As filed with the Securities and Exchange Commission on September 26, 2000
Registration No. 333-37882
Registration No. 333-37882-01
Registration No. 333-37882-02
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO.2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
CARCO AUTO LOAN MASTER TRUST
(In which the Certificates evidence undivided interests)
CHRYSLER FINANCIAL RECEIVABLES CORPORATION
(As successor to U.S. Auto Receivables Company, the registrant under
Registration Statement No. 333-38873)
DAIMLERCHRYSLER WHOLESALE RECEIVABLES LLC
(Depositor into the CARCO Auto Loan Master Trust)
(Exact name of registrant as specified in its charter)
DELAWARE 6146 38-3523542
(State of (Primary Standard Industrial (I.R.S. Employer
Incorporation) Classification Code Number) Identification No.)
27777 Franklin Road
Southfield, Michigan 48034
(248) 948-3031
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
CHRISTOPHER A. TARAVELLA, ESQ.
Chrysler Financial Company L.L.C.
27777 Franklin Road
Southfield, Michigan 48034
(248) 948-3060
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------
Copies to:
RENWICK D. MARTIN, ESQ.
Brown & Wood LLP
One World Trade Center
New York, New York 10048
(212) 839-5300
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement
becomes effective as determined by market conditions.
-------------------
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, check the
following box. /__/
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. /__/
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. /__/
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================= ================= ===================== ====================== ===============
Proposed Maximum Proposed Maximum Amount of
Title of each class of Amount to be Offering Price Per Aggregate Offering Registration
Securities to be registered registered Unit(1) Price (1) Fee
------------------------------------------------- ----------------- --------------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
Asset Backed Certificates........................ $501,000,000 (2) 100% $501,000,000(2) $151,779 (3)
================================================= ================= ===================== ====================== ===============
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Includes $500,000,000 of unissued Asset Backed Certificates registered
under Registration Statement No. 333-38873 (on which U.S. Auto Receivables
Company is the registrant).
(3) Includes the filing fee of $151,515 paid in connection with the
$500,000,000 of Asset Backed Certificates referred to in footnote (2). $264
has been previously paid herewith in respect of $1,000,000 of Asset Backed
Certificates.
</TABLE>
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
In accordance with Rule 429 of the General Rules and Regulations
under the Securities Act of 1933, the Prospectus included herein is a combined
Prospectus which also relates to $500,000,000 of unissued Asset Backed
Certificates registered under Registration Statement No. 333-38873 and this
Registration Statement constitutes Post-Effective Amendment No. 1 to such
Registration Statement.
The information in this prospectus supplement and the prospectus is not
complete and may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus supplement and the prospectus are not an offer to
sell these securities and they are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to completion dated September 26, 2000
DAIMLER CHRYSLER
Prospectus Supplement
---------------------
To Prospectus dated , 200[ ]
$[ ]
CARCO AUTO LOAN MASTER TRUST
Issuer
[Floating Rate][ %] Auto Loan Asset Backed Certificates,
Series [200_-_], due , 200 .
DAIMLERCHRYSLER WHOLESALE RECEIVABLES LLC, Seller
CHRYSLER FINANCIAL COMPANY, L.L.C., Servicer
Before you decide to invest in the Series [200_-_] certificates, please read
this prospectus supplement and the prospectus, especially the risk factors
beginning on page [ ] of this prospectus supplement and page [ ] of the
prospectus.
The Series [200_-_] certificates are interests in the trust only and do not
represent interests in or obligations of DaimlerChrysler AG, DaimlerChrysler
Wholesale receivables LLC, Chrysler Financial Company L.L.C. or any of their
affiliates.
Principal amount................................... $
Per annum interest rate............................ %
Expected principal payment date....................
Legal final........................................
Initial public offering price(1)................... $ %
Underwriting discount.............................. $ %
Proceeds to seller................................. $ %
The initial public offering price will also include interest accrued on the
Series 200_-_ notes, if any, from _______________.
The seller must pay expenses estimated to be $____________.
The trust will pay interest on the Series 200_-_ on the ___ day of each month.
The first distribution date will be ____________.
We will deliver the Series 200_-_ notes in book-entry form only on or
about [ ], 200[ ].
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the Series [200_-_] certificates or
determined that this prospectus supplement or the prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
----------------------------------------------------
[Underwriter(s)]
---------------------------------------------------
The date of this prospectus supplement is , 200 .
<PAGE>
Reading the Prospectus and Prospectus Supplement
We provide information on the offered securities in two documents that
offer varying levels of detail:
o Prospectus - provides general information, some of which may not
apply to the offered securities.
o Prospectus Supplement - provides a summary of the specific terms of
the offered securities.
You should rely only on the information contained in this document. We
have not authorized anyone to provide you with different information.
We suggest you read this prospectus supplement and the prospectus. The
prospectus supplement pages begin with "S". If the terms of the offered
securities described in this prospectus supplement vary with the accompanying
prospectus, you should rely on the information in this prospectus supplement.
We include cross-references to sections in these documents where you can
find further related discussions. Refer to the table of contents on page [ ]
in this document and on page [ ] in the prospectus to locate the referenced
sections.
Limitations on Offers or Solicitations
We do not intend this document to be an offer or solicitation:
o if used in a jurisdiction in which the offer or solicitation is not
authorized;
o if the person making the offer or solicitation is not qualified to
do so; or
o if the offer or solicitation is made to anyone to whom it is
unlawful to make the offer or solicitation.
<PAGE>
Table Of Contents
Section Page
Reading the Prospectus and Prospectus S-3
Supplement
Summary of Series Terms S-4
o Parties S-4
o Title of Securities S-4
o Invested Amount S-4
o Series Issuance Date S-4
o Series Cut-Off Date S-4
o Terms of the Certificates S-4
o Legal Final S-5
o Revolving Period S-5
o Accumulation Period S-5
o Controlled Amortization Period S-5
o Reinvestment Period S-5
o Excluded Series; Prefunded Period S-6
o Early Amortization Period S-6
o Credit Enhancement S-6
o Yield Supplement Account S-7
o Excess Principal Collections S-7
o Excess Servicing S-7
o Servicing Fee Rate S-7
o Optional Repurchase S-7
o Other Series of Certificates S-8
o ERISA Considerations S-8
o Tax Status S-8
o Certificate Ratings S-8
o Risk Factors S-8
o Certificates Not Listed on any Exchange S-8
Risk Factors S-8
o The Timing of Principal Payments May Not
Be As Expected S-9
o Interest Rates on the Series [2000_-_]
Certificates May be Lower than Expected S-10
o Credit Enhancement is Limited and May be
Reduced S-11
o The Trust is Dependent on CFC and
DaimlerChrysler S-11
Use of Proceeds S-12
The Dealer Floorplan Financing Business S-12
The Accounts S-14
CFC's Performance History S-15
o Loss Experience S-15
o Aging Experience S-16
o Geographic Distribution S-16
Maturity and Principal Payment
Considerations S-17
Series Provisions S-19
o General S-19
o Interest S-19
o Principal S-22
o Excess Funding Account S-25
o Allocation Percentages S-26
o Principal Collections for All Series S-28
o Allocation of Collections; Limited
Subordination of Seller's Interest S-29
o Deficiency Amount S-30
o Available Subordinated Amount S-31
o Distributions from the Collection
Account[; Reserve Fund]; [Yield
Supplement Account]; [Other Enhancement] S-34
o Principal Collections S-38
o Required Participation Percentage S-40
o [Principal Funding Account] S-40
o [Prefunding Account] S-41
o [Other Enhancement] S-41
o Distributions S-41
o Optional Repurchase S-43
o Investor Charge-Offs S-43
o [Reinvestment Events] S-44
o Early Amortization Events S-47
o Termination S-49
o Reports S-49
Underwriting S-51
Legal Matters S-52
Certificate Ratings S-53
Glossary of Principal Terms for the
Prospectus Supplement S-53
Other Series of Investor Certificates A-1
<PAGE>
Summary of Series Terms
This summary highlights selected information from this prospectus
supplement and may not contain all the information that you need to consider
in making an investment decision. It provides general, simplified descriptions
of matters that are highly complex. You should carefully read this document
and the accompanying prospectus. You will find a detailed description of the
terms of the Series [200_-_] certificates following this summary and in the
prospectus.
<PAGE>
Parties
Party Description
Issuer o CARCO Auto Loan Master Trust (the "trust")
--------------------------------------------------
Seller o DaimlerChrysler Wholesale Receivables LLC ("DCWR"),
an indirectly owned subsidiary of Chrysler Financial
Company L.L.C. ("CFC").
o DCWR's executive offices are located at 27777
Franklin Road, Southfield, Michigan 48034-8286, and
its telephone number is (248) 948-3031.
--------------------------------------------------
Servicer o CFC, a wholly owned subsidiary of DaimlerChrysler
Corporation ("DaimlerChrysler").
--------------------------------------------------
Trustee o The Bank of New York.
-------------------------------------------------------
Title of Securities
[Floating Rate] [ %] Auto Loan Asset Backed Certificates, Series
[200_-_] (the "Series [200_-_] certificates").
Invested Amount
The total principal amount of the Series [200_-_] certificates invested
in receivables on the date they are issued is expected to be $[ ____________
]. This invested amount is subject to decreases and increases as described in
this prospectus supplement under the caption "Series Provisions -- Allocation
Percentages".
Series Issuance Date
[ ], 200[ ].
Series Cut-Off Date
[ ], 200[ ].
Terms of the Certificates
Interest Payment Dates
o Interest will be payable on the [ ] of each [month] [quarter]
[other], unless the [ ] is not a business day, in which case the
payment will be made on the following business day. The first payment
will be on [ ], 200[ ].
Per Annum Interest [Rate] [Rates]
o [ ]. [[ ]] [above] [below] [times[ ] or, if lower, the assets
receivables rate described in this prospectus supplement.] [Interest will
be calculated on the basis of the actual number of days in the applicable
interest period divided by 360.] [Interest will be calculated on the
basis of a 360-day year of twelve 30-day months.]
Interest Periods
o Each period from and including a distribution date to but
excluding the day prior to the following distribution date, except that
the first interest period will be [ ] days.]
Principal Payments
o We expect to pay the principal of the Series [200_-_]
certificates in full on [ ], 200[ ].
o However, under some circumstances we may pay principal earlier
or later or in reduced amounts. See "Maturity and Principal Payment
Considerations" in this prospectus supplement.
Legal Final
We will be obligated to pay the outstanding principal amount of the
Series [200_-_] certificates, to the extent not previously paid, by
[ ], 200[ ].
Revolving Period
During the revolving period, we will not pay principal on the Series
[2000_-_] certificates or accumulate principal for that purpose. Instead, we
will use the Series [200_-_] share of principal collections to make principal
distributions on other series and or pay them to the seller. The revolving
period will begin at the close of business on the Series Cut-Off Date and end
when the [accumulation period] [controlled amortization period] begins. The
revolving period will also end if an early amortization period that is not
terminated begins.
[Accumulation Period
We will accumulate principal for the Series [200_-_] certificates during
an accumulation period of between one and _____ months long unless an early
amortization period that is not terminated begins before the start of the
accumulation period. The latest date on which the accumulation period will
commence is _____. During the accumulation period we will accumulate the
Series [200_-_] share of principal collections for payment on ______. See
"Series Provisions -- Principal" in this prospectus supplement.]
[Controlled Amortization Period
The Series [200_-_] certificates will have a controlled amortization
period of between one and ____ months long unless an early termination period
that is not terminated begins before the start of the controlled amortization
period. The latest date on which the controlled amortization period will
commence is _______. We expect to make payments of principal on the Series
[200_-_] certificates on each distribution date during that period. See
"Series Provisions -- Principal" in this prospectus supplement.].
[Reinvestment Period]
If a reinvestment event occurs, the Series [200_-_] certificates will
have a reinvestment period. Under some circumstances, the revolving period may
recommence if the seller takes some actions. See "Series Provisions --
Reinvestment Events".]
[Excluded Series; Prefunded Period
We are issuing the Series [200_-_] certificates at a time when another
series is amortizing or accumulating principal or is about to do so. We refer
to that other series as a paired series in relation to Series [200_-_].
Consequently, we will keep the Series [200_-_] initial invested amount in a
prefunding account during its prefunded period. The prefunded period will
start on the Series [200_-_] issuance date and will not go beyond _______. As
funds are deposited into an account for the paired series, we will release an
equal amount of funds from the prefunding account to the seller. However,
until the paired series is paid in full, we will not allocate any collections
on the receivables to Series [200_-_]. In this context, we refer to Series
[200_-_] as an excluded series. During the prefunded period, we will pay
interest on the Series [200_-_] certificates out of net investment earnings
from funds in the prefunded account [and funds in a yield supplement account].
We will not pay principal on the Series [200_-_] certificates until the paired
series has been paid in full. The effect of this prefunding arrangement is
that we will apply the Series [200_-_] invested amount to the purchase of its
share of receivables during the prefunded period to the extent the paired
series amortizes or accumulates. See "Series Provisions -- Excluded Series;
Prefunded Period" in this prospectus supplement.]
Early Amortization Period
If an early amortization event occurs and is not cured, you will begin
to receive payments of principal. We refer to this period after the occurrence
of an early amortization event as the early amortization period. Early
amortization events are events that might adversely affect the trust's ability
to make payments on the Series [200_-_] certificates as originally expected.
See "Description of the Certificates -- Reinvestment Events and Early
Amortization Events" in the prospectus and "Series Provisions -- Early
Amortization Events" in this prospectus supplement for a description of the
events that might cause an early amortization period to start and, in some
cases, terminate.
Credit Enhancement
Subordination of the Seller's Interest
o The seller's interest in the trust will be subordinated to the
rights of the Series [200_-_] certificateholders to the extent
described in this prospectus supplement. Collections on the
receivables otherwise allocable to the seller may be used to pay
interest on the Series [200_-_] certificates and other amounts, but
only to the extent of the available subordinated amount.
o The "available subordinated amount" will initially be
$[ ____________ ] but is subject to reduction from time to time. See
"Series Provisions -- Allocation of Collections; Limited
Subordination of Seller's Interest" in this prospectus supplement
for more information about the available subordinated amount.
[Reserve Fund
o On the Series [200_-_] issuance date, the seller will deposit
$[ _______ ] into the reserve fund for the Series [200_-_]
certificates. The reserve fund required amount for any distribution
date will equal [ ]% of the outstanding principal balance of the
Series [200_-_] certificates for that distribution date, after
giving effect to any change in the outstanding principal balance on
that distribution date. Amounts on deposit in the reserve fund will
be available to pay monthly interest, the monthly servicing fee and
investor default amounts and, on the final payment date, carry-over
amounts.]
[Other Enhancement]
o The trust will have the benefit of a [letter of credit]
[interest rate swap] [currency swap] [cash collateral account]
[guaranty] [surety bond] [insurance policy] [spread account] [other
enhancement] [issued by [ ______ ]] for the benefit of the Series
[200_-_] certificateholders as described in this prospectus supplement.
[Describe subordination of another series, if applicable.] See "Series
Provisions -- Distributions from the Collection Account; Reserve Fund;
[Yield Supplement Account]; Other Enhancement" in this prospectus
supplement].
[Yield Supplement Account
On the Series [200_-_] issuance date, the seller will deposit $[ _______
] in the yield supplement account for the Series [200_-_] certificates. The
yield supplement account required amount for any distribution date will equal
[ ]% of the outstanding principal balance of the Series [200_-_] certificates
for that distribution date, after giving effect to any change in the
outstanding principal balance on that distribution date.
Amounts on deposit in the yield supplement account will be available to
pay carry-over amounts.]
Excess Principal Collections
Principal collections allocable to other series, to the extent not
needed to make payments in respect of the other series, will be applied to
make principal payments in respect of the Series [200_-_] certificates and of
other series of certificates entitled to principal payments.
[Excess Servicing
All interest collections otherwise allocable to any series with respect
to any distribution date, to the extent the collections are not needed to make
payments to or deposits for the benefit of certificateholders of the series or
to restore the credit enhancement for the series, will be applied to cover
shortfalls with respect to interest payments and other amounts due to or for
the benefit of the holders of the Series 1999-1 certificates, the Series
[200_-_] certificates, the Series [ ] certificates and each Series of
certificates issued after the Series [200_-_] certificates that is designated
by the seller to share the collections.]
Servicing Fee Rate
[ ]% [per month] [per annum] [(on a [ ] day basis)], or less if
the servicer waives any portion of the monthly servicing fee on any date.
Optional Repurchase
The Series [200_-_] certificateholders' interest in the trust is subject
to optional repurchase by the servicer on any distribution date after the
invested amount for the Series [200_- ] certificates is reduced to $[ ] or
less.
Other Series of Certificates
The trust has previously issued and may issue additional series of
certificates. A summary of series currently outstanding is contained in "Annex
I -- Other Series of Investor Certificates" at the end of this prospectus
supplement.
ERISA Considerations
[It is expected that the Series [200_-_] certificates will be eligible
for purchase by employee benefit plans. However, plans contemplating the
purchase of Series [200_-_] certificates should consult their counsel before
making a purchase. See "ERISA Considerations" in the prospectus.] [Other.]
Tax Status
Brown & Wood LLP, federal tax counsel to the trust, is of the opinion
that at the time of initial issuance of the Series [200_-_] certificates for
federal income tax purposes:
o the Series [200_-_] certificates will be characterized as debt
and
o the trust will not be characterized as an association, or a
publicly traded partnership, taxable as a corporation.
By your acceptance of a certificate, you will agree to treat your Series
[200_-_] certificates as indebtedness of the seller for federal, state and
local income and franchise tax purposes and Michigan single business tax
purposes.
Certificate Ratings
The trust will issue the Series [200_-_] certificates only if they are
rated at the time of issuance in the highest long-term rating category by at
least one nationally recognized rating agency.
The rating agencies and their ratings only address the likelihood that
you will ultimately receive all of your required principal and interest
distributions. The rating agencies and their ratings do not address the
likelihood that any carry-over interest amounts will be paid, the likelihood
you will receive interest or principal payments on a scheduled date, or
whether you will receive any principal on the Series [200_-_] certificates
prior to or after the expected distribution date.
Risk Factors
An investment in Series 200_-_ certificates involves material risks. See
"Risk Factors" in this prospectus supplement or the prospectus.
Certificates Not Listed on any Exchange
The Series 200_-_ certificates will not be listed on an exchange or quoted in
an automated quotation system of a registered securities association. See
"Risk Factors--Your Ability to Resell Certificates is Limited" in this
prospectus supplement or the prospectus.
<PAGE>
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Risk Factors
-------------------------------------------------------------------------------
In this section and in the prospectus under the heading "Risk Factors,"
we discuss the principal risk factors of an investment in the certificates.
The Timing of Principal Payments May Not be as Expected. Several factors
will have an effect on the amount and timing of principal payments on the
Series [200_-_] certificates. Some of those factors are described below.
You may not receive your principal on the expected payment date because of the
performance of other series:
o The shorter the accumulation period the greater the chance that
payment in full of the Series [200_-_] certificates by their
expected distribution date will depend on principal collections from
other series.] A series from which principal collections are
expected to be available to make payments on the Series [200_-_]
certificates may enter an early amortization period [or reinvestment
period] after [ ] [the [ ] distribution date] [the start of its
accumulation period]. Principal collections from that series will
not be available to pay principal of the Series [200_-_]
certificates. As a result, you may receive some of your principal
later than the Series [200_-_] expected distribution date. [Payments
of principal during the controlled amortization period may be less
than the amount we expect to pay.] [Also, you will not receive any
principal until the invested amount of the paired series has been
paid in full.] On written request, the seller will give you
disclosure documents relating to the other outstanding series. Those
documents describe the events which could result in the start of an
early amortization period for those series.
If an early amortization event occurs, you may receive your principal sooner
or later than you expected and you may not receive all of your principal:
o If an early amortization event occurs, you may receive your
principal sooner or later than you expected and you may not receive
all of your principal. In particular, a significant decline in the
amount of receivables generated could cause an early amortization of
your certificates. If the balance of the receivables is not
maintained at a specified level, CFC must designate additional
accounts, the receivables of which will be sold to the seller. The
seller will be required to transfer those receivables to the trust.
If additional accounts are not designated by CFC when required, an
early amortization event will occur. In some cases, however, the
resulting early amortization period may end and you will stop
receiving principal payments.
o If a bankruptcy event relating to CFC, the seller or DaimlerChrysler
were to occur, an early amortization event would occur. In that case
additional receivables would not be transferred to the trust and
principal payments on the Series [200_-_] certificates would
commence.
See "The Dealer Floorplan Financing Business" in the prospectus and "Maturity
and Principal Payment Considerations" and "Series Provisions -- Early
Amortization Events" in this prospectus supplement for more information about
the timing of payments on the Series [200_-_] certificates.
You may receive interest at a lower rate than you expected. The
receivables bear interest at the prime rates of banks plus a margin, while the
certificate rate is based on [_____]. Several factors will have an effect on
the interest rates of the Series [200_-_] certificates. Some of those factors
are described below.
You will receive the lower of [ ] and the assets receivables rate:
o The "assets receivables rate" is based on the interest rates on the
receivables and investment earnings on amounts on deposit in trust
bank accounts. If (a) the certificate rate based on [_____] exceeds
(b) the assets receivables rate, the certificate rate will be the
assets receivables rate.
You will receive less interest if the trust is not able to make up a
deficiency in interest payments if the certificate rate is higher than the
assets receivables rate:
o The certificate rate based on [ ] may exceed the assets receivables
rate as a result of (i) [ ] exceeding the interest rate on the
receivables and (ii) [ ] exceeding the investment earnings on
amounts, if any, on trust accounts in which principal collections
are held. In this regard, CFC may reduce the interest rates borne by
the receivables. Any deficiency in interest payments resulting from
the assets receivables rate being lower than the certificate rate
based on [ _____ ] and interest on the deficiency (a "Carry-over
Amount") will be paid with:
o any amounts in the yield supplement account;
o any funds remaining after all required distributions and deposits
for the Series [200_-_] certificates have been made; and
o on the last distribution date for Series [200_-_], amounts in the
[reserve fund and] some of the seller's collections.
We cannot assure you that those amounts, if any, will be sufficient to pay any
of these unpaid interest amounts. If any of these unpaid interest amounts is
outstanding for [six] distribution dates in a row, an [early amortization
event] [reinvestment event] will occur.]
Credit Enhancement is Limited and May be Reduced. As the Credit
Enhancement Is Reduced, You Are More Likely to Incur Losses and to Receive
Your Principal Earlier or Later Than You Expected. Credit enhancement of the
Series [200_-_] certificates will be provided by the subordination of the
seller's interest to the extent of the available subordinated amount as
described in this prospectus supplement [and by amounts in the reserve fund].
[Describe other subordination of the seller's interest, if applicable.]
[Describe any other applicable credit enhancements.] The amount of such credit
enhancement is limited and will be reduced from time to time. See "Series
Provisions -- Allocation of Collections; Limited Subordination of Seller's
Interest" for more information about credit enhancement for the Series
[200_-_] certificates.
The Trust is Dependent on CFC and DaimlerChrysler. The trust is
completely dependent upon CFC for the generation of new receivables. The
ability of CFC to generate receivables is in turn dependent to a large extent
on the sales of automobiles and light duty trucks manufactured or distributed
by DaimlerChrysler. Several factors will have an effect on that dependence. If
CFC does not generate sufficient receivables, an early amortization event may
occur.
Your Ability to Resell Certificates is Limited. There may be no
secondary market for your certificates. The underwriters may participate in
making a secondary market in the certificates, but are under no obligation to
do so. We cannot assure you that a secondary market will develop. If a
secondary market does develop, we cannot assure you that it will continue or
that you will be able to resell your certificates. Also, your certificates
will not be listed on any securities exchange or quoted in the automated
quotation system of any registered securities association. As a result, you
will not have the liquidity that might be provided by that kind of listing or
quotation.
You can find a "Glossary of Principal Terms for the Prospectus
Supplement" beginning on page S-[__] in this prospectus supplement.
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Use of Proceeds
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From the net proceeds of the Series [200_-_] certificates, we will make
the deposits to the [Reserve Fund] [the Yield Supplement Account] [the Excess
Funding Account] described in this prospectus supplement, and we will pay the
remaining $________ of the net proceeds to DCWR. DCWR will use the proceeds to
purchase receivables from CFC or to repay amounts previously borrowed to
purchase receivables. CFC will use the portion of the proceeds paid to it for
general corporate purposes.
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The Dealer Floorplan Financing Business
-------------------------------------------------------------------------------
You can read about the dealer floorplan financing business under "The
Dealer Floorplan Financing Business" in the prospectus. The receivables sold
to the trust were or will be selected from extensions of credit and advances
made by DaimlerChrysler and CFC to approximately [ ] domestic motor vehicle
dealers.
o CFC financed [ ]% of the total number of all
DaimlerChrysler-franchised dealers as of [ _________ ], 200[ ].
o CFC has extended credit lines to [ ] DaimlerChrysler-franchised
dealers that also operate non-DaimlerChrysler franchises
(representing approximately [ ]% of the aggregate credit lines of
dealers in the U.S. Wholesale Portfolio as of [ _________ ], 200[ ])
and [ ] non-DaimlerChrysler dealers (representing approximately [ ]%
of those aggregate credit lines).
o As of [ _________ ], 200[ ], the balance of principal receivables in
the U.S. Wholesale Portfolio was approximately $[ ] billion.
o CFC currently services the U.S. Wholesale Portfolio through its home
office and through a network of [ ] zone offices located throughout
the United States.
o As of [ _________ ], 200[ ], the average credit lines per dealer in
the U.S. Wholesale Portfolio for new and used vehicles (which
includes Auction Vehicles) were $[ ] million and $[ ] million,
respectively, and the average balance of principal receivables per
dealer was $[ ] million.
o As of [ ], 200[ ], the aggregate total receivables balance as a
percentage of the aggregate total credit lines was approximately [
]%.
The following table sets forth the percentages of dealer account balances
by year of credit line origination for the U.S. Wholesale Portfolio.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Portfolio Percentages by Year
of Credit Line Origination
As of [ ], 200[ ]
---------------------------------------------------------------------------------------------------------
Prior to
200[ ] 1999 1998 1997 1996 1995 1994 1994
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
[ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
---------------------------------------------------------------------------------------------------------
</TABLE>
As of [ ], 200[ ], the weighted average spread over the prime rate
charged to dealers in the U.S. Wholesale Portfolio was approximately [ ]%.
Used vehicles (which excludes Auction Vehicles) represented
approximately [ ]% of the aggregate principal amount of receivables in the
U.S. Wholesale Portfolio as of [ ], 200[ ]. As of [ ],
200[ ], used vehicles represented approximately [ ]% of the aggregate
principal amount of receivables in the trust (including Excluded Receivables).
The following table provides the percentage of dealers in the U.S.
Wholesale Portfolio that were subject to finance hold as of the dates
indicated. Finance Hold Experience As of December 31,
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Finance Hold Experience
As of [ ] As of December 31,
----------------- -------------------------------------------------------------------------------
200[ ] 1999 1998 1997 1996 1995 1994 1993 1992 1991
----------------- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of [ ]% 0.04% 0.9% 2.1% 1.1% 1.8% 1.6% 3.2% 6.8% 9.4%
Dealers
---------------------------------------------------------------------------------------------------------------------
</TABLE>
The following table provides the number and percentage of dealers in
Dealer Trouble Status in the U.S. Wholesale Portfolio as of the dates
indicated.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Dealer Trouble Experience
As of
[ ] As of December 31,
----------------- -------------------------------------------------------------------------------
200[ ] 1999 1998 1997 1996 1995 1994 1993 1992 1991
----------------- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Dealers [ ] 27 21 24 20 6 12 21 56 100
------------------------------------- -------------------------------------------------------------------------------
Percentage of [ ]% 0.9% 0.7% 0.7% 0.6% 0.2% 0.3% 0.6% 1.8% 3.1%
Dealers
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
The Accounts
-------------------------------------------------------------------------------
As of [ _________ ], 200[ ], with respect to the Accounts in the trust:
o there were approximately [ ] Accounts and the principal
receivables balance was approximately $[ ] billion;
o the average credit lines per dealer for new and used
vehicles (which include Auction Vehicles) were approximately $[
]million and $[ ] million, respectively, and the average balance of
principal receivables per dealer was approximately $[ ] million; and
o the aggregate total receivables balance as a percentage of
the aggregate total credit line was approximately [ ]%.
Unless otherwise indicated, the statistics included in this paragraph, in the
table below and under "The Accounts -- General" and " -- Geographic
Distribution" with respect to the Accounts and the receivables in the trust
give effect to approximately $[ ____ ] million of principal receivables
balances with respect to dealers (the "Excluded Receivables" and the "Excluded
Dealers", respectively), that are in voluntary or involuntary bankruptcy
proceedings or voluntary or involuntary liquidation or that, subject to
limitations, are being voluntarily removed by the seller from the trust. A
portion of those principal receivables was created after those dealers entered
into that status or were designated by the seller for removal from the trust
and, as a result, are owned by CFC. Principal receivables balances created
prior to those dealers entering into that status or being designated for
removal from the trust are included in the principal receivables balance. See
"Description of the Certificates -- Removal of Accounts" in the prospectus for
a description of the manner in which an Account can be removed from the trust.
The following table sets forth the percentages of dealer account
balances by year of credit line origination for the accounts in the trust.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Portfolio Percentages by Year
of Credit Line Origination
As of [ , 200[ ]
-------------------------------------------------------------------------------------------------
2000 Prior to
[ ] 1999 1998 1997 1996 1995 1994 1994
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
[ % [ ]% [ ]% [ ]% [ ]%
]
% [ ]% [ ]% [ ]%
-------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
</TABLE>
As of [ _________ ], 200[ ], the weighted average spread over the Prime
Rate charged to Dealers was approximately [ ]%.
-------------------------------------------------------------------------------
CFC's Performance History
-------------------------------------------------------------------------------
Loss Experience
The following tables set forth the average principal receivables balance
and loss experience for each of the periods shown on the U.S. Wholesale
Portfolio. Because the Eligible Accounts will be only a portion of the entire
U.S. Wholesale Portfolio, actual loss experience with respect to the Eligible
Accounts may be different. We cannot assure you that the loss experience for
the receivables in the future will be similar to the historical experience set
forth below with respect to the U.S. Wholesale Portfolio. Also, the historical
experience set forth below reflects financial assistance provided by Chrysler
or DaimlerChrysler to DaimlerChrysler-franchised dealers as described under
"The Dealer Floorplan Financing Business -- Relationship with DaimlerChrysler"
in the prospectus. If DaimlerChrysler is not able to or elects not to provide
that assistance, the loss experience in respect of the U.S. Wholesale
Portfolio may be adversely affected. See "Risk Factors -- Trust's Relationship
to DaimlerChrysler and CFC" in the prospectus and "Risk Factors -- The Trust
is Dependent on DaimlerChrysler and CFC" in this prospectus supplement.
<PAGE>
<TABLE>
<CAPTION>
Loss Experience for the U.S. Wholesale Portfolio
($ Millions)
[ ] months Ended
[ ], Year Ended December 31,
------------------ ---------------------------------------------------------------
200[ ] 1999 1999 1998 1997 1996 1995 1994 1993
------------------ ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Average Principal
Receivables Balance(1) $[ ] $[ ] $10,430 $9,236 $8,877 $8,825 $8,256 $6,754 $6,271
---------------------------------------------------------------------------------------------------------------------
Net Losses/(Net Recoveries)(2) $[ ] $[ ] $ (0) $ 11 $ 4 $ (0) $ (1) $ (1) $ 12
---------------------------------------------------------------------------------------------------------------------
Net Losses/(Net Recoveries) as
a Percent of Liquidations [ ]% [ ]% (0.001)% 0.020% 0.007% (0.000)% (0.002)% (0.003)% 0.035%
---------------------------------------------------------------------------------------------------------------------
Net Losses/(Net Recoveries) as
a Percent of Average Principal
Receivables Balance(3) [ ]% [ ]% (0.00)% 0.12% 0.04% (0.00)% (0.01)% (0.01)% 0.19%
---------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987
----------------------------------------------------------------------------------
Average Principal
Receivables Balance(1) $5,344 $4,826 $4,726 $4,933 $4,129 $3,787
---------------------------------------------------------------------------------------------------------------------
Net Losses/(Net Recoveries)(2) $ 26 $ 36 $ 23 $ 13 $ 3 $ 2
---------------------------------------------------------------------------------------------------------------------
Net Losses/(Net Recoveries) as
a Percent of Liquidations 0.098% 0.163% 0.117% 0.060% 0.015% 0.015%
---------------------------------------------------------------------------------------------------------------------
Net Losses/(Net Recoveries) as
a Percent of Average Principal
Receivables Balance(3) 0.49% 0.75% 0.49% 0.26% 0.07% 0.06%
---------------------------------------------------------------------------------------------------------------------
(1) Average Principal Receivables Balance is the average of the month-end
principal balances for the [ ______ ] months ending on the last day of
the period, except for the [ ] months ended [ _________ ], 200[ ] and [
], [ _____ ], which are based on a [ ]-month average.
(2) Net losses in any period are gross losses less recoveries for such
period.
(3) Percentages for the [ ] months ended [ ], 200[ ] and [ ] are expressed on
an annualized basis.
-------------------------------------------------------------------------------
</TABLE>
Aging Experience
The following table provides the age distribution of vehicle inventory
for all dealers in the U.S. Wholesale Portfolio, as a percentage of total
principal outstanding at the date indicated. Because the Eligible Accounts
will only be a portion of the entire U.S. Wholesale Portfolio, actual age
distribution with respect to the Eligible Accounts may be different.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Age Distribution for the U.S. Wholesale Portfolio
<S> <C> <C> <C> <C> <C> <C> <C>
As of [ ] As of December 31,
200[ ] 1999 1998 1997 1996 1995 1994 1993
Days
1-120...... [ ]% 81.7% 81.7% 80.1% 80.4% 82.2% 82.5% 82.4%
121-180.... [ ] 12.1 11.0 10.8 10.0 9.3 10.1 9.6
181-270.... [ ] 3.6 4.1 4.2 5.0 3.8 4.0 4.6
Over 270... [ ] 2.6 3.2 4.9 4.6 4.7 3.4 3.4
---------------------------------------------------------------------------------------------
</TABLE>
Geographic Distribution
The following table provides the geographic distribution of the vehicle
inventory for all dealers in the trust on the basis of receivables outstanding
and the number of dealers generating the portfolio. The percentages may not
add to 100.00% because of rounding.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
Geographic Distribution of Accounts in the trust
As of [ ], 200[ ]
Percentage of Percentage of
Receivables Receivables Total Number of Number of
Outstanding(2) Outstanding(2) Dealers(3) Dealers(3)
<S> <C> <C> <C> <C>
[Texas].............. $ % %
[California].........
[New York]...........
[Florida]............
[Illinois]...........
[New Jersey].........
[Michigan]...........
[ ]............. % %
Other(1).............
Total................ $ % %
(1) No other state includes more than 5% of the outstanding receivables.
(2) Includes Excluded Receivables.
(3) Includes Excluded Dealers.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Maturity and Principal Payment Considerations
--------------------------------------------------------------------------------
You will begin receiving principal on your certificates if an Early
Amortization Period that is not terminated has commenced. Full amortization of
the Series [200_-_] certificates by the [ ________________ ] distribution date
(the "Series [200_-_] Expected Payment Date") depends on, among other things,
repayment by dealers of the receivables and may not occur if dealer payments
are insufficient. Because the receivables are paid upon retail sale of the
underlying vehicle, the timing of the payments is uncertain. Also, there is no
assurance that CFC will generate additional receivables under the Accounts or
that any particular pattern of dealer payments will occur. [Also, the shorter
the Accumulation Period Length the greater the likelihood that payment of the
Series [200_-_] certificates in full by the Series [200_-_] Expected Payment
Date will be dependent on the reallocation of principal collections which are
initially allocated to other outstanding series.] If one or more other series
from which principal collections are expected to be available to be
reallocated to the payment of the Series [200_-_] certificates enters into an
early amortization period [or reinvestment period] after [ ] [the [ ]
distribution date] [the start of the Accumulation Period], principal
collections allocated to those series will not be available to be reallocated
to make payments of principal of the Series [200_-_] certificates and [you may
receive your final payment of principal later than the Series [200_-_]
Expected Payment Date] [the amount of principal distributed on the Series
[200_-_] certificates on any distribution date during the Controlled
Amortization Period may be less than the Controlled Amortization Amount.]
[Also, you will not receive any payments of principal until the invested
amount of the Paired Series has been reduced to zero.]
Because an Early Amortization Event with respect to the Series [200_-_]
certificates may occur and would initiate an Early Amortization Period, you
may receive the final distribution of principal on your Series [200_-_]
certificates prior to the scheduled termination of the Revolving Period or
prior to the Series [200_-_] Expected Payment Date. [Several of the events
which constitute Reinvestment Events with respect to the Series [200_-_]
certificates may constitute early amortization events with respect to other
Series. Should an event of that type occur, holders of certificates of those
other series would receive monthly distribution of principal, which
distributions would not be limited to any controlled amortization amount. At
the same time, Series [200_-_] Certificateholder Principal Collections would
be retained in the Principal Funding Account and would not be distributed to
Series [200_-_] certificateholders until the Series [200_-_] Expected Payment
Date or, if earlier, the first distribution date following the occurrence of
an Early Amortization Event.
The amount of new receivables generated in any month and monthly payment
rates on the receivables may vary because of seasonal variations in vehicle
sales and inventory levels, retail incentive programs provided by vehicle
manufacturers and various economic factors affecting vehicle sales generally.
The following table sets forth the highest and lowest monthly payment rates
for the U.S. Wholesale Portfolio during any month in the periods shown and the
average of the monthly payment rates for all months during the periods shown.
The monthly payment rate is the percentage equivalent of a fraction, the
numerator of which is the aggregate of all collections of principal during the
period and the denominator of which is the average aggregate principal balance
for the period. We cannot assure you that the rate of principal collections
will be similar to the historical experience set forth below. As the Eligible
Accounts will be only a portion of the entire U.S. Wholesale Portfolio,
historical monthly payment rates with respect to the Eligible Accounts may be
different than those shown below.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Rates for the U.S. Wholesale Portfolio
[ ] Months Ended
[ ] Year Ended December 31,
---------------------- -------------------------------------------------------------------------------
200[ ] [ ] 1999 1998 1997 1996 1995 1994 1993 1992 1991
---------------------- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month [ ]% [ ]% 60.5% 60.8% 57.7% 58.3% 59.1% 59.7% 54.7% 50.6% 49.0%
------------------------------------------------------------------------------------------------------------------------------
Lowest Month [ ] [ ] 44.7 42.5 41.1 43.2 36.5 34.2 35.9 34.4 30.2
------------------------------------------------------------------------------------------------------------------------------
Average of the Months
in the Period [ ] [ ] 52.0 50.0 48.2 49.0 45.6 50.3 46.6 41.3 38.2
------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-------------------------------------------------------------------------------
Series Provisions
-------------------------------------------------------------------------------
General
The trust will issue the Series [200_-_] certificates under the Pooling
and Servicing Agreement and a Series Supplement relating to the Series
[200_-_] certificates (the "Series Supplement"). Beneficial interests in
Series [200_-_] certificates will be offered in minimum denominations of
$1,000 and integral multiples of that amount. The trustee will make available
for inspection a copy of the Pooling and Servicing Agreement, without exhibits
or schedules, on request. You should refer to the prospectus for additional
information concerning the Series [200_-_] certificates and the Pooling and
Servicing Agreement.
In general terms, we allocate collections on the receivables first among
each series. We then allocate the series collections between the investors in
that series and the seller. We apply the investor's share of interest
collections to pay the investors' share of the servicing fee and interest on
the Series [200_-_] certificates and to cover the investors' share of losses
on the principal receivables. If the investors' share of interest collections
is not sufficient to cover those amounts, we will use the seller's share of
collections, but only up to the available subordinated amount, to cover the
shortfall. When it is time to distribute principal to investors or accumulate
principal collections for that purpose, we will use the investors' share of
principal collections. Under some circumstances, we may use collections
allocated to another series, but which are not then needed by that series. For
the most part, the trustee applies the collections pursuant to directions from
the servicer.
The preceding paragraph is a very simplified description of the primary
allocation and use of collections on the receivables. The following
description contains a precise description of the calculations of allocations
and the manner, timing and priorities of the application of the collections.
Many of the calculations are complex and are described in the definition of
the terms used. The complex defined terms are needed in order to tell you the
precise amount that will be available to make a specified payment. The
Glossary of Principal Terms for the Prospectus Supplement at the end of this
prospectus supplement contains many of these definitions. However, for
convenience we often include the definition where its subject is being
discussed.
Interest
Interest on the principal balance of the Series [200_-_] certificates
will accrue at the Certificate Rate and will be payable to the Series [200_-_]
certificateholders on each distribution date, commencing [ ], 200[ ].
Interest payable on any distribution date will accrue from and including the
preceding distribution date to but excluding that distribution date, or, in
the case of the first distribution date, from and including the Series [200_-_
]Issuance Date to but excluding the first distribution date. Each of those
periods is an "Interest Period." Interest will be calculated on a basis of
[the actual number of days in each Interest Period divided by [360] [other]]
[a 360-day year of twelve 30-day months]. Interest due for any distribution
date but not paid on that distribution date will be due on the next
distribution date, together with interest on the amount at the Certificate
Rate [calculated on the basis of [ ]], to the extent permitted by applicable
law. We will make interest payments on the Series [200_-_] certificates
generally out of Series [200_-_] Certificateholder Interest Collections, [any
withdrawals from the Reserve Fund, [Excess Interest Collections, if any,
allocated to Series [200_-_], ] and Investment Proceeds and, under some
circumstances, Available Seller's Collections to the extent of the Available
Subordinated Amount [and any withdrawals from the Yield Supplement Account]
[describe other sources.]
The Certificate Rate for each Interest Period will be determined on the
[LIBOR Determination Date ] [Adjustment Date] preceding that Interest Period.
The "Certificate Rate" will be [ %] [equal to [the lesser of (a)] the index]
[LIBOR] [plus] [minimum] [times] [ ]% [and (b) [except with respect to [the
Prefunded Period [other]] the [Assets Receivables Rate for the related
distribution date].
"Monthly Interest" for any distribution date means the amount of
interest accrued in respect of the Series [200_-_] certificates in the
Interest Period for that distribution date.
["LIBOR" with respect to any Interest Period will be established by the
Calculation Agent and will equal 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 second LIBOR Business Day prior to that Interest Period (a
"LIBOR Determination Date"). "Telerate Page 3750" means the display page so
designated on the Dow Jones Telerate Service, or any other page as may replace
that page on that service, or any other service as may be nominated as the
information vendor, for the purpose of displaying London interbank offered
rates of major banks). If that rate appears on Telerate Page 3750, LIBOR will
be that rate. "LIBOR Business Day" as used in this prospectus supplement means
a 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. 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 that date. If at least two reference banks provide the
Calculation Agent with the offered quotations, LIBOR on that 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 the quotations. If on that date fewer than two of the reference banks
provide the Calculation Agent with the offered quotations, LIBOR on that 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 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 that date to leading European banks for
United States dollar deposits for one month. If, however, those banks are not
quoting as described above, LIBOR for that date will be LIBOR applicable to
the Interest Period immediately preceding that Interest Period. The
"Calculation Agent" will be the trustee.
[Describe Index and define Adjustment Date.]
[If the Certificate Rate for a distribution date [other than a
distribution date [with respect to the Prefunded Period] [other]] calculated
on the basis of [the Index] [LIBOR] as described above is greater than the
Assets Receivable Rate, then the Certificate Rate for that distribution date
will be the Assets Receivables Rate.]
[The "Assets Receivables Rate" for any Interest Period shall equal the
product of
(i) the quotient obtained by dividing
(a) 360 by
(b) the actual number of days elapsed in that period and
(ii) a percentage, expressed as a fraction,
o the numerator of which is the sum of
(a) Certificateholder Interest Collections for the Collection
Period immediately preceding the last day of that period,
which for this purpose only is based on interest amounts
billed to the dealers which are due during that Collection
Period, less the Monthly Servicing Fee with respect to
that immediately preceding Collection Period,
(b) the Investment Proceeds to be applied on the distribution
date related to that period and
(c) Excess Interest Collections allocated to Series [2000_-_]
with respect to that period] and
o the denominator of which is the sum of
(a) the product of
(x) the Floating Allocation Percentage,
(y) the Series Allocation Percentage and
(z) the average Pool Balance, after giving effect to any
charge-offs, for that immediately preceding
Collection Period,
(b) the principal balance on deposit in the Excess Funding
Account on the first day of that period, after giving
effect to all deposits to and withdrawals therefrom on
that first day, and
(c) the principal balance on deposit in the Principal Funding
Account on the first day of that period, after giving
effect to all deposits to and withdrawals therefrom on
that first day, [other].
If the Certificate Rate for any distribution date is based on the Assets
Receivables Rate, the Series [200_-_] will be entitled to receive the
Carry-over Amount to the extent of available funds. The "Carry-over Amount"
for a distribution date will be the sum of
(i) the excess of
o the amount of interest on the Series [200_-_] certificates that
would have accrued in respect of the related Interest Period
had interest been calculated based on [LIBOR][the Index], over
o the amount of interest on the Series [200_-_] certificates
actually accrued in respect of that Interest Period based on
the Assets Receivables Rate plus
(ii) the unpaid portion of any excess from prior distribution dates, and
interest accrued on that amount calculated on the basis of
[LIBOR][the Index].
A Carry-over Amount will only be payable from amounts on deposit in the Yield
Supplement Account and, if those amounts are depleted, to the extent funds are
allocated and available for that purpose after making all required
distributions and deposits with respect to the Series [200_-_] certificates,
including payments with respect to principal [(including payments to the
Excess Funding Account)], Monthly Interest, the Monthly Servicing Fee[, the
Reserve Fund Deposit Amount] and the Investor Default Amount as described
below under "Distributions from the Collection Account; [Reserve Fund;] Yield
Supplement Account [Other Enhancement]". Also, any Carry-over Amount
outstanding on the final distribution date, after making the distributions
described in the preceding sentence, will be paid on the final distribution
date from
o amounts on deposit in the Reserve Fund that would otherwise be
payable to the seller, and
o Available Seller's Collections on deposit in the Collection
Account that would otherwise be payable to the seller, as described
under "Distributions from the Collection Account; [Reserve Fund];
Yield Supplement Account][Other Enhancement]".
The rating of the Series [200_-_] certificates does not address the likelihood
of payment of any Carry-over Amount.]
Principal
We will not make principal payments to the Series [200_-_]
certificateholders until the Series [200_-_] [Expected Payment Date]
[Principal Commencement Date] or, upon the commencement of an Early
Amortization Period that is not terminated as described in this prospectus
supplement, until the first Special Payment Date. [However, even if an Early
Amortization Event occurs, we will not make principal payments will be made to
the Series [200_-_] certificateholders during the Prefunded Period.] On each
distribution date with respect to the Revolving Period, collections of
principal receivables allocable to the interest of the Series [200_-_]
certificateholders in the Trust Assets (the "Series [200_-_]
Certificateholders' Interest") that are not required to be deposited to the
Excess Funding Account, subject to limitations, will either be
o allocated to one or more series which are in amortization, early
amortization or accumulation periods to cover principal payments due
to the certificateholders of any of those series or which provides
for excess funding accounts or similar arrangements or
o if no series is then amortizing or accumulating principal or
otherwise does not provide for excess funding accounts or similar
arrangements, paid to the seller to maintain the Series [200_-_]
Certificateholders' Interest or held as Unallocated Principal
Collections.
See "Allocation Percentages -- Principal Collections for all Series" and
"Distributions from the Collection Account[; Reserve Fund][; Yield Supplement
Account][; Other Enhancement] -- Principal Collections".
The "Revolving Period" will be the period beginning at the close of
business on the Series Cut-Off Date and terminating on the earlier of
o the close of business on the day immediately preceding the
Accumulation Period Commencement Date and
o the close of business on the day an Early Amortization Period
commences.
The Revolving Period, however, may recommence upon the termination of an Early
Amortization Period. See "Early Amortization Events". During the Revolving
Period, we will not use the Series [200_-_] certificateholders' share of
principal collection to make principal payments on the Series [200_-_]
certificates. Instead, we will use them to make principal distributions on
other series or we will pay them to the seller.
[Unless an Early Amortization Period [or Reinvestment Period] that is
not terminated as described in this prospectus supplement shall have
commenced, the Series [200_-_] certificates will have an Accumulation Period
of one, two, three, four or five month(s) long as described in the following
paragraph.
On the [ ] distribution date and each subsequent distribution
date after that date that occurs prior to the Accumulation Period Commencement
Date, the servicer shall calculate the Accumulation Period Length. The
"Accumulation Period Length" will be calculated on each of those dates as the
lesser of
(i) the number of full Collection Periods between that distribution date
and the Series [200_-_] Expected Payment Date and
(ii) the product, rounded upwards to the nearest integer not greater than
five, of
(a) one divided by the lowest Monthly Payment Rate on the
receivables during the last [ ] months and
(b) a fraction,
o the numerator of which is the sum of
(x) the Invested Amount as of that distribution date,
after giving effect to all changes in the Invested
Amount on that date, and
(y) the invested amounts of all other series [,excluding
some series,] currently in their amortization or
accumulation periods or expected to be in their
amortization or accumulation periods by the Series
[200_-_] Expected Payment Date and
o the denominator of which is the sum of the Invested
Amount and the invested amounts as of that distribution
date, after giving effect to all changes in those amounts
on that date, of all other outstanding series [,excluding
some series,] which are expected to be outstanding on the
Series [200_-_] Expected Payment Date.
The "Accumulation Period Commencement Date" will be determined as
follows:
the Accumulation Period
Commencement Date
if the Accumulation will be the first day in the following
Period Length is Collection Period:
--------------------------------- ---------------------------------------
five Collection Periods [ ] Collection Period
Four Collection Periods [ ] Collection Period
Three Collection Periods [ ] Collection Period
Two Collection Periods [ ] Collection Period
one Collection Period [ ] Collection Period
However, if at any time after the [ ] distribution date, any
other outstanding series [,excluding some series,] shall have entered into an
early amortization period, the Accumulation Period Commencement Date shall be
the earlier of
o the date that that outstanding series shall have entered into its
early amortization period and
o the Accumulation Period Commencement Date as previously determined..
See "Annex I-- Other Series of Investor Certificates"
The calculation of the Accumulation Period Length will allow us to
reduce the length of the Accumulation Period based on the invested amounts of
other series which are scheduled to be in their revolving periods during the
Accumulation Period and on increases in the principal payment rate.
Unless and until an Early Amortization Period [or Reinvestment Period]
that is not terminated as described in this prospectus supplement shall have
occurred and until the outstanding principal balance of the Series [200_-_]
certificates is paid in full, on each distribution date with respect to the
[Accumulation Period][Controlled Amortization Period], collections of
principal receivables allocable to the Series [200_-_] Certificateholders'
Interest plus other amounts comprising Monthly Principal will no longer be
paid for the benefit of another series or to the seller. Instead, those
collections up to the [Controlled Deposit Amount][Controlled Distribution
Amount] for each of those distribution dates will be [deposited in the
Principal Funding Account][distributed to the Series [200_-_]
certificateholders]. [We will use the funds deposited in the Principal Funding
Account and any amounts in the Excess Funding Account to pay the outstanding
principal balance of the Series [200_-_] certificates on the Series [200_-_]
Expected Payment Date. If on that date the total amount in the Principal
Funding Account and the Excess Funding Account is less than the outstanding
principal balance of the Series [200_-_] certificates, the Early Amortization
Period will commence. On each subsequent distribution date the Series [200_-_]
certificateholders will receive distributions of Monthly Principal and Monthly
Interest until the outstanding principal balance of the Series [200_-_]
certificates has been paid in full or the Termination Date has occurred. Even
if the total amount in the Principal Funding Account Balance and the Excess
Funding Account on the Series [200_-_] Expected Payment Date is insufficient
to pay the outstanding principal balance of the Series [200_-_] certificates
in full, we will distribute that amount to the Series [200_-_]
certificateholders at that time.] [However, we will not make any payments of
principal on the Series [200_-_] certificates during the Prefunded Period.]
Excess Funding Account
Unless and until an Early Amortization Event [or Reinvestment Event]
shall have occurred, we will keep the Excess Funded Amount in the Excess
Funding Account established with the trustee. The Excess Funded Amount will
initially equal the excess, if any, of the initial principal balance of the
Series [200_-_] certificates, over the Initial Invested Amount. The trustee
will invest funds on deposit in the Excess Funding Account at the direction of
the servicer in Eligible Investments. Those investments must mature on or
prior to the next distribution date.
We will pay funds on deposit in the Excess Funding Account to the seller
or allocate them to one or more series which are in amortization, early
amortization or accumulation periods, but only to the extent of any increases
in the Invested Amount as a result of the addition of receivables to the
trust, a reduction in the Seller's Interest, or a reduction in the invested
amount of any other series. We will deposit additional amounts in the Excess
Funding Account on a distribution date to the extent that
(i) the sum of
o the Series [200_-_] Certificateholders' Interest in Principal
Receivables, determined for this purpose by reducing the
interest by the amount, if any, by which the Required
Participation Amount exceeds the Pool Balance due to an
increase in the Subordination Factor, and
o the amount on deposit in the Excess Funding Account prior to
the deposit on that distribution date is less than
(ii) the outstanding principal balance of the Series [200_-_]
certificates, but only to the extent that funds are available as
described in this prospectus supplement.
If other series provide for excess funding accounts or other arrangements
similar to the Excess Funding Account involving fluctuating levels of
investment in the receivables, the allocation of additional receivables to
increase the Invested Amount will be based on the proportion that the amount
on deposit in the Excess Funding Account bears to the amounts on deposit in
the excess funding accounts of all series providing for excess funding
accounts or similar arrangements or to amounts otherwise similarly available.
The deposit of amounts in the Excess Funding Account will be based on the
proportion that the Adjusted Invested Amount bears to the adjusted invested
amounts of all series providing for excess funding accounts or similar
arrangements.
On each distribution date, we will apply all investment income received
on amounts in the Excess Funding Account during the related Collection Period
as described in this prospectus supplement.
On the ________ distribution date we will transfer any funds on deposit
in the Excess Funding Account to the Principal Funding Account. No funds will
be deposited in the Excess Funding Account during any Early Amortization
Period. Also, we will not deposit any amounts into the Excess Funding Account
with respect to any Collection Period following the _____________ Collection
Period.]
Allocation Percentages
Allocation between the Series [200_-_] Certificateholders and the
Seller. We will allocate funds to the Series [200_-_] certificateholders on
the basis of various percentages. Which percentage we use depends on whether
the collections being allocated are interest collections, principal
collections or other amounts and whether or not the collections are received
in the Revolving Period.
The servicer will allocate amounts initially allocated to Series
[200_-_] as described under "Description of the certificates -- Allocation
Percentages -- Allocations among Series" in the prospectus between the Series
[200_-_] Certificateholders' Interest and the Seller's Interest for each
Collection Period as follows:
o Series Allocable Interest Collections and the Series Allocable
Defaulted Amount will be allocated to Series [200_-_]
certificateholders based on the Floating Allocation Percentage[.
During any Early Amortization Period, however, Series Allocable
Interest Collections will be allocated to the Series [200_-_]
certificateholders based on the Principal Allocation Percentage];
o during any period that is not the Accumulation Period or an Early
Amortization Period (a "Nonprincipal Period"), Series Allocable
Principal Collections will be allocated to Series [200_-_]
certificateholders based on the Floating Allocation Percentage;
o during the [Accumulation Period][Controlled Amortization Period]
and any Early Amortization Period [or Reinvestment Period], Series
Allocable Principal Collections will be allocated to Series [200_-_]
certificateholders based on the [Principal Allocation
Percentage][other]; and
o Series Allocable Miscellaneous Payments will at all times be
allocated to Series [200_-_] certificateholders.
We will allocate to the seller all amounts that are not allocated to the
Series [200_-_] certificateholders as described above.
The Floating Allocation Percentage effects, in general, a pro rata
allocation based on the Invested Amount, The "Floating Allocation Percentage"
for any Collection Period will be [the percentage equivalent, which shall
never exceed 100%, of a fraction, the numerator of which is the Invested
Amount as of the last day of the immediately preceding Collection Period and
the denominator of which is the product of
o the Pool Balance as of that last day and
o the Series Allocation Percentage for the Collection Period in
respect of which the Floating Allocation Percentage is being
calculated.
With respect to the first Collection Period, however, the Floating Allocation
Percentage shall mean the percentage equivalent of a fraction, the numerator
of which is the Initial Invested Amount as of the Series Issuance Date and the
denominator of which is the Series Allocation Percentage of the Pool Balance
as of the Series Cut-Off Date][other].
The Principal Allocation Percentage is, in general, based on the
Invested Amount at the end of the Revolving Period. Consequently, even though
we are distributing or accumulating principal collections for Series [200_-_]
certificateholders, the numerator used for the calculation will not decline.
The "Principal Allocation Percentage" for any Collection Period will be [the
percentage equivalent, which shall never exceed 100%, of a fraction, the
numerator of which is the Invested Amount as of the last day of the Revolving
Period, if that last day has occurred or, if that 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
o the Pool Balance as of that last day and
o the Series Allocation Percentage for the Collection Period in
respect of which the Principal Allocation Percentage is being
calculated][other].
The Invested Amount represents the amount of outstanding principal
receivables allocable to the Series 200_-_ certificateholders. The Invested
Amount may increase or decrease depending on principal collection deposited
into or released from the Excess Funding Account, principal distributed to or
accumulated for Series [200_-_] certificateholders and losses on the
receivables and the reimbursement of those losses. The "Invested Amount" for
any date will be [an amount equal to the Initial Invested Amount
o minus the amount, without duplication, of principal payments,
except for principal payments made from the Excess Funding Account,
made to Series [200_-_] certificateholders or deposited to the
Principal Funding Account in respect of the Series [200_-_]
certificates prior to that date since the Series Issuance Date
o minus the excess, if any, of
(i) the aggregate amount of Investor Charge-Offs for all
distribution dates preceding that date, over
(ii) the aggregate amount of any reimbursements of Investor
Charge-Offs for all distribution dates preceding that
date][other].
The "Initial Invested Amount" means [[the portion of the initial principal
amount of the Series [200_-_] certificates which is invested in principal
receivables on the Series Issuance Date, which is expected to equal $[ ],
based on information as of the Series Cut-off Date,] during the Prefunded
Period, zero and after that time [ ]],
o plus 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,
o minus 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.
The Floating Allocation Percentage and the Principal Allocation
Percentage will be adjusted for any Collection Period in which Additional
Accounts are designated to reflect the additional receivables added to the
trust.
Principal Collections for All Series
We will allocate principal collections allocated to the Series [200_-_]
Certificateholders' Interest for any Collection Period first [to make required
deposits to the Excess Funding Account during the Revolving Period], [to make
required payments of principal [to the Principal Funding Account during the
[Accumulation Period] [or Reinvestment Period] and] to the Series [200_-_]
certificateholders during [the Controlled Amortization Period and] any Early
Amortization Period] [describe other applications, if applicable]. See
"Distributions from the Collection Account; [Reserve Fund;] Yield Supplement
Account; Other Enhancement -- Principal Collections". The servicer will
determine the amount of Available Series [200_-_] Certificateholder Principal
Collections for any Collection Period remaining after required payments, if
any, and the amount of any similar excess for any other series ("Excess
Principal Collections"). The servicer will allocate Excess Principal
Collections to cover any principal distributions to certificateholders for any
series entitled to them which are either scheduled or permitted and which have
not been covered out of principal collections and other amounts allocated to
those series ("Principal Shortfalls"). See "Maturity and Principal Payment
Considerations". We will generally not use Excess Principal Collections to
cover investor charge-offs for any series. If Principal Shortfalls exceed
Excess Principal Collections for any Collection Period, we will allocate
Excess Principal Collections [pro rata among the applicable series based on
the relative amounts of Principal Shortfalls] [describe other method of
applying, if applicable].
Allocation of Collections; Limited Subordination of Seller's Interest
On any date on which collections are deposited in the Collection
Account, the servicer will distribute directly to the seller an amount equal
to
o the Excess Seller's Percentage for the related Collection Period
of Series Allocable Interest Collections for that date and
o the Excess Seller's Percentage for the related Collection
Period of Series Allocable Principal Collections for that date.
However, the servicer will make this distribution only if the Seller's
Participation Amount, determined after giving effect to any Principal
Receivables transferred to the trust on that 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 that Determination
Date.
The Excess Seller's Percentage is an allocation percentage that reflects
the seller's share of cancellations that will not be available as part of the
Available Seller's Collections to cover losses and shortfalls allocable to the
Series [200_-_] certificates.
Also, during any Nonprincipal Period, subject to limitations, the
servicer will distribute directly to the seller on each date of deposit an
amount equal to the Available Seller's Principal Collections for that date.
However, the servicer will make this distribution only if the Seller's
Participation Amount, determined after giving effect to any principal
receivables transferred to the trust on that 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 that Determination
Date. [describe exceptions, if any]
The Available Seller's Principal Collections is the seller's share of
principal collections that are part of the Available Seller's Collections,
which are generally available to cover losses and shortfalls allocable to the
Series [200_-_] certificates. The Available Seller's Interest Collections is
also part of the Available Seller's Collections. The allocation percentage
used to determine each of these amounts is the percentage equal to the
Seller's Percentage minus the Excess Seller's Percentage. The Seller's
Percentage is the allocation percentage used to determine the seller's entire
share of collections. It will vary depending on whether interest collections,
principal collections or defaulted receivables are being allocated and whether
the allocation occurs during the Revolving Period. The "Seller's Percentage"
means 100% minus
o the Floating Allocation Percentage, when used with respect to
interest collections [, except during any Early Amortization
Period], Defaulted Receivables and principal collections during any
Nonprincipal Period, and
o the [Principal Allocation Percentage][other], when used with
respect to [interest collections during any Early Amortization
Period and] principal collections during the [Accumulation Period]
[Controlled Amortization Period] and any Early Amortization Period
[or Reinvestment Period].
The "Seller's Participation Amount" for any date means an amount equal
to the Pool Balance on that date minus the aggregate invested amounts for all
outstanding series on that date.
Deficiency Amount
[On each Determination Date [with respect to a distribution date that
occurs on or prior to the Fully Reinvested Date [or any distribution date
after that date during the Revolving Period, if the Revolving Period has
recommenced]], the servicer will determine any shortfall in amounts payable to
or for the account of the Series [200_-_] certificatesholders and losses on
the receivables that are allocable to the Series [200_-_] certificates. This
shortfall and loss amount is the "Deficiency Amount". It is calculated as the
amount, if any, by which
(i) the sum of
o Monthly Interest for the following distribution date,
o Monthly Interest accrued but not paid with respect to prior
distribution dates, and interest on that Monthly Interest,
o the Monthly Servicing Fee for that distribution date,
o the Investor Default Amount for that distribution date,
o the amount of any Adjustment Payment allocated to the Series
[200_-_] certificates for that distribution date that has not been
deposited in the Collection Account as required under the Pooling
and Servicing Agreement and
o if that distribution date is the final distribution date, any
Carry-over Amount on that distribution date that will not be
satisfied on that date by the application of amounts on deposit in
the Yield Supplement Account as described under "Distributions from
the Collection Account; Reserve Fund; Yield Supplement Account;
Other Enhancement -- Yield Supplement Account", exceeds
(ii) the sum of
[o] Certificateholder Interest Collections and Investment Proceeds
for that distribution date,
[o Excess Interest collections allocated to Series [200_-_] with
respect to that distribution date] [and
o the amount of funds in the Reserve Fund on that
Determination Date available to fund any portion of the
Deficiency Amount as described under "Distributions from
the Collection Account; Reserve Fund[; Yield Supplement
Account] -- Interest Collections"].
The lesser of the Deficiency Amount and the Available Subordinated Amount is
the "Draw Amount".(1) [Include other sources of funds and applications of the
Draw Amount, as appropriate.]1 We will use Available Seller's Collections, up
to the Draw Amount, to cover the shortfalls and losses represented by the
Deficiency Amount.
Available Subordinated Amount
The amount of seller's collections available to cover any Deficiency
Amount is limited to Available Seller's Collections, which is in turn
determined by the Available Subordinated Amount. Under certain circumstances,
the seller may, but is not obligated to, increase the Available Subordinated
Amount by the Incremental Subordinated Amount. The formulas for determining
these amounts are set forth below.
The "Available Subordinated Amount" for a Determination Date is equal to
(i) the lesser of
(a) the Available Subordinated Amount for the preceding
Determination Date, minus, with limitations, the Draw
Amount for that preceding Determination Date, [minus funds
from the Reserve Fund applied to cover any portion of the
Investor Default Amount,] plus the excess, if any, of the
Required Subordinated Amount for that Determination Date
over the Required Subordinated Amount for the immediately
preceding Determination Date due to an increase in the
Subordination Factor, plus the amount of Excess Servicing
available to be paid to the seller as described under
"Distributions from the Collection Account[; Reserve
Fund;] [Yield Supplement Account][; Other Enhancement]--
Excess Servicing", and
(b) the product of the fractional equivalent of the Subordinated
Percentage and the Invested Amount,
[minus (ii) in the case of clause (i)(a), the Incremental Subordinated
Amount for that preceding Determination Date,]
[plus (iii) the Incremental Subordinated Amount for the current
Determination Date,]
[plus (iv) 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.]
---------------
(1) Modify, as appropriate, if interest collections, Investment Proceeds and
Available Sellers' Collections from one series will be available to cover
interest or other shortfalls for a related series.
<PAGE>
However, from and after the commencement of the [Accumulation
Period][Controlled Amortization Period] until the [Series 200_-_] certificates
are paid in full and from and after the commencement of any Early Amortization
Period that is not terminated as described in this prospectus supplement until
the payment in full of the [Series 200_-_] certificates, we will calculate the
Available Subordinated Amount on the basis of the Invested Amount as of the
close of business on the day preceding the [Accumulation Period] [Controlled
Amortization Period] or Early Amortization Period, as applicable. [Also, from
and after the commencement of any Reinvestment Period that is not terminated
until the earliest of
o the commencement of any Early Amortization Period that is not
terminated as described in this prospectus supplement,
o the payment in full of the [Series 200_-_] certificates and
o the Fully Reinvested Date,
we will calculate the Available Subordinated Amount on the basis of the
Invested Amount as of the close of business on the day preceding that
Reinvestment Period [less [describe permitted reductions]. The Available
Subordinated Amount for the first Determination Date is equal to the Required
Subordinated Amount.
The "Required Subordinated Amount" is, as of any date of determination,
[the sum of
o ] the product of the initial Subordinated Percentage[, as
adjusted from time to time as described in this prospectus
supplement other than as a result of an increase in the Subordinated
Percentage at the option of the seller,] and the Invested Amount
[and
o the Incremental Subordinated Amount.]
Assuming that the Initial Invested Amount of the [Series 200_-_] certificates
is equal to the initial principal amount of the [Series 200_-_] certificates,
the Required Subordinated Amount would initially be $[ ].
The "Incremental Subordinated Amount" on any Determination Date will
equal the result obtained by multiplying
(i) a fraction, the numerator of which is the sum of the
Invested Amount on the last day of the immediately preceding
Collection Period and the Available Subordinated Amount for
that Determination Date, calculated without adding the
Incremental Subordinated Amount for that Determination Date as
described in the third clause in the definition of "Available
Subordinated Amount" above, and the denominator of which is the
Pool Balance on that last day by
(ii) the excess, if any, of
(a) the sum of the Overconcentration Amount, the Installment
Balance Amount and the aggregate amount of Ineligible
Receivables on that Determination Date over
(b) the aggregate amount of Ineligible Receivables,
receivables in Accounts containing Dealer
Overconcentrations and receivables in Installment
Balances, in each case that became Defaulted Receivables
during the preceding Collection Period and are not subject
to reassignment from the trust, unless insolvency events
relating to the seller or CFC have occurred, as further
described in the Pooling and Servicing Agreement.
The "Subordinated Percentage" will initially equal the percentage
equivalent of a fraction, the numerator of which is the Subordination Factor
and the denominator of which will be the excess of 100% over the Subordination
Factor. The "Subordination Factor" will [initially] be [ ]% [, but will
be subject to increase to [ ]% in the event that the rating of CFC's long-term
unsecured debt is lowered below BBB- by Standard & Poor's or withdrawn by
Standard & Poor's, unless the seller receives written confirmation from
Standard & Poor's that the failure to so increase the Subordination Factor
would not result in Standard & Poor's lowering or withdrawing its rating of
the [Series 200_-_] certificates. The seller may, in its sole discretion, at
any time increase the Available Subordinated Amount for so long as the
cumulative amount of the increases does not exceed the lesser of (i) $
[ ] or (ii) [ ]% of the Invested Amount. The
seller is not under any obligation to increase the Available Subordinated
Amount at any time, except as described in this prospectus supplement. If [the
sum of] the Available Subordinated Amount [and the Incremental Subordinated
Amount] were reduced to less than the Required Subordinated Amount [and the
Incremental Subordinated Amount], a [Reinvestment Event] [Early Amortization
Event] would occur. The seller could elect to increase the Available
Subordinated Amount at the time the [Reinvestment Event] [Early Amortization
Event] would otherwise occur, thus preventing or delaying the occurrence of
the [Reinvestment Event] [Early Amortization Event] [Describe partial
Reinvestment Periods resulting from a failure to meet the test described
above, if applicable.].
[Negative Carry Subordinated Amount. We will set aside funds to mitigate
the decrease in interest collections that arises when principal collections
are deposited in an account and invested in Eligible Investments rather than
reinvested in receivables. In the event of the occurrence of [a Reinvestment
Event,] [an Early Amortization Event] [or the commencement of the Accumulation
Period] [or the commencement of the Controlled Amortization Period], Interest
Collections and Principal Collections otherwise distributed to the seller in
respect of the Excess Seller's Percentage will be deposited to the Reserve
Fund [and other] until the aggregate amount of the deposits made for that
purpose is $________. We will not replenish any of those funds that are
deposited for that purpose and are later withdrawn from the Reserve Fund.
[Describe other subordination of the Seller's Interest, if applicable.]
Distributions from the Collection Account[; Reserve Fund]
[; Yield Supplement Account][; Other Enhancement]
Interest Collections. On each distribution date [with respect to a
Collection Period that ends prior to the Fully Invested Date [and each
Collection Period after the Fully Invested Date during the Revolving Period]],
the trustee will apply Series [200_-_] Certificateholder Interest Collections
and Investment Proceeds, if any, [Excess Interest Collections allocated to
Series [200_-_] [other amounts] in respect of the related Collection Period to
make the following distributions in the following priority:
[o first, the trustee will [deposit into the Interest Funding Account]
[distribute to the Series [200_-_] certificateholders] an amount
equal to Monthly Interest for that distribution date, plus the
amount of any Monthly Interest previously due but not [deposited to
the Interest Funding Account or] distributed on a prior distribution
date, plus, but only to the extent permitted under applicable law,
interest at the Certificate Rate on Monthly Interest previously due
but not [deposited or] distributed;
[o second, [describe application, if any, to cover interest or other
shortfalls with respect to related series;]
o third, the trustee will distribute to the servicer an amount
equal to the Monthly Servicing Fee for that distribution date,
unless that amount has been netted against deposits to the
Collection Account as described in the prospectus under "Description
of the Certificates -- Allocation of Collections; Deposits in
Collection Account" or waived by the servicer;
[o fourth, the trustee will deposit into the Reserve Fund an
amount equal to the Reserve Fund Deposit Amount, if any, for that
distribution date shall be deposited in the Reserve Fund;]
o fifth, an amount equal to the Investor Default Amount, if
any, for that distribution date shall be treated as a portion of
Available Series [200_-_] Certificateholder Principal Collections
for that distribution date;
[o sixth, the trustee will distribute to the Series [200_-_]
certificateholders an amount equal to any outstanding Carry-over
Amount, after giving effect to any withdrawals from the Yield
Supplement Account;]
[o seventh, the trustee will deposit into the Yield Supplement
Account an amount equal to the Yield Supplement Account Deposit
Amount, if any, for that distribution date;]
[o eighth, describe other applications, if any]; and
o ninth, the balance shall constitute Excess Servicing].
[Describe application of Interest Collections, Investment Proceeds and
other amounts allocated to related series to cover distributions under the
first clause above, if applicable.]
[If, during the Prefunded Period, the Investment Proceeds [describe
other funds] are not sufficient to make the entire distributions required by
the first clause above, the trustee shall withdraw funds from the Yield
Supplement Account and apply the funds to complete the distributions under
that clause.]
[If [Series 200_-_] Certificateholder Interest Collections and
Investment Proceeds [Excess Interest Collections allocated to Series [200_-_]
[describe other funds] are not sufficient to make the entire distributions
required by the first, second, third and fifth clauses above and, in the case
of the final payment date only, the sixth clause above, the trustee [after
applying amounts on deposit in the Yield Supplement Account and [describe
other funds]] shall withdraw funds from the Reserve Fund and apply those funds
to complete the distributions under those clauses. In the case of the sixth
clause above, the withdrawal will be limited to amounts that would otherwise
be distributable to the seller. During any Early Amortization Period [or
Reinvestment Period], however, the trustee will not apply funds in the Reserve
Fund to make distributions required by the fifth clause above to the extent
that, after giving effect to the application, the amount on deposit in the
Reserve Fund would be be less than $[ ].]
If there is a Draw Amount for the distribution date and the distribution
date is not the final payment date, the trustee shall apply the amount of
Available Seller's Collections for the related Collection Period on deposit in
the Collection Account on that distribution date, but only up to the Draw
Amount, to make the distributions required by the first, second, third and
fifth clauses above [that have not been made through the application of funds
from the Reserve Fund [or the Yield Supplement Account] [or describe other
funds] as described in the preceding paragraph.] If there is a Draw Amount for
that distribution date and that distribution date is the final distribution
date, the trustee shall apply the amount of Available Seller's Collections for
the related Collection Period on deposit in the Collection Account on that
distribution date, but only up to the Draw Amount, to make the distributions
required by the first, second, third, fifth and sixth clauses above that have
not been made through the application of funds from the Reserve Fund [or the
Yield Supplement Account] [or described other funds] as described in the
preceding paragraph.] Additionally, the trustee will apply Available Seller's
Collections to any unpaid Adjustment Payments. The Available Subordinated
Amount will be reduced by the amount of Available Seller's Collections so
applied. If the Draw Amount exceeds the Available Seller's Collections, the
Available Subordinated Amount will be reduced by the amount of the excess, but
not by more than the sum of the Investor Default Amount and the portion of
Adjustment Payments not paid by the seller, in order to maintain the Invested
Amount, but not by more than the Investor Default Amount for the distribution
date.
"[Series 200_-_] Certificateholder Interest Collections" for any
distribution date will be the portion of Series Allocable Interest Collections
for the related Collection Period allocated to the [Series 200_-_]
Certificateholders' Interest as described under "Allocation Percentages --
Allocation Between the [Series 200_-_] Certificateholders and the Seller".
"Investment Proceeds" for any distribution date will be an amount equal
to the sum of investment earnings for the preceding Collection Period from:
[o funds held in the Reserve Fund;]
[o the Series Allocation Percentage of funds held in the Collection
Account;]
[o funds held in the Excess Funding Account;]
[o funds held in the Yield Supplement Account;]
[o funds held in the Principal Funding Account;]
[o funds held in the Prefunding Account;]
[o funds held in the Interest Funding Account;]
[o funds held in [other accounts].]
[Investment Proceeds. On each distribution date with respect to a
Collection Period that ends after the Fully Reinvested Date [other than any of
those Collection Periods during the Revolving Period], the trustee will apply
Investment Proceeds [Excess Interest Collections allocated to Series [200_-_]]
[describe other funds], in respect of the related Collection Period to make
the following distributions in the following priority:
o first, an amount equal to Monthly Interest for that
distribution date, plus, the amount of any Monthly Interest
previously due but not [deposited in the Interest Funding Account
or] distributed on a prior distribution date, plus, but only to the
extent permitted under applicable law, interest at the Certificate
Rate plus [ ]% on Monthly Interest previously due but not [deposited
or] distributed, shall be [deposited to the Interest Funding
Account] [distributed to Series [200_-_] certificateholders;
[o second, describe other applications, including, if applicable, to
cover interest or other shortfalls with respect to related series;
and]
o third, the balance shall be distributed to the seller.]
[Describe application of Interest Collections, Investment Proceeds and
other amounts allocated to related Series to cover distributions under the
first clause above, if applicable.]
[If, on any distribution date, Investment Proceeds [Excess Interest
Collections allocated to Series [200_-_]] [describe other funds] are not
sufficient to make the entire distribution required in clause first above
[after applying [describe other funds]], the trustee shall withdraw funds from
the Reserve Fund and apply those funds to complete the distribution under that
clause.]
[Reserve Fund. The "Reserve Fund" will be an Eligible Deposit Account
established and maintained in the name of the trustee for the benefit of the
[Series 200_-_] certificateholders. On the Series Issuance Date, the seller
will deposit $[ ] ([ ]% of the principal
balance of the Series [200_-_] certificates) into the Reserve Fund. We will
deposit certain collections into the Reserve Fund in an effort to keep the
Reserve Fund Required Amount in the Reserve Fund. The "Reserve Fund Required
Amount" for any distribution date will equal [ ]% of the outstanding principal
balance of the [Series 200_-_] certificates for that distribution date, after
giving effect to any change in that balance on that distribution date.
[Describe any increases in the Reserve Fund Required Amount.] Funds in the
Reserve Fund will be invested in Eligible Investments that will mature on or
prior to the next distribution date. On each Determination Date, the servicer
will apply any investment earnings (net of losses and investment expenses)
with respect to the Reserve Fund as set forth under "Distributions from the
Collection Account; Reserve Fund[; Yield Supplement Account] [Other
Enhancement]". After the earlier of the payment in full of the outstanding
principal balance of the [Series 200_-_] certificates and the Termination
Date, any funds remaining on deposit in the Reserve Fund will be paid to the
seller. [Describe other applications, if any.]
If, after giving effect to the allocations, distributions and deposits
in the Reserve Fund described above under "Interest Collections", the amount
in the Reserve Fund is less than the Reserve Fund Required Amount for the next
distribution date, the trustee shall deposit any remaining Available Seller's
Collections for the related Collection Period into the Reserve Fund until the
amount in the Reserve Fund is equal to that Reserve Fund Required Amount.
If, for any distribution date with respect to an Early Amortization
Period [or Reinvestment Period], after giving effect to the allocations,
distributions and deposits described in the preceding paragraph, the amount in
the Reserve Fund is less than the Excess Reserve Fund Required Amount for that
distribution date, the trustee shall deposit the remaining Available Seller's
Collections for the related Collection Period into the Reserve Fund until the
amount in the Reserve Fund is equal to that Excess Reserve Fund Required
Amount.
[Yield Supplement Account. The "Yield Supplement Account" will be an
Eligible Deposit Account established and maintained in the name of the trustee
for the benefit of the Series [200_-_] certificateholders. On the Series
Issuance Date, the seller will deposit $[ ] ([ ]% of the principal balance of
the Series [200_-_] certificates) into the Yield Supplement Account. We will
apply funds in the Yield Supplement Account toward the payment of the
shortfalls interest distributions to Series [200_-_] certificateholders]
described in the following paragraph. After the Series Issuance Date, we will
fund the Yield Supplement Account as described under "Interest Collections"
above.
[On any distribution date with respect to the Prefunded Period on which
Investment Proceeds [describe other funds] are insufficient to make the entire
distributions required by the first clause] under "Interest Collections"
above, the trustee will apply the amount on deposit in the Yield Supplement
Account on that distribution date toward payment of that insufficiency.] [On
any distribution date on which there is a Carry-over Amount, the trustee will
apply the amount on deposit in the Yield Supplement Account on that
distribution date toward payment of that Carry-over Amount to satisfy that
Carry-over Amount.] [Describe other applications, e.g., to pay Monthly
Interest [other than during a Prefunded Period].] Funds in the Yield
Supplement Account will be invested [in Eligible Investments that mature on or
prior to the next distribution date] [at the direction of the servicer in any
investments consisting of financial assets that by their terms convert to cash
within a finite period of time]. On each Determination Date, the servicer will
apply any investment earnings, net of losses and investment expenses, with
respect to the Yield Supplement Account as set forth under "Distributions from
the Collection Account; [Reserve Fund;] Yield Supplement Account; Other
Enhancement". After the earlier of the payment in full of the outstanding
principal balance of the Series [200_-_] certificates and the Termination
Date, any funds remaining on deposit in the Yield Supplement Account will be
paid to the seller. [Describe other applications.]]
Excess Servicing. On each distribution date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any
Collection Period that ends after the Fully Reinvested Date during the
Revolving Period]], the servicer will allocate Excess Servicing with respect
to the Collection Period immediately preceding that distribution date, in the
following priority:
o [first, we will allocate an amount equal to the aggregate
amount of Investor Charge-Offs which have not been previously
reimbursed, after giving effect to the allocation on that
distribution date of Series Allocable Miscellaneous Payments with
respect to that distribution date, in the same manner as we allocate
Available [Series 200_-_] Certificateholder Principal Collections
for that distribution date;
o second, the trustee will pay to the servicer an amount
equal to the aggregate outstanding amounts of the Monthly Servicing
Fee which have been previously waived as described under
"Description of the certificates -- Servicing Compensation and
Payment of Expenses" in the prospectus;
[o third, describe other applications; and]
o fourth, the balance, if any, shall increase the Available
Subordinated Amount as described in the definition of "Available
Subordinated Amount" and be distributed to the seller.]
Principal Collections
On each distribution date [with respect to a Collection Period that ends
prior to the Fully Reinvested Date [or any Collection Period that ends after
the Reinvested Date during the Revolving Period]], the servicer will allocate
Available [Series 200_-_] Certificateholder Principal Collections as follows:
o for each distribution date with respect to any Nonprincipal
Period, the servicer will allocate all Available Series [200_-_]
Certificateholder Principal Collections
(i) [first, to make a deposit to the Excess Funding Account if the
sum of
(a) the [Series 200_-_] Certificateholders' Interest in
Principal Receivables, determined for this purpose by
reducing that interest by the amount, if any, by which the
Required Participation Amount exceeds the Pool Balance due
to an increase in the Subordination Factor, and
(b) the amount on deposit in the Excess Funding Account prior
to the allocation on that distribution date is less than
the outstanding principal balance of the [Series 200_-_]
certificates and
(ii) second] to Excess Principal Collections as described under
"Allocation Percentages-- Principal Collections for all
Series"; and
o for each distribution date with respect to the
[Accumulation Period][Controlled Amortization Period], all Available
[Series 200_-_] Certificateholder Principal Collections the servicer
will allocate:
(i) first, an amount equal to Monthly Principal for that
distribution date will be deposited to the Principal Funding
Account; and
(ii) second, the balance, if any, will be allocated to Excess
Principal Collections; and
o for each distribution date with respect to any Early
Amortization Period, the trustee will distribute an amount equal to
the Monthly Principal to the [Series 200_-_] certificateholders.
[If the Invested Amount is greater than zero on the Termination Date,
any funds remaining in the Reserve Fund, after the application of funds in the
Reserve Fund as described above under "Interest Collections", will be treated
as a portion of Available [Series 200_-_] Certificateholder Principal
Collections for the distribution date occurring on the Termination Date.]
Monthly Principal is the amount of principal that we will distribute to
or accumulate for the Series [200_-_] certificateholders. The "Monthly
Principal" with respect to any distribution date relating to the [Accumulation
Period][Controlled Amortization Period] or any Early Amortization Period [or
Reinvestment Period] will equal Available [Series 200_-_] Certificateholder
Principal Collections for that distribution date. For each distribution date,
however, [with respect to the Controlled Amortization Period, Monthly
Principal will not exceed the Controlled Deposit Amount]. Also, Monthly
Principal will not exceed the Invested Amount.
[During the Controlled Accumulation Period, we intend to accumulate each
month a fixed amount equal to the Controlled Accumulation Amount, which is
equal to the Invested Amount as of the ________ distribution date, after
giving effect to any changes in the Invested Account on that date, divided by
the Accumulation Period Length. Because there may be funds in the Excess
Funding Account and the amount of principal collection may fluctuate, we
intend to accumulate the Controlled Deposit Amount in each distribution date
in the Controlled Accumulation Period. The "Controlled Deposit Amount" for a
distribution date will be the excess, if any, of
(i) [the sum of
(a) ] the product of the Controlled Accumulation Amount
and the number of distribution dates from and including
the first distribution date with respect to the
Accumulation Period through and including that
distribution date, but not in excess of the Accumulation
Period Length, [and
(b) the amount on deposit in the Excess Funding Account as of
the [ ] distribution date, after
giving effect to any withdrawals from or deposits to that
account on that date, other than the transfer to the
Principal Funding Account of amounts on deposit in the
Excess Funding Account on that date, ]
(ii) over the sum of amounts on deposit in the [Excess Funding
Account and] the Principal Funding Account, in each case before
giving effect to any withdrawals from or deposits to those
accounts on that distribution date.]
Required Participation Percentage
As described under "Description of the Certificates--Addition of
Accounts" in the prospectus, the seller will be required to add the
receivables of Additional Accounts if the Pool Balance at the end of a
Collection Period is less than the Required Participation Amount for the
following distribution date. The calculation of the Required Participation
Amount is a function of the Required Participation Percentage. The "Required
Participation Percentage" for [Series 200_-_] is [ ]%. However, 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 that determination is being made is greater than
[ ]% of the Pool Balance on that last day, the Required Participation
Percentage, as of that last day and with respect to that Collection Period and
the immediately following Collection Period only, will be [ ]%.
Furthermore, the seller may, upon ten days' prior notice to the trustee, the
Rating Agencies and any Enhancement provider, reduce the Required
Participation Percentage to not less than 100%, so long as the Rating Agencies
shall not have notified the seller or the servicer that any reduction will
result in a reduction or withdrawal of the rating of the [Series 200_-_]
certificates or any other outstanding series or class of certificates.
[Principal Funding Account
The servicer will establish and maintain in the name of the trustee an
Eligible Deposit Account for the benefit of the Series [200_-_]
certificateholders (the "Principal Funding Account"). On each distribution
date with respect to the [Accumulation Period] [or any Reinvestment Period],
we will deposit Monthly Principal in the Principal Funding Account as provided
above under "Principal Collections". If an Early Amortization Period [that is
not terminated as described in this prospectus supplement] commences during
the [Accumulation Period] [or any Reinvestment Period], we will distribute the
Principal Funding Account Balance shall be paid to the Series [200_-_]
certificateholders on the first distribution date after the Collection Period
in which the Early Amortization Period begins.
The trustee will invest all amounts on deposit in the Principal Funding
Account on any distribution date, after giving effect to distributions to be
made on that distribution date (the "Principal Funding Account Balance"), from
the date of their deposit to on or prior to the Series [200_-_] Expected
Payment Date at the direction of the servicer in Eligible Investments that
will mature on or prior to the following distribution date. The servicer may
select an appropriate agent as representative of the servicer for the purpose
of designating those investments. On each distribution date, the trustee will
apply the interest and other investment income on the Principal Funding
Account Balance as provided above under "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account]; Other Enhancement]".]
[Prefunding Account
The servicer will establish and maintain in the name of the trustee, on
behalf of the trust, an Eligible Deposit Account for the benefit of the Series
[200_-_] certificateholders (the "Prefunding Account"). On the Series Issuance
Date the seller will deposit an amount equal to the initial principal amount
of the Series [200_-_] certificates in the Prefunding Account. As funds are
accumulated in the Principal Funding Account for the Paired Series or
distributed to holders of certificates of those series, the trustee will
distribute an equal amount of funds on deposit in the Prefunding Account to
the seller.
The trustee will invest all amounts on deposit in the Prefunding Account
on any distribution date, after giving effect to distributions to be made on
that distribution date (the "Prefunding Account Balance"), from the date of
their deposit at the direction of the servicer in Eligible Investments that
will mature on or prior to the following distribution date. The servicer may
select an appropriate agent as representative of the servicer for the purpose
of designating those investments. On each distribution date, the trustee will
apply the interest and other investment income on the Prefunding Account
Balance as provided above under "Distributions from the Collection Account[;
Reserve Fund][; Yield Supplement Account][; Other Enhancement]".]
[Describe other Series [200_-_] accounts, if applicable.]
[Other Enhancement]
[Describe any other Enhancement]
Distributions
The trust will make payments to Series [200_-_] certificateholders from
the Collection Account, [the Reserve Fund,] [the Principal Funding Account,]
[the Interest Funding Account,] [the Yield Supplement Account,] [other] and
[the Excess Funding Account].
o The trustee will apply funds on deposit in the Collection
Account, [the Reserve Fund,] [the Interest Funding Account,] [the
Yield Supplement Account,] [other] to make the following
distributions at the following times:
o on each [distribution date] [interest payment date or
Special Payment Date] all amounts on deposit in the Collection
Account, [the Reserve Fund,] [the Interest Funding Account,] [the
Yield Supplement Account] [other] as are payable to the Series
[200_-_] certificateholders with respect to accrued interest will be
distributed to the Series [200_-_] certificateholders.
o The trustee will apply the funds on deposit in the
[Collection Account,] [the Principal Funding Account,] [other] and
[the Excess Funding Account], to make, without duplication, the
following distributions at the following times:
[o on each distribution date during the Controlled Amortization
Period the trustee will distribute to the Series [200_-_]
certificateholders all amounts on deposit in the Collection
Account [and the Excess Funding Account] [other] as are payable
to the Series [200_-_] certificateholders with respect to
principal; and]
[o on the Series [200_-_] Expected Payment Date, the trustee will
distribute to the Series [200_-_] certificateholders the
Principal Funding Account Balance, [the amount on deposit in
the Excess Funding Account] [and all amounts on deposit in the
Collection Account [other] as are payable to Series [200_-_]
certificateholders with respect to principal up to a maximum
amount on that date equal to the excess of the outstanding
principal amount of the Series [200_-_] certificates over
unreimbursed Investor Charge-Offs, each on that date].
[o on each Special Payment Date, the Principal Funding Account
Balance, the trustee will distribute to the Series [200_-_]
certificateholders [the amount on deposit in the Excess Funding
Account] [and all amounts on deposit in the Collection
Account][other] as are payable to Series [200_-_]
certificateholders with respect to principal up to a maximum
amount on that date equal to the excess of the outstanding
principal amount of the Series [200_-_] certificates over
unreimbursed Investor Charge-Offs, each on that date.]
[o On each distribution date on which there is an unpaid Carry-over
Amount, the trustee will distribute to the Series [200_-_]
certificateholders that Carry-over Amount to the extent funds are
available therefor first from amounts on deposit in the Yield
Supplement Account and second to the extent funds are available for
that purpose after making all required distributions and deposits
with respect to the Series [200_-_] certificates as provided above
under "Distributions from the Collection Account [; Reserve Fund;]
[Yield Supplement Account][; Other Enhancement] -- Interest
Collections".];
[o If, on the finals distribution date, there is any Carry-over Amount,
after giving effect to any distributions on that date under the
first through third clauses above, the trustee shall distribute to
the Series [2000-A] certificateholders
o amounts on deposit in the Reserve Fund, to the extent
those amounts would otherwise be distributed to the
seller, and
o Available Seller's Collections on deposit in the
Collection Account, to the extent those amounts would
otherwise be distributed to the seller, which are
available to satisfy the Carry-over Amount on the final
distribution date, as described above under "Distributions
from the Collection Account; [Reserve Fund][; Yield
Supplement Account][; Other Enhancement] -- Interest
Collections".
We will make the distributions to the Series [200_-_] certificateholders
of record at the close of business on the day immediately preceding the
related distribution date (each of those days a "Record Date"), except that
the final distribution with respect to any Series [200_-_] Certificate will be
made only upon surrender of that Series [2000-__] Certificate.
Optional Repurchase
The Series [200_-_] Certificateholders' Interest will be subject to
optional repurchase by the servicer on any distribution date after the
Invested Amount becomes less than or equal to $[ ___________ ], which is [
____ ]% of the initial outstanding principal amount of the Series [200_-_]
certificates. [Series [200_-_] certificates will also be subject to repurchase
at the option of the seller or the Series [200_-_] certificateholders at any
time on or after the [ ] distribution date.] The purchase price will equal the
sum of
o the Invested Amount of the Series [200_-_] certificates on the
Determination Date preceding the distribution date on which the
purchase is scheduled to be made,
o accrued and unpaid interest on the Series [200_-_] certificates
at the Certificate Rate, together with interest on overdue interest,
[and
o any outstanding Carry-Over Amount with respect to the Series
[200_-_] certificates.]
Investor Charge-Offs
Investor Default Amounts are losses incurred in the receivables during a
Collection Period that are allocable to the Series [200_-_]
certificateholders. We intend to cover Investor Default Amounts as described
under "Interest Collections" under "Distribution's from the Collection Account
[; Reserve Fund] [; Yield Supplement Account] [; Other Enhancement]". If we
are unable to do so, Investor Charge-offs may occur.
If the Available Subordinated Amount is reduced to zero and on any
distribution date the Deficiency Amount is greater than zero, the outstanding
principal balance of the Series [200_-_] certificates will be reduced by the
Deficiency Amount, but not by more than the Investor Default Amount for that
distribution date. Such reduction is an "Investor Charge-Off". Any reduction
in the outstanding principal balance of the Series [200_-_] certificates will
have the effect of slowing or reducing the return of principal to the holders
of Series [200_-_] certificates. If the outstanding principal balance of the
Series [200_-_] certificates has been reduced by any Investor Charge-Offs, it
will be increased on any distribution date, but not by an amount in excess of
the aggregate unreimbursed Investor Charge-Offs, by the sum of
o Series Allocable Miscellaneous Payments for that distribution
date and
o the amount of Excess Servicing allocated and available for that
purpose as described above.
[Reinvestment Events
We describe what happens upon the occurrence of a Reinvestment Event
under "Description of the Certificates--Reinvestment Events and Early
Amortization Events" in the prospectus.
The Reinvestment Events with respect to the Series [200_-_] certificates
are the following:
[1. failure on the part of DCWR, the servicer or CFC, as applicable,
o to make any payment or deposit required by the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, including
but not limited to any Transfer Deposit Amount or Adjustment
Payment, on or before the date occurring two business days after the
date that payment or deposit is required to be made;
o to deliver a Distribution Date Statement on the date
required under the Pooling and Servicing Agreement, or within the
applicable grace period which will not exceed five business days;
o to comply with its covenant not to create any lien on a
Receivable; or
o to observe or perform in any material respect any other
covenants or agreements set forth in the Pooling and Servicing
Agreement or the Receivables Purchase Agreement, which failure
continues unremedied for a period of 45 days after written notice of
that failure;
2. any representation or warranty made by the RPA seller in the
Receivables Purchase Agreement or by DCWR in the Pooling and
Servicing Agreement or any information required to be given by DCWR
to the trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after
written notice and as a result the interests of the
certificateholders are materially and adversely affected. A
Reinvestment Event, however, shall not be deemed to occur if DCWR
has repurchased the related receivables or all of the receivables,
if applicable, during that period in accordance with the provisions
of the Pooling and Servicing Agreement;
3. the occurrence of events of bankruptcy, insolvency or receivership
relating to any of CFC or DaimlerChrysler;
4. a failure by DCWR to convey receivables in Additional Accounts to
the trust within five business days after the day on which it is
required to convey the receivables under the Pooling and Servicing
Agreement;
5. on any Determination Date, the Available Subordinated Amount for the
next distribution date will be reduced to an amount less than the
Required Subordinated Amount on that Determination Date after giving
effect to the distributions to be made on the next distribution
date;
6. any Service Default with respect to the Series [200_-_] certificates
occurs;
7. on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on that
last day;
8. on any Determination Date, the average of the Monthly Payment Rates
for the two preceding Collection Periods, is less than [ ]%;
9. the delivery by the seller to the trustee, of a notice stating that
the seller will no longer continue to sell receivables to the trust
commencing on [ ] or any yearly anniversary of that date; provided,
however, that the seller shall have delivered to the trustee an
opinion of counsel to the effect that, following the discontinuation
of sales of receivables, the trust shall not become an investment
company within the meaning of the Investment Company Act of 1940, as
amended;
10. on any Determination Date, the quotient expressed as a percentage
and obtained by dividing
(i) the sum of
(a) the amount on deposit in the Yield Supplement Account on
the next distribution date, after giving effect to the
distribution to be made on that distribution date, and
(b) the amount on deposit in the Yield Supplement Account on
the immediately preceding distribution date, after giving
effect to the distributions made on that distribution
date, by
(ii) the sum of
(a) the outstanding principal balance of the Series [200_-_]
certificates on the next distribution date, after giving
effect to all distributions and payments to be made on
that distribution date, and
(b) the outstanding principal balance of the Series [200_-_]
certificates on the immediately preceding distribution
date, after giving effect to all distributions and
payments made on that distribution date,
is less than [ ]%;
11. interest at the Certificate Rate is not paid on the Series [200_-_]
Certificate on any interest payment date;
12. any Carry-over Amount is outstanding on six consecutive distribution
dates; and
13. [other].(2)
[In the case of any event described in the clause [1, 2 or 6] above, a
Reinvestment Event with respect to Series [200_-_] will be deemed to have
occurred only if, after the applicable grace period described in those
clauses, if any, either the trustee or Series [200_-_] certificateholders
holding Series [200_-_] certificates evidencing more than 50% of the aggregate
unpaid principal amount of the Series [200_-_] certificates by written notice
to the seller and the servicer, and the trustee, if given by
certificateholders, declare that a Reinvestment Event has occurred as of the
date of that notice. In the case of any event described in clause [3, 4, 5, 7,
8, 9, 10, 11, 12 or 13] above, a Reinvestment Event with respect to Series
[200_-_] will be deemed to have occurred without any notice or other action on
the part of the trustee or the Series [200_-_] certificateholders immediately
upon the occurrence of that event.]
[Under limited circumstances, a Reinvestment Period which commences
prior to the scheduled end of the Revolving Period may terminate and the
Revolving Period recommence. If a Reinvestment Period results from the failure
by DCWR to convey receivables in Additional Accounts to the trust, as
described in clause 4 above, during the Revolving Period and no other
Reinvestment Period or Early Amortization Period [that has not been terminated
as described in this prospectus supplement] has commenced, the Reinvestment
Period resulting from that failure will terminate and the Revolving Period
will recommence. However, it will not recommence if the scheduled termination
date of the Revolving Period has occurred, as of the end of the first
Collection Period during which the seller would no longer be required to
convey receivables to the trust. The seller may no longer be required to
convey receivables as described above as a result of a reduction in the
Invested Amount occurring due to principal payments made in respect of the
Series [200_-_] certificates and the certificates of other outstanding series
during the Reinvestment Period or as a result of the subsequent addition of
receivables to the trust. However, if any Reinvestment Event occurs, the
Revolving Period will recommence following the receipt of
---------------
(2) Delete or modify, as appropriate.
<PAGE>
o written confirmation by each Rating Agency, other than
Moody's, that its rating of the Series [200_-_] certificates will
not be withdrawn or lowered as a result of that recommencement and
o the consent of Series [200_-_] certificateholders holding
Series [200_-_] certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [200_-_]
certificates to that recommencement, provided that no other
Reinvestment Period or Early Amortization Period [that has not been
terminated as described in this prospectus supplement] has commenced
and the scheduled termination of the Revolving Period has not
occurred.]
[Describe other cures of Reinvestment Events and partial Reinvestment
Periods, if applicable.]
Early Amortization Events
[The Early Amortization Events with respect to the Series [200_-_]
certificates will include each of the events so defined in the prospectus,
plus the following:
1. failure on the part of DCWR, the servicer or CFC, as applicable,
o to make any payment or deposit required by the Pooling and
Servicing Agreement or the Receivables Purchase Agreement,
including but not limited to any Transfer Deposit Amount or
Adjustment Payment, on or before the date occurring two
business days after the date that payment or deposit is
required to be made; or
o to deliver a Distribution Date Statement on the date required
under the Pooling and Servicing Agreement, or within the
applicable grace period which will not exceed five business
days; or
o to comply with its covenant not to create any lien on a
Receivable; or
o to observe or perform in any material respect any other
covenants or agreements set forth in the Pooling and Servicing
Agreement or the Receivables Purchase Agreement, which failure
continues unremedied for a period of 45 days after written
notice of that failure;
2. any representation or warranty made by the RPA seller in the
Receivables Purchase Agreement or by DCWR in the Pooling and
Servicing Agreement or any information required to be given by DCWR
to the trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after
written notice and as a result the interests of the
certificateholders are materially and adversely affected. An Early
Amortization Event, however, shall not be deemed to occur if DCWR
has repurchased the related receivables or all of the receivables,
if applicable, during that period in accordance with the provisions
of the Pooling and Servicing Agreement;
3. the occurrence of events of bankruptcy, insolvency or receivership
relating to CFC or DaimlerChrysler;
4. a failure by DCWR to convey receivables in Additional Accounts to
the trust within five business days after the day on which it is
required to convey those receivables under the Pooling and Servicing
Agreement;
5. on any Determination Date, the Available Subordinated Amount for the
next distribution date will be reduced to an amount less than the
Required Subordinated Amount on that Determination Date after giving
effect to the distributions to be made on the next distribution
date;
6. any Service Default with respect to the Series [200_-_] certificates
occurs;
7. on any Determination Date, as of the last day of the preceding
Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on that
last day;
8. on any Determination Date, the average of the Monthly Payment Rates
for the three preceding Collection Periods, is less than [ ]%;
9. any Carry-over Amount is outstanding on six consecutive distribution
dates; and
10. the outstanding principal amount of the Series [200_-_] certificates
is not repaid by the Series [200_-_] Expected Payment Date; and
11. [Other].(3)
[In the case of any event described in clauses [1, 2 or 6] above, an
Early Amortization Event with respect to Series [200_-_] will be deemed to
have occurred only if, after the applicable grace period described in those
clauses, if any, either the trustee or Series [200_-_] certificateholders
holding Series [200_-_] certificates evidencing more than 50% of the aggregate
unpaid principal amount of the Series [200_-_] certificates by written notice
to the seller and the servicer, and the trustee, if given by
certificateholders, declare that an Early Amortization Event has occurred as
of the date of that notice. In the case of any Early Amortization Event
described in the prospectus or any event described in [3, 4, 5, 7, 8, 9, 10 or
11] above, an Early Amortization Event with respect to Series [200_-_] will be
deemed to have occurred without any notice or other action on the part of the
trustee or the Series [200_-_] certificateholders immediately upon the
occurrence of that event.]
---------------
(3) Delete or modify, as appropriate.
<PAGE>
[Under limited circumstances, an Early Amortization Period which
commences prior to the scheduled end of the Revolving Period may terminate and
the Revolving Period recommence. If an Early Amortization Period results from
the failure by DCWR to convey receivables in Additional Accounts to the trust,
as described in clause 4 above, during the Revolving Period and no
[Reinvestment Event or] Early Amortization Event [that has not been cured or
waived as described in this prospectus supplement] has occurred, the Early
Amortization Period resulting from that failure will terminate and the
Revolving Period will recommence. However, it will not recommence if the
scheduled termination date of the Revolving Period has occurred, as of the end
of the first Collection Period during which the seller would no longer be
required to convey receivables to the trust. The seller may no longer be
required to convey receivables as described above as a result of a reduction
in the Invested Amount occurring due to principal payments made in respect of
the Series [200_-_] certificates and the certificates of other outstanding
series during the Early Amortization Period or as a result of the subsequent
addition of receivables to the trust. However, if any Early Amortization
Event, other than an Early Amortization Event described in the third clause
above or in the prospectus, occurs, the Revolving Period will recommence
following receipt of
o written confirmation by each Rating Agency, other than
Moody's, that its rating of the Series [200_-_] certificates will
not be withdrawn or lowered as a result of the recommencement and
o the consent of Series [200_-_] certificateholders holding
Series [200_-_] certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [200_-_]
certificates to the recommencement, provided that no other
[Reinvestment Event or] Early Amortization Event] [that has not been
cured or waived as described in this prospectus supplement] has
occurred and the scheduled termination of the Revolving Period has
not occurred.]
Termination
The last payment of principal and interest on the Series [200_-_]
certificates will be due and payable no later than the [ ]
distribution date (the "Termination Date"). In the event that the Invested
Amount is greater than zero on the Termination Date, after giving effect to
deposits and distributions otherwise to be made on the Termination Date, the
trustee will sell or cause to be sold an interest in the receivables, as
specified in the Pooling and Servicing Agreement, in an amount equal to the
sum of
o 110% of the Invested Amount on the Termination Date, after giving
effect to the deposits and distributions, and
o 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 that Determination Date.
In no event, however, shall the amount exceed the product of the Series
Allocation Percentage, for the Collection Period in which the Termination Date
occurs, of receivables on the Termination Date. The trustee will distribute
the net proceeds of the sale and any collections on the receivables will be
paid to Series [200_-_] certificateholders on the Termination Date to the
extent necessary to pay the remaining amounts due to the Series [200_-_]
certificateholders.
Reports
On each distribution date, including each distribution date that
corresponds to the Series [200_-_] Expected Payment Date or any Special
Payment Date, commencing with the initial distribution date, the trustee will
forward to each Series [200_-_] certificateholder of record a statement (the
"Distribution Date Statement") prepared by the servicer setting forth the
following information. In the case of the third, fourth and fifth clauses
below, the information will be presented on the basis of an original principal
amount of $1,000 per Series [200_-_] certificate if the [Accumulation Period]
[Controlled Amortization Period] or an Early Amortization Period][or
Reinvestment Period] has commenced). The information includes:
o the aggregate amount of collections, the aggregate amount
of Interest Collections and the aggregate amount of Principal
Collections processed during the immediately preceding Collection
Period;
o the Series Allocation Percentage, the Floating Allocation
Percentage, the Principal Allocation Percentage and the Series
[200_-_] Certificate Principal Percentage for that Collection
Period;
o the total amount, if any, distributed on the Series [200_-_]
certificates;
o the amount of the distribution allocable to principal on the
Series [200_-_] certificates;
o the amount of the distribution allocable to interest on the
Series [200_-_] certificates;
o the Investor Default Amount for that distribution date;
o the Draw Amount, if any, for that Collection Period;
o the amount of the Investor Charge-Offs and the amounts of
reimbursements of the Investor Charge-Offs for that Collection
Period;
o the amount of the Monthly Servicing Fee for that Collection
Period;
o the [Controlled Distribution Amount][Controlled Deposit Amount]
for the following distribution date;
o the Invested Amount[, the Excess Funded Amount] and the
outstanding principal balance of the Series [200_-_] certificates
for that distribution date, after giving effect to all distributions
which will occur on that distribution date;
o the "pool factor" for the Series [200_-_] certificates as
of the Determination Date with respect to that distribution date,
consisting of an eleven-digit decimal expressing the Invested Amount
as of that Determination Date, determined after taking into account
any reduction in that Invested Amount which will occur on that
distribution date, as a proportion of the Initial Invested Amount;
o the Available Subordinated Amount for that Determination Date;
o [the Reserve Fund balance for that date];
o [the Principal Funding Account Balance,] [the Interest Funding
Account Balance,] [the Prefunding Account Balance] and [the Yield
Supplement Account balance] with respect to that date;
o [during any Reinvestment Period, information with respect to the
Eligible Investments in the accounts for the Series [200_-_]
certificates;] and
o [other].
[However, after the Fully Reinvested Date, [unless the Revolving Period has
recommenced,] that statement will not include the information in clauses
[_____________________________s____ above].]
-------------------------------------------------------------------------------
Underwriting
-------------------------------------------------------------------------------
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement"), the seller has agreed to sell to the
underwriters named below (the "underwriters"), and each of the underwriters
has severally agreed to purchase from the seller, the principal amount of the
Series [200_-_] certificates set forth opposite its name:
-------------------------------------------------------------------------------
Underwriters Series [200_-_]
Certificates
---------------------------------------------------------- ----------------
[ ]............................................ $[ ]
[ ]............................................ [ ]
Total.............................................. $[ ]
[Distribution of the Series [200_-_] certificates will be made from time
to time in negotiated transactions or otherwise at varying prices to be
determined at the time of sale. Proceeds to the seller will be [ ]% of
the aggregate principal amount of the Series [200_-_] certificates plus
accrued interest from [ ], before deducting expenses estimated to
be $[ ]. In connection with the purchase and sale of the Series
[200_-_] certificates, the underwriters may be deemed to have received
compensation from the seller in the form of underwriting discounts.
[In the ordinary course of their businesses, the underwriters and their
respective affiliates have engaged and may engage in investment banking
transactions with the seller and its affiliates.]
The underwriters intend to make a secondary market in the Series
[200_-_] certificates, but have no obligation to do so. We cannot assure you
that a secondary market for the Series [200_-_] certificates will develop or,
if it does develop, that it will continue or that it will provide holders of
the Series [200_-_] certificates with a sufficient level of liquidity of, or
trading markets for, the Series [200_-_] certificates.
-------------------------------------------------------------------------------
Legal Matters
-------------------------------------------------------------------------------
Certain legal matters relating to the Series [200_-_] certificates will
be passed upon for DCWR by Brown & Wood LLP, New York, New York, and for the
underwriters by Brown & Wood LLP. Federal income tax and ERISA matters will be
passed upon for DCWR and the trust by Brown & Wood LLP. In addition to
representing the underwriters, Brown & Wood LLP from time to time represents
Chrysler Financial Company L.L.C. and its affiliates on other matters. See
"Legal Matters" in the prospectus.
-------------------------------------------------------------------------------
Certificate Ratings
-------------------------------------------------------------------------------
The trust will issue the Series [200_-_] certificates only if they are
rated at the time of issuance in the highest long-term rating category by at
least one nationally recognized rating agency.
The rating agencies and their ratings only address the likelihood that
you will ultimately receive all of your required principal and interest
distributions. The rating agencies and their ratings do not address the
likelihood that any carry-over interest amounts will be paid, the likelihood
you will receive interest or principal payments on a scheduled date, or
whether you will receive any principal on the Series [200_-_] certificates
prior to or after the expected distribution date.
The ratings assigned to the Series [200_-_] certificates should be
evaluated independently form similar ratings on other types of securities. A
rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time by the rating agencies.
<PAGE>
-------------------------------------------------------------------------------
Glossary of Principal Terms for Prospectus Supplement
-------------------------------------------------------------------------------
"Accumulation Period Commencement Date" means the date on which the
Accumulation Period will begin, which is determined as follows:
The Accumulation Period
Commencement Date
If the Accumulation will be the first day in the following
Period Length is Collection Period:
----------------------------- --------------------------------------
Five Collection Periods [ ] Collection Period
Four Collection Periods [ ] Collection Period
Three Collection Periods [ ] Collection Period
Two Collection Periods [ ] Collection Period
One Collection Period [ ] Collection Period
However, if at any time after the [ _____________ ] payment date, any other
outstanding series [(excluding certain series)] shall have entered into an
early amortization period, the Accumulation Period Commencement Date shall be
the earlier of
o the date that that outstanding series shall have entered into its
early amortization period and
o the Accumulation Period Commencement Date as previously
determined.
"Accumulation Period Length" means the length of the Accumulation Period,
which will be lesser of
(i) the number of full Collection Periods between such payment date and
the Series 200_-_ Expected Payment Date and
(ii) the product, rounded upwards to the nearest integer not greater than
five, of
(a) one divided by the lowest Monthly Payment Rate on the
receivables during the last [ ] months and
(b) a fraction,
(x) the numerator of which is the sum of
(1) the Invested Amount as of that distribution date,
after giving effect to all changes in the Invested
Amount on that date, and
(2) the invested amounts of all other series [,excluding
some series,] currently in their amortization or
accumulation periods or expected to be in their
amortization or accumulation periods by the Series
[200_-_] Expected Payment Date and
(y) the denominator of which is the sum of the Invested Amount
and the invested amounts as of that distribution date,
after giving effect to all changes in those amounts on
that date, of all other outstanding series [,excluding
some series,] which are expected to be outstanding on the
Series [200_-_] Expected Payment Date.
"Assets Receivables Rate" means the product of
(i) the quotient obtained by dividing
o 360 by
o the actual number of days elapsed in that period and
(ii) a percentage, expressed as a fraction,
(a) the numerator of which is the sum of
(x) Certificateholder Interest Collections for the
Collection Period immediately preceding the last day
of that period, which for this purpose only is based
on interest amounts billed to the dealers which are
due during that Collection Period, less the Monthly
Servicing Fee with respect to that immediately
preceding Collection Period,
(y) the Investment Proceeds to be applied on the
distribution date related to that period and
(z) Excess Interest Collections allocated to Series
[2000_-_] with respect to that period] and
(b) the denominator of which is the sum of
(x) the product of
(1) the Floating Allocation Percentage,
(2) the Series Allocation Percentage and
(3) the average Pool Balance, after giving effect to
any charge-offs, for that immediately preceding
Collection Period,
(y) the principal balance on deposit in the Excess
Funding Account on the first day of that period,
after giving effect to all deposits to and
withdrawals therefrom on that first day, and
(z) the principal balance on deposit in the Principal
Funding Account on the first day of that period,
after giving effect to all deposits to and
withdrawals therefrom on that first day, [other].
"Available Seller's Collections" means, for any date, the sum of
o the Available Seller's Interest Collections for that date and
o the Available Seller's Principal Collections for that date.
The Available Seller's Collections, however, will be zero for any Collection
Period with respect to which the Available Subordinated Amount is zero on the
Determination Date immediately following the end of that Collection Period.
"Available Seller's Interest Collections" means, for any date, an amount
equal to the result obtained by multiplying
(i) the excess of
(a) the Seller's Percentage for the related Collection Period over
(b) the Excess Seller's Percentage for that Collection Period by
(ii) Series Allocable Interest Collections for that date.
"Available Seller's Principal Collections" means, for any date, an amount
equal to the product of
(i) the excess of
(a) the Seller's Percentage for the related Collection Period over
(b) the Excess Seller's Percentage for that Collection Period and
(ii) Series Allocable Principal Collections for that date.
"Available Series 200_-_ Certificateholder Principal Collections" means,
for any distribution date, the sum of
(i) the product of
(a) the Floating Allocation Percentage, with respect to any
Nonprincipal Period, or the Principal Allocation Percentage,
with respect to the [Accumulation Period][Controlled
Amortization Amount] or any Early Amortization Period [or
Reinvestment Period], for the related Collection Period and
(b) Series Allocable Principal Collections deposited in the
Collection Account for the related Collection Period,
(ii) the amount, if any, of Interest Collections, Investment Proceeds,
[funds in the Reserve Fund,] Available Seller's Collections and
Excess Servicing allocated to cover the Investor Default Amount or
reimburse Investor Charge-Offs,
(iii) Series Allocable Miscellaneous Payments on deposit in the
Collection Account for that distribution date and
(iv) Excess Principal Collections, if any, from other series allocated to
Series [200_-_].
"Available Subordinated Amount" means, for a Determination Date, an
amount equal to
(i) the lesser of
(a) the Available Subordinated Amount for the preceding
Determination Date, minus, with limitations, the Draw Amount
for that preceding Determination Date, [minus funds from the
Reserve Fund applied to cover any portion of the Investor
Default Amount,] plus the excess, if any, of the Required
Subordinated Amount for that Determination Date over the
Required Subordinated Amount for the immediately preceding
Determination Date due to an increase in the Subordination
Factor, plus the amount of Excess Servicing available to be
paid to the seller as described under "Distributions from the
Collection Account[; Reserve Fund;] [Yield Supplement
Account][; Other Enhancement]-- Excess Servicing", and
(b) the product of the fractional equivalent of the Subordinated
Percentage and the Invested Amount,
[minus (ii) in the case of the first subclause to the first clause above
the Incremental Subordinated Amount for that preceding Determination
Date,]
[plus (iii) the Incremental Subordinated Amount for the current
Determination Date,]
[plus (iv) 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.]
"Calculation Agent" means the trustee.
"Certificate Rate" means [ %] [an amount equal to [the lesser of (a)] the
index] [LIBOR] [plus] [minimum] [times] [ ]% [and (b) [except with respect to
[the Prefunded Period [other]] the [Assets Receivables Rate for the related
distribution date].
"Carry-over Amount" means
(i) the excess of
(a) the amount of interest on the Series [200_-_] certificates that
would have accrued in respect of the related Interest Period
had interest been calculated based on [LIBOR][the Index], over
(b) the amount of interest on the Series [200_-_] certificates
actually accrued in respect of that Interest Period based on
the Assets Receivables Rate
plus (ii) the unpaid portion of any excess from prior distribution dates,
and interest accrued on that amount calculated on the basis of
[LIBOR][the Index].
"CFC" means Chrysler Financial Company L.L.C.
"Controlled Accumulation Amount" means an amount equal to the Invested
Amount as of the [ ] distribution date (after giving effect to any changes in
the Invested Amount on that date) divided by the [Accumulation Period
Length].]
"Controlled Deposit Amount" means, for a distribution date, the excess,
if any, of
(i) [the sum of
(a) ] the product of the Controlled Accumulation Amount and the
number of distribution dates from and including the first
distribution date with respect to the Accumulation Period
through and including that distribution date, but not in excess
of the Accumulation Period Length, [and
(b) the amount on deposit in the Excess Funding Account as of the
[ ] distribution date, after giving effect
to any withdrawals from or deposits to that account on that
date, other than the transfer to the Principal Funding Account
of amounts on deposit in the Excess Funding Account on that
date, ]
over (ii) the sum of amounts on deposit in the [Excess Funding Account
and] the Principal Funding Account, in each case before giving effect to
any withdrawals from or deposits to those accounts on that distribution
date.]
"DaimlerChrysler" means DaimlerChrysler Corporation.
"DCWR" means DaimlerChrysler Wholesale Receivables LLC.
"Deficiency Amount" means the amount, if any, by which
(i) the sum of
o Monthly Interest for the following distribution date,
o Monthly Interest accrued but not paid with respect to
prior distribution dates, and interest on that Monthly
Interest,
o the Monthly Servicing Fee for that distribution date,
o the Investor Default Amount for that distribution date,
o the amount of any Adjustment Payment allocated to the
Series [200_-_] certificates for that distribution date
that has not been deposited in the Collection Account as
required under the Pooling and Servicing Agreement and
o if that distribution date is the final distribution date,
any Carry-over Amount on that distribution date that will
not be satisfied on that date by the application of
amounts on deposit in the Yield Supplement Account as
described under "Distributions from the Collection
Account; Reserve Fund; Yield Supplement Account; Other
Enhancement -- Yield Supplement Account",
exceeds (ii) the sum of
[o] Certificateholder Interest Collections and Investment Proceeds
for that distribution date,
[o Excess Interest collections allocated to Series [200_-_] with
respect to that distribution date] [and
o the amount of funds in the Reserve Fund on that Determination
Date available to fund any portion of the Deficiency Amount as
described under "Distributions from the Collection Account;
Reserve Fund[; Yield Supplement Account] -- Interest
Collections"].
"Distribution Date Statement" means a statement prepared by the
servicer setting forth the following information (which, in the case of the
third, fourth and fifth clauses below, will be stated on the basis of an
original principal amount of $1,000 per Series [200_-_] certificate if the
[Accumulation Period] [Controlled Amortization Period] or an Early
Amortization Period][or Reinvestment Period] has commenced):
o the aggregate amount of collections, the aggregate
amount of Interest Collections and the aggregate amount of
Principal Collections processed during the immediately
preceding Collection Period;
o the Series Allocation Percentage, the Floating Allocation
Percentage, the Principal Allocation Percentage and the Series
[200_-_] Certificate Principal Percentage for that Collection
Period;
o the total amount, if any, distributed on the Series [200_-_]
certificates;
o the amount of the distribution allocable to principal on the
Series [200_-_] certificates;
o the amount of the distribution allocable to interest on the
Series [200_-_] certificates;
o the Investor Default Amount for that distribution date;
o the Draw Amount, if any, for that Collection Period;
o the amount of the Investor Charge-Offs and the amounts of
reimbursements of the Investor Charge-Offs for that Collection
Period;
o the amount of the Monthly Servicing Fee for that Collection
Period;
o the [Controlled Distribution Amount][Controlled Deposit
Amount] for the following distribution date;
o the Invested Amount[, the Excess Funded Amount] and
the outstanding principal balance of the Series [200_-_]
certificates for that distribution date, after giving effect to
all distributions which will occur on that distribution date;
o the "pool factor" for the Series [200_-_] certificates
as of the Determination Date with respect to that distribution
date, consisting of an eleven-digit decimal expressing the
Invested Amount as of that Determination Date, determined after
taking into account any reduction in that Invested Amount which
will occur on that distribution date, as a proportion of the
Initial Invested Amount;
o the Available Subordinated Amount for that Determination
Date;
o [the Reserve Fund balance for that date];
o [the Principal Funding Account Balance,] [the Interest
Funding Account Balance,] [the Prefunding Account Balance] and
[the Yield Supplement Account balance] with respect to that
date;
o [during any Reinvestment Period, information with respect to
the Eligible Investments in the accounts for the Series
[200_-_] certificates;] and
o [other].
[However, after the Fully Reinvested Date, [unless the Revolving Period has
recommenced,] that statement will not include the information in clauses
[_________________________________ above].]
"Draw Amount" means the lesser of (i) the Deficiency Amount and (ii) the
Available Subordinated Amount.
"Excess Principal Collections" means the amount of Available
Certificateholder Principal Collections for any Collection Period remaining
after their application to required payments or deposits for Series [200_-_],
if any, and the amount of any similar excess for any other series.
"Excess Reserve Fund Required Amount" for any distribution date with
respect to an Early Amortization Period [or Reinvestment Period] means an
amount equal to the greater of
(i) [ ]% of the initial principal balance of the [Series 200_-_]
certificates and
(ii) the excess of
(a) 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 that distribution date, and
(y) an amount equal to
(1) the excess of the Required Participation Percentage
over 100% multiplied by
(2) the outstanding principal balance of the [Series
200_-_] certificates on that distribution date, after
giving effect to any changes in that balance on that
distribution date,
(b) over the excess of
(x) the Series Allocation Percentage of the Pool Balance on
the last day of the immediately preceding Collection
Period over
(y) the Invested Amount on that distribution date, after
giving effect to changes in that amount on that
distribution date; provided that the Excess Reserve Fund
Required Amount shall not exceed that Available
Subordinated Amount. [Describe adjustments, if applicable]
"Excess Seller's Percentage" means, for any Collection Period, a
percentage, which percentage shall never be less than 0% nor more than 100%,
equal to
(i) 100% minus, when used with respect to interest collections [, except
during any Early Amortization Period,] and principal collections
during any Nonprincipal Period, the sum of
(a) the Floating Allocation Percentage with respect to that
Collection Period and
(b) the percentage equivalent of a fraction, the numerator of which
is the Available Subordinated Amount as of the Determination
Date occurring in that Collection Period, after giving effect
to the allocations, distributions, withdrawals and deposits to
be made on the distribution date immediately following that
Determination Date, and the denominator of which is the product
of
(x) the Pool Balance as of the last day of that immediately
preceding Collection Period and
(y) the Series Allocation Percentage for the Collection Period
in respect of which the Excess Seller's Percentage is
being calculated or
(ii) 100% minus, when used with respect to [interest collections during
any Early Amortization Period and] principal collections during [the
Accumulation Period] [Controlled Amortization Period] and any Early
Amortization Period [or Reinvestment Period], the sum of
(a) the [Principal Allocation Percentage] [other] with respect to
that Collection Period and
(b) the percentage described in the clause (i)(b) above for that
Collection Period.
"Excluded Dealers" means the dealers that are in voluntary or involuntary
bankruptcy proceedings or voluntary or involuntary liquidation or that,
subject to limitations, are being voluntarily removed by the seller from the
trust.
"Excluded Receivables" means principal receivables with respect to
Excluded Dealers.
"final distribution date" means the distribution date on which, after
giving effect to all payments to be made on that distribution date, the
outstanding principal balance of the [Series 200_-_] certificates will be paid
in full.
"Floating Allocation Percentage" means, for any Collection Period, [the
percentage equivalent, which shall never exceed 100%, of a fraction, the
numerator of which is the Invested Amount as of the last day of the
immediately preceding Collection Period and the denominator of which is the
product of
o the Pool Balance as of that last day and
o the Series Allocation Percentage for the Collection Period in
respect of which the Floating Allocation Percentage is being
calculated.
With respect to the first Collection Period, however, the Floating Allocation
Percentage shall mean the percentage equivalent of a fraction, the numerator
of which is the Initial Invested Amount as of the Series Issuance Date and the
denominator of which is the Series Allocation Percentage of the Pool Balance
as of the Series Cut-Off Date][other].
"Incremental Subordinated Amount" means on any Determination Date the
result obtained by multiplying
(i) a fraction, the numerator of which is the sum of the Invested Amount
on the last day of the immediately preceding Collection Period and
the Available Subordinated Amount for such Determination Date,
calculated without adding the Incremental Subordinated Amount for
such Determination Date, and the denominator of which is the Pool
Balance on such last day by
(ii) the excess, if any, of
(a) the sum of the Overconcentration Amount, the Installment
Balance Amount and the aggregate amount of Ineligible
Receivables on such Determination Date over
(b) the aggregate amount of Ineligible Receivables, receivables in
Accounts containing Dealer Overconcentrations and receivables
in Installment Balances, in each case that became Defaulted
Receivables during the preceding Collection Period and are not
subject to reassignment from the trust, unless certain
insolvency events relating to the seller or CFC have occurred,
as further described in the Pooling and Servicing Agreement.
"Initial Invested Amount" means [[the portion of the initial principal
amount of the Series [200_-_] certificates which is invested in principal
receivables on the Series Issuance Date, which is expected to equal $[ ],
based on information as of the Series Cut-off Date,] during the Prefunded
Period, zero and after that time [ _________ ]],
o plus 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,
o minus 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.
"Interest Period" means, with respect to any distribution date, the
period from and including the preceding distribution date to but excluding
that distribution date, or, in the case of the first distribution date, from
and including the Series [200_-_] issuance date to but excluding the first
distribution date.
"Invested Amount" means for any date [an amount equal to the Initial
Invested Amount,
o minus the amount, without duplication, of principal payments,
except for principal payments made from the Excess Funding Account,
made to Series [200_-_] certificateholders or deposited to the
Principal Funding Account in respect of the Series [200_-_]
certificates prior to that date since the Series Issuance Date
o minus the excess, if any, of
(i) the aggregate amount of Investor Charge-Offs for all
distribution dates preceding that date, over
(ii) the aggregate amount of any reimbursements of Investor
Charge-Offs for all distribution dates preceding that
date][other].
"Investment Proceeds" means, for any distribution date, an amount equal
to the sum of investment earnings for the preceding Collection Period from:
[o funds held in the Reserve Fund;]
[o the Series Allocation Percentage of funds held in the Collection
Account;]
[o funds held in the Excess Funding Account;]
[o funds held in the Yield Supplement Account;]
[o funds held in the Principal Funding Account;]
[o funds held in the Prefunding Account;]
[o funds held in the Interest Funding Account;]
[o funds held in [other accounts].]
"Investor Charge-Off" means a reduction in the outstanding principal
balance of the Series [200_-_] certificates, calculated as described on paages
S-__.
"LIBOR" means, with respect to any Interest Period, the rate established
by the Calculation Agent, which will equal 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. However, 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 that
date. If at least two reference banks provide the Calculation Agent with the
offered quotations, LIBOR on that 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 the quotations. If
on that date fewer than two of the reference banks provide the Calculation
Agent with the offered quotations, LIBOR on that 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
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 that date to leading European banks for United States dollar
deposits for one month. If, however, those banks are not quoting as described
above, LIBOR for that date will be LIBOR applicable to the Interest Period
immediately preceding that Interest Period.
"LIBOR Business Day" means a 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" means, with respect to any Interest Period,
the second LIBOR Business Day prior to that Interest Period.
"Monthly Interest" means, for any distribution date, the amount of
interest accrued in respect of the Series [200_-_] certificates in the
Interest Period for that distribution date.
"Monthly Principal" means, with respect to any distribution date relating
to the [Accumulation Period][Controlled Amortization Period] or any Early
Amortization Period [or Reinvestment Period], the Available [Series 200_-_]
Certificateholder Principal Collections for that distribution date. For each
distribution date, however, [with respect to the Controlled Amortization
Period, Monthly Principal may not exceed the Controlled Deposit Amount]. Also,
Monthly Principal will not exceed the Invested Amount.
"Nonprincipal Period" means any period that is not the Accumulation
Period or an Early Amortization Period.
"pool factor" means, for a distribution date, an eleven-digit decimal
expressing the Invested Amount as of the Determination Date, determined after
taking into account any reduction in the Invested Amount which will occur on
the distribution date, as a proportion of the Initial Invested Amount.
"Prefunding Account" means an Eligible Deposit Account established and
maintained by the servicer in the name of the trustee, on behalf of the trust,
for the benefit of the [Series 200_-_] certificateholders into which the
seller will deposit the initial principal amount of the Series [200_-_]
certificates.
"Prefunding Account Balance" means all amounts on deposit in the
Prefunding Account on any distribution date, after giving effect to
distributions to be made on such distribution date.
"Principal Allocation Percentage" means, for any Collection Period, [the
percentage equivalent, which shall never exceed 100%, of a fraction, the
numerator of which is the Invested Amount as of the last day of the Revolving
Period, if that last day has occurred or, if that 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
o the Pool Balance as of that last day and
o the Series Allocation Percentage for the Collection Period in
respect of which the Principal Allocation Percentage is being
calculated][other].
"Principal Funding Account" means an Eligible Deposit Account established
and maintained by the servicer in the name of the trustee, on behalf of the
trust, for the benefit of the Series [200_-_]certificateholders and in which
principal is accumulated for payment to the Series [200_-_]
certificateholders.
"Principal Funding Account Balance" means all amounts on deposit in the
Principal Funding Account on any distribution date, after giving effect to
distributions to be made on such distribution date.
"Principal Shortfalls" means any principal distributions to
certificateholders for any series entitled to those principal distributions
which are either scheduled or permitted and which have not been covered out of
principal collections and other amounts allocated to the series.
"Record Date" means, for any distribution date, the day immediately
preceding that date.
"Required Participation Percentage" means, for [Series 200_-_], [ ____
]%. If, however, 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 the determination is being made
is greater than [ ]% of the Pool Balance on that last day, the Required
Participation Percentage shall mean, as of that last day and with respect to
that Collection Period and the immediately following Collection Period only, [
____ ]%. Furthermore, the seller may, upon ten days' prior notice to the
trustee, the Rating Agencies and any Enhancement provider, reduce the Required
Participation Percentage to not less than 100%, so long as the Rating Agencies
shall not have notified the seller or the servicer that any reduction will
result in a reduction or withdrawal of the rating of the [Series 200_-_]
certificates or any other outstanding series or class of certificates.
"Required Subordinated Amount" means, as of any date of determination,
[the sum of
o ] the product of the initial Subordinated Percentage[, as
adjusted from time to time as described in this prospectus
supplement other than as a result of an increase in the Subordinated
Percentage at the option of the seller,] and the Invested Amount
[and
o the Incremental Subordinated Amount.]
"Reserve Fund" means an Eligible Deposit Account established and
maintained in the name of the trustee for the benefit of the [Series 200_-_]
certificateholders to hold the Reserve Fund Required Amount.
"Reserve Fund Deposit Amount" means the amount, if any, by which the
Reserve Fund Required Amount exceeds the amount on deposit in the Reserve
Fund.
"Reserve Fund Required Amount" means, for any distribution date, [ ]% of
the outstanding principal balance of the [Series 200_-_] certificates for that
distribution date, after giving effect to any change in that balance on that
distribution date. [Describe any increases in the Reserve Fund Required
Amount.]
"Revolving Period" means the period beginning at the close of business on
the Series Cut-Off Date and terminating on the earlier of
o the close of business on the day immediately preceding the day on
which the Accumulation Period commences and
o the close of business on the day an Early Amortization Period
commences.
The Revolving Period, however, may recommence upon the termination of an Early
Amortization Period.
"Seller's Participation Amount" means, for any date, an amount equal to
the Pool Balance on that date minus the aggregate invested amounts for all
outstanding series on that date.
"Seller's Percentage" means 100% minus
o the Floating Allocation Percentage, when used with respect
to interest collections [, except during any Early Amortization
Period], Defaulted Receivables and principal collections during any
Nonprincipal Period, and
o the [Principal Allocation Percentage][other], when used
with respect to [interest collections during any Early Amortization
Period and] principal collections during the [Accumulation Period]
[Controlled Amortization Period] and any Early Amortization Period
[or Reinvestment Period].
"[Series 200_-_] Certificateholder Interest Collections" means, for any
distribution date, the portion of Series Allocable Interest Collections for
the related Collection Period allocated to the [Series 200_-_]
Certificateholders' Interest as described under "Series Provisions --
Allocation Percentages -- Allocation Between the [Series 200_-_]
Certificateholders and the Seller" in this prospectus supplement.
"Series [200_-_] Certificateholders' Interest" means the interest of the
Series [200_-_] certificateholders in the Trust Assets.
"Series [200_-_] certificates" means the [Floating Rate] [ %] Auto Loan
Asset Backed Certificates, Series [200_-_].
"Series [200_-_] Expected Payment Date" means the [ ________________ ]
distribution date.
"Series Supplement" means the series supplement to the Pooling and
Servicing Agreement relating to the Series [200_-_] certificates.
"Subordinated Percentage" means, initially, 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, [initially] [ _____ ]% [, but will be
subject to increase to [ ]% in the event that the rating of CFC's long-term
unsecured debt is lowered below BBB- by Standard & Poor's or withdrawn by
Standard & Poor's, unless the seller receives written confirmation from
Standard & Poor's that the failure to so increase the Subordination Factor
would not result in Standard & Poor's lowering or withdrawing its rating of
the [Series 200_-_] certificates.]
"Telerate Page 3750" means the display page so designated on the Dow
Jones Telerate Service, or any other page as may replace that page on that
service, or any other service as may be nominated as the information vendor,
for the purpose of displaying London interbank offered rates of major banks.
"Termination Date" means the [ ____________ ] distribution date, on which
the last payment of principal and interest on the Series [200_-_] certificates
will be due and payable.
"trust" means the CARCO Auto Loan Master Trust.
"underwriters" means [ ] and [ ].
"Underwriting Agreement" means the Underwriting Agreement [between]
[among] [ ] dated as of [ ].
"Yield Supplement Account" means an Eligible Deposit Account established
and maintained in the name of the trustee for the benefit of the Series
[200_-_] certificateholders to hold the Yield Supplement Required Amount.
"Yield Supplement Account Deposit Amount" means the amount, if any, by
which the Yield Supplement Account Required Amount exceeds the amount on
deposit in the Yield Supplement Account.
"Yield Supplement Account Required Amount" means for any distribution
date
[o that occurs during the Prefunded Period, [ ],]
[o that occurs [after the Prefunded Period and] prior to the Fully
Reinvested Date [or any distribution date after the Fully Reinvested
Date during the Revolving Period]], [ ]% of the outstanding
principal balance of the Series [200_-_] certificates for that
distribution date, after giving effect to any change in that balance
on that distribution date, [and
o for any [other] distribution date that occurs on or after the Fully
Reinvested Date, zero].
<PAGE>
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<PAGE>
Annex I
-------------------------------------------------------------------------------
Other Series of Investor Certificates
-------------------------------------------------------------------------------
This Annex I sets forth the principal characteristics of
o the Floating Rate Auto Loan Asset Backed Certificates, Series
1996-1,
o the Floating Rate Auto Loan Asset Backed Certificates, Series
1996-2,
o the 6.689% Auto Loan Asset Backed Certificates, Series 1997-1,
o the Floating Rate Auto Loan Asset Backed Certificates, Series
1998-1,
o the Fixed Rate Auto Loan Asset Backed Certificates, Series 1999-1,
o the Floating Rate Auto Loan Asset Backed Certificates, Series
1999-2,
o the Floating Rate Auto Loan Asset Backed Certificates, Series
1999-3,
o the 6.43% Auto Loan Asset Backed Certificates, Series 1999-4 and
o the Floating Rate Auto Loan Asset Backed Certificates,
Series 2000-A ("Series 1996-1", "Series 1996-2", "Series 1997-1",
"Series 1998-1", "Series 1999-1", "Series 1999-2", "Series 1999-3",
"Series 1999-4" and "Series 2000-A", respectively).
For more specific information with respect to any Series, any prospective
investor should contact DCWR at (248) 948-3067. DCWR will provide, without
charge, to any prospective purchaser, a copy of the disclosure document with
respect to that series.
1. Series 1996-1
Initial Principal Amount............ $500,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day
of each month
Current Principal Amount............ $500,000,000
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 11.1% of the Invested
Amount
Revolving Period.................... October 31, 1996 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Expected Payment Date............... November 2003 Distribution Date
Termination Date.................... October 2005 Distribution Date
2. Series 1996-2
Initial Principal Amount............ $500,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day
of each month
Current Principal Amount............ $500,000,000
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 11.1% of the Invested
Revolving Period.................... November 30, 1996 to the earlier of
the commencement of an Accumulation
Period or an Early Amortization Period
Expected Payment Date............... December 2001 Distribution Date
Termination Date.................... November 2003 Distribution Date
3. Series 1997-1
Initial Principal Amount............ $700,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day
of each month
Current Principal Amount............ $369,729,998.17
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 11.1% of the Invested
Amount
Revolving Period.................... July 31, 1997 to the earlier of the
commencement of an Accumulation
Period, a Reinvestment Period or an
Early Amortization Period
Expected Payment Date............... August 2004 Distribution Date
Termination Date.................... August 2006 Distribution Date
4. Series 1998-1
Initial Principal Amount............
Class A-1 Certificates.......... $500,000,000
Class A-2 Certificates.......... $500,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day
of each month
Current Principal Amount
Class A-1 Certificates.......... $500,000,000
Class A-2 Certificates.......... $500,000,000
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 11.1% of the Invested
Amount
Revolving Period
Class A-1 Certificates.......... July 1, 1998 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Class A-2 Certificates.......... July 1, 1998 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Expected Payment Date
Class A-1 Certificates.......... June 2001 Distribution Date
Class A-2 Certificates.......... June 2002 Distribution Date
Termination Date
Class A-1 Certificates.......... March 2003 Distribution Date
Class A-2 Certificates.......... March 2004 Distribution Date
5. Series 1999-1
Initial Principal Amount
Class A-1 Certificates.......... $400,000,000
Class A-2 Certificates.......... $600,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day of
each month Principal Amount
Class A-1 Certificates.......... $400,000,000
Class A-2 Certificates.......... $600,000,000
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 11.7% of the Invested
Amount
Revolving Period
Class A-1 Certificates.......... March 1, 1999 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Class A-2 Certificates.......... March 1, 1999 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Expected Payment Date
Class A-1 Certificates.......... March 2001 Distribution Date
Class A-2 Certificates.......... March 2002 Distribution Date
Termination Date
Class A-1 Certificates.......... March 2003 Distribution Date
Class A-2 Certificates.......... March 2004 Distribution Date
6. Series 1999-2
Initial Principal Amount
Class A-1 Certificates.......... $750,000,000
Class A-2 Certificates.......... $600,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day of
each month
Current Principal Amount
Class A-1 Certificates.......... $750,000,000
Class A-2 Certificates.......... $600,000,000
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 11.1% of the Invested
Amount
Revolving Period
Class A-1 Certificates.......... May 1, 1999 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Class A-2 Certificates.......... May 1, 1999 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Expected Payment Date
Class A-1 Certificates.......... May 2002 Distribution Date
Class A-2 Certificates.......... May 2004 Distribution Date
Termination Date
Class A-1 Certificates.......... May 2004 Distribution Date
Class A-2 Certificates.......... May 2006 Distribution Date
7. Series 1999-3
Initial Principal Amount............ $1,000,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day
of each month
Current Principal Amount............ $1,000,000,000
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 11.1% of the Invested
Amount
Revolving Period.................... June 30, 1999 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Expected Payment Date............... July 15, 2002
Termination Date.................... July 15, 2004
8. Series 1999-4
Initial Principal Amount............ $500,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day
of each month
Current Principal Amount............ $500,000,000
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 12% of the Invested Amount
Revolving Period.................... October 31, 1999 to the earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Expected Payment Date............... November 15, 2002
Termination Date.................... November 15, 2004
9. 2000-A
Initial Principal Amount............ $750,000,000
Scheduled Interest Payment Date..... Monthly, on or about the fifteenth day
of each month
Current Principal Amount............ $750,000,000
Required Participation Percentage... 103%
Initial Subordinated Amount......... Approximately 11.1% of the Invested
Amount
Revolving Period.................... March 31, 2000 to earlier of the
commencement of an Accumulation Period
or an Early Amortization Period
Expected Payment Date............... March 17, 2003
Termination Date.................... March 15, 2005
<PAGE>
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<PAGE>
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Subject to Completion Dated September 26, 2000
PROSPECTUS
DAIMLERCHRYSLER
CARCO AUTO LOAN MASTER TRUST
Issuer
Auto Loan Asset Backed Certificates
DAIMLERCHRYSLER WHOLESALE RECEIVABLES LLC, Seller
CHRYSLER FINANCIAL COMPANY L.L.C., Servicer
The trust--
o may periodically issue asset backed certificates in one or more
series with one or more classes; and
o will own
-- receivables arising from a portfolio of automobile dealer
revolving floorplan financing agreements;
-- payments due on those receivables; and
-- other property described in this prospectus and in the
prospectus supplement.
The certificates--
o will represent interests in the trust;
o will be paid only from the assets of the trust;
o will represent the right to payments in the amounts and at
the times described in the prospectus supplement for those
certificates;
o offered by this prospectus will be rated in the highest
long-term rating category, unless otherwise specified, at the
time of issuance by at least one nationally recognized rating
agency; and
o may benefit from one or more forms of credit enhancement.
-------------------------------------------------------------------------------
Before you decide to invest in any of the certificates, please read this
prospectus and the related prospectus supplement, especially the risk factors
beginning on page of the prospectus. The certificates will be interests
in the trust only and neither the certificates nor the assets of the trust
will represent interests in or obligations of DaimlerChrysler Wholesale
Receivables LLC, DaimlerChrysler AG, DaimlerChrysler Corporation, Chrysler
Financial Company L.L.C. or any of their affiliates. Neither the Securities
and Exchange Commission nor any state securities commission has approved or
disapproved the securities or determined that this prospectus or any
prospectus supplement is accurate or complete. Any representation to the
contrary is a criminal offense.
-------------------------------------------------------------------------------
The date of this prospectus is , 2000.
<PAGE>
Reading This Prospectus and the
Accompanying Prospectus Supplement
We provide information on your certificates in two separate documents
that offer varying levels of detail:
o this prospectus provides general information, some of which may
not apply to a particular series of certificates, including your
certificates, and
o the accompanying prospectus supplement provides a summary of the
specific terms of your certificates.
If the terms of the certificates described in this prospectus vary
with the accompanying prospectus supplement, you should rely on the
information in the prospectus supplement.
We include cross-references to sections in these documents where you
can find further related discussions. Refer to the table of contents in the
front of each document to locate the referenced sections.
You should rely only on the information contained in this prospectus
and the accompanying prospectus supplement, including any information
incorporated by reference. We have not authorized anyone to provide you with
different information. The information in this prospectus or the accompanying
prospectus supplement is only accurate as of the dates on their respective
covers.
Where You Can Find More Information
The seller has filed a Registration Statement (together with all
amendments and exhibits, the "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act"), with the Securities and
Exchange Commission (the "Commission") with respect to the certificates
offered by this prospectus. This prospectus, which forms part of the
Registration Statement, does not contain all of the information contained in
the Registration Statement and the exhibits to the Registration Statement.
The Registration Statement may be inspected and copied at:
o the public reference facilities maintained by the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549 (telephone
1-800-732-0330),
o the SEC's regional office at Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661, and
o the SEC's regional office at Seven World Trade Center, New York,
New York 10048.
Also, the Commission maintains a Web site at http://www.sec.gov containing
reports, proxy and information statements and other information regarding
registrants, including Chrysler Financial Company L.L.C., that file
electronically with the SEC.
Incorporation of Documents by Reference
The Commission allows information filed with it to be incorporated by
reference into this prospectus. The following documents filed with the
Commission by the servicer, on behalf of the trust, are incorporated in this
prospectus by reference: the trust's Annual Report on Form 10-K for the year
ended December 31, 1999 and the trust's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000. All reports and other documents filed by the
seller, as originator of any trust, in accordance with Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and
prior to the termination of the offering of the certificates shall be deemed
to be incorporated by reference in this prospectus.
For purposes of this prospectus, any statement in this prospectus or
in a document incorporated or deemed to be incorporated by reference may be
modified or superseded. Those statements may be modified or superseded by any
other statement in this prospectus, an incorporated document or a document
incorporated by reference. The statement may only be modified or superseded to
a limited extent. The original form of the statement will no longer be a part
of this prospectus. Only the modified form of the statement will constitute a
part of this prospectus.
Copies of the Documents
You will receive a free copy of any or all of the documents
incorporated in this prospectus or incorporated by reference into the
accompanying prospectus supplement if:
o you received this prospectus and
o you requested the copies from Assistant Secretary, Chrysler
Financial Company L.L.C., 1000 Chrysler Drive, CIMS 485-14-78,
Auburn Hills, Michigan 48236-2766 (Telephone: 248-512-3990).
This offer only includes the exhibits to the documents, if the exhibits are
specifically incorporated by reference in the documents. You may also read and
copy these materials at the public reference facilities of the Commission in
Washington D.C., referred to previously.
<PAGE>
-------------------------------------------------------------------------------
Table of Contents
-------------------------------------------------------------------------------
----------------------------------------------------
Section Page
----------------------------------------------------
Reading the Prospectus and the 2
Accompanying Prospectus Supplement
Where You Can Find More Information 2
Incorporation of Documents by Reference 2
Summary 6
Risk Factors 10
o Limited Ability to Resell
Certificates 10
o Legal Aspects 10
o Payments 12
o Social, Economic and Other Factors 12
o Trust's Relationship to
DaimlerChrysler and CFC 12
o Credit Enhancement 13
o Control 14
o Additional Series 14
o Ratings of the Certificates 14
o Book-Entry Registration 15
DaimlerChrysler Wholesale Receivables
LLC and the Trust 15
o DaimlerChrysler Wholesale
Receivables LLC 15
o The Trust 17
Use of Proceeds 18
The Dealer Floorplan Financing Business 18
o General 18
o Creation of Receivables 19
o Credit Underwriting Process 19
o Billing, Collection Procedures and 20
Payment Terms
o Revenue Experience 21
o Relationship with DaimlerChrysler 21
o Dealer Monitoring 22
o "Dealer Trouble" Status and CFC's
Write-Off Policy 22
o Additional Information 23
The Accounts 24
o General 24
Chrysler Financial Company L.L.C.,
Chrysler Financial Corporation and
Chrysler Credit Corporation 25
Description of the Certificates 26
o General 26
o Interest 26
o Principal 27
o Book-Entry Registration 30
o Definitive Certificates 34
o The Seller's Certificate 35
o New Issuances 35
o Conveyance of Receivables and
Collateral Security 37
o Representations and Warranties 38
o Eligible Accounts and Eligible
Receivables 41
o Ineligible Receivables, the
Installment Balance Amount and the
Overconcentration Amount 43
o Addition of Accounts 43
o Removal of Accounts 45
o Excluded Series 49
o Collection Account 49
o Excess Funding Account 51
o Allocation Percentages 52
o Allocation of Collections; Deposits
in Collection Account 54
o Limited Subordination of Seller's
Interest; Enhancements 55
o Distributions 57
o Defaulted Receivables and Recoveries 57
o Optional Repurchase 58
o Reinvestment Events and Early
Amortization Events 58
o Termination; Fully Reinvested Date 60
o Indemnification 61
o Collection and Other Servicing
Procedures 62
o Servicer Covenants 63
o Servicing Compensation and Payment
of Expenses 64
o Matters Regarding the Servicer 65
o Service Default 65
o Reports 66
o Evidence as to Compliance 67
o Amendments 67
o List of Certificateholders 68
o The Trustee 68
Description of the Receivables Purchase
Agreement 69
o Sale or Transfer of Receivables 69
o Representations and Warranties 70
o Covenants 71
o Termination 71
Legal Aspects of the Receivables 71
o Transfer of Receivables 71
o Matters Relating to Bankruptcy 73
Tax Matters 75
o Federal Income Tax Consequences 75
o State and Local Tax Consequences 80
ERISA Considerations 81
o General 81
Experts 83
Plan of Distribution 83
Legal Matters 86
Glossary of Principal Terms for Prospectus 87
Global Clearance, Settlement and Tax A-1
Documentation Procedures
<PAGE>
-------------------------------------------------------------------------------
Summary
-------------------------------------------------------------------------------
The following summary is a short, concise description of the main
structural features that a series or class of certificates may have. For this
reason, this summary does not contain all the information that may be
important to you or that describes all of the terms of a certificate. You will
find a detailed description of the possible terms of a certificate following
this summary. Refer to the Glossary of Principal Terms for Prospectus for the
definitions of each capitalized term used in this summary and elsewhere in
this prospectus.
Parties
--------------------------------------------------
Party Description
--------------------------------------------------
Issuer o CARCO Auto Loan Master
Trust (the "trust").
--------------------------------------------------
Seller o DaimlerChrysler Wholesale
Receivables LLC ("DCWR"),
a special-purpose
indirectly owned subsidiary
of Chrysler Financial
Company L.L.C. ("CFC").
--------------------------------------------------
Servicer o CFC, a wholly owned
subsidiary of
DaimlerChrysler Corporation
("DaimlerChrysler"), the
successor to Chrysler
Corporation.
--------------------------------------------------
Trustee o The Bank of New York.
--------------------------------------------------
-------------------------------------------------------
Title of Securities
Auto Loan Asset Backed Certificates (the "certificates").
The Trust
The trust will be governed by a Pooling and Servicing Agreement dated
as of May 31, 1991, among DCWR, as an assignee, as seller, CFC, as a successor
by merger, as servicer, and The Bank of New York, as a successor trustee. The
assets of the trust include
o receivables existing under the accounts at the close of business on
May 31, 1991, receivables generated under the accounts from time to
time after that date during the term of the trust as well as
receivables generated under any accounts added to the trust from
time to time,
o all funds collected or to be collected in respect of the
receivables,
o all funds on deposit in the accounts of the trust,
o any other enhancement issued with respect to any particular series
or class and
o a security interest in motor vehicles and parts inventory,
equipment, fixtures, service accounts and, in some cases, realty
and/or a personal guarantee securing the receivables.
The Accounts
The accounts by which the receivables have been or will be generated
are revolving credit agreements entered into with CFC, directly or as
successor to an affiliate, by dealers to finance the purchase of their
automobile and light duty truck inventory. Accounts may be added to, or
removed from, the trust. See "The Accounts", "Description of the Certificates
-- Eligible Accounts and Eligible Receivables", " -- Addition of Accounts" and
" -- Removal of Accounts".
The Receivables
The receivables consist of advances made by CFC to domestic motor
vehicle dealers to purchase the vehicles. The vehicles consist primarily of
new automobiles, light duty trucks and other vehicles. The principal amount of
an advance in respect of a vehicle typically is equal to the wholesale
purchase price of the vehicle plus destination charges and, subject to
exceptions, is due upon the retail sale of the vehicle. See "The Dealer
Floorplan Financing Business -- Creation of Receivables" and " -- Payment
Terms". The receivables bear interest at a floating rate. See "The Dealer
Floorplan Financing Business -- Revenue Experience".
The Certificates
The trust will issue the certificates in series, each of which will
consist of one or more classes. The prospectus supplement will set forth the
specific terms of a series of certificates.
We will allocate the trust's assets in part to the certificateholders
of each series, and will allocate the remainder to the seller. We will
subordinate a portion of the seller's interest to the certificateholders'
interest of each series. The certificates of each series will evidence an
undivided beneficial interest in the trust and will represent the right to
receive from the assets funds required to make payments of interest on and
principal of the series.
The principal amount of the seller's interest may fluctuate as the
aggregate amount of the receivables balance changes from time to time, as we
issue new series and as outstanding series amortize.
Form and Denomination
of Certificates
You may purchase certificates in book-entry form only and in $1,000
increments.
Interest
The trust will pay interest on the certificates in a series with the
frequency specified in the prospectus supplement. Each series or class of
certificates will have its own interest rate, which may be fixed, variable,
contingent, or adjustable or have any combination of these characteristics and
will be specified in the prospectus supplement. The trust's sources of funds
for the payment of interest on a series of certificates will include:
o interest collections on the receivables allocable to that series and
o any available credit enhancement for that series
Principal
The trust will make principal payments on a series of certificates on
one or more dates specified in the prospectus supplement. We will specify in
the prospectus supplement the sources of funds that the trust will use to pay
principal. Typically, these sources will include:
o all or a portion of the principal collections on the receivables
allocable to that series,
o all or a portion of the interest collections allocable to that
series remaining after the trust has made interest payments on that
series and
o any available credit enhancement for that series.
We will set forth in the prospectus supplement for a series the
manner in which the trust will accumulate or apply available funds toward
principal payments on that series of certificates.
Each series of certificates will have a revolving period during which
we will make no principal payments on that series of certificates. We may
structure principal payments for a class of certificates in the following
ways, among others:
o a single expected final payment date, on which we will repay all
principal at once or
o an amortization period, during which we will repay principal on each
specified distribution date until we have repaid all principal.
If a series has more than one class of certificates, we may repay
principal differently for the various classes.
However, it is possible that principal payments on a class or series
of certificates will begin earlier than the date we specify in the prospectus
supplement. If an early amortization event occurs for a series of
certificates, the trust will apply all principal collections allocated to that
series to the repayment of the outstanding principal of certificates in that
series, unless we provide in the prospectus supplement that those funds will
be set aside for payment on a later date. An early amortization event will
likely cause us to repay principal on the certificates earlier than the
expected date we specified in the prospectus supplement for that series. Also,
an early amortization event may result in delays or reductions in the payments
on your certificates.
Also, the servicer or other designated person may have the option to
purchase the outstanding certificates of a series when its invested amount is
reduced to a specified level.
Limited Subordination of
the Seller's Interest;
Enhancements
The seller's interest will be subordinated to the rights of the
certificateholders of each series to the extent described in the related
prospectus supplement. Also, we may provide other enhancements. See "Limited
Subordination of Seller's Interest; Enhancements".
Tax Matters
In the opinion of Brown & Wood LLP, special federal income tax
counsel for the seller and the trust, the certificates of each series will be
characterized as debt of the seller for federal income tax purposes and the
trust will not be characterized as an association, or a publicly traded
partnership, taxable as a corporation under federal income tax law. In the
opinion of Michigan counsel for the seller and the trust, the certificates
will be characterized as debt of the seller for Michigan income and single
business tax purposes. By your acceptance of a certificate, you will agree to
treat your certificates as indebtedness of the seller for federal, state and
local income and single business tax purposes. We might issue the certificates
with original issue discount. See "Tax Matters" for additional information
concerning the application of federal and Michigan tax laws.
ERISA Considerations
If you are an employee benefit plan, you should review the
considerations discussed under "ERISA Considerations" in this prospectus and
consult counsel before investing in the certificates.
Certificate Ratings
Unless we specify otherwise in the related prospectus supplement, we
will issue the certificates of a series only if they are rated in the highest
long-term rating category by at least one nationally recognized rating agency.
The rating agencies and their ratings do not address whether you will
receive any principal on your certificates prior to or after the expected
distribution date. See "Risk Factors -- Ratings of the certificates".
Risk Factors
An investment in Series 200_-_ certificates involves material risks.
See "Risk Factors" in this prospectus.
<PAGE>
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Risk Factors
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In this section and in the related prospectus supplement under the
heading "Risk Factors," we discuss the principal risk factors of an investment
in the certificates.
Your Ability to Resell Certificates is Limited.
There may be no secondary market for your certificates. Underwriters
may participate in making a secondary market in the certificates, but are
under no obligation to do so. We cannot assure you that a secondary market
will develop. If a secondary market does develop, we cannot assure you that it
will continue or that you will be able to resell your certificates. Also, your
certificates will not be listed on any securities exchange or quoted in the
automated quotation system of any registered securities association. As a
result, you will not have the liquidity that might be provided by that kind of
listing or quotation.
Various Legal Aspects May Cause Delays in Your Receiving
Payments or May Result in Reduced Payments or Losses
on Your Certificates.
This risk factor discusses various ways in which a third party may
become entitled to receive collections on the receivables instead of the
trust. If that happens, you will experience delays in distributions on your
certificates and may experience reductions in distributions on your
certificates. Ultimately, you may incur a loss on your certificates.
There are limited circumstances under the Uniform Commercial Code and
applicable federal law in which prior or subsequent transferees of receivables
could have an interest in the receivables with priority over the trust's
interest. See "Legal Aspects of the Receivables -- Transfer of Receivables".
CFC and the seller have and will treat the transactions described in
this prospectus as a sale of the receivables to the seller and then to the
trust. However, CFC and/or the seller may become a debtor in a bankruptcy case
and a creditor or trustee-in-bankruptcy of the debtor or the debtor itself may
take the position that the sale of receivables to the seller or to the trust
should be recharacterized as a pledge of the receivables to secure a borrowing
of the debtor. In that case, the trust could experience delays in payments of
collections of receivables to it or, should the court rule in favor of any
trustee, debtor or creditor, reductions in the amount of the payments could
result. Also, if the transfer of receivables to the seller is recharacterized
as a pledge, a tax or government lien on the property of CFC arising before
any receivables come into existence may have priority over the seller's
interest in the receivables. See "Legal Aspects of the Receivables -- Matters
Relating to Bankruptcy".
At the time a vehicle is sold, CFC's security interest in the vehicle
will terminate. Therefore, if a dealer fails to remit to CFC amounts owed with
respect to vehicles that have been sold, the related receivables will no
longer be secured by vehicles.
The Timing of Payments on the Receivables Will
Determine Whether We Will Pay Principal on the
Certificates When Intended.
Dealers pay receivables upon the retail sale of the underlying
vehicle. The timing of those sales is uncertain. Also, we cannot assure you
that there will be additional receivables created under the Accounts or that
any particular pattern of dealer repayments will occur. The payment of
principal on the certificates depends on dealer repayments. As a result, you
may not receive your principal when you expected because:
o the certificates of your series or class may not be fully
amortized by its expected payment date, if any, or
o the payment of principal to certificateholders or the
deposit of principal in a principal funding account during the
controlled amortization period or accumulation period, if any, with
respect to your series or class of certificates may not equal the
controlled amortization amount or controlled deposit amount, if any,
with respect to the series or class.
Social, Economic and Other Factors
Will Affect the Level of the Collections
on the Receivables and May Affect the Amount
of the Distributions of the Certificates.
Payment of the receivables is largely dependent upon the retail sale
of the related vehicles. The level of retail sales of cars and light duty
trucks may change as the result of a variety of social and economic factors.
Economic factors include
o interest rates,
o unemployment levels,
o the rate of inflation and
o consumer perception of economic conditions generally.
The use of incentive programs, e.g., manufacturers' rebate programs, may
affect retail sales. However, we cannot predict whether or to what extent
economic or social factors will affect the level of vehicle sales.
The Ability of the Trust to Make Payments on Your Certificates Depends in
Part on the Ability of DaimlerChrysler and CFC to Generate Receivables and
the Ability of CFC to Perform its Obligations under the
Pooling and Servicing Agreement.
Neither CFC nor DaimlerChrysler is obligated to make any payments in
respect of any certificates or the receivables. However, the trust depends
completely upon CFC to generate new receivables. The ability of CFC to
generate receivables depends in turn to a large extent on the sales of
automobiles and light duty trucks manufactured or distributed by
DaimlerChrysler. We cannot assure you that CFC will continue to generate
receivables at the same rate as receivables were generated in prior years.
Also, if CFC were to cease acting as servicer, delays in processing payments
on the receivables and information in respect of the receivables could occur
and result in delays in payments to you.
CFC makes representations and warranties with respect to the
characteristics of the receivables. In some cases, CFC would be required to
purchase receivables with respect to which the representations and warranties
have been breached. If CFC fails to make a required repurchase, the trust may
have less funds. In addition, subject to limitations, CFC has the ability to
change the terms of the Accounts, including the rate and the credit line, as
well as change its underwriting procedures. These changes could reduce the
amount of collections received on the receivables.
Under agreements between DaimlerChrysler and
DaimlerChrysler-franchised dealers, DaimlerChrysler is committed to purchase
unmiled vehicles from the dealers upon dealership termination. If
DaimlerChrysler is not able to repurchase the new vehicles under the
repurchase provision of new vehicles in the dealer agreements, losses with
respect to the receivables may be adversely affected. See "The Dealer
Floorplan Financing Business -- Relationship with DaimlerChrysler". Also,
because a substantial number of the vehicles to be sold by the Dealers are
manufactured or distributed by DaimlerChrysler, if DaimlerChrysler were
temporarily or permanently no longer manufacturing or distributing vehicles,
the rate of sales of DaimlerChrysler-manufactured vehicles owned by the
Dealers would decrease. In that case, payment rates and the loss experience
with respect to the receivables will be adversely affected. See "The Dealer
Floorplan Financing Business".
Credit Enhancement is Limited.
If the Credit Enhancement is Exhausted, You May Incur a Loss.
We will provide credit enhancement of each series of certificates by
subordinating the seller's interest to the extent of the available
subordinated amount for the series as described in the related prospectus
supplement. The amount of the credit enhancement is limited and will be
reduced from time to time as described in the related prospectus supplement.
If the credit enhancement is exhausted, you are much more likely to incur a
loss. See "Limited Subordination of Seller's Interest; Enhancements".
Other Certificateholders May
Control the Actions of the Trust. Their Actions May
Be Adverse to Your Interest.
In some cases, the consent or approval of the holders of a specified
percentage of the aggregate unpaid principal amount of all outstanding
certificates of all outstanding series will be required to direct some
actions. These actions include amending the pooling and servicing agreement in
some cases and directing a reassignment of the entire portfolio of
receivables. Also, following the occurrence of an insolvency event with
respect to the seller, the holders of certificates evidencing more than 50% of
the aggregate unpaid principal amount of each series or each class of each
series, and any holder of a supplemental certificate, will be required to
direct the trustee not to sell or otherwise liquidate the receivables.
The Issuance of Additional Series of
Certificates May Adversely Affect Your Interest.
The trust, as a master trust, has previously issued series and is
expected to issue additional series, which may be represented by different
classes within a series. A series supplement delivered under the pooling and
servicing agreement in connection with the issuance of other series will
specify principal terms applicable to the series. No series supplement may
change the terms of the certificates of another series or the terms of the
pooling and servicing agreement as applied to the certificates of another
series. See "Description of the Certificates -- New Issuances". However, we
cannot assure you that the terms of any one series might not have an impact on
the timing or amount of payments received by a certificateholder of any other
series.
Credit Ratings of the Certificates Reflect the Rating Agency's
Assessment of the Likelihood that You Will Receive Your
Payments of Interest and Principal.
Unless we specify otherwise in the related prospectus supplement, it
will be a condition to the issuance of the certificates of each series offered
by this prospectus that they be rated in the highest long-term rating category
by at least one nationally recognized rating agency. Any rating assigned to
the certificates of a series or a class by a rating agency
o will reflect the rating agency's assessment of the
likelihood that certificateholders of the series or class will
receive the payments of interest and principal required to be made
under the pooling and servicing agreement and
o will be based primarily on the value of the receivables in
the trust, the level of subordination of the seller's interest in
the trust and the availability of any enhancement with respect to
the series or class.
However, any rating will not, unless we otherwise specify in the related
prospectus supplement, address the likelihood that the principal of, or
interest on, any certificates of the series or class will be paid on a
scheduled date. The rating will not be a recommendation to buy, hold or sell
certificates of the series or class, and the rating will not comment as to the
market price or suitability for a particular investor. We cannot assure you
that a rating will remain for any given period of time or that a rating agency
will not reduce or withdraw a rating in the future if in its judgment
circumstances in the future so warrant.
Book-Entry Registration May Limit Your
Ability to Resell or Pledge Your Certificates.
Unless we otherwise specify in the prospectus supplement relating to
a series of certificates, the certificates of each series will initially be
book-entry certificates and will not be registered in your name or your
nominee's name. Accordingly, you will not be recognized by the trustee as the
"certificateholder". You will only be able to exercise the rights of a
certificateholder indirectly through DTC and its participating organizations,
and, if applicable, through Euroclear or Clearstream Banking and their
respective participating organizations. See "Description of the Certificates
-- General", " -- Book-Entry Registration" and " -- Definitive Certificates".
You can find a "Glossary of Principal Terms for the Prospectus"
beginning on page _____ in this prospectus.
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DaimlerChrysler Wholesale Receivables LLC and the Trust
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DaimlerChrysler Wholesale Receivables LLC
DCWR is a limited liability company formed under the laws of the
State of Delaware on February 4, 2000 as a wholly owned subsidiary of CFC, for
the limited purpose of purchasing wholesale, retail and other receivables from
CFC and transferring the receivables to third parties or issuing indebtedness
secured by receivables to third parties. DCWR acquired the Seller's Interest
from U.S. Auto Receivables Company ("USA") on May 31, 2000. At that time DCWR
assumed the obligations of the seller under the Pooling and Servicing
Agreement and the obligations of the purchaser under the Receivables Purchase
Agreement. On August 8, 1991, USA had acquired the Seller's Interest from
Chrysler Auto Receivables Company ("CARCO") and assumed those obligations. As
of May 31, 2000, USA was merged into a member of DCWR and no longer exists.
CARCO is a wholly-owned subsidiary of CFC.
DCWR is deemed to have made all representations and warranties of the
seller in the Pooling and Servicing Agreement and any Series Supplement with
respect to any series of certificates outstanding as of May 31, 2000. In
addition, DCWR has assumed the obligations of USA under the certificates with
respect to any outstanding series, the Pooling and Servicing Agreement and the
Receivables Purchase Agreement and has agreed to hold USA harmless from any
liability related to those obligations. Obligations transferred to and assumed
by DCWR include USA's obligation with respect to the subordinated notes held
by CFC, the proceeds of which note were used to fund a portion of the purchase
price of receivables from CCC on the Initial Closing Date and a portion of the
purchase prices of the receivables arising in the Additional Accounts added to
the trust on Addition Dates subsequent to the Initial Closing Date. CFC may
make additional subordinated loans to DCWR in the future.
The seller has taken steps in structuring the transactions
contemplated by this prospectus that are intended to insure that the voluntary
or involuntary application for relief by CFC under the United States
Bankruptcy Code or similar applicable state laws ("Insolvency Laws") will not
result in the consolidation of the assets and liabilities of the seller with
those of CFC. These steps include the creation of the seller as a separate,
limited-purpose subsidiary under a limited liability company agreement
containing limitations on the nature of the seller's business, as described
above, and on the seller's ability to commence a voluntary case or proceeding
under any Insolvency Law without the unanimous affirmative vote of all its
officers. However, we cannot assure you that the activities of the seller
would not result in a court concluding that the assets and liabilities of the
seller should be consolidated with those of CFC in a proceeding under any
Insolvency Law. See "Risk Factors -- Legal Aspects May Result in Delays in or
Reductions or Loss of Payments to Certificateholders" and "Legal Aspects of
the Receivables -- Matters Relating to Bankruptcy".
Also, tax and other statutory liabilities, including liabilities to
the Pension Benefit Guaranty Corporation relating to the underfunding of
pension plans, of DaimlerChrysler or CFC can be asserted against the seller.
To the extent that any of those liabilities arise after the transfer of
receivables to the trust, the trust's interest in the receivables would be
prior to the interest of the claimant with respect to the liabilities.
However, the existence of a claim against the seller could permit the claimant
to subject the seller to an involuntary proceeding under the Bankruptcy Code
or other Insolvency Law. See "Risk Factors --Legal Aspects May Result in
Delays in or Reductions or Loss of Payments to Certificateholders" and "Legal
Aspects of the Receivables --Matters Relating to Bankruptcy" and "Risk Factors
--Trust's Relationship to DaimlerChrysler and CFC".
DCWR's executive offices are located at 27777 Franklin Road,
Southfield, Michigan 48034-8286, and its telephone number is (248) 948-3031.
The Trust
The trust was formed in accordance with the laws of the State of New
York under the Pooling and Servicing Agreement. The property of the trust
consists of
o the receivables existing in the Accounts on May 31, 1991 (the
"Initial Cut-Off Date").
o all receivables generated in the Accounts from time to time
after the Initial Cut-Off Date during the term of the trust as well
as receivables generated in any Accounts added to the trust from
time to time, but excluding receivables in any Accounts that are
removed from the trust from time to time after the Initial Cut-Off
Date,
o an assignment of all the seller's rights and remedies under the
Receivables Purchase Agreement,
o all funds collected or to be collected in respect of the
receivables,
o all funds on deposit in accounts of the trust,
o any Enhancement issued with respect to any particular series or
class of certificates and
o a security interest in the vehicles and any other collateral
security.
See "Description of the Certificates -- Addition of Accounts". See
"Description of the Receivables Purchase Agreement" for a summary of terms of
the Receivables Purchase Agreement.
CFC will not convey to the trust receivables ("Fleet Receivables")
originated in connection with multiple new vehicle orders of at least five
vehicles by specified Dealers. The terms "receivables" and "principal
receivables" as used in this prospectus will not refer to Fleet Receivables.
The property of the Trust may also include Enhancements for the
benefit of certificateholders of a particular series or class. The
certificateholders of a particular series or class will not have any interest
in any Enhancements provided for the benefit of the certificateholders of
another series or class, unless we so provide in the related Series Supplement
or Series Supplements. Under the Pooling and Servicing Agreement, the seller
will be allowed, subject to limitations and conditions, and in some
circumstances will be obligated,
o to designate from time to time Additional Accounts to be included
as Accounts and to convey to the trust the receivables of the
Additional Accounts, and
o to designate from time to time Accounts to be removed and
to require the trustee to convey receivables in the Removed Accounts
to the seller.
The trust was formed for this and like transactions under the Pooling
and Servicing Agreement and prior to formation had no assets or obligations.
The trust will not engage in any business activity other than
o acquiring and holding the receivables and the other assets of the
trust and proceeds from the receivables and those assets,
o issuing the certificates and the seller's certificate, and any
Supplemental certificates, and making payments on those certificates
o and related activities.
As a consequence, we do not expect the trust to have any need for, or source
of, capital resources other than the assets of the trust.
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Use of Proceeds
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Unless we otherwise provide in the related prospectus supplement:
o from the net proceeds from the sale of the certificates of
a series offered by this prospectus we will make the deposit of the
Excess Funded Amount, if any, for the series, to the Excess Funding
Account for the series, and we will pay the remaining portion of the
net proceeds to DCWR;
o DCWR will use the portion of the proceeds paid to it,
together with the subordinated loan from CFC described under
"DaimlerChrysler Wholesale Receivables LLC and the Trust --
DaimlerChrysler Wholesale Receivables LLC", to purchase receivables
from CFC or to repay amounts previously borrowed to purchase
receivables; and
o CFC will use the portion of the proceeds paid to it for
general corporate purposes.
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The Dealer Floorplan Financing Business
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General
The receivables transferred to the trust under to the Pooling and
Servicing Agreement were or will be selected from extensions of credit and
advances, known as "wholesale" or "floorplan" financing, made by
DaimlerChrysler, directly or as successor to Chrysler Corporation, and CFC,
directly or as a successor to affiliates, to domestic motor vehicle dealers.
These funds are used by dealers to purchase new and used vehicles manufactured
or distributed by DaimlerChrysler and other manufacturers pending sale to
retail buyers. As described in this prospectus, receivables transferred to the
trust are secured by the vehicles and, in many cases parts inventory,
equipment, fixtures and service accounts of the vehicle dealers. In some
cases, the receivables are also secured by realty owned by, and/or a personal
guarantee of, a vehicle dealer.
CFC, as successor to Chrysler Financial Corporation ("CFC Corp.") and
Chrysler Credit Corporation ("CCC"), is the primary wholesale financing source
for DaimlerChrysler-franchised dealers in the United States. DaimlerChrysler
vehicles for which CFC provides wholesale financing include vehicles
manufactured under the CHRYSLER, PLYMOUTH, DODGE and JEEP trademarks. CFC,
directly or as successor to CFC Corp. or CCC, has extended credit lines to
DaimlerChrysler-franchised dealers that also operate non-DaimlerChrysler
franchises and non-DaimlerChrysler dealers. CFC services the accounts of
domestic dealers financed by it (the "U.S. Wholesale Portfolio") through its
Southfield Support office located in Southfield, Michigan and through a
network of zone offices located throughout the United States.
Vehicles financed by any dealer under the floorplan program are
categorized by CFC, under its policies and procedures, as New Vehicles or Used
Vehicles based on whether the vehicles qualify for the new or used wholesale
and retail interest rate chargeable to the dealer in connection with the
vehicles financed. Currently, "New Vehicles" consist of
o current and prior model year unmiled vehicles,
o current model year miled vehicles purchased at a closed auction
conducted by DaimlerChrysler and
o prior model year and two year old miled vehicles.
Currently, "Used Vehicles" consist of previously owned vehicles, other than
current model year miled vehicles purchased at a closed auction conducted by
DaimlerChrysler and prior model year and two year old miled vehicles. Vehicles
purchased by a dealer at a closed auction conducted by DaimlerChrysler are
referred to, collectively, as "Auction Vehicles". New Vehicles and Used
Vehicles may be categorized differently in the future based on CFC's practices
and policies.
Creation of Receivables
CFC finances 100% of the wholesale invoice price of new vehicles,
including destination charges. DaimlerChrysler originates receivables in
respect of DaimlerChrysler-manufactured or distributed vehicles concurrently
with the shipment of the vehicles to the financed dealer.
Once a dealer has commenced the floorplanning of a manufacturer's
vehicles through CFC, CFC will finance all purchases of vehicles by the dealer
from the manufacturer. CFC will cancel this arrangement, however, if a
dealer's inventory is considered by CFC to be seriously overstocked, if a
dealer is experiencing financial difficulties or if a dealer requests
controlled vehicle releases. In those circumstances, known as "finance hold",
the applicable local zone office of CFC assumes control of vehicle releases to
the dealer. CFC makes special arrangements to finance inter-dealer sales of
vehicles.
Credit Underwriting Process
CFC extends credit to dealers from time to time based upon
established credit lines. Dealers may establish lines of credit to finance
purchases of new, used and auction vehicles. All DaimlerChrysler-franchised
dealers that have a new vehicle line of credit are also eligible for a used
vehicle and an auction vehicle credit line. A new vehicle credit line relates
to New Vehicles, other than current model year miled vehicles purchased at a
closed auction conducted by DaimlerChrysler, and a used vehicle credit line
relates to Used Vehicles. An auction vehicle credit line relates to Auction
Vehicles.
A newly franchised dealer requesting the establishment of a new
vehicle credit line must submit an application to a CFC zone office. After
receipt of the application, the local zone office investigates the prospective
dealer. The office reviews the prospective dealer's credit reports and bank
references and evaluates the dealer's marketing capabilities and start-up
financial resources and credit requirements. When an existing dealer requests
the establishment of a wholesale new vehicle credit line, the office reviews
the dealer's credit reports, including the experience of the dealer's current
financing source, and bank references. Further, the office investigates the
dealer's current state of operations and management, including evaluating a
factory reference, and marketing capabilities. For credit lines within an
office's approval limits, the office either approves or disapproves the
dealer's request. For credit lines in excess of an office's approval limits,
the office transmits the requisite documentation to the Southfield Support
Dealer Credit Department for approval or disapproval. CFC applies the same
underwriting standards for dealers franchised by other manufacturers.
Upon approval, dealers execute a series of financing agreements with
CFC and, in the case of DaimlerChrysler-franchised dealers, DaimlerChrysler.
These agreements provide CFC a first priority security interest in the
vehicles and other collateral and a demand master promissory note in favor of
CFC. Under these agreements, CFC requires all dealers to maintain insurance
coverage for each vehicle for which it provided floorplan financing, with CFC
designated as loss payee.
The size of a credit line initially offered to a dealer is based upon
the dealer's sales record, or, in the case of a prospective dealer, expected
annual sales, and the dealer's effective net worth. The amount of a dealer's
credit line for new vehicles is adjusted quarterly by CFC. The adjustment is
based upon the dealer's average new vehicle sales during the prior 180 days
and is, typically, in an amount sufficient to finance a 75-day supply of
vehicles. The amount of a dealer's credit line for used vehicles is also
adjusted periodically. This adjustment is based upon the dealer's average used
vehicle sales for the prior 180 days and is, typically, in an amount
sufficient to finance 50% of a 30 to 45-day supply of vehicles. CFC determines
the size of a dealer's auction vehicle credit line on a case by case basis and
makes adjustments periodically based on CFC's practices and procedures.
The aggregate amount advanced for each Used Vehicle is equal to the
National Automotive Dealers Association's Official Wholesale Used Car Trade-in
Guide wholesale book value for the vehicle. However, the aggregate amount of
the credit line for the used vehicles may not exceed 50% of the value of the
dealer's total inventory of used vehicles. The amount advanced for New
Vehicles and all Auction Vehicles is equal to the amount invoiced with respect
to the vehicles and the auction purchase price, including auction fees, of the
Auction Vehicles, respectively.
Billing, Collection Procedures and Payment Terms
CFC prepares and distributes each month to each dealer a statement
setting forth billing and related account information. CFC generates and mails
each dealer's bills on the sixth and seventh calendar day of the month.
Interest and other nonprincipal charges must be paid by the end of the month
in which they are billed. CFC bills interest and handling fees in arrears, but
bills insurance costs in advance. Upon the sale of a vehicle for which it has
provided floorplan financing, CFC is entitled to receive payment in full of
the related advance. Dealers remit payments by check directly to CFC's local
zone offices or electronically via an electronic funds transfer system
maintained by the Southfield Support office.
Revenue Experience
CFC charges dealers interest at a floating rate based on the rate
(the "Prime Rate") designated as the "prime rate" from time to time by
financial institutions selected by CFC, plus a designated spread ranging from
0.25% to 1.00% on New Vehicles. The Prime Rate is reset by CFC on the first
and sixteenth days of every month and is applied to all balances outstanding
during the applicable period. The actual spread for each dealer is determined
according to the total amount of the dealer's credit lines. CFC typically
increases the spreads charged on Used Vehicle balances by an additional 0.75%.
Previously owned vehicles, however, purchased at a DaimlerChrysler closed
auction are financed at the applicable New Vehicle rate. In the case of a few
larger dealers, CFC charges the dealers interest at a floating rate based on
LIBOR plus 2.75% up to the Prime Rate plus 0.50%.
Relationship with DaimlerChrysler
DaimlerChrysler provides to some DaimlerChrysler-franchised dealers
financial assistance in the form of working capital loans and other loans. In
addition, DaimlerChrysler provides floorplan assistance to all
DaimlerChrysler-franchised dealers through a number of formal and informal
programs. On all new vehicle financings, DaimlerChrysler reimburses dealers
directly for the finance costs for a specified period from the date of
shipment. DaimlerChrysler also has a supplemental floorplan assistance
program. In this program, DaimlerChrysler reimburses dealers at the time of
retail sale, for a specified amount depending upon the vehicle model.
Under an agreement between DaimlerChrysler and each
DaimlerChrysler-franchised dealer, DaimlerChrysler commits to repurchase
unsold new vehicles in inventory upon dealership termination, at the vehicles'
wholesale prices less a specified margin. DaimlerChrysler only repurchases
current model year vehicles that are new, undamaged and unused.
DaimlerChrysler also agrees to repurchase from dealers, at the time of
franchise termination, parts inventory at specified percentages of the invoice
price. If CFC takes possession of a dealer's parts inventory, DaimlerChrysler
is only obligated to pay CFC 55% of the invoice price of the inventory. All of
the assistance, however, is provided by DaimlerChrysler for the benefit of its
dealers, and does not relieve the dealers of any of their obligations to CFC.
Much of the assistance is provided at the option of DaimlerChrysler,
which may terminate any of the optional programs in whole or in part at any
time. If DaimlerChrysler is unable to or elects not to provide the assistance,
the loss experience of CFC in respect of the U.S. Wholesale Portfolio may be
adversely affected. In addition, because a substantial number of the vehicles
sold by the dealers are manufactured or distributed by DaimlerChrysler, if
DaimlerChrysler were temporarily or permanently no longer in that business,
the rate of sales of DaimlerChrysler-manufactured vehicles would decrease.
This would adversely affect payment rates and the loss experience of the U.S.
Wholesale Portfolio. See "Payment Terms" for a discussion of an installment
payment plan made available to dealers. See also "Risk Factors -- Trust's
Relationship to DaimlerChrysler and CFC".
Dealer Monitoring
CFC's local zone offices monitor the level of each dealer's wholesale
credit line on a periodic basis. Dealers are permitted to exceed those lines
on a temporary basis. For example, a dealer may, immediately prior to a
seasonal sales peak, purchase more vehicles than it is otherwise permitted to
finance under its existing credit lines. As another example, because of slow
inventory turnover, a dealer's credit lines may be reduced prior to its
liquidating a sufficient portion of its vehicle inventory. If at any time CFC
learns that a dealer's balance exceeds its approved credit lines, CFC will
evaluate the dealer's financial position and may temporarily increase the
dealer's credit lines or place the dealer in a disciplinary category known as
"finance hold". See "Creation of Receivables".
Zone office personnel conduct audits of dealer vehicle inventories on
a regular basis. The timing of each visit is varied and no advance notice is
given to the audited dealer. Auditors review dealers' financial records and
conduct a physical inventory of the vehicles on the dealers' premises. Through
the audit process, CFC reconciles each dealer's physical inventory with its
records of financed vehicles. Audits are intended to identify instances where
a dealer sold vehicles but did not immediately repay the related advances. The
audit process also aids CFC in determining in those instances whether a dealer
received sale proceeds but diverted the proceeds to uses other than the
repayment of the obligations to CFC.
"Dealer Trouble" Status and CFC's Write-Off Policy
Under some circumstances, CFC will classify a dealer under "Dealer
Trouble" status. The circumstances include
o failure to remit any principal or interest payment when due,
o any notifications of liens, levies or attachments and
o a general deterioration of its financial condition.
Once a dealer is assigned to Dealer Trouble status, CFC determines any more
extension of credit on a case-by-case basis.
CFC attempts to work with dealers to resolve instances of Dealer
Trouble status. If, however, a dealer remains on that status, it can result in
one of the following:
o an orderly liquidation in which the dealer voluntarily liquidates
its inventory through normal sales to retail customers,
o a forced liquidation in which CFC repossesses the dealer's
inventory and, in the case of DaimlerChrysler-franchised dealers,
closes the franchise,
o a voluntary surrender of the dealer's inventory and, in the case
of DaimlerChrysler-franchised dealers, franchise closure, or
o a forced sale of the dealership.
CFC typically works with franchised dealers to find third parties to purchase
a troubled dealership.
The proceeds of the sales are used to repay amounts due to CFC. Once
liquidation has begun, CFC performs an analysis of its position, writes off
any amounts identified at that time as uncollectible and attempts to liquidate
all possible collateral remaining. During the course of a liquidation, CFC may
recognize additional losses or recoveries.
Additional Information
We will set forth in the prospectus supplement for each series
additional information with respect to the Dealer Floorplan Financing
Business.
<PAGE>
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The Accounts
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General
The receivables arise in the revolving financing arrangements (the
"Accounts") with domestic automobile dealers ("dealers") franchised by
DaimlerChrysler and/or other automobile manufacturers. CFC selected the
Accounts from all the wholesale accounts in the U.S. Wholesale Portfolio that
are Eligible Accounts (the "Eligible Portfolio"). Each Account in the Eligible
Portfolio must be an account established by CFC, directly or as successor to
CFC Corp. or CCC, in the ordinary course of business and meet other criteria
provided in the Pooling and Servicing Agreement. See "Description of the
Certificates -- Representations and Warranties". CFC and the seller have
represented that each believes that the Accounts will be representative of the
accounts in the Eligible Portfolio and that the inclusion of the Accounts, as
a whole, will not represent an adverse selection from the Eligible Portfolio.
From time to time, dealers deposit funds with CFC in cash management
accounts, limited in amount to the amount of the wholesale accounts. CFC
applies funds deposited by a dealer in its cash management account to reduce
the dealer's outstanding Principal Receivables balance. Under some
circumstances, a dealer may reborrow the funds.
Under the Pooling and Servicing Agreement, the seller, and under the
Receivables Purchase Agreement, CFC has the right, subject to limitations and
conditions, and in some circumstances is obligated, to choose from time to
time additional qualifying wholesale accounts to be included as Accounts and
to convey to the trust some of the receivables of the Additional Accounts,
including receivables created after the conveyance. These accounts must meet
the eligibility criteria set forth above as of the date the accounts are
designated as Additional Accounts. CFC will convey the receivables then
existing, with exceptions, or later created under the Additional Accounts to
the seller. The seller will then convey them to the trust. See "Description of
the Certificates -- Addition of Accounts". In addition, as of any Additional
Cut-off Date in respect of Additional Accounts and the date any new
receivables are generated, CFC will represent and warrant to the seller, and
the seller will represent and warrant to the trust, that the receivables meet
the eligibility requirements set forth in the Pooling and Servicing Agreement.
See "Description of the Certificates -- Conveyance of Receivables". Under some
circumstances specified in the Pooling and Servicing Agreement, the seller has
the right to remove Accounts, and the receivables arising from the Accounts,
from the trust. See "Description of the Certificates -- Removal of Accounts".
During the term of the trust, the Accounts from which the receivables arise
will be the same Accounts designated by the seller on the Initial Cut-Off Date
plus any Additional Accounts, minus any Accounts removed from the trust.
We will provide information about the Accounts in each prospectus
supplement.
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Chrysler Financial Company L.L.C.
Chrysler Financial Corporation and
Chrysler Credit Corporation
-------------------------------------------------------------------------------
CFC, a Michigan limited liability company and a wholly-owned
subsidiary of DaimlerChrysler, is a financial services organization. It is the
continuing company resulting from a merger on October 25, 1998, of CFC Corp.
into CFC. CFC Corp., a Michigan corporation, was the continuing corporation
resulting from a merger on June 1, 1967, of a financial services subsidiary of
Chrysler Corporation, as predecessor of DaimlerChrysler, into a newly
acquired, previously nonaffiliated finance company incorporated in 1926. CFC
is engaged in the following:
o automotive retail, wholesale and fleet financing,
o servicing commercial leases and loans,
o property, casualty and other insurance and
o automotive dealership facility development and management.
CFC's business depends substantially upon DaimlerChrysler's
operations. In particular, lower levels of production and sale of
DaimlerChrysler's automotive products could reduce the level of CFC's finance
and insurance operations. See "Risk Factors -- Trust's Relationship to
DaimlerChrysler and CFC". CFC's executive offices are located at 27777
Franklin Road, Southfield, Michigan 48034-8286 and its telephone number is
(248) 948-3060.
CCC, a wholly owned subsidiary of CFC Corp., provided retail,
wholesale and lease financing services to automobile dealers and their
customers throughout the United States. On December 31, 1995, CCC merged into
CFC Corp. CFC Corp., in accordance with the terms of the Pooling and Servicing
Agreement and the Receivables Purchase Agreement, assumed all the rights and
obligations of CCC under (a) the Pooling and Servicing Agreement, including
rights and obligations of the servicer, and (b) the Receivables Purchase
Agreement, Agreement including rights and obligations of the seller. After
that merger, CFC Corp. provided retail, wholesale and lease financing services
to automobile dealers and their customers throughout the United States. On
October 25, 1998, CFC Corp. merged into CFC. CFC, under the terms of the
Pooling and Servicing Agreement, assumed all the rights and obligations of CFC
Corp. under (a) the Pooling and Servicing Agreement, including rights and
obligations of the servicer, and (b) the Receivables Purchase Agreement,
including rights and obligations of the seller.
We will provide additional information about CFC in the prospectus
supplement for each series.
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Description of the Certificates
------------------------------------------------------------------------------
General
The trust will issue the certificates of a series under a Pooling and
Servicing Agreement (as amended and supplemented from time to time, the
"Pooling and Servicing Agreement"), among DCWR, as seller of the receivables,
CFC, as servicer of the receivables, and the trustee. The Pooling and
Servicing Agreement will be substantially in the form filed as an exhibit to
the Registration Statement of which this prospectus is a part. The trustee
will make available for inspection a copy of the Pooling and Servicing
Agreement, without exhibits or schedules, to certificateholders of a Series on
written request. The following summary describes terms that may be applicable
to the certificates of each series, is not complete and is qualified in its
entirety by reference to the Pooling and Servicing Agreement and the
applicable Series Supplement.
The certificates of each series will evidence undivided beneficial
interests in assets of the trust allocated to the certificateholders of the
series (the "Certificateholders' Interest"). These interests will represent
the right to receive from the trust assets funds up to, but not in excess of,
the amounts required to make payments of interest on and principal of the
certificates of the series under the Pooling and Servicing Agreement as
described in the related prospectus supplement.
The certificates of each series will initially be represented by
certificates registered in the name of the nominee of DTC (together with any
successor depository selected by the seller, the "Depository"), except as set
forth below. Unless the related prospectus supplement states otherwise, the
certificates of each series will be available for purchase in minimum
denominations of $1,000 and integral multiples of $1,000 in book-entry form
only. DTC has informed the seller that DTC's nominee will be Cede.
Accordingly, Cede is expected to be the holder of record of the certificates.
Unless and until Definitive Certificates are issued, no certificateholder will
be entitled to receive a physical certificate representing a certificate. All
references in this prospectus to actions by certificateholders shall refer to
actions taken by DTC upon instructions from Participants. Also, all references
in this prospectus to distributions, notices, reports and statements to
certificateholders shall refer to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of the certificates, as
the case may be. See "Book-Entry Registration" and "Definitive Certificates".
Interest
The certificates of a series or class will accrue interest on their
principal balance at the per annum rate set forth in or determined as
described in the prospectus supplement. Interest will be payable to the
certificateholders of a series or class on the interest payment dates
specified in the prospectus supplement. If the prospectus supplement for a
series or class of certificates so provides, the interest rate and the
interest payment dates for each certificate of that series or class may be
adjusted from time to time, including as a result of a decline in the interest
rate of the receivables.
Except as otherwise stated in this prospectus or in the related
prospectus supplement, interest collections and other amounts allocable to the
Certificateholders' Interest of a Series will be used to make interest
payments to certificateholders of the Series on each interest payment date
with respect to those certificateholders. During any Early Amortization
Period, however, with respect to a series, we will distribute interest to the
certificateholders monthly on each Special Payment Date.
If the interest payment dates for a series or class occur less than
monthly, we will deposit the collections or other amounts, or the portion
allocable to the class, in one or more trust accounts (each an "Interest
Funding Account"). The trustee will apply the amounts in the Interest Funding
Account to make interest payments to certificateholders of the series or class
on the following interest payment date for that series. If a series has more
than one class of certificates, each class may have a separate Interest
Funding Account.
Principal
The certificates of each series and class will have a revolving
period (the "Revolving Period"). During the Revolving Period, principal
collections and other amounts otherwise allocable to the Certificateholders'
Interest of the series or class will not be paid to those certificateholders.
Instead, they will be
o paid to the seller,
o deposited to the Excess Funding Account, if any, for the
series or
o distributed to, or for the benefit of, the certificateholders of
other classes or series.
A Revolving Period for a series will begin on the date stated in the related
prospectus supplement (the "Series Cut-off Date") and end on the earlier of:
o the day immediately before the Accumulation Period commencement
date or the Controlled Amortization Period commencement date for the
series and
o the day immediately before the day on which an Early
Amortization Event or a Reinvestment Event occurs with respect to
the series.
If a series has more than one class of certificates, each class may have a
different Revolving Period.
The trust may use any of the following structures for paying
principal on a series or class of certificates. We will describe the actual
structure for a series or class in the related prospectus supplement.
A series may have an accumulation period (the "Accumulation Period").
The Accumulation Period will begin at the close of business on the date
specified in or determined in the manner specified in the prospectus
supplement and end on the earliest of:
o the beginning of a Reinvestment Period with respect to the
series,
o the beginning of an Early Amortization Period with respect to the
series and
o payment in full of the outstanding principal amount of the series
certificates.
During the Accumulation Period for a series, we will deposit
principal collections and other amounts allocable to the Certificateholders'
Interest of the series, which may include some Excess Principal Collections,
on each distribution date in a trust account established for the benefit of
the certificateholders of the series (a "Principal Funding Account"). The
trustee will apply the amounts in the Principal Funding Account, together with
any amounts in the Excess Funding Account allocable to the series, to make
principal distributions to the certificateholders of the series when due. The
amount to be deposited in a Principal Funding Account for any series on any
distribution date may, but will not necessarily, be limited to the Controlled
Deposit Amount. The "Controlled Deposit Amount" is an amount stated in the
related prospectus supplement plus, in the case of some distribution dates,
any amounts in the Excess Funding Account allocable to the series. If a series
has more than one class of certificates, each class may have a different
Accumulation Period and a separate Principal Funding Account and Controlled
Deposit Amount. Also, there may be priorities among the classes with respect
to deposits of principal into the Principal Funding Accounts.
A series may have a controlled amortization period (the "Controlled
Amortization Period"). The Controlled Amortization Period will begin at the
close of business on the date stated in or determined in the manner stated in
the related prospectus supplement and will end on the earliest of:
o the beginning of a Reinvestment Period with respect to the
series,
o the beginning of an Early Amortization Period with respect to the
series and
o payment in full of the outstanding principal amount of the
certificates of that series.
During the Controlled Amortization Period for a series, the trustee
will apply principal collections and other amounts allocable to the
Certificateholders' Interest of the series, which may include Excess Principal
Collections and amounts in the Excess Funding Account, on each distribution
date to make principal distributions to any class of certificateholders of the
series then scheduled to receive distributions. The amount to be distributed
to those certificateholders may be limited to the Controlled Amortization
Amount for the series. If a series has more than one class of certificates,
each class may have a different Controlled Amortization Period and a separate
Controlled Amortization Amount. In addition, the related prospectus supplement
may describe priorities among the classes with respect to the distributions.
A series may have a reinvestment period (the "Reinvestment Period").
The Reinvestment Period will begin on the day on which a Reinvestment Event
has occurred and end on the earliest of:
o the beginning of an Early Amortization Period with respect to the
series,
o the recommencement of the Revolving Period in accordance with the
related Series Supplement and
o payment in full of the outstanding principal amount of the
certificates of that series.
During the Reinvestment Period for a series, we will deposit
principal collections and other amounts allocable to the Certificateholders'
Interest of the series, which may include some Excess Principal Collections,
on each distribution date in a Principal Funding Account. The trustee will
apply the funds in the Principal Funding Account, together with any amounts in
the Excess Funding Account allocable to the series, to make principal
distributions to the certificateholders of the series when due. The amount to
be deposited in a Principal Funding Account for any series on any distribution
date will not be limited to any Controlled Deposit Amount or Controlled
Amortization Amount. If a series has more than one class of certificates, each
class may have a separate Principal Funding Account and there may be
priorities among the classes with respect to deposits of principal into the
Principal Funding Accounts.
The "Early Amortization Period" for a series is the period beginning
on the day on which an Early Amortization Event has occurred with respect to
the series and ending on the earliest of:
o payment in full of the outstanding principal amount of the
certificates of that series,
o the recommencement of the Revolving Period in accordance with the
related Series Supplement and
o the Termination Date for the series.
The start of an Early Amortization Period for a series will terminate
its Revolving Period, Reinvestment Period, Controlled Amortization Period or
Accumulation Period, as applicable. Further, we will no longer pay principal
collections and some other amounts allocable to the Certificateholders'
Interest of that series to the seller or the holders of any other outstanding
series or deposited in a Principal Funding Account. Instead, the trustee will
distribute them as principal payments to the applicable certificateholders of
that series monthly on each distribution date beginning with the distribution
date following the Collection Period in which that Early Amortization Period
begins (each of those distribution dates, a "Special Payment Date"). During an
Early Amortization Period for a series, distributions of principal to
certificateholders of the series will not be limited to any Controlled Deposit
Amount or Controlled Amortization Amount. In addition, on the first Special
Payment Date for any series, to the extent stated in the related Series
Supplement, the trustee will distribute any funds on deposit in its Excess
Funding Account, if any, and any funds on deposit in its Principal Funding
Account with respect to that series to the certificateholders of the relevant
class or series up to the outstanding principal balance of their certificates.
See "Reinvestment Events and Early Amortization Events" for a discussion of
the events which might lead to the beginning of an Early Amortization Period
with respect to a Series.
The trust may use any combination of the above described structures
for a series or class and may use any other principal payment structure set
forth in a prospectus supplement.
We will invest funds on deposit in any Principal Funding Account in
Eligible Investments. The Eligible Investments in the related prospectus
supplement intended to assure a minimum rate of return on the investment of
the funds. To make it more likely that the principal amount of a series or
class of certificates will be paid in full at the end of its Accumulation
Period, the series or class may be subject to a maturity liquidity facility or
other similar mechanism stated in the relevant prospectus supplement. A
maturity liquidity facility is a financial contract that typically provides
that enough principal will be available to retire the certificates at a
specified date.
Certificates of a series or class may also be purchased from time to
time, typically at their respective principal amounts, in connection with a
remarketing of the certificates if we so provide in the related prospectus
supplement. A purchase of certificates of a series or class may cause the
outstanding principal amount of series or class to decrease prior to the start
of any Controlled Amortization Period or Early Amortization Period. The
prospectus supplement for any series subject to purchase will describe the
conditions to and procedures for any purchase. The proceeds of any purchase
would be paid to the holders of the certificates so purchased.
Book-Entry Registration
Unless in the related prospectus supplement states otherwise,
certificateholders may hold certificates of a Series through DTC, in the
United States, or Clearstream Banking, societe anonyme ("Clearstream") or
Euroclear, in Europe, if they are participants of those systems, or indirectly
through organizations which are participants in those systems.
Cede, as nominee for DTC, will be the registered holder of the global
certificates. Except as described in this prospectus, no certificateholder
will be entitled to receive a certificate representing that person's interest
in the certificates. Unless and until Definitive Certificates are issued, all
references in this prospectus to actions by certificateholders shall refer to
actions taken by DTC upon instructions from its Participants. Also, all
references in this prospectus to distributions, notices, reports and
statements to certificateholders shall refer to distributions, notices,
reports and statements to Cede, as the registered holder of the certificates,
for distribution to the certificateholders in accordance with DTC procedures.
Clearstream and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in Clearstream's and
Euroclear's names on the books of their respective depositaries. Those
depositaries will hold those positions in customers' securities accounts in
the depositaries' names on the books of DTC. Citibank, N.A. ("Citibank") will
act as depositary for Clearstream and Morgan Guaranty Trust Company of New
York ("Morgan") will act as depositary for Euroclear (in those capacities, the
"Foreign Agency Depositaries").
Transfers between DTC participants will occur in the ordinary way in
accordance with DTC rules. Transfers between Clearstream Participants and
Euroclear Participants will occur in the ordinary way in accordance with their
applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream
or Euroclear participants, on the other, will be effected in DTC in accordance
with DTC rules on behalf of the relevant European international clearing
system by its Foreign Agency Depositary. Those cross-market transactions,
however, will require the counterparty in the relevant European international
clearing system to deliver instructions to the system in accordance with its
rules and procedures and within its European time deadlines. The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its Foreign Agency Depositary
to take action to effect final settlement on its behalf. The Foreign Action
Depositary will then deliver or receive securities in DTC, and make or receive
payment in accordance with normal procedures for same-day funds settlement
applicable to DTC. Clearstream Participants and Euroclear Participants may not
deliver instructions directly to the Foreign Agency Depositaries.
Because of time-zone differences, credits of securities received in
Clearstream or Euroclear as a result of a transaction with a DTC participant
will be made during subsequent securities settlement processing and dated the
business day following the DTC settlement date. Those credits or any
transactions in the securities settled during the processing will be reported
to the relevant Euroclear or Clearstream participant on that business day.
Cash received in Clearstream or Euroclear as a result of sales of securities
by or through a Clearstream Participant or a Euroclear Participant to a DTC
participant will be received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account only as of the
business day following settlement in DTC. For additional information regarding
clearance and settlement procedures for the certificates, see Annex I. Also,
for information with respect to tax documentation procedures relating to the
certificates, see Annex I and "Tax Matters --Federal Income Tax Consequences
-- Foreign Investors".
DTC is
o a limited-purpose trust company organized under the laws of the
State of New York,
o a member of the Federal Reserve System,
o a "clearing corporation" within the meaning of the UCC and
o a "clearing agency" registered under the provisions of Section
17A of the Exchange Act.
DTC was created to hold securities for its participating
organizations ("Participants") and facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in their accounts, eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and may include other organizations.
Indirect access to the DTC system also is available to others including banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("Indirect Participants").
Certificateholders that are not Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, certificates may do so only through Participants and Indirect
Participants. In addition, certificateholders will receive all distributions
of principal of and interest on the certificates from the trustee through DTC
and its Participants. Under a book-entry format, certificateholders will
receive payments after the related distribution date because, while payments
are required to be forwarded to Cede, as nominee for DTC, on each distribution
date, DTC will forward the payments to its Participants which then will be
required to forward them to Indirect Participants or certificateholders. It is
anticipated that the only "Certificateholder", as that term is used in the
Pooling and Servicing Agreement, will be Cede, as nominee of DTC, and that the
trustee will not recognize certificateholders as certificateholders under the
Pooling and Servicing Agreement. Certificateholders will only be permitted to
exercise the rights of certificateholders under the Pooling and Servicing
Agreement indirectly through DTC and its Participants who in turn will
exercise their rights through DTC.
Under the rules, regulations and procedures creating and affecting
DTC and its operations, DTC must make book-entry transfers among Participants
on whose behalf it acts with respect to the certificates and must receive and
transmit distributions of principal of and interest on the certificates.
Participants and Indirect Participants with which certificateholders have
accounts with respect to the certificates also must make book-entry transfers
and receive and transmit those payments on behalf of their respective
certificateholders.
Because DTC can only act on behalf of Participants, who in turn act
on behalf of Indirect Participants and banks, a certificateholder will have a
limited ability to pledge certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of the
certificates.
DTC has told the seller that it will take any action permitted to be
taken by a certificateholder under the Pooling and Servicing Agreement only at
the direction of one or more Participants to whose account with DTC the
certificates are credited.
Clearstream is incorporated under the laws of Luxembourg as a
professional depository. Clearstream holds securities for Clearstream
participants and facilitates the clearance and settlement of securities
transactions between Clearstream participants through electronic book-entry
changes in accounts of Clearstream participants, eliminating the need for
physical movement of certificates. Transactions may be settled in Clearstream
in any of 28 currencies, including United States dollars. Clearstream provides
to Clearstream participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Clearstream interfaces with domestic
markets in several countries. As a professional depository, Clearstream is
subject to regulation by the Luxembourg Monetary Institute. Clearstream
participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies,
checkering corporations and other organizations. Indirect access to
Clearstream is also available to others, including banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Clearstream participant, either directly or indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to clear
and settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Transactions may now be settled in any of 27
currencies, including United States dollars. The Euroclear System includes
various other services, including securities lending and borrowing, and
interfaces with domestic markets in several countries similar to the
arrangements for cross-market transfers with DTC described above under
"Book-Entry Registration". The Euroclear System ("Euroclear") is operated by
Morgan Guaranty Trust Company of New York, Brussels, Belgium office (the
"Euroclear Operator") under contract with Euroclear S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted by
the Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear Clearance System cash accounts are accounts with the Euroclear
Operator, not the Cooperative. The Cooperative establishes policy for the
Euroclear System on behalf of Euroclear Participants. Euroclear Participants
include banks, including central banks, securities brokers and dealers and
other professional financial intermediaries and may include any underwriters,
agents or dealers involved in the distribution of the certificates. Indirect
access to the Euroclear System is also available to other firms that clear
through or maintain a custodial relationship with a Euroclear Participant,
either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member of the Federal Reserve System. Because of this
fact, it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operative Procedures of the Euroclear System, and applicable
Belgian law (collectively, the "Terms and Conditions"). The Terms and
Conditions govern transfers of securities and cash within the Euroclear
System, withdrawals of securities and cash from the Euroclear System, and
receipts of payments with respect to securities in the Euroclear System. All
securities in the Euroclear System are held on a fungible basis without
attribution of specific certificates to specific securities clearance
accounts. The Euroclear Operator acts under the Terms and Conditions only on
behalf of Euroclear Participants, and has no record of or relationship with
persons holding through Euroclear Participants.
Distributions with respect to certificates held through Clearstream
or Euroclear will be credited to the cash accounts of Clearstream Participants
or Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Foreign Agency Depositary. The
distributions will be subject to tax reporting in accordance with relevant
United States tax laws and regulations. See "Tax Matters". Clearstream or the
Euroclear Operator, as the case may be, will take any other action permitted
to be taken by a certificateholder under the Pooling and Servicing Agreement
or the applicable Series Supplement on behalf of a Clearstream Participant or
Euroclear Participant only in accordance with its relevant rules and
procedures and subject to its Foreign Agency Depositary's ability to effect
those actions on its behalf through DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of certificates among participants
of DTC, Clearstream and Euroclear, they are under no obligation to perform or
continue to perform the procedures and the procedures may be discontinued at
any time.
Definitive Certificates
Unless the related prospectus supplement states otherwise, the trust
will issue the certificates of a series or class in fully registered,
certificated form to certificateholders or their nominees ("Definitive
Certificates"), rather than to DTC or its nominee only if
o the seller advises the trustee in writing that DTC is no
longer willing or able to properly discharge its responsibilities as
Depository with respect to the certificates of the series or class
and the seller is unable to locate a qualified successor,
o the seller, at its option, chooses to end the book-entry system
through DTC with respect to the series or class or
o after a Service Default occurs, certificateholders
representing not less than 50% of the aggregate unpaid principal
amount of the certificates of the series or class advise the trustee
and DTC through Participants in writing that the continuation of a
book-entry system through DTC, or a successor to DTC, is no longer
in the best interests of the certificateholders.
If any of the events described in the immediately preceding paragraph
occurs, DTC must notify all Participants of the availability of Definitive
Certificates. When DTC surrenders the certificate or certificates representing
those certificates and gives instructions for re-registration, the trustee
will issue the certificates in the form of Definitive Certificates. After
doing so, the trustee will recognize the holders of the Definitive
Certificates as certificateholders under the Pooling and Servicing Agreement
("Holders"). If the trust issues Definitive Certificates or DTC ceases to be
the clearing agency for any series or class of certificates, the Pooling and
Servicing Agreement provides that the applicable certificateholders will be
notified of that event.
The trustee will make distributions of principal of, and interest on,
the certificates directly to Holders in accordance with the procedures set
forth in this prospectus and in the Pooling and Servicing Agreement. On each
distribution date the trustee will make distributions to Holders in whose
names the Definitive Certificates were registered at the close of business on
the related record date. The trustee will make distributions by check mailed
to the address of the Holder as it appears on the register maintained by the
trustee. The trustee will make the final distribution on any Certificate,
whether Definitive Certificates or the certificate or certificates registered
in the name of Cede representing the certificates, however, only when the
certificate is presented and surrendered on the final payment date at the
office or agency that is specified in the notice of final distribution to
certificateholders. The trustee will provide that notice to registered
certificateholders not later than the fifth day of the month of the final
distribution.
Definitive Certificates will be transferable and exchangeable at the
offices of the trustee, which shall initially be 101 Barclay Street, New York,
New York 10286. The trustee will not impose any service charge for any
registration of transfer or exchange, but the trustee may require payment of a
sum sufficient to cover any tax or other governmental charge imposed in
connection with a transfer exchange.
The Seller's Certificate
The Pooling and Servicing Agreement provides that the seller may,
from time to time, exchange a portion of the certificate evidencing the
Seller's Interest (the "Seller's Certificate") for another certificate (a
"Supplemental Certificate") for transfer or assignment to a person or entity
chosen by the seller upon the execution and delivery of a supplement to the
Pooling and Servicing Agreement, if
o the seller shall at the time of that exchange and after
giving effect to the exchange have an interest in the Pool Balance
of not less than 2% of the aggregate amount of the principal
balances of the receivables (the "Pool Balance"),
o the seller shall have delivered to the trustee, the Rating
Agencies and any Enhancement provider a Tax Opinion with respect to
the exchange and
o the seller shall have delivered to the trustee written
confirmation from the applicable Rating Agencies that the exchange
will not result in a reduction or withdrawal of the rating of any
outstanding series or class of certificates.
Any later transfer or assignment of a Supplemental Certificate is also subject
to the second and third conditions described in the preceding sentence. The
seller may transfer a Supplemental Certificate to a securitization vehicle
that in turn issues asset-backed securities based on that Supplemental
Certificate.
New Issuances
The Pooling and Servicing Agreement states that under one or more
Series Supplements, the trustee may issue two types of certificates:
o one or more series of certificates which are transferable and
have the characteristics described below under "New Issuances" and
o the Seller's Certificate, and any Supplemental Certificate,
which will evidence the Seller's Interest and will be transferable
only upon the satisfaction of conditions described under "The
Seller's Certificate".
The Pooling and Servicing Agreement also provides that, under one or
more Series Supplements, the seller may cause the trustee to issue one or more
new series. Under the Pooling and Servicing Agreement, the seller may specify,
among other things, with respect to any series:
o its name or designation,
o its initial principal amount, or method for calculating that
amount,
o its certificate rate, or the method for determining its
certificate rate,
o a date on which it will begin its Accumulation Period or
Controlled Amortization Period, if any,
o the method for allocating principal and interest to
certificateholders of the series,
o the percentage used to calculate monthly servicing fees,
o the issuer and terms of any Enhancement or the level of
subordination provided by the Seller's Interest,
o the terms on which the certificates of the series may be
exchanged for certificates of another series, be subject to
repurchase, optional redemption or mandatory redemption by the
seller or be remarketed by any remarketing agent,
o the Series Termination Date and
o any other terms permitted by the Pooling and Servicing
Agreement (all of those terms, the "Principal Terms" of the series).
The seller may offer any series to the public under a prospectus or
other disclosure document in transactions either registered under the
Securities Act or exempt from registration under the Securities Act, directly
or through one or more underwriters or placement agents. There is no limit to
the number of series that may be issued under the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the seller may
specify Principal Terms of a new series so that each series has a Controlled
Amortization Period or Accumulation Period which may have a different length
and begin on a different date than the Controlled Amortization Period or
Accumulation Period for any other series. Further, one or more series may be
in their Reinvestment Periods, Early Amortization Periods, Controlled
Amortization Periods or Accumulation Periods while other series are not. Thus,
some series may be amortizing or accumulating principal, while other series
are not. Moreover, different series may have the benefits of different forms
of Enhancement issued by different entities. Under the Pooling and Servicing
Agreement, the trustee will hold each form of Enhancement only on behalf of a
specified series or a particular class within that series. The seller may
specify different certificate rates and Monthly Servicing Fees with respect to
each series, or a particular class. In addition, the seller has the option to
vary among series, or classes within a series, the terms upon which the seller
may repurchase a series, or classes within a series.
Under the Pooling and Servicing Agreement and a Series Supplement, a
new series may be issued only if specified conditions are satisfied. The
seller may cause the issuance of a new series by notifying the trustee at
least five business days in advance of the applicable Series Issuance Date.
The notice shall state the designation of any series, and classes within a
series, if any. The Pooling and Servicing Agreement states that the trustee
will issue a new series only when it is delivered the following:
o a Series Supplement in form satisfactory to the trustee signed by
the seller and the servicer and specifying the Principal Terms of
the series
o the form of any Enhancement and any related agreement,
o an opinion of counsel to the effect that, for federal income and
Michigan income and single business tax purposes,
o the issuance will not adversely affect the characterization of
the certificates of any outstanding series or class as debt of the
seller,
o such issuance will not cause a taxable event to any
certificateholders (an opinion of counsel to the effect referred to
in the first subclause above and this subclause with respect to any
action is referred to in this prospectus as a "Tax Opinion"), and
o the new series will be characterized as debt of the seller, and
o written confirmation from each applicable Rating Agency
that the issuance will not cause it to reduce or withdraw the rating
of any outstanding series or class of certificates.
The issuance is also subject to the conditions that
o the seller shall have represented and warranted that the
issuance shall not, in the reasonable belief of the seller, cause an
Early Amortization Event or Reinvestment Event to occur with respect
to any outstanding series, and
o after giving effect to the issuance, the seller's interest in the
Pool Balance shall not be less than 2% of the Pool Balance.
When all of these conditions are satisfied, the trustee will issue the series.
Conveyance of Receivables and Collateral Security
CARCO, USA and/or DCWR, as applicable, has sold and assigned or will
sell and assign to the trust
o all of its right, title and interest in and to the receivables
and the related Collateral Security as of the Initial Cut-Off Date,
o all receivables created in the Accounts after the Initial Cut-Off
Date,
o its interests in the related Collateral Security and the
Receivables Purchase Agreement and
o the proceeds of all of the foregoing.
The "Collateral Security" in respect of the receivables is a security interest
in vehicles and parts inventory, equipment, fixtures, service accounts and, in
some cases, realty and a personal guarantee.
DCWR and CFC must indicate in their computer records that the
receivables in the Accounts and the related Collateral Security have been
conveyed to the trust. In addition, the seller must provide to the trustee a
computer file or microfiche or written list containing a true and complete
list showing for each Account, as of the Initial Cut-Off Date and the
applicable Additional Cut-Off Date,
o its account number,
o the outstanding balance of the receivables in the Account and
o the outstanding balance of principal receivables in the Account.
CFC will retain and will not deliver to the trustee any other records
or agreements relating to the receivables. Except as set forth above, CFC has
not and will not segregate the records and agreements relating to the trust's
receivables from those relating to other accounts of CFC. CFC has not and will
not stamp or mark the physical documentation relating to the receivables to
reflect the transfer of the receivables to the trust. The seller will file one
or more financing statements in accordance with applicable state law to
perfect the trust's interest in the receivables, the Collateral Security, the
Receivables Purchase Agreement and the proceeds of those items. See "Risk
Factors" and "Legal Aspects of the Receivables".
As contemplated above and as described below under "Addition of
Accounts", the seller has the right, subject to limitations and conditions,
and in some circumstances is obligated, to designate from time to time
additional accounts to be included as Additional Accounts, to purchase from
CFC the receivables then existing or created after that time in the Additional
Accounts and to convey the receivables to the trust. Each Additional Account
must be an Eligible Account. In respect of any conveyance of receivables in
Additional Accounts, the seller will follow the procedures set forth in the
preceding paragraph, except the list will show information for the Additional
Accounts as of the date the Additional Accounts are identified and selected
(the "Additional Cut-Off Date").
Representations and Warranties
The seller will represent and warrant to the trust, among other
things, that
o as of each Series Cut-Off Date, and the date of issuance of
any series (a "Series Issuance Date"), or, in the case of the
Additional Accounts, as of the Additional Cut-Off Date and the date
the related receivables are transferred to the trust (an "Addition
Date"), each Account or Additional Account was an Eligible Account,
o as of the Series Cut-Off Date, or as of the Additional
Cut-Off Date, in the case of any Additional Accounts, or as of the
date any future receivable is generated (a "Transfer Date"), each
receivable is an Eligible Receivable or, if the receivable is not an
Eligible Receivable, the receivable is conveyed to the trust as
described below under "Ineligible Receivables, the Installment
Balance Amount and the Overconcentration Amount",
o each receivable and all Collateral Security conveyed to the
trust on the Transfer Date or, in the case of Additional Accounts,
on the Addition Date, and all of the seller's right, title and
interest in the Receivables Purchase Agreement, have been conveyed
to the trust free and clear of any liens and
o all appropriate consents and governmental authorizations
required to be obtained by the seller in connection with the
conveyance of each receivable or Collateral Security have been duly
obtained.
If the seller breaches any representation and warranty described in
the preceding paragraph the trust will reassign the related receivables to the
seller in the manner described in the following paragraph. However, the trust
will be entitled to make that reassignment only if
o the breach remains uncured for 30 days or a longer period
as may be agreed to by the trustee, after the earlier to occur of
the discovery of the breach by the seller or the servicer or receipt
of written notice of the breach by the seller or the servicer, and
o the breach has a materially adverse effect on the
Certificateholders' Interest in the receivable or, in the case of a
breach relating to an Account, all receivables in the related
Account ("Ineligible Receivables").
The trust will reassign each Ineligible Receivable to the seller on
or before the end of the Collection Period in which the reassignment
obligation arises by deducting the principal balance of the receivable from
the Pool Balance. A deduction may cause the Pool Balance minus the aggregate
Invested Amounts for all outstanding series (the "Seller's Participation
Amount") to be less than the aggregate Available Subordinated Amounts for all
outstanding series (the "Trust Available Subordinated Amount") on the second
business day preceding the distribution date (each second business day
preceding a Distribution Day, a "Determination Date"), after giving effect to
the allocations, distributions, withdrawals and deposits to be made on the
distribution date. If this happens, the seller must make a deposit into the
Collection Account in immediately available funds in an amount equal to the
amount by which the Seller's Participation Amount would be less than the Trust
Available Subordinated Amount (that amount, a "Transfer Deposit Amount"). If
the Transfer Deposit Amount is not so deposited, the principal balance of the
related Ineligible Receivables will be deducted from the Pool Balance only to
the extent the Seller's Participation Amount is not reduced below the Trust
Available Subordinated Amount. Any principal balance not so deducted will not
be reassigned and will remain part of the trust. The reassignment of any
receivable to the seller and the payment of any related Transfer Deposit
Amount will be the sole remedy available against the seller for any breach of
the representations and warranties described in this section.
The seller will also represent and warrant to the trust that, among
other things, as of each Series Issuance Date
o it is duly formed as a limited liability company and in
good standing, it has the authority to consummate the transactions
contemplated by the Pooling and Servicing Agreement and the Pooling
and Servicing Agreement constitutes a valid, binding and enforceable
agreement of the seller, and
o the Pooling and Servicing Agreement constitutes a valid sale,
transfer and assignment to the trust of all right, title and
interest of the seller in the receivables and the Collateral
Security, whether then existing or created after that time, the
Receivables Purchase Agreement, and the proceeds of those items,
including proceeds in any of the accounts established for the
benefit of the certificateholders of any series, subject to the
rights of the Purchasers with respect to some of the Collateral
Security, under the UCC as then in effect in the State of Michigan,
which is effective as to each receivable existing on the Initial
Closing Date, or as of the Addition Date, if applicable, or, as to
each receivable arising after those dates, upon the creation of that
receivable and until termination of the trust.
If a breach of any of the representations and warranties described in
the preceding paragraph has a materially adverse effect on the
Certificateholders' Interest in the receivables, either the trustee or the
holders of certificates of all outstanding series evidencing not less than a
majority of the aggregate unpaid principal amount of all outstanding series,
by written notice to the seller and the servicer, and to the trustee and the
provider of any Enhancement if given by certificateholders, may direct the
seller to accept the reassignment of the Certificateholders' Interest of all
series within 60 days of the notice, or within a longer period specified in
the notice. The seller must accept the reassignment of the Certificateholders'
Interest on a distribution date occurring within the 60-day period. However,
the reassignment need not be made if at the end of the applicable period, the
representations and warranties shall then be true and correct in all material
respects and any materially adverse effect caused by the breach shall have
been cured. The price for the reassignment will typically be equal to the sum
of:
o the aggregate "Invested Amounts", as specified in the
related Series Supplements, of all series on the Determination Date
preceding the distribution date on which the purchase is scheduled
to be made,
o accrued and unpaid interest on the unpaid principal amount of the
certificates at the applicable certificate rate, together with
interest on overdue interest, and
o with respect to any particular series, any other amounts stated
in its Series Supplement.
The payment of the reassignment price for all outstanding series will be
considered a payment in full of the Certificateholders' Interest. The trustee
will distribute those funds to the applicable certificateholders upon
presentation and surrender of the certificates. If the trustee or the
certificateholders give a notice as provided in the preceding paragraph, the
obligation of the seller to make any deposit will constitute the sole remedy
respecting a breach of the representations and warranties available to
certificateholders or the trustee on behalf of the certificateholders.
DCWR will be deemed to have made all the representations and
warranties of the seller in the Pooling and Servicing Agreement and in any
Series Supplement with respect to any series or class of certificates.
Eligible Accounts and Eligible Receivables
As discussed under "Representations and Warranties" above, the seller
represents that, as of specified times, the Accounts are Eligible Accounts and
the receivables are Eligible Receivables.
An "Eligible Account" is a wholesale financing line of credit
extended by CFC, directly or as successor to CFC Corp. or CCC, to a Dealer,
which, as of its date of determination:
o is established by CFC, directly or as successor to CFC Corp. or
CCC, in the ordinary course of business under a floorplan financing
agreement,
o is in favor of an Eligible Dealer,
o is in existence and maintained and serviced by CFC, directly or
as successor to CFC Corp. or CCC, and
o in respect of which no amounts have been charged off as
uncollectible or are classified as past due or delinquent.
An "Eligible Dealer" is a dealer:
o which is located in the United States of America, including its
territories and possessions,
o which has not been identified by the servicer as being the
subject of any voluntary or involuntary bankruptcy proceeding or in
voluntary or involuntary liquidation,
o in which DaimlerChrysler or any affiliate of DaimlerChrysler does
not have an equity investment and
o which has not been classified by the servicer as being under
Dealer Trouble status.
An "Eligible Receivable" is a receivable:
o which was originated or acquired by CFC, directly or as
successor to CFC Corp. or CCC, in the ordinary course of business,
o which has arisen under an Eligible Account and is payable in
United States dollars,
o which is owned by CFC, CFC Corp. or CCC at the time of sale to
the seller,
o which represents the obligation of a dealer to repay an advance
made to the Dealer to finance the acquisition of vehicles,
o which at the time of creation and at the time of transfer to the
trust is secured by a perfected first priority security interest in
the related vehicle,
o which was created in compliance in all respects with all
requirements of law applicable to the receivable and under a
floorplan financing agreement which complies in all respects with
all requirements of law applicable to any party to the agreement,
o with respect to which all consents and governmental
authorizations required to be obtained by DaimlerChrysler, CCC, CFC
Corp., CFC or the seller in connection with the creation of the
receivable or the transfer of the receivable to the trust or the
performance by CCC, CFC Corp. or CFC of the floorplan financing
agreement under which the receivable was created, have been duly
obtained,
o as to which at all times following the transfer of the
receivable to the trust, the trust will have good and marketable
title to the receivable free and clear of all liens arising prior to
the transfer or arising at any time, other than liens permitted
under the Pooling and Servicing Agreement,
o which has been the subject of a valid transfer and assignment
from the seller to the trust of all the seller's interest in the
receivable, including any proceeds of the receivable,
o which will at all times be the legal and assignable payment
obligation of the related Dealer, enforceable against the dealer in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy or other similar laws,
o which at the time of transfer to the trust is not subject
to any right of rescission, setoff, or any other defense, including
defenses arising out of violations of usury laws, of the Dealer,
o as to which, at the time of transfer of the receivable to the
trust, DaimlerChrysler, CCC, CFC Corp., CFC and the seller have
satisfied all their respective obligations with respect to the
Receivable required to be satisfied at that time,
o as to which, at the time of transfer of the receivable to the
trust, neither DaimlerChrysler, CCC, CFC Corp. or CFC nor the seller
has taken or failed to take any action which would impair the rights
of the trust or the certificateholders,
o which constitutes "chattel paper" as defined in Article 9 of the
UCC as then in effect in the State of Michigan and
o which was transferred to the trust with all applicable
governmental authorization.
The trustee did not and will not make any initial or periodic general
examination of the receivables or any records relating to the receivables for
the purpose of establishing the presence or absence of defects, compliance
with representations and warranties of the seller or for any other purpose.
Also, the trustee will not make any initial or periodic general examination of
the servicer for the purpose of establishing the compliance by the servicer
with its representations or warranties, the observation of its obligations
under the Pooling and Servicing Agreement or for any other purpose. The
servicer, however, will deliver to the trustee on or before March 31 of each
calendar year, an opinion of counsel with respect to the validity of the
interest of the trust in and to the receivables and other components of the
trust.
Ineligible Receivables, the Installment Balance Amount
and the Overconcentration Amount
For the purpose of facilitating the administration and reporting
requirements of the servicer under the Pooling and Servicing Agreement, the
seller will transfer all Ineligible Receivables arising in an Eligible Account
to the trust. If, however, the Series Supplement for a series so states, the
Incremental Subordinated Amount for the series will be adjusted by the portion
of the aggregate principal amount of receivables included in the series
allocable to the Certificateholders' Interest of the series. Also, if the
Series Supplement for a series so states, the Incremental Subordinated Amount
for the series shall be adjusted to reflect, on each distribution date,
o the aggregate principal amount of receivables in the trust
on the distribution date which are Dealer Overconcentrations (the
"Overconcentration Amount") allocable to the Certificateholders'
Interest of the series and
o the portion of the aggregate amount of Installment Balances
in respect of which CFC has not received an offsetting payment from
the related Dealer on the distribution date (the "Installment
Balance Amount") allocable to the Certificateholders' Interest of
the series.
"Dealer Overconcentrations" on any distribution date means, with
respect to any Dealer or group of affiliated Dealers, the excess of
o the aggregate principal amount of receivables due from the
Dealer or group of affiliated Dealers on the last day of the
Collection Period immediately preceding such distribution date over
o 2% of the Pool Balance on the last day of the immediately
preceding Collection Period.
Addition of Accounts
Subject to the conditions described in this paragraph, the seller has
the right to designate from time to time additional accounts to be included as
Accounts (the "Additional Accounts"). Also, the seller must add the
receivables of Additional Accounts if the Pool Balance on the last day of any
Collection Period is less than the Required Participation Amount as of the
following distribution date, after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the distribution date.
In that case, unless insolvency events have occurred with respect to the
seller, CFC or DaimlerChrysler, then CFC under the Receivables Purchase
Agreement must sell to the seller, and the seller under the Pooling and
Servicing Agreement must transfer and assign to the trust, within 10 business
days after the end of the Collection Period, interests in all receivables
arising in the Additional Accounts, whether the receivables are then existing
or created after that time. Any designation of Additional Accounts is subject
to the following conditions, among others:
o each Additional Account must be an Eligible Account;
o ________ the seller shall represent and warrant that the addition of
the Additional Accounts shall not, in the reasonable belief of the
seller, cause an Early Amortization Event or Reinvestment Event to
occur with respect to any series;
o the seller shall not select the Additional Accounts in a manner
that it believes is adverse to the interests of the
certificateholders or any Enhancement provider;
o if the addition is not required, the seller shall deliver a
Tax Opinion and other opinions of counsel with respect to the
addition of the Additional Accounts to the trustee, the Rating
Agencies and any Enhancement provider; and
o the applicable Rating Agencies shall have provided written
confirmation that the addition will not cause the rating of any
outstanding series or class of certificates to be reduced or
withdrawn.
The seller may, however, from time to time, at its discretion, and
subject only to the limitations specified in this paragraph, designate
Additional Accounts. Additional Accounts designated in accordance with the
provisions described in this paragraph are referred to in this prospectus as
"Automatic Additional Accounts". Unless each Rating Agency otherwise consents,
o the number of Automatic Additional Accounts designated with
respect to any of the three consecutive Collection Periods beginning
in January, April, July and October of each calendar year shall not
exceed 8% of the number of Accounts as of the first day of the
calendar year during which the Collection Periods begin and
o the number of Automatic Additional Accounts designated
during any calendar year shall not exceed 20% of the number of
Accounts as of the first day of the 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 the Collection Period. On
or before January 31, April 30, July 31 and 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
that date shall not have resulted in any applicable Rating Agency reducing or
withdrawing its rating of any outstanding series or class of certificates. On
or before January 31 and July 31 of each calendar year, or on or before the
last day of each month in some circumstances, the seller shall have delivered
to the trustee, each Rating Agency and any Enhancement provider an opinion of
counsel with respect to the Automatic Additional Accounts included as Accounts
during the preceding calendar year confirming the validity and perfection of
each transfer of that Automatic Additional Accounts. If the trustee has not
received the Rating Agency confirmation or opinion of counsel with respect to
any Automatic Additional Accounts, the seller must remove the Automatic
Additional Accounts from the trust.
Each Additional Account, including each Automatic Additional Account,
must be an Eligible Account at the time of its addition. However, since
Additional Accounts may not have been a part of the initial portfolio of CCC,
CFC Corp. or CFC, they may not be of the same credit quality as the initial
Accounts. Additional Accounts may have been originated by CCC, CFC Corp. or
CFC at a later date using credit criteria different from those which were
applied to the initial Accounts or may have been acquired by CCC, CFC Corp. or
CFC from another wholesale lender that had different credit criteria. In
addition, the seller will be permitted to designate Additional Accounts that
contain receivables that have been sold or pledged to third parties.
Following, however, the applicable Additional Cut-Off Date, no receivables
arising after the Additional Cut-Off Date in any of those accounts shall be
sold or pledged to any third parties.
The "Required Participation Amount" for any date is an amount equal
to the sum of:
o the sum of the amounts for each series obtained by
multiplying the Required Participation Percentage for the series by
the Initial Invested Amount for the series at that time. However,
each Excluded Series will be excluded from this calculation until
the Invested Amount of the related Paired Series is reduced to zero;
and
o the Trust Available Subordinated Amount on the immediately
preceding Determination Date, after giving effect to the
allocations, distributions, withdrawals and deposits to be made on
the distribution date following the Determination Date.
The "Required Participation Percentage" for a series will be
specified in the related Series Supplement.
Removal of Accounts
The seller shall have the right at any time to require the removal
from the trust of Eligible Accounts. To remove any Eligible Account, the
seller, or the servicer on its behalf, shall, among other things,
o furnish to the trustee, any Enhancement provider and the
Rating Agencies a written notice (the "Removal Notice") stating the
Determination Date on which removal of one or more Accounts will
commence (the "Removal Commencement Date") and the Accounts to be
removed from the trust (the "Designated Accounts"),
o determine on the Removal Commencement Date the aggregate
principal balance of receivables in respect of each the Designated
Account (the "Designated Balance"),
o from and after the Removal Commencement Date, cease to transfer
to the trust all receivables arising in the Designated Accounts,
o from and after the Removal Commencement Date, allocate all
principal collections in respect of each Designated Account, first
to the oldest outstanding principal balance of the Designated
Account, until the Determination Date on which the Designated
Balance in the Designated Account is reduced to zero (the "Removal
Date"),
o on each business day from and after the Removal Commencement Date
to and until the related Removal Date, allocate
o to the trust, to be further allocated under the Pooling and
Servicing Agreement, interest collections in respect of each
Designated Account with respect to receivables in all Designated
Accounts sold to the trust, and
o to the seller the remainder of the interest collections in all of
those Designated Accounts,
o represent and warrant that the removal of any Eligible
Account on any Removal Date shall not, in the reasonable belief of
the seller, cause an Early Amortization Event or Reinvestment Event
to occur with respect to any Series or cause the Pool Balance to be
less than the Required Participation Amount,
o represent and warrant that no selection procedures believed by
the seller to be adverse to the interests of the certificateholders
were utilized in selecting the Designated Accounts,
o represent and warrant that the removal will not cause the rating
of any outstanding series or class of certificates to be reduced or
withdrawn, and
o on or before the related Removal Date, deliver to the
trustee and any Enhancement provider an officers' certificate
confirming the items set forth in the sixth, seventh and eighth
clauses above and a Tax Opinion with respect to the removal.
No Designated Accounts shall be removed if the removal will cause the
rating of any outstanding series or class of certificates to be reduced or
withdrawn.
On any date on which an Account becomes an Ineligible Account, which
date will be deemed the Removal Commencement Date for the Account, the seller
will start the removal of the Account from the trust by taking each of the
actions specified in the first five clauses of the preceding paragraph with
respect to the Ineligible Account.
Upon satisfaction of the above conditions, on the Removal Date with
respect to any the Designated Account, the seller will stop allocating
collections of receivables to the Designated Account, which shall be deemed
removed from the trust for all purposes (a "Removed Account").
In addition to the removal rights described in the four paragraphs
above, the seller shall have the right at any time to remove Accounts from the
trust and, in connection with the removal, repurchase the then existing
receivables in the Accounts. To remove Accounts and repurchase the then
existing receivables in those Accounts, the seller, or the servicer on its
behalf, shall, among other things:
o furnish to the trust, each Enhancement provider and the
Rating Agencies a Removal Notice stating the Designated Accounts
which are to be removed, and the then existing receivables in the
Designated Accounts (the "Designated Receivables") which are to be
repurchased from the trust and the Determination Date on which the
removal of the Designated Accounts and the purchase of the
Designated Receivables will occur (the "Removal and Repurchase
Date"),
o deliver to the trustee on the Removal and Repurchase Date a
computer file or microfiche or written list containing a true and
complete list of the Removed Accounts stating for each Account its
account number and the aggregate amount of receivables outstanding
in the Account,
o represent and warrant that the removal of any Eligible
Account and the repurchase of the receivables then existing in the
Account on any Removal and Repurchase Date shall not, in the
reasonable belief of the seller, cause an Early Amortization Event
or Reinvestment Event to occur with respect to any Series or cause
the Pool Balance to be less than the Required Participation Amount,
o represent and warrant that no selection procedures believed by
the seller to be adverse to the interests of the certificateholders
were used in selecting the Designated Accounts,
o represent and warrant as of the Removal and Repurchase Date
that the list of Removed Accounts delivered to the trustee as of the
Removal and Repurchase Date, is true and complete in all material
respects,
o represent and warrant that the removal and repurchase will
not cause the rating of any outstanding series or class of
certificates to be reduced or withdrawn by the applicable Rating
Agency,
o deliver to the trustee, each Rating Agency and any
Enhancement providers a Tax Opinion, dated the Removal and
Repurchase Date, with respect to the removal and repurchase, and
o deliver to the trustee and any Enhancement providers an
officers' certificate confirming the items set forth in the fourth
through seventh clauses above.
The seller may not remove Designated Accounts or repurchase
Designated Receivables unless each Rating Agency shall have notified the
seller, the servicer and the trustee in writing that the removal and
repurchase will not cause the Rating Agency's rating of any outstanding series
or class of certificates to be reduced or withdrawn.
Upon satisfaction of the above conditions, on the Removal and
Repurchase Date with respect to any Designated Account and Designated
Receivables, the Designated Account shall be deemed removed, and the
Designated Receivables ("Repurchased Receivables") shall be deemed
repurchased, from the trust for all purposes.
On each distribution date, the trustee will apply any amounts on
deposit in the Collection Account on the distribution date resulting from
payment by the seller of the Repurchased Receivables Purchase Price, first, to
fund any unpaid Miscellaneous Payment due on or prior to the distribution
date. Second, an amount equal to the product of
o the amount of any Repurchased Receivables Purchase Price
initially deposited by the seller in the Collection Account in
connection with the repurchase, and
o the Monthly Payment Rate for the immediately preceding Collection
Period
shall be treated as principal collections collected in the immediately
preceding Collection Period. The "Monthly Payment Rate" for a Collection
Period is the percentage obtained by dividing principal collections for the
Collection Period by the daily average Pool Balance for the Collection Period.
The seller, however, shall have the right to require the reassignment
to it of all the trust's right, title and interest in the receivables then
existing and created after that time in Accounts ("Automatic Removed
Accounts") designated by the seller, together with existing and future
collections and proceeds from those receivables, upon satisfaction of the
following conditions:
o on or before the fifth business day immediately preceding
the date upon which the Accounts are to be removed, the seller shall
have given the trustee, each Enhancement provider and the Rating
Agencies a Removal Notice specifying the date for removal of the
Automatic Removed Accounts (the "Automatic Removal Date");
o 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 stating for
each Account, as of the removal notice date, its account number and
the aggregate amount of receivables outstanding in the Account;
o the seller shall have represented and warranted as of each
Automatic Removal Date that the list of Automatic Removed Accounts
delivered to the trustee, as of the Automatic Removal Date, is true
and complete in all material respects;
o the trustee shall have received confirmation from each
Rating Agency that the removal will not cause the Ratings Agency's
rating of any outstanding series or class of certificates to be
reduced or withdrawn;
o 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 the removal will not cause an Early Amortization Event or
Reinvestment Event to occur with respect to any series; and
o 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 the removal.
However, from and after the date on which no series issued prior to
March 10, 1999, is outstanding, the conditions specified in the first clause
above that relate to Enhancement providers and Rating Agencies and the
conditions specified in the fourth, fifth and sixth clauses 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 the trust's interest in the receivables arising in the Automatic Removed
Accounts, all monies due and to become due and all amounts received with
respect to the receivables and all proceeds of the receivables shall be deemed
removed from the trust for all purposes.
Excluded Series
A series of certificates may be designated as an excluded series (an
"Excluded Series") with respect to a series of certificates previously issued
by the trust as to which the Accumulation Period or Controlled Amortization
Period has commenced (a "Paired Series"). This allows a seller, in effect, to
replace an amortizing series with a new series without waiting for the
amortizing series to be paid in full.
Each Excluded Series will be prefunded with an initial deposit to a
prefunding account in an amount equal to the initial principal balance of the
Excluded Series. The source of funds will primarily be the proceeds of the
offering of the Excluded Series. Any prefunding account will be held for the
benefit of the Excluded Series and not for the benefit of the Paired Series.
As funds are accumulated in the Principal Funding Account for the Paired
Series or distributed to holders of certificates of the Paired Series, the
trustee will distribute to the seller an equal amount of funds from any
prefunding account for the Excluded Series. Until payment in full of the
Paired Series, no interest collections, principal collections, Defaulted
Amounts or Miscellaneous Payments will be allocated to the related Excluded
Series. Also, it is expected that any Excluded Series will be excluded from
the calculation of the Required Participation Amount as described under " --
Addition of Accounts".
Collection Account
In general, either the servicer, subject to limitations, will hold
the trust's funds or the trustee will keep those funds in accounts that must
be Eligible Deposit Accounts.
The servicer has established and will maintain an Eligible Deposit
Account for the benefit of the certificateholders in the name of the trustee,
on behalf of the trust (the "Collection Account"). "Eligible Deposit Account"
means either
o a segregated account with an Eligible Institution or
o a segregated trust account with the corporate trust
department of a depository institution organized under the laws of
the United States or any one of the states of the United States, or
any domestic branch of a foreign bank, having corporate trust powers
and acting as trustee for funds deposited in the account, so long as
any of the securities of the depository institution has a credit
rating from each Rating Agency in one of its generic rating
categories which signifies investment grade.
"Eligible Institution" means
o the corporate trust department of the trustee or
o a depository institution organized under the laws of the
United States or any one of the states of the United States, or the
District of Columbia, or a domestic branch of a foreign bank, which
at all times
o has either
o a long-term unsecured debt rating of A2 or better
by Moody's Investors Service, Inc. ("Moody's") and of
AAA or better by Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies ("Standard &
Poor's") or
o a certificate of deposit rating of P-1 by Moody's
or A-1+ by Standard & Poor's, and
o is a member of the FDIC.
Funds in the Collection Account generally will be invested in
Eligible Investments. "Eligible Investments" are book-entry securities,
negotiable instruments or physical securities having original or remaining
maturities of 30 days or less, but in no event occurring later than the
distribution date next succeeding the trustee's acquisition of the book-entry
securitized, negotiable instruments or physical securities, except as
otherwise provided in the related Series Supplement. Eligible Investments are
limited to:
o direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
o demand deposits, time deposits or certificates of deposit of any
depositary institution or trust company incorporated under the laws
of the United States of America or any state of the United States,
or any domestic branch of a foreign bank, and subject to supervision
and examination by Federal or state banking or depository
institution authorities. However, at the time of the trust's
investment or contractual commitment to invest in the demand
deposits, the deposits or certificates of deposit, the commercial
paper or other short-term unsecured debt obligations, other than
obligations the rating of which is based on the credit of a person
or entity other than the depository institution or trust company of
the depositary institution or trust company, must have a credit
rating from each of the Rating Agencies in its highest investment
category;
o commercial paper having, at the time of the trust's
investment or contractual commitment to invest in the commercial
paper, a rating from each of the Rating Agencies in its highest
investment category;
o except during a Reinvestment Period with respect to any
series, investments in money market funds having a rating from each
of the Rating Agencies in its highest investment category or
otherwise approved in writing thereby;
o bankers' acceptances issued by any depository institution or
trust company referred to in the second clause of this sentence;
o repurchase obligations, including those of appropriately rated
broker-dealers and financial institutions; and
o any other investment consisting of a financial asset that
by its terms converts to cash within a finite period of time.
However, each Rating Agency shall have notified the seller, the
servicer and the trustee that the trust's investment in the
financial asset will not cause the Rating Agency to reduce or
withdraw its then rating of any outstanding class or series.
Any earnings, net of losses and investment expenses, on funds in the
Collection Account will be credited to the Collection Account. The servicer
will have the revocable power to instruct the trustee to make withdrawals and
payments from the Collection Account for the purpose of making payments under
the Pooling and Servicing Agreement. The servicer may select an appropriate
agent as representative of the servicer for the purpose of choosing the
investments.
Excess Funding Account
Except, to the extent provided in the related Series Supplement,
during an Early Amortization Period or Reinvestment Period for a series, we
will keep the Excess Funded Amount, if any, for that series in an Eligible
Account (the "Excess Funding Account") established with the trustee for the
series. The "Excess Funded Amount" for a series will initially equal the
excess, if any, of the initial principal balance of the certificates of the
series over the Initial Invested Amount of the series. The trustee will invest
funds on deposit in the Excess Funding Account for a series will be invested
by the trustee at the direction of the servicer in Eligible Investments. The
investments must mature on or prior to the next distribution date. The
servicer may select an agent for the purpose of designating the investments.
The trustee will distribute funds on deposit in the Excess Funding
Account for a series to the seller or allocate them to one or more other
series which are in Controlled Amortization, Early Amortization, Reinvestment
or Accumulation Periods to the extent of any increases in the Invested Amount
of that series as a result of the addition of receivables to the trust, a
reduction in the Seller's Interest, or a reduction in the Initial Invested
Amount of any other series. The trustee will deposit additional amounts in the
Excess Funding Account for a series on a distribution date to the extent that
the sum of the Certificateholders' Interest of the series in principal
receivables and the amount on deposit in the Excess Funding Account, if any,
for the series prior to that date is less than the outstanding principal
balance of the certificates of the series, but only to the extent that funds
are available as provided in the related Series Supplement. The allocation of
additional receivables to increase the Invested Amount of each series that
provides for an Excess Funding Account or similar arrangement involving
fluctuating levels of investment in the receivables will be made pro rata on
the basis of the amounts in the excess Funding Accounts or similar basis. The
deposit of amounts in the Excess Funding Accounts for each of those series
will be made pro rata on the basis of their respective Adjusted Invested
Amounts.
On each distribution date, we will apply all investment income earned
on amounts in the Excess Funding Account for any series since the preceding
distribution date as described in this prospectus and in the related
prospectus supplement.
The trustee will distribute funds on deposit in the Excess Funding
Account for a series on the earliest of
o the commencement of a Reinvestment Period with respect to the
series,
o the commencement of an Early Amortization Period with respect to
the series and
o the distribution date or distribution dates specified in or
determined in the manner provided in the Series Supplement for the
series
to the certificateholders of the series or a class of the series or deposit
those amounts in the Principal Funding Account for the series or a class of
the series, in each case if and to the extent the related Series Supplement so
states. Also, except as otherwise provided in the related Series Supplement,
we will not deposit funds in the Excess Funding Account for a series during
any Early Amortization Period or Reinvestment Period with respect to the
series or with respect to any Collection Period following the Collection
Period stated in or determined in the manner provided in the Series Supplement
for the series.
Allocation Percentages
We will allocate collections to each series and then between the
seller and the certificateholders of that series on the basis of various
percentages. Which percentage we use depends on whether the collections being
allocated are interest collections or principal collections or other amounts
and whether or not the collections are received in the Revolving Period for a
series.
Allocations among Series. Under the Pooling and Servicing Agreement,
during each Collection Period the servicer will allocate to each outstanding
Series its share of interest collections, principal collections, Defaulted
Receivables and Miscellaneous Payments based on the applicable Series
Allocable Interest Collections, Series Allocable Principal Collections, Series
Allocable Defaulted Amount and Series Allocable Miscellaneous Payments.
"Series Allocable Interest Collections", "Series Allocable Principal
Collections", "Series Allocable Defaulted Amount" and "Series Allocable
Miscellaneous Payments" are, with respect to any series of certificates
for any Collection Period, the product of the Series Allocation
Percentage for the series and the amount of interest collections,
principal collections, the Defaulted Amount and Miscellaneous Payments,
respectively, with respect to the Collection Period.
"Miscellaneous Payments" for any Collection Period are the sum of
o Adjustment Payments and Transfer Deposit Amounts received with
respect to the Collection Period and
o Unallocated Principal Collections on the distribution date
available to be treated as Miscellaneous Payments as described below
under "Principal Collections for all Series".
"Series Allocation Percentage" is, with respect to a series for any
Collection Period, the percentage equivalent of a fraction, the numerator
of which is the Adjusted Invested Amount of the series as of the last day
of the immediately preceding Collection Period and the denominator of
which is the Trust Adjusted Invested Amount as of that last day.
"Adjusted Invested Amount" is, with respect to a series for any
date, an amount equal to the sum of
o the Initial Invested Amount of the series, minus unreimbursed
Investor Charge-Offs for the series and
o the Available Subordinated Amount with respect to the
series, after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the distribution date during
the Collection Period in which the date occurs.
"Trust Adjusted Invested Amount" is, with respect to any Collection
Period, the sum of the Adjusted Invested Amounts for all outstanding
series.
"Initial Invested Amount" is, with respect to any series and for any
date, the amount stated in the related Series Supplement. The Initial
Invested Amount for any series may be increased or decreased from time to
time as stated in the related Series Supplement, including as a result of
deposits to or withdrawals from the Excess Funding Account, if any, for
the series.
Allocation Between the Certificateholders and the Seller. The
servicer will allocate amounts initially allocated to each series between the
Certificateholders' Interest and the Seller's Interest for each Collection
Period as stated in the related Series Supplement and described in the related
prospectus supplement. If a series consists of more than one class, the
amounts allocated to the Certificateholders' Interest of the series will be
further allocated between those classes as stated in the related Series
Supplement and described in the related prospectus supplement.
Principal Collections for all Series. We will allocate principal
collections allocated to the Certificateholders' Interest of any series, for
any Collection Period with respect to any Accumulation Period, Controlled
Amortization Period, Reinvestment Period or Early Amortization Period with
respect to the series or a class of the series, first to make required
payments of principal to the Principal Funding Account or to the
Certificateholders of the series or class, in each case if and to the extent
stated in the Series Supplement for the series. The servicer will determine
the amount of available certificateholder principal collections for each
series and any Collection Period remaining after the required payments, if any
("Excess Principal Collections"). The servicer will allocate Excess Principal
Collections to cover any principal distributions to certificateholders of any
series which are either scheduled or permitted and which have not been covered
out of principal collections and other amounts allocated to the series
("Principal Shortfalls"). Excess Principal Collections will not be used to
cover Investor Charge-Offs for any series. If Principal Shortfalls exceed
Excess Principal Collections for any Collection Period, Excess Principal
Collections will be allocated pro rata among the applicable series based on
the relative amounts of Principal Shortfalls, unless otherwise provided in the
applicable Series Supplements. To the extent that Excess Principal Collections
exceed Principal Shortfalls, the trustee will pay the balance to the seller if
the Seller's Participation Amount, determined after giving effect to any
principal receivables transferred to the trust on that 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 the
Determination Date. Any amount not allocated to the seller because the
Seller's Participation Amount does not exceed the Trust Available Subordinated
Amount will be held unallocated ("Unallocated Principal Collections") until
the Seller's Participation Amount exceeds the Trust Available Subordinated
Amount, at which time we will allocate the amount to the seller. However, if
an Early Amortization Period, Accumulation Period, Controlled Amortization
Period or Reinvestment Period commences for any series, the amount will be
treated as a Series Allocable Miscellaneous Payment.
Allocation of Collections; Deposits in Collection Account
On each Determination Date, the servicer will calculate the amounts
to be allocated in respect of collections on receivables received with respect
to the related Collection Period to the certificateholders of each outstanding
series or class or the seller in accordance with the Series Supplements.
The servicer, no later than two business days after the processing
date, will deposit all collections received with respect to the receivables,
excluding, with exceptions, portions allocable to the seller, in each
Collection Period into the Collection Account. However, the servicer need not
make daily deposits if
o CFC remains the servicer under the Pooling and Servicing
Agreement,
o no Service Default has occurred and is continuing and
o CFC has and maintains a short-term debt rating of at least A-1 by
Standard & Poor's and P-1 by Moody's, and
o CFC arranges for and maintains a letter of credit or other
form of Enhancement in respect of the servicer's obligation to make
deposits of collections on the receivables in the Collection Account
that is acceptable in form and substance to each Rating Agency or
o CFC otherwise obtains the Rating Agency confirmations
described below in this paragraph.
In that case, subject to any limitations referred to below, CFC may use for
its own benefit all collections until the related distribution date. At that
time CFC will make the deposits in an amount equal to the net amount of the
deposits and withdrawals which would have been made if deposits were made on a
daily basis. However, before ceasing daily deposits as described above, the
seller must deliver to the trustee written confirmation from the applicable
Rating Agencies that the failure by CFC to make daily deposits will not cause
the Rating Agencies to reduce or withdraw rating of any outstanding series or
class of certificates.
In addition, during any Collection Period the servicer will be
required to deposit interest collections and principal collections into the
Collection Account only to the extent of
o the distributions the trust must make to certificateholders,
o the amounts the trust must deposit into any account maintained
for the benefit of certificateholders of any series and other
parties and
o the amounts the trust must pay to any Enhancement provider on the
distribution date relating to the Collection Period.
Also, if, at any time prior to that distribution date, the amount of
collections deposited in the Collection Account exceeds the amount the
servicer is required to deposit, the servicer will be permitted to withdraw
the excess from the Collection Account.
On any date on which the servicer deposits collections in the
Collection Account, the servicer will distribute directly to the seller the
amount of the interest collections allocable to each series specified in the
related Series Supplement and described in the related prospectus supplement.
However, the trustee will make that distribution only if the Seller's
Participation Amount, determined after giving effect to any Principal
Receivables transferred to the trust on the date, exceeds the Trust Available
Subordinated Amount for the immediately preceding Determination Date, after
giving effect to the allocations, distributions, withdrawals and deposits
required to be made on the distribution date immediately following the
Determination Date. Also, during the Revolving Period for any series, subject
to limitations, the servicer will distribute directly to the seller on each
date of deposit the amount of principal collections allocable to each series
stated in the related Series Supplement and described in the related
prospectus supplement if the Seller's Participation Amount, determined after
giving effect to any principal receivables transferred to the trust on that
date, exceeds the Trust Available Subordinated Amount for the immediately
preceding Determination Date, after giving effect to the allocations,
distributions, withdrawals and deposits the servicer is to make on the
distribution date immediately following the Determination Date.
Limited Subordination of Seller's Interest; Enhancements
Subordination of Seller's Interest. With respect to any series of
certificates, we will subordinate the Seller's Interest to the rights of
certificateholders of the series to the extent described in the related
prospectus supplement. This will provide credit enhancement to the series. The
amount of the subordination with respect to any series is the "Available
Subordinated Amount" for the series. We will decrease and increase the
Available Subordinated Amount for any series from time to time if and to the
extent described in the related prospectus supplement. We will describe in the
prospectus supplement for each series the manner in which the servicer may
draw upon collections attributable to the Available Subordinated Amount for
the series to make payments to or for the benefit of the holders of
certificates of the series. If we so state in the related Series Supplements,
the Available Subordinated Amount for a series may be available to more than
one series of certificates.
Enhancements. In addition to the subordination described above, for
any series, we may provide enhancements ("Enhancements") with respect to one
or more classes of the series, including one or more of the following:
o letter of credit,
o surety bond,
o cash collateral account,
o spread account,
o guaranteed rate agreement,
o swap, including without limitation currency swaps, or other
interest protection agreement,
o repurchase obligation,
o cash deposit or
o another form of credit enhancement described in the related
prospectus supplement.
We may also provide enhancements to a series or class or classes of a series
by subordination provisions which require that distributions of principal
and/or interest be made with respect to the certificates of the series or the
class or classes before distributions are made to one or more series or one or
more classes of the series. If we so provide in the related prospectus
supplement, any form of Enhancement may be available to more than one class or
series. The trust may use a currency swap to issue certificates payable in a
currency other than United States dollars.
If we provide Enhancement with respect to a series, we will include
in the related prospectus supplement a description of
o the amount payable under the Enhancement,
o any conditions to payment we do not otherwise describe in this
prospectus,
o the conditions, if any, under which we may reduce the amount
payable under the Enhancement and under which we may terminate or
replace the Enhancement and
o any material provisions of any agreement relating to the
Enhancement.
Additionally, we may set forth in the related prospectus supplement the
information with respect to the applicable Enhancement provider, including
o a brief description of its principal business activities,
o its principal place of business, place of incorporation and the
jurisdiction under which it is chartered or licensed to do business,
o if applicable, the identity of regulatory agencies which exercise
primary jurisdiction over the conduct of its business and
o its total assets, and its stockholders' equity or policyholders'
surplus, if applicable, as of a date we state in the prospectus
supplement.
Limitations on Subordination and Enhancements. We intend the presence
of an Available Subordinated Amount or Enhancement with respect to a series or
class to enhance the likelihood of receipt by certificateholders of the series
or class of the full amount of principal and interest and to decrease the
likelihood that the certificateholders will experience losses. However, unless
we otherwise state in the prospectus supplement for a series, neither
subordination of the Seller's Interest nor the Enhancement, if any, will
provide protection against all risks of loss or will guarantee repayment of
the entire principal balance of the certificates and interest on the
certificates. If losses exceed the amount covered by the subordination or
Enhancement or are not covered by the subordination or Enhancement,
certificateholders will bear their allocable share of deficiencies. In
addition, if we provide specific Enhancement for the benefit of more than one
class or series, certificateholders of that class or series will be subject to
the risk that the Enhancement will be exhausted by the claims of
certificateholders of other classes or series.
Distributions
The servicer will make payments to certificateholders of a series or
a class from the Collection Account and any accounts established for the
benefit of the certificateholders as we describe in the related prospectus
supplement.
Defaulted Receivables and Recoveries
"Defaulted Receivables" on any Determination Date are
o all receivables which the servicer charged off as uncollectible
in respect of the immediately preceding Collection Period and
o all receivables which were Eligible Receivables when
transferred to the trust, which arose in an Account which became an
Ineligible Account after the date of transfer of the receivables to
the trust and which were not Eligible Receivables for any six
consecutive Determination Dates after the date of transfer of the
receivables to the trust.
The "Defaulted Amount" for any Collection Period will be an amount, which
shall not be less than zero, equal to
o the principal amount of receivables that became Defaulted
Receivables during the preceding Collection Period minus
o the sum of
o the full amount of any Defaulted Receivables subject to
reassignment to the seller or purchase by the servicer for the
Collection Period unless events of bankruptcy, insolvency or
receivership have occurred with respect to either of the seller or
the servicer, in which event the Defaulted Amount will not be
reduced for those Defaulted Receivables, and
o the excess, if any, for the immediately preceding
Determination Date of the amount determined under this second clause
for the Determination Date over the amount determined under the
first clause for the Determination Date.
The servicer will change off receivables as uncollectible in accordance with
the servicer's customary and usual policies and procedures for servicing its
own comparable revolving dealer wholesale loan accounts. The servicer will
allocate a portion of the Series Allocable Defaulted Amount for each series
and Collection Period between the certificateholders of the series and the
seller as we state in the related Series Supplement. The portion of the
Defaulted Amount allocated to the certificateholders of a series will be the
"Investor Default Amount" for the series. The servicer will further allocate
the Investor Default Amount for any series that consists of more than one
class between those classes as we state in the related Series Supplement.
If the servicer adjusts the amount of any receivable because of a
rebate, billing error or other non-cash items to a dealer, or because the
receivable was created in respect of inventory which was refused or returned
by a dealer, we will reduce the principal amount of each of the Seller's
Interest and the Pool Balance by the amount of the adjustment or charge-off.
Further, to the extent that the reduction in the Seller's Interest would
reduce the Seller's Participation Amount below the Trust Available
Subordinated Amount for the immediately preceding Determination Date, after
giving effect to the allocations, distributions, withdrawals and deposits to
be made on the distribution date immediately following that Determination
Date, the seller will deposit a cash amount equal to the deficiency into the
Collection Account in immediately available funds (an "Adjustment Payment") on
the day on which the servicer makes the adjustment.
Optional Repurchase
If we so state in the prospectus supplement relating to a series of
certificates, on any distribution date occurring after the Invested Amount of
the certificates of the series is reduced to the percentage of the initial
outstanding principal amount of the certificates of the series we state in the
prospectus supplement, the servicer will have the option, subject to
conditions, to repurchase the Certificateholders' Interest of the series. The
purchase price will be equal to the Invested Amount of the series on the
Determination Date preceding the distribution date on which the servicer will
make the repurchase plus accrued and unpaid interest on the unpaid principal
amount of the certificates of the series at the applicable certificate rate,
together with interest on overdue interest, to the extent lawful, plus any
other amounts we state in the related Series Supplement. The servicer will
deposit the purchase price in the Collection Account in immediately available
funds on the distribution date on which CFC exercises that option. Following
any purchase, the certificateholders of the series will have no further rights
with respect to the Certificateholders' Interest of the series, other than the
right to receive the final distribution on the certificates of that series. If
CFC fails for any reason to deposit the purchase price, the servicer will
continue to make payments to the certificateholders of the series as we
describe in the related prospectus supplement.
Reinvestment Events and Early Amortization Events
Beginning on the first distribution date following the Collection
Period in which a Reinvestment Event has occurred with respect to any series,
o the servicer will no longer pay to DCWR principal
collections allocable to the Certificateholders' Interest of the
series or allocate those collections to any other series but instead
will deposit those collections to the Principal Funding Account for
the series monthly on each distribution date, and
o the Controlled Deposit Amount or Controlled Amortization Amount,
if any, will no longer apply to distributions of principal in respect
of the certificates of the series,
in each case except as we describe below under "Reinvestment Events and Early
Amortization Events" or as we state in the related Series Supplement. A
"Reinvestment Event" is, for any series, any of the events we so describe in
the related Series Supplement and describe in the related prospectus
supplement.
If any event we so define occurs, we will deem a Reinvestment Event
to have occurred with respect to the series without any notice or other action
on the part of any other party immediately upon the occurrence of the event.
The Reinvestment Period with respect to the series will begin as of the close
of business on the business day immediately preceding the day on which we deem
the Reinvestment Event to have occurred. Monthly deposits of principal to the
Principal Funding Account for the series will, except as we describe below
under "Reinvestment Events and Early Amortization Events" or state in the
related Series Supplement, begin on the first distribution date following the
Collection Period in which a Reinvestment Period has begun with respect to the
series.
Beginning on the first distribution date following the Collection
Period in which an Early Amortization Event has occurred with respect to any
series,
o the servicer will no longer pay to DCWR Principal
Collections allocable to the Certificateholders' Interest of the
series, allocate those collections to any other series or retain
those collections in the Principal Funding Account for the series
but instead will be distributed to certificateholders of the series
monthly on each distribution date and
o the Controlled Deposit Amount or Controlled Amortization Amount,
if any, will no longer apply to distributions of principal on the
certificates of the series,
in each case except as we describe below under "Reinvestment Events and Early
Amortization Events" or state in the related Series Supplement. An "Early
Amortization Event" is, for any series, any of the events we so define in the
related Series Supplement and describe in the related prospectus supplement,
as well as each of the following events:
o the occurrence of events of bankruptcy, insolvency or
receivership relating to the trust or the seller; and
o the trust or DCWR becomes an investment company within the
meaning of the Investment Company Act of 1940.
If any event we describe above or in the prospectus supplement for a
series occurs, we will deem an Early Amortization Event to have occurred with
respect to the series without any notice or other action on the part of any
other party immediately upon the occurrence of the event. The Early
Amortization Period with respect to the series will begin as of the close of
business on the business day immediately preceding the day on which we deem
the Early Amortization Event to have occurred. Monthly distributions of
principal to the certificateholders of the series will begin on the first
distribution date following the Collection Period in which an Early
Amortization Period has begun with respect to the series, except as we
describe below under "Reinvestment Events and Early Amortization Events". The
failure of the trust to pay the outstanding principal amount of the
certificates of any series or class by their Expected Payment Date will have
the same consequences as the occurrence of an Early Amortization Event with
respect to the series or class. We shall deem all references in this
prospectus to Early Amortization Events to include that type of failure.
Even if a Reinvestment Period or an Early Amortization Period begins
with respect to a series, that period may terminate and the Revolving Period
with respect to the series and any class may recommence when the event giving
rise to the beginning of the Reinvestment Period or Early Amortization Period
no longer exists, whether as a result of the distribution of principal to
certificateholders of the series or otherwise, in each case if and to the
extent we state in the Series Supplement for the series.
In addition, if an insolvency event occurs with respect to DCWR, or
DCWR violates its covenant not to create any lien on any receivable, in each
case as provided in the Pooling and Servicing Agreement, on the day of the
insolvency event or violation, as applicable, DCWR will, subject to the
actions of the certificateholders, immediately cease to transfer receivables
to the trust and promptly give notice to the trustee of the insolvency event
or violation, as applicable. Under the terms of the Pooling and Servicing
Agreement, within 15 days the trustee will publish a notice of the insolvency
event or violation stating that the trustee intends to sell, liquidate or
otherwise dispose of the receivables in a commercially reasonable manner and
on commercially reasonable terms, unless within a stated period of time
holders of certificates of each outstanding series representing more than 50%
of the aggregate unpaid principal amount of the certificates of each
outstanding series, or, with respect to any series with two or more classes,
the certificates of each class, and each person holding a Supplemental
Certificate, instruct the trustee not to sell, dispose of or otherwise
liquidate the receivables and to continue transferring receivables as before
the insolvency event or violation, as applicable. If the portion of the
proceeds allocated to the Certificateholders' Interest and the proceeds of any
collections on the receivables in the Collection Account allocable to the
Certificateholders' Interest are not enough to pay the aggregate unpaid
principal balance of the certificates in full plus accrued and unpaid interest
on the certificates, certificateholders will incur a loss.
Termination; Fully Reinvested Date
Termination. The trust will terminate on the earliest to occur of
o the day following the distribution date on which the aggregate
Invested Amounts for all series is zero,
o May 31, 2012 and
o the date on which the Servicer distributes to the
certificateholders proceeds from the sale, disposal or other
liquidation of the receivables following an insolvency event with
respect to DCWR or any violation by DCWR of its covenant not to
create any lien on any receivable, in each case as stated in the
Pooling and Servicing Agreement and as we describe above under
"Reinvestment Events and Early Amortization Events".
When the trust is terminated, the trust will transfer to DCWR all right, title
and interest in the receivables and other funds of the trust, other than
amounts in the trust's accounts for the final distribution of principal and
interest to certificateholders.
In any event, the last payment of principal and interest on any
series of certificates will be due and payable no later than the date we state
in the related prospectus supplement (the "Series Termination Date").
Fully Reinvested Date. The "Fully Reinvested Date" is the date on
which the amount on deposit in the Principal Funding Account with respect to a
series equals the outstanding principal amount of the certificates of the
series. After the Fully Reinvested Date occurs with respect to any series,
certificateholders of that series will no longer have any interest in the
receivables. Further, all the representations and covenants of the seller and
the servicer relating to the receivables, as well as other provisions of the
Pooling and Servicing Agreement and all remedies for breaches of those
representations, covenants and other provisions, will no longer accrue to the
benefit of the certificateholders of that series, in each case unless the
Revolving Period with respect to the series recommences as we state in the
related Series Supplement. Those representations, covenants and other
provisions include
o the conditions to the exchange of the Seller's Certificate we
describe under "The Seller's Certificate",
o the conditions to the issuance of a new series we describe under
"New Issuances",
o the representations we describe under "Representations and
Warranties" to the extent they relate to the receivables and the
Collateral Security,
o the limitations on additions and removals of Accounts we describe
under "Addition of Accounts" and "Removal of Accounts",
respectively, and
o the obligations of the servicer with respect to servicing
the receivables we describe under "Collection and Other Servicing
Procedures" and "Servicer Covenants".
Also, if the Fully Reinvested Date occurs with respect to any series, the
servicer will allocate to that series no interest collections, principal
collections, Defaulted Receivables or Miscellaneous Payments, unless the
series' Revolving Period begins again as we describe above. However, when the
servicer has made the final distribution with respect to each series of
certificates or the series' Fully Reinvested Date has occurred, the trustee
will convey and transfer to DCWR, all right, title and interest in the
receivables.
Indemnification
The Pooling and Servicing Agreement states that the servicer will
indemnify the trust and the trustee from and against any loss, liability,
expense, damage or injury suffered or sustained arising out of any acts,
omissions or alleged acts or omissions arising out of activities of the trust,
the trustee or the servicer under the Pooling and Servicing Agreement. The
servicer will not so indemnify the trust or the trustee, however, if the acts,
omissions or alleged acts or omissions constitute fraud, gross negligence,
breach of fiduciary duty or willful misconduct by the trustee. Also, the
servicer will not indemnify the trust, the trustee or the certificateholders
for any act taken by the trustee at the request of the certificateholders or
for any tax which the trust or the certificateholders is required to pay.
The Pooling and Servicing Agreement states that, except as we
describe above and with other exceptions, neither the seller, the servicer nor
any of their directors, officers, employees or agents will be under any
liability to the trust, the trustee, the certificateholders or any other
person for taking any action, or for refraining from taking any action, under
the Pooling and Servicing Agreement. However, neither the seller, the servicer
nor any of their directors, officers, employees or agents will be protected
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence of any of those persons in the
performance of their duties or by reason of reckless disregard of their
obligations and duties under the Pooling and Servicing Agreement.
Also, the Pooling and Servicing Agreement states that the servicer is
not under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its servicing responsibilities under the Pooling
and Servicing Agreement. The servicer may, in its sole discretion, undertake
any legal action which it may deem necessary or desirable for the benefit of
the certificateholders with respect to the Pooling and Servicing Agreement and
the rights and duties of the parties to that agreement and the interest of the
certificateholders under that agreement.
Collection and Other Servicing Procedures
Under the Pooling and Servicing Agreement, the servicer is
responsible for servicing, collecting, enforcing and administering the
receivables. The servicer must do so in accordance with customary and usual
procedures for servicing its own revolving credit line dealer wholesale loans,
except where the failure to so act would not materially and adversely affect
the rights of the trust.
CFC covenants that it may only change the terms relating to the
Accounts if
o in the servicer's reasonable judgment, the charge will not cause
any Early Amortization Event or Reinvestment Event to occur with
respect to any series and
o the servicer applies the change to the comparable segment
of the portfolio of revolving credit line dealer wholesale loan
accounts with similar characteristics owned or serviced by CFC and
not only to the Accounts.
When acting as a servicer, the servicer will, among other things
o collect and record payments,
o communicate with dealers,
o investigate payment delinquencies,
o evaluate the increase of credit limits, and
o maintain internal records with respect to each Account.
Managerial and custodial services performed by the servicer on behalf
of the trust include
o providing assistance in any inspections of the documents and
records relating to the Accounts and receivables by the trustee
under the Pooling and Servicing Agreement,
o maintaining the agreements, documents and files relating to the
Accounts and receivables as custodian for the trust and
o providing related data processing and reporting services for
certificateholders and on behalf of the trustee.
Servicer Covenants
In the Pooling and Servicing Agreement the servicer covenants that:
o it will duly satisfy all obligations on its part to be
fulfilled under or in connection with the receivables and the
Accounts, will maintain in effect all qualifications required in
order to service the receivables and the Accounts and will comply in
all material respects with all requirements of law in connection
with servicing the receivables and the Accounts, the failure to
comply with which would have a materially adverse effect on the
certificateholders of any outstanding series;
o it will not permit any rescission or cancellation of a receivable
except as ordered by a court of competent jurisdiction or other
government authority;
o it will do nothing to impair the rights of the certificateholders
in the receivables or the Accounts; and
o it will not reschedule, revise or defer payments due on any
receivable except in accordance with its guidelines for servicing
revolving credit line dealer wholesale loans.
Under the terms of the Pooling and Servicing Agreement, if the seller
or the servicer discovers, or receives written notice, that any covenant of
the servicer set forth above has not been complied with in all material
respects and the noncompliance has not been cured within 30 days, or a longer
period as the trustee may agree to, and has a materially adverse effect on the
interests of all certificateholders in any receivable or Account, CFC, as
servicer, will purchase the receivable or all receivables in the Account, as
applicable. If CFC is the servicer, CFC will purchase the receivable or
receivables on the Determination Date following the expiration of the 30-day
cure period and the servicer will be obligated to deposit into the Collection
Account an amount equal to the amount of the receivable or receivables plus
accrued and unpaid interest on that amount. We shall deem the amount of the
deposit a Transfer Deposit Amount. The purchase by the servicer constitutes
the sole remedy available to the certificateholders if the covenant or
warranty of the servicer is not satisfied and the trust's interest in any
purchased receivables shall be automatically assigned to the servicer.
Servicing Compensation and Payment of Expenses
Unless we state otherwise in the related Series Supplement or
prospectus supplement, the servicer's compensation with respect to the
certificates of a series for its servicing activities and reimbursement for
its expenses will be a monthly servicing fee (the "Servicing Fee"). The
Servicing Fee is an amount payable in arrears on each distribution date on or
before the Series Termination Date of the series and the Fully Reinvested
Date, if any, of the series, and after that date during the Revolving Period
with respect to the series, if the Revolving Period begins again, equal to
one-twelfth of the product of
o the "Servicing Fee Rate" set forth in the series Supplement,
o the Pool Balance as of the last day of the second preceding
Collection Period and
o the Series Allocation Percentage for the series for the
immediately preceding Collection Period.
Unless we state otherwise in a related Series Supplement or prospectus
supplement, the share of the Servicing Fee allocable to certificateholders of
any series with respect to any distribution date (the "Monthly Servicing Fee")
shall be equal to one-twelfth of the product of
o the Servicing Fee Rate and
o the Invested Amount of the series as of the last day of the
second preceding Collection Period.
The seller shall pay the remainder of the Servicing Fee with respect to any
series. The servicer shall pay the Monthly Servicing Fee with respect to any
series solely to the extent amounts are available for distribution of the
Monthly Servicing Fee under the terms of the Pooling and Servicing Agreement.
The servicer may waive its right to receive the Servicing Fee with
respect to any series on any distribution date, so long as it believes that
enough interest collections will be available on a future distribution date to
pay the Monthly Servicing Fee relating to the waived Servicing Fee. If that
happens, we shall deem the Servicing Fee and the Monthly Servicing Fee for the
series and the distribution date to be zero.
The servicer will pay from its servicing compensation expenses it
incurs when servicing the Accounts and the receivables including, without
limitation, payment of fees and disbursements of the trustee and independent
accountants and all other fees and expenses which are not expressly stated in
the Pooling and Servicing Agreement to be payable by the trust or the
certificateholders other than federal, state and local income and franchise
taxes, if any, of the trust or the certificateholders.
Matters Regarding the Servicer
The servicer may not resign from its obligations and duties under the
Pooling and Servicing Agreement, except upon determination that those duties
are no longer permissible under applicable law. No resignation will become
effective until the trustee or a successor to the servicer has assumed the
servicer's responsibilities and obligations under the Pooling and Servicing
Agreement (CFC or any successor servicer, the "servicer"). The servicer may
delegate any of its duties as servicer to any of its affiliates, but any
delegation will not relieve the servicer of its obligation under the Pooling
and Servicing Agreement.
Any person into which, in accordance with the Pooling and Servicing
Agreement, the servicer may be merged or consolidated or any person resulting
from any merger or consolidation to which the servicer is a party, or any
person succeeding to the business of the servicer, will be the successor to
the servicer under the Pooling and Servicing Agreement.
Service Default
In the event of any Service Default, the trustee, by written notice
to the servicer, may terminate all of the rights and obligations of the
servicer, as servicer, under the Pooling and Servicing Agreement and in and to
the receivables and the proceeds of the receivables and appoint a new servicer
(a "Service Transfer"). The rights and interest of the seller under the
Pooling and Servicing Agreement in the Seller's Interest will not be affected
by any Service Transfer. The trustee shall as promptly as possible appoint a
successor servicer and if no successor servicer has been appointed by the
trustee and has accepted the appointment by the time the servicer ceases to
act as servicer, all rights, authority, power and obligations of the servicer
under the Pooling and Servicing Agreement shall pass to and be vested in the
trustee. Before any Service Transfer, the trustee will review any bids
obtained from potential servicers meeting eligibility requirements set forth
in the Pooling and Servicing Agreement to serve as successor servicer for
servicing compensation not in excess of the Servicing Fee, plus excess amounts
payable to the seller.
A "Service Default" refers to any of the following events:
o failure by the servicer to make any payment, transfer or
deposit, or to give instructions to the trustee to make any payment,
transfer or deposit, on the date the Pooling and Servicing Agreement
requires the servicer to do so, which is not cured within a five
business day grace period;
o failure by the servicer duly to observe or perform any
other covenants or agreements of the servicer in the Pooling and
Servicing Agreement which failure has a materially adverse effect on
the certificateholders of any outstanding series and which continues
unremedied for a period of 30 days after the date the trustee shall
have given written notice of the failure to the servicer,
o the servicer delegates its duties under the Pooling and Servicing
Agreement, except as specifically permitted under that agreement;
o any representation, warranty or certification made by the
servicer in the Pooling and Servicing Agreement or in any
certificate delivered under the Pooling and Servicing Agreement
proves to have been incorrect in any material respect when made, has
a materially adverse effect on the rights of the certificateholders
of any outstanding Series, and which materially adverse effect
continues for a period of 60 days after the trustee shall have given
written notice of that fact to the servicer; or
o events of bankruptcy, insolvency or receivership occur with
respect to the servicer.
However, a delay in or failure of performance referred to under the
first clause for a period of ten business days or referred to under the
second, third or fourth clauses for a period of 60 business days, shall not
constitute a Service Default if the delay or failure was caused by an act of
God or other similar occurrence. If any of those events occurs, the servicer
shall not be relieved from using its best efforts to perform its obligations
in a timely manner in accordance with the terms of the Pooling and Servicing
Agreement and the servicer shall provide the trustee, any Enhancement
provider, the seller and the certificateholders prompt notice of the failure
or delay by it, together with a description of its efforts to so perform its
obligations. The servicer shall immediately notify the trustee in writing of
any Service Default.
Reports
On each distribution date, including each distribution date that
corresponds to an interest payment date or any Special Payment Date, the
trustee will forward to each certificateholder of record of any series a
statement (the "Distribution Date Statement") prepared by the servicer. The
Distribution Date Statement will set forth information with respect to the
trust and the certificates of the series, as we state in the related Series
Supplement and describe in the related prospectus supplement.
With respect to each interest payment date or Special Payment Date,
the Distribution Date Statement with respect to any Series will include the
following information with respect to the certificates of the series:
o the total amount distributed on the certificates of the series;
o the amount of the distribution allocable to principal on the
certificates of the series; and
o the amount of the distribution allocable to interest on the
certificates of the series.
On or before January 31 of each calendar year, the trustee will
furnish, or cause to be furnished, to each person who at any time during the
preceding calendar year was a certificateholder of record a statement
containing the information required to be provided by an issuer of
indebtedness under the Code for the preceding calendar year or the applicable
portion of that year during which the person was a certificateholder, together
with other customary information which the Code requires issuers of
indebtedness to provide and other customary information which
certificateholders need to prepare their tax returns. See "Tax Matters".
Evidence as to Compliance
The Pooling and Servicing Agreement states that on or before March 31
of each calendar year, the servicer will cause a firm of nationally recognized
independent public accountants, who will also render other services to the
servicer or the seller, to furnish a report regarding matters in connection
with the servicing of CFC's portfolio of wholesale receivables.
The Pooling and Servicing Agreement states that on or before March 31
of each calendar year, the servicer will deliver to the trustee a statement,
signed by an officer of the servicer. The statement will state that the
servicer has fully performed, or caused to be fully performed, its obligations
in all material respects under the Pooling and Servicing Agreement throughout
the preceding year or, if there has been a default in the performance of any
obligation, will state the nature and status of the default.
You may obtain copies of all statements, certificates and reports
furnished to the trustee by delivering a written request to the trustee.
Amendments
The seller, the servicer and the trustee may amend the Pooling and
Servicing Agreement and any Series Supplement, without certificateholder
consent, so long as any amendment shall not, as evidenced by an opinion of
counsel, adversely affect in any material respect the interests of the
certificateholders.
The seller, the servicer and the trustee may amend the Pooling and
Servicing Agreement and any Series Supplement with the consent of the holders
of certificates evidencing not less than 66-2/3% of the aggregate unpaid
principal amount of the certificates of all adversely affected series for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Pooling and Servicing Agreement or of modifying
in any manner the rights of certificateholders. No amendment, however, may
o reduce in any manner the amount of or delay the timing of
distributions the servicer is required to make to certificateholders
or deposits of amounts to be so distributed without the consent of
each affected certificateholder,
o change the definition or the manner of calculating any
Certificateholders' Interest without the consent of each affected
certificateholder,
o reduce the amount available under any Enhancement without the
consent of each affected certificateholder,
o adversely affect the rating of any series or class by each
Rating Agency without the consent of the holders of certificates of
the series or class evidencing not less than 66-2/3% of the
aggregate unpaid principal amount of the certificates of the series
or class or
o reduce that percentage of the unpaid principal amount of
certificates the holders of which are required to consent to any
amendment without the consent of each certificateholder.
Promptly following the execution of any amendment to the Pooling and Servicing
Agreement, other than an amendment described in the preceding paragraph, the
trustee will notify each certificateholder in writing of the substance of the
amendment.
However, we will deem each holder of a certificate offered by this
prospectus, by its acceptance of the certificate, to have consented to an
amendment to the Pooling and Servicing Agreement that
o provides that funds in the Collection Account may be invested in
any Eligible Investments,
o provides that the seller need not make any deposit to the
Collection Account in respect of the Repurchased Receivables Price
of any Designated Receivables repurchased from the trust,
o otherwise changes the procedures for removing receivables from
the trust as described under "Removal of Accounts",
o provides that, subject to the limitations we describe in
this prospectus, CFC need not deposit collections with respect to
any Collection Period in the Collection Account until the related
distribution date or
o permits the designation of Automatic Additional Accounts as we
describe in this prospectus.
The Pooling and Servicing Agreement may not be amended in any manner
which materially adversely affects the interests of any Enhancement provider
without its prior consent.
List of Certificateholders
Upon written request of any three or more certificateholders of
record, the trustee will give those certificateholders access during business
hours to the current list of certificateholders of a series or all outstanding
series, as applicable, for purposes of communicating with other
certificateholders of the series or all outstanding series, as applicable,
with respect to their rights under the Pooling and Servicing Agreement. See
"Book-Entry Registration" and "Definitive Certificates".
The Pooling and Servicing Agreement will not provide for any annual
or other meetings of certificateholders.
The Trustee
The Bank of New York, a New York banking corporation, will act as
trustee under the Pooling and Servicing Agreement. On August 23, 1996, The
Bank of New York, a New York banking corporation, succeeded Manufacturers and
Traders Trust Company, as trustee, under the Pooling and Servicing Agreement
and under an Agreement of Resignation, Appointment and Acceptance dated as of
August 23, 1996 between DCWR, CFC, as successor to CFC Corp., Manufacturers
and Traders Trust Company, as resigning trustee, and The Bank of New York, as
successor trustee. The Corporate Trust Office of the Bank of New York is
located at 101 Barclay Street, New York, New York 10286. The seller, the
servicer and their respective affiliates may from time to time enter into
normal banking and trustee relationships with the trustee and its affiliates.
The trustee may hold certificates in its own name with the same rights it
would have if it were not the trustee. In addition, for purposes of meeting
the legal requirements of local jurisdictions, the trustee shall have the
power to appoint a co-trustee or separate trustees of all or a part of the
trust. In the event of those appointments, all rights, powers, duties and
obligations shall be conferred or imposed upon the trustee and the separate
trustee or co-trustee jointly, or, in any jurisdiction in which the trustee
shall be incompetent or unqualified to perform some acts, singly upon the
separate trustee or co-trustee, who shall exercise and perform those rights,
powers, duties and obligations solely at the direction of the trustee.
The trustee may resign at any time, in which event the seller must
appoint a successor trustee. The servicer may also remove the trustee if the
trustee ceases to be eligible to continue as the trustee under the Pooling and
Servicing Agreement or if the trustee becomes insolvent. If that happens, the
servicer may appoint a successor trustee. Any resignation or removal of the
trustee and appointment of a successor trustee does not become effective until
the acceptance of the appointment by the successor trustee.
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Description of the Receivables Purchase Agreement
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The parties to the Receivables Purchase are CFC, as seller (together
with its predecessors as appropriate, the "RPA seller"), and DCWR, as
purchaser. CFC became the RPA seller as successor by merger. DCWR became the
purchaser as assignee of USA, which was in turn an assignee of CARCO. In the
following summary we describe terms of the Receivables Purchase Agreement. The
summary, however, is qualified in its entirety by reference to the Receivables
Purchase Agreement.
Sale or Transfer of Receivables
Under the Receivables Purchase Agreement, the RPA seller sold or
transferred to the seller all of its right, title and interest in and to all
of the receivables and the Collateral Security as of the Initial Cut-Off Date
and all of the receivables created after that date. In addition, the RPA
seller has previously designated Additional Accounts, and has previously
conveyed to the seller the Principal Receivables in the Additional Accounts,
together with the related Collateral Security, as of the applicable Additional
Cut-Off Date and all receivables, and related Collateral Security, created
after that date. As we describe in this prospectus, under the Pooling and
Servicing Agreement, the seller has transferred to the trust all of its right,
title and interest in and to the Receivables Purchase Agreement.
In connection with the sale or transfer of the receivables to the
seller, the RPA seller must indicate in its computer files that the
receivables have been sold or transferred to the seller, and that the
receivables have been transferred by the seller to the trust. In addition, the
RPA seller must provide to the seller a computer file or microfiche or written
list containing a true and complete list of all the receivables. The records
and agreements relating to the Accounts and receivables have not and will not
be segregated by the RPA seller from other documents and agreements relating
to other accounts and receivables and are not and will not be stamped or
marked to reflect the sale or transfer of the receivables to the seller. The
computer records, however, of the RPA seller have been and will be marked to
evidence the sale or transfer. The RPA seller has filed UCC financing
statements with respect to the receivables meeting the requirements of
Michigan state law. See "Risk Factors -- Legal Aspects" and "Legal Aspects of
the Receivables -- Transfer of Receivables".
Representations and Warranties
The RPA seller has or will make representations and warranties to the
seller that, among other things, as of the Initial Closing Date and each
Series Issuance Date, it was duly formed and in good standing and that it has
the authority to consummate the transactions contemplated by the Receivables
Purchase Agreement.
The RPA seller has or will also make representations and warranties
to the seller relating to the receivables to the effect, among other things,
that
o as of the Initial Closing Date and each Series Issuance Date,
each of the Accounts is an Eligible Account and
o as of the date any new receivable is created, the receivable is
an Eligible Receivable.
If any representation and warranty set forth in this paragraph is breached and
the breach results in an Ineligible Receivable and the requirement that the
seller accept retransfer of the Ineligible Receivable under the Pooling and
Servicing Agreement, the RPA seller shall repurchase the Ineligible Receivable
from the seller on the date of the retransfer. The purchase price for the
Ineligible Receivable shall be the face amount of the Ineligible Receivable,
of which at least the amount of any cash deposit required to be made by the
seller under the Pooling and Servicing Agreement in respect of the retransfer
of the Ineligible Receivable shall be paid in cash.
The RPA seller has or will also make representations and warranties
to the seller to the effect, among other things, that as of the Initial
Closing Date and each Series Issuance Date
o the Receivables Purchase Agreement is a legal, valid and binding
obligation of the RPA seller and
o the Receivables Purchase Agreement is a valid sale or
transfer to the seller of all right, title and interest of the RPA
seller in and to the receivables, whether then existing or created
after that time in the Accounts, the Collateral Security and the
proceeds of those items which is effective as to each receivable
upon the creation of that receivable.
If any of the representations and warranties described in this paragraph are
breached and the breach results in the obligation of the seller under the
Pooling and Servicing Agreement to accept retransfer of the receivables, the
RPA seller will repurchase the receivables retransferred to the seller for an
amount of cash equal to the amount of cash the seller is required to deposit
under the Pooling and Servicing Agreement in connection with the retransfer.
The RPA seller has agreed to indemnify the seller and to hold the
seller harmless from and against any and all losses, damages and expenses,
including reasonable attorneys' fees, suffered or incurred by the seller if
the foregoing representations and warranties are materially false.
Covenants
In the Receivables Purchase Agreement, the RPA seller has covenanted
that it will perform its obligations under the agreements relating to the
receivables and the Accounts in conformity with its current policies and
procedures relating to the receivables and the Accounts.
The RPA seller has covenanted further that, except for the sale and
conveyances under the Receivables Purchase Agreement and the interests created
under the Pooling and Servicing Agreement, the RPA seller will not sell,
pledge, assign or transfer any interest in the receivables to any other
person. The RPA seller also has covenanted to defend and indemnify the seller
for any loss, liability or expense incurred by the seller in connection with a
breach by the RPA seller of any of its representations, warranties or
covenants contained in the Receivables Purchase Agreement.
In addition, the RPA seller has expressly acknowledged and consented
to the seller's assignment of its rights relating to the receivables under the
Receivables Purchase Agreement to the trustee.
Termination
The Receivables Purchase Agreement will terminate immediately after
the trust terminates. Also, if under provisions of federal law the RPA seller
becomes party to any bankruptcy or similar proceeding, other than as a
claimant, and if the proceeding is not voluntary and is not dismissed within
60 days of its institution, the RPA seller will immediately cease to sell or
transfer receivables to the seller and will promptly give notice of that event
to the seller and to the trustee.
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Legal Aspects of the Receivables
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Transfer of Receivables
On the Initial Closing Date, the RPA seller sold and assigned the
receivables to the seller, and the seller immediately transferred the
receivables to the trust. The seller has represented and warranted and will
represent and warranty on the Series Issuance Date with respect to each Series
that
o the transfer to the trust constituted a valid transfer to the
trust of all right, title and interest of the seller in and to the
receivables and
o under the UCC, as in effect in Michigan, there exists a
valid, subsisting and enforceable first-priority perfected ownership
interest in the receivables, in existence at the time of the
formation of the trust or at the date of addition of any Additional
Accounts, in favor of the trust and a valid, subsisting and
enforceable first-priority perfected ownership interest in the
receivables created after that time in favor of the trust on and
after their creation.
However, the transfer of receivables by the seller to the trust could be
deemed to create a security interest under the UCC. For a discussion of the
trust's rights arising from these representations and warranties not being
satisfied, see "Description of the Certificates -- Representations and
Warranties".
Each of the RPA seller and the seller has represented that the
receivables are "chattel paper" for purposes of the UCC as in effect in
Michigan. If the receivables are deemed to be chattel paper and the transfer
of the receivables by either the RPA seller to the seller or by the seller to
the trust is deemed either to be a sale or to create a security interest, the
UCC as in effect in Michigan applies. In that case, the transferee must either
take possession of the chattel paper or file an appropriate financing
statement or statements in order to perfect its interest in the chattel paper.
Both the seller and the trust have filed financing statements covering the
receivables under the UCC as in effect in Michigan to perfect their respective
interests in the receivables and continuation statements will be filed as
required to continue the perfection of those interests. The receivables have
not and will not be stamped to indicate the interest of the seller or the
trustee.
There are circumstances under the UCC and applicable federal law in
which prior or subsequent transferees of receivables could have an interest in
the receivables with priority over the trust's interest. A purchaser of the
receivables who gives new value and takes possession of the instruments which
evidence the receivables, i.e., the chattel paper, in the ordinary course of
the purchaser's business may, under some circumstances, have priority over the
interest of the trust in the receivables. A tax or other government lien on
property of the RPA seller or the seller arising prior to the time a
receivable is conveyed to the trust may also have priority over the interest
of the trust in the receivable. Under the Receivables Purchase Agreement, the
RPA seller will warrant to the seller, and under the Pooling and Servicing
Agreement, the seller has warranted to the trust, that the receivables have
been transferred free and clear of the lien of any third party. Each of the
RPA seller and the seller has also covenanted that it will not sell, pledge,
assign, transfer or grant any lien on any receivable or, except as we describe
under "Description of the Certificates -- The Seller's Certificate", the
Seller's Certificate, or any interest in the Seller's Certificate, other than
to the trust. Also, while CFC is the servicer, cash collections on the
receivables may, in some cases, be commingled with the funds of CFC prior to
each distribution date and, in the event of the bankruptcy of CFC, the trust
may not have a perfected interest in those collections.
Matters Relating to Bankruptcy
The RPA seller has warranted to the seller in the Receivables
Purchase Agreement that the sale of the receivables by it to the seller is a
valid sale of the receivables to the seller. Also, the RPA seller and the
seller have agreed to treat the transactions described in this prospectus as a
sale of the receivables to the seller, and the RPA seller has or will take all
actions that are required under Michigan law to perfect the seller's ownership
interest in the receivables. However, the RPA seller could become a debtor in
a bankruptcy case and a creditor or trustee-in-bankruptcy of the debtor or the
debtor itself could take the position that the sale of receivables from the
debtor to the seller should be recharacterized as a pledge of the receivables
to secure a borrowing from the debtor. In that event, payments of collections
of receivables to the seller could be delayed, or, if the court should rule in
favor of any trustee, debtor in possession or creditor, reduced in amount. See
"Special Considerations -- Legal Aspects".
In a 1993 case decided by the U.S. Court of Appeals for the Tenth
Circuit, Octagon Gas System, Inc. v. Rimmer, the court determined that
"accounts", as defined under the Uniform Commercial Code, would be included in
the bankruptcy estate of a transferor regardless of whether the transfer is
treated as a sale or a secured loan. Although the receivables are likely to be
viewed as "chattel paper", as defined under the Uniform Commercial Code,
rather than as accounts, the Octagon holding may be applied to chattel paper.
The circumstances under which the Octagon ruling would apply are not fully
known and the extent to which the Octagon decision will be followed in other
courts or outside of the Tenth Circuit is not certain. If the holding in the
Octagon case were applied in a CFC bankruptcy, however, even if the transfer
of receivables to the seller and the trust were treated as a sale, the
receivables would be part of CFC's bankruptcy estate and would be subject to
claims of creditors. In that event, payments to the seller and
certificateholders could be delayed or reduced.
In addition, the RPA seller could become a debtor in a bankruptcy
case and a creditor or trustee-in-bankruptcy of the debtor or the debtor
itself could request a court to order that the RPA seller should be
substantively consolidated with the seller. In that event, payments on the
certificates could be delayed, or, if a bankruptcy court should rule in favor
of any creditor, trustee-in-bankruptcy or the debtor, reduced in amount.
The seller has warranted to the trust that the transfer of the
receivables to the trust is a sale of the receivables to the trust. The seller
has or will take all actions that are required under Michigan law to perfect
the trust's ownership interest in the receivables and the seller has warranted
to the trust that the trust will at all times have a first priority perfected
ownership interest in the receivables and, with exceptions, in proceeds of the
receivables. Nevertheless, a tax or government lien on property of CFC or the
seller arising prior to the time a receivable is conveyed to the trust may
have priority over the interest of the trust in the receivable. DCWR's limited
liability agreement provides that it shall not file a voluntary application
for relief under Title 11 of the United States Code (the "Bankruptcy Code")
without the affirmative vote of the two independent directors of its member.
Under the Pooling and Servicing Agreement, the trustee, all certificateholders
and any Enhancement provider will covenant that they will not at any time
institute against the seller any bankruptcy, reorganization or other
proceedings under any federal or state bankruptcy or similar law. In addition,
other steps will be taken to avoid the seller's becoming a debtor in a
bankruptcy case. However, the seller could become a debtor in a bankruptcy
case, and a bankruptcy trustee for the seller or the seller as debtor in
possession or a creditor of the seller could take the position that the
transfer of the receivables from the seller to the trust should be
recharacterized as a pledge of the receivables. In that event, payments on the
certificates could be delayed or, should the court rule in favor of any
trustee, debtor in possession or creditor, reduced in amount.
The seller does not intend to file, and CFC has agreed that it will
not cause the seller to file, a voluntary application for relief under the
Bankruptcy Code or any similar applicable state law with respect to the seller
so long as the seller is solvent and does not foresee becoming insolvent.
If the RPA seller or the seller were to become a debtor in a
bankruptcy case, a Reinvestment Event or an Early Amortization Event would
occur with respect to the certificates of each series. In that event, under
the Receivables Purchase Agreement, new receivables would no longer be
transferred to the seller and, under the Pooling and Servicing Agreement, only
collections on receivables already sold to the seller and transferred to the
trust would be available to be applied to pay interest accruing on the
certificates and to pay the principal amount of the certificates. If that
happens, the servicer must allocate all collections on Principal Receivables
to the oldest principal balance first. If the bankruptcy court were to alter
the allocation method, the rate of payment on the certificates might be
adversely affected. In addition, distributions in respect of principal on each
certificate would not be subject to any applicable Controlled Distribution
Amount.
The occurrence of events of bankruptcy, insolvency or receivership
with respect to the servicer will result in a Service Default. The Service
Default, in turn, may result in a Reinvestment Event or an Early Amortization
Event with respect to a series. If no other Service Default other than the
commencement of the bankruptcy or similar event exists, a
trustee-in-bankruptcy of the servicer may have the power to prevent either the
trustee or the certificateholders from appointing a successor servicer.
Payments made in respect of repurchases of receivables by CFC or the
seller under the Pooling and Servicing Agreement may be recoverable by CFC or
the seller, as debtor in possession, or by a creditor or a
trustee-in-bankruptcy of CFC or the seller as a preferential transfer from CFC
or the seller if the payments are made within one year prior to the filing of
a bankruptcy case in respect of CFC.
Neither USA nor CARCO intends to file, and CFC has agreed that it
will not cause USA or CARCO to file, a voluntary application for relief under
the Bankruptcy Code or any similar applicable state law with respect to USA or
CARCO so long as USA and CARCO is solvent and does not foresee becoming
insolvent.
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Tax Matters
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Federal Income Tax Consequences
We discuss below federal income tax consequences to holders of the
certificates. This discussion does not purport to deal with all aspects of
federal income taxation that may be relevant to holders of the certificates in
light of their personal investment circumstances, nor to holders subject to
special treatment under the federal income tax laws, for example, banks, life
insurance companies and tax-exempt organizations. Prospective investors are
advised to consult their own tax advisors with regard to the federal income
tax consequences of holding and disposing of the certificates, as well as the
tax consequences arising under the laws of any state, foreign country or other
jurisdiction. This discussion is based upon present provisions of the Internal
Revenue Code of 1986 (the "Code"), the regulations promulgated under the Code,
and judicial or ruling authority, all of which are subject to change, which
change may be retroactive. No ruling on any of the issues discussed below will
be sought from the IRS.
The discussion assumes that a certificate is issued in registered
form, has all payments denominated in U.S. dollars, has a term that exceeds
one year, and does not bear "contingent interest" as defined in Section
871(h)(4) of the Code. Moreover, except as provided below, the discussion
assumes that the interest on the certificate meets the requirements for
"qualified stated interest" under Treasury regulations (the "OID regulations")
relating to original issue discount ("OID"), and that any OID on the
certificate, i.e., any excess of the principal amount of the certificate over
its issue price, does not exceed a de minimis amount, i.e., is less than 1/4%
of its principal amount multiplied by the number of full years until its
maturity date, all within the meaning of the OID regulations. If those
conditions are not satisfied, additional tax considerations will be disclosed
in the applicable prospectus supplement.
Treatment of the Certificates as Indebtedness of the Seller. The
seller and the holders of certificates offered by this prospectus will express
in the Pooling and Servicing Agreement the intent that, for federal, state and
local income and franchise tax purposes and Michigan single business tax
purposes, the certificates will be indebtedness of the seller secured by the
receivables and any other trust assets allocable to the certificates. DCWR, by
the acceptance of the assignment of the Pooling and Servicing Agreement will
agree, and each Certificateholder, by the acceptance of a certificate, will
agree to treat the certificates as indebtedness of the seller for federal,
state and local income and franchise tax purposes and Michigan single business
tax purposes. However, the Pooling and Servicing Agreement refers to the
transfer of the receivables as a "sale" for non-tax purposes, and because
different criteria are used in determining the non-tax accounting treatment of
the transaction, the seller will treat the Pooling and Servicing Agreement,
for non-tax purposes, as effecting a transfer of an ownership interest in the
receivables and not as creating a debt obligation of the seller.
A basic premise of federal income tax law is that the economic
substance of a transaction determines the tax consequences. The form of a
transaction, while a relevant factor, is not conclusive evidence of its
economic substance. In appropriate circumstances, the courts have allowed
taxpayers, as well as the IRS, to treat a transaction in accordance with its
economic substance, as determined under federal income tax law, even though
the participants in the transaction have characterized it differently for
non-tax purposes.
The determination of whether the economic substance of a property
transfer is a sale or a loan secured by the transferred property has been made
by the IRS and the courts on the basis of numerous factors designed to
determine whether the transferor has relinquished, and the transferee has
obtained, substantial incidents of ownership in the property. Among those
factors, the primary factors examined are whether the transferee has the
opportunity to gain if the property increases in value, and has the risk of
loss if the property decreases in value. Based upon its analysis of those
factors, Brown & Wood LLP, special tax counsel to the seller and the trust
("Tax Counsel"), is of the opinion that for federal income tax purposes the
seller will properly be treated as the owner of the receivables and any other
trust assets allocable to the certificates and, accordingly, the certificates
will properly be characterized as indebtedness of the seller that is secured
by the receivables and the other assets.
Interest Income to Certificateholders. Assuming the certificates are
debt obligations for federal income tax purposes, they will not be considered
issued with OID, except as discussed below or in the applicable prospectus
supplement. Interest on the certificates will be taxable as ordinary interest
income when received by certificateholders utilizing the cash-basis method of
accounting and when accrued by certificateholders utilizing the accrual method
of accounting. Under the OID regulations, a holder of a certificate issued
with a de minimis amount of OID must include the OID in income, on a pro rata
basis, as principal payments are made on the Certificate. A certificateholder
who buys a certificate for less than its principal amount will be subject to
the "market discount" rules of the Code, and a certificateholder who buys a
certificate for more than its principal amount will be subject to the premium
amortization rules of the Code.
However, if any interest due on a series or class of certificates is
not paid in full on its scheduled payment date, or if the amount of interest
payable currently on a series or class is reduced because of a limitation
based on the average interest rate currently payable on the receivables,
certificates of that series or class will after that time be considered to be
issued with OID. Moreover, even before that event, the certificates of a
series or class would be considered to have OID from their date of issuance
unless, at the time of issuance, the likelihood of a late payment or
nonpayment of interest, or reduction in the amount of interest payable based
on the interest rate currently payable on the receivables, on the series or
class was considered a "remote contingency" under applicable Treasury
regulations.
The seller intends to take the position, based on the exception for
remote contingencies, that OID does not arise on a series or class of
certificates unless and until an event described in the first sentence of the
preceding paragraph occurs. However, if the Investor certificates of a series
or class were considered to have OID, either initially or subsequently, all
holders of certificates of that series or class would after that time be
required to accrue OID into income at a rate equal to the full interest rate
payable on the certificates, probably determined without regard to any
limitation based upon the interest payable on the receivables, whether or not
all or part of the interest on the certificates was paid currently. Moreover,
the holders would be required to accrue any de minimis discount into income
over the life of the certificates rather than when principal is paid. As a
result, holders might be required to report taxable income prior to the
receipt of cash attributable to the income.
The trustee will be required to report annually to the IRS, and to
each certificateholder of record, the amount of interest paid on the
certificates and the amount of interest withheld for federal income taxes, if
any, for each calendar year, except as to exempt holders. Exempt holders are
holders that are corporations, tax-exempt organizations, qualified pension and
profit-sharing trusts, individual retirement accounts, or nonresident aliens
who provide certification as to their status as nonresidents. Accordingly,
each nonexempt certificateholder will be required to provide, under penalties
of perjury, a certificate on IRS Form W-9 containing the holder's name,
address, federal taxpayer identification number and a statement that the
holder is not subject to backup withholding. Should a nonexempt
certificateholder fail to provide the required certification, the trustee, or
the Participants or Indirect Participants, will be required to withhold, or
cause to be withheld, 31% of the interest, and principal, otherwise payable to
the holder, and remit the withheld amounts to the IRS as a credit against the
holder's federal income tax liability.
Possible Classification of the Trust as a Partnership or Association.
As described above, it is the opinion of Tax Counsel that the certificates
will properly be characterized as debt of the seller for federal income tax
purposes. However, that opinion is not binding on the IRS and thus no
assurance can be given that that characterization will prevail.
For example, if the IRS were to contend successfully that the
certificates were not debt of the seller for federal income tax purposes, the
trust might be classified for federal income tax purposes as a partnership, an
association taxable as a corporation or a "publicly traded partnership"
taxable as a corporation. If the certificates are treated as interests in a
partnership, the partnership would in all likelihood be treated as a "publicly
traded partnership". A publicly traded partnership is taxable as a
corporation. If the partnership were nevertheless not taxable as a
corporation, because of an exception for an entity whose income is interest
income that is not derived in the conduct of a financial business, it would
not be subject to federal income tax. Rather, each item of income, gain, loss,
deduction and credit generated through the ownership of the receivables by the
partnership would be passed through to the partners in the partnership,
including the certificateholders, according to their respective interests in
the partnership.
The income reportable by the certificateholders as partners in a
partnership could differ from the income reportable by the certificateholders
as holders of debt. However, except as provided below, it is not expected that
the differences would be material. If the certificateholders were treated as
partners, a cash basis certificateholder might be required to report income
when it accrues to the partnership rather than when it is received by the
certificateholder. Moreover, if the certificates are interests in a
partnership, an individual's share of expenses of the partnership would be
miscellaneous itemized deductions that in the aggregate are allowed only to
the extent they exceed two percent of the individual's adjusted gross income,
and are subject to other limitations, meaning that the individual might be
taxed on a greater amount of income than the stated interest on the
certificates. Finally, if any certificates are treated as equity interests in
a partnership in which other certificates are debt, all or part of a
tax-exempt investor's share of income from the certificates that are treated
as equity would be treated as unrelated debt-financed income under the Code
taxable to the investor.
If, alternatively, the trust were treated as either an association
taxable as a corporation or a "publicly traded partnership" taxable as a
corporation, the resulting entity would be subject to federal income taxes at
corporate tax rates on its taxable income generated by ownership of the
receivables. Moreover, distributions by the entity would probably not be
deductible in computing the entity's taxable income and all or part of
distributions to certificateholders would probably be treated as dividend
income to the certificateholders. An entity-level tax could result in reduced
distributions to certificateholders and the certificateholders could be liable
for a share of an entity-level tax.
Because the seller will treat the certificates as indebtedness for
federal income tax purposes, the trustee, and Participants and Indirect
Participants, will not comply with the tax reporting requirements that would
apply under these alternative characterizations of the certificates.
Foreign Investors. Tax Counsel has given its opinion that the
certificates will properly be classified as debt of the seller for federal
income tax purposes. If the certificates are so treated:
o interest paid or accrued to a nonresident alien or foreign
corporation or partnership would be exempt from U.S. withholding
taxes , including backup withholding taxes. However, the holder must
comply with applicable identification requirements and must not
actually or constructively own 10% or more of the voting stock of
the seller and must not be a controlled foreign corporation with
respect to the seller. Applicable identification requirements will
be satisfied if there is delivered to a securities clearing
organization, or bank or other financial institution that holds the
certificates on behalf of the customer in the ordinary course of its
trade or business
o IRS Form W-8 or W-8BEN signed under penalties of
perjury by the beneficial owner of the certificates stating
that the holder is not a U.S. person and providing the holder's
name and address,
o IRS Form 1001 or W-8BEN signed by the beneficial owner
of the certificates or the owner's agent claiming exemption
from withholding under an applicable tax treaty, or
o IRS Form 4224 or W-8ECI signed by the beneficial owner
of the certificates or the owner's agent claiming exemption
from withholding of tax on income connected with the conduct of
a trade or business in the United States.
Form W-8, Form 10001 and Form 4224 are effective until December 31,
2000. Form W-8BEN and W-8ECI are effective until the third
succeeding calendar year from the date the form is signed.
However, in any case
o the applicable form must be delivered under applicable
procedures and must be properly transmitted to the United
States entity otherwise required to withhold tax and
o none of the entities receiving the form may have actual
knowledge that the holder is a U.S. person or that any
certification on the form is false.
Treasury Regulations published in the Federal Register on October 14, 1997
(the "New Withholding Regulations") modify these procedures for claiming
exemption from withholding taxes, effective for payments made after December
31, 2000;
o a holder of a certificate who is a nonresident alien or
foreign corporation will not be subject to United States federal
income tax on gain realized on the sale, exchange or redemption of
the certificate. However,
o the gain must not be effectively connected to a trade
or business carried on by the holder in the United States,
o in the case of a holder that is an individual, the
holder must not be present in the United States for 183 days or more
during the taxable year in which the sale, exchange or redemption
occurs and
o in the case of gain representing accrued interest, the
conditions described in the first clause must be
satisfied; and
o a certificate held by an individual who at the time of
death is a nonresident alien will not be subject to United
States federal estate tax as a result of the individual's death
if, immediately before his death,
o the individual did not actually or constructively own
10% or more of the voting stock of the seller and
o the holding of the certificate was not effectively
connected with the conduct by the decedent of a trade or
business in the United States.
If the IRS were to contend successfully that the certificates are
interests in a partnership, not taxable as a corporation, a certificateholder
that is a nonresident alien or foreign corporation might be required to file a
U.S. individual or corporate income tax return and pay tax on its share of
partnership income at regular U.S. rates, including, in the case of a
corporation, the branch profits tax, and would be subject to withholding tax
on its share of partnership income. If the certificates are recharacterized as
interests in an association taxable as a corporation or a "publicly traded
partnership" taxable as a corporation, to the extent distributions on the
certificates were treated as dividends, a nonresident alien individual or
foreign corporation would be taxed on the gross amount of those dividends, and
subject to withholding, at a rate of 30% unless the rate were reduced by an
applicable treaty.
Backup Withholding. A certificateholder may be subject to backup
withholding at the rate of 31% with respect to interest paid on the
certificates if the certificateholder, upon issuance, fails to supply the
trustee or his broker with his taxpayer identification number, furnishes an
incorrect taxpayer identification number, fails to report interest, dividends
or other "reportable payments", as defined in the Code, properly, or, in some
cases, fails to provide the trustee or his broker with a certified statement,
under penalty of perjury, that he is not subject to backup withholding.
The trustee will be required to report annually to the IRS, and to
each certificateholder of record, the amount of interest paid, and OID
accrued, if any, on the certificates, and the amount of interest withheld for
U.S. federal income taxes, if any, for each calendar year, except as to exempt
holders. Exempt holders are holders that are corporations, tax-exempt
organizations or nonresident aliens who provide certification as to their
status as nonresidents. As long as the only "certificateholder" of record is
Cede & Co., as nominee for DTC, certificateholders and the IRS will receive
tax and other information including the amount of interest paid on the
certificates owned from participants and indirect participants rather than
from the trustee. The trustee, however, will respond to requests for necessary
information to enable participants, indirect participants and other persons to
complete their reports. Each non-exempt certificateholder will be required to
provide, under penalty of perjury, a certificate on IRS Form W-9 containing
his or her name, address, correct federal taxpayer identification number and a
statement that he or she is not subject to backup withholding. Should a
nonexempt certificateholder fail to provide the required certification, the
participants or indirect participants, or the paying agent, will be required
to withhold 31% of the interest, and principal, otherwise payable to the
holder, and remit the withheld amount to the IRS as a credit against the
holder's federal income tax liability.
The New Withholding Regulations will be effective for payments made
after December 31, 2000, subject to transition rules. The discussion set forth
above does not take the New Withholding Regulations into account. Prospective
non-U.S. persons who own certificates are strongly urged to consult their own
tax advisor with respect to the New Withholding Regulations.
State and Local Tax Consequences
The servicer will service and collect the receivables in Michigan.
The State of Michigan imposes a state individual income tax and a single
business tax which is based partially upon the net income of corporations,
partnerships and other entities doing business in the State of Michigan. This
discussion is based upon present provisions of Michigan statutes and the
regulations promulgated under those statutes, and applicable judicial or
ruling authority, all of which are subject to change, which change may be
retroactive. No ruling on any of the issues discussed below will be sought
from the Michigan Department of Treasury.
If the certificates are treated as debt of the seller for federal
income tax purposes, in the opinion of Christopher A. Taravella, Esq., Vice
President and General Counsel of the seller, Michigan tax counsel to the
seller and the trust ("Michigan Tax Counsel"), this treatment will also apply
for Michigan tax purposes. Under this treatment, the trust will not be subject
to the Michigan single business tax and certificateholders not otherwise
subject to Michigan tax would not become subject to the tax solely because of
their ownership of the certificates. Certificateholders already subject to
taxation in Michigan, however, could be required to pay tax on the income
generated from ownership of these certificates.
In the alternative, if the trust is treated as a partnership, not
taxable as a corporation, for federal income tax purposes, in the opinion of
Michigan Tax Counsel, the same treatment should also apply for Michigan tax
purposes. In that case, the resulting constructive partnership should not be
treated as doing business in Michigan but rather should be treated as a
passive holder of investments and, as a result, should not be subject to the
Michigan single business tax, which, if applicable, could result in reduced
distributions to certificateholders. Certificateholders also should not be
subject to Michigan single business tax on the income received through the
partnership.
Under current law, certificateholders that are nonresidents of
Michigan and that are not otherwise subject to Michigan income tax should not
be subject to Michigan income tax on the income from the constructive
partnership. Under current law corporate certificateholders are not subject to
Michigan income tax. In any event, classification of the arrangement as a
"partnership" would not cause a certificateholder not otherwise subject to
taxation in Michigan to pay Michigan tax on income beyond that derived from
the certificates.
If the certificates are instead treated as ownership interests in an
association or "publicly traded partnership", the hypothetical entity should
not be subject to the Michigan single business tax, which, if applicable,
could result in reduced distributions to certificateholders. A
certificateholder not otherwise subject to tax in Michigan would not become
subject to Michigan tax as a result of its mere ownership of that type of
interest.
Because each state's income tax laws vary, it is impossible to
predict the income tax consequences to the certificateholders in all of the
state taxing jurisdictions in which they are already subject to tax.
Certificateholders are urged to consult their own tax advisors with respect to
state income and franchise taxes.
-------------------------------------------------------------------------------
ERISA Considerations
-------------------------------------------------------------------------------
General
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit-sharing or other employee benefit plan from engaging in transactions
involving "plan assets" with persons that are "parties in interest" under
ERISA or "disqualified persons" under the Code with respect to the plan. A
violation of these "prohibited transaction" rules may generate excise tax and
other liabilities under ERISA and the Code for that person. For example, a
prohibited transaction would arise, unless an exemption were available, if the
certificates of a series or class were viewed as debt of the seller and the
seller were a disqualified person or party in interest with respect to a plan
that acquired certificates of that series or class.
Moreover, additional prohibited transactions could arise if the
assets of the trust were deemed to constitute assets of any plan that owned
certificates. The Department of Labor ("DOL") has issued a final regulation
(the "Plan Assets Regulation") concerning the definition of what constitutes
the "plan assets" of an employee benefit plan subject to ERISA or the Code or
an individual retirement account ("IRA") (collectively referred to as "Benefit
Plans"). Under the Plan Assets Regulation the assets and properties of
corporations, partnerships and other entities in which a Benefit Plan acquires
an "equity interest" could be deemed to be assets of the Benefit Plan in some
circumstances. Accordingly, if Benefit Plans purchase certificates, the trust
could be deemed to hold plan assets of the Benefit Plan unless one of the
exceptions under the Plan Assets Regulation is applicable to the trust.
The Plan Assets Regulation only applies to the purchase by a Benefit
Plan of an "equity interest" in an entity. Assuming that the certificates of a
series or class are equity interests, the Plan Assets Regulation contains an
exception that provides that if a Benefit Plan acquires a "publicly-offered
security", the issuer of the security is not deemed to hold plan assets. A
publicly-offered security is a security that is
o freely transferable,
o part of a class of securities that is owned by 100 or more
investors independent of the issuer and of one another and
o either is
o part of a class of securities registered under
Section 12(b) or 12(g) of the Exchange Act or
o sold to the plan as part of an offering of securities
to the public under an effective registration statement under
the Securities Act and the class of securities of which the
security is a part is registered under the Exchange Act within
120 days, or a later time as may be allowed by the Commission,
after the end of the fiscal year of the issuer during which the
offering of the securities to the public occurred.
The certificates of each series and class must be separately tested
under, and may each meet, the criteria of publicly-offered securities as
described above. There are no restrictions imposed on the transfer of the
certificates. The certificates will be sold as part of an offering under an
effective registration statement under the Securities Act, and may or may not
be timely registered under the Exchange Act. Based on information provided by
the underwriter or placement agent for certificates of any series or class
that will be registered under the Exchange Act, the seller will notify the
trustee as to whether or not certificates of the series or, if the series
consists of more than one class, each class will be held by at least 100
separately named persons at the conclusion of the offering, unless the related
prospectus supplement states otherwise. The seller will not determine whether
the 100-investor requirement of the exception for publicly offered securities
is satisfied as to the certificates of any series or class. Prospective
purchasers may obtain a copy of the notification described in the third
preceding sentence from the trustee at 101 Barclay Street, New York, New York
10286.
If the certificates of any series or class fail to meet the criteria
of publicly-offered securities and the trust's assets are deemed to include
assets of Benefit Plans that are holders of the certificates, transactions
involving the trust and "parties in interest" or "disqualified persons" with
respect to the plans might be prohibited under Section 406 of ERISA and
Section 4975 of the Code unless an exemption is applicable. Thus, for example,
if a participant in any Benefit Plan is an obligor or guarantor of one of the
receivables, under DOL interpretations the purchase of the certificates by the
plan could constitute a prohibited transaction. There are a number of class
exemptions issued by the DOL that may apply in that event. However, even if
all of the conditions specified in the exemptions are satisfied, they would
probably not apply to all transactions involving the trust's assets.
In light of the foregoing, fiduciaries of a Benefit Plan considering
the purchase of certificates of any series or class should consult their own
counsel as to whether the assets of the trust which are represented by the
certificates would be considered plan assets, and the consequences that would
apply if the trust's assets were considered plan assets.
In addition, based on the reasoning of the United States Supreme
Court's decision in John Hancock Life Ins. Co. v. Harris Trust and Sav. Bank,
510 U.S. 86 (1993), under some circumstances assets in the general account of
an insurance company may be deemed to be plan assets for some purposes. Under
that reasoning a purchase of certificates with assets of an insurance
company's general account might be subject to the prohibited transaction rules
described above. Insurance companies investing assets of their general
accounts should also consider the potential effects of the enactment of
Section 401(c) of ERISA, Prohibited Transaction Exemption 95-60, and Labor
Department Regulation Section 2550.401c-1.
Unless the applicable prospectus supplement states otherwise, if the
certificates will not be timely registered under the Exchange Act, or if the
seller does not notify the trustee, as described above, that the certificates
of any particular series or class will be expected to be held by at least 100
persons, the certificates of the series or class, as the case may be, may not
be acquired by any Benefit Plan or by any entity investing assets that are
treated as assets of a Benefit Plan. Furthermore, in that case, the Pooling
and Servicing Agreement, the Series Supplement and each certificate will
provide that each holder of the certificate shall be deemed to have
represented and warranted that it is not a Benefit Plan and is not purchasing
the certificate on behalf of a Benefit Plan or with assets that are treated as
assets of a Benefit Plan.
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Experts
-------------------------------------------------------------------------------
The financial statements of the trust as of December 31, 1999 and
1998, and for each of the years in the three-year period ended December 31,
1999, have been incorporated by reference in this prospectus and in the
registration statement in reliance upon the report by KPMG LLP, independent
certified public accountants, incorporated by reference in this prospectus,
and upon the authority of that firm as experts in accounting and auditing.
-------------------------------------------------------------------------------
Plan of Distribution
-------------------------------------------------------------------------------
The seller may sell certificates offered by this prospectus in any of
three ways:
o through underwriters or dealers;
o directly to one or more purchasers; or
o through agents.
We will set forth in the related prospectus supplement the terms of
the offering of any series certificates, including, without limitation
o the names of any underwriters,
o the purchase price of the certificates and the proceeds to
the seller from the sale,
o any underwriting discounts and other items constituting
underwriter's compensation,
o any initial public offering price and
o any discounts or concessions allowed or reallowed or paid to
dealers.
If the seller uses underwriters in a sale of any certificates of a
series, the certificates will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices to be determined at the time of sale or at the time of
commitment for the certificates. The certificates may be offered to the public
either through underwriting syndicates represented by managing underwriters or
by underwriters without a syndicate. Unless we set forth otherwise in the
related prospectus supplement, the obligations of the underwriters to purchase
the certificates will be subject to conditions precedent, and the underwriters
will be obligated to purchase all of the certificates if any of the
certificates are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Certificates of a series may also be offered and sold, if we so state
in the related prospectus supplement, in connection with a remarketing upon
their purchase, in accordance with a redemption or repayment under their
terms, by one or more firms ("remarketing firms") acting as principals for
their own accounts or as agents for the seller. We will identify in the
related prospectus supplement any remarketing firm and describe the terms of
its agreement, if any, with the seller and its compensation. Remarketing firms
may be deemed to be underwriters in connection with the certificates they
remarket.
Certificates may also be sold directly by the seller or through
agents designated by the seller from time to time. We will name any agent
involved in the offer or sale of certificates, and we will set forth any
commissions payable by the seller to the agent, in the related prospectus
supplement. Unless we indicate otherwise in the related prospectus supplement,
any agent will act on a best efforts basis for the period of its appointment.
Each underwriting agreement and placement agreement will provide that
DCWR and CFC will indemnify the underwriters and agents, respectively, against
civil liabilities, including liabilities under the Securities Act, or
contribute to payments the several underwriters and agents, as applicable, may
be required to make in respect of those civil liabilities.
The trust may, from time to time, invest the funds in its accounts in
Eligible Investments acquired from the underwriters, agents or the seller.
We will set forth the place and time of delivery for a series of
certificates in the prospectus supplement.
Until the distribution of the certificates of a series is completed,
rules of the Commission may limit the ability of the underwriters and selling
group members to bid for and purchase those certificates. As an exception to
these rules, the underwriters are permitted to engage in transactions that
stabilize the price of those certificates. Those transactions consist of bids
or purchases for the purpose of pegging, fixing or maintaining the price of
the certificates. Purchases of a certificate for the purpose of stabilization
could cause the price of the certificate to be higher than it might be in the
absence of the purchases.
In connection with the offering of a series, the underwriters may
make short sales of the certificates of that series and may purchase those
certificates on the open market to cover positions created by short sales.
Short sales involve the sale by the underwriters of a greater number of
certificates than they are required to purchase in the offering. The
underwriters must close out any short position by purchasing certificates in
the open market. The underwriters are more likely to create a short position
if they are concerned that there may be downward pressure on the price of the
certificates in the open market after pricing that could adversely affect
investors who purchase in the offering. Similar to other purchase
transactions, the underwriters' purchases to cover the short sales may have
the effect of raising or maintaining the market price of the certificates or
preventing or retarding a decline in the market price of certificates. As a
result, the price of the certificates may be higher than the price that might
otherwise exist in the open market.
Neither CFC, DCWR nor any of the underwriters makes any
representation or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the prices of the
certificates of any series. In addition, neither CFC, DCWR nor any of the
underwriters makes any representation that the underwriters will engage in the
transactions or that the transactions, once commenced, will not be
discontinued without notice.
If any certificates of a series are offered in the United Kingdom,
each underwriter and placement agent will represent and agree that
o it has not offered or sold, and will not offer or sell, any
of those certificates to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments, as principal or
agent, for the purposes of their businesses or otherwise in
circumstances that do not constitute an offer to the public in the
United Kingdom for the purposes of the Public Offers of Securities
Regulations 1995,
o it has complied and will comply with all applicable
provisions of the Financial Services Act of 1986 of Great Britain
with respect to anything done by it in relation to those securities
in, from or otherwise involving the United Kingdom and
o it has only issued or passed on and will only issue or pass
on in the United Kingdom any document in connection with the issue
of those securities to a person who is of a kind described in
Article 11(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom the
document may otherwise lawfully be issued or passed on.
If you initially receive an electronic copy of the prospectus and
prospectus supplement from an underwriter, you will receive a paper copy of
the prospectus and prospectus supplement upon request to the underwriter. Upon
receipt of a qualifying request, the underwriter will promptly deliver a paper
copy of the prospectus and prospectus supplement to you free of charge.
-------------------------------------------------------------------------------
Legal Matters
-------------------------------------------------------------------------------
Certain legal matters relating to the certificates will be passed
upon for DCWR by Brown & Wood LLP, New York, New York, and for any
underwriters, agents or dealers by the counsel we name in the applicable
prospectus supplement, which may be Brown & Wood LLP. Federal income tax and
ERISA matters will be passed upon for DCWR and the trust by the counsel we
named in the applicable prospectus supplement, which may also be Brown & Wood
LLP. Brown & Wood LLP from time to time represents Chrysler Financial Company
L.L.C. and its affiliates on other matters.
<PAGE>
Glossary of Terms for Prospectus
"Accounts" means the revolving financing arrangements with dealers
franchised by DaimlerChrysler and/or other automobile manufacturers in which
the receivables arise.
"Accumulation Period" means, for any applicable series, the period
beginning at the close of business on the date specified in or determined in
the manner specified in the prospectus supplement and ending on the earliest
of:
o the beginning of a Reinvestment Period with respect to the
series,
o the beginning of an Early Amortization Period with respect to the
series and
o payment in full of the outstanding principal amount of the series
certificates.
"Addition Date" means, in the case of an Additional Account, the date
on which the receivables in the Additional Account are first transferred to
the trust.
"Additional Accounts" means the additional accounts which the seller
has the right, subject to conditions, to designate from time to time to be
included as Accounts.
"Additional Cut-Off Date" means, with respect to any Additional
Accounts, the date those Additional Accounts are identified and selected.
"Adjusted Invested Amount" means, with respect to a series for any
date, an amount equal to the sum of
o the Initial Invested Amount of the series, minus unreimbursed
Investor Charge-Offs for the series and
o the Available Subordinated Amount with respect to the
series, after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the distribution date during
the Collection Period in which that date occurs.
"Adjustment Payment" means, to the extent that a reduction in the
Seller's Interest would reduce the Seller's Participation Amount below the
Trust Available Subordinated Amount for the immediately preceding
Determination Date, after giving effect to the allocations, distributions,
withdrawals and deposits to be made on the distribution date, a cash amount
equal to the deficiency which will be deposited by the seller into the
Collection Account in immediately available funds on the day on which the
adjustment occurs.
"Auction Vehicles" means, collectively, the vehicles purchased by a
dealer at a closed auction conducted by DaimlerChrysler.
"Automatic Additional Accounts" means the Additional Accounts which
the seller may designate from time to time, at its discretion, subject only to
some limitations.
"Automatic Removal Date" means the date upon which the Automatic
Removed Accounts are to be removed.
"Automatic Removed Accounts" means the Accounts, designated by the
seller, with respect to which 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 created after that time, all monies
due or to become due and all amounts received with respect to those
receivables and all proceeds of those receivables in or with respect to the
Accounts, upon satisfaction of the following conditions:
o on or before the fifth business day immediately preceding
the date upon which the Accounts are to be removed, the seller shall
have given the trust, each Enhancement provider and the Rating
Agencies a Removal Notice specifying the Automatic Removal Date of
the Automatic Removed Accounts;
o 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 stating for
each Account, as of the removal notice date, its account number and
the aggregate amount of receivables outstanding in the Account;
o the seller shall have represented and warranted as of each
Automatic Removal Date that the list of Automatic Removed Accounts
delivered pursuant to the second clause above, as of the Automatic
Removal Date, is true and complete in all material respects;
o the trustee shall have received confirmation from each
Rating Agency that the removal will not cause the Ratings Agency's
rating of any outstanding series or class of certificates to be
reduced or withdrawn;
o 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 the removal will not cause an Early Amortization Event or
Reinvestment Event to occur with respect to any series; and
o 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 the removal.
"Available Subordinated Amount" means the amount of the subordination
for a series.
"Bankruptcy Code" means Title 11 of the United States Code.
"Benefit Plans" means, collectively, employee benefit plans subject
to ERISA or the Code or individual retirement accounts.
"CARCO" means Chrysler Auto Receivables Company.
"CCC" means Chrysler Credit Corporation.
"Certificateholders' Interest" means, for any series, the undivided
beneficial interests in certain assets of the trust allocated to the Interest
of the Certificateholders of the series.
"certificates" means the Auto Loan Asset Backed Certificates.
"CFC" means Chrysler Financial Company L.L.C.
"CFC Corp." means Chrysler Financial Corporation .
"Citibank" means Citibank, N.A.
"Clearstream" means Clearstream Banking, societe anonyme.
"Code" means the Internal Revenue Code of 1986.
"Collateral Security" means, in respect of the receivables, a
security interest in vehicles and parts inventory, equipment, fixtures,
service accounts and, in some cases, realty and a personal guarantee.
"Collection Account" means an Eligible Deposit Account which the
servicer has established and will maintain for the benefit of the
certificateholders in the name of the trustee, on behalf of the trust.
"Commission" means the Securities and Exchange Commission.
"Controlled Amortization Period" means, for any applicable series, a
controlled amortization period which will begin at the close of business on
the date stated in or determined in the manner stated in the related
prospectus supplement and will end on the earliest of:
o the beginning of a Reinvestment Period with respect to the
series,
o the beginning of an Early Amortization Period with respect
to the series and payment in full of the outstanding principal
amount of the certificates of that series.
"Controlled Deposit Amount" means, for any series, an amount stated
in the related prospectus supplement plus, in the case of some distribution
dates, any amounts in the Excess Funding Account allocable to the series.
"Cooperative" means Euroclear S.C., a Belgian cooperative corporation.
"DaimlerChrysler" means DaimlerChrysler Corporation, the successor to
Chrysler Corporation.
"DCWR" means DaimlerChrysler Wholesale Receivables LLC.
"Dealer Overconcentrations" means, on any distribution date, with
respect to any Dealer or group of affiliated Dealers, the excess of
o the aggregate principal amount of receivables due from the
Dealer or group of affiliated Dealers on the last day of the
Collection Period immediately preceding that distribution date over
o 2% of the Pool Balance on the last day of the immediately
preceding Collection Period.
"Dealer Trouble" means a status under which a dealer will be
classified by CFC under some circumstances which include
o failure to remit any principal or interest payment when due,
o any notifications of liens, levies or attachments and
o a general deterioration of its financial condition.
"dealers" means domestic automobile dealers franchised by
DaimlerChrysler and/or other automobile manufacturers.
"Defaulted Amount" means for any Collection Period will be an amount,
which shall not be less than zero, equal to (a) the principal amount of
receivables that became Defaulted Receivables during the preceding Collection
Period minus (b) the sum of (i) the full amount of any Defaulted Receivables
subject to reassignment to the seller or purchase by the servicer for the
Collection Period unless events of bankruptcy, insolvency or receivership have
occurred with respect to either of the seller or the servicer, in which event
the Defaulted Amount will not be reduced for those Defaulted Receivables and
(ii) the excess, if any, for the immediately preceding Determination Date of
the amount determined pursuant to this clause (b) for that Determination Date
over the amount determined pursuant to clause (a) for that Determination Date.
"Defaulted Receivables" means on any Determination Date
o all receivables which were charged off as uncollectible in
respect of the immediately preceding Collection Period and
o all receivables which were Eligible Receivables when
transferred to the trust, which arose in an Account which became an
Ineligible Account after the date of transfer of the receivables to
the trust and which were not Eligible Receivables for any six
consecutive Determination Dates after that date.
"Definitive Certificates" means the certificates of a series or class
issued in fully registered, certificated form to certificateholders or their
nominees.
"Depository" means DTC, together with any successor depository
selected by the seller.
"Designated Accounts" means the Accounts to be removed from the
trust.
"Designated Balance" means the aggregate principal balance of
receivables in respect of each of the Designated Accounts.
"Designated Receivables" means, at any time, the then existing
receivables in the Designated Accounts.
"Determination Date" means each second business day preceding a
Distribution Day.
"Distribution Date Statement" means a statement prepared by the
servicer and forwarded by the trustee to each certificateholder of record of
any series on each distribution date, including each distribution date that
corresponds to an interest payment date or any Special Payment Date, that sets
forth information with respect to the trust and the certificates of the
series, as stated in the related Series Supplement and described in the
related prospectus supplement.
"DOL" means the Department of Labor.
"Early Amortization Event" means any of the events so defined in the
related Series Supplement and, described in the related prospectus supplement,
as well as each of the following events:
o the occurrence of events of bankruptcy, insolvency or
receivership relating to the trust or the seller; and
o the trust or DCWR becomes an investment company within the
meaning of the Investment Company Act of 1940.
"Early Amortization Period" means the period beginning on the day on
which an Early Amortization Event has occurred with respect to a series and
ending on the earliest of:
o payment in full of the outstanding principal amount of the
certificates of that series,
o the recommencement of the Revolving Period in accordance with the
related Series Supplement and
o the Termination Date for the series.
"Eligible Account" means a wholesale financing line of credit
extended by CFC, directly or as successor to CFC Corp. or CCC, to a Dealer,
which, as of its date of determination:
o is established by CFC, directly or as successor to CFC Corp. or
CCC, in the ordinary course of business pursuant to a floorplan
financing agreement,
o is in favor of an Eligible Dealer,
o is in existence and maintained and serviced by CFC, directly or
as successor to CFC Corp. or CCC, and
o in respect of which no amounts have been charged off as
uncollectible or are classified as past due or delinquent.
"Eligible Dealer" means a Dealer:
o which is located in the United States of America, including its
territories and possessions,
o which has not been identified by the servicer as being the
subject of any voluntary or involuntary bankruptcy proceeding or in
voluntary or involuntary liquidation,
o in which DaimlerChrysler or any affiliate of DaimlerChrysler does
not have an equity investment and
o which has not been classified by the servicer as being under
Dealer Trouble status.
"Eligible Deposit Account" means either
o a segregated account with an Eligible Institution or
o a segregated trust account with the corporate trust
department of a depository institution organized under the laws of
the United States or any one of the states of the United States, or
any domestic branch of a foreign bank, having corporate trust powers
and acting as trustee for funds deposited in such account, so long
as any of the securities of the depository institution has a credit
rating from each Rating Agency in one of its generic rating
categories which signifies investment grade.
"Eligible Institution" means
o the corporate trust department of the trustee or
o a depository institution organized under the laws of the
United States or any one of the states of the United States, or the
District of Columbia, or a domestic branch of a foreign bank, which
at all times (i) has either (x) a long-term unsecured debt rating of
A2 or better by Moody's and of AAA or better by Standard & Poor's or
(y) a certificate of deposit rating of P-1 by Moody's or A-1+ by
Standard & Poor's and (ii) is a member of the FDIC.
"Eligible Investments" means book-entry securities, negotiable
instruments or physical securities having original or remaining maturities of
30 days or less, but in no event occurring later than the distribution date
next succeeding the trustee's acquisition of those securities or instruments,
except as otherwise provided in the related Series Supplement. Eligible
Investments are limited to:
o direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
o demand deposits, time deposits or certificates of deposit of any
depositary institution or trust company incorporated under the laws
of the United States of America or any state of the United States,
or any domestic branch of a foreign bank, and subject to supervision
and examination by Federal or state banking or depository
institution authorities. However, at the time of the trust's
investment or contractual commitment to invest in those investments,
the commercial paper or other short-term unsecured debt obligations,
other than obligations the rating of which is based on the credit of
a person or entity other than the depository institution or trust
company, of that entity shall have a credit rating from each of the
Rating Agencies in its highest investment category;
o commercial paper having, at the time of the trust's
investment or contractual commitment to invest in the commercial
paper, a rating from each of the Rating Agencies in its highest
investment category;
o except during a Reinvestment Period with respect to any
series, investments in money market funds having a rating from each
of the Rating Agencies in its highest investment category or
otherwise approved in writing by each of the Rating Agencies;
o bankers' acceptances issued by any depository institution or
trust company referred to in the second clause of this sentence;
o certain repurchase obligations, including those of appropriately
rated broker-dealers and financial institutions; and
o 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 in that
investment will not cause its then rating of any outstanding class
or series with respect to which it is a Rating Agency to be reduced
or withdrawn.
"Eligible Portfolio" means all the wholesale accounts in the U.S.
Wholesale Portfolio that are Eligible Accounts.
"Eligible Receivable" means a receivable
o which was originated or acquired by CFC, directly or as
successor to CFC Corp. or CCC, in the ordinary course of business,
o which has arisen under an Eligible Account and is payable in
United States dollars,
o which is owned by CFC, CFC Corp. or CCC at the time of sale to
the seller,
o which represents the obligation of a Dealer to repay an advance
made to the Dealer to finance the acquisition of vehicles,
o which at the time of creation and at the time of transfer to the
trust is secured by a perfected first priority security interest in
the related vehicle,
o which was created in compliance in all respects with all
requirements of law applicable to it and pursuant to a floorplan
financing agreement which complies in all respects with all
requirements of law applicable to any party to the agreement,
o with respect to which all consents and governmental
authorizations required to be obtained by DaimlerChrysler, CCC, CFC
Corp., CFC or the seller in connection with the creation of the
receivable or the transfer of the receivable to the trust or the
performance by CCC, CFC Corp. or CFC of the floorplan financing
agreement under which the receivable was created, have been duly
obtained,
o as to which at all times following the transfer of the
receivable to the trust, the trust will have good and marketable
title to the receivable free and clear of all liens arising prior to
the transfer or arising at any time, other than liens permitted
under the Pooling and Servicing Agreement,
o which has been the subject of a valid transfer and assignment
from the seller to the trust of all the seller's interest in the
receivable, including any proceeds of the receivable,
o which will at all times be the legal and assignable payment
obligation of the related Dealer, enforceable against the Dealer in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy or other similar laws,
o which at the time of transfer to the trust is not subject
to any right of rescission, setoff, or any other defense, including
defenses arising out of violations of usury laws, of the Dealer,
o as to which, at the time of transfer of the Receivable to the
trust, DaimlerChrysler, CCC, CFC Corp., CFC and the seller have
satisfied all their respective obligations with respect to the
Receivable required to be satisfied at that time,
o as to which, at the time of transfer of the Receivable to the
trust, neither DaimlerChrysler, CCC, CFC Corp. or CFC nor the seller
has taken or failed to take any action which would impair the rights
of the trust or the certificateholders,
o which constitutes "chattel paper" as defined in Article 9 of the
UCC as then in effect in the State of Michigan and
o which was transferred to the trust with all applicable
governmental authorization.
"Enhancements" means enhancements which may be provided with respect
to one or more classes of a series, including one or more of the following:
o letter of credit,
o surety bond,
o cash collateral account,
o spread account,
o guaranteed rate agreement,
o swap, including without limitation currency swaps, or other
interest protection agreement,
o repurchase obligation,
o cash deposit or
o another form of credit enhancement described in the related
prospectus supplement.
"Euroclear" means the Euroclear System.
"Euroclear Operator" means Morgan Guaranty trust Company of New York,
Brussels, Belgium office.
"Euroclear Participants" means participants of Euroclear.
"Excess Funded Amount" means, initially, the initial principal
balance of the certificates of a series over the Initial Invested Amount of
the series.
"Excess Funding Account" means an Eligible Account established with
the trustee for a series in which the Excess Funding Amount will be
maintained, except, to the extent provided in the related Series Supplement,
during an Early Amortization Period or Reinvestment Period for the series.
"Excess Principal Collections" means the amount of available
certificateholder principal collections for each series and any Collection
Period remaining after required payments, if any.
"Excluded Series" means a series of certificates designated as an
excluded series with respect to a Paired Series.
"Fleet Receivables" means receivables originated in connection with
multiple new vehicle orders of at least five vehicles by specified Dealers.
"Foreign Agency Depositaries" means Citibank, when acting in its
capacity as depositary for Clearstream, and Morgan, when acting in its
capacity as depositary for Euroclear.
"Fully Reinvested Date" means the date on which the amount on deposit
in the Principal Funding Account with respect to a series equals the
outstanding principal amount of the certificates of the series.
"Global Securities" means the globally offered certificates.
"Holders" means the certificateholders under the Pooling and
Servicing Agreement.
"Indirect Participants" means entities including banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly.
"Ineligible Receivables" means any receivable as to which the
Certificateholders' Interest with respect to the receivable will be reassigned
to the seller on the terms and conditions set forth in this prospectus as a
result of a breach by the seller of any representation and warranty described
in the first paragraph of "Representations and Warranties" in this prospectus,
which breach remains uncured for 30 days or a longer period as may be agreed
to by the trustee, after the earlier to occur of the discovery of such breach
by the seller or the servicer or receipt of written notice of such breach by
the seller or the servicer, and which breach has a materially adverse effect
on the Certificateholders' Interest in any receivable or Account.
"Initial Cut-Off Date" means May 31, 1991.
"Initial Invested Amount" means with respect to any series and for
any date, the amount stated as the "Initial Invested Amount" in the related
Series Supplement. The Initial Invested Amount for any series may be increased
or decreased from time to time as stated in the related Series Supplement,
including as a result of deposits to or withdrawals from the Excess Funding
Account, if any, for the series.
"Insolvency Laws" means the United States Bankruptcy Code or similar
applicable state laws.
"Installment Balance Amount" means the portion of the aggregate
amount of Installment Balances in respect of which CFC has not received an
offsetting payment from the related Dealer on a distribution date.
"interest collections" means collections under the receivables that
consist of interest and other non-principal charges, including insurance fees,
amounts recorded on Defaulted Receivables and insurance proceeds.
"Interest Funding Account" means the one or more trust accounts in
which collections or other amounts, or the portion allocable to a class, will
be deposited if the interest payment dates for a series or class occur less
than monthly.
"Investor Default Amount" means the portion of the Defaulted Amount
allocated to the certificateholders of a series.
"IRA" means an individual retirement account.
"Michigan Tax Counsel" means Christopher A. Taravella, Esq., Vice
President and General Counsel of the seller, Michigan tax counsel to the
seller and the trust.
"Miscellaneous Payments" means, for any Collection Period, the sum of
o Adjustment Payments and Transfer Deposit Amounts received with
respect to the Collection Period and
o Unallocated Principal Collections on the distribution date
available to be treated as Miscellaneous Payments as described in
this prospectus under "Principal Collections for all Series".
"Monthly Payment Rate" means, for a Collection Period, the percentage
obtained by dividing Principal Collections for the Collection Period by the
daily average Pool Balance for the Collection Period.
"Monthly Servicing Fee" means, unless a related Series Supplement or
prospectus supplement states otherwise, the share of the Servicing Fee
allocable to certificateholders of any series with respect to any distribution
date, which shall generally be equal to one-twelfth of the product of
o the Servicing Fee Rate and
o the Invested Amount of the series as of the last day of the
second preceding Collection Period.
"Moody's" means Moody's Investors Service, Inc.
"Morgan" means Morgan Guaranty Trust Company of New York, Brussels,
Belgium office.
"New Vehicles" means
o current and prior model year unmiled vehicles,
o current model year miled vehicles purchased at a closed auction
conducted by DaimlerChrysler and
o prior model year and two year old miled vehicles.
"New Withholding Regulations" means the Treasury regulations
published in the Federal Register on October 14, 1997.
"OID" means original issue discount.
"OID regulations" means the Treasury regulations relating to OID.
"Overconcentration Amount" means the aggregate principal amount of
receivables in the trust on a distribution date which are Dealer
Overconcentrations.
"Paired Series" means a series of certificates previously issued by
the trust as to which the Accumulation Period or Controlled Amortization
Period has commenced with respect to which a series of certificates may be
designated as an excluded series.
"Participants" means the participating organizations of DTC which
include securities brokers and dealers, banks, trust companies and clearing
corporations and may include certain other organizations.
"Plan Assets Regulation" means the final regulation issued by DOL
concerning the definition of what constitutes the "plan assets" of Benefit
Plans.
"Pool Balance" means the aggregate amount of the principal balances
of the receivables.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement, as amended and supplemented from time to time, among DCWR, as
seller of the receivables, CFC, as servicer of the receivables, and the
trustee.
"prime rate" means the rate designated as the "prime rate" from time
to time by certain financial institutions selected by CFC.
"principal collections" means collections of principal on the
receivables.
"Principal Funding Account" means the trust account established for
the benefit of the certificateholders of a series in which, during the
Accumulation Period for the series, Principal Collections and other amounts
allocable to the Certificateholders' Interest of the series, which may include
some Excess Principal Collections, will be deposited.
"principal receivables" means the portion of the receivables that
represents principal.
"Principal Shortfalls" means any principal distributions to
Certificateholders of any series which are either scheduled or permitted and
which have not been covered out of Principal Collections and certain other
amounts allocated to the series.
"Principal Terms" means the terms of a series which, under the
Pooling and Servicing Agreement, the seller may specify, including, among
other things:
o its name or designation,
o its initial principal amount, or method for calculating such
amount,
o its certificate rate, or the method for determining its
certificate rate,
o a date on which it will begin its Accumulation Period or
Controlled Amortization Period, if any,
o the method for allocating principal and interest to
certificateholders of such series,
o the percentage used to calculate monthly servicing fees,
o the issuer and terms of any Enhancement or the level of
subordination provided by the Seller's Interest,
o the terms on which the certificates of such series may be
exchanged for certificates of another Series, be subject to
repurchase, optional redemption or mandatory redemption by the
seller or be remarketed by any remarketing agent,
o the Series Termination Date and
o any other terms permitted by the Pooling and Servicing Agreement.
"Rating Agency" means each rating agency designated by the seller in
the related Series Supplement in respect of any outstanding series or class.
"Registration Statement" means the registration statement, together
with all amendments and exhibits, which the seller has filed under the
Securities Act with the Commission with respect to the certificates offered
pursuant to this prospectus.
"Reinvestment Event" means, for any series, any of the events so
defined in the related Series Supplement and described in the related
prospectus supplement.
"Reinvestment Period" means, for any applicable series, the period
beginning on the day on which a Reinvestment Event has occurred and ending on
the earliest of:
o the beginning of an Early Amortization Period with respect to the
series,
o the recommencement of the Revolving Period in accordance with the
related Series Supplement and
o payment in full of the outstanding principal amount of the
certificates of that series.
"remarketing firms" means one or more firms which, acting as
principals for their own accounts or as agents for the seller, may offer and
sell the Certificates of a series, if the related prospectus supplement so
states, in connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms.
"Removal and Repurchase Date" means the Determination Date on which
the removal of the Designated Accounts and the purchase of the Designated
Receivables will occur.
"Removal Commencement Date" means the Determination Date on which
removal of one or more Accounts will commence.
"Removal Date" means the Determination Date on which the Designated
Balance in a Designated Account is reduced to zero.
"Removal Notice" means a written notice furnished to the trustee, any
Enhancement provider and the Rating Agencies by the seller, or the servicer on
its behalf stating the Removal Commencement Date and the Designated Accounts.
"Removed Account" means a Designated Account as to which the seller
has stopped allocating collections of receivables and which has been deemed
removed from the trust for all purposes.
"Repurchased Receivables" means Designated Receivables which have
been deemed repurchased from the trust for all purposes.
"Required Participation Amount" means for any date an amount equal to
the sum of:
o the sum of the amounts for each series obtained by
multiplying the Required Participation Percentage for the series by
the Initial Invested Amount for the series at that time. However,
each Excluded Series will be excluded from this calculation until
the Invested Amount of the related Paired Series is reduced to zero;
and
o the Trust Available Subordinated Amount on the immediately
preceding Determination Date, after giving effect to the
allocations, distributions, withdrawals and deposits to be made on
the distribution date following that Determination Date.
"Required Participation Percentage" means, for a series, the required
participation percentage specified in the related Series Supplement.
"Revolving Period" means the revolving period, for the certificates
of each series and class, during which Principal Collections and other amounts
otherwise allocable to the Certificateholders' Interest of that series or
class will be
o paid to the seller,
o deposited to the Excess Funding Account, if any, for that series
or
o distributed to, or for the benefit of, the
certificateholders of other classes or series, A Revolving Period
for a series will begin on the Series Cut-off Date and end on the
earlier of:
o the day immediately before the Accumulation Period commencement
date or the controlled amortization period commencement date for the
series and
o the day immediately before the day on which an Early
Amortization Event or a Reinvestment Event occurs with respect to
the series.
"RPA seller" means CFC, as seller, together with its predecessors as
appropriate, under the Receivables Purchase Agreement.
"Securities Act" means the Securities Act of 1933.
"Seller's Certificate" means the certificate evidencing the Seller's
Interest.
"Seller's Participation Amount" means the Pool Balance minus the
aggregate Invested Amounts for all outstanding series.
"Series Allocable Defaulted Amount" means, with respect to any series
of certificates for any Collection Period, the product of the Series
Allocation Percentage for the series and the amount of the Defaulted Amount
with respect to the Collection Period.
"Series Allocable Interest Collections" means, with respect to any
series of certificates for any Collection Period, the product of the Series
Allocation Percentage for the series and the amount of Interest Collections,
with respect to the Collection Period.
"Series Allocable Miscellaneous Payments" means, with respect to any
series of certificates for any Collection Period, the product of the Series
Allocation Percentage for the series and the amount of Miscellaneous Payments,
with respect to the Collection Period.
"Series Allocable Principal Collections" means, with respect to any
series of certificates for any Collection Period, the product of the Series
Allocation Percentage for the series and the amount of Principal Collections,
with respect to the Collection Period.
"Series Allocation Percentage" means, with respect to a series for
any Collection Period, the percentage equivalent of a fraction, the numerator
of which is the Adjusted Invested Amount of the series as of the last day of
the immediately preceding Collection Period and the denominator of which is
the Trust Adjusted Invested Amount as of that last day.
"Series Cut-off Date" means, for a series, the date stated in the
related prospectus supplement on which a revolving period for the series will
begin.
"Series Issuance Date" means the date of issuance of any series.
"Series Termination Date" means, for any series, the date stated in
the related prospectus supplement, on which the last payment of principal and
interest on any series of certificates will be due and payable, if not
previously paid.
"Service Default" means any of the following events:
o failure by the servicer to make any payment, transfer or
deposit, or to give instructions to the trustee to make any payment,
transfer or deposit, on the date the servicer is required to do so
under the Pooling and Servicing Agreement, which is not cured within
a five business day grace period;
o failure by the servicer duly to observe or perform any
other covenants or agreements of the servicer in the Pooling and
Servicing Agreement which failure has a materially adverse effect on
the certificateholders of any outstanding series and which continues
unremedied for a period of 30 days after the date written notice of
the failure shall have been given to the servicer by the trustee,
o the servicer delegates its duties under the Pooling and Servicing
Agreement, except as specifically permitted thereunder;
o any representation, warranty or certification made by the
servicer in the Pooling and Servicing Agreement or in any
certificate delivered pursuant to the Pooling and Servicing
Agreement proves to have been incorrect in any material respect when
made, has a materially adverse effect on the rights of the
certificateholders of any outstanding Series, and which materially
adverse effect continues for a period of 60 days after written
notice of that fact shall have been given to the servicer by the
trustee; or
o events of bankruptcy, insolvency or receivership occur with
respect to the servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under the first clause for a period of ten business days or
referred to under the second, third or fourth clauses for a period of 60
business days, shall not constitute a Service Default if the delay or failure
was caused by an act of God or other similar occurrence.
"Service Transfer" means, in the event of any Service Default, an
action by the trustee, by written notice to the servicer, terminating all of
the rights and obligations of the servicer, as servicer, under the Pooling and
Servicing Agreement and in and to the receivables and the proceeds thereof and
appointing a new servicer.
"servicer" means CFC or any successor servicer.
"Servicing Fee" means a monthly servicing fee which constitutes the
servicer's compensation with respect to the certificates of a series for its
servicing activities and reimbursement for its expenses, unless the related
Series Supplement or prospectus supplement states otherwise.
"Servicing Fee Rate" means, for a series, the servicing fee rate set
forth in the related Series Supplement.
"Special Payment Date" means, during an Early Amortization Period for
a series, each distribution date beginning with the distribution date
following the Collection Period in which the Early Amortization Period begins.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies.
"Supplemental Certificate" means a certificate for which the seller
may, from time to time, exchange a portion of the Seller's Certificate for
transfer or assignment to a person or entity chosen by the seller upon the
execution and delivery of a supplement to the Pooling and Servicing Agreement,
if
o the seller shall at the time of that exchange and after
giving effect to the exchange have an interest of not less than 2%
in the Pool Balance,
o the seller shall have delivered to the trustee, the Rating
Agencies and any Enhancement provider a Tax Opinion with respect to
the exchange and
o the seller shall have delivered to the trustee written
confirmation from the applicable Rating Agencies that the exchange
will not result in a reduction or withdrawal of the rating of any
outstanding series or class of certificates. Any later transfer or
assignment of a Supplemental Certificate is also subject to the
second and third conditions described in the preceding sentence.
"Tax Counsel" means Brown & Wood LLP, special federal income tax
counsel to the seller and the trust.
"Tax Opinion" means an opinion of counsel to the effect that, for
federal income and Michigan income and single business tax purposes,
o such action (other than some specified actions) will not
adversely affect the characterization of the certificates of any
outstanding series or class as debt of the seller and
o the issuance will not cause a taxable event to any
certificateholders.
"Terms and Conditions" means, collectively, the Terms and Conditions
Governing Use of Euroclear and the related Operative Procedures of the
Euroclear System, and applicable Belgian law.
"Transfer Date" means the Series Cut-Off Date, or the Additional
Cut-Off Date, in the case of any Additional Accounts, or the date any future
receivable is generated.
"Transfer Deposit Amount" means, for any Determination Date, the
amount by which the Seller's Participation Amount would be less than the Trust
Available Subordinated Amount, after giving effect to the allocations,
distributions, withdrawals and deposits to be made on that distribution date,
following a deduction by the servicer of the principal balance of a receivable
from the Pool Balance.
"trust" means CARCO Auto Loan Master Trust.
"Trust Adjusted Invested Amount" means with respect to any Collection
Period, the sum of the Adjusted Invested Amounts for all outstanding series.
"Trust Available Subordinated Amount" means the aggregate Available
Subordinated Amounts for all outstanding series.
"U.S. Wholesale Portfolio" means the accounts of domestic dealers
financed and serviced by CFC.
"UCC" means the Uniform Commercial Code.
"Unallocated Principal Collections" means any amount of Principal
Collections which are held unallocated.
"USA" means U.S. Auto Receivables Company.
"Used Vehicles" means previously owned vehicles, other than current
model year miled vehicles purchased at a closed auction conducted by
DaimlerChrysler and prior model year and two year old miled vehicles.
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Annex I
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Global Clearance, Settlement
and Tax Documentation Procedures
-------------------------------------------------------------------------------
Except in limited circumstances, we will make available the globally
offered certificates (the "Global Securities") only in book-entry form. Unless
we state otherwise in a prospectus supplement for a series, investors in the
Global Securities may hold the Global Securities through any of DTC,
Clearstream or Euroclear. Investors may trade the Global Securities as home
market instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same-day funds.
Investors holding Global Securities through Clearstream and Euroclear
will conduct secondary market trades between each other in the ordinary way
under their normal rules and operating procedures and under conventional
eurobond practice, i.e., seven calendar day settlement.
Investors holding Global Securities through DTC will conduct
secondary market trades between each other under the rules and procedures
applicable to U.S. corporate debt obligations.
Clearstream or Euroclear and DTC participants holding Global
Securities will effect secondary cross-market trades between each other on a
delivery-against-payment basis through Citibank, N.A. ("Citibank") and Morgan
Guaranty Trust Company of New York ("Morgan") as the respective depositaries
of Clearstream and Euroclear and as participants in DTC.
Non-U.S. holders of Global Securities will be exempt from U.S.
withholding taxes if those holders meet requirements and deliver appropriate
U.S. tax documents to the securities clearing organizations or their
participants.
Initial Settlement
DTC, in the name of Cede & Co. as nominee of DTC, will hold all
Global Securities in book-entry form. Financial institutions acting on the
behalf of investors as direct and indirect participants in DTC will represent
those investors' interests in the Global Securities. As a result, Clearstream
and Euroclear will hold positions on behalf of their participants through
their respective depositaries, Citibank and Morgan, which in turn will hold
those positions in accounts as participants of DTC.
Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable to securities previously issued by
the trust. DTC will credit investor securities custody accounts with their
holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through
Clearstream or Euroclear accounts will follow the settlement procedures
applicable to conventional eurobonds, except that there will be no temporary
global security and no "lock-up" or restricted period. Clearstream or
Euroclear will credit Global Securities to the securities custody accounts on
the settlement date against payment in same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that purchasers and sellers can settle on the
desired value date.
Trading between DTC participants. DTC participants will settle
secondary market trades between each other using the procedures applicable to
securities previously issued by the trust in same-day funds.
Trading between Clearstream and/or participants. Clearstream
participants and/or Euroclear participants will settle secondary market trades
between each other using the procedures applicable to conventional eurobonds
in same-day funds.
Trading between DTC seller and Clearstream or Euroclear purchaser.
When a DTC participant desires to transfer Global Securities from its account
to the account of a Clearstream participant or a Euroclear participant the
purchaser will send instructions to Clearstream or Euroclear through a
participant at least one business day prior to settlement. Clearstream or
Euroclear will instruct Citibank or Morgan, respectively, as the case may be,
to receive the Global Securities against payment. Payment will include
interest accrued on the Global Securities from and including the last coupon
payment date to and excluding the settlement date. For transactions settling
on the 31st day of the month, payment will include interest accrued to and
excluding the first day of the following month. Citibank or Morgan will then
make payment to the DTC participant's account against delivery of the Global
Securities. After settlement has been completed, the respective clearing
system will credit the Global Securities to its system and, in accordance with
its usual procedures, to the Clearstream participant's or Euroclear
participant's account. The Global Securities credit will appear the next day,
European time, and the cash debit will be back-valued to, and the interest on
the Global Securities will accrue from, the value date, which would be the
preceding day when settlement occurred in New York. If settlement is not
completed on the intended value date, i.e., the trade fails, the Clearstream
or Euroclear cash debit will be valued instead as of the actual settlement
date.
Clearstream participants and Euroclear participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. They may do so the most directly by prepositioning
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Clearstream or Euroclear. Under
this approach, they may take on credit exposure to Clearstream or Euroclear
until the Global Securities are credited to their accounts one day later.
As an alternative, if Clearstream or Euroclear has extended a line of
credit to them, participants can elect not to preposition funds and allow that
credit line to be drawn upon to finance settlement. Under this procedure,
Clearstream participants or Euroclear participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared
the overdraft when the Global Securities were credited to their accounts.
However, interest on the Global Securities would accrue from the value date.
Therefore, in many cases the investment income on the Global Securities earned
during that one-day period may substantially reduce or offset the amount of
the overdraft charges, although this result will depend on each participant's
particular cost of funds.
Since the settlement is taking place during New York business hours,
DTC participants can employ their usual procedures for sending Global
Securities to Citibank or Morgan for the benefit of Clearstream participants
or Euroclear participants. The sale proceeds will be available to the DTC
seller on the settlement date. Thus, to the DTC participant a cross-market
transaction will settle no differently than a trade between two DTC
participants.
Trading between Clearstream or Euroclear seller and DTC purchaser.
Due to time zone differences in their favor, Clearstream and Euroclear
participants may employ their customary procedures for transactions in which
they are to transfer Global Securities by the respective clearing system,
through Citibank or Morgan, to a DTC participant. The seller will send
instructions to Clearstream or Euroclear through a participant at least one
business day prior to settlement. In these cases, Clearstream or Euroclear
will instruct Citibank or Morgan, as appropriate, to deliver the bonds to the
DTC participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date. For transactions settling on the
31st day of the month, payment will include interest accrued to and excluding
the first day of the following month. Clearstream or Euroclear will then
reflect the payment in the account of the Clearstream participant or Euroclear
participant the following day, and back-value to the value date, which would
be the preceding day, when settlement occurred in New York, the receipt of the
cash proceeds in the Clearstream or Euroclear participant's account. Should
the Clearstream or Euroclear participant have a line of credit with its
respective clearing system and elect to be in debit in anticipation of receipt
of the sale proceeds in its account, the back-valuation will extinguish any
overdraft charges incurred over that one-day period. If settlement is not
completed on the intended value date, i.e., the trade fails, Clearstream or
Euroclear would instead value as of the settlement date the receipt of the
cash proceeds in the Clearstream or Euroclear participant's account.
Finally, day traders that use Clearstream or Euroclear and that
purchase Global Securities from DTC participants for delivery to Clearstream
participants or Euroclear participants should note that these trades would
automatically fail on the sale side unless affirmative action were taken. At
least three techniques should be readily available to eliminate this potential
problem:
o borrowing through Clearstream or Euroclear for one day, until the
purchase side of the day trade is reflected in their Clearstream or
Euroclear accounts, in accordance with the clearing system's
customary procedures;
o borrowing the Global Securities in the U.S. from a DTC participant
no later than one day prior to settlement, which would give the
Global Securities enough time to be reflected in their Clearstream
or Euroclear account in order to settle the sale side of the trade;
or
o staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC participant is
at least one day prior to the value date for the sale to the
Clearstream participant or Euroclear participant.
U.S. Federal Income Tax Documentation Requirements
A holder of Global Securities holding securities through Clearstream
or Euroclear, or through DTC if the holder has an address outside the U.S.,
will be subject to the 30% U.S. withholding tax that applies to payments of
interest, including original issue discount, on registered debt issued by U.S.
persons, unless the holder takes one of the following steps to obtain an
exemption or reduced tax rate:
o Exemption for non-U.S. persons (Form W-8BEN). Non-U.S. persons that
are beneficial owners can obtain a complete exemption from the
withholding tax by filing a signed Form W-8BEN (Certificate of
Foreign Status).
o Exemption for non-U.S. persons with effectively connected income
(Form W-8ECI). A non-U.S. person, including a non-U.S. corporation
or bank with a U.S. branch, for which the interest income is
effectively connected with its conduct of a trade or business in the
United States, can obtain an exemption from the withholding tax by
filing Form W-8ECI (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the
United States).
o Exemption or reduced rate for non-U.S. persons resident in treaty
countries (Form 1001). Non-U.S. persons that are beneficial owners
residing in a country that has a tax treaty with the United States
can obtain an exemption or reduced tax rate, depending on the treaty
terms, by filing Form 1001 (Ownership, Exemption or Reduced Rate
Certificate). If the treaty provides only for a reduced rate,
withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8BEN. Form 1001 may be filed by the
beneficial owner or his agent.
o Exemption for U.S. persons (Form W-9). U.S. persons can obtain a
complete exemption from the withholding tax by filing Form W-9
(Request for Taxpayer Identification Number and Certification).
o U.S. Federal Income Tax Reporting Procedure. The Global Security
holder, or in the case of a Form 1001 or a Form W-8ECI filer, his
agent, files by submitting the appropriate form to the person
through whom he holds, which is the clearing agency, in the case of
persons holding directly on the books of the clearing agency. Form
W-8BEN and Form 1001 are effective for three calendar years and Form
W-8ECI is effective for one calendar year.
In this summary, we have not dealt with all aspects of federal income
tax withholding that may be relevant to foreign holders of these Global
Securities. We advise investors to consult their own tax advisors for specific
tax advice concerning their holding and disposing of these Global Securities.
<PAGE>
<TABLE>
<CAPTION>
=========================================================================================================
<S> <C>
No dealer, salesman or other person has DAIMLERCHRYSLER
been authorized to give any information or to make
any representations, other than those contained in
the prospectus or prospectus supplement. Any
information or representations, other than those CARCO
contained in the prospectus or prospectus Auto Loan
supplement, are not authorized by the seller or by Master trust
the underwriters. Do not rely on any information
or representations other than those contained in
the prospectus or prospectus supplement. $[ ]
[Floating Rate][ %] Auto Loan
We only intend the prospectus supplement Asset Backed certificates,
to be an offer to sell or a solicitation of any [Series 200_-_],
offer to buy the offered securities if: due [ ]
o used in jurisdictions in which the offer
or solicitation is authorized,
DAIMLERCHRYSLER WHOLESALE RECEIVABLES LLC
Seller
o the person making the offer or
solicitation is qualified to do so, and
o the offer or solicitation is made to CHRYSLER FINANCIAL COMPANY L.L.C.
anyone to whom it is lawful to make the Servicer
offer or solicitation.
The information in the prospectus or
prospectus supplement is only accurate as of the
date of this prospectus supplement.
All dealers effecting transactions in the ----------------------------------------
offered securities within 90 days after the date
of this prospectus supplement may be required to
deliver the prospectus and prospectus supplement, PROSPECTUS SUPPLEMENT
regardless of their participation in this
distribution This is in addition to the obligation -----------------------------------------
of dealers to deliver the prospectus supplement
when acting as underwriters or when selling their
unsold allotments or subscriptions. [underwriters]
</TABLE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate of the amount of fees and expenses
(other than underwriting discounts and commissions) to be incurred in
connection with the issuance and distribution of the Certificates.
SEC Filing Fee............................................ $278
Trustee's Fees and Expenses (including counsel fees)...... $11,000
Accounting Fees and Expenses.............................. $10,000
Legal Fees and Expenses................................... $10,000
Printing and Engraving Expenses........................... $15,000
Rating Agency Fees........................................ $94,000
Miscellaneous............................................. $6,000
Total................................................ $147,000
Item 15. Indemnification of Directors and Officers.
DaimlerChrysler Corporation (parent of Chrysler Financial Company
L.L.C. and therefore the indirect parent of the Registrant) is incorporated
under Delaware law. Section 145 of the Delaware General Corporation Law
provides that a Delaware corporation may indemnify any persons, including
officers and directors, who are, or are threatened to be made, parties to any
threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or
in the right of such corporation), by reason of the fact that such person was
an officer or director of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding, provided such officer or director acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, for criminal proceedings, had no reasonable
cause to believe that his conduct was illegal. A Delaware corporation may
indemnify officers and directors in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to
be liable to the corporation. Where an officer or director is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
Section B of Article VIII of the Certificate of Incorporation of
DaimlerChrysler Corporation, the indirect parent of the Registrant, provides,
in effect, that, subject to certain limited exceptions, DaimlerChrysler
Corporation will indemnify the officers and directors of DaimlerChrysler
Corporation or its subsidiaries to the extent permitted by Delaware law. In
addition, DaimlerChrysler Corporation maintains insurance providing for
payment, subject to certain exceptions, on behalf of officers and directors of
DaimlerChrysler Corporation and its subsidiaries of money damages incurred as
a result of legal actions instituted against them in their capacities as such
officers or directors.
The Registrant, DaimlerChrysler Wholesale Receivables LLC, is formed
under Delaware law. Section 18-108 of the Delaware Limited Liability Company
Act provides, in effect, that a Michigan limited liability company may
indemnify and hold harmless any member or manager or other person from and
against any and all claims and demands whatsoever.
Section 8.2 of the Registrant's Limited Liability Company Agreement
indemnifies each member, employee or agent of the Registrant against expenses,
judgments and amounts paid in settlement actually and reasonably incurred by
such person in connection with actions, suits or proceedings by reason of such
person being a member, employee or agent of the Registrant.
<PAGE>
Item 16. Exhibits:
1.1 -- Form of Underwriting Agreement with respect to the Certificates is
incorporated by reference from Exhibit 1.1 of the Registrant's
Registration Statement on Form S-3 (File No. 333-38873).
3.1 -- Certificate of Formation of the Registrant.*
3.2 -- Limited Liability Company Agreement of the Registrant.*
4.1 -- Form of Pooling and Servicing Agreement among the Registrant, the
Servicer and the Trustee is incorporated by reference from Exhibit
4.1 of the Registrant's Registration Statement on Form S-1 (File No.
33-41177).
4.2 -- First Amendment to the Pooling and Servicing Agreement is
incorporated by reference from Exhibit 4.2 of the Registrant's
Registration Statement on Form S-1 (File No. 33-52990).
4.3 -- Second Amendment to the Pooling and Servicing Agreement is
incorporated by reference from Exhibit 4.3 of the Registrant's
Registration Statement on Form S-1 (File No. 33-70144).
4.4 -- Third Amendment to the Pooling and Servicing Agreement.*
4.5 Fourth Amendment to the Pooling and Servicing Agreement.*
4.6 -- Form of Series Supplement to the Pooling and Servicing Agreement,
including the form of the Certificates and the Form of Servicing
Report, is incorporated by reference from Exhibit 4.4 of the
Registrant's Registration Statement on Form S-3 (File No.
333-38873).
5.1 -- Opinion of Brown & Wood LLP with respect to certain matters
involving the Certificates.*
8.1 -- Opinion of Brown & Wood LLP with respect to federal tax matters.
8.2 -- Opinion of Christopher A. Taravella, Esq. with respect to tax
matters under Michigan law and the Certificates.*
23.1-- Consent of Christopher A. Taravella, Esq. (included in opinion filed
as Exhibit 8.2).*
23.2-- Consent of Brown & Wood LLP (included in opinions filed as Exhibits
5.1 and 8.1).*
23.3-- Consent of KPMG LLP.*
24.1-- Power of Attorney of DaimlerChrysler Wholesale Receivables LLC.*
24.2-- Power of Attorney of Chrysler Financial Receivables Corporation.*
-------------
*Filed previously.
Item 17. Undertakings.
(a) As to Rule 415: The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made of the securities registered hereby, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this registration
statement (or the most recent post-effective amendment
hereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this
registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in this registration statement or any material
change to such information in this registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended, that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) As to indemnification: Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended, may be permitted to
directors, officers and controlling persons of the registrant pursuant to the
provisions described in Item 15 herein, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
(c) As to documents subsequently filed that are incorporated by
reference: The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated
by reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(d) As to information omitted in reliance on Rule 430A: The
undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, as amended, the information omitted
from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act of 1933, as amended,
shall be deemed to be part of this registration statement as of
the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, as amended, each post-effective
amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No.2 to Form S-3 Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Southfield, State of Michigan, on the 26th day of September, 2000.
DAIMLER CHRYSLER WHOLESALE RECEIVABLES LLC
By Chrysler Financial Receivables Corporation,
a member
By /s/ DARRELL L. DAVIS*
----------------------------------------------
Darrell L. Davis
President
CHRYSLER FINANCIAL RECEIVABLES CORPORATION
as successor to U.S. Auto Receivables Company, the
registrant under Registration Statement
No. 333-38873.
By /s/ DARRELL L. DAVIS*
------------------------------------------------
Darrell L. Davis
President
*By /s/ BYRON C. BABBISH
------------------------------------------------
Byron C. Babbish
Attorney-in-Fact
CARCO AUTO LOAN MASTER TRUST,
By
DaimlerChrysler Wholesale Receivables LLC, as
depositor, on behalf of the trust, by Chrysler
Financial Receivables Corporation, a member
By /s/ BYRON C. BABBISH
-------------------------------------------------
Byron C. Babbish
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No.2 to Form S-3 Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Principal executive officer of Chrysler Financial Receivables
Corporation:
/s/ DARRELL L. DAVIS* President September 26, 2000
----------------------------------------
Darrell L. Davis
Principal financial officer of Chrysler Financial Receivables
Corporation:
/s/ MICHAEL MUEHLBAYER* Vice President September 26, 2000
----------------------------------------
Michael Muehlbayer
<PAGE>
Principal accounting officer of Chrysler Financial
Receivables Corporation:
/s/ D.H. OLSEN* Vice President and September 26, 2000
------------------------------------- Controller
D.H. Olsen
------------------------------------------------------------------------------
Board of Directors of Chrysler Financial Receivables
Corporation:
*By /s/ BYRON.C. BABBISH
-----------------------------------
Byron.C. Babbish
Attorney-in-Fact
September 26, 2000
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
1.1 -- Form of Underwriting Agreement with respect to the Certificates is
incorporated by reference from Exhibit 1.1 of the Registrant's
Registration Statement on Form S-3 (File No. 333-38873).
3.1 -- Certificate of Formation of the Registrant.*
3.2 -- Limited Liability Company Agreement of the Registrant.*
4.1 -- Form of Pooling and Servicing Agreement among the Registrant, the
Servicer and the Trustee is incorporated by reference from Exhibit
4.1 of the Registrant's Registration Statement on Form S-1 (File No.
33-41177).
4.2 -- First Amendment to the Pooling and Servicing Agreement is
incorporated by reference from Exhibit 4.2 of the Registrant's
Registration Statement on Form S-1 (File No. 33-52990).
4.3 -- Second Amendment to the Pooling and Servicing Agreement is
incorporated by reference from Exhibit 4.3 of the Registrant's
Registration Statement on Form S-1 (File No. 33-70144).
4.4 -- Third Amendment to the Pooling and Servicing Agreement.*
4.5 Fourth Amendment to the Pooling and Servicing Agreement.*
4.6 -- Form of Series Supplement to the Pooling and Servicing Agreement,
including the form of the Certificates and the Form of Servicing
Report, is incorporated by reference from Exhibit 4.4 of the
Registrant's Registration Statement on Form S-3 (File No.
333-38873).
5.1 -- Opinion of Brown & Wood LLP with respect to certain matters
involving the Certificates.*
8.1 -- Opinion of Brown & Wood LLP with respect to federal tax matters.
8.2 -- Opinion of Christopher A. Taravella, Esq. with respect to tax
matters under Michigan law and the Certificates.*
23.1-- Consent of Christopher A. Taravella, Esq. (included in opinion filed
as Exhibit 8.2).*
23.2-- Consent of Brown & Wood LLP (included in opinions filed as Exhibits
5.1 and 8.1).*
23.3-- Consent of KPMG LLP.*
24.1-- Power of Attorney of DaimlerChrysler Wholesale Receivables LLC.*
24.2-- Power of Attorney of Chrysler Financial Receivables Corporation.*
-------------
*Filed previously.
<PAGE>
Exhibit 8.1
[Letterhead of Brown & Wood LLP]
September 26, 2000
DaimlerChrysler Wholesale Receivables LLC
27777 Franklin Road
Southfield, Michigan 48034
Re: DaimlerChrysler Wholesale Receivables LLC
Registration Statement on Form S-3
-----------------------------------------
Ladies and Gentlemen:
We have acted as special federal tax counsel in respect of the CARCO Auto
Loan Master Trust (the "Trust") in connection with the filing by
DaimlerChrysler Wholesale Receivables LLC, a Delaware limited liability
company (the "Registrant"), of a Registration Statement on Form S-3 (such
registration statement, together with the exhibits and any amendments thereto
as of the date hereof, the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act") for the registration under the Act of asset backed
certificates (the "Certificates") in an aggregate principal amount of up to
$501,000,000. As described in the Registration Statement, the Certificates
will be issued from time to time in one or more series with one or more
classes, with each series being issued by the Trust, which was formed by the
Registrant pursuant to a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") among the Registrant, as assignee, Chrysler Financial
Company L.L.C. (as a successor by merger), as servicer, and The Bank of New
York, as successor trustee.
We have advised the Registrant with respect to certain federal income tax
consequences of the proposed issuance of the Certificates. This advice is
summarized under the headings "Summary--Tax Matters" and "Tax Matters--Federal
Income Tax Consequences" in the Prospectus and "Summary of Series Terms--Tax
Status" in the Prospectus Supplement, all a part of the Registration
Statement. Such description does not purport to discuss all possible federal
income tax ramifications of the proposed issuance, but with respect to those
federal income tax consequences that are discussed, in our opinion, the
description is accurate in all material respects. We hereby confirm and adopt
the opinions expressly set forth under the caption "Tax Matters" in the
Prospectus and the caption "Summary of Series Terms--Tax Status" in the
Prospectus Supplement. There can be no assurance, however, that contrary
positions will not be taken by the Internal Revenue Service or that the law
will not change.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to a reference to this firm (as special federal tax
counsel to DaimlerChrysler Wholesale Receivables LLC and the Trust) under the
heading "Tax Matters--Federal Income Tax Consequences" in the Prospectus
forming a part of the Registration Statement, without implying or admitting
that we are "experts" within the meaning of the Act or the rules and
regulations of the Commission issued thereunder, with respect to any part of
the Registration Statement, including this exhibit.
Very truly yours,
Brown & Wood LLP
