the immediately preceding
Determination Date exceeds the Seller's Participation Amount on such date
(determined after giving effect to any Principal Receivables transferred to
the Trust on such Distribution Date), Section 4.08(c) hereof shall not apply
and the amount of such excess shall be deposited into the Reserve Fund, with
any remaining Available Seller's Principal Collections paid to the Seller.]
SECTION 4.09. Investor Charge-Offs. If, on any
Distribution Date on which the Available Subordinated Amount on the preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on such Distribution Date) is zero and
the Deficiency Amount for such Distribution Date is greater than zero, the
Invested Amount shall be reduced by the amount of the excess of such
Deficiency Amount over any remaining Available Subordinated Amount on such
Determination Date, but not by more than the Investor Default Amount.
Investor Charge-Offs shall thereafter be reimbursed and the Invested Amount
increased (but not by an amount in excess of the aggregate unreimbursed
Investor Charge-Offs on any Distribution Date) by the sum of (a) Allocable
Miscellaneous Payments with respect to such Distribution Date and (b) the
amount of Excess Servicing allocated and available for that purpose pursuant
to Section 4.10(a).
SECTION 4.10. Excess Servicing. The Servicer
shall cause the Trustee to apply, on each Distribution Date [with respect to
Collection Period that ends prior to the Fully Reinvested Date] [or any such
Collection Period thereafter during the Revolving Period], Excess Servicing
with respect to the Collection Period immediately preceding such Distribution
Date, to make the following distributions in the following priority:
(a) an amount equal to the aggregate amount of
Investor Charge-Offs which have not been previously reimbursed as
provided in Section 4.09 (after giving effect to the allocation
on such Distribution Date of any amount for that purpose pursuant
to Section 4.09) shall be treated as a portion of Available
Investor Principal Collections with respect to such Distribution
Date;
(b) an amount equal to the aggregate outstanding
amounts of the Certificateholders Monthly Servicing Fee
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which have been previously waived pursuant to
Section 3.01 shall be distributed to the Servicer; and
[(c) describe other applications;] and
(d) the balance, if any, shall be [distributed to
the Seller][treated as Excess Interest Collections].
SECTION 4.11. Excess Principal Collections.
(a) That portion of Excess Principal Collections for any Distribution Date
equal to the amount of Series [19_-_] Excess Principal Collections for such
Distribution Date will be allocated to Series [199_-_] and will be
distributed as set forth in this Series Supplement.
(b) Series [199_-_] Excess Principal Collections,
with respect to any Distribution Date, shall mean an amount equal to the
Series [199_-_] Principal Shortfall for such Distribution Date; provided,
however, that, if the aggregate amount of Excess Principal Collections for
all Series for such Distribution Date is less than the aggregate amount of
Principal Shortfalls for all Series for such Distribution Date, then Series
[199_-_] Excess Principal Collections for such Distribution Date shall equal
the product of (x) Excess Principal Collections for all Series for such
Distribution Date and [(y) a fraction, the numerator of which is the Series
[199_-_] Principal Shortfall for such Distribution Date and the denominator
of which is the aggregate amount of Principal Shortfalls for all Series for
such Distribution Date] [describe other non-pro rata formula, if applicable].
The Series [199_-_] Principal Shortfall, with respect to any Distribution
Date, shall equal the excess of (i) (x) [for any Distribution Date with
respect to the Accumulation Period, the Controlled Deposit Amount [other]
[for any Distribution Date with respect to the Controlled Amortization
Period, the Controlled Distribution Amount] [other], or (y) for any
Distribution Date with respect to an Early Amortization Period [or
Reinvestment Period], the [Invested Amount] [other], over (ii) Available
Investor Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Excess Principal Collections).
[SECTION 4.12. Excess Interest Collections.
[Describe allocations of Excess Interest Collections, if applicable.]
[SECTION 4.13. Excess Funding Account. (a) Any
funds on deposit in the Excess Funding Account on [the earlier of] [the [ ]
Distribution Date] [the Principal Commencement Date] will be deposited in the
Principal
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Funding Account on such date. In addition, on each Distribution Date with
respect to the Controlled Amortization Period an amount equal to the quotient
obtained by dividing the amount on deposit in the Excess Funding Account as
of the [ ] Distribution Date (after giving effect to any withdrawals from or
deposits to such account on such date) by [ ] will be distributed to Series
[199_-_] Certificateholders on such date in respect of principal of the
Series [199_-_] Certificates.] In addition, no funds will be deposited in the
Excess Funding Account during any Early Amortization Period [or Reinvestment
Period] or with respect to any Collection Period following the [ Collection
Period] [the Accumulation Period Commencement Date].
(b) On each Determination Date during the
Revolving Period, the Seller shall determine whether the sum of the Invested
Amount and the amount on deposit in the Excess Funding Account (other than
any Investment Proceeds) is greater than the outstanding principal balance of
the Series [199_-_] Certificates. If on any such Determination Date such sum
is greater than the outstanding principal balance of the Series [199_-_]
Certificates and thus there are sufficient Principal Receivables in the Trust
to permit an increase in the Invested Amount without causing an Early
Amortization Event to occur with respect to any outstanding Series, the
Seller shall notify the Trustee of the amount of the increase in the Invested
Amount. Subject to the provisions set forth below in this Section 4.12(b) and
to Sections 4.12(c) and (d) below, upon receipt of such notice the Invested
Amount shall be increased by the amount specified, and the Servicer shall
instruct the Trustee to withdraw from the Excess Funding Account and pay to
the Seller or allocate to one or more other Series, on the immediately
succeeding Distribution Date, an amount equal to the amount of such increase
in the Invested Amount. Such payment shall be in payment or partial payment
pursuant to the Receivables Purchase Agreement for additional Principal
Receivables transferred to the Trust or allocated to Series [199_-_]. To the
extent that the Invested Amount is increased by any payment to the Seller or
any allocation to one or more other Series, the Seller's Interest or such
other Series' invested amount, as applicable, shall be reduced by the amount
of such payment. In addition, any increase in the Invested Amount is subject
to the condition that after giving effect to such increase (i) the Pool
Balance equals or exceeds (ii) the sum of (A) the Required Participation
Amount, (B) the sum of the Required Subordinated Amount and the sum of the
required subordinated amounts for all other Series (or, if such other series
shall have no required subordinated amount, the available
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subordinated amount with respect to such Series) and (C) the sum of any
subordinated amounts supporting any Enhancement for all other Series. In
connection with the foregoing, the Seller shall endeavor (taking into account
any seasonality experienced in the Accounts in the Trust) to minimize the
amounts on deposit, from time to time, in the Excess Funding Account.
(c) In the event that other Series issued by the
Trust provide for excess funding accounts or other arrangements similar to
the Excess Funding Account involving fluctuating levels of investments in
Principal Receivables, (i) the allocation of additional Principal Receivables
to increase the Invested Amount and the invested amounts of such other Series
(and the related withdrawals from the Excess Funding Account and the other
excess funding or similar accounts) will be based on the proportion that the
amount on deposit in the Excess Funding Account bears to amounts on deposit
in the excess funding accounts of all Series providing for excess funding
accounts or such similar arrangements or to amounts otherwise similarly
available and (ii) the deposit of amounts into the Excess Funding Account and
the excess funding accounts of such other Series will be pro rata based on
the proportion that the Adjusted Invested Amount bears to the adjusted
invested amounts of all Series providing for excess funding accounts or such
similar arrangements.
(d) In the event that any other Series is in an
amortization, early amortization, reinvestment or accumulation period the
amounts of any withdrawals from the Excess Funding Account shall be applied
first to satisfy in full any then applicable funding or payment requirements
of such Series and second to make a payment to the Seller. In the event that
more than one other Series is in an amortization, early amortization,
reinvestment or accumulation period, the amounts of any withdrawals from the
Excess Funding Account shall be allocated (and, if necessary, reallocated)
among such Series as specified in the related Series Supplement to meet the
funding or payment requirements of each such Series first to satisfy in full
all then applicable funding or payment requirements of each such Series and
second to make a payment to the Seller.]
[SECTION 4.14. Accumulation Period Length;
Accumulation Period Commencement Date. Beginning on the [ ]
Distribution Date, and on each Distribution Date thereafter that occurs prior
to the Accumulation Period Commencement Date, the Servicer shall calculate the
Accumulation Period Length and, if applicable, determine the Accumulation
Period Commencement Date. Once the Servicer
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has determined the Accumulation Period Commencement Date, the Servicer shall
promptly notify the Trustee in writing of such determination. In connection
therewith, the Seller hereby agrees not to cause the Trust to issue any new
Series during the period from the date hereof until the date that the Series
[199_-_] Certificates shall have been paid in full, if such issuance would
have an adverse effect on the results obtained by application of the formula
used to compute the Accumulation Period Length.]
[SECTION 4.15. Enhancement. [To be provided.]
ARTICLE V
Distributions and Reports
to Series [199_-_] Certificateholders
SECTION 5.01. Distributions. (a) On each
Distribution Date, the Trustee shall distribute to each Series [199_-_]
Certificateholder of record on the preceding Record Date (other than as
provided in Section 12.02 of the Agreement respecting a final distribution)
such Certificate holder's pro rata share (based on the aggregate fractional
undivided interests represented by the Series [199_-_] Certificates held by
such Certificateholder) of the amounts on deposit in the Series [199_-_]
Accounts as is payable to the Series [199_-_] Certificateholders on such
Distribution Date pursuant to Section 4.07.
(b) Except as provided in Section 12.02 of the
Agreement with respect to a final distribution, distributions to Series
[199_-_] Certificateholders hereunder shall be made by check mailed to each
Series [199_-_] Certificateholder at such Certificateholder's address
appearing in the Certificate Register without presentation or surrender of
any Series [199_-_] Certificate or the making of any notation thereon;
provided, however, that, with respect to Series [199_-_] Certificates
registered in the name of a Depository, such distributions shall be made to
such Depository in immediately available funds.
SECTION 5.02. Reports and Statements to Series
[199_-_] Certificateholders. (a) At least two Business Days prior to each
Distribution Date, the Servicer will provide to the Trustee, and on each
Distribution Date, the Trustee shall forward to each Series [199_-_]
Certificateholder, a statement substantially in the form of Exhibit B
prepared by the Servicer setting forth certain
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information relating to the Trust and the Series [199_-_] Certificates.
(b) A copy of each statement provided pursuant to
paragraph (a) will be made available for inspection at the
Corporate Trust Office.
(c) On or before January 31 of each calendar
year, beginning with calendar year 199[], the Trustee shall furnish or cause
to be furnished to each Person who at any time during the preceding calendar
year was a Series [199_-_] Certificateholder (or Certificate Owner), a
statement prepared by the Servicer containing the information which is
required to be contained in the statement to Series [199_-_]
Certificateholders as set forth in paragraph (a) above, aggregated for such
calendar year or the applicable portion thereof during which such Person (or
any related Certificate Owner) was a Series [199_-_] Certificateholder (or
Certificate Owner), together with other information as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code and
such other customary information as is necessary to enable the Series
[199_-_] Certificateholders (or Certificate Owners) to prepare their tax
returns. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Internal Revenue
Code as from time to time in effect.
ARTICLE VI
Amortization Events
SECTION 6.01. Additional Amortization Events.
The occurrence of any of the following events shall, immediately upon the
occurrence thereof without notice or other action on the part of the Trustee
or the Series [199_-_] Certificateholders, be deemed to be an Early
Amortization Event solely with respect to Series [199_-_]:
[(a) the Trust shall file a petition commencing a
voluntary case under any chapter of the Federal bankruptcy laws;
or the Trust shall file a petition or answer or consent seeking
reorganization, arrangement, adjustment, or composition under any
other similar applicable Federal law, or shall consent to the
filing of any such petition, answer, or consent; or the Trust
shall appoint, or consent to the appointment of, a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or
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insolvency of it or of any substantial part of its property; or
the Trust shall make an assignment for the benefit of creditors,
or shall admit in writing its inability to pay its debts
generally as they become due;
(b) any order for relief against the Trust shall have
been entered by a court having jurisdiction in the premises under
any chapter of the Federal bankruptcy laws, and such order shall
have continued undischarged or unstayed for a period of 60 days;
or a decree or order by a court having jurisdiction in the
premises shall have been entered approving as properly filed a
petition seeking reorganization, arrangement, adjustment, or
composition of the Trust under any other similar applicable
Federal law, and such decree or order shall have continued
undischarged or unstayed for a period of 120 days; or a decree or
order of a court having jurisdiction in the premises for the
appointment of a custodian, receiver, liquidator, trustee,
assignee, sequestrator, or other similar official in bankruptcy
or insolvency of the Trust or of any substantial part of its
property, or for the winding up or liquidation of its affairs,
shall have been entered, and such decree or order shall have
remained in force undischarged or unstayed for a period of 120
days;
(c) the outstanding principal amount of the Series
[199_-_] Certificates is not repaid by the Expected Payment Date.
(d) on any Determination Date, the average of the
Monthly Payment Rates for the two preceding Collection Periods is
less than [ ]%;
(e) on any Determination Date, the Available
Subordinated Amount for the next Distribution Date will be less
than the Required Subordinated Amount on such Determination Date,
after giving effect to the distributions to be made on the next
Distribution Date;
(f) any Service Default with respect to Series
[199_-_] occurs;
(g) on any Determination Date, as of the last day of
the preceding Collection Period, the aggregate amount of
Principal Receivables relating to Used Vehicles exceeds [ ]% of
the Pool Balance on such last day;
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(h) on any Determination Date, the quotient obtained
by dividing (i) the sum of (x) the amount on deposit in the Yield
Supplement Account on the next Distribution Date, after giving
effect to the distributions to be made on such Distribution Date,
and (y) the amount on deposit in the Yield Supplement Account on
the immediately preceding Distribution Date, after giving effect
to the distributions made on such Distribution Date, by (ii) the
sum of (A) the outstanding principal balance of the Series
[199_-_] Certificates on the next Distribution Date, after giving
effect to all distributions and payments to be made on such
Distribution Date and (B) the outstanding principal balance of
the Series [199_-_] Certificates on the immediately preceding
Distribution Date, after giving effect to all distributions and
payments made on such Distribution Date, is less than [ ];
(i) any Carry-over Amount or Additional Carry-over
Amount is outstanding on six consecutive Distribution
Dates;
(j) the outstanding principal amount of the Series
199_-_ Certificates is not repaid by the Expected
Payment Date; and
(k) [other]. 1/
ARTICLE VII
Reinvestment Events
SECTION 7.01. Reinvestment Events. If any one of
the following events shall occur:
(a) a failure by the Seller to convey Receivables in
Additional Accounts to the Trust within five Business Days after
the day on which it is required to convey such Receivables
pursuant to the Agreement;
(b) the Servicer (or CFC, if it is not the Servicer)
shall file a petition commencing a voluntary case under any
chapter of the Federal bankruptcy laws; or the Servicer (or CFC,
as aforesaid) shall file a petition or answer or consent seeking
reorganization, arrangement, adjustment, or composition under any
other similar applicable Federal law, or shall consent to the
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filing of any such petition, answer, or consent; or the Servicer
(or CFC, as aforesaid) shall appoint, or consent to the
appointment of, a custodian, receiver, liquidator, trustee,
assignee, sequestrator or other similar official in bankruptcy or
insolvency of it or of any substantial part of its property; or
the Servicer (or CFC, as aforesaid) shall make an assignment for
the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due;
(c) any order for relief against the Servicer (or
CFC, if it is not the Servicer) shall have been entered by a
court having jurisdiction in the premises under any chapter of
the Federal bankruptcy laws, and such order shall have continued
undischarged or unstayed for a period of 60 days; or a decree or
order by a court having jurisdiction in the premises shall have
been entered approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of the
Servicer (or CFC, as aforesaid) under any other similar
applicable Federal law, and such decree or order shall have
continued undischarged or unstayed for a period of 120 days; or a
decree or order of a court having jurisdiction in the premises
for the appointment of a custodian, receiver, liquidator,
trustee, assignee, sequestrator, or other similar official in
bankruptcy or insolvency of the Servicer (or CFC, as aforesaid)
or of any substantial part of its property, or for the winding up
or liquidation of its affairs, shall have been entered, and such
decree or order shall have remained in force undischarged or
unstayed for a period of 120 days;
(d) Chrysler shall file a petition commencing a
voluntary case under any chapter of the Federal bankruptcy laws;
or Chrysler shall file a petition or answer or consent seeking
reorganization, arrangement, adjustment, or composition under any
other similar applicable Federal law, or shall consent to the
filing of any such petition, answer, or consent; or Chrysler
shall appoint, or consent to the appointment of, a custodian,
receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any
substantial part of its property; or Chrysler shall make an
assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become
due;
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(e) any order for relief against Chrysler shall have
been entered by a court having jurisdiction in the premises under
any chapter of the Federal bankruptcy laws, and such order shall
have continued undischarged or unstayed for a period of 60 days;
or a decree or order by a court having jurisdiction in the
premises shall have been entered approving as properly filed a
petition seeking reorganization, arrangement, adjustment, or
composition of Chrysler under any other similar applicable
Federal law, and such decree or order shall have continued
undischarged or unstayed for a period of 120 days; or a decree or
order of a court having jurisdiction in the premises for the
appointment of a custodian, receiver, liquidator, trustee,
assignee, sequestrator, or other similar official in bankruptcy
or insolvency of Chrysler or of any substantial part of its
property, or for the winding up or liquidation of its affairs,
shall have been entered, and such decree or order shall have
remained in force undischarged or unstayed for a period of 120
days;
(f) failure on the part of the Seller, the Servicer
or CFC, as applicable, (i) to make any payment or deposit
(including any Transfer Deposit Amount or Adjustment Payment)
required by the terms of the Agreement or the Receivables
Purchase Agreement on or before the date occurring two Business
Days after the date such payment or deposit is required to be
made therein, or (ii) with respect to any Series, to deliver a
Distribution Date Statement within five Business Days of the day
such item is due to be delivered under the Agreement, or (iii)
duly to observe or perform in any material respect the covenant
of the Seller set forth in Section 2.06(a) of the Agreement or
(iv) duly to observe or perform in any material respect any other
covenants or agreements of the Seller or the Servicer, as the
case may be, set forth in the Agreement or the Receivables
Purchase Agreement, which failure in the case of this clause (iv)
continues unremedied for a period of 45 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Trustee or
any Enhancement Provider;
(g) any representation or warranty made by CFC in the
Receivables Purchase Agreement or the Seller in the Agreement or
any information contained in a computer file or microfiche or
written list required to be delivered by the Seller pursuant to
Section 2.01, 2.05, 2.07 or 2.08 of the Agreement, (i) shall
prove to have been incorrect in any material respect when made or
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when delivered, and shall continue to be incorrect in any
material respect for a period of 60 days after the date on which
written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Trustee and
(ii) as a result of such incorrectness the interests of the
Holders of the Investor Certificates are materially and adversely
affected; provided, however, that a Reinvestment Event shall not
be deemed to have occurred under this paragraph if the Seller has
repurchased the related Receivable or all such Receivables, if
applicable, during such period in accordance with the provisions
of the Agreement;
(h) on any Determination Date, the average of the
Monthly Payment Rates for the two preceding Collection
Periods is less than [ ]%;
(i) on any Determination Date, the Available
Subordinated Amount for the next Distribution Date will be less
than the Required Subordinated Amount on such Determination Date,
after giving effect to the distributions to be made on the next
Distribution Date;
(j) any Service Default with respect to
Series [199_-_] occurs;
(k) on any Determination Date, as of the last day of
the preceding Collection Period, the aggregate amount of
Principal Receivables relating to Used Vehicles exceeds [ ]% of
the Pool Balance on such last day;
(l) on any Determination Date, the quotient obtained
by dividing (i) the sum of (x) the amount on deposit in the Yield
Supplement Account on the next Distribution Date, after giving
effect to the distributions to be made on such Distribution Date,
and (y) the amount on deposit in the Yield Supplement Account on
the immediately preceding Distribution Date, after giving effect
to the distributions made on such Distribution Date, by (ii) the
sum of (A) the outstanding principal balance of the Series
[199_-_] Certificates on the next Distribution Date, after giving
effect to all distributions and payments to be made on such
Distribution Date, and (B) the outstanding principal balance of
the Series [199_-_] Certificates on the immediately preceding
Distribution Date, after giving effect to all distributions and
payments made on such Distribution Date, is less than [ ]%;
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(m) interest at the Certificate Rate is not paid
on the Series [199_-_] Certificates on any
[Distribution Date] [Interest Payment Date];
(n) the delivery by the Seller to the Trustee of a
notice, stating that the Seller will no longer continue to sell
Receivables to the Trust on [ ] or any yearly anniversary
thereof; provided that the Seller shall have delivered to the
Trustee an Opinion of Counsel to the effect that, following the
suspension of the sale of Receivables, the Trust shall not become
an "investment company" within the meaning of the Investment
Company Act;
(o) any Carry-over Amount or Additional Carry-over
Amount is outstanding on six consecutive Distribution Dates; or
(p) [other];
then, subject to applicable law, and after the applicable grace period, if
any, a reinvestment event (a "Reinvestment Event") shall occur without any
notice or other action on the part of the Trustee, any Agent, the Series
[199_-_] Certificateholders or any other Beneficiary, immediately upon the
occurrence of such event.] 2/
[ARTICLE VIII
Optional Repurchase
SECTION 8.01. Optional Repurchase. (a) On any
Distribution Date occurring after the date on which the Invested Amount is
reduced to $[ ] or less, the Seller shall have the option, subject to the
condition set forth in paragraph (c) to purchase the entire Series [199_-_]
Certificateholders' Interest, at a purchase price equal to the Reassignment
Amount for such Distribution Date.
(b) The Seller shall give the Servicer and the
Trustee at least 10 days' prior written notice of the Distribution Date on
which the Seller intends to exercise such purchase option. Not later than
12:00 noon, New York City time, on such Distribution Date the Seller shall
deposit the Reassignment Amount into the Collection Account in immediately
available funds. Such purchase option is subject to payment in full of the
Reassignment Amount. The
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Reassignment Amount shall be distributed as set forth in Section 9.01(b).]
(c) [Add other repurchase provisions, if applicable.]
ARTICLE IX
Final Distributions
SECTION 9.01. Sale of Certificateholders' Interest
Pursuant to Section 2.03 of the Agreement; Distributions Pursuant to [Section
8.01 of This Series Supplement or] Section 2.03 or 12.02(c) of the Agreement.
(a) The amount to be paid by the Seller to the Collection Account with
respect to Series [199_-_] in connection with a purchase of the
Certificateholders' Interest pursuant to Section 2.03 of the Agreement shall
equal the Reassignment Amount for the Distribution Date on which such
repurchase occurs.
(b) With respect to the Reassignment Amount
deposited into the Collection Account pursuant to Section [8.01 or] 9.01 of
this Series Supplement or Section 2.03 of the Agreement or any Termination
Proceeds deposited into the Collection Account pursuant to Section 12.02(c)
of the Agreement, the Trustee shall, not later than 12:00 noon, New York City
time, on the Distribution Date on which such amounts are deposited (or, if
such date is not a Distribution Date, on the immediately following
Distribution Date) (in the priority set forth below): (i) first, (x) deposit
the Invested Amount on such date [into the Principal Funding Account] and (y)
deposit the amount of accrued and unpaid interest on the unpaid balance of
the Series [199_-_] Certificates, plus the amount of Additional Interest, if
any, for such Distribution Date and any Additional Interest, Carry-over
Amount, Additional Carry-over Amount or Asset Composition Premium previously
due but not paid to Series [199_-_] Certificateholders on any prior
Distribution Date, up to the Reassignment Amount for Series [199_-_] and (ii)
second, pay the remainder of any Termination Proceeds to the Seller.
[Describe other applications, if any.]
(c) Notwithstanding anything to the contrary in
this Series Supplement or the Agreement, the entire amount deposited [in the
Principal Funding Account] pursuant to Section [8.01 or] 9.01 and all other
amounts on deposit therein shall be distributed in full to the Series
[199_-_] Certificateholders on such date and any distribution made
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pursuant to paragraph (b) above shall be deemed to be a final distribution
pursuant to Section 12.02 of the Agreement with respect to Series [199_-_].
SECTION 9.02. Distribution of Proceeds of Sale,
Disposition or Liquidation of the Receivables Pursuant to Section 9.02 of the
Agreement. (a) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
deposited into the Collection Account pursuant to Section 9.02(b) of the
Agreement, the Trustee shall first (in each case, after giving effect to any
deposits and distributions otherwise to be made on such Distribution Date)
deduct an amount equal to the Invested Amount on such Distribution Date from
the portion of the Insolvency Proceeds allocated to Allocable Principal
Collections and deposit such amount in [the Principal Funding Account];
provided that the amount of such deposit shall not exceed the product of (x)
the portion of the Insolvency Proceeds allocated to Allocable Principal
Collections and (y) 100% minus the Excess Seller's Percentage with respect to
the related Collection Period. The remainder of the portion of the Insolvency
Proceeds allocated to Allocable Principal Collections shall be allocated to
the Seller's Interest and shall be released to the Seller on such
Distribution Date. [Describe other applications, if any.]
(b) Not later than 12:00 noon, New York City
time, on such Distribution Date, the Trustee shall first (in each case, after
giving effect to any deposits and distributions otherwise to be made on such
Distribution Date) deduct an amount equal to the sum of (i) Monthly Interest
for such Distribution Date, (ii) any Monthly Interest previously due but not
[deposited to the Interest Funding Account or] distributed on a prior
Distribution Date, (iii) the amount of Additional Interest, if any, for such
Distribution Date and any Additional Interest previously due but not
[deposited to the Interest Funding Account or] distributed on a prior
Distribution Date, [(iv) any Carry-over Amount for such Distribution Date and
any Carry-over Amount previously due but not distributed to the Series
[199_-_] Certificateholders on a prior Distribution Date and (v) the amount
of any Additional Carry-over Amount for such Distribution Date and any
Additional Carry-over Amount previously due but not distributed to the Series
[199_-_] Certificateholders on a prior Distribution Date,] from the portion
of the Insolvency Proceeds allocated to Allocable Non-Principal Collections
and deposit such amount in the Collection Account with such funds designated
by the Trustee as being held for the benefit of the Series [199_-_]
Certificateholders; provided
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that the amount of such distribution shall not exceed (x) the product of (A)
the portion of the Insolvency Proceeds allocated to Allocable Non-Principal
Collections and (B) 100% minus the Excess Seller's Percentage. The remainder
of the portion of the Insolvency Proceeds allocated to Allocable
Non-Principal Collections shall be allocated to the Seller's Interest and
shall be released to the Seller on such Distribution Date. [Describe other
applications, if any.]
(c) Notwithstanding anything to the contrary in
this Series Supplement or the Agreement, the entire amount deposited in the
Principal Funding Account and the Collection Account pursuant to this Section
and all other amounts on deposit therein shall be distributed in full to the
Series [199_-_] Certificateholders on the Distribution Date on which funds
are deposited pursuant to this Section (or, if not so deposited on a
Distribution Date, on the immediately following Distribution Date) and any
distribution made pursuant to this Section shall be deemed to be a final
distribution pursuant to Section 12.02 of the Agreement with respect to
Series [199_-_].
ARTICLE X
Other Series Provisions
SECTION 10.01. Certain Permitted Actions; Amendments
to the Agreement; Additional Covenants. (a) Notwithstanding anything to the
contrary in the Agreement, funds on deposit in the Collection Account may be
invested in any Eligible Investments (as that term is defined in this Series
Supplement).
(b) Notwithstanding anything to the contrary in
the Agreement, including Section 2.07(c) thereof, the Seller shall not be
required to make any deposit to the Collection Account in respect of the
Repurchased Receivables Price of any receivables repurchased by the Seller
from the Trust pursuant to such Section.
(c) Notwithstanding anything to the contrary
contained herein or in the Agreement, the Seller shall have the right to
require the reassignment to it of all the Trust's right, title and interest
in, to and under the Receivables then existing and thereafter created, all
monies due or to become due and all amounts received with respect thereto and
all proceeds thereof in or with respect to the Accounts ("Automatic Removed
Accounts") designated by the Seller, upon satisfaction of the following
conditions:
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(a) on or before the fifth business day immediately preceding the date upon
which such Accounts are to be removed, the Seller shall have given the Trust,
each Enhancement Provider and the Rating Agencies a Removal Notice specifying
the date for removal of the Automatic Removed Accounts (the "Automatic
Removal Date"); (b) on or prior to the date that is five Business Days after
the Automatic Removal Date, the Seller shall have delivered to the Trustee a
computer file or microfiche or written list containing a true and complete
list of the Automatic Removed Accounts specifying for each such Account, as
of the removal notice date, its account number and the aggregate amount of
Receivables outstanding in such Account; (c) the Seller shall have
represented and warranted as of each Automatic Removal Date that the list of
Automatic Removed Accounts delivered pursuant to clause (b) above, as of the
Automatic Removal Date, is true and complete in all material respects; (d)
the Trustee shall have received confirmation from each Rating Agency that
such removal will not result in a reduction or withdrawal of such Rating
Agency's rating of any outstanding Series or Class of Certificates; (e) the
Seller shall have delivered to the Trustee, each Rating Agency and any
Enhancement Providers an officers' certificate, dated the Automatic Removal
Date, to the effect that the Seller reasonably believes that such removal
will not cause an early amortization event to occur with respect to any
Series; and (f) the Seller shall have delivered to the Trustee, each Rating
Agency and any Enhancement Providers a Tax Opinion, dated the Automatic
Removal Date, with respect to such removal.
Upon satisfaction of the above conditions, on the
Automatic Removal Date all the right, title and interest of the Trust in and
to the Receivables arising in the Automatic Removed Accounts, all monies due
and to become due and all amounts received with respect thereto and all
proceeds thereof shall be deemed removed from the Trust for all purposes.
(d) Notwithstanding anything to the contrary
herein or in the Agreement, subject to the other limitations described in
Section 4.03 of the Agreement, CFC need not deposit collections with respect
to any Collection Period in the Collection Account until the related
Distribution Date.
(e) Unless otherwise agreed to by the Rating
Agencies, notwithstanding anything to the contrary herein or in the
Agreement, the Seller may from time to time, at its discretion, and subject
only to the limitations specified in this paragraph, designate Additional
Accounts to be added to the Trust. (Additional Accounts designated to be
added to
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the Trust in accordance with the provisions of this Section 10.01(e) are
referred to herein as "Automatic Additional Accounts".) On the Addition Date
with respect to any Automatic Additional Accounts, the Trust shall purchase
the Receivables in such Automatic Additional Accounts (and such Automatic
Additional Accounts shall be deemed to be Accounts for purposes of the
Agreement) as of the close of business on the applicable Additional Cut-Off
Date, subject to the satisfaction of the following conditions:
(i) such Automatic Additional Accounts shall be
Eligible Accounts;
(ii) the Seller shall, to the extent required by
Section 4.03 of the Agreement, have deposited in the Collection
Account all Collections with respect to such Automatic Additional
Accounts since the Additional CutOff Date;
(iii) no selection procedures believed by the Seller
to be adverse to the interests of the Series [199_-_]
Certificateholders were used in selecting such Automatic
Additional Accounts;
(iv) as of each of the Additional Cut-Off Date and
the Addition Date, no Insolvency Event with respect to CFC or the
Seller shall have occurred nor shall the transfer of the
Receivables arising in the Automatic Additional Accounts to the
Trust have been made in contemplation of the occurrence thereof;
(v) the addition of the Receivables arising in the
Automatic Additional Accounts shall not cause an early
amortization event or any event that, after the giving of notice
or the lapse of time, would constitute a early amortization event
to occur with respect to any Series;
(vi) on or before each Addition Date with respect to
Automatic Additional Accounts, the Seller shall have delivered to
the Trustee and the Rating Agencies (A) an Opinion of Counsel
with respect to the Receivables in the Automatic Additional
Accounts substantially in the form of Exhibit G-2 to the
Agreement and (B) a Tax Opinion with respect to such addition;
(vii) within ten Business Days of the date on which
any such Receivables are added to the Trust, the Seller shall
have delivered to the Trustee a written assignment and a computer
file or a microfiche list containing a true and complete list of
the related
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Automatic Additional Accounts specifying for each such Account
its account number, the collection status, the aggregate amount
outstanding in such Account and the aggregate amount of Principal
Receivables outstanding in such Account; and
(viii) the Seller shall have delivered to the Trustee
an Officer's Certificate of the Seller, dated the Addition Date,
to the effect that conditions (i) through (v) and (vii) above
have been satisfied.
The Seller hereby represents and warrants to the
Trust as of the related Addition Date as to the matters relating to it set
forth in paragraphs (iii) and (iv) above and that the file or list described
below is, as of the applicable Additional Cut-Off Date, true and complete in
all material respects.
In connection with the designation of Automatic
Additional Account to be added to the Trust, the Seller shall deliver to the
Trustee (i) the computer file or microfiche list required to be delivered
pursuant to Section 2.01 of the Agreement with respect to such Automatic
Additional Accounts and (ii) a duly executed, written Assignment (including
an acceptance by the Trustee for the benefit of the Certificateholders),
substantially in the form of Exhibit B to the Agreement (the "Assignment").
Unless each Rating Agency otherwise consents, the
number of Automatic Additional Accounts added to the Trust with respect to
any of the three consecutive Collection Periods beginning in January, April,
July and October of each calendar year shall not exceed 8% of the number of
Accounts as of the first day of the calendar year during which such
Collection Periods commence and the number of Automatic Additional Accounts
designated during any such calendar year shall not exceed 20% of the number
of Accounts as of the first day of such calendar year. On or before the first
business day of each Collection Period beginning in January, April, July and
October of each calendar year, the Seller shall have requested and obtained
notification from each Rating Agency of any limitations to the right of the
Seller to designate Eligible Accounts as Automatic Additional Accounts during
any period which includes such Collection Period. To the extent that
Automatic Additional Accounts have been added to the Trust during the three
consecutive Collection Periods ending in the calendar month prior to such
date, on or before January 31, April 30, July 31, October 31 of each calendar
year, the Trustee shall have received confirmation from each Rating Agency
that the addition of all Automatic Additional Accounts included as
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Accounts during the three consecutive Collection Periods ending in the
calendar month prior to such date shall not have resulted in any applicable
Rating Agency reducing or withdrawing its rating of any outstanding Series or
Class of Certificates. If such Rating Agency confirmation with respect to any
Automatic Additional Accounts is not so received, such Automatic Additional
Accounts will be removed from the Trust.
(f) Each Holder of a Series [199_-_] Certificate,
by such Holder's acceptance thereof, will be deemed to have consented to an
amendment to the Agreement that incorporates the provisions of Sections
10.01(a) and 10.01(b), 10.01(c), 10.01(d) and 10.01(e), it being understood
that no such amendment shall be effective unless and until each Series of
Investor Certificates issued prior to October 20, 1994 shall no longer be
outstanding or shall have consented to such amendment in accordance with the
Agreement.
[(g) Notwithstanding anything to the contrary in
the Agreement, the Seller shall have the option to designate at any time and
from time to time a percentage or percentages, which may be a fixed
percentage or a variable percentage based on a formula (the "Discount
Percentage"), of all or any specified portion of Principal Receivables
created after the Discount Option Date to be treated as Non- Principal
Receivables ("Discount Option Receivables"). The Seller shall also have the
option of reducing or withdrawing the Discount Percentage, at any time and
from time to time, on and after such Discount Option Date. The Seller shall
provide to the Servicer, the Trustee and any Rating Agency 30 days' prior
written notice of the Discount Option Date, and such designation shall become
effective on the Discount Option Date (i) unless such designation in the
reasonable belief of the Seller would cause an amortization event or
reinvestment event with respect to any Series to occur, or an event which,
with notice or lapse of time or both, would constitute an amortization event
or reinvestment event with respect to any Series and (ii) only if the Rating
Agency Condition shall have been satisfied with respect to such designation.
After the discount Option Date (i) Discount Option Receivable Collections
shall be treated as Collections of Non-Principal Receivables and (ii) the
definition of "Principal Receivables" shall be amended to read as follows:
"Principal Receivables" with respect to an Account
shall mean amounts shown on the Servicer's records as Receivables (other than
such amounts which represent Non- Principal Receivables) payable by the
related Dealer; provided, however, that after the Discount Option Date,
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Principal Receivables on any Date of Processing thereafter shall mean
Principal Receivables as otherwise determined pursuant to this definition
minus the amount of any Discount Option Receivables. Notwithstanding anything
to the contrary in this Agreement, (i) Purchased Receivables and Fleet
Receivables shall not be deemed to be Principal Receivables for the purposes
of this Agreement and (ii) the amount of Principal Receivables on any date of
determination for all purposes of this Agreement shall be deemed to be the
actual amount thereof at such time minus the aggregate amount on deposit at
such time in the Cash Management Accounts maintained for the benefit of the
related Dealers.]
[(h) Each Holder of a Series [199_-_]
Certificate, by such Holder's acceptance thereof, will be deemed to have
consented to an amendment to the Agreement that incorporates the provisions
of Section 10.01(g), it being understood that no such amendment shall be
effective unless and until each Series of Investor Certificates issued prior
to August 19, 1997, shall no longer be outstanding or shall have consented to
such amendment in accordance with the Agreement.]
(i) Except for the conveyance hereunder to the
Trustee, the Seller will not sell, pledge, assign or transfer to any other
Person any rights it might have to funds on deposit in [the Reserve Fund,]
[the Principal Funding Account,] [the Excess Funding Account,] [the Yield
Supplement Account,] [other,] or Investment Proceeds with
respect thereto.
[SECTION 10.02. Effect of Fully Reinvested Date;
Conveyance of Receivables. (a) Notwithstanding anything to the contrary in
the Agreement, upon the occurrence of the Fully Reinvested Date, after giving
effect to all allocations, distributions, withdrawals and deposits to be made
on such date, the following provisions of the Agreement shall no longer apply
to the Seller or the Servicer, as applicable, the Series [199_-_]
Certificates or the Series [199_-_] Certificateholders[, unless, in each
case, the Revolving Period shall have recommenced]:
(i) Section 2.01 (except to the extent it relates to
amounts received with respect to the Receivables and the
Collateral Security and proceeds (including "proceeds" as defined
in Section 9-306 of the UCC as in effect in the State of Michigan
and Recoveries) thereof on deposit in the Series [199_-_]
Accounts on the Fully Reinvested Date, after giving effect to all
such allocations, distributions, withdrawals and deposits);
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(ii) Section 2.03(i) and Section 2.03(j) (except to
the extent it relates to amounts received with respect to the
Receivables and the Collateral Security and proceeds (including
"proceeds" as defined in Section 9-306 of the UCC as in effect in
the State of Michigan and Recoveries) thereof on deposit in the
Series [199_-_] Accounts on the Fully Reinvested Date, after
giving effect to all such allocations, distributions, withdrawals
and deposits) and all obligations and remedies in Section 2.03
relating to a breach of the representations contained in those
Sections other than to the extent provided above);
(iii) Section 2.04;
(iv) Section 2.05; provided that the Seller may from
time to time at its sole discretion, voluntarily designate
additional Accounts (including Partial Accounts) to be included
as Accounts and transfer to the Trust the Receivables (and the
related Collateral Security) of such Additional Accounts;
(v) Sections 2.06(a),(b),(c) and (d);
(vi) Section 2.07; provided that the Seller may from
time to time at its sole discretion remove Accounts from the
Trust;
(vii) Section 2.08;
(viii) Section 2.09;
(ix) the first sentence of Section 3.01(a), Section
3.01(b) and Section 3.01(d);
(x) Section 3.03(a)(vii), Section 3.03 (viii),
Section 3.03 (ix), Section 3.03(x) and Section 3.03(xi) and all
obligations and remedies contained in Sections 3.03(a) and
3.03(b) relating to a breach of the representations contained in
those Sections;
(xi) Section 3.06;
(xii) Section 3.07;
(xiii) Section 3.09;
(xiv) Section 4.03;
(xv) Section 4.04;
62
<PAGE>
(xvi) Section 6.03(b) (except for the first, second and
last sentences thereof) and the last two sentences of Section 6.03
(c) and the conditions set forth in Section 6.03(c) to the
exchange of CARCO Certificate;
(xvii) Section 8.06;
(xviii) Section 8.08;
(xix) Section 11.01(e); and
[(xx) [Sections 13.02(a),(b) and (c) and] clauses
(ii) and (iii) of Section 13.02(d).
(b) Upon the later to occur of (i) the Fully
Reinvested Date and the making of all allocations, distributions, withdrawals
and deposits to be made on such date and (ii) the date on which each other
Series is either no longer outstanding or the fully reinvested date has
occurred with respect thereto, the Trustee shall sell, assign and convey to
the Seller or its designee, without recourse, representation or warranty, all
right, title and interest of the Trust in the Receivables, whether then
existing or thereafter created, all Collateral Security with respect thereto,
all monies due or to become due and all amounts received with respect thereto
and all proceeds thereof except for amounts on deposit in the Collection
Account that are allocable to Investor Certificates and amounts on deposit in
any Series Account. The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be
reasonably requested by the Seller to vest in the Seller or its designee all
right, title and interest which the Trust had in all such property.]
[SECTION 10.03. Tax Treatment. The Seller has
entered into the Agreement and this Series Supplement and the Series [199_-_]
Certificates have been issued with the intention that the Series [199_-_]
Certificates will quality under applicable tax law as indebtedness of the
Seller secured by the Trust assets attributable to the Series [199_-_]
Certificates. The Seller, each Beneficiary and each Series [199_-_]
Certificateholder and Certificate Owner, by the acceptance of its Series
[199_-_] Certificate or Book-Entry Certificate, as applicable, agrees to
treat the Series [199_-_] Certificates as indebtedness of the Seller secured
by the Trust assets attributable to the Series [199_-_] Certificates, for
Federal income taxes, state and local income and franchise taxes, Michigan
Single Business tax and any other taxes imposed on or measured by income in
whole or in part.
63
<PAGE>
ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Ratification of Agreement. As
supplemented by this Series Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented by this Series
Supplement shall be read, taken and construed as one and the same instrument.
SECTION 11.02. Counterparts. This Series
Supplement may be executed in two or more counterparts (and by different
parties on separate counterparts) each of which shall be an original, but all
of which together shall constitute one and the same instrument.
[SECTION 11.03 Dealer Concentrations. So long
as this Series [199_-_] shall be outstanding, on the last day of each
Collection Period, the Servicer shall determine if the aggregate amount of
Principal Receivables due from any Dealer or group of affiliated Dealers on
such date is greater than [ ]% of the Pool Balance on such date. The Servicer
shall promptly provide the Trustee a report setting forth the basis for such
determination. The Trustee upon request from any Rating Agency will make such
report available to such Rating Agency.]
SECTION 11.04. GOVERNING LAW. THIS SERIES
SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Seller, the Servicer and
the Trustee have caused this Series Supplement to be duly executed by their
respective officers as of the day and year first above written.
U.S. AUTO RECEIVABLES COMPANY,
Seller,
by
---------------------------
64
<PAGE>
CHRYSLER FINANCIAL
CORPORATION, Servicer,
by
---------------------------
THE BANK OF NEW YORK, Trustee,
by
----------------------------
65
<PAGE>
EXHIBIT A
[FORM OF CERTIFICATE]
FACE OF CERTIFICATE
[THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT
OF A BENEFIT PLAN (AS DEFINED BELOW).]
Initial Invested Amount:
REGISTERED 1/
$[ ]
Certificate No. R-[ ]
CUSIP NO. [ ]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
CARCO AUTO LOAN MASTER TRUST
[FLOATING RATE] [ %] AUTO LOAN
ASSET BACKED CERTIFICATES, SERIES [199_-_]
evidencing a fractional undivided interest in certain
assets of the
CARCO AUTO LOAN MASTER TRUST
the corpus of which consists primarily of wholesale (i.e., dealer floorplan)
receivables (the "Receivables") generated from time to time in the ordinary
course of business in a portfolio of revolving financing arrangements (the
"Accounts") of Chrysler Financial Corporation meeting certain eligibility
criteria. This certificate (a "Certificate") does not represent an interest
in, or obligation of, U.S. Auto Receivables Company (the "Seller"
- --------
1/ Denominations of [$1,000] and integral multiples of [$1,000] in excess
thereof.
1
<PAGE>
or "USA"), Chrysler Financial Corporation or any affiliate
thereof.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling and
Servicing Agreement referred to on the reverse side hereof or be valid for
any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Seller has caused this Certificate
to be duly executed.
U.S. AUTO RECEIVABLES COMPANY,
by
-------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the within-mentioned Pooling and
Servicing Agreement.
THE BANK OF NEW YORK
as Trustee,
by
------------------------
Authorized Officer
2
<PAGE>
REVERSE OF CERTIFICATE
[The Series [199_-_] Certificates may not be acquired by or
for the account of any employee benefit plan, trust or account, including an
individual retirement account, that is subject to Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, or that is described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, or an
entity whose underlying assets include plan assets by reason of a plan's
investment in such entity (a "Benefit Plan"). By accepting and holding this
Series [199_-_] Certificate, the Holder hereof shall be deemed to have
represented and warranted that it is not a Benefit Plan. By acquiring any
interest in this Series [199_-_] Certificate, the applicable Certificate
Owner or Owners shall be deemed to have represented and warranted that it or
they are not Benefit Plans.]
This certifies that Cede & Co. (the "Series [199_-_]
Certificateholder"), is the registered owner of a fractional undivided
interest in certain assets of the CARCO AUTO LOAN MASTER TRUST (the "Trust")
created pursuant to a Pooling and Servicing Agreement dated as of May 31,
1991, as assigned by Chrysler Auto Receivables Company to U.S. Auto
Receivables Company (the "Seller") on August 8, 1991 (as assigned and as
amended and supplemented from time to time, the "P&S"), among the Seller,
Chrysler Credit Corporation, which has been succeeded by Chrysler Financial
Corporation, as servicer (the "Servicer"), and Manufacturers and Traders
Trust Company, which has been succeeded by The Bank of New York, as trustee
(the "Trustee"), as supplemented by the Series [199_-_] Supplement dated as
of [ ], [199_-_] among the Seller, the Servicer and the Trustee (the "Series
Supplement"), that are allocated to the Series [199_-_] Certificateholders'
Interest pursuant to the P&S and the Series Supplement. The P&S and the
Series Supplement are hereinafter collectively referred to as the Pooling and
Servicing Agreement. The corpus of the Trust will include (a) all of the
Seller's right, title and interest in, to and under the Receivables in each
Account and all Collateral Security with respect thereto owned by the Seller
at the close of business on the Cut-Off Date, in the case of the Initial
Accounts, and on the applicable Additional Cut-Off Date, in the case of
Additional Accounts, and all monies due or to become due and all amounts
received with respect thereto and all proceeds (including "proceeds" as
defined in Section 9-306 of the UCC as in effect in the State of Michigan and
Recoveries) thereof, (b) all of the Seller's rights, remedies, powers and
privileges with respect to such Receivables under the Receivables Purchase
Agreement,
3
<PAGE>
(c) all of the Seller's right, title and interest in, to and under the
Receivables in each Account (other than any newly created Receivables in any
Designated Account) and all Collateral Security with respect thereto owned by
the Seller at the close of business on each Transfer Date and not theretofore
conveyed to the Trust, all monies due or to become due and all amounts
received with respect thereto and all proceeds (including "proceeds" as
defined in Section 9-306 of the UCC as in effect in the State of Michigan
and Recoveries) thereof, (d) all monies on deposit in, and Eligible
Investments or other investments credited to, the Collection Account or
any Series Account, (e) any Enhancements and (f) all other assets and
interests constituting the Trust. In addition to the Certificates, the
Seller's Certificate will be issued pursuant to the Pooling and Servicing
Agreement which will represent the Seller's Interest in the Trust. The
Seller's Certificate will represent the interest in the Trust Assets
not represented by the Investor Certificates.
The Receivables consist of advances made directly or
indirectly by Chrysler Financial Corporation to domestic automobile dealers
franchised by Chrysler Corporation or any other automobile manufacturers.
Subject to the terms and conditions of the Agreement, the
Seller may from time to time direct the Trustee, on behalf of the Trust, to
issue one or more new Series of Investor Certificates, which will represent
fractional undivided interests in certain of the Trust Assets.
This Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement to
which, as amended and supplemented from time to time, the Series [199_-_]
Certificateholder by virtue of the acceptance hereof assents and is bound.
Although a summary of certain provisions of the Pooling and Servicing
Agreement is set forth below, this Certificate does not purport to summarize
the Pooling and Servicing Agreement and reference is made to the Pooling and
Servicing Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee. A copy of the Pooling and Servicing
Agreement (without schedules and exhibits) may be requested from the Trustee
by writing to the Trustee at The Bank of New York, 101 Barclay Street, New
York, New York 10286, Attention: Corporate Trust Office. To the extent not
defined herein, the capitalized terms used herein have the
4
<PAGE>
meanings ascribed to them in the Pooling and Servicing Agreement.
The Seller has entered into the Pooling and Servicing
Agreement and the Series [199_-_] Certificates have been (or will be) issued
with the intention that the Series [199_-_] Certificates will qualify under
applicable tax law as indebtedness of the Seller secured by the Receivables.
The Seller, each Beneficiary and each Certificateholder and Certificate
Owner, by the acceptance of its Certificate or Book-Entry Certificate, as
applicable, agrees to treat the Series [199_-_] Certificates as indebtedness
of the Seller secured by the Receivables for Federal income taxes, state and
local income, single business and franchise taxes and any other taxes imposed
on or measured by income.
On each Distribution Date, the Trustee shall distribute to
each Series [199_-_] Certificateholder of record at the close of business on
the day preceding such Distribution Date (each a "Record Date") such
Certificateholder's pro rata share (based on the aggregate fractional
undivided interest represented by the Series [199_-_] Certificates held by
such Certificateholder, except as otherwise provided in the Pooling and
Servicing Agreement) of such amounts on deposit in the Collection Account and
any Series Account as are payable in respect of the Series [199_-_]
Certificates pursuant to the Pooling and Servicing Agreement. Distributions
with respect to this Certificate will be made by the Trustee by check mailed
to the address of the Certificateholder of record appearing in the
Certificate Register without the presentation or surrender of this
Certificate or the making of any notation thereon (except for the final
distribution in respect of this Certificate) except that with respect to
Series [199_-_] Certificates registered in the name of a Depository,
including Cede & Co., the nominee for The Depository Trust Company,
distributions will be made in immediately available funds. Final payment of
this Certificate will be made only upon presentation and surrender of this
Certificate at the office or agency specified in the notice of final
distribution delivered by the Trustee to the Certificateholder in accordance
with the Pooling and Servicing Agreement.
On the Distribution Date occurring after the Invested
Amount is reduced to $[ ] or less, the Seller has the option to purchase the
entire Series [199_-_] Certificateholders' Interest in the Trust. The
purchase price will be equal to the Reassignment Amount (as defined
5
<PAGE>
in the Series Supplement). [Describe other repurchase provisions.]
This Certificate does not represent an obligation of, or an
interest in, Chrysler Corporation, the Seller, the Servicer, or any affiliate
of any of them and is not insured or guaranteed by any governmental agency or
instrumentality. This Certificate is limited in right of payment to certain
Collections with respect to the Receivables (and certain other amounts), all
as more specifically set forth herein and in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement may be amended from
time to time (including in connection with the issuance of a Supplemental
Certificate) by the Servicer, the Seller and the Trustee, without the consent
of any of the Series [199_-_] Certificateholders, so long as any such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Certificateholders of any outstanding
Series. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's rights, duties or immunities under the
Pooling and Servicing Agreement or otherwise. Notwithstanding anything
contained therein to the contrary, the Trustee, with the consent of any
Enhancement Providers, may at any time and from time to time amend, modify or
supplement the form of Distribution Date Statement.
The Pooling and Servicing Agreement may also be amended
from time to time (including in connection with the issuance of a
Supplemental Certificate) by the Servicer, the Seller and the Trustee with
the consent of the Holders of Certificates evidencing not less than
66-2/3% of the aggregate unpaid principal amount of the Certificates
of all adversely affected Series, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Pooling
and Servicing Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment to the
Pooling and Servicing Agreement shall (i) reduce in any manner the amount of
or delay the timing of distributions to be made to Certificateholders
or deposits of amounts to be so distributed without the consent of each
affected Certificateholder; (ii) change the definition or the manner
of calculating any Certificateholders' interest without the consent of each
affected Certificateholder; (iii) reduce the amount available under
any Enhancement without the consent of each affected
6
<PAGE>
Certificateholder; (iv) adversely affect the rating of any Series or
class by each Rating Agency without the consent of the holders of
certificates of such Series or Class evidencing not less than 66-2/3% of the
aggregate unpaid principal amount of the Certificates of such Series
or Class; or (v) reduce the aforesaid percentage required to consent to any
such amendment without the consent of all Certificateholders. The
Pooling and Servicing Agreement may not be amended in any manner which
adversely affects the interests of any Enhancement Provider without its prior
consent.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register of the Trustee upon
surrender of this Certificate for registration of transfer at the office or
agency maintained by the Trustee in New York, New York, accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly
executed by the Holder hereof or such Holder's attorney duly authorized, and
thereupon one or more new Series [199_-_] Certificates of authorized
denominations evidencing the same aggregate fractional undivided interest
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Pooling
and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Series [199_-_] Certificates are
exchangeable for new Series [199_-_] Certificates evidencing like aggregate
fractional undivided interests as requested by the Certificateholder
surrendering such Certificates. No service charge may be imposed for any such
exchange but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
7
<PAGE>
The Servicer, the Trustee, the Transfer Agent and Registrar
and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither
the Servicer nor the Trustee, the Transfer Agent and Registrar, nor any agent
of any of them, shall be affected by notice to the contrary except in certain
circumstances described in the Pooling and Servicing Agreement.
8
<PAGE>
ASSIGNMENT
Social Security or other identifying number of assignee
- -------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
-----------------------------------------
- --------------------------------------------------------------------
(name and address of assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: *
------------- -------------------------
Signature Guaranteed:
-------------------------
- --------------------
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the reverse of the within Certificate
in every particular, without alteration, enlargement or any change
whatsoever.
<PAGE>
EXHIBIT B
Series XXXX-X Initial Amounts
Initial Invested Amount
Principal Accumulation Amount
Aggregate Subordinated Amount
Swap Subordinated Amount
Required Reserve Percentage
Monthly Servicing Fee Rate
Required Participation Percentage
Subordination Factor
Expected Accumulation Period
Expected Final Payment Date
Initial Settlement Date
Spread to Index
<TABLE>
<CAPTION>
Series XXXX-X MONTHLY REPORTING
Swap
Subordi- Aggregate Excess
Series XXXX-X Invested Subordinated nated Subordinated Funding Acct
Principal Receivables Total Amount Amount Amount Amount Excess (Cash) Certificates
- --------------------- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series Allocation
Percentage
Beginning Balance
Floating Allocation
Percentage
Principal Collections
New Principal Receivables
Principal Default Amounts
Receivables Added for
Additional Accounts
Controlled Accumulation
Shortfall
Monthly Principal Accumulated
Principal Allocation
Percentage
Ending Balance
Floating Allocation
Percentage
Pool Factor
Non-Principal Receivables
- -------------------------
Total Interest Collections
Interest Collections
Interest Collections
on "D" and "L" Accounts
Recoveries on Receivables
Written off
Investment Income
<CAPTION>
Subordinated Amount &
Reserve Fund Current Previous
- --------------------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning Subordination Amount
Required Subordination Draw
Amount
Excess Servicing
Required Subordinated Amount Series XXXX-X
<PAGE>
2
Available Subordination Amount
as of:
Initial Subordinated Amount
Incremental Subordination Amount
Default Receivables
Overconcentration Amount
Installment Balance Amount
Other Ineligible Amounts
Beginning of Period
Seller's Participation Deficiency
Required Reduction of Invested
Amount
End of Period
Seller's Participation Deficiency
Required Reduction of Invested
Amount
Beginning Reserve Fund Balance
Reserve Fund Required Amount
Reserve Fund Draw
Reserve Fund Deposit Amount
Ending Reserve Fund Balance
Beginning Yield Supplement Account
Balance
Yield Supplement Account Draw
Yield Supplement Account Deposit
Ending Yield Supplement Account
Balance
<CAPTION>
Required Interest Distributions Current Previous
- ------------------------------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Available Non-Principal Collections
Investor Non-Principal Collections
Subordinated Non-Principal
Collections
Investment Income
Total Non-Principal Available
Monthly Interest
[Index]
Spread to [Index]
Certificate Rate
Servicing Fee Rate
Asset Receivables Rate
Certificate Rate
<PAGE>
3
Accrual From
Accrual To
Days in Period
Interest Shortfall
Additional Interest
Carry-over Amount
Carry-over Shortfall
Additional Carry-over Shortfall
Monthly Servicing Fee
Investor Monthly Servicing Fee
Reserve Fund Deposit Amount
Investor Default Amount
Excess Servicing and Subordinated
Collections
Excess Subordinated Non-Principal
Collections
Excess Servicing
Yield Supplement Draw
Deficiency Amount
Required Principal Distributions
- --------------------------------
Investor Principal
Seller Monthly Principal
<CAPTION>
Funding Account Balances Beginning Reinvested Deposits Withdrawals Ending
- ------------------------ --------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Excess Funding Account
Principal Funding Account
Total
Ending Series Allocation Percentage
(SAP)
Ending Pool Balance
SAP*Pool Balance
Reserve Fund Balance
Yield Supplement Account Balance
Total Funding Account Balances
Total Assets
<CAPTION>
Summary of Investor Distributions Actual Per $1000 Start Tracking Accumulation Period Length ?
- --------------------------------- ------ --------- -----------------------------------------
Investor Monthly Principal
Investor Monthly Interest
Total Investor Distributions
</TABLE>
EXHIBIT 4.5
FORM OF REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of [ ], 199[ ] (the
"Remarketing Agreement"), by and among Chrysler Financial Corporation
("CFC"), U.S. Auto Receivables Company ("USA"), The Bank of New York, as
Trustee under the below-mentioned Pooling and Servicing Agreement (in its
capacity as trustee, the "Trustee", and in its capacity as remarketing
coordinator, the "Remarketing Coordinator") and [ ] (in its capacity as
underwriter, the "Underwriter" and in its capacity as remarketing
broker-dealer, the "Remarketing Broker-Dealer").
WHEREAS USA expects to cause the CARCO Auto Loan Master
Trust (the "Trust") to issue $[ ] principal amount of Floating Rate Auto
Loan Asset Backed Certificates, Series 199[ - ], consisting of $[ ]
principal amount of [Class A-1] [Money Market Extendible Certificates],
Series 199[ - ] (the "Certificates" and any holder of such Certificates, a
"Certificateholder"), and $[ ] principal amount of [Class A-2] [Medium
Term Certificates, Series 199[ - ] (the "Class A-2 Certificates")], pursuant
to and with the rights assigned to them in the Pooling and Servicing
Agreement dated as of May 31, 1991, as assigned by Chrysler Auto Receivables
Company ("CARCO") to USA on August 8, 1991 (as assigned and as supplemented
and amended from time to time, the "P&S"), among CARCO, USA, as Seller,
Chrysler Credit Corporation, which has been succeeded by CFC, as Servicer,
and Manufacturers and Traders Trust Company, which has been succeeded by the
Trustee, and the series 199[ - ] Supplement to the P&S dated as of [ ], 199[
] (the "Supplement") among the Seller, CFC and the Trustee (the P&S and the
Supplement collectively referred to as the "Pooling and Servicing
Agreement");
WHEREAS the Certificates will initially be sold to and
purchased by the Underwriter pursuant to the terms and conditions of an
Underwriting Agreement (the "Underwriting Agreement"), dated [ ], 199[ ],
among USA, CFC and the Underwriter;
WHEREAS USA has requested that [ ] act
as the Remarketing Broker-Dealer under this Agreement to remarket
Certificates which are the subject of an Election Notice in a Remarketing on
behalf of the Certificateholders from time to time who wish to sell the
related Certificates in a Remarketing, all in accordance with the terms of
this Agreement, including the Remarketing Procedures described in
<PAGE>
2
Annex A hereto and in accordance with the Pooling and Servicing Agreement;
WHEREAS USA has requested the Remarketing Coordinator to
manage each Remarketing in accordance with the terms of this Agreement,
including the Remarketing Procedures described in Annex A hereto, and the
Pooling and Servicing Agreement; and
WHEREAS the Remarketing Broker-Dealer and the Remarketing
Coordinator are willing to assume such duties on the terms and conditions
expressly set forth herein;
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the terms and conditions herein set forth, the
parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used and not
defined in this Agreement, including Annex A hereto, shall have the meanings
assigned to them in the Pooling and Servicing Agreement.
Section 2. Appointment and Obligations of the Remarketing
Broker-Dealer and the Remarketing Coordinator. (a) USA hereby requests that [
] act, and [ ] hereby agrees to act, as Remarketing Broker-Dealer for the
purpose of remarketing Certificates from time to time on behalf of the
Certificateholders and performing such other duties as are assigned to the
Remarketing Broker-Dealer herein and in the Pooling and Servicing Agreement,
all in accordance with and pursuant to the procedures set forth herein and in
the Pooling and Servicing Agreement.
(b) The Remarketing Broker-Dealer may, in its sole
discretion, but shall not be obligated to, remarket Certificates which are
the subject of an Election Notice in a Remarketing and the Remarketing
Broker-Dealer agrees to carry out such other duties as are assigned to it
herein, all in accordance with the provisions of this Agreement.
(c) USA hereby requests that the Trustee act, and the
Trustee hereby agrees to act, as the Remarketing Coordinator to perform the
duties and obligations assigned to it herein and in the Pooling and Servicing
Agreement in accordance with and pursuant to the procedures set forth herein
and therein.
Section 3. Annual Adjustment; Certain Expenses.
On the Business Day following the Distribution Date in [ ] of
each of 199[ ], 199[ ] and 199[ ] (each,
<PAGE>
3
an "Annual Adjustment Date"), the Remarketing Broker-Dealer shall deliver an
amount equal to the Annual Adjustment to USA by wire transfer of immediately
available funds to such account or accounts as the Seller may specify from
time to time. "Annual Adjustment" means, with respect to any Annual
Adjustment Date, an amount equal to the product of (x) the aggregate initial
principal amount of Certificates as to which the [Class A-1 Revolving Period]
ended during any of the twelve Interest Periods immediately preceding such
Annual Adjustment Date, as the result of a Purchase Option with respect to
such Certificate not being exercised, and (y) the Rebate Percentage
applicable on such Annual Adjustment Date. The Rebate Percentage for each of
the three Annual Adjustment Dates shall be: .[ ]%, .[ ]% and .[ ],
respectively. The foregoing calculations shall be made by the Remarketing
Broker-Dealer and shall be conclusive absent manifest error. Notwithstanding
the foregoing, the Remarketing Broker-Dealer shall not have any obligation to
pay the Annual Adjustment with respect to Certificates (i) as to which the
[Class A-1 Revolving Period] ended as a result of the occurrence of an Early
Amortization Event or (ii) for which the first distribution of [Special Class
A-1 Monthly Principal] is due on the [ ] 199[ ] Distribution Date.
Section 4. Dealing in the Certificates; Redemption of the
Remarketing Broker-Dealer's Certificates. (a) The Remarketing Broker-Dealer,
when acting as Remarketing Broker-Dealer or in its individual or any other
capacity, may, to the extent permitted by law, buy, sell, own, hold and deal
in any of the Certificates, either as principal or as agent. The Remarketing
Broker-Dealer is not obligated to purchase any Certificates that would
otherwise remain unsold in a Remarketing. The Remarketing Broker-Dealer may
sell Certificates which it owns during a Remarketing Period without giving
preference to Certificates as to which an Election Notice has been delivered.
(b) The Remarketing Broker-Dealer may exercise any vote or
join in any action which any Holder or Owner of Certificates may be entitled
to exercise or take pursuant to the terms and conditions contained herein and
in the Pooling and Servicing Agreement with like effect as if it did not act
in any capacity hereunder. The Remarketing Broker-Dealer, in its individual
capacity, either as principal or agent, may also engage in or have an
interest in any financial or other transaction with USA, CARCO, the
Remarketing Coordinator or the Trustee or any of their respective Affiliates
and may act as depository, trustee or agent for any committee or body of
Owners of the Certificates or any obligations of USA, CARCO, the
<PAGE>
4
Remarketing Coordinator or the Trustee or any of their respective Affiliates
as freely as if it did not act in any capacity hereunder.
Section 5. Information. (a) If the Remarketing
Broker-Dealer determines that it is necessary (as evidenced by an opinion of
counsel, who may be an employee of the Remarketing Broker-Dealer) to use a
disclosure document in connection with the Remarketing of Certificates, the
Remarketing Broker-Dealer will notify USA, and USA will promptly provide to
the Remarketing Broker-Dealer the Prospectus distributed in connection with
the initial sale of the Certificates (as amended or supplemented by USA)
satisfactory to the Remarketing Broker-Dealer and its counsel in respect of
the Certificates (such Prospectus, as amended or supplemented, being referred
to herein as the "Disclosure Document"). USA will supply the Remarketing
Broker-Dealer with such number of copies of the Disclosure Documents as the
Remarketing Broker-Dealer reasonably requests from time to time. USA will
supplement and amend the Disclosure Documents so that at all times they will
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements in the Disclosure Documents,
in the light of the circumstances under which they were made, not misleading.
The Remarketing Broker-Dealer agrees to provide USA with such information
relating to it as may be necessary for USA to fulfill its obligations under
this Section 5(a). USA acknowledges that such information relating to the
Remarketing Broker-Dealer consists only of the following information (x)
contained in the Prospectus relating to the Certificates: (i) the last
paragraph of the cover page, (ii) the legend at the top of page 2, (iii) the
second sentence under "Special Considerations--Limited Liquidity", and (y)
the statements in the related Prospectus Supplement under the heading
"Underwriting".
(b) In addition, USA agrees to furnish to the Remarketing
Broker-Dealer: (i) all notices and other communications required to be
delivered by USA or an Affiliate thereof to any party under the Pooling and
Servicing Agreement and each report or other document mailed or made
available to Holders or Owners of Certificates (including all "Annual
Servicer's Certificates" delivered pursuant to Section 3.05 of the P&S), (ii)
notice of the purchase of Certificates, either in a Remarketing or otherwise,
by USA or an Affiliate thereof, (iii) notice of the occurrence of (A) the
downgrading or withdrawal of the rating of the Certificates [or the Class A-2
Certificates] by a nationally recognized statistical rating agency, (B) the
giving of notice of an election to exercise USA's
<PAGE>
5
option to repurchase all the Certificates [and the Class A-2 Certificates]
and (C) the amendment of the Pooling and Servicing Agreement, (iv) upon
request, complete and correct copies of publicly available portions of all
quarterly and annual financial reports of CFC and the Trust, (v) upon
request, the annual audited consolidated balance sheets of CFC, (vi) upon
request, all notices, reports or other communications received by USA from
the Trustee, the Clearing Agency or any other Person pursuant to or in
connection with the Pooling and Servicing Agreement and (vii) such other
information as the Remarketing Broker-Dealer reasonably requests from time
to time, in such form as the Remarketing Broker-Dealer reasonably requests,
relating to the Certificates or the financial condition of USA or any
Affiliate of USA to the extent such information is deemed by the Remarketing
Broker-Dealer to be necessary or appropriate to the performance by the
Remarketing Broker-Dealer of its services hereunder and to the extent such
information is available to USA. USA shall promptly provide the Remarketing
Broker-Dealer with as many copies of the foregoing materials and information
as the Remarketing Broker-Dealer reasonably requests from time to time.
(c) If, at any time during the term of this Agreement, any
event or condition relating to or affecting USA or any Affiliate of USA or
the Certificates shall occur which might affect the accuracy or completeness
of any statement of a material fact contained in any of the materials and
information referred to in paragraph (a) or (b) above or any document
incorporated therein by reference or any other materials or information made
publicly available by USA, USA shall promptly notify the Remarketing
Broker-Dealer in writing of the circumstances and details of such event or
condition.
(d) None of the information contained in any of the reports
or other documents mailed or made available to Holders or Owners of
Certificates (including all "Annual Servicer's Certificates" delivered
pursuant to Section 3.05 of the P&S) or filed by or on behalf of USA or any
Affiliate of USA with the Securities and Exchange Commission (including any
documents incorporated therein by reference) or any documents referred to in
Section 5(a) or 5(b) hereof (collectively, the "Remarketing Materials") shall
contain an untrue or misleading statement of material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
<PAGE>
6
Section 6. Conditions to the Remarketing Broker-Dealer's
Obligations. The obligations of the Remarketing Broker-Dealer under this
Agreement have been undertaken in reliance on (i) the due performance in all
material respects by USA of its obligations and agreements as set forth in
this Agreement, the Underwriting Agreement and the Pooling and Servicing
Agreement, (ii) the accuracy in all material respects as of the dates
specified therein of the representations and warranties contained in the
Underwriting Agreement and the Pooling and Servicing Agreement and (iii) the
further condition that none of the following events shall have occurred:
(a) the rating of the Certificates [or the Class A-2
Certificates] shall have been downgraded or withdrawn by a
nationally recognized statistical rating agency;
(b) USA shall have elected to exercise its repurchase
option with respect to the Certificates [and the Class A-2
Certificates];
(c) without the prior written consent of the Remarketing
Broker-Dealer (which consent shall not be unreasonably withheld),
the Pooling and Servicing Agreement shall have been amended in any
manner that in the opinion of the Remarketing Broker-Dealer
materially changes the rights of Certificateholders under the
Pooling and Servicing Agreement, the remarketability of the
Certificates or the Remarketing Procedures described in Annex A
hereto;
(d) there is a material misstatement or omission in any of
the Remarketing Materials or in any Disclosure Document that in the
opinion of the Remarketing Broker-Dealer (x) is not corrected within
a reasonable period of time and (y) materially changes the rights of
Certificateholders under the Pooling and Servicing Agreement or the
remarketability of the Certificates;
(e) an Early Amortization Event or Reinvestment Event shall
have occurred; or
(f) if at any time the Remarketing Broker-Dealer shall
determine for any reason that it is not advisable to remarket the
Certificates by reason of (A) a pending or proposed change in tax
laws applicable to the Certificates (which determination shall be
evidenced by an opinion of counsel), (B) a pending or proposed
change in laws resulting in the Certificates no longer
<PAGE>
7
being qualified as "Eligible Securities" as defined in Rule 2a-7
promulgated under the Investment Company Act of 1940 (which
determination shall be evidenced by an opinion of counsel), (C) a
material adverse change in the financial condition of USA, CFC or
Chrysler Corporation, (D) a banking moratorium under the laws of the
State of New York or the United States of America, (E) the
suspension or termination of trading in securities generally on the
New York Stock Exchange or the establishment of minimum prices on
such Exchange or (F) domestic or international hostilities; or
(g) CFC, USA or any affiliate thereof shall issue a Series
of certificates, backed by wholesale receivables, (A) having a
revolving period subject to automatic extension absent an election
to terminate such revolving period, and otherwise having the same
terms and legal final maturity of [ , ] or less, as the
Certificates, the (B) the interest rate of which is a percentage
over the Commercial Paper Rate or a comparable 30-day index and such
percentage exceeds [the Class A-1 Spread].
In the event of the failure of any of such conditions, the Remarketing
Broker-Dealer may immediately terminate its duties under this Agreement;
provided that, with respect to the failure of any such conditions specified
in clauses (f)(D), (f)(E) or (f)(F) above, the Remarketing Broker-Dealer may
immediately suspend its duties under this Agreement until the earlier to
occur of (x) the 180th day following the first occurrence of such failure or
(y) such time as such moratorium, suspension or termination or hostilities,
as the case may be, has ceased. If, on or after the 180th day following the
occurrence of such failure specified in clauses (f)(D), (f)(E) or (f)(F)
above, in the opinion of the Remarketing Broker-Dealer, the occurrence of
such event has materially changed the nature of the Certificates or the
remarketability thereof, the Remarketing Broker-Dealer may then immediately
terminate its duties hereunder.
Section 7. Indemnification. (a) USA and CFC jointly and
severally agree to indemnify and hold harmless the Remarketing Broker-Dealer
and each person who controls the Remarketing Broker-Dealer within the meaning
of the Securities Act of 1933, as amended, and the rules promulgated
thereunder (the "Act") against any and all losses, claims, damages or
liabilities, arising under the Act, the Securities Exchange Act of 1934, as
amended, and the rules promulgated thereunder or other Federal or state
statutory law or regulation, at common law or otherwise,
<PAGE>
8
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Remarketing Materials,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agree to reimburse each such
indemnified party, as incurred, for any legal or other expenses incurred by
it in connection with investigating or defending any such loss, claim,
damage, liability or action. In addition, in the event that the Remarketing
Broker-Dealer becomes involved in any action, proceeding or investigation
brought by or against any Person in connection with performing the services
which USA has requested the Remarketing Broker-Dealer to perform under this
Agreement, USA and CFC will reimburse the Remarketing Broker-Dealer for any
loss, claim, damage or expense (including the cost of any investigation and
preparation and legal fees and expenses in connection therewith, as such
losses, claims, damages or expenses are incurred (except to the extent that
any such loss, claim, damage or expense results from the gross negligence,
bad faith or wilful misconduct of the Remarketing Broker-Dealer in performing
the services which USA has requested the Remarketing Broker-Dealer to perform
under this Agreement)). If for any reason the foregoing indemnification is
unavailable to the Remarketing Broker-Dealer or is insufficient to hold the
Remarketing Broker-Dealer harmless, USA and CFC shall contribute to the
amount paid or payable by the Remarketing Broker-Dealer as a result of such
loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by USA on the one hand and
the Remarketing Broker-Dealer on the other hand in connection with the
subject matter hereof but also the relative fault of USA and the Remarketing
Broker-Dealer as well as any relevant equitable considerations. The
reimbursement, indemnity and contribution obligations of USA and CFC under
this Section 7 shall be in addition to any liability which USA and CFC may
otherwise have, shall extend upon the same terms and conditions to any of the
Affiliates, officers, directors, employees and controlling persons (if any)
of the Remarketing Broker-Dealer and any such Affiliate or Person and shall
be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of USA, CFC, the Remarketing Broker-Dealer, any
such Affiliate and any such Person. The foregoing provisions shall survive
the period of the Remarketing Broker-Dealer's services under this Agreement
or any termination thereof and shall also survive the termination or
cancelation of this Agreement and the Remarketing of any Certificates
hereunder.
<PAGE>
9
(b) The Remarketing Broker-Dealer shall not incur any
liability to USA, CFC or any other Person for its actions as Remarketing
Broker-Dealer pursuant to the terms hereof without gross negligence or in the
absence of wilful misconduct. The Remarketing Broker-Dealer shall not be
liable to USA, CFC or any other Person on account of the failure of any
Person to whom the Remarketing Broker-Dealer has sold any Certificates to pay
for such Certificates or to deliver any document in respect of such sale
unless such failure was directly caused by the wilful misconduct of the
Remarketing Broker-Dealer. The Remarketing Broker-Dealer shall have no
obligation whatsoever to remarket any Certificates.
Section 8. Termination of Remarketing Agreement. This
Agreement shall terminate as to the Remarketing Broker-Dealer upon the
resignation of the Remarketing Broker-Dealer pursuant to Section 6 hereof.
The provisions of Section 7 hereof shall continue in effect as to actions
prior to the date of termination of this Agreement, and each party shall pay
to the others any amounts owing at the time of termination of this Agreement.
Section 9. Remarketing Broker-Dealer's Performance; Duty of
Care. (a) The duties of the Remarketing Broker-Dealer shall be determined
solely by the express provisions of this Remarketing Agreement. No implied
covenants or obligations of or against the Remarketing Broker-Dealer shall be
read into this Remarketing Agreement or the Pooling and Servicing Agreement.
(b) In the absence of bad faith on the part of the
Remarketing Broker-Dealer, the Remarketing Broker-Dealer may conclusively
rely upon any document furnished to it which purports to conform to the
requirements of this Remarketing Agreement or the Pooling and Servicing
Agreement, as to the truth of the statements expressed in any of such
documents. The Remarketing Broker-Dealer shall be fully protected for any
action taken, suffered or omitted under the provisions of this Agreement or
otherwise upon the faith of any document or communication reasonably believed
by it to have been signed, presented or made by the proper party or parties.
The Remarketing Broker-Dealer may consult with counsel selected by it and the
opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted under the
provisions of this Agreement or otherwise, in accordance with such opinion
and in reliance thereon.
<PAGE>
10
(c) [ ] shall incur no liability to USA, CFC or any
Certificate Owner or Holder of Certificates in its individual capacity or as
Remarketing Broker-Dealer for any action or failure to act, on its part, in
connection with a Remarketing or otherwise, except as a result of gross
negligence or willful misconduct on its part.
(d) The Remarketing Broker-Dealer shall perform its
services hereunder as an independent contractor with respect to USA, and
nothing contained herein shall be deemed to create any partnership, joint
venture, or relationship of principal and agent between or among the parties
hereto or any of their Affiliates.
Section 10. Governing Law. This Remarketing Agreement shall
be governed by and construed in accordance with the laws of the State of New
York.
Section 11. Term of Agreement. Unless otherwise terminated
in accordance with the provisions hereof, this Agreement shall remain in full
force and effect from the date hereof until the first day thereafter on which
no Certificate is in a [Class A-1 Revolving Period]. Regardless of any
termination of this Agreement pursuant to any of the provisions hereof, the
obligations of USA pursuant to Section 5, and USA and CFC pursuant to Section
7, shall remain operative and in full force and effect until fully satisfied.
Section 12. Successors and Assigns. The rights and
obligations of USA or CFC hereunder may not be assigned or delegated to any
other Person without the prior written consent of the Remarketing
Broker-Dealer; provided that such consent shall not be required in the case
of any assignment to an Affiliate of USA or CFC. The rights and obligations
of the Remarketing Broker-Dealer hereunder may not be assigned or delegated
to any other Person without the prior written consent of USA. This Agreement
shall inure to the benefit of and be binding upon USA, CFC, the Remarketing
Coordinator and the Remarketing Broker-Dealer and their respective successors
and assigns. Any successor to the Remarketing Broker-Dealer, and any director
or officer, or any Person controlling the Remarketing Broker-Dealer, as the
case may be, shall be entitled to the benefits of the agreements contained
herein. The terms "successors" and "assigns" shall not include any purchaser
of any Certificates merely because of such purchase.
Section 13. Headings. Section headings have been inserted
in this Agreement as a matter of convenience of reference only, and it is
agreed that such section headings
<PAGE>
11
are not a part of this Agreement and will not be used in the interpretation
of any provision of this Agreement.
Section 14. Severability. If any provision of this
Agreement shall be held or deemed to be or shall, in fact, be invalid,
inoperative or unenforceable as applied in any particular case in any or all
jurisdictions because it conflicts with any provision of any constitution,
statute, rule or public policy or for any other reason, such circumstances
shall not have the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case, circumstance or jurisdiction,
or of rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatsoever.
Section 15. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded as an original and all
of which shall constitute one and the same document.
Section 16. Remarketing Broker-Dealer Not Acting as
Underwriter. It is understood and agreed by all parties hereto that the
Remarketing Broker-Dealer's only duties hereunder are as set forth in Section
2 of this Agreement. When engaged in the Remarketing of any Certificates
which are the subject of an Election Notice, the Remarketing Broker-Dealer
shall act only as agent for and on behalf of each Certificate Owner of the
related Certificates. The Remarketing Broker-Dealer shall not act as
underwriter for any Certificates which are the subject of an Election Notice.
Except in connection with the exercise of a Purchase Option by the
Remarketing Broker-Dealer, the Remarketing Broker-Dealer shall in no way be
obligated to advance its own funds to purchase any Certificates or to
otherwise expend or risk its own funds or incur or become exposed to any
financial liability in the performance of its services hereunder.
Section 17. Amendments. (a) This Agreement may be amended
by any instrument in writing signed by all of the parties hereto so long as
this Agreement as amended is not inconsistent with the Pooling and Servicing
Agreement in effect as of the date of any such amendment.
(b) In the event that (x) the Certificates are issued as
Definitive Certificates or (y) the Depository Trust Company ceases to be the
Depository, the parties hereto will negotiate in good faith to agree upon any
necessary or appropriate modifications to the Remarketing Procedures set
forth in Annex A hereto and the Remarketing
<PAGE>
12
Coordinator will notify Certificateholders (or cause Certificateholders to be
notified) of any such modifications which materially affect the procedures to
be followed in the event a Certificateholder seeks to elect not to extend the
[Class A-1 Revolving Period] with respect to its Certificates.
Section 18. No Petition. The Remarketing Coordinator and
the Remarketing Broker-Dealer, by entering into this Agreement, hereby
covenant and agree that they will not at any time institute against USA any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under any United States federal or state
bankruptcy or similar law.
Section 19. Notices. Unless otherwise specified, any
notices, requests, consents or other communications given or made hereunder
or pursuant hereto shall be made in writing and shall be deemed to have been
validly given or made when delivered or mailed, registered or certified mail,
return receipt requested and postage prepaid, addressed as follows: if to
USA, to 27777 Franklin Road, Southfield, Michigan 48034, Attention:
Secretary; if to the Remarketing Coordinator, to The Bank of New York [ ],
Attention: [ ]; and if to the Remarketing Broker-Dealer, to [ ], Attention:
[ ]; or to such other address as any of the above shall specify to the others
in writing.
IN WITNESS WHEREOF, each of CFC, USA, the Remarketing
Broker-Dealer, the Trustee, and the Remarketing Coordinator has caused this
Agreement to be executed in its name and on its behalf by one of its duly
authorized officers as of the date first above written.
CHRYSLER FINANCIAL CORPORATION,
by
-----------------------
Name:
Title:
U.S. AUTO RECEIVABLES COMPANY,
by
-----------------------
Name:
Title:
<PAGE>
13
[ ],
as Remarketing Broker-Dealer,
by
-----------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
and Remarketing Coordinator,
by
-----------------------
Name:
Title:
<PAGE>
ANNEX A
REMARKETING AND SETTLEMENT PROCEDURES
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Annex A, the
following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the
plural forms of such terms. Capitalized terms used in this Annex A without
definition have the respective meanings assigned in the Pooling and Servicing
Agreement.
"Agent Member" means the designated Depository Participant
or Indirect Participant of the Depository which will maintain records of
Certificate Owners and which will be authorized and instructed to disclose
certain information to the Remarketing Broker-Dealer, the Remarketing
Coordinator and the Trustee.
"Certificate" means a [Class A-1] [Money Market
Extendible] Certificate.
"Certificate Owner" means a Class A-1 [Money
Market Extendible] Certificate Owner.
"Electing Notice" means a notice delivered by a Certificate
Owner to its Agent Member, with a copy to the Remarketing Coordinator
substantially in the form of Exhibit A to the Prospectus Supplement relating
to the Certificates, pursuant to which such Certificate Owner elects not to
extend the Class A-1 Revolving Period with respect to one or more
Certificates held by it.
"Election Notice Number" means a unique identification
number assigned by the Remarketing Coordinator to each Election Notice in
accordance with Section 2.01(b).
"Election Period" means each period beginning on and
including the [ ] to last Business Day of each calendar month and ending on
and including the [ ] to last Business Day of each such calendar month.
"Indirect Participant" means a bank, broker, dealer, trust
company or other financial institution or other Person that clears or
maintains a custodial relationship with a Depository Participant, either
directly or indirectly.
<PAGE>
2
"Par Price" means the purchase price payable by the
Remarketing Broker-Dealer to an Electing Certificateholder for a Certificate
as to which it exercises a Purchase Option in an amount equal to the unpaid
principal amount of such Certificate.
"Purchase Option" means the right of the Remarketing
Broker-Dealer to purchase and remarket a Certificate as to which an Election
Notice has been received by the Remarketing Coordinator.
"Remarketing" means each periodic operation of the
procedures for remarketing Certificates as set forth herein.
"Remarketing Broker-Dealer" means [ ]
"Remarketing Period" means each period beginning on and
including the first day of each Election Period and ending on and including
the [ ] to last Business Day of the calendar month that includes such
Election Period.
"Settlement Date" means, with respect to any Election
Period and any Election Notice, the Distribution Date next succeeding such
Election Period.
Section 1.02. Other Definitional Provisions. (a) All
references herein to any hour or other time of day shall be to such hour or
time of day in New York City.
(b) The "end of any Business Day" or the "close of business
on any Business Day" means 4:00 p.m. on such Business Day and "through and
including" or "ending on and including" any Business Day means "through and
including 4:00 p.m." or "ending on and including 4:00 p.m.", respectively, on
such Business Day.
ARTICLE II
REMARKETING OF CERTIFICATES
Section 2.01. Election Notices. (a) During each Election
Period, each Certificate Owner shall have the right to deliver an Election
Notice to its Agent Member, with a copy to the Remarketing Coordinator and
the Remarketing Broker-Dealer, with respect to each Certificate held by such
Certificate Owner. Election Notices shall be effective only upon receipt by
the Remarketing Coordinator. Any such Election Notice shall be irrevocable,
which irrevocability may be waived only by the Remarketing Broker-Dealer. The
Remarketing Broker-Dealer may waive the irrevocability of an Election Notice
by delivering written notice to the
<PAGE>
3
Remarketing Coordinator and to the related Electing Certificateholder's Agent
Member prior to the close of business on the last day of the related
Remarketing Period.
(b) Upon receipt of each Election Notice, the Remarketing
Coordinator shall assign an Election Notice Number to each Election Notice it
receives.
(c) By 10:00 a.m. on each Business Day during an Election
Period, the Remarketing Coordinator shall deliver to the Remarketing
Broker-Dealer a complete list of Election Notices received by the Remarketing
Coordinator during the preceding Business Day. By 10:00 a.m. on each Business
Day next following the end of each Election Period, the Remarketing
Coordinator shall deliver to the Remarketing Broker-Dealer the list described
in the preceding sentence and a complete list identifying each Election
Notice received by the Remarketing Coordinator during such Election Period.
All lists described in this Section 2.01(c) shall include the dollar amount
of each Certificate with respect to which an Election Notice has been
received by the Remarketing Coordinator, each related Election Notice Number,
and the identity of the related Electing Certificateholder.
Section 2.02. Procedure for Remarketing. (a) During each
Remarketing Period, the Remarketing Broker- Dealer shall have the right to
remarket any Certificates as to which an Election Notice has been received by
the Remarketing Coordinator and the Remarketing Broker-Dealer. By 10:00 a.m.
on the Business Day next following the end of the Remarketing Period, the
Remarketing Broker-Dealer shall deliver to the Remarketing Coordinator (i) a
list identifying each Certificate as to which an Election Notice has been
received by the Remarketing Coordinator in the related Election Period with
respect to which the Remarketing Broker-Dealer has exercised a Purchase
Option during the related Remarketing Period and (ii) a list identifying each
Certificate as to which an Election Notice has been received by the
Remarketing Coordinator in the related Election Period with respect to which
the Remarketing Broker-Dealer has not exercised a Purchase Option during the
related Remarketing Period. The Remarketing Coordinator shall deliver to the
Servicer a complete list containing the foregoing information by such date.
All lists described in this Section 2.02(a) shall include the dollar amount
of each Certificate with respect to which an Election Notice has been
received by the Remarketing Coordinator, each related Election Notice Number,
and the identity of any Electing Certificateholders.
<PAGE>
4
(b) The Remarketing Broker-Dealer, upon exercising a
Purchase Option with respect to a Certificate as permitted by, and during the
time periods specified in, Section 2.02(a), shall promptly notify the
Remarketing Coordinator by written notice of the exercise of such Purchase
Option. Such notice shall specify the dollar amount of each related
Certificate, each related Election Notice Number, the designated Settlement
Date and the identity of the purchaser of the related Certificates. Each such
notice from the Remarketing Broker-Dealer shall constitute an irrevocable
instruction to the Remarketing Coordinator, the Agent Member and the
Depository that the Purchase Option with respect to each such Certificate
shall be effective with respect thereto as of the designated Settlement Date
and that the Remarketing Coordinator, the Agent Member and the Depository
should effect the transfer of each such Certificate on such Settlement Date.
Upon receipt by the Remarketing Coordinator of any such notice, each
Certificate described in such notice shall be deemed remarketed for the
related Remarketing Period and no further remarketing of such Certificate for
the related Remarketing Period shall be effective. The Remarketing
Broker-Dealer shall be responsible for determining whether any Certificate
shall have been deemed Remarketed, in accordance with the preceding sentence.
(c) For each Certificate as to which an Election Notice has
been delivered and a Purchase Option exercised, the Remarketing Broker-Dealer
shall purchase such Certificate at the Par Price from the Electing
Certificateholder on the related Settlement Date in accordance with the
Settlement Procedures contained herein.
ARTICLE III
SETTLEMENT PROCEDURES
Section 3.01. Electing Certificateholders. (a) By 10:00
a.m. on the [ ] Business Day of the calendar month of each Settlement Date,
the Remarketing Coordinator shall, by telephone, facsimile, telex or
otherwise, advise each Electing Certificateholder (or its Agent Member) (i)
of the CUSIP number and dollar amount of such Electing Certificateholder's
Certificates, if any, as to which a Purchase Option was exercised for
settlement on such Settlement Date and (ii) to give instructions to its Agent
Member to deliver, by 8:30 a.m. on such Settlement Date, such Certificates,
by book entry to the Depository for the account of the Remarketing
Broker-Dealer against payment by the Remarketing Broker-Dealer of the Par
Price therefor.
<PAGE>
5
(b) By 8:30 a.m. on each Settlement Date, the Remarketing
Broker-Dealer shall pay, or provide for payment of, the Par Price to or for
the account of each Electing Certificateholder for each Certificate as to
which the Remarketing Broker-Dealer has exercised a Purchase Option for
settlement on such Settlement Date against delivery in book-entry form of the
related Certificates.
Section 3.02. Purchasers. By 4:30 p.m. on the Business Day
[ ] preceding each Settlement Date, the Remarketing Broker-Dealer shall, by
telephone, facsimile, telex or otherwise, advise each purchaser (or its Agent
Member who will in turn advise such purchaser) that is purchasing
Certificates as a result of a Remarketing (i) of the amount that it will be
required by 8:30 a.m. on such Settlement Date to pay to or for the account of
the Remarketing Broker-Dealer with respect to the Certificates to be
purchased against delivery by book entry of such Certificates and (ii) to
give instructions to its Agent Member to pay such purchase price therefor to
the Remarketing Broker-Dealer, against delivery of such Certificates by book
entry through the Depository, by 8:30 a.m. on such Settlement Date.
Section 3.03. Payment and Delivery. (a) In accordance with
the Depository's normal procedures, the transactions described in Sections
3.01 and 3.02 will be executed on each Settlement Date through the
Depository, and the accounts of the Remarketing Broker-Dealer and Agent
Members at the Depository will be debited and credited and certificates
delivered by book entry as necessary to effect the purchases and sales of
Certificates. All purchases and payments with respect to such transactions in
the Certificates shall be made in same-day funds.
(b) If any Electing Certificateholder selling Certificates
in a Remarketing fails to deliver such Certificates, the Agent Member of such
selling Electing Certificateholder, and of any other Person that was to have
purchased Certificates in such Remarketing, may deliver to any such other
Person a number of Certificates that is less than the number of Certificates
that otherwise was to be purchased by such Person. In such event, the number
of Certificates to be so delivered shall be determined by such Agent Member.
Delivery of such lesser number of Certificates shall constitute good
delivery.
(c) As long as Cede & Co., or the Depository or any other
nominee therefor, continues to hold the certificates representing the
Certificates, no physical certificates will need to be delivered by any
selling Electing Certificateholder or the Remarketing Broker-Dealer
<PAGE>
6
to reflect any transfer of Certificates effected by a Remarketing.
ARTICLE IV
OTHER PROVISIONS
Section 4.01. Purchase of Certificates by the Remarketing
Broker-Dealer. The Remarketing Broker-Dealer may purchase for its own account
Certificates in a Remarketing, pursuant to a Purchase Option or otherwise.
The Remarketing Broker-Dealer is not obligated to purchase any Certificates
and the Remarketing Broker-Dealer shall, in its sole discretion, determine
which, if any, Certificates as to which it shall exercise a Purchase Option
without regard to the time at which Election Notices are delivered or
received, the amount of Certificates as to which Election Notices have been
delivered or to any other factors. The Remarketing Broker-Dealer may sell
Certificates owned by it in the Remarketing or otherwise at any time in its
sole discretion. Except in connection with the exercise of a Purchase Option
by the Remarketing Broker-Dealer, the Remarketing Broker-Dealer is not
obligated in any case to provide funds to make payment to an Electing
Certificateholder upon such Electing Certificateholder's delivery of an
Election Notice.
Section 4.02. Obligations of Depository and Agent Members.
Whenever the text hereof purports to impose a duty or obligation on the
Depository or any Agent Member, such text shall mean that the Servicer shall
use its best efforts to cause each of the Depository or such Agent Member to
fulfill their respective duties or to perform their respective obligations.
Exhibit 5.1
October 23, 1997
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
U. S. Auto Receivables Company
27777 Franklin Road
Southfield, Michigan 48034
Ladies and Gentlemen:
Re: Registration Statement on Form S-3
to register Asset Backed Certificates
to be issued by CARCO Auto Loan Master Trust
(the "Registration Statement")
------------------------------
I am Vice President and General Counsel of Chrysler Financial
Corporation, a Michigan corporation, as servicer (the "Servicer") and U. S.
Auto Receivables Company, a Delaware corporation, as seller (the "Seller"),
in connection with the above-captioned Registration Statement, filed by the
Seller with the Securities and Exchange Commission in connection with the
registration by the Seller of Asset Backed Certificates (the "Certificates")
representing interests in CARCO Auto Loan Master Trust (the "Trust") in an
aggregate principal amount of $6 billion. As described in the Registration
Statement, the Certificates will be issued from time to time by the Trust in
series ("Series"). With respect to each Series, the Certificates will be
issued pursuant to a supplement to the Pooling and Servicing Agreement and
the Certificates will be sold from time to time pursuant to certain
underwriting agreements (the "Underwriting Agreements") between the Seller
and various underwriters named therein.
I, or members of my staff upon whom I am relying, have examined and
relied upon the Registration Statement and, in each case as filed with the
Registration Statement, the form of Pooling and Servicing Agreement and
supplements thereto, including the forms of Certificates, and the form of
Underwriting
<PAGE>
Agreement (collectively, the "Operative Documents"). In addition, I, or
members of my staff upon whom I am relying, have examined and considered
executed originals or counterparts, or certified or other copies identified
to my satisfaction as being true copies of such certificates, instruments,
documents, and other corporate records of the Seller, and matters of fact and
law as I deem necessary for the purposes of this opinion. Capitalized terms
not otherwise defined herein have the meanings assigned to them in the
Registration Statement.
In my examination I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as
certified or photostatic copies, and the authenticity of the originals of
such documents. As to any facts material to the opinions expressed herein
which were not independently established or verified, I have relied upon
statements and representations of officers and other representatives of the
Seller and others.
Based on and subject to the foregoing, I am of the opinion that, with
respect to the Certificates of any Series, when (i) the Registration
Statement becomes effective pursuant to the provisions of the Securities Act
of 1933, as amended, (ii) the amount, price, interest rate, and other
principal terms of such Certificates have been duly approved by the Board of
Directors of the Seller, (iii) the issuance, execution, and delivery of the
Certificates have been approved by the Board of Directors of the Seller, (iv)
the applicable Operative Documents relating to such Series have each been
duly completed, executed, and delivered by the parties thereto substantially
in the form filed as an exhibit to the Registration Statement reflecting the
terms established as described above, and (v) such Certificates have been
duly executed by the Seller, authenticated by the Trustee, and sold by the
Seller and paid for by the underwriter, all in accordance with the terms and
conditions of the Operative Documents and in the manner described in the
Registration Statement, such Certificates will have been legally issued,
fully paid, and non-assessable.
I am admitted to the State Bar of Michigan and I express no opinion
as to the laws of any other jurisdiction except the laws of the United States
of America and the State of Michigan to the extent specifically referred to
herein.
2
<PAGE>
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Matters" in the Prospectus included in the Registration Statement. This
opinion is given as of the date hereof and I undertake no obligation to
notify you of any changes in law or fact occurring after the date hereof.
Very truly yours,
/s/ Christopher A. Taravella
Christopher A. Taravella
Vice President and
General Counsel
EXHIBIT 8.1
[Letterhead of]
CRAVATH, SWAINE & MOORE
[New York Office]
October 27, 1997
CARCO Auto Loan Master Trust
Registration Statement on Form S-3
Relating to $6,000,000,000 of
Auto Loan Asset Backed Certificates
Dear Sirs:
We have acted as special Federal tax counsel for CARCO Auto
Loan Master Trust (the "Trust"), in connection with the above-captioned
Registration Statement (such registration statement, together with the
exhibits and any amendments thereto, the "Registration Statement"), filed by
the Trust with the Securities and Exchange Commission in connection with the
registration by the Trust of trust certificates (the "Certificates"). As
described in the Registration Statement, the Certificates will be issued from
time to time in series by the Trust, which was created pursuant to a Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement") among U.S.
Auto Receivables Company, Chrysler Credit Corporation, which has been
succeeded by Chrysler Financial Corporation, and Manufacturers and Traders
Trust Company, which has been succeeded by The Bank of New York, as trustee.
Capitalized terms not otherwise defined herein are used as defined in the
Registration Statement.
In that connection, we are generally familiar with the
proceedings required to be taken in connection with the proposed
authorization, issuance and sale of any series of Certificates and we have
examined copies of such documents, corporate records and other instruments as
we have deemed necessary or appropriate for the purposes of this opinion,
including the Registration Statement, the Pooling and Servicing Agreement and
the form of pooling and servicing agreement supplement (the "Supplement")
filed as exhibits to
<PAGE>
2
the Registration Statement (including the form of each class of Certificates
included as an exhibit).
Based on the foregoing and assuming that the Supplement
with respect to each series of Certificates is executed and delivered in
substantially the form we have examined and the transactions contemplated to
occur under the Registration Statement, the Pooling and Servicing Agreement
and the Supplement in fact occur in accordance with the terms thereof, we
hereby confirm that the statements set forth in the Prospectus forming part
of the Registration Statement under the captions "Prospectus Summary--Tax
Matters" (to the extent they relate to Federal income tax consequences),
"--ERISA Considerations", "Certain Tax Matters--Federal Income Tax
Consequences" and "ERISA Considerations" accurately reflect our opinion with
respect to a transaction to which those provisions by their terms apply.
We know that we are referred to under the headings "Certain
Federal Income Tax Consequences" and "Legal Opinions" in the Prospectus
Supplement forming part of the Registration Statement and we hereby consent
to the use of our name therein and to the use of this opinion for filing with
the Registration Statement as Exhibit 8 thereto.
Very truly yours,
/s/ Cravath, Swaine & Moore
U.S. Auto Receivables Company
27777 Franklin Road
Southfield, Michigan 48034
O
Exhibit 8.2
October 23, 1997
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
U. S. Auto Receivables Company
27777 Franklin Road
Southfield, Michigan 48034
Ladies and Gentlemen:
Re: Registration Statement on Form S-3
to register Asset Backed Certificates
to be issued by CARCO Auto Loan Master Trust
(the "Registration Statement")
------------------------------
I am Vice President and General Counsel of Chrysler Financial
Corporation, a Michigan corporation, as servicer (the "Servicer") and U. S.
Auto Receivables Company, a Delaware corporation, as seller (the "Seller"),
in connection with the above-captioned Registration Statement, filed by the
Seller with the Securities and Exchange Commission in connection with the
registration by the Seller of Asset Backed Certificates (the "Certificates")
representing interests in CARCO Auto Loan Master Trust (the "Trust") in an
aggregate principal amount of $6 billion. As described in the Registration
Statement, the Certificates will be issued from time to time by the Trust in
series ("Series"). With respect to each Series, the Certificates will be
issued pursuant to a supplement to the Pooling and Servicing Agreement and
the Certificates will be sold from time to time pursuant to certain
underwriting agreements (the "Underwriting Agreements") between the Seller
and various underwriters named therein.
I, or members of my staff upon whom I am relying, have examined and
relied upon the Registration Statement and, in each case as filed with the
Registration Statement, the form of Pooling and Servicing Agreement and
supplements thereto, including the forms of Certificates, and the form of
Underwriting
<PAGE>
Agreement (collectively, the "Operative Documents"). In addition, I, or
members of my staff upon whom I am relying, have examined and considered
executed originals or counterparts, or certified or other copies identified
to my satisfaction as being true copies of such certificates, instruments,
documents, and other corporate records of the Seller, and matters of fact and
law as I deem necessary for the purposes of this opinion. Capitalized terms
not otherwise defined herein have the meanings assigned to them in the
Registration Statement.
In my examination I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as
certified or photostatic copies, and the authenticity of the originals of
such documents. As to any facts material to the opinions expressed herein
which were not independently established or verified, I have relied upon
statements and representations of officers and other representatives of the
Seller and others.
I hereby confirm that the statements set forth in the Prospectus
forming a part of the Registration Statement under the caption "Certain Tax
Matters - State and Local Tax Consequences" accurately describe the material
Michigan tax consequences to holders of the Certificates.
I am admitted to the State Bar of Michigan and I express no opinion
as to the laws of any other jurisdiction except the laws of the United States
of America and the State of Michigan to the extent specifically referred to
herein.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me in the Prospectus included
in the Registration Statement. This opinion is given as of the date hereof
and I undertake no obligation to notify you of any changes in law or fact
occurring after the date hereof.
Very truly yours,
/s/ Christopher A. Taravella
Christopher A. Taravella
Vice President and
General Counsel
2
EXHIBIT 23.3
[Letterhead of Deloitte & Touche LLP]
Deloitte &
Touche LLP
____________ _________________________________________
Suite 900 Telephone (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of CARCO Auto Loan Master Trust on Form S-3 of our report dated January 21,
1997 appearing in the Annual Report on Form 10-K of CARCO Auto Loan Master
Trust for the year ended December 31, 1996, and to the reference to Deloitte
& Touche LLP under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ Deloitte & Touche LLP
October 27, 1997
_______________
Deloitte Touche
Tohmatsu
International
_______________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
of U.S. Auto Receivables Company hereby severally constitutes and appoints
CHRISTOPHER A. TARAVELLA, BYRON C. BABBISH and SILVIA M. KLEER, or any one or
more of them, to be his agents, proxies and attorneys-in-fact, to sign and
execute in his name, place and stead and on his behalf as a director of U.S.
Auto Receivables Company, and to file with the Securities and Exchange
Commission, the Registration Statement of CARCO Auto Loan Master Trust on
Form S-3, registering under the Securities Act of 1933, as amended, auto loan
asset backed securities and any and all further amendments (including any
pre- and post-effective amendments) to such Registration Statement, and to
file all exhibits thereto and other documents in connection therewith,
granting unto said attorneys-in-fact and agents and each of them, full power
and authority to do and perform each and every act and thing required to be
done that may be necessary or desirable, hereby approving, ratifying and
confirming all that the aforesaid agents, proxies and attorneys-in-fact do,
or that any one of them does or causes to be done, on his behalf pursuant to
this Power of Attorney.
<PAGE>
- 2 -
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
this 23rd day of October, 1997
/s/ D. M. Cantwell /s/ D. L. Davis
- ----------------------------------- -------------------------------
D. M. Cantwell D. L. Davis
/s/ M. A. Kickham /s/ J. A. Sellgren
- ----------------------------------- -------------------------------
M. A. Kickham J. A. Sellgren
