CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
August 30, 1999
Date of Report ........................................................
(Date of earliest event reported)
CARCO Auto Loan Master Trust
........................................................................
(Exact name of registrant as specified in its charter)
State of Delaware 333-38873 and 33-55795 None
...........................................................................
(State or other jurisdiction (Commission) (IRS Employer
of incorporation) File No.) Identification No.)
27777 Franklin Rd., Southfield, Michigan 48034
..............................................
(Address of principal executive offices)
(248) 948-3067
Registrant's telephone number, including area code....................
This filing relates to Registration Statement No. 333-38873 and 33-55795.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Listed below are the financial statements, pro forma financial
information and exhibits, if any, filed as a part of this Report:
(a) Financial statements of businesses acquired;
None
(b) Pro forma financial information:
None
(c) Exhibits. The following exhibits are filed as
part of this Current Report on Form 8-K:
Description Exhibit No.
----------- -----------
Series 1999-1 Supplement dated as of March 10, 4.1
1999, among U.S. Auto Receivables Company, as
Seller, Chrysler Financial Company L.L.C., as
Servicer, and the Bank of New York, as
Trustee.
Series 1999-2 Supplement dated as of May 20, 4.2
1999, among U.S. Auto Receivables Company, as
Seller, Chrysler Financial Company L.L.C., as
Servicer, and the Bank of New York, as
Trustee.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CHRYSLER FINANCIAL COMPANY L.L.C.
Date: August 30, 1999 By: /s/ B.C. Babbish
---------------------------------
B.C. Babbish
Assistant Secretary
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EXHIBIT INDEX
Exhibit
No. Description of Exhibit
- ------- -----------------------
4.1 Series 1999-1 Supplement dated as of March 10,
1999, among U.S. Auto Receivables Company, as
Seller, Chrysler Financial Company L.L.C., as
Servicer, and the Bank of New York, as
Trustee.
4.2 Series 1999-2 Supplement dated as of May 20,
1999, among U.S. Auto Receivables Company, as
Seller, Chrysler Financial Company L.L.C., as
Servicer, and the Bank of New York, as
Trustee.
-4-
CONFORMED COPY
SERIES 1999-1 SUPPLEMENT dated as of March 10,
1999 (the "Series Supplement"), among U.S. AUTO
RECEIVABLES COMPANY, a Delaware corporation, as Seller,
CHRYSLER FINANCIAL COMPANY L.L.C., a Michigan limited
liability company, 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 Company L.L.C., as Servicer, and Manufacturer
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 1999-1 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 "Fixed Rate Auto Loan Asset Backed
Certificates, Series 1999-1". Series 1999-1 shall consist of two classes to
be known as the "Class A-1 Certificates, Series 1999-1" and the "Class A-2
Certificates, Series 1999-1".
(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.
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ARTICLE II
Definitions
SECTION 2.01. Definitions. (a) Whenever used in this Series
Supplement the following words and phrases shall have the following meanings.
"Adjusted Invested Amount" shall mean, with respect to Series 1999-1
for any Collection Period, an amount equal to the sum of (a) the Initial
Invested Amount of the Series 1999-1 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 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).
"Allocable Defaulted Amount" shall mean, with respect to any
Collection Period, the product of (a) the Series 1999-1 Allocation Percentage
with respect to such Collection Period and (b) the Defaulted Amount with
respect to such Collection Period.
"Allocable Excess Spread" shall mean, with respect to any
Distribution Date, the amount of excess servicing with respect to all
outstanding Series that would otherwise be distributed to the Seller other
than any such excess servicing with respect to any such Series that, if not
distributed to the Seller, would result in the available subordinated amount
for such Series being less than the required subordinated amount for such
Series and that is allocated to Series 1999-1 on such Distribution Date
pursuant to Section 4.14.
"Allocable Miscellaneous Payments" shall mean, with respect to any
Distribution Date, the product of (a) the Series 1999-1 Allocation Percentage
for the related Collection Period and (b) Miscellaneous Payments with respect
to the related Collection Period.
"Allocable Non-Principal Collections" shall mean, with respect to
any Deposit Date, the product of (a) the Series 1999-1 Allocation Percentage
for the related Collection Period and (b) the aggregate amount of
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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 1999-1 Allocation Percentage for
the related Collection Period and (b) the aggregate amount of Collections in
respect of Principal Receivables relating to such Deposit Date.
"Automatic Additional Accounts" shall have the meaning specified in
Section 9.01(e).
"Automatic Removal Accounts" shall have the meaning specified in
Section 9.01(c).
"Automatic Removal Date" shall have the meaning specified in
Section 9.01(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 1999-1 Excess
Principal Collections on deposit in the Collection Account for such
Distribution Date and (d) on the Class A-2 Termination Date, any funds in the
Reserve Fund after giving effect to Section 4.08.
"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
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(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 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) the excess, if any, of the Required Subordinated Amount for such
Determination Date over the Required Subordinated Amount for the immediately
preceding Distribution Date due to an increase in the Subordination Factor
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 (v) $11,173,184 or (w)
1.12% of the Invested Amount on such date; provided, however, (x) that, from
and after the commencement of the Class A-1 Accumulation Period until the
Class A-1 Certificates are paid in full, (y) from and after the commencement
of the Class A-2 Accumulation Period until the Class A-2 Certificates are
paid in full and (z) from and after the commencement of any Early
Amortization Period (other than an Early Amortization Period which has ended
as described in clause (c) or clause (d) of the definition thereof in this
Series Supplement) 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-1 Accumulation Period, Class A-2
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Accumulation Period, or Early Amortization Period, as applicable.
"Certificate Principal Percentage" shall mean (a) for any Collection
Period and the Class A-1 Certificates, the percentage equivalent (which shall
never exceed 100%) of a fraction, the numerator of which is the Class A-1
Invested Amount as of the last day of the Class A-1 Revolving Period if such
last day has occurred or, if such last day has not occurred, as of the last
day of the immediately preceding Collection Period and the denominator or
which is the sum of (i) the Class A-1 Invested Amount as of the last day of
the Class A-1 Revolving Period if such last day has occurred or, if such last
day has not occurred, as of the last day of the immediately preceding
Collection Period and (ii) the Class A-2 Invested Amount as of the last day
of the Class A-2 Revolving Period, if such last day has occurred, of if such
last day has not occurred, as of the last day of the immediately preceding
Collection Period, provided that after the Class A-1 Certificates have been
paid in full the Certificate Principal Percentage with respect thereto shall
be zero; and (b) for any Collection Period and the Class A-2 Certificates in
the aggregate, 100% minus the Certificate Principal Percentage for the Class
A-1 Certificates.
"Class A-1 Accumulation Period" shall mean, unless an Early
Amortization Event shall have occurred prior thereto (other than an Early
Amortization Event which has resulted in an Early Amortization Period which
has ended as described in clause (c) or clause (d) of the definition thereof
in this Series Supplement), the period commencing on the Class A-1
Accumulation Period Commencement Date and ending upon the first to occur of
(a) the commencement of an Early Amortization Period (other than an Early
Amortization Period which has ended as described in clause (c) or clause (d)
of the definition thereof in this Series Supplement) and (b) the payment in
full to Class A-1 Certificateholders of the outstanding principal amount of
the Class A-1 Certificates.
"Class A-2 Accumulation Period" shall mean, unless an Early
Amortization Event shall have occurred prior thereto (other than an Early
Amortization Event which has resulted in an Early Amortization Period which
has ended as described in clause (c) or clause (d) of the definition thereof
in this Series Supplement), the period commencing on the Class A-2
Accumulation Period Commencement Date and ending upon the first to occur of
(a) the commencement of an Early Amortization Period (other than an Early
Amortization Period which has ended as described in clause (c) or
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clause (d) of the definition thereof in this Series Supplement) and (b) the
payment in full to Class A-2 Certificateholders of the outstanding principal
amount of the Class A-2 Certificates.
"Class A-1 Accumulation Period Commencement Date" shall mean the
first day of the Collection Period upon which the number of full Collection
Periods remaining until the Class A-1 Expected Payment Date first equals the
Class A-1 Accumulation Period Length; provided, however, that, if at any time
after the September 2000 Distribution Date, any other outstanding Series
(other than any Excluded Series) shall have entered into a reinvestment
period or an early amortization period, the Class A-1 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-1 Accumulation Period Commencement Date as
previously determined. If the Class A-1 Accumulation Period Length is one
month, two months, three months, four months or five months, the Class A-1
Accumulation Period Commencement Date shall mean the first day of the
February 2001 Collection Period, the January 2001 Collection Period, the
December 2000 Collection Period, the November 2000 Collection Period or the
October 2000 Collection Period, respectively.
"Class A-2 Accumulation Period Commencement Date" shall mean the
first day of the Collection Period upon which the number of full Collection
Periods remaining until the Class A-2 Expected Payment Date first equals the
Class A-2 Accumulation Period Length; provided, however, that, if at any time
after the September 2001 Distribution Date, any other outstanding Series
(other than any Excluded Series) shall have entered into a reinvestment
period or an early amortization period, the Class A-2 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-2 Accumulation Period Commencement Date as
previously determined. If the Class A-2 Accumulation Period Length is one
month, two months, three months, four months or five months, the Class A-2
Accumulation Period Commencement Date shall mean the first day of the
February 2002 Collection Period, the January 2002 Collection Period, the
December 2001 Collection Period, the November 2001 Collection Period or the
October 2001 Collection Period, respectively.
"Class A-1 Accumulation Period Length" shall mean a period which is
one, two, three, four or five month(s)
6
long and is calculated as of the September 2000 Distribution Date and each
Distribution Date thereafter that occurs prior to the Class A-1 Accumulation
Period Commencement Date, as the lesser of (i) the number of full Collection
Periods between such Distribution Date and the Class A-1 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 12 months and (b) a fraction, the numerator of which is the sum of (i)
the Class A-1 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 Class A-1 Expected Payment Date as of such
Distribution Date (after giving effect to all changes therein on such date)
and the denominator of which is the sum of the Invested Amount as of such
Distribution Date (after giving effect to all changes therein on such date)
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 Class A-1
Expected Payment Date.
"Class A-2 Accumulation Period Length" shall mean a period which is
one, two, three, four or five month(s) long and is calculated as of the
September 2001 Distribution Date and each Distribution Date thereafter that
occurs prior to the Class A-2 Accumulation Period Commencement Date, as the
lesser of (i) the number of full Collection Periods between such Distribution
Date and the Class A-2 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 12 months and (b) a fraction,
the numerator of which is the sum of (i) the Class A-2 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 Class
A-2 Expected Payment Date as of such Distribution Date (after giving effect
to all changes therein on such date) and the denominator of which is the sum
of such Class A-2 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 Class A-2 Expected Payment Date.
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"Class A-1 Additional Interest" shall have the meaning specified in
Section 4.02(a).
"Class A-2 Additional Interest" shall have the meaning specified in
Section 4.02(b).
"Class A-1 Allocation Percentage" shall mean, for any Collection
Period, 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 reductions thereof to occur on
the immediately following distribution Date) by the aggregate outstanding
principal amount of all the Series 1999-1 Certificates as of such last day
(after giving effect to any reductions thereof to occur on the immediately
following Distribution Date).
"Class A-2 Allocation Percentage" shall mean, for any Collection
Period, the percentage obtained by subtracting from 100% the Class A-1
Allocation Percentage.
"Class A-1 Available Investor Principal Collections" shall
mean, for any Distribution Date, the product of (x) the Available Investor
Principal Collections for such Distribution Date and (y) the Certificate
Principal Percentage for the Class A-1 Certificates for the immediately
preceding Collection Period.
"Class A-2 Available Investor Principal Collections" shall mean, for
any Distribution Date, the product of (x) the Available Investor Principal
Collections for such Distribution Date and (y) the Certificate Principal
Percentage for the Class A-2 Certificates for the immediately preceding
Collection Period.
"Class A-1 Certificate Rate" shall mean, with respect to any
Interest Period, 5.65% per annum.
"Class A-2 Certificate Rate" shall mean, with respect to any
Interest Period, 5.78% per annum.
"Class A-1 Certificateholders" shall mean the Holders of Class A-1
Certificates.
"Class A-2 Certificateholders" shall mean the Holders of Class A-2
Certificates.
"Class A-1 Certificateholders' Interest" shall mean that portion of
the Certificateholders' Interest evidenced by the Class A-1 Certificates.
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"Class A-2 Certificateholders' Interest" shall mean that portion of
the Certificateholders' Interest evidenced by the Class A-2 Certificates.
"Class A-1 Certificates" shall mean any one of the certificates
executed by the Seller and authenticated by the Trustee, substantially in the
form of Exhibit A-1.
"Class A-2 Certificates" shall mean any one of the certificates
executed by the Seller and authenticated by the Trustee, substantially in the
form of Exhibit A-2.
"Class A-1 Controlled Amortization Amount" shall mean an amount
equal to the Class A-1 Invested Amount as of the September 2000 Distribution
Date (after giving effect to any changes therein on such date), divided by
the Class A-1 Accumulation Period Length.
"Class A-2 Controlled Amortization Amount" shall mean an amount
equal to the Class A-2 Invested Amount as of the September 2001 Distribution
Date (after giving effect to any changes therein on such date), divided by
the Class A-2 Accumulation Period Length.
"Class A-1 Controlled Distribution Amount" shall mean, with respect
to any Distribution Date, the excess, if any, of (a) the sum of (i) the
product of the Class A-1 Controlled Amortization Amount and the number of
Distribution Dates from and including the first Distribution Date with
respect to the Class A-1 Accumulation Period through and including such
Distribution Date (but not in excess of the Class A-1 Accumulation Period
Length) and (ii) the amount on deposit in the Excess Funding Account with
respect to the Class A-1 Certificates as of the September 2000 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 with respect to the Class A-1
Certificates and the Principal Funding Account, in each case before giving
effect to any withdrawals from or deposits to such accounts on such
Distribution Date.
"Class A-2 Controlled Distribution Amount" shall mean, with respect
to any Distribution Date, the excess, if any, of (a) the sum of (i) the
product of the Class A-2 Controlled Amortization Amount and the number of
Distribution Dates from and including the first Distribution Date with
respect to the Class A-2 Accumulation Period through and including such
Distribution Date (but not in
9
excess of the Class A-2 Accumulation Period Length) and (ii) the amount on
deposit in the Excess Funding Account with respect to the Class A-2
Certificates as of the September 2001 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 with respect to the Class A-2 Certificates and the Principal
Funding Account, in each case before giving effect to any withdrawals from or
deposits to such accounts on such Distribution Date.
"Class A-1 Expected Payment Date" shall mean the March 2001
Distribution Date.
"Class A-2 Expected Payment Date" shall mean the March 2002
Distribution Date.
"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 $400,000,000, 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 or an increase in the
Subordination Factor since the Series Issuance Date and prior to the
September 2000 Distribution Date, minus (z) the amount of any principal
payments (except principal payments made from the Excess Funding Account)
made to the holders of any Class A-1 Certificates that have been paid in
full.
"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 $600,000,000, 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 or an increase in the
Subordination Factor since the Series Issuance Date.
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"Class A-1 Initial Principal Amount" shall mean $400,000,000.
"Class A-2 Initial Principal Amount" shall mean $600,000,000.
"Class A-1 Interest Shortfall" shall have the meaning specified in
Section 4.02(a).
"Class A-2 Interest Shortfall" shall have the meaning specified in
Section 4.02(b).
"Class A-1 Invested Amount" means for any date an amount equal to
the Class A-1 Initial 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 holders
of 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.
"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 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.
"Class A-1 Investor Charge-Offs" shall have the meaning specified in
Section 4.09.
"Class A-2 Investor Charge-Offs" shall have the meaning specified in
Section 4.09.
"Class A-1 Monthly Interest" shall have the meaning specified in
Section 4.02.
"Class A-2 Monthly Interest" shall have the meaning specified in
Section 4.02.
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"Class A-1 Monthly Principal" means, with respect to any
Distribution Date, the amount of monthly principal distributable with respect
to the Class A-1 Certificates on such Distribution Date, as determined
pursuant to Section 4.03.
"Class A-2 Monthly Principal" means, with respect to any
Distribution Date, the amount of monthly principal distributable with respect
to the Class A-2 Certificates on such Distribution Date, as determined
pursuant to Section 4.03.
"Class A-1 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 Class A-1
Invested Amount on such Distribution Date, (b) accrued and unpaid interest on
the unpaid balance of the Class A-1 Certificates (calculated on the basis of
the outstanding principal balance of the Class A-1 Certificates at the Class
A-1 Certificate Rate, through the day preceding such Distribution Date and
(c) the amount of Class A-1 Additional Interest, if any, for such
Distribution Date and any Class A-1 Additional Interest previously due but
not distributed to the Class A-1 Certificateholders on a prior Distribution
Date.
"Class A-2 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 Class A-2
Invested Amount on such Distribution Date, (b) accrued and unpaid interest on
the unpaid balance of the Class A-2 Certificates (calculated on the basis of
the outstanding principal balance of the Class A-2 Certificates at the Class
A-2 Certificate Rate), through the day preceding such Distribution Date, (c)
the amount of Class A-2 Additional Interest, if any, for such Distribution
Date and any Class A-2 Additional Interest previously due but not distributed
to the Class A-2 Certificateholders on a prior Distribution Date.
"Class A-1 Revolving Period" shall mean the period beginning at the
close of business on the Series Cut-Off Date and terminating on the earlier
of (a) the close of business on the day immediately preceding the Class A-1
Accumulation Period Commencement Date and (b) the close of business on the
day an Early Amortization Period commences; provided, however, that, if any
Early Amortization Period terminates as described in clause (c) or clause (d)
of the definition thereof in this Series Supplement, the Class A-1
12
Revolving Period will recommence as of the close of business on the day such
Early Amortization Period terminates.
"Class A-2 Revolving Period" shall mean the period beginning at the
close of business on the Series Cut-Off Date and terminating on the earlier
of (a) the close of business on the day immediately preceding the Class A-2
Accumulation Period Commencement Date and (b) the close of business on the
day an Early Amortization Period commences; provided, however, that, if any
Early Amortization Period terminates as described in clause (c) or clause (d)
of the definition thereof in this Series Supplement, the Class A-2 Revolving
Period will recommence as of the close of business on the day such Early
Amortization Period terminates.
"Class A-1 Termination Date" shall mean the March 2003 Distribution
Date.
"Class A-2 Termination Date" shall mean the March 2004 Distribution
Date.
"Class A-1 Termination Proceeds" shall mean any Termination Proceeds
arising out of a sale of Receivables (or interests therein) pursuant to
Section 9.01 of this Series Supplement with respect to Class A-1.
"Class A-2 Termination Proceeds" shall mean any Termination Proceeds
arising out of a sale of Receivables (or interests therein) pursuant to
Section 9.01 of this Series Supplement with respect to Class A-2.
"Closing Date" shall mean March 10, 1999.
"Deficiency Amount" shall have the meaning specified in Section
4.05.
"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.
"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 1999-1 and terminating on the earliest of (a) the payment
in full of the outstanding principal balance of the Series 1999-1
Certificates; (b) with respect to the Class A-1 Certificates, the Class A-1
Termination Date and, with respect to the Class A-2 Certificates, the Class
A-2 Termination Date; (c) if such Early Amortization Period has
13
resulted from the occurrence of an Early Amortization Event described in
Section 9.01(a) 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(a), 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, with
respect to the Class A-1 Certificates, the Class A-1 Revolving Period or,
with respect to the Class A-2 Certificates, the Class A-2 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
Sections 9.01(a), (f) or (g) of the Agreement or Section 6.01, other than
Section 6.01(f), (g) or (h), 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 1999-1 Certificates, and (ii) Series 1999-1 Certificateholders
holding Series 1999-1 Certificates evidencing more than 50% of the aggregate
unpaid principal amount of the Series 1999-1 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, with respect to the Class A-1 Certificates,
the Class A-1 Revolving Period or, with respect to the Class A-2
Certificates, the Class A-2 Revolving Period shall not have occurred.
"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
(unless each Rating Agency confirms in writing that a longer maturity will
not result in the downgrade or withdrawal of such Rating Agency's rating of
the Series 1999-1 Certificates), but in no event occurring later than the
Distribution Date next succeeding the Trustee's acquisition thereof (unless
each Rating Agency confirms in writing that a longer maturity will not result
in the downgrade or withdrawal of such Rating Agency's rating of the Series
1999-1 Certificates), which evidence:
14
(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 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) 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); and
(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
15
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 nonbank 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 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 1999-1 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 1999-1 Account (other
than the Collection Account and the Yield Supplement 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+;
16
(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;
(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
17
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 account the
issuance of such guarantee, will not result in the
downgrade or withdrawal of the ratings assigned to the
Series 1999-1 Certificates; and
(H) the repurchase obligations shall require that the
repurchase obligation be over- collateralized 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 Funding Amount" shall have the meaning specified in Section
4.04(c)(i).
"Excess Reserve Fund Required Amount" shall mean, for any
Distribution Date with respect to an Early Amortization Period, an amount
equal to the greater of (a) 5% of the initial principal balance of the Series
1999-1 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,
18
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
1999-1 Certificates on such Distribution Date (after giving effect to any
changes therein on such Distribution Date) over (ii) the excess of (x) the
Series 1999-1 Allocation Percentage of the Pool Balance on the last day of
the immediately preceding Collection Period over (y) the Invested Amount on
such Distribution Date (after giving effect to changes therein on such
Distribution Date); provided that the Excess Reserve Fund Required Amount
shall not exceed such Available Subordinated Amount.
"Excess Seller's Percentage" shall mean, with respect to any
Collection Period, a percentage (which percentage shall never be less than 0%
nor more than 100%) equal to (a) 100% minus, when used with respect to Non-
Principal Receivables, Defaulted Receivables and Principal Receivables during
any 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
1999-1 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 Principal Receivables during the Class A-1 Accumulation
Period, the Class A-2 Accumulation Period and an Early Amortization Period,
the sum of (i) the Principal Allocation Percentage with respect to such
Collection Period and (ii) the percentage equivalent of a fraction, the
numerator of which is the Available Subordinated Amount as of the
Determination Date occurring in such Collection Period (after giving effect
to the allocations, distributions, withdrawals and deposits to be 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 1999-1
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 sum of the amount, if any, specified
19
pursuant to Section 4.06(a)(v) with respect to such Distribution Date.
"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 and the
denominator of which is the product of (a) the Pool Balance as of such last
day and (b) the Series 1999-1 Allocation Percentage for the Collection Period
in respect of which the Floating Allocation Percentage is being calculated;
provided, however, that, with respect to the March 1999 Collection Period,
the Floating Allocation Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Initial Invested Amount on the
Closing Date and the denominator of which is the product of (x) the Pool
Balance on the Series Cut-Off Date and (y) the Series 1999-1 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 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.
"Initial Distribution Date" shall mean April 15, 1999.
"Initial Invested Amount" means the sum of the Class A-1 Initial
Invested Amount and the Class A-2 Initial Invested Amount.
"Initial Reserve Fund Deposit Amount" shall mean $3,500,000.
"Interest Period" shall mean, with respect to any Distribution Date,
the period from and including the Distribution Date immediately preceding
such Distribution Date to but excluding such Distribution Date (or, in the
20
case of the Initial Distribution Date, the period from and including the
Closing Date to but excluding the Initial Distribution Date). Interest will
be calculated on the basis of a 360-day year of twelve 30-day months.
"Invested Amount" shall mean 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.
"Investment Proceeds" shall mean, with respect to any Determination
Date, all interest and other investment earnings accumulated for the
immediately preceding Collection Period (net of losses and investment
expenses) on funds on deposit in the Series 1999-1 Accounts, together with an
amount equal to the Series 1999-1 Allocation Percentage of the interest and
other investment earnings on funds held in the Collection Account credited to
the Collection Account pursuant to Section 4.02 of the Agreement.
"Investor Charge-Offs" shall have the meaning specified in
Section 4.09.
"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.
"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 any Nonprincipal Period, or the Principal
Allocation Percentage, with respect to the Class A-1 Accumulation Period, the
Class A-2 Accumulation Period or an Early Amortization Period for the related
Collection Period (or any partial Collection Period which occurs as the first
Collection Period during an Early Amortization 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) and (b) the amount, if
any, of Collections of Non-Principal Receivables, Investment Proceeds,
Allocable Excess Spread,
21
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 Payment Rate" shall mean, for any Collection Period, the
percentage derived from dividing the Principal Collections for such
Collection Period by the average daily Pool Balance for such Collection
Period.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.01.
"Nonprincipal Period" shall mean any period that is not the Class
A-1 Accumulation Period, the Class A-2 Accumulation Period or an Early
Amortization Period.
"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 Allocation Percentage" shall mean with respect to
any Collection Period, the percentage equivalent (which shall never exceed
100%) of a fraction, the numerator of which is the sum of (x) the Class A-1
Invested Amount as of the last day of the Class A-1 Revolving Period, if such
last day has occurred or, if such last day has not occurred, as of the last
day of the immediately preceding Collection Period, or, after the Class A-1
Certificates have been paid in full, zero and (y) the Class A-2 Invested
Amount as of the last day of the Class A-2 Revolving Period, if such last day
has occurred or, if such last day has not occurred, 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 1999-1
Allocation Percentage for 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 (c) or clause (d) of the definition thereof
in this Series Supplement), the Principal Allocation Percentage shall be
reset using the Pool Balance as of the close of business on the date on which
such Early Amortization Event shall have occurred and Principal Collections
shall be allocated for such portion of such
22
Collection Period using such reset Principal Allocation Percentage.
"Reassignment Amount" shall mean the sum of the Class A-1
Reassignment Amount and the Class A-2 Reassignment Amount.
"Required Participation Percentage" shall mean, with respect to
Series 1999-1, 103%; 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 9.04 is greater
than 1.5% 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, 104%;
provided further that the Seller may, upon 10 days' prior notice to the
Trustee and each Rating Agency, 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) 0.35% and (b) the
outstanding principal balance of the Series 1999-1 Certificates on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date).
23
"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,
Defaulted Receivables and Principal Receivables during any Nonprincipal
Period, and (b) the Principal Allocation Percentage, when used with respect
to Principal Receivables during the Class A-1 Accumulation Period, the Class
A-2 Accumulation Period and an Early Amortization Period.
"Series 1999-1" shall mean the Series of Investor Certificates, the
terms of which are specified in this Series Supplement.
"Series 1999-1 Accounts" shall have the meaning specified in Section
4.04(d)(i).
"Series 1999-1 Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series 1999-1.
"Series 1999-1 Certificateholders" shall mean the Class A-1
Certificateholders and the Class A-2 Certificateholders.
"Series 1999-1 Certificates" shall mean the Class A-1 Certificates
and the Class A-2 Certificates.
"Series 1999-1 Excess Principal Collections" shall mean that portion
of Excess Principal Collections allocated to Series 1999-1 pursuant to
Section 4.11.
"Series 1999-1 Principal Shortfall" shall have the meaning specified
in Section 4.11.
"Series Cut-off Date" shall mean February 28, 1999.
"Servicing Fee Rate" shall mean, with respect to Series 1999-1, l%
per annum (on a 30/360 day basis), or such lesser percentage as the Servicer
shall determine in connection with a waiver by the Servicer of all or any
portion of the Monthly Servicing Fee on any date.
24
"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 (c) or clause (d) of the
definition thereof in this Series Supplement).
"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 10.5%; provided, however, that the
Subordination Factor will be 11.5% 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 & Poor's rating of the Series 1999-1 Certificates.
"Trust Available Subordinated Amount" means the sum of the Available
Subordinated Amount and the sum of the aggregate available subordinated
amounts for all other outstanding Series.
(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
1999-1, Moody's and Standard & Poor's. As used in this Series Supplement and
in the Agreement with respect to Series 1999-1, "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.
("Fitch"), and Duff & Phelps, Inc. ("D&P"), although no such entity shall be
deemed to be a Rating Agency for any purposes of the Agreement or this Series
Supplement with respect to Series 1999-1.
(c) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement. The definitions
in Section 2.01 are applicable to the singular as well as to the plural forms
of such terms and to the masculine as well as to the feminine and neuter
genders of such terms.
(d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Series
25
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 Class A-2 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 1999-1 Allocation Percentage with respect to the immediately
preceding Collection Period. The share of the Monthly Servicing Fee allocable
to the Series 1999-1 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
1999-1 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 1999-1 Certificateholders shall in no event be liable for the
share of the Servicing Fee to be paid by 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 all
or any portion of 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
26
on any future Distribution Date to pay the Certificateholders Monthly
Servicing Fee relating to the waived Monthly Servicing Fee. If the Servicer
so waives all or any portion of the Monthly Servicing Fee for any
Distribution Date, the Monthly Servicing Fee and the Certificateholders
Monthly Servicing Fee for such waived Distribution Date shall be deemed to be
reduced by the amount so waived 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 1999-1 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 1999-1 pursuant to Article IV of
the Agreement shall be allocated and distributed as set forth in this
Article.
(b) The Servicer shall instruct the 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 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
27
(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 any Nonprincipal
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
1999-1 Certificateholders' Interest pursuant to Section 7.01 of this Series
Supplement and proceeds from the sale, 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 any Nonprincipal 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).
SECTION 4.02. Monthly Interest. (a) The amount of monthly interest
("Class A-1 Monthly Interest") with
28
respect to the Class A-1 Certificates on any Distribution Date, commencing
with the Initial Distribution Date, shall be an amount equal to one-twelfth
of the product of (i) the Class A-1 Certificate Rate and (ii) the outstanding
principal balance of the Class A-1 Certificates as of the close of business
on the preceding Distribution Date (after giving effect to all repayments of
principal made to Class A-1 Certificateholders on such preceding Distribution
Date, if any); provided, however, that Class A-1 Monthly Interest for the
Initial Distribution Date shall be $2,197,222.22.
On the Determination Date preceding each Distribution Date,
commencing with the Initial Distribution Date, the Servicer shall determine
the excess, if any (the "Class A-1 Interest Shortfall"), of (x) the aggregate
Class A-1 Monthly Interest for the Interest Period applicable to such
Distribution Date over (y) the amount which will be available to be
distributed to Class A-1 Certificateholders on such Distribution Date in
respect thereof pursuant to this Series Supplement. If the Class A-1 Interest
Shortfall with respect to any Distribution Date is greater than zero, an
additional amount ("Additional Class A-1 Interest") equal to one-twelfth of
the product of (i) the Class A-1 Certificate Rate and (ii) such Class A-1
Interest Shortfall (or the portion thereof which has not been paid to Class
A-1 Certificateholders) shall be payable as provided herein with respect to
the Class A-1 Certificates on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such Class
A-1 Interest Shortfall is paid to Class A-1 Certificateholders.
Notwithstanding anything to the contrary herein, Additional Class A-1
Interest shall be payable or distributed to Class A-1 Certificateholders only
to the extent permitted by applicable law.
(b) The amount of monthly interest ("Class A-2 Monthly Interest")
with respect to the Class A-2 Certificates on any Distribution Date,
commencing with the Initial Distribution Date, shall be an amount equal to
one-twelfth of the product of (i) the Class A-2 Certificate Rate and (ii) the
outstanding principal balance of the Class A-2 Certificates as of the close
of business on the preceding Distribution Date (after giving effect to all
repayments of principal made to Class A-2 Certificateholders on such
preceding Distribution Date, if any); provided, however, that Class A-2
Monthly Interest for the Initial Distribution Date shall be $3,371,666.67.
29
On the Determination Date preceding each Distribution Date,
commencing with the Initial Distribution Date, the Servicer shall determine
the excess, if any (the "Class A-2 Interest Shortfall"), of (x) the aggregate
Class A-2 Monthly Interest for the Interest Period applicable to such
Distribution Date over (y) the amount which will be available to be
distributed to Class A-2 Certificateholders on such Distribution Date in
respect thereof pursuant to this Series Supplement. If the Class A-2 Interest
Shortfall with respect to any Distribution Date is greater than zero, an
additional amount ("Class A-2 Additional Interest") equal to one-twelfth of
the product of (i) the Class A-2 Certificate Rate and (ii) such Class A-2
Interest Shortfall (or the portion thereof which has not been paid to Class
A-2 Certificateholders) shall be payable as provided herein with respect to
the Class A-2 Certificates on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such Class
A-2 Interest Shortfall is paid to Class A-2 Certificateholders.
Notwithstanding anything to the contrary herein, Additional Class A-2
Interest shall be payable or distributed to Class A-2 Certificateholders only
to the extent permitted by applicable law.
SECTION 4.03. Determination of Monthly Principal. (a) The amount of
Class A-1 Monthly Principal distributable with respect to the Class A-1
Certificates on each Distribution Date with respect to the Class A-1
Accumulation Period shall be equal to the Class A-1 Available Investor
Principal Collections with respect to such Distribution Date; provided,
however, that, for each such Distribution Date, Class A-1 Monthly Principal
shall not exceed the Class A-1 Controlled Distribution Amount for such
Distribution Date; and provided further that Class A-1 Monthly Principal
shall not exceed the Class A-1 Invested Amount.
(b) The amount of Class A-2 Monthly Principal distributable with
respect to the Class A-2 Certificates on each Distribution Date with respect
to the Class A-2 Accumulation Period shall be equal to the Class A-2
Available Investor Principal Collections with respect to such Distribution
Date; provided, however, that, for each such Distribution Date, Class A-2
Monthly Principal shall not exceed the Class A-2 Controlled Distribution
Amount for such Distribution Date; and provided further that Class A-2
Monthly Principal shall not exceed the Class A-2 Invested Amount.
30
(c) The amount of Class A-1 Monthly Principal distributable on each
Distribution Date with respect to an Early Amortization Period shall be equal
to the Class A-1 Invested Amount or, if less, the amount distributable in
respect of the Class A-1 Certificates on such Distribution Date pursuant to
Section 4.06(e).
(d) The amount of Class A-2 Monthly Principal distributable on each
Distribution Date with respect to an Early Amortization Period shall be equal
to the Class A-2 Invested Amount or, if less, the amount distributable in
respect of the Class A-2 Certificates on such Distribution Date pursuant to
Section 4.06(e).
SECTION 4.04. Establishment of Reserve Fund and Funding Accounts.
(a) (i) The Servicer, for the benefit of the Series 1999-1
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 1999-1" and shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series 1999-1 Certificateholders. On the Closing Date, 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 1999-1 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) 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 1999-1
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 1999-1" and shall bear a designation
clearly
31
indicating that the funds deposited therein are held for the benefit of the
Series 1999-1 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 1999-1 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) of this Series Supplement. Funds on deposit
in the Principal Funding Account shall be invested from the date of their
deposit to on or prior to the Class A-1 Expected Payment Date or, after the
Class A-1 Certificates have been paid in full, the Class A-2 Expected Payment
Date by the Trustee 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 Principal Funding Account on a Business Day
(which immediately precedes either the Class A-1 Expected Payment Date or the
Class A-2 Expected Payment Date) upon the maturity of any Eligible
Investments are not required to be invested overnight.
(c) (i) The Servicer, for the benefit of the Series 1999-1
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 1999-1" and shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series 1999-1 Certificateholders. No deposit will be made to the Excess
Funding Account on the Closing Date.
(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 1999-1 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
32
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 over
night.
(d) (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 and other financial assets credited to, the Reserve Fund, the
Principal Funding Account and the Excess Funding Account (collectively the
"Series 1999-1 Accounts") and in all proceeds thereof. The Series 1999-1
Accounts shall be under the sole dominion and control of the Trustee for the
benefit of the Series 1999-1 Certificateholders. If, at any time, any of the
Series 1999-1 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 1999-1 Account meeting the conditions
specified in paragraph (a)(i), (b)(i) or (c)(i) above, as applicable, as an
Eligible Deposit Account and shall transfer any cash and/or any investments
to such new Series 1999-1 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 1999-1 Account, except as
expressly provided herein. Schedule 1, which is hereby incorporated into and
made part of this Series Supplement, identifies each Series 1999-1 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 1999-1 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 1999-1 Account.
(ii) Pursuant to the authority granted to the Servicer in Section
3.01(a) of the Agreement, the Servicer shall have the power, revocable by the
Trustee, to make withdrawals and payments or to instruct the Trustee to make
withdrawals and payments from the Series 1999-1 Accounts for the purposes of
carrying out the Servicer's or Trustee's duties hereunder.
SECTION 4.05. Deficiency Amount. With respect to each Distribution
Date, commencing with the Initial Distri bution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Deficiency
Amount"), if
33
any, by which (a) the sum of (i) Class A-1 Monthly Interest and Class A-2
Monthly Interest for such Distribution Date, (ii) any Class A-1 Monthly
Interest and Class A-2 Monthly Interest previously due but not distributed to
the Series 1999-1 Certificateholders on a prior Distribution Date, (iii)
Class A-1 Additional Interest and Class A-2 Additional Interest, if any, for
such Distribution Date and any Class A-1 Additional Interest and Class A-2
Additional Interest previously due but not distributed to the Series 1999-1
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; and (vi) the Series 1999-1
Allocation Percentage of the amount of any Adjustment Payment required to be
deposited in the Collection Account pursuant to Section 3.09(a) of the
Agreement with respect to the related Collection Period that has not been so
deposited as of such Determination Date, 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 any Allocable Excess
Spread with respect to such Distribution Date and (ii) the amount of funds in
the Reserve Fund which are available pursuant to Section 4.08(a) to cover any
portion of the Deficiency Amount. The lesser of the Deficiency Amount and the
Available Subordinated Amount shall be the "Required Subordination Draw
Amount".
SECTION 4.06. Application of Investor Non-Principal Collections,
Investment Proceeds, Allocable Excess Spread and Available Investor Principal
Collections. The Servicer shall cause the Trustee to apply, on each
Distribution Date, commencing with the Initial Distribution Date, Investor
Non-Principal Collections, Investment Proceeds, Allocable Excess Spread and
Available Investor Principal Collections to make the following distributions:
(a) On each Distribution Date, commencing with the Initial
Distribution Date, an amount equal to the sum of Investor Non-Principal
Collections, any Investment Proceeds and any Allocable Excess Spread with
respect to such Distribution Date will be distributed 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 to the Class A-1
Certificateholders on a prior Distribution Date, plus the amount of
any Class A-1 Additional Interest for such Distribution Date and any
Class A-1 Additional Interest previously
34
due but not distributed to the Class A-1 Certificateholders on a
prior Distribution Date 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 distributed to the Class A-2
Certificateholders on a prior Distribution Date, plus the amount of
any Class A-2 Additional Interest for such Distribution Date and any
Class A-2 Additional Interest previously due but not distributed to
the Class A-2 Certificateholders on a prior Distribution Date shall
be distributed to the Class A-2 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; and
(v) fifth, the balance, if any, shall constitute Excess
Servicing and shall be allocated and distributed as set forth in
Section 4.10.
In the event Investor Nonprincipal Collections, Investment Proceeds
and Allocable Excess Spread 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
1999-1 Certificates pursuant to 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 Series 1999-1 Certificateholders of the
other Class pursuant to such clause.
35
(b) On each Distribution Date, commencing with the Initial
Distribution Date, with respect to any Nonprincipal 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
(reduced for this purpose by the amount, if any, by which the Required
Participation Amount exceeds the Pool Balance due to an increase in the
Subordination Factor) 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 1999-1 Certificates and second treated as Excess Principal Collections
and applied in accordance with Section 4.04 of the Agreement.
(c) On each Distribution Date with respect to the Class A-1
Accumulation Period, an amount equal to Class A-1 Available Investor
Principal Collections will be distributed in the following priority:
(i) first, an amount equal to Class A-1 Monthly Principal for
such Distribution Date, shall be deposited by the Servicer or the
Trustee into the Principal Funding Account; and
(ii) second, unless an Early Amortization Event has occurred
(other than an Early Amortization Event which has resulted in an
Early Amortization Period which has ended as described in clause (c)
or clause (d) of the definition thereof in this Series Supplement),
after giving effect to the transactions referred to in clause (i)
above, an amount equal to the balance, if any, of such Class A-1
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.
(d) On each Distribution Date with respect to the Class A-2
Accumulation Period, an amount equal to Class A-2 Available Investor
Principal Collections will be distributed in the following priority:
(i) first, an amount equal to Class A-2 Monthly Principal for
such Distribution Date, shall be deposited by the Servicer or the
Trustee into the Principal Funding Account; and
(ii) second, unless an Early Amortization Event
has occurred (other than an Early Amortization Event
36
which has resulted in an Early Amortization Period which has ended as
described in clause (c) or clause (d) of the definition thereof in
this Series Supplement), after giving effect to the transactions
referred to in clause (i) above, an amount equal to the balance, if
any, of such Class A-2 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.
(e) On each Distribution Date with respect to any Early Amortization
Period, an amount equal to the sum of Class A-1 Monthly Principal and Class
A-2 Monthly Principal will be distributed to the Class A-1 Certificateholders
and the Class A-2 Certificateholders, respectively.
In the event Available Certificateholder Principal Collections are
insufficient to make the entire amount of any distribution described in
clause (e) 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 1999-1 Certificates pursuant to 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 Series 1999-1
Certificateholders of the other Class pursuant to such clause.
SECTION 4.07. Distributions to Series 1999-1 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 and the Excess Funding Account:
(i) on each Distribution Date, all amounts on deposit in the
Collection Account or the Reserve Fund that are payable to the
Series 1999-1 Certificateholders with respect to accrued interest
will be distributed to the Series 1999-1 Certificateholders;
(ii) on the Class A-1 Expected Payment Date, all amounts on
deposit in the Principal Funding Account and the amount on deposit
in the Excess Funding Account with respect to the Class A-1
Certificates, and all amounts on deposit in the Collection Account
that are payable to the Class A-1 Certificateholders with respect to
principal, up to a maximum amount on any
37
such day equal to the excess of the outstanding principal balance of
the Class A-1 Certificates over the unreimbursed Class A-1 Investor
Charge-Offs, shall be distributed to the Class A-1
Certificateholders.
(iii) on the Class A-2 Expected Payment Date, all amounts on
deposit in the Principal Funding Account and the amount on deposit
in the Excess Funding Account with respect to the Class A-2
Certificates, and all amounts on deposit in the Collection Account
that are payable to the Class A-2 Certificateholders with respect to
principal, up to a maximum amount on any such day equal to the
excess of the outstanding principal balance of the Class A-2
Certificates over the unreimbursed Class A-2 Investor Charge-Offs,
shall be distributed to the Class A-2 Certificateholders.
(iv) on each Special Payment Date, all amounts on deposit in
the Principal Funding Account and the Excess Funding Account, and
all amounts on deposit in the Collection Account, in each such case
that are payable to the Class A-1 Certificateholders with respect to
principal, up to a maximum amount on any such day equal to the
excess of the outstanding principal balance of the Class A-1
Certificates over the unreimbursed Investor Charge-Offs, shall be
distributed to the Class A-1 Certificateholders.
(v) on each Special Payment Date, all amounts on deposit in
the Principal Funding Account and the Excess Funding Account, and
all amounts on deposit in the Collection Account, in each such case
that are payable to the Class A-2 Certificateholders with respect to
principal, up to a maximum amount on any such day equal to the
excess of the outstanding principal balance of the Class A-2
Certificates over the unreimbursed Investor Charge-Offs, shall be
distributed to the Class A-2 Certificateholders.
(b) 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 8.01 and 8.02 of this Series Supplement.
SECTION 4.08. Application of Reserve Fund and Available Subordinated
Amount. (a) If the portion of Investor Non-Principal Collections, Investment
Proceeds and Allocable Excess Spread allocated to the Series 1999-1
Certificateholders on any Distribution Date pursuant to Section 4.06(a) is
not sufficient to make the entire distributions required on such Distribution
Date by
38
Sections 4.06(a)(i), (ii) and (iv), the Servicer shall cause the Trustee to
withdraw funds from the Reserve Fund to the extent available therein, and
apply such funds to complete the distributions pursuant to Section
4.06(a)(i), (ii) and (iv); provided, however, that during any Early
Amortization Period (other than an Early Amortization Period which has ended
as described in clause (c) or clause (d) of the definition thereof in this
Series Supplement) 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, 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. Any such Available
Seller's Collections remaining after the application thereof pursuant to the
preceding sentence 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 1999-1 as described in Section
4.05(a)(vi). The amount of the Available Seller's Collections applied in
accordance with the two 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 1999-1 as described
in Section 4.05(a)(vi).
(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, 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,
39
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 4.08(b) into the Reserve Fund until the amount in the
Reserve Fund is equal to such Reserve Fund Required Amount. On the Class A-2
Termination Date, any funds in the Reserve Fund will be treated as Available
Investor Principal Collections.
(d) If, for any Distribution Date with respect to an Early
Amortization 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.
(e) The balance of Available Seller's Collections on any
Distribution Date, after giving effect to any distributions thereof pursuant
to Section 4.08(a), (b), (c) or (d), 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 (an "Investor Charge-Off"). Any
such reduction shall be applied to reduce the Class A-1 Invested Amount (a
"Class A-1 Investor Charge-Off") and the Class A-2 Invested Amount (a "Class
A-2 Investor Charge-Off") pro rata based on the Class A-1 Allocation
Percentage and the Class A-2 Allocation
40
Percentage, respectively, in each case for the related Collection Period.
Class A-1 Investor Charge-Offs and Class A-2 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). Any
such increase shall be applied to increase the outstanding principal balance
the Class A-1 Certificates and the Class A-2 Certificates pro rata based on
the Class A-1 Allocated Percentage and the Class A-2 Allocation Percentage,
respectively, in each case for the related Collection Period.
SECTION 4.10. Excess Servicing. The Servicer shall cause the Trustee
to apply, on each Distribution Date, commencing with the Initial Distribution
Date, 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 which have been
previously waived pursuant to Section 3.01 shall be distributed to
the Servicer;
(c) an amount necessary to increase the Available
Subordinated Amount to the Required Subordinated Amount
shall be distributed to the Seller; and
(d) the balance, if any, shall constitute Excess
Spread.
SECTION 4.11. Excess Principal Collections. (a) That portion of
Excess Principal Collections for any Distribution Date equal to the amount of
Series 1999-1 Excess Principal Collections for such Distribution Date will be
allocated to Series 1999-1 and will be distributed as set forth in this
Series Supplement.
41
(b) Series 1999-1 Excess Principal Collections, with respect to any
Distribution Date, shall mean an amount equal to the Series 1999-1 Principal
Shortfall for such Distribution Date; provided, however, that, if the
aggregate amount of Excess Principal Collections for all Series for such
Distribution Date is less than the aggregate amount of Principal Shortfalls
for all Series entitled to share Excess Principal Collections for such
Distribution Date, then Series 1999-1 Excess Principal Collections for such
Distribution Date shall equal the product of (x) Excess Principal Collections
for all Series for such Distribution Date and (y) a fraction, the numerator
of which is the Series 1999-1 Principal Shortfall for such Distribution Date
and the denominator of which is the aggregate amount of Principal Shortfalls
for all Series entitled to share Excess Principal Collections for such
Distribution Date. The "Series 1999-1 Principal Shortfall", with respect to
any Distribution Date, shall equal the excess of (i) (x) for any Distribution
Date with respect to the Class A-1 Accumulation Period, the Class A-1
Controlled Distribution Amount, or with respect to the Class A-2 Accumulation
Period, the Class A-2 Controlled Distribution Amount, or (y) for any
Distribution Date with respect to an Early Amortization Period, the Invested
Amount, over (ii) (x) with respect to the Class A-1 Accumulation Period, the
Class A-1 Available Investor Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Excess Principal Collections),
or with respect to the Class A-2 Accumulation Period, the Class A-2 Available
Investor Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Excess Principal Collections) or (y) with
respect to an Early Amortization Period, Available Investor Principal
Collections for such Distribution Date (excluding any portion thereof
attributable to Excess Principal Collections).
SECTION 4.12. Excess Funding Account. (a) Any funds on deposit in
the Excess Funding Account on the September 2000 Distribution Date and
allocable to the holders of Class A-1 Certificates will be deposited in the
Principal Funding Account on such date. In addition, on the September 2001
Distribution Date the amount on deposit in the Excess Funding Account will be
deposited in the Principal Funding Account. No funds will be deposited in the
Excess Funding Account during any Early Amortization Period. Additionally, no
amounts will be deposited in the Excess Funding Account (i) with respect to
the Class A-1 Certificates, with respect to any Collection Period following
the July 2000 Collection Period or (ii) with respect to the Class A-2
Certificates, with respect to any Collection Period following the July 2001
Collection Period.
42
(b) On each Determination Date during any Nonprincipal Period, the
Seller shall determine whether the sum of the Invested Amount (reduced for
this purpose by the amount, if any, by which the Required Participation
Amount exceeds the Pool Balance due to an increase in the Subordination
Factor) 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 1999-1 Certificates. If on any such Determination Date such sum is
greater than the outstanding principal balance of the Series 1999-1
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(d) and (e) 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. Any such increase 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. 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 1999-1. 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 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.
43
(c) On each Determination Date during the Class A-2 Revolving Period
(after the commencement of the Class A-1 Accumulation Period), the Seller
shall determine whether the sum of the Class A-2 Invested Amount (reduced for
this purpose by the amount, if any, by which the Required Participation
Amount exceeds the Pool Balance due to an increase in the Subordination
Factor) and the amount on deposit in the Excess Funding Account (other than
any Investment Proceeds) is greater than the outstanding principal balance of
the Class A-2 Certificates. If on any such Determination Date such sum is
greater than the outstanding principal balance of the Class A-2 Certificates
and thus there are sufficient Principal Receivables in the Trust to permit an
increase in the Class A-2 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 Class
A-2 Invested Amount. Subject to the provisions set forth below in this
Section 4.12(c) and to Sections 4.12(d) and (e) below, upon receipt of such
notice the Class A-2 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 Class A-2 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 1999-1. To the extent that the Class A-2 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 Class A-2 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 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.
(d) In the event that other Series issued by the Trust provide for
excess funding accounts or other
44
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 or the Class
A-2 Invested Amount, as applicable, 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.
(e) In the event that any other Series is in an amortization, early
amortization 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 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 4.13. (a) Class A-1 Accumulation Period Length; Class A-1
Accumulation Period Commencement Date. Beginning on the September 2000
Distribution Date, and on each Distribution Date thereafter that occurs prior
to the Class A-1 Accumulation Period Commencement Date, the Servicer shall
calculate the Class A-1 Accumulation Period Length and, if applicable,
determine the Class A-1 Accumulation Period Commencement Date. Once the
Servicer has determined the Class A-1 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 Class A-1 Certificates shall have been paid in full,
if such issuance would have an adverse effect on the results obtained by
application of the
45
formula used to compute the Class A-1 Accumulation Period Length.
(b) Class A-2 Accumulation Period Length; Class A-2 Accumulation
Period Commencement Date. Beginning on the September 2001 Distribution Date,
and on each Distribution Date thereafter that occurs prior to the Class A-2
Accumulation Period Commencement Date, the Servicer shall calculate then
Class A-2 Accumulation Period Length and, if applicable, determine the Class
A-2 Accumulation Period Commencement Date. Once the Servicer has determined
the Class A-2 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 Class
A-2 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 Class A-2 Accumulation Period Length.
SECTION 4.14. Excess Spread. On each Distribution Date, (a)
the Servicer shall allocate excess servicing with respect to all outstanding
Series that would otherwise be distributable to the Seller other than any
such excess servicing with respect to any such Series that, if not
distributed to the Seller, would result in the available subordinated amount
for such Series being less than the required subordinated amount for such
Series ("Seller Excess Spread") to each Series issued on or after March 10,
1999 that is designated by the Seller to share such excess servicing (the
"Designated Series"), pro rata, in proportion to the Non-Principal Collection
Shortfalls, if any, with respect to the Designated Series and (b) the
Servicer shall withdraw (or shall instruct the Trustee to withdraw) from the
Collection Account and pay to the Seller an amount equal to the excess, if
any, of (x) the aggregate amount for all Series of the Seller Excess Spread
for such Distribution Date over (y) the aggregate amount for all Designated
Series which the related Supplements specify are "Non-Principal Collection
Shortfalls" for such Distribution Date. The Non-Principal Collection
Shortfall for Series 1999-1 for any Distribution Date shall be equal to the
excess, if any, of (x) the full amount required to be paid pursuant to
Section 4.06(a) (excluding Section 4.06(a)(v)) on such Distribution Date over
(y) the amount of Investor Non-Principal Collections and any Investment
Proceeds with respect to such Distribution Date.
46
ARTICLE V
Distributions and Reports
to Series 1999-1 Certificateholders
SECTION 5.01. Distributions. (a) On each Distribution Date,
commencing with the Initial Distribution Date, the Trustee shall distribute
to each Series 1999-1 Certificateholder of record on the preceding Record
Date (other than as provided in Section 12.02 of the Agreement respecting a
final distribution) such Certificateholder's pro rata share (based on the
aggregate fractional undivided interests represented by the Series 1999-1
Certificates held by such Certificateholder) of the amounts on deposit in the
Series 1999-1 Accounts as is payable to the Series 1999-1 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 1999-1
Certificateholders hereunder shall be made by check mailed to each Series
1999-1 Certificateholder at such Certificateholder's address appearing in the
Certificate Register without presentation or surrender of any Series 1999-1
Certificate or the making of any notation thereon; provided, however, that,
with respect to Series 1999-1 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 1999-1
Certificateholders. (a) At least two Business Days prior to each Distribution
Date, commencing with the Initial Distribution Date, the Servicer will
provide to the Trustee, and on each such Distribution Date, the Trustee shall
forward to each Series 1999-1 Certificateholder, a statement substantially in
the form of Exhibit B prepared by the Servicer setting forth certain
information relating to the Trust and the Series 1999-1 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 2000, the Trustee shall furnish or cause to be furnished to
each Person who at any time during the preceding calendar year was a Series
1999-1 Certificateholder (or Certificate Owner), a statement prepared by the
Servicer containing the information which is
47
required to be contained in the statement to Series 1999-1 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 1999-1 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 1999-1
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 be deemed to be an Early Amortization Event
solely with respect to Series 1999-1:
(a) on any Determination Date, the average of the Monthly
Payment Rates for the three preceding Collection Periods is less than
20%;
(b) 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;
(c) any Service Default with respect to Series
1999-1 occurs;
(d) on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds 20% of the Pool Balance
on such last day;
(e) on any Distribution Date the amount of funds in the
Reserve Fund after giving effect to any withdrawals therefrom or
deposits thereto on such Distribution Date shall be less than 0.10%
of the outstanding principal balance of the Series 1999-1
Certificates on such Distribution Date (after giving
48
effect to any changes therein on such Distribution Date);
(f) the outstanding principal amount of the Class A-1
Certificates is not repaid by the Class A-1 Expected Payment Date;
(g) the outstanding principal amount of the Class A-2
Certificates is not repaid by the Class A-2 Expected Payment Date;
(h) 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
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; and
(i) 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.
The Trustee agrees that upon gaining knowledge of the occurrence of
any event described in Section 9.01 of the Agreement or Section 6.01 of this
Series Supplement it shall
49
(a) promptly provide notice to the Rating Agencies of the occurrence of such
event and (b) notify the Series 1999-1 Certificateholders of the occurrence
of such event within 45 days of the expiration of the applicable grace
period, if any. In the case of any event described in Sections 9.01(f) or (g)
of the Agreement or Section 6.01(c) of this Series Supplement, an Early
Amortization Event with respect to Series 1999-1 will be deemed to have
occurred only if, after the applicable grace period described in such
Sections, if any, either the Trustee or Series 1999-1 Certificateholders
evidencing more than 50% of the aggregate unpaid principal amount of the
Series 1999-1 Certificates by written notice to the Seller and the Servicer
(and the Trustee, if given by Series 1999-1 Certificateholders) declare that
an Early Amortization Event has occurred as of the date of such notice. In
the case of any other Early Amortization Event, such Early Amortization Event
will be deemed to have occurred immediately upon the occurrence of such
event, without any notice or other action on the part of the Trustee or the
Series 1999-1 Certificateholders.
In the case of any Early Amortization Event described in Sections
9.01(a), (f) or (g) of the Agreement or this Section 6.01, other than
Sections 6.01(f), (g), (h) or (i), provided that (i) 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 clause
(c) or clause (d) of the definition thereof in this Series Supplement) has
occurred and (ii) the scheduled termination of, with respect to the Class A-1
Certificates, the Class A-1 Revolving Period or, with respect to the Class
A-2 Certificates, the Class A-2 Revolving Period has not occurred, the
Trustee agrees that it shall request written confirmation from Standard &
Poor's, Duff & Phelps, Inc. and Fitch Investors Service, Inc. that the
termination of the Early Amortization Period caused by the occurrence of such
Early Amortization Event will not result in the downgrading or withdrawal of
such entity's rating of the Series 1999-1 Certificates.
The Trustee further agrees that, where applicable, it shall promptly
notify the Series 1999-1 Certificateholders that it has received the written
confirmation referred to in the preceding paragraph, and that the Series
1999-1 Certificateholders may elect to terminate the related Early
Amortization Period.
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ARTICLE VII
Optional Repurchase
SECTION 7.01. Optional Repurchase. (a) On any Distribution Date
occurring after the date on which the Class A-1 Invested Amount is reduced to
$40,000,000 or less, the Servicer shall have the option to purchase the
entire Class A-1 Certificateholders' Interest, at a purchase price equal to
the Class A-1 Reassignment Amount for such Distribution Date.
(b) On any Distribution Date occurring after the date on which the
Class A-2 Invested Amount is reduced to $60,000,000 or less, the Servicer
shall have the option to purchase the entire Class A-2 Certificateholders'
Interest, at a purchase price equal to the Class A-2 Reassignment Amount for
such Distribution Date.
(c) The Servicer shall give the Seller and the Trustee at least 10
days' prior written notice of the Distribution Date on which the Servicer
intends to exercise one of the purchase options described above. Not later
than 12:00 noon, New York City time, on such Distribution Date the Servicer
shall deposit the Class A-1 Reassignment Amount or the Class A-2 Reassignment
Amount, as applicable, into the Collection Account in immediately available
funds. Such purchase options are subject to payment in full of the Class A-1
Reassignment Amount or the Class A-2 Reassignment Amount, as applicable. The
Class A-1 Reassignment Amount or the Class A-2 Reassignment Amount, as
applicable, shall be distributed as set forth in Section 8.01(e) or (f), as
applicable.
(d) If at the time the Servicer exercises one of its purchase
options hereunder the Servicer's long-term unsecured debt has a rating lower
than Baa3 by Moody's, the Servicer shall deliver to the Trustee on such
Distribution Date an Opinion of Counsel (which must be an independent outside
counsel) to the effect that, in reliance on certain certificates to the
effect that the Class A-1 Certificateholders' Interest or Class A-2
Certificateholders' Interest, as applicable, purchased by the Servicer
constitutes fair value for the consideration paid therefor and as to the
solvency of the Servicer, the purchase of the Class A-1 Certificateholders'
Interest or Class A-2 Certificateholders' Interest, as applicable, would not
be considered a fraudulent conveyance under applicable law.
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ARTICLE VIII
Final Distributions
SECTION 8.01. Sale of Certificateholders' Interest Pursuant to
Section 2.03 of the Agreement; Distributions Pursuant to Section 7.01 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 1999-1 in connection with a purchase of the Series 1999-1
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 2.03 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): (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 1999-1 Certificates, plus
the amount of Class A-1 Additional Interest and Class A-2 Additional
Interest, if any, for such Distribution Date and any Class A-1 Additional
Interest or Class A-2 Additional Interest previously due but not paid to
Series 1999-1 Certificateholders on any prior Distribution Date, up to the
Reassignment Amount for Series 1999-1.
(c) With respect to any Class A-1 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): first, (x) deposit the Class A-1 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 Class A-1
Certificates, plus the amount of Class A-1 Additional Interest, if any, for
such Distribution Date and any Class A-1 Additional Interest previously due
but not paid to Class A-1 Certificateholders on any prior Distribution Date,
up to the Class A-1 Reassignment Amount and (ii) second, pay the remainder of
any Class A-1 Termination Proceeds to the Seller.
52
(d) With respect to any Class A-2 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): first, (x) deposit the Class A-2 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 Class A-2
Certificates, plus the amount of Class A-2 Additional Interest, if any, for
such Distribution Date and any Class A-2 Additional Interest previously due
but not paid to Class A-2 Certificateholders on any prior Distribution Date,
up to the Class A-2 Reassignment Amount and (ii) second, by the remainder of
any Class A-2 Termination Proceeds to the Seller.
(e) With respect to the Class A-1 Reassignment Amount deposited into
the Collection Account pursuant to Section 7.01 of this Series Supplement,
the Trustee shall, not later than 12:00 noon, New York City time, on the
Distribution Date on which such amounts are deposited (in the priority set
forth below): (x) deposit the Class A-1 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 Class A-1 Certificates, plus the amount
of Class A-1 Additional Interest, if any, for such Distribution Date and any
Class A-1 Additional Interest previously due but not paid to Class A-1
Certificateholders on any prior Distribution Date, up to the Class A-1
Reassignment Amount.
(f) With respect to the Class A-2 Reassignment Amount deposited into
the Collection Account pursuant to Section 7.01 of this Series Supplement,
the Trustee shall, not later than 12:00 noon, New York City time, on the
Distribution date on which such amounts are deposited (in the priority set
forth below): (x) deposit the Class A-2 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 Class A-2 Certificates, plus the amount
of Class A-2 Additional Interest, if any, for such Distribution Date and any
Class A-2 Additional Interest previously due but not paid to Class A-2
Certificateholders on any prior Distribution Date, up to the Class A-2
Reassignment Amount.
(g) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited in the Principal
Funding Account pursuant to
53
Section 7.01 or 8.01 and all other amounts on deposit therein shall be
distributed in full to the Class A-1 Certificateholders or the Class A-2
Certificateholders, as applicable, on such date and any distribution made
pursuant to paragraph (c) or (d) above shall be deemed to be a final
distribution pursuant to Section 12.02 of the Agreement with respect to the
Class A-1 Certificates or Class A-2 Certificates.
SECTION 8.02. 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.
(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) Class A-1 Monthly Interest and
Class A-2 Monthly Interest for such Distribution Date, (ii) any Class A-1
Monthly Interest and Class A-2 Monthly Interest previously due but not
distributed on a prior Distribution Date and (iii) the amount of Class A-1
Additional Monthly Interest and Class A-2 Additional Monthly Interest, if
any, for such Distribution Date and any Class A-1 Additional Monthly Interest
and Class A-2 Additional Monthly Interest previously due but not distributed
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 1999-1 Certificateholders; provided that
the amount of such distribution shall not exceed (x) the product of
54
(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.
(c) Notwithstanding anything to the contrary in this Series
Supplement or in 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
1999-1 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 1999-1.
ARTICLE IX
Miscellaneous Provisions
SECTION 9.01. 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: (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
55
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. Notwithstanding the provisions
described above, from and after the date on which no Series issued prior to
March 10, 1999, is outstanding, the conditions specified in (a) that relate
to Enhancement Providers and Rating Agencies and the conditions specified in
(d), (e) and (f) above will not be required if all of the Accounts to be
removed have liquidated and have zero balances.
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
56
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 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 1999-1 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;
57
(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
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
58
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 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 1999-1 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 9.01(a) and 9.01(b),
9.01(c), 9.01(d) and 9.01(e), it being understood that no such amendment
shall be effective unless and until (i) 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 and (ii) with
respect to the last sentence of Section 9.01(c), each Series of Investor
Certificates issued prior to March 10, 1999 shall no longer be outstanding or
shall have consented to such amendment in accordance with the Agreement.
(g) 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 or the Excess Funding Account, or Investment Proceeds with respect
thereto.
(h) Notwithstanding anything to the contrary in Section 12.02(c) of
the Agreement, the following shall be applicable to the Series 1999-1
Certificates;
In the event that the Class A-1 Invested Amount is greater than zero on the
Class A-1 Termination Date (after giving effect to deposits and distributions
otherwise to be made on the Class A-1 Termination Date), the Trustee will
sell or cause to be sold on the Class A-1 Termination Date Receivables (or
interests therein) in an amount equal to the sum of (i) 110% of the Class A-1
Invested Amount on the Class A-1 Termination Date (after giving effect to
such deposits and distributions) and (ii) the product of the Available
Subordinated Amount on the preceding Determination
59
Date (after giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date following such Determination
Date) and the Class A-1 Allocation Percentage; provided, however, that in no
event shall such amount exceed the product of the Series 1999-1 Allocation
Percentage (for the Collection Period in which the Class A-1 Termination Date
occurs) of Receivables on the Class A-1 Termination Date and the Class A-1
Allocation Percentage. The proceeds (the "Class A-1 Termination Proceeds")
from such sale shall be immediately deposited into the Collection Account for
the benefit of the Class A-1 Certificateholders.
In the event that the Class A-2 Invested Amount is greater than zero
on the Class A-2 Termination Date (after giving effect to deposits and
distributions otherwise to be made on the Class A-2 Termination Date), the
Trustee will sell or cause to be sold on the Class A-2 Termination Date
Receivables (or interests therein) in an amount equal to the sum of (i) 110%
of the Class A-2 Invested Amount on the Class A-2 Termination Date (after
giving effect to such deposits and distributions) and (ii) 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 1999-1 Allocation Percentage
(for the Collection Period in which the Class A-2 Termination Date occurs) of
Receivables on the Class A-2 Termination Date. The proceeds (the "Class A-2
Termination Proceeds") from such sale shall be immediately deposited into the
Collection Account for the benefit of the Class A-2 Certificateholders.
SECTION 9.02. 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 9.03. 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 9.04. Dealer Concentrations. So long as this Series 1999-1
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
60
greater than 1.5% 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 9.05. 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.
61
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 /s/ B.C. Babbish
---------------------------------
CHRYSLER FINANCIAL COMPANY
L.L.C., Servicer,
by /s/ B.C. Babbish
---------------------------------
THE BANK OF NEW YORK,
Trustee,
by /s/ Cheryl L. Laser
---------------------------------
CONFORMED COPY
SERIES 1999-2 SUPPLEMENT
Among
U.S. AUTO RECEIVABLES COMPANY
CHRYSLER FINANCIAL COMPANY L.L.C.
and
THE BANK OF NEW YORK, as Trustee
Dated as of May 20, 1999
TABLE OF CONTENTS
Page
----
ARTICLE I
Creation of the Series 1999-2 Certificates
SECTION 1.01. Designation............................................... 1
ARTICLE II
Definitions
SECTION 2.01. Definitions............................................... 2
ARTICLE III
Servicing Fee
SECTION 3.01. Servicing Compensation.................................... 29
ARTICLE IV
Rights of Series 1999-2 Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections....... 30
SECTION 4.02. Monthly Interest.......................................... 32
SECTION 4.03. Determination of Monthly Principal........................ 35
SECTION 4.04. Establishment of Reserve Fund and Funding Accounts........ 36
SECTION 4.05. Deficiency Amount......................................... 39
SECTION 4.06. Application of Investor Non-Principal Collections,
Investment Proceeds and Available Investor Principal
Collections............................................. 40
SECTION 4.07. Distributions to Series 1999-2 Certificateholders......... 44
SECTION 4.08. Application of Reserve Fund and Available Subordinated
Amount.................................................. 46
SECTION 4.09. Investor Charge-Offs...................................... 49
SECTION 4.10. Excess Servicing.......................................... 49
SECTION 4.11. Excess Principal Collections.............................. 50
SECTION 4.12. Excess Funding Account.................................... 51
SECTION 4.13. (a) Class A-1 Accumulation Period Length;
Class A-1 Accumulation Period Commencement Date......... 54
ARTICLE V
Distributions and Reports
to Series 1999-2 Certificateholders
SECTION 5.01. Distributions............................................. 54
SECTION 5.02. Reports and Statements to Series 1999-2
Certificateholders...................................... 55
ARTICLE VI
Amortization Events
SECTION 6.01. Additional Amortization Events............................ 56
ARTICLE VII
Optional Repurchase
SECTION 7.01. Optional Repurchase....................................... 58
ARTICLE VIII
Final Distributions
SECTION 8.01. Sale of Certificateholders' Interest Pursuant
to Section 2.03 of the Agreement;
Distributions Pursuant to Section 7.01 of
this Series Supplement or Section 2.03 or
12.02(c) of the Agreement............................... 59
SECTION 8.02. Distribution of Proceeds of Sale, Disposition
or Liquidation of the Receivables Pursuant
to Section 9.02 of the Agreement........................ 62
ARTICLE I
Miscellaneous Provisions
SECTION 9.01. Certain Permitted Actions; Amendments to the
Agreement; Additional Covenants......................... 64
SECTION 9.02. Ratification of Agreement................................. 69
SECTION 9.03. Counterparts.............................................. 69
SECTION 9.04. Dealer Concentrations..................................... 69
SECTION 9.05. The Certificates.......................................... 69
SECTION 9.06. GOVERNING LAW............................................. 69
<PAGE>
CONFORMED COPY
SERIES 1999-2 SUPPLEMENT dated as
of May 20, 1999 (the "Series Supplement"),
among U.S. AUTO RECEIVABLES COMPANY, a
Delaware corporation, as Seller, CHRYSLER
FINANCIAL COMPANY L.L.C., a Michigan limited
liability company, 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 Company L.L.C., as Servicer, and Manufacturer
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 1999-2 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 1999-2". Series 1999-2 shall consist of two classes to
be known as the "Class A-1 Certificates, Series 1999-2" and the "Class A-2
Certificates, Series 1999-2".
(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.
ARTICLE II
Definitions
SECTION 2.01. Definitions. (a) Whenever used in this Series
Supplement the following words and phrases shall have the following meanings.
"Adjusted Invested Amount" shall mean, with respect to Series 1999-2
for any Collection Period, an amount equal to the sum of (a) the Initial
Invested Amount of the Series 1999-2 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 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).
"Allocable Defaulted Amount" shall mean, with respect to any
Collection Period, the product of (a) the Series 1999-2 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 1999-2 Allocation Percentage
for the related Collection Period and (b) Miscellaneous Payments with respect
to the related Collection Period.
"Allocable Non-Principal Collections" shall mean, with respect to
any Deposit Date, the product of (a) the Series 1999-2 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 1999-2 Allocation Percentage for
the related Collection Period and (b) the aggregate amount of Collections in
respect of Principal Receivables relating to such Deposit Date.
2
"Assets Receivables Rate" shall mean, with respect to any Interest
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 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, except to the extent 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
to be applied on the Distribution Date related to such Interest Period and
(ii) the denominator of which is the sum of (A) the product of (I) the Series
1999-2 Floating Allocation Percentage, (II) the Series 1999-2 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 (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 (after giving effect to all deposits to and withdrawals therefrom on
such first day).
"Automatic Additional Accounts" shall have the meaning specified in
Section 9.01(e).
"Automatic Removal Accounts" shall have the meaning specified in
Section 9.01(c).
"Automatic Removal Date" shall have the meaning specified in Section
9.01(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 1999-2 Excess
Principal Collections on deposit in the Collection Account for such
Distribution Date and (d) on the Class A-2 Termination Date, any funds in the
Reserve Fund after giving effect to Section 4.08, except for Section 4.08(e).
3
"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 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) the excess, if any, of the Required Subordinated Amount for such
Determination Date over the Required Subordinated Amount for the immediately
preceding Distribution Date due to an increase in the Subordination Factor
and (ii) the product of the fractional equivalent of the Subordinated
Percentage and the Invested Amount on such Determination Date, minus (b) in
4
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 (v) $15,000,000 or (w)
1.11% of the Invested Amount on such date; provided, however, (x) that, from
and after the commencement of the Class A-1 Accumulation Period until the
Class A-1 Certificates are paid in full, (y) from and after the commencement
of the Class A-2 Accumulation Period until the Class A-2 Certificates are
paid in full and (z) from and after the commencement of any Early
Amortization Period (other than an Early Amortization Period which has ended
as described in clause (c) or clause (d) of the definition thereof in this
Series Supplement) 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-1 Accumulation Period, Class A-2
Accumulation Period, or Early Amortization Period, as applicable.
"Calculation Agent" shall mean the Trustee.
"Certificate Principal Percentage" shall mean (a) for any Collection
Period and the Class A-1 Certificates, the percentage equivalent (which shall
never exceed 100%) of a fraction, the numerator of which is the Class A-1
Invested Amount as of the last day of the Class A-1 Revolving Period if such
last day has occurred or, if such last day has not occurred, as of the last
day of the immediately preceding Collection Period and the denominator or
which is the sum of (i) the Class A-1 Invested Amount as of the last day of
the Class A-1 Revolving Period if such last day has occurred or, if such last
day has not occurred, as of the last day of the immediately preceding
Collection Period and (ii) the Class A-2 Invested Amount as of the last day
of the Class A-2 Revolving Period, if such last day has occurred, of if such
last day has not occurred, as of the last day of the immediately preceding
Collection Period, provided that after the Class A-1 Certificates have been
paid in full the Certificate Principal Percentage with
5
respect thereto shall be zero; and (b) for any Collection Period and the
Class A-2 Certificates in the aggregate, 100% minus the Certificate Principal
Percentage for the Class A-1 Certificates.
"Class A-1 Accumulation Period" shall mean, unless an Early
Amortization Event shall have occurred prior thereto (other than an Early
Amortization Event which has resulted in an Early Amortization Period which
has ended as described in clause (c) or clause (d) of the definition thereof
in this Series Supplement), the period commencing on the Class A-1
Accumulation Period Commencement Date and ending upon the first to occur of
(a) the commencement of an Early Amortization Period (other than an Early
Amortization Period which has ended as described in clause (c) or clause (d)
of the definition thereof in this Series Supplement) and (b) the payment in
full to Class A-1 Certificateholders of the outstanding principal amount of
the Class A-1 Certificates.
"Class A-2 Accumulation Period" shall mean, unless an Early
Amortization Event shall have occurred prior thereto (other than an Early
Amortization Event which has resulted in an Early Amortization Period which
has ended as described in clause (c) or clause (d) of the definition thereof
in this Series Supplement), the period commencing on the Class A-2
Accumulation Period Commencement Date and ending upon the first to occur of
(a) the commencement of an Early Amortization Period (other than an Early
Amortization Period which has ended as described in clause (c) or clause (d)
of the definition thereof in this Series Supplement) and (b) the payment in
full to Class A-2 Certificateholders of the outstanding principal amount of
the Class A-2 Certificates.
"Class A-1 Accumulation Period Commencement Date" shall mean the
first day of the Collection Period upon which the number of full Collection
Periods remaining until the Class A-1 Expected Payment Date first equals the
Class A-1 Accumulation Period Length; provided, however, that, if at any time
after the November 2001 Distribution Date, any other outstanding Series
(other than any Excluded Series) shall have entered into a reinvestment
period or an early amortization period, the Class A-1 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-1 Accumulation Period Commencement Date as
6
previously determined. If the Class A-1 Accumulation Period Length is one
month, two months, three months, four months or five months, the Class A-1
Accumulation Period Commencement Date shall mean the first day of the April
2002 Collection Period, the March 2002 Collection Period, the February 2002
Collection Period, the January 2002 Collection Period or the December 2001
Collection Period, respectively.
"Class A-2 Accumulation Period Commencement Date" shall
mean the first day of the Collection Period upon which the number of full
Collection Periods remaining until the Class A-2 Expected Payment Date first
equals the Class A-2 Accumulation Period Length; provided, however, that, if
at any time after the November 2003 Distribution Date, any other outstanding
Series (other than any Excluded Series) shall have entered into a
reinvestment period or an early amortization period, the Class A-2
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-2 Accumulation Period
Commencement Date as previously determined. If the Class A-2 Accumulation
Period Length is one month, two months, three months, four months or five
months, the Class A-2 Accumulation Period Commencement Date shall mean the
first day of the April 2004 Collection Period, the March 2004 Collection
Period, the February 2004 Collection Period, the January 2004 Collection
Period or the December 2003 Collection Period, respectively.
"Class A-1 Accumulation Period Length" shall mean a period which is
one, two, three, four or five month(s) long and is calculated as of the
November 2001 Distribution Date and each Distribution Date thereafter that
occurs prior to the Class A-1 Accumulation Period Commencement Date, as the
lesser of (i) the number of full Collection Periods between such Distribution
Date and the Class A-1 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 12 months and (b) a fraction,
the numerator of which is the sum of (i) the Class A-1 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 Class
A-1 Expected Payment Date as of such Distribution Date (after giving effect
to all changes therein on such date) and the
7
denominator of which is the sum of the Invested Amount as of such
Distribution Date (after giving effect to all changes therein on such date)
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 Class A-1
Expected Payment Date.
"Class A-2 Accumulation Period Length" shall mean a period which is
one, two, three, four or five month(s) long and is calculated as of the
November 2003 Distribution Date and each Distribution Date thereafter that
occurs prior to the Class A-2 Accumulation Period Commencement Date, as the
lesser of (i) the number of full Collection Periods between such Distribution
Date and the Class A-2 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 12 months and (b) a fraction,
the numerator of which is the sum of (i) the Class A-2 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 Class
A-2 Expected Payment Date as of such Distribution Date (after giving effect
to all changes therein on such date) and the denominator of which is the sum
of such Class A-2 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 Class A-2 Expected Payment Date.
"Class A-1 Additional Carry-Over Amount" shall have the meaning
specified in Section 4.02(c).
"Class A-2 Additional Carry-Over Amount" shall have the meaning
specified in Section 4.02(d).
"Class A-1 Additional Interest" shall have the meaning specified in
Section 4.02(a).
"Class A-2 Additional Interest" shall have the meaning specified in
Section 4.02(b).
"Class A-1 Allocation Percentage" shall mean, for any Collection
Period, the percentage obtained by dividing
8
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 reductions thereof to occur on the immediately following distribution
Date) by the aggregate outstanding principal amount of all the Series 1999-2
Certificates as of such last day (after giving effect to any reductions
thereof to occur on the immediately following Distribution Date).
"Class A-2 Allocation Percentage" shall mean, for any Collection
Period, the percentage obtained by subtracting from 100% the Class A-1
Allocation Percentage.
"Class A-1 Available Investor Principal Collections" shall mean, for
any Distribution Date, the product of (x) the Available Investor Principal
Collections for such Distribution Date and (y) the Certificate Principal
Percentage for the Class A-1 Certificates for the immediately preceding
Collection Period.
"Class A-2 Available Investor Principal Collections" shall mean, for
any Distribution Date, the product of (x) the Available Investor Principal
Collections for such Distribution Date and (y) the Certificate Principal
Percentage for the Class A-2 Certificates for the immediately preceding
Collection Period.
"Class A-1 Carry-over Amount" shall mean, for any Distribution Date
with respect to which the related Class A-1 Certificate Rate is calculated on
the basis of the Assets Receivables Rate, the excess of (a) Class A-1 Monthly
Interest for such Distribution Date determined as if such Class A-1
Certificate Rate were calculated on the basis of the LIBOR formula set forth
in clause (a) of the definition of Class A-1 Certificate Rate over (b) the
actual Class A-1 Monthly Interest for such Distribution Date.
"Class A-2 Carry-over Amount" shall mean, for any Distribution Date
with respect to which the related Class A-2 Certificate Rate is calculated on
the basis of the Assets Receivables Rate, the excess of (a) Class A-2 Monthly
Interest for such Distribution Date determined as if such Class A-2
Certificate Rate were calculated on the basis of the LIBOR formula set forth
in clause (a) of the definition of Class A-2 Certificate Rate over (b) the
actual Class A-2 Monthly Interest for such Distribution Date.
"Class A-1 Carry-over Shortfall" shall have the meaning specified in
Section 4.02(c).
9
"Class A-2 Carry-over Shortfall" shall have the meaning specified in
Section 4.02(d).
"Class A-1 Certificate Rate" shall mean, with respect to any
Interest Period, the lesser of (a) LIBOR for such Interest Period, plus 0.07%
and (b) the Assets Receivables Rate for the immediately preceding Interest
Period.
"Class A-2 Certificate Rate" shall mean, with respect to any
Interest Period, the lesser of (a) LIBOR for such Interest Period, plus 0.13%
and (b) the Assets Receivables Rate for the immediately preceding Interest
Period.
"Class A-1 Certificateholders" shall mean the Holders of Class A-1
Certificates.
"Class A-2 Certificateholders" shall mean the Holders of Class A-2
Certificates.
"Class A-1 Certificateholders' Interest" shall mean that portion of
the Certificateholders' Interest evidenced by the Class A-1 Certificates.
"Class A-2 Certificateholders' Interest" shall mean that portion of
the Certificateholders' Interest evidenced by the Class A-2 Certificates.
"Class A-1 Certificates" shall mean any one of the certificates
executed by the Seller and authenticated by the Trustee, substantially in the
form of Exhibit A-1.
"Class A-2 Certificates" shall mean any one of the certificates
executed by the Seller and authenticated by the Trustee, substantially in the
form of Exhibit A-2.
"Class A-1 Controlled Amortization Amount" shall mean an amount
equal to the Class A-1 Invested Amount as of the November 2001 Distribution
Date (after giving effect to any changes therein on such date), divided by
the Class A-1 Accumulation Period Length.
"Class A-2 Controlled Amortization Amount" shall mean an amount
equal to the Class A-2 Invested Amount as of the November 2003 Distribution
Date (after giving effect to
10
any changes therein on such date), divided by the Class A-2 Accumulation
Period Length.
"Class A-1 Controlled Distribution Amount" shall mean, with respect
to any Distribution Date, the excess, if any, of (a) the sum of (i) the
product of the Class A-1 Controlled Amortization Amount and the number of
Distribution Dates from and including the first Distribution Date with
respect to the Class A-1 Accumulation Period through and including such
Distribution Date (but not in excess of the Class A-1 Accumulation Period
Length) and (ii) the amount on deposit in the Excess Funding Account with
respect to the Class A-1 Certificates as of the November 2001 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 with respect to the Class A-1
Certificates and the Principal Funding Account, in each case before giving
effect to any withdrawals from or deposits to such accounts on such
Distribution Date.
"Class A-2 Controlled Distribution Amount" shall mean, with respect
to any Distribution Date, the excess, if any, of (a) the sum of (i) the
product of the Class A-2 Controlled Amortization Amount and the number of
Distribution Dates from and including the first Distribution Date with
respect to the Class A-2 Accumulation Period through and including such
Distribution Date (but not in excess of the Class A-2 Accumulation Period
Length) and (ii) the amount on deposit in the Excess Funding Account with
respect to the Class A-2 Certificates as of the November 2003 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 with respect to the Class A-2
Certificates and the Principal Funding Account, in each case before giving
effect to any withdrawals from or deposits to such accounts on such
Distribution Date.
"Class A-1 Expected Payment Date" shall mean the May 2002
Distribution Date.
"Class A-2 Expected Payment Date" shall mean the May 2004
Distribution Date.
11
"Class A-1 Final Payment Date" shall mean the first Distribution
Date on which, after giving effect to all payments to be made on that
Distribution Date, the outstanding principal amount of the Class A-1
Certificates will be paid in full.
"Class A-2 Final Payment Date" shall mean the first Distribution
Date on which, after giving effect to all payments to be made on that
Distribution Date, the outstanding principal amount of the Class A-2
Certificates will be paid in full.
"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 $750,000,000, 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 or an increase in the
Subordination Factor since the Series Issuance Date and prior to the November
2001 Distribution Date, minus (z) the amount of any principal payments
(except principal payments made from the Excess Funding Account) made to the
holders of any Class A-1 Certificates that have been paid in full.
"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 $600,000,000, 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 or an increase in the
Subordination Factor since the Series Issuance Date.
"Class A-1 Initial Principal Amount" shall mean $750,000,000.
12
"Class A-2 Initial Principal Amount" shall mean $600,000,000.
"Class A-1 Interest Shortfall" shall have the meaning specified in
Section 4.02(a).
"Class A-2 Interest Shortfall" shall have the meaning specified in
Section 4.02(b).
"Class A-1 Invested Amount" means for any date an amount equal to
the Class A-1 Initial 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 holders
of 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.
"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
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.
"Class A-1 Investor Charge-Offs" shall have the meaning specified in
Section 4.09.
"Class A-2 Investor Charge-Offs" shall have the meaning specified in
Section 4.09.
"Class A-1 Monthly Interest" shall have the meaning specified in
Section 4.02.
"Class A-2 Monthly Interest" shall have the meaning specified in
Section 4.02.
13
"Class A-1 Monthly Principal" means, with respect to any
Distribution Date, the amount of monthly principal distributable with respect
to the Class A-1 Certificates on such Distribution Date, as determined
pursuant to Section 4.03.
"Class A-2 Monthly Principal" means, with respect to any
Distribution Date, the amount of monthly principal distributable with respect
to the Class A-2 Certificates on such Distribution Date, as determined
pursuant to Section 4.03.
"Class A-1 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 Class A-1
Invested Amount on such Distribution Date, (b) accrued and unpaid interest on
the unpaid balance of the Class A-1 Certificates (calculated on the basis of
the outstanding principal balance of the Class A-1 Certificates at the Class
A-1 Certificate Rate as in effect during the applicable Interest Periods)
through the day preceding such Distribution Date, (c) the amount of Class A-1
Additional Interest, if any, for such Distribution Date and any Class A-1
Additional Interest previously due but not distributed to the Class A-1
Certificateholders on a prior Distribution Date, (d) any Class A-1 Carry-over
Amount for such Distribution Date and any Class A-1 Carry-over Amount
previously due but not distributed to the Class A-1 Certificateholders on a
prior Distribution Date and (e) any Class A-1 Additional Carry-Over Amount
for such Distribution Date and any Class A-1 Additional Carry-Over Amount
previously due but not distributed to the Class A-1 Certificateholders on a
prior Distribution Date.
"Class A-2 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 Class A-2
Invested Amount on such Distribution Date, (b) accrued and unpaid interest on
the unpaid balance of the Class A-2 Certificates (calculated on the basis of
the outstanding principal balance of the Class A-2 Certificates at the Class
A-2 Certificate Rate as in effect during the applicable Interest Periods)
through the day preceding such Distribution Date, (c) the amount of Class A-2
Additional Interest, if any, for such Distribution Date and any Class A-2
Additional Interest
14
previously due but not distributed to the Class A-2 Certificateholders on a
prior Distribution Date, (d) any Class A-2 Carry-over Amount for such
Distribution Date and any Class A-2 Carry-over Amount previously due but not
distributed to the Class A-2 Certificateholders on a prior Distribution Date
and (e) any Class A-2 Additional Carry-Over Amount for such Distribution Date
and any Class A-2 Additional Carry-Over Amount previously due but not
distributed to the Class A-2 Certificateholders on a prior Distribution Date.
"Class A-1 Revolving Period" shall mean the period beginning at the
close of business on the Series Cut-Off Date and terminating on the earlier
of (a) the close of business on the day immediately preceding the Class A-1
Accumulation Period Commencement Date and (b) the close of business on the
day an Early Amortization Period commences; provided, however, that, if any
Early Amortization Period terminates as described in clause (c) or clause (d)
of the definition thereof in this Series Supplement, the Class A-1 Revolving
Period will recommence as of the close of business on the day such Early
Amortization Period terminates.
"Class A-2 Revolving Period" shall mean the period beginning at the
close of business on the Series Cut-Off Date and terminating on the earlier
of (a) the close of business on the day immediately preceding the Class A-2
Accumulation Period Commencement Date and (b) the close of business on the
day an Early Amortization Period commences; provided, however, that, if any
Early Amortization Period terminates as described in clause (c) or clause (d)
of the definition thereof in this Series Supplement, the Class A-2 Revolving
Period will recommence as of the close of business on the day such Early
Amortization Period terminates.
"Class A-1 Termination Date" shall mean the May 2004 Distribution
Date.
"Class A-2 Termination Date" shall mean the May 2006 Distribution
Date.
"Class A-1 Termination Proceeds" shall mean any Termination Proceeds
arising out of a sale of Receivables (or interests therein) pursuant to
Section 9.01 of this Series Supplement with respect to Class A-1.
"Class A-2 Termination Proceeds" shall mean any Termination Proceeds
arising out of a sale of Receivables (or interests therein) pursuant to
Section 9.01 of this Series Supplement with respect to Class A-2.
15
"Closing Date" shall mean May 20, 1999.
"Deficiency Amount" shall have the meaning specified in Section
4.05.
"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.
"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 1999-2 and terminating on the earliest of (a) the payment
in full of the outstanding principal balance of the Series 1999-2
Certificates; (b) with respect to the Class A-1 Certificates, the Class A-1
Termination Date and, with respect to the Class A-2 Certificates, the Class
A-2 Termination Date; (c) if such Early Amortization Period has resulted from
the occurrence of an Early Amortization Event described in Section 9.01(a) 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(a), 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, with respect to the
Class A-1 Certificates, the Class A-1 Revolving Period or, with respect to
the Class A-2 Certificates, the Class A-2 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 Sections 9.01(a), (f)
or (g) of the Agreement or Section 6.01, other than Section 6.01(f), (g) or
(h), 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 1999-2
Certificates, and (ii) Series 1999-2 Certificateholders holding Series 1999-2
Certificates evidencing more than 50% of the aggregate unpaid principal
16
amount of the Series 1999-2 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, with respect to the Class A-1 Certificates, the
Class A-1 Revolving Period or, with respect to the Class A-2 Certificates,
the Class A-2 Revolving Period shall not have occurred.
"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
(unless each Rating Agency confirms in writing that a longer maturity will
not result in the downgrade or withdrawal of such Rating Agency's rating of
the Series 1999-2 Certificates), but in no event occurring later than the
Distribution Date next succeeding the Trustee's acquisition thereof (unless
each Rating Agency confirms in writing that a longer maturity will not result
in the downgrade or withdrawal of such Rating Agency's rating of the Series
1999-2 Certificates), 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 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
17
therein, a rating from each of the Rating Agencies in the highest
investment category granted thereby;
(iv) 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); and
18
(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 nonbank 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 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 1999-2 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));
19
(B) in the case of any Series 1999-2 Account (other than
the Collection Account and the Yield Supplement 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;
(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
20
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 account the issuance
of such guarantee, will not result in the downgrade or
withdrawal of the ratings assigned to the Series 1999-2
Certificates; and
(H) the repurchase obligations shall require that the
repurchase obligation be over-collateralized 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
21
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 Funding Amount" shall have the meaning specified in Section
4.04(d)(i).
"Excess Reserve Fund Required Amount" shall mean, for any
Distribution Date with respect to an Early Amortization Period, an amount
equal to the greater of (a) 5% of the initial principal balance of the Series
1999-2 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 1999-2 Certificates on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date) over (ii) the excess of (x) the Series 1999-2 Allocation
Percentage of the Pool Balance on the last day of the immediately preceding
Collection Period over (y) the Invested Amount on such Distribution Date
(after giving effect to changes therein on such Distribution Date); provided
that the Excess Reserve Fund Required Amount shall not exceed such Available
Subordinated Amount.
"Excess Seller's Percentage" shall mean, with respect to any
Collection Period, a percentage (which percentage shall never be less than 0%
nor more than 100%) equal to (a) 100% minus, when used with respect to
Non-Principal Receivables, Defaulted Receivables and Principal Receivables
during any 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 1999-2 Allocation Percentage for the Collection
Period in respect of which the Excess Seller's Percentage is being
22
calculated or (b) 100% minus, when used with respect to Principal Receivables
during the Class A-1 Accumulation Period, the Class A-2 Accumulation Period
and an Early Amortization Period, the sum of (i) the Principal Allocation
Percentage with respect to such Collection Period and (ii) the percentage
equivalent of a fraction, the numerator of which is the Available
Subordinated Amount as of the Determination Date occurring in such Collection
Period (after giving effect to the allocations, distributions, withdrawals
and deposits to be 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 1999-2 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)(vii) with
respect to such Distribution Date.
"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 and the
denominator of which is the product of (a) the Pool Balance as of such last
day and (b) the Series 1999-2 Allocation Percentage for the Collection Period
in respect of which the Floating Allocation Percentage is being calculated;
provided, however, that, with respect to the May 1999 Collection Period, the
Floating Allocation Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Initial Invested Amount on the
Closing Date and the denominator of which is the product of (x) the Pool
Balance on the Series Cut-Off Date and (y) the Series 1999-2 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 Incremental Subordinated Amount for such Distribution Date
23
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.
"Initial Distribution Date" shall mean June 15, 1999.
"Initial Invested Amount" means the sum of the Class A-1
Initial Invested Amount and the Class A-2 Initial Invested Amount.
"Initial Reserve Fund Deposit Amount" shall mean $4,725,000.
"Initial Yield Supplement Account Deposit Amount" shall mean
$5,400,000.
"Interest Period" shall mean, with respect to any Distribution Date,
the period from and including the Distribution Date immediately preceding
such Distribution Date to but excluding such Distribution Date (or, in the
case of the Initial Distribution Date, the period from and including the
Closing Date to but excluding the Initial Distribution Date). Interest will
be calculated on the basis of the actual number of days in each Interest
Period divided by 360 days.
"Invested Amount" shall mean 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.
"Investment Proceeds" shall mean, with respect to any Determination
Date, all interest and other investment earnings accumulated for the
immediately preceding Collection Period (net of losses and investment
expenses) on funds on deposit in the Series 1999-2 Accounts, together with an
amount equal to the Series 1999-2 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
24
"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.
"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 any Nonprincipal Period, or the
Principal Allocation Percentage, with respect to the Class A-1 Accumulation
Period, the Class A-2 Accumulation Period or an Early Amortization Period for
the related Collection Period (or any partial Collection Period which occurs
as the first Collection Period during an Early Amortization 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) and (b) the
amount, if any, of Collections of Non-Principal Receivables, Investment
Proceeds, 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.
"LIBOR" shall mean, with respect to any Interest Period, the offered
rate for United States dollar deposits for one month that appears on Telerate
Page 3750 as of 11:00 A.M., London time, on the LIBOR Determination Date. If
on any LIBOR Determination Date the offered rate does not appear on Telerate
Page 3750, the Calculation Agent will request each of the reference banks
(which shall be major banks that are engaged in transactions in the London
interbank market selected by the Calculation Agent) to provide the
Calculation Agent with its offered quotation for United States dollar
deposits for one month to prime banks in the London interbank market as of
11:00 A.M., London time, on such date. If at least two reference banks
provide the Calculation Agent with such offered quotations, LIBOR on such
date will be the arithmetic mean, rounded upwards, if necessary, to the
nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage
point rounded upward, of all such quotations. If on such date fewer than two
of the reference banks provide the Calculation Agent with such quotations,
LIBOR on such date will be the arithmetic mean, rounded upwards, if
necessary, to the nearest 1/100,000 of 1% (.0000001), with
25
five one-millionths of a percentage point rounded upward, of the offered per
annum rates that one or more leading banks in The City of New York selected
by the Calculation Agent are quoting as of 11:00 A.M., New York City time, on
such date to leading European banks for United States dollar deposits for one
month; provided, however, that if such banks are not quoting as described
above, LIBOR for such date will be LIBOR applicable to the Interest Period
immediately preceding such Interest Period.
"LIBOR Business Day" shall mean any day that is both a Business Day
and a day on which banking institutions in the City of London, England are
not required or authorized by law to be closed.
"LIBOR Determination Date" shall mean, with respect to any Interest
Period, the second LIBOR Business Day prior to such Interest Period.
"Monthly Payment Rate" shall mean, for any Collection Period, the
percentage derived from dividing the Principal Collections for such
Collection Period by the average daily Pool Balance for such Collection
Period.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.01.
"Nonprincipal Period" shall mean any period that is not the Class
A-1 Accumulation Period, the Class A-2 Accumulation Period or an Early
Amortization Period.
"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 Allocation Percentage" shall mean with respect to any
Collection Period, the percentage equivalent (which shall never exceed 100%)
of a fraction, the numerator of which is the sum of (x) the Class A-1
Invested Amount as
26
of the last day of the Class A-1 Revolving Period, if such last day has
occurred or, if such last day has not occurred, as of the last day of the
immediately preceding Collection Period, or, after the Class A-1 Certificates
have been paid in full, zero and (y) the Class A-2 Invested Amount as of the
last day of the Class A-2 Revolving Period, if such last day has occurred or,
if such last day has not occurred, 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 1999-2 Allocation
Percentage for 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 (c) or clause (d) of the definition thereof in this
Series Supplement), the Principal Allocation Percentage shall be reset using
the Pool Balance as of the close of business on the date on which such Early
Amortization Event shall have occurred and Principal Collections shall be
allocated for such portion of such Collection Period using such reset
Principal Allocation Percentage.
"Reassignment Amount" shall mean the sum of the Class A-1
Reassignment Amount and the Class A-2 Reassignment Amount.
"Required Participation Percentage" shall mean, with respect to
Series 1999-2, 103%; 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 9.04 is greater
than 1.5% 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, 104%;
provided further that the Seller may, upon 10 days' prior notice to the
Trustee and each Rating Agency, 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.
27
"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) 0.35% and (b) the
outstanding principal balance of the Series 1999-2 Certificates on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date).
"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,
Defaulted Receivables and Principal Receivables during any Nonprincipal
Period, and (b) the Principal Allocation Percentage, when used with respect
to Principal Receivables during the Class A-1 Accumulation Period, the Class
A-2 Accumulation Period and an Early Amortization Period.
"Series 1999-2" shall mean the Series of Investor
Certificates, the terms of which are specified in this Series Supplement.
"Series 1999-2 Accounts" shall have the meaning specified in Section
4.04(e)(i).
28
"Series 1999-2 Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series 1999-2.
"Series 1999-2 Certificateholders" shall mean the Class A-1
Certificateholders and the Class A-2 Certificateholders.
"Series 1999-2 Certificates" shall mean the Class A-1 Certificates
and the Class A-2 Certificates.
"Series 1999-2 Excess Principal Collections" shall mean
that portion of Excess Principal Collections allocated to Series 1999-2
pursuant to Section 4.11.
"Series 1999-2 Principal Shortfall" shall have the meaning specified
in Section 4.11.
"Series Cut-off Date" shall mean April 30, 1999.
"Servicing Fee Rate" shall mean, with respect to Series 1999-2, 1%
per annum (on a 30/360 basis), or such lesser percentage as the Servicer
shall determine in connection with a waiver by the Servicer of all or any
portion of the Monthly Servicing Fee on any date.
"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 (c) or clause (d) of the
definition thereof in this Series Supplement).
"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 10%; provided, however, that the
Subordination Factor will be 11% 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 & Poor's rating of the Series 1999-2 Certificates.
29
"Telerate Page 3750" shall mean the display page so designated on
the Dow Jones Telerate Service (or such other page as may replace that page
on that service, or such other service as may be nominated as the information
vendor, for the purpose of displaying London interbank offered rates of major
banks).
"Trust Available Subordinated Amount" means the sum of the 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) 0.40% and (b)
the outstanding principal balance of the Series 1999-2 Certificates on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date).
(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
1999-2, Moody's and Standard & Poor's. As used in this Series Supplement and
in the Agreement with respect to Series 1999-2, "highest investment category"
shall mean (i) in the case of Standard & Poor's, A-1+ 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.
("Fitch"), and Duff & Phelps, Inc. ("D&P"), although no such entity shall be
deemed to be a Rating Agency for any purposes of the Agreement or this Series
Supplement with respect to Series 1999-2.
(c) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them
30
in the Agreement. The definitions in Section 2.01 are applicable to the
singular as well as to the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Series Supplement shall refer to this Series
Supplement as a whole and not to any particular provision of this Series
Supplement; references to any Article, Section or Exhibit are references to
Articles, Sections and Exhibits in or to this Series Supplement unless
otherwise specified; and the term "including" means "including without
limitation".
31
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 Class A-2 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 1999-2 Allocation Percentage with respect to the immediately
preceding Collection Period. The share of the Monthly Servicing Fee allocable
to the Series 1999-2 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
1999-2 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 1999-2 Certificateholders shall in no event be liable for the
share of the Servicing Fee to be paid by 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 all
or any portion of 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 all or any portion of the Monthly
Servicing Fee for any Distribution Date, the Monthly Servicing Fee and the
32
Certificateholders Monthly Servicing Fee for such Distribution Date shall be
deemed to be reduced by the amount so waived 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 1999-2 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 1999-2 pursuant to Article IV of
the Agreement shall be allocated and distributed as set forth in this
Article.
(b) Subject to Section 4.01(d) 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 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,
33
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 any Nonprincipal
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
1999-2 Certificateholders' Interest pursuant to Section 7.01 of this Series
Supplement and proceeds from the sale, 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 any Nonprincipal 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).
34
(d) 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) until the amount on deposit in
the Yield Supplement Account is equal to the Yield Supplement Account
Required Amount.
SECTION 4.02. Monthly Interest. (a) The amount of monthly interest
("Class A-1 Monthly Interest") with respect to the Class A-1 Certificates on
any Distribution Date, commencing with the Initial Distribution Date, shall
be an amount equal to the product of (i) the Class A-1 Certificate Rate, (ii)
the outstanding principal balance of the Class A-1 Certificates as of the
close of business on the preceding Distribution Date (after giving effect to
all repayments of principal made to Class A-1 Certificateholders on such
preceding Distribution Date, if any) or, in the case of the Initial
Distribution Date, the Closing Date and (iii) a fraction, the numerator of
which is the actual number of days elapsed in such Interest Period and the
denominator of which is 360.
On the Determination Date preceding each Distribution Date,
commencing with the Initial Distribution Date, the Servicer shall determine
the excess, if any (the "Class A-1 Interest Shortfall"), of (x) the aggregate
Class A-1 Monthly Interest for the Interest Period applicable to such
Distribution Date over (y) the amount which will be available to be
distributed to Class A-1 Certificateholders on such Distribution Date in
respect thereof pursuant to this Series Supplement. If the Class A-1 Interest
Shortfall with respect to any Distribution Date is greater than zero, an
additional amount ("Additional Class A-1 Interest") equal to the product of
(i) the Class A-1 Certificate Rate (calculated pursuant to clause (a) of the
definition thereof) for the Interest Period commencing on the related
Distribution Date (or, for subsequent Interest Periods, the Class A-1
Certificate Rate (calculated pursuant to clause (a) of the definition
thereof) for such subsequent Interest Periods), (ii) such Class A-1 Interest
Shortfall (or the portion thereof which has not been paid to Class A-1
Certificateholders) and (iii) a fraction, the numerator of which is the
actual number of days elapsed in such Interest Period (or in a
35
<PAGE>
subsequent Interest Period) and the denominator of which is 360, shall
be payable as provided herein with respect to the Class A-1 Certificates
on each Distribution Date following such Distribution Date to and including
the Distribution Date on which such Class A-1 Interest Shortfall is paid to
Class A-1 Certificateholders. Notwithstanding anything to the contrary
herein, Additional Class A-1 Interest shall be payable or distributed to
Certificateholders only to the extent permitted by applicable law.
(b) The amount of monthly interest ("Class A-2 Monthly Interest")
with respect to the Class A-2 Certificates on any Distribution Date,
commencing with the Initial Distribution Date, shall be an amount equal to
the product of (i) the Class A-2 Certificate Rate, (ii) the outstanding
principal balance of the Class A-2 Certificates as of the close of business
on the preceding Distribution Date (after giving effect to all repayments of
principal made to Class A-2 Certificateholders on such preceding Distribution
Date, if any) or, in the case of the Initial Distribution Date, the Closing
Date and (iii) a fraction, the numerator of which is the actual number of
days elapsed in such Interest Period and the denominator of which is 360.
On the Determination Date preceding each Distribution Date,
commencing with the Initial Distribution Date, the Servicer shall determine
the excess, if any (the "Class A-2 Interest Shortfall"), of (x) the aggregate
Class A-2 Monthly Interest for the Interest Period applicable to such
Distribution Date over (y) the amount which will be available to be
distributed to Class A-2 Certificateholders on such Distribution Date in
respect thereof pursuant to this Series Supplement. If the Class A-2 Interest
Shortfall with respect to any Distribution Date is greater than zero, an
additional amount ("Class A-2 Additional Interest") equal to the product of
(i) the Class A-2 Certificate Rate (calculated pursuant to clause (a) of the
definition thereof) for the Interest Period commencing on the related
Distribution Date (or, for subsequent Interest Periods, the Class A-2
Certificate Rate (calculated pursuant to clause (a) of the definition
thereof) for such subsequent Interest Periods), (ii) such Class A-2 Interest
Shortfall (or the portion thereof which has not been paid to Class A-2
Certificateholders) and (iii) a fraction, the numerator of which is the
actual number of days elapsed in such Interest Period (or in a subsequent
Interest Period) and the denominator of which is 360, shall be payable as
provided herein with respect to the
36
Class A-2 Certificates on each Distribution Date following such Distribution
Date to and including the Distribution Date on which such Class A-2 Interest
Shortfall is paid to Class A-2 Certificateholders. Notwithstanding anything
to the contrary herein, Additional Class A-2 Interest shall be payable or
distributed to Class A-2 Certificateholders only to the extent permitted by
applicable law.
(c) On the Determination Date preceding each Distribution Date,
commencing with the Initial Distribution Date, the Servicer shall determine
the excess, if any (the "Class A-1 Carry-over Shortfall"), of (x) the Class
A-1 Carry-over Amount, if any, for such Distribution Date over (y) the amount
which will be available to be distributed to Class A-1 Certificateholders in
respect thereof on such Distribution Date pursuant to this Series Supplement.
If the Class A-1 Carry-over Shortfall with respect to any Distribution Date
is greater than zero, an additional amount ("Class A-1 Additional Carry-over
Amount") equal to the product of (i) the Class A-1 Certificate Rate
(calculated pursuant to clause (a) of the definition thereof) for the
Interest Period commencing on the related Distribution Date (or, for
subsequent Interest Periods, the Class A-1 Certificate Rate (calculated
pursuant to clause (a) of the definition thereof) for such subsequent
Interest Periods), (ii) such Class A-1 Carry-over Shortfall (or the portion
thereof which has not been paid to Class A-1 Certificateholders) and (iii) a
fraction, the numerator of which is the actual number of days elapsed in such
Interest Period (or in a subsequent Interest Period) and the denominator of
which is 360, shall be payable as provided herein with respect to the Class
A-1 Certificates on each Distribution Date following such Distribution Date
to the Distribution Date on which such Class A-1 Carry-over Shortfall is paid
to Class A-1 Certificateholders. Notwithstanding anything to the contrary
herein, any Class A-1 Additional Carry-Over Amount shall be payable or
distributed to Class A-1 Certificateholders only to the extent permitted by
applicable law.
(d) On the Determination Date preceding each Distribution Date,
commencing with the Initial Distribution Date, the Servicer shall determine
the excess, if any (the "Class A-2 Carry-over Shortfall"), of (x) the Class
A-2 Carry-over Amount, if any, for such Distribution Date over (y) the amount
which will be available to be distributed to Class A-2 Certificateholders in
respect thereof on such Distribution Date pursuant to this Series Supplement.
If
37
the Class A-2 Carry-over Shortfall with respect to any Distribution Date is
greater than zero, an additional amount ("Class A-2 Additional Carry-over
Amount") equal to the product of (i) the Class A-2 Certificate Rate
(calculated pursuant to clause (a) of the definition thereof) for the
Interest Period commencing on the related Distribution Date (or, for
subsequent Interest Periods, the Class A-2 Certificate Rate (calculated
pursuant to clause (a) of the definition thereof) for such subsequent
Interest Periods), (ii) such Class A-2 Carry-over Shortfall (or the portion
thereof which has not been paid to Class A-2 Certificateholders) and (iii) a
fraction, the numerator of which is the actual number of days elapsed in such
Interest Period (or in a subsequent Interest Period) and the denominator of
which is 360, shall be payable as provided herein with respect to the Class
A-2 Certificates on each Distribution Date following such Distribution Date
to the Distribution Date on which such Class A-2 Carry-over Shortfall is paid
to Class A-2 Certificateholders. Notwithstanding anything to the contrary
herein, any Class A-2 Additional Carry-Over Amount shall be payable or
distributed to Class A-2 Certificateholders only to the extent permitted by
applicable law.
SECTION 4.03. Determination of Monthly Principal. (a) The amount of
Class A-1 Monthly Principal distributable with respect to the Class A-1
Certificates on each Distribution Date with respect to the Class A-1
Accumulation Period shall be equal to the Class A-1 Available Investor
Principal Collections with respect to such Distribution Date; provided,
however, that, for each such Distribution Date, Class A-1 Monthly Principal
shall not exceed the Class A-1 Controlled Distribution Amount for such
Distribution Date; and provided further that Class A-1 Monthly Principal
shall not exceed the Class A-1 Invested Amount.
(b) The amount of Class A-2 Monthly Principal distributable with
respect to the Class A-2 Certificates on each Distribution Date with respect
to the Class A-2 Accumulation Period shall be equal to the Class A-2
Available Investor Principal Collections with respect to such Distribution
Date; provided, however, that, for each such Distribution Date, Class A-2
Monthly Principal shall not exceed the Class A-2 Controlled Distribution
Amount for such Distribution Date; and provided further that Class A-2
Monthly Principal shall not exceed the Class A-2 Invested Amount.
38
(c) The amount of Class A-1 Monthly Principal distributable on each
Distribution Date with respect to an Early Amortization Period shall be equal
to the Class A-1 Invested Amount or, if less, the amount distributable in
respect of the Class A-1 Certificates on such Distribution Date pursuant to
Section 4.06(e).
(d) The amount of Class A-2 Monthly Principal distributable on each
Distribution Date with respect to an Early Amortization Period shall be equal
to the Class A-2 Invested Amount or, if less, the amount distributable in
respect of the Class A-2 Certificates on such Distribution Date pursuant to
Section 4.06(e).
SECTION 4.04. Establishment of Reserve Fund and Funding Accounts.
(a) (i) The Servicer, for the benefit of the Series 1999-2
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 1999-2" and shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series 1999-2 Certificateholders. On the Closing Date, 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 on or before the following Distribution Date. All Eligible
Investments shall be held by the Trustee for the benefit of the Series 1999-2
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) of this Series Supplement.
(b) (i) The Servicer, for the benefit of the Series 1999-2
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 1999-2" and shall bear a designation
clearly indicating that the funds deposited therein are held for the
39
benefit of the Series 1999-2 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 1999-2 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) of this Series Supplement.
(iii) If on any Distribution Date there is a Class A-1 Carry-over
Amount or a Class A-2 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 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. The
Trustee shall be authorized to dispose of investments in the Yield Supplement
Account in order to obtain funds with which to satisfy any Class A-1
Carry-over Amount or Class A-2 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 Series 1999-2
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
40
Funding Account for CARCO Auto Loan Master Trust, Series 1999-2" and shall
bear a designation clearly indicating that the funds deposited therein are
held for the benefit of the Series 1999-2 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 1999-2 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) 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 following Distribution Date.
(d) (i) The Servicer, for the benefit of the Series 1999-2
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 1999-2" and shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series 1999-2 Certificateholders. No deposit will be made to the Excess
Funding Account on the Closing Date.
(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 1999-2 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 following Distribution Date.
(e) (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 and other financial
41
assets credited to, the Reserve Fund, the Yield Supplement Account, the
Principal Funding Account and the Excess Funding Account (collectively the
"Series 1999-2 Accounts") and in all proceeds thereof. The Series 1999-2
Accounts shall be under the sole dominion and control of the Trustee for the
benefit of the Series 1999-2 Certificateholders. If, at any time, any of the
Series 1999-2 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 1999-2 Account meeting the conditions
specified in paragraph (a)(i), (b)(i), (c)(i) or (d)(i) above, as applicable,
as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Series 1999-2 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 1999-2
Account, except as expressly provided herein. Schedule 1, which is hereby
incorporated into and made part of this Series Supplement, identifies each
Series 1999-2 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 1999-2 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 1999-2 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 1999-2 Accounts for the purposes of
carrying out the Servicer's or Trustee's duties hereunder.
SECTION 4.05. Deficiency Amount. With respect to each Distribution
Date, commencing with the Initial Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Deficiency
Amount"), if any, by which (a) the sum of (i) Class A-1 Monthly Interest and
Class A-2 Monthly Interest for such Distribution Date, (ii) any Class A-1
Monthly Interest and Class A-2 Monthly Interest previously due but not
distributed to the Series 1999-2 Certificateholders on a prior Distribution
Date, (iii) Class A-1 Additional Interest and Class A-2
42
Additional Interest, if any, for such Distribution Date and any Class A-1
Additional Interest and Class A-2 Additional Interest previously due but not
distributed to the Series 1999-2 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 1999-2 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; (vii) if
such Distribution Date constitutes the Class A-1 Final Payment Date the sum
of (A) the amount of any Class A-1 Carry-over Amount for such Distribution
Date, (B) the amount of any Class A-1 Carry-over Amount previously due but
not previously distributed to Class A-1 Certificateholders on a prior
Distribution Date, (C) the amount of any Class A-1 Additional Carry-over
Amount for such Distribution Date and (D) the amount of any Class A-1
Additional Carry-over Amount previously due but not previously paid to Class
A-1 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 has not
been so deposited as of such Determination Date; and (viii) if such
Distribution Date constitutes the Class A-2 Final Payment Date the sum of (A)
the amount of any Class A-2 Carry-over Amount for such Distribution Date, (B)
the amount of any Class A-2 Carry-over Amount previously due but not
previously distributed to Class A-2 Certificateholders on a prior
Distribution Date, (C) the amount of any Class A-2 Additional Carry-over
Amount for such Distribution Date and (D) the amount of any Class A-2
Additional Carry-over Amount previously due but not previously paid to Class
A-2 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 and
(ii) the amount of funds in the Reserve Fund which are available pursuant to
Section 4.08(a) and Section 4.08(d) or 4.08(e), as applicable, 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".
43
SECTION 4.06. Application of Investor Non-Principal Collections,
Investment Proceeds and Available Investor Principal Collections. The
Servicer shall cause the Trustee to apply, on each Distribution Date,
commencing with the Initial Distribution Date, Investor Non-Principal
Collections, Investment Proceeds and Available Investor Principal Collections
to make the following distributions:
(a) On each Distribution Date, commencing with the Initial
Distribution Date, an amount equal to the sum of Investor Non-Principal
Collections and any Investment Proceeds with respect to such Distribution
Date will be distributed in the following priority:
(i) first, an amount equal to Class A-1 Monthly Interest for
such Distribution Date, plus the amount of any Class A-1 Monthly
Interest previously due but not distributed to the Class A-1
Certificateholders on a prior Distribution Date, plus the amount of
any Class A-1 Additional Interest for such Distribution Date and any
Class A-1 Additional Interest previously due but not distributed to
the Class A-1 Certificateholders on a prior Distribution Date 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
distributed to the Class A-2 Certificateholders on a prior
Distribution Date, plus the amount of any Class A-2 Additional
Interest for such Distribution Date and any Class A-2 Additional
Interest previously due but not distributed to the Class A-2
Certificateholders on a prior Distribution Date shall be distributed
to the Class A-2 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
44
treated as a portion of Investor Principal Collections for such
Distribution Date;
(v) fifth, an amount equal to the Class A-1 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 Class A-1 Carry-over Amount previously
due but not previously distributed to the Class A-1
Certificateholders on a prior Distribution Date, plus the amount of
any Class A-1 Additional Carry-over Amount for such Distribution
Date and any Class A-1 Additional Carry-over Amount previously due
but not previously distributed to the Class A-1 Certificateholders
on a prior Distribution Date shall be distributed to the Class A-1
Certificateholders; and an amount equal to the Class A-2 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 Class A-2 Carry-over
Amount previously due but not previously distributed to the Class
A-2 Certificateholders on a prior Distribution Date, plus the amount
of any Class A-2 Additional Carry-over Amount for such Distribution
Date and any Class A-2 Additional Carry-over Amount previously due
but not previously distributed to the Class A-2 Certificateholders
on a prior Distribution Date 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; and
(vii) seventh, the balance, if any, shall constitute Excess
Servicing and shall be allocated and distributed as set forth in
Section 4.10.
In the event Investor Nonprincipal Collections and Investment
Proceeds 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
45
Class of Series 1999-2 Certificates pursuant to any 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 Series 1999-2
Certificateholders of the other Class pursuant to such clause.
(b) On each Distribution Date, commencing with the Initial
Distribution Date, with respect to any Nonprincipal 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
(reduced for this purpose by the amount, if any, by which the Required
Participation Amount exceeds the Pool Balance due to an increase in the
Subordination Factor) 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 1999-2 Certificates and second treated as Excess Principal Collections
and applied in accordance with Section 4.04 of the Agreement.
(c) On each Distribution Date with respect to the Class A-1
Accumulation Period, an amount equal to Class A-1 Available Investor
Principal Collections will be distributed in the following priority:
(i) first, an amount equal to Class A-1 Monthly Principal for
such Distribution Date, shall be deposited by the Servicer or the
Trustee into the Principal Funding Account; and
(ii) second, unless an Early Amortization Event has occurred
(other than an Early Amortization Event which has resulted in an
Early Amortization Period which has ended as described in clause (c)
or clause (d) of the definition thereof in this Series Supplement),
after giving effect to the transactions referred to in clause (i)
above, an amount equal to the balance, if any, of such Class A-1
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.
46
(d) On each Distribution Date with respect to the Class
A-2 Accumulation Period, an amount equal to Class A-2 Available Investor
Principal Collections will be distributed in the following priority:
(i) first, an amount equal to Class A-2 Monthly Principal for
such Distribution Date, shall be deposited by the Servicer or the
Trustee into the Principal Funding Account; and
(ii) second, unless an Early Amortization Event has occurred
(other than an Early Amortization Event which has resulted in an
Early Amortization Period which has ended as described in clause (c)
or clause (d) of the definition thereof in this Series Supplement),
after giving effect to the transactions referred to in clause (i)
above, an amount equal to the balance, if any, of such Class A-2
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.
(e) On each Distribution Date with respect to any Early Amortization
Period, an amount equal to the sum of Class A-1 Monthly Principal and Class
A-2 Monthly Principal will be distributed to the Class A-1 Certificateholders
and the Class A-2 Certificateholders, respectively.
In the event Available Certificateholder Principal Collections are
insufficient to make the entire amount of any distribution described in
clause (e) 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 1999-2 Certificates pursuant to 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 Series 1999-2
Certificateholders of the other Class pursuant to such clause.
47
SECTION 4.07. Distributions to Series 1999-2 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 and the Excess Funding Account:
(i) on each Distribution Date, all amounts on deposit in the
Collection Account or the Reserve Fund that are payable to the
Series 1999-2 Certificateholders with respect to accrued interest
will be distributed to the Series 1999-2 Certificateholders;
(ii) on the Class A-1 Expected Payment Date, all amounts on
deposit in the Principal Funding Account and the amount on deposit
in the Excess Funding Account with respect to the Class A-1
Certificates, and all amounts on deposit in the Collection Account
that are payable to the Class A-1 Certificateholders with respect to
principal, up to a maximum amount on any such day equal to the
excess of the outstanding principal balance of the Class A-1
Certificates over the unreimbursed Class A-1 Investor Charge-Offs,
shall be distributed to the Class A-1 Certificateholders.
(iii) on the Class A-2 Expected Payment Date, all amounts on
deposit in the Principal Funding Account and the amount on deposit
in the Excess Funding Account with respect to the Class A-2
Certificates, and all amounts on deposit in the Collection Account
that are payable to the Class A-2 Certificateholders with respect to
principal, up to a maximum amount on any such day equal to the
excess of the outstanding principal balance of the Class A-2
Certificates over the unreimbursed Class A-2 Investor Charge-Offs,
shall be distributed to the Class A-2 Certificateholders.
(iv) on each Special Payment Date, all amounts on deposit in
the Principal Funding Account and the Excess Funding Account, and
all amounts on deposit in the Collection Account, in each such case
that are payable to the Class A-1 Certificateholders with respect to
principal, up to a maximum amount on any such day equal to the
excess of the outstanding principal balance of the Class A-1
Certificates over the unreimbursed Investor Charge-Offs, shall be
distributed to the Class A-1 Certificateholders.
48
(v) on each Special Payment Date, all amounts on deposit
in the Principal Funding Account and the Excess Funding Account,
and all amounts on deposit in the Collection Account, in each such
case that are payable to the Class A-2 Certificateholders with
respect to principal, up to a maximum amount on any such day equal
to the excess of the outstanding principal balance of the Class
A-2 Certificates over the unreimbursed Investor Charge-Offs, shall
be distributed to the Class A-2 Certificateholders.
(b) On each Distribution Date on which there is any Class A-1
Carry-over Amount or Class A-1 Additional Carry-over Amount, the Servicer
shall instruct the Trustee to distribute to the Class A-1 Certificateholders
the amounts on deposit in the Yield Supplement Account and the Collection
Account payable with respect thereto pursuant to Section 4.04(b)(iii) and
Section 4.06(a) (other than from Available Seller's Collections),
respectively.
(c) On each Distribution Date on which there is any Class A-2
Carry-over Amount or Class A-2 Additional Carry-over Amount, the Servicer
shall instruct the Trustee to distribute to the Class A-2 Certificateholders
the amounts on deposit in the Yield Supplement Account and the Collection
Account payable with respect thereto pursuant to Section 4.04(b)(iii) and
Section 4.06(a) (other than from Available Seller's Collections),
respectively.
(d) If, on the Class A-1 Final Payment Date, there is any Class A-1
Carry-over Amount or Class A-1 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 Class A-1
Certificateholders the amounts payable with respect thereto pursuant to
Sections 4.08(b) and 4.08(d).
(e) If, on the Class A-2 Final Payment Date, there is any Class A-2
Carry-over Amount or Class A-2 Additional Carry-over Amount (after giving
effect to any distributions on such date pursuant to Section 4.07(c)), the
Servicer shall instruct the Trustee to distribute to the Class A-2
Certificateholders the amounts payable with respect thereto pursuant to
Sections 4.08(b) and 4.08(e).
(f) The distributions to be made pursuant to this Section are
subject to the provisions of Sections 2.03,
49
9.02, 10.01 and 12.02 of the Agreement and Sections 8.01 and 8.02 of this
Series Supplement.
SECTION 4.08. Application of Reserve Fund and Available Subordinated
Amount. (a) If the portion of Investor Non-Principal Collections and
Investment Proceeds allocated to the Series 1999-2 Certificateholders on any
Distribution Date pursuant to Section 4.06(a) is not sufficient to make the
entire distributions required on such Distribution Date by Sections
4.06(a)(i), (ii) and (iv), the Servicer shall cause the Trustee to withdraw
funds from the Reserve Fund to the extent available therein, and apply such
funds to complete the distributions pursuant to Section 4.06(a)(i), (ii) and
(iv); provided, however, that during any Early Amortization Period (other
than an Early Amortization Period which has ended as described in clause (c)
or clause (d) of the definition thereof in this Series Supplement) 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 Class A-1 Final
Payment Date or the Class A-2 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 Class A-1 Final Payment
Date or the Class A-2 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
(x) Sections 4.06(a)(i), (ii) and (iv) with respect to the Series 1999-2
Certificates and (y) Section (v) with respect to the Class A-1 Certificates,
in the case of the Class A-1 Final Payment Date, or with respect to the Class
A-2 Certificates, in the case of the Class A-2 Final Payment Date, that have
not been made through the application of funds from the Reserve Fund
50
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 1999-2 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 1999-2 as described
in Section 4.05(a)(vi).
(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(f), (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, 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 (g) 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 4.08(b)
into the Reserve Fund until the amount in the Reserve Fund is equal to such
Reserve Fund Required Amount. On the Class A-2 Termination Date, any funds in
the Reserve Fund will be treated as Available Investor Principal Collections.
(d) If, on the Class A-1 Final Payment Date, after giving effect to
(c) above, there is a Class A-1 Carry-over Amount or a Class A-1 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 Class A-1 Carry-over Amount or Class A-1
Additional Carry-over Amount from the Reserve Fund (to the extent available
51
therein), and distribute such funds to the Class A-1 Certificateholders.
(e) If, on the Class A-2 Final Payment Date, after giving effect to
(c) above, there is a Class A-2 Carry-over Amount or a Class A-2 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 Class A-2 Carry-over Amount or Class A-2
Additional Carry-over Amount from the Reserve Fund (to the extent available
therein), and distribute such funds to the Class A-2 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 1999-2
Certificates and (ii) the Class A-2 Termination Date shall be paid to the
Seller.
(f) If, for any Distribution Date with respect to an Early
Amortization 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.
(g) The balance of Available Seller's Collections on any
Distribution Date, after giving effect to any distributions thereof pursuant
to Section 4.08(a), (b), (c) or (f), 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
52
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 (an "Investor Charge-Off"). Any such reduction shall
be applied to reduce the Class A-1 Invested Amount (a "Class A-1 Investor
Charge-Off") and the Class A-2 Invested Amount (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. Class A-1 Investor Charge-Offs and Class A-2 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). Any such increase shall be applied to increase the
outstanding principal balance the Class A-1 Certificates and the Class A-2
Certificates pro rata based on the Class A-1 Allocated Percentage and the
Class A-2 Allocation Percentage, respectively, in each case for the related
Collection Period.
SECTION 4.10. Excess Servicing. The Servicer shall cause the Trustee
to apply, on each Distribution Date, commencing with the Initial Distribution
Date, 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 which have been
previously waived pursuant to Section 3.01 shall be distributed to
the Servicer; and
53
(c) the balance, if any, shall be distributed to the Seller.
SECTION 4.11. Excess Principal Collections. (a) That portion of
Excess Principal Collections for any Distribution Date equal to the amount of
Series 1999-2 Excess Principal Collections for such Distribution Date will be
allocated to Series 1999-2 and will be distributed as set forth in this
Series Supplement.
(b) Series 1999-2 Excess Principal Collections, with respect to any
Distribution Date, shall mean an amount equal to the Series 1999-2 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 entitled to share Excess Principal Collections for such
Distribution Date, then Series 1999-2 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 1999-2 Principal Shortfall for such Distribution Date
and the denominator of which is the aggregate amount of Principal Shortfalls
for all Series entitled to share Excess Principal Collections for such
Distribution Date. The "Series 1999-2 Principal Shortfall", with respect to
any Distribution Date, shall equal the excess of (i) (x) for any Distribution
Date with respect to the Class A-1 Accumulation Period, the Class A-1
Controlled Distribution Amount, or with respect to the Class A-2 Accumulation
Period, the Class A-2 Controlled Distribution Amount, or (y) for any
Distribution Date with respect to an Early Amortization Period, the Invested
Amount, over (ii) (x) with respect to the Class A-1 Accumulation Period, the
Class A-1 Available Investor Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Excess Principal Collections),
or with respect to the Class A-2 Accumulation Period, the Class A-2 Available
Investor Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Excess Principal Collections) or (y) with
respect to an Early Amortization Period, Available Investor Principal
Collections for such Distribution Date (excluding any portion thereof
attributable to Excess Principal Collections).
54
SECTION 4.12. Excess Funding Account. (a) Any funds on deposit in
the Excess Funding Account on the November 2001 Distribution Date
and allocable to the holders of Class A-1 Certificates will be deposited in
the Principal Funding Account on such date. In addition, on the November 2003
Distribution Date the amount on deposit in the Excess Funding Account will be
deposited in the Principal Funding Account. No funds will be deposited in the
Excess Funding Account during any Early Amortization Period. Additionally, no
amounts will be deposited in the Excess Funding Account (i) with respect to
the Class A-1 Certificates, with respect to any Collection Period following
the September 2001 Collection Period or (ii) with respect to the Class A-2
Certificates, with respect to any Collection Period following the September
2003 Collection Period.
(b) On each Determination Date during any Nonprincipal Period, the
Seller shall determine whether the sum of the Invested Amount (reduced for
this purpose by the amount, if any, by which the Required Participation
Amount exceeds the Pool Balance due to an increase in the Subordination
Factor) 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 1999-2 Certificates. If on any such Determination Date such sum is
greater than the outstanding principal balance of the Series 1999-2
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(d) and (e) 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. Any such increase 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. 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
55
1999-2. 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 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) On each Determination Date during the Class A-2 Revolving Period
(after the commencement of the Class A-1 Accumulation Period), the Seller
shall determine whether the sum of the Class A-2 Invested Amount (reduced for
this purpose by the amount, if any, by which the Required Participation
Amount exceeds the Pool Balance due to an increase in the Subordination
Factor) and the amount on deposit in the Excess Funding Account (other than
any Investment Proceeds) is greater than the outstanding principal balance of
the Class A-2 Certificates. If on any such Determination Date such sum is
greater than the outstanding principal balance of the Class A-2 Certificates
and thus there are sufficient Principal Receivables in the Trust to permit an
increase in the Class A-2 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 Class
A-2 Invested Amount. Subject to the provisions set forth below in this
Section 4.12(c) and to Sections 4.12(d) and (e) below, upon receipt of such
notice the Class A-2 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 Class A-2 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
56
1999-2. To the extent that the Class A-2 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
Class A-2 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 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.
(d) 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 or the Class A-2 Invested Amount, as applicable, 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.
(e) In the event that any other Series is in an amortization, early
amortization 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
57
amortization 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 4.13. (a) Class A-1 Accumulation Period Length; Class A-1
Accumulation Period Commencement Date. Beginning on the November 2001
Distribution Date, and on each Distribution Date thereafter that occurs prior
to the Class A-1 Accumulation Period Commencement Date, the Servicer shall
calculate the Class A-1 Accumulation Period Length and, if applicable,
determine the Class A-1 Accumulation Period Commencement Date. Once the
Servicer has determined the Class A-1 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 Class A-1 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 Class A-1 Accumulation Period
Length.
(b) Class A-2 Accumulation Period Length; Class A-2 Accumulation
Period Commencement Date. Beginning on the November 2003 Distribution Date,
and on each Distribution Date thereafter that occurs prior to the Class A-2
Accumulation Period Commencement Date, the Servicer shall calculate then
Class A-2 Accumulation Period Length and, if applicable, determine the Class
A-2 Accumulation Period Commencement Date. Once the Servicer has determined
the Class A-2 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 Class
A-2 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 Class A-2 Accumulation Period Length.
58
ARTICLE V
Distributions and Reports
to Series 1999-2 Certificateholders
SECTION 5.01. Distributions. (a) On each Distribution Date,
commencing with the Initial Distribution Date, the Trustee shall distribute
to each Series 1999-2 Certificateholder of record on the preceding Record
Date (other than as provided in Section 12.02 of the Agreement respecting a
final distribution) such Certificateholder's pro rata share (based on the
aggregate fractional undivided interests represented by the Series 1999-2
Certificates held by such Certificateholder) of the amounts on deposit in the
Series 1999-2 Accounts as is payable to the Series 1999-2 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 1999-2
Certificateholders hereunder shall be made by check mailed to each Series
1999-2 Certificateholder at such Certificateholder's address appearing in the
Certificate Register without presentation or surrender of any Series 1999-2
Certificate or the making of any notation thereon; provided, however, that,
with respect to Series 1999-2 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 1999-2
Certificateholders. (a) At least two Business Days prior to each Distribution
Date, commencing with the Initial Distribution Date, the Servicer will
provide to the Trustee, and on each such Distribution Date, the Trustee shall
forward to each Series 1999-2 Certificateholder, a statement substantially in
the form of Exhibit B prepared by the Servicer setting forth certain
information relating to the Trust and the Series 1999-2 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 2000, the Trustee shall furnish or cause to be furnished to
each Person who at any time during the preceding calendar year was a Series
1999-2
59
Certificateholder (or Certificate Owner), a statement prepared by the
Servicer containing the information which is required to be contained in the
statement to Series 1999-2 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
1999-2 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 1999-2 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 be deemed to be an Early Amortization Event
solely with respect to Series 1999-2:
(a) on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods is less than
20%;
(b) 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;
(c) any Service Default with respect to Series 1999-2 occurs;
(d) on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds 20% of the Pool
Balance on such last day;
60
(e) any Class A-1 Carry-over Amount or Class A-2 Carry-over
Amount or any Class A-1 Additional Carry-over Amount or Class A-2
Additional Carry-over Amount is outstanding on six consecutive
Distribution Dates;
(f) the outstanding principal amount of the Class A-1
Certificates is not repaid by the Class A-1 Expected Payment Date;
(g) the outstanding principal amount of the Class A-2
Certificates is not repaid by the Class A-2 Expected Payment Date;
(h) 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
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; and
(i) 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,
61
and such decree or order shall have remained in force undischarged
or unstayed for a period of 120 days.
The Trustee agrees that upon gaining knowledge of the occurrence of
any event described in Section 9.01 of the Agreement or Section 6.01 of this
Series Supplement it shall (a) promptly provide notice to the Rating Agencies
of the occurrence of such event and (b) notify the Series 1999-2
Certificateholders of the occurrence of such event within 45 days of the
expiration of the applicable grace period, if any. In the case of any event
described in Sections 9.01(f) or (g) of the Agreement or Section 6.01(c) of
this Series Supplement, an Early Amortization Event with respect to Series
1999-2 will be deemed to have occurred only if, after the applicable grace
period described in such Sections, if any, either the Trustee or Series
1999-2 Certificateholders evidencing more than 50% of the aggregate unpaid
principal amount of the Series 1999-2 Certificates by written notice to the
Seller and the Servicer (and the Trustee, if given by Series 1999-2
Certificateholders) declare that an Early Amortization Event has occurred as
of the date of such notice. In the case of any other Early Amortization
Event, such Early Amortization Event will be deemed to have occurred
immediately upon the occurrence of such event, without any notice or other
action on the part of the Trustee or the Series 1999-2 Certificateholders.
In the case of any Early Amortization Event described in Sections
9.01(a), (f) or (g) of the Agreement or this Section 6.01, other than
Sections 6.01(f), (g), (h) or (i), provided that (i) 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 clause
(c) or clause (d) of the definition thereof in this Series Supplement) has
occurred and (ii) the scheduled termination of, with respect to the Class A-1
Certificates, the Class A-1 Revolving Period or, with respect to the Class
A-2 Certificates, the Class A-2 Revolving Period has not occurred, the
Trustee agrees that it shall request written confirmation from Standard &
Poor's, Duff & Phelps, Inc. and Fitch Investors Service, Inc. that the
termination of the Early Amortization Period caused by the occurrence of such
Early Amortization Event will not result in the downgrading or withdrawal of
such entity's rating of the Series 1999-2 Certificates.
The Trustee further agrees that, where applicable, it shall promptly
notify the Series 1999-2
62
Certificateholders that it has received the written confirmation referred to
in the preceding paragraph, and that the Series 1999-2 Certificateholders may
elect to terminate the related Early Amortization Period.
ARTICLE VII
Optional Repurchase
SECTION 7.01. Optional Repurchase. (a) On any Distribution Date
occurring after the date on which the Class A-1 Invested Amount is reduced to
$75,000,000 or less, the Servicer shall have the option to purchase the
entire Class A-1 Certificateholders' Interest, at a purchase price equal to
the Class A-1 Reassignment Amount for such Distribution Date.
(b) On any Distribution Date occurring after the date on which the
Class A-2 Invested Amount is reduced to $60,000,000 or less, the Servicer
shall have the option to purchase the entire Class A-2 Certificateholders'
Interest, at a purchase price equal to the Class A-2 Reassignment Amount for
such Distribution Date.
(c) The Servicer shall give the Seller and the Trustee at least 10
days' prior written notice of the Distribution Date on which the Servicer
intends to exercise one of the purchase options described above. Not later
than 12:00 noon, New York City time, on such Distribution Date the Servicer
shall deposit the Class A-1 Reassignment Amount or the Class A-2 Reassignment
Amount, as applicable, into the Collection Account in immediately available
funds. Such purchase options are subject to payment in full of the Class A-1
Reassignment Amount or the Class A-2 Reassignment Amount, as applicable. The
Class A-1 Reassignment Amount or the Class A-2 Reassignment Amount, as
applicable, shall be distributed as set forth in Section 8.01(e) or (f), as
applicable.
(d) If at the time the Servicer exercises one of its purchase
options hereunder the Servicer's long-term unsecured debt has a rating lower
than Baa3 by Moody's, the Servicer shall deliver to the Trustee on such
Distribution Date an Opinion of Counsel (which must be an independent outside
counsel) to the effect that, in reliance on certain certificates to the
effect that the Class A-1 Certificateholders' Interest or Class A-2
63
Certificateholders' Interest, as applicable, purchased by the Servicer
constitutes fair value for the consideration paid therefor and as to the
solvency of the Servicer, the purchase of the Class A-1 Certificateholders'
Interest or Class A-2 Certificateholders' Interest, as applicable, would not
be considered a fraudulent conveyance under applicable law.
ARTICLE VIII
Final Distributions
SECTION 8.01. Sale of Certificateholders' Interest Pursuant to
Section 2.03 of the Agreement; Distributions Pursuant to Section 7.01 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 1999-2 in connection with a purchase of the Series 1999-2
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 2.03 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): (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 1999-2 Certificates, plus
the amount of Class A-1 Additional Interest and Class A-2 Additional
Interest, if any, for such Distribution Date plus the amount of any Class A-1
Additional Interest or Class A-2 Additional Interest previously due but not
paid to Series 1999-2 Certificateholders on a prior Distribution Date, plus
the amount of any Class A-1 Carry-over Amount or Class A-2 Carry-over Amount
for such Distribution Date, plus the amount of any Class A-1 Carry-over
Amount or Class A-2 Carry-over Amount previously due but not paid to Series
1999-2 Certificateholders on a prior Distribution Date, plus the amount of
any Class A-1 Additional Carry-over Amount or Class A-2 Additional Carry-over
Amount for such Distribution Date, plus the amount of any Class A-1
64
Additional Carry-over Amount or Class A-2 Additional Carry-over Amount
previously due but not paid to Series 1999-2 Certificateholders on any prior
Distribution Date, up to the Reassignment Amount for Series 1999-2.
(c) With respect to any Class A-1 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): first, (x) deposit the Class A-1 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 Class A-1
Certificates, plus the amount of Class A-1 Additional Interest, if any, for
such Distribution Date, plus the amount of any Class A-1 Additional Interest
previously due but not paid to Class A-1 Certificateholders on a prior
Distribution Date, plus the amount of any Class A-1 Carry-over Amount for
such Distribution Date, plus the amount of any Class A-1 Carry-over Amount
previously due but not paid to Class A-1 Certificateholders on any prior
Distribution Date, plus the amount of any Class A-1 Additional Carry-over
Amount for such Distribution Date, plus the amount of any Class A-1
Additional Carry-over Amount previously due but not paid to Class A-1
Certificateholders on a prior Distribution Date, up to the Class A-1
Reassignment Amount and (ii) second, pay the remainder of any Class A-1
Termination Proceeds to the Seller.
(d) With respect to any Class A-2 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): first, (x) deposit the Class A-2 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 Class A-2
Certificates, plus the amount of Class A-2 Additional Interest, if any, for
such Distribution Date, plus the amount of any Class A-2 Additional Interest
previously due but not paid to Class A-2 Certificateholders on a prior
Distribution Date, plus the amount of any Class A-2 Carry-over Amount for
such Distribution Date, plus
65
the amount of any Class A-2 Carry-over Amount previously due but not paid to
Class A-2 Certificateholders on any prior Distribution Date, plus the amount
of any Class A-2 Additional Carry-over Amount for such Distribution Date,
plus the amount of any Class A-2 Additional Carry-over Amount previously due
but not paid to Class A-2 Certificateholders on a prior Distribution Date, up
to the Class A-2 Reassignment Amount and (ii) second, by the remainder of any
Class A-2 Termination Proceeds to the Seller.
(e) With respect to the Class A-1 Reassignment Amount deposited into
the Collection Account pursuant to Section 7.01 of this Series Supplement,
the Trustee shall, not later than 12:00 noon, New York City time, on the
Distribution Date on which such amounts are deposited (in the priority set
forth below): (x) deposit the Class A-1 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 Class A-1 Certificates, plus the amount
of Class A-1 Additional Interest, if any, for such Distribution Date, plus
the amount of any Class A-1 Additional Interest previously due but not paid
to Class A-1 Certificateholders on a prior Distribution Date, plus the amount
of any Class A-1 Carry-over Amount for such Distribution Date, plus the
amount of any Class A-1 Carry-over Amount previously due but not paid to
Class A-1 Certificateholders on any prior Distribution Date, plus the amount
of any Class A-1 Additional Carry-over Amount for such Distribution Date,
plus the amount of any Class A-1 Additional Carry-over Amount previously due
but not paid to Class A-1 Certificateholders on a prior Distribution Date, up
to the Class A-1 Reassignment Amount.
(f) With respect to the Class A-2 Reassignment Amount deposited into
the Collection Account pursuant to Section 7.01 of this Series
Supplement, the Trustee shall, not later than 12:00 noon, New York City time,
on the Distribution date on which such amounts are deposited (in the priority
set forth below): (x) deposit the Class A-2 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 Class A-2 Certificates, plus the
amount of Class A-2 Additional Interest, if any, for such Distribution Date,
plus the amount of any Class A-2 Additional Interest previously due but not
paid to Class A-2 Certificateholders on a prior Distribution Date, plus the
amount of any Class A-2 Carry-
66
over Amount for such Distribution Date, plus the amount of any Class A-2
Carry-over Amount previously due but not paid to Class A-2 Certificateholders
on any prior Distribution Date, plus the amount of any Class A-2 Additional
Carry-over Amount for such Distribution Date, plus the amount of any Class
A-2 Additional Carry-over Amount previously due but not paid to Class A-2
Certificateholders on a prior Distribution Date, up to the Class A-2
Reassignment Amount.
(g) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited in the
Principal Funding Account pursuant to Section 7.01 or 8.01 and all other
amounts on deposit therein shall be distributed in full to the Class A-1
Certificateholders or the Class A-2 Certificateholders, as applicable, on
such date and any distribution made pursuant to paragraph (c) or (d) above
shall be deemed to be a final distribution pursuant to Section 12.02 of the
Agreement with respect to the Class A-1 Certificates or Class A-2
Certificates.
SECTION 8.02. 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.
(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) Class A-1
67
Monthly Interest and Class A-2 Monthly Interest for such Distribution Date,
(ii) any Class A-1 Monthly Interest and Class A-2 Monthly Interest previously
due but not distributed on a prior Distribution Date, (iii) the amount of
Class A-1 Additional Monthly Interest and Class A-2 Additional Monthly
Interest, if any, for such Distribution Date and any Class A-1 Additional
Monthly Interest and Class A-2 Additional Monthly Interest previously due but
not distributed on a prior Distribution Date, (iv) any Class A-1 Carry-over
Amount and Class A-2 Carry-over Amount for such Distribution Date and any
Class A-1 Carry-over Amount and Class A-2 Carry-over Amount previously due
but not distributed to the Series 1999-2 Certificateholders on a prior
Distribution Date and (v) the amount of any Class A-1 Additional Carry-over
Amount and any Class A-2 Additional Carry-over Amount for such Distribution
Date and any Class A-1 Additional Carry-over Amount and any Class A-2
Additional Carry-over Amount previously due but not distributed to the Series
1999-2 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 1999-2
Certificateholders; provided 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.
(c) Notwithstanding anything to the contrary in this Series
Supplement or in 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
1999-2 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 1999-2.
68
ARTICLE IX
Miscellaneous Provisions
SECTION 9.01. 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) that will mature so that funds will be available on or before the
following Distribution Date.
(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: (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
69
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.
Notwithstanding the provisions described above, from and after the date on
which no Series issued prior to March 10, 1999, is outstanding, the
conditions specified in (a) that relate to Enhancement Providers and Rating
Agencies and the conditions specified in (d), (e) and (f) above will not be
required if all of the Accounts to be removed have liquidated and have zero
balances.
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.
70
(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 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 Cut-Off Date;
(iii) no selection procedures believed by the Seller to
be adverse to the interests of the Series 1999-2
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
71
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
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
72
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 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 1999-2 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 9.01(a) and 9.01(b),
9.01(c), 9.01(d) and 9.01(e), it being understood that no such amendment
shall be effective unless and until (i) 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 and (ii) with
respect to the last sentence of Section 9.01(c), each Series of Investor
Certificates issued prior to March 10, 1999 shall no longer be outstanding or
shall have consented to such amendment in accordance with the Agreement.
(g) 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 or the Yield Supplement Account, or
Investment Proceeds with respect thereto.
(h) Notwithstanding anything to the contrary in Section 12.02(c) of
the Agreement, the following shall be applicable to the Series 1999-2
Certificates;
73
In the event that the Class A-1 Invested Amount is greater than zero on the
Class A-1 Termination Date (after giving effect to deposits and distributions
otherwise to be made on the Class A-1 Termination Date), the Trustee will
sell or cause to be sold on the Class A-1 Termination Date Receivables (or
interests therein) in an amount equal to the sum of (i) 110% of the Class A-1
Invested Amount on the Class A-1 Termination Date (after giving effect to
such deposits and distributions) and (ii) the product of 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) and the Class A-1
Allocation Percentage; provided, however, that in no event shall such amount
exceed the product of the Series 1999-2 Allocation Percentage (for the
Collection Period in which the Class A-1 Termination Date occurs) of
Receivables on the Class A-1 Termination Date and the Class A-1 Allocation
Percentage. The proceeds (the "Class A-1 Termination Proceeds") from such
sale shall be immediately deposited into the Collection Account for the
benefit of the Class A-1 Certificateholders.
In the event that the Class A-2 Invested Amount is greater than zero
on the Class A-2 Termination Date (after giving effect to deposits and
distributions otherwise to be made on the Class A-2 Termination Date), the
Trustee will sell or cause to be sold on the Class A-2 Termination Date
Receivables (or interests therein) in an amount equal to the sum of (i) 110%
of the Class A-2 Invested Amount on the Class A-2 Termination Date (after
giving effect to such deposits and distributions) and (ii) 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 1999-2 Allocation Percentage
(for the Collection Period in which the Class A-2 Termination Date occurs) of
Receivables on the Class A-2 Termination Date. The proceeds (the "Class A-2
Termination Proceeds") from such sale shall be immediately deposited into the
Collection Account for the benefit of the Class A-2 Certificateholders.
SECTION 9.02. Ratification of Agreement. As supplemented by this
Series Supplement, the Agreement is in all respects ratified and confirmed
and the Agreement as so
74
supplemented by this Series Supplement shall be read, taken and construed as
one and the same instrument.
SECTION 9.03. 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 9.04. Dealer Concentrations. So long as this Series 1999-2
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 1.5% 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 9.05. The Certificates. Notwithstanding anything to the
contrary in this Agreement, each of the Class A-1 Certificates and Class A-2
Certificates may be executed by manual or facsimile signature on behalf of
the Seller by any assistant secretary of the Seller.
SECTION 9.06. 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.
75
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 /s/David H. Olsen
-------------------------------
CHRYSLER FINANCIAL COMPANY
L.L.C., Servicer,
By /s/David H. Olsen
-------------------------------
THE BANK OF NEW YORK,
Trustee,
By /s/Erwin Soriano
-------------------------------
76
EXHIBIT A-1
[FORM OF CERTIFICATE]
FACE OF CERTIFICATE
Initial Invested Amount: 1/
REGISTERED
$[ ]
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
FIXED RATE AUTO LOAN ASSET BACKED CERTIFICATES, SERIES 1999-1
5.65% CLASS A-1 CERTIFICATES, SERIES 1999-1
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 Company L.L.C. meeting certain eligibility
criteria. This certificate (a "Certificate") does not represent an interest
in, or obligation of, U.S. Auto Receivables Company (the "Seller" or "USA"),
Chrysler Financial Company L.L.C. 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.
- --------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
2
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
3
REVERSE OF CERTIFICATE
This certifies that Cede & Co. (the "Class A-1
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
Company L.L.C., 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 1999-1 Supplement dated as of
March 10, 1999 among the Seller, the Servicer and the Trustee (the "Series
Supplement"), that are allocated to the Class A-1 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, (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 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.
4
The Receivables consist of advances made directly or
indirectly by Chrysler Financial Company L.L.C. to domestic automobile
dealers franchised by DaimlerChrysler 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 Class A-1
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 meanings ascribed
to them in the Pooling and Servicing Agreement.
The Seller has entered into the Pooling and Servicing
Agreement and the Class A-1 Certificates have been (or will be) issued with
the intention that the Class A-1 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 Class A-1 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 Class A-1 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 Class A-1 Certificates held by such
Certificateholder, except as otherwise provided in the Pooling
5
and Servicing Agreement) of such amounts on deposit in the Collection Account
and any Series Account as are payable in respect of the Class A-1
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
Class A-1 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 on which the outstanding
principal amount of the Class A-1 Certificates will be reduced to $40,000,000
or less, the Servicer shall have the option to purchase the entire Class A-1
Certificateholders' Interest in the Trust at a purchase price equal to the
Reassignment Amount using funds on deposit in the Principal Funding Account
and the Excess Funding Account and amounts on deposit in the Collection
Account as are payable to the Class A-1 Certificateholders or, to the extent
of any insufficiency of such funds (the "Insufficiency Amount"), funds in an
amount equal to the Insufficiency Amount provided by Chrysler Financial
Company L.L.C.
This Certificate does not represent an obligation of, or
an interest in, DaimlerChrysler 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 Class A-1 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
6
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 Investor Certificates evidencing not less than
66-2/3% of the aggregate unpaid principal amount of the certificates of the
Investor 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 Investor 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
Investor Certificateholders or deposits of amounts to be so distributed
without the consent of such each affected Investor Certificateholder; (ii)
change the definition or the manner of calculating any
certificateholders' interest without the consent of each affected Investor
Certificateholder; (iii) reduce the amount available under any Enhancement
without the consent of each affected Investor 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 Investor Certificates of such Series or Class or (v) reduce the aforesaid
percentage required to consent to any such amendment without the consent of
all Investor 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 Class A-1 Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest will be issued to
the designated transferee or transferees.
7
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A-1 Certificates are
exchangeable for new Class A-1 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.
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
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 A-2
[FORM OF CERTIFICATE]
FACE OF CERTIFICATE
Initial Invested Amount: 1/
REGISTERED
$[ ]
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
FIXED RATE AUTO LOAN ASSET BACKED CERTIFICATES, SERIES 1999-1
5.78% CLASS A-2 CERTIFICATES, SERIES 1999-1
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 Company L.L.C. meeting certain eligibility
criteria. This certificate (a "Certificate") does not represent an interest
in, or obligation of, U.S. Auto Receivables Company (the "Seller" or "USA"),
Chrysler Financial Company L.L.C. 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
- --------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
2
benefit under the Pooling and Servicing Agreement referred to on the reverse
side hereof or be valid for any purpose.
3
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
4
REVERSE OF CERTIFICATE
This certifies that Cede & Co. (the "Class A-2
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
Company L.L.C., 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 1999-1 Supplement dated as of
March 10, 1999 among the Seller, the Servicer and the Trustee (the "Series
Supplement"), that are allocated to the Class A-2 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, (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 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.
5
The Receivables consist of advances made directly or
indirectly by Chrysler Financial Company L.L.C. to domestic automobile
dealers franchised by DaimlerChrysler 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 Class A-2
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 meanings ascribed
to them in the Pooling and Servicing Agreement.
The Seller has entered into the Pooling and Servicing
Agreement and the Class A-2 Certificates have been (or will be) issued with
the intention that the Class A-2 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 Class A-2 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 Class A-2 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 Class A-2 Certificates held by such
Certificateholder, except as otherwise provided in the Pooling
6
and Servicing Agreement) of such amounts on deposit in the Collection Account
and any Series Account as are payable in respect of the Class A-2
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
Class A-2 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 on which the outstanding
principal amount of the Class A-2 Certificates will be reduced to $60,000,000
or less, the Servicer shall have the option to purchase the entire Class A-2
Certificateholders' Interest in the Trust at a purchase price equal to the
Reassignment Amount using funds on deposit in the Principal Funding Account
and the Excess Funding Account and amounts on deposit in the Collection
Account as are payable to the Class A-2 Certificateholders or, to the extent
of any insufficiency of such funds (the "Insufficiency Amount"), funds in an
amount equal to the Insufficiency Amount provided by Chrysler Financial
Company L.L.C.
This Certificate does not represent an obligation of, or
an interest in, DaimlerChrysler 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 Class A-2 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
7
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 Investor Certificates evidencing not less than
66-2/3% of the aggregate unpaid principal amount of the certificates of the
Investor 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 Investor 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
Investor Certificateholders or deposits of amounts to be so distributed
without the consent of such each affected Investor Certificateholder; (ii)
change the definition or the manner of calculating any certificateholders'
interest without the consent of each affected Investor Certificateholder;
(iii) reduce the amount available under any Enhancement without the consent
of each affected Investor 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 Investor Certificates
of such Series or Class or (v) reduce the aforesaid percentage required to
consent to any such amendment without the consent of all Investor
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 Class A-2 Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest will be issued to
the designated transferee or transferees.
8
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A- 2 Certificates are
exchangeable for new Class A-2 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.
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.
9
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.
