As filed with the Securities and Exchange Commission on October 5, 1994
Registration No. 33-
Post Effective Amendment No. 1 to Registration Statement No. 33-55397
Post Effective Amendment No. 3 to Registration Statement No. 33-74336
==========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CARCO AUTO LOAN MASTER TRUST
(In which the Certificates evidence undivided interests)
U.S. AUTO RECEIVABLES COMPANY
(Originator of the Trust described herein)
(Exact name of registrant as specified in its charter)
DELAWARE 6146 38-2997412
(State of (Primary Standard Industrial (I.R.S. Employer
Incorporation) Classification Code Number) Identification No.)
27777 Franklin Road
Southfield, Michigan 48034
(810) 948-3031
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
ROBERT A. LINK, ESQ.
Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034
(810) 948-3060
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
Copies to:
GREGORY M. SHAW, ESQ.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019-7475
(212) 474-1902
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement
becomes effective as determined by market conditions.
----------------
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 other than securities offered only in connection
with dividend or interest reinvestment plans, check the following
box. [X]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of each Amount Maximum Maximum Amount of
class of securities to be Offering Price Aggregate Registration
to be registered Registered Per Unit(1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Asset Backed
Certificates.......... $3,000,000,000 100% $3,000,000,000 $600,000.00
<FN>
(1) Estimated solely for the purpose of calculating the registration fee.
</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 (i) $700,000,000 OF UNISSUED ASSET
BACKED CERTIFICATES REGISTERED UNDER REGISTRATION NO. 33-55397 AND THIS
REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO SUCH
REGISTRATION STATEMENT, AND (ii) $800,000,000 OF UNISSUED ASSET BACKED
CERTIFICATES REGISTERED UNDER REGISTRATION STATEMENT NO. 33-74336 AND
THIS REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 3
TO SUCH REGISTRATION STATEMENT.
==========================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
[Single Class]
Subject to Completion Dated October 5, 1994
PROSPECTUS SUPPLEMENT
To Prospectus dated , 1994
$
CARCO AUTO LOAN MASTER TRUST
[FLOATING RATE] [ %] AUTO LOAN
ASSET BACKED CERTIFICATES, SERIES [199_-_]
U.S. AUTO RECEIVABLES COMPANY, SELLER
CHRYSLER CREDIT CORPORATION, SERVICER
The [Floating Rate] [ %] Auto Loan Asset Backed Certificates,
Series [199_-_] (the "Series [199_-_] Certificates") offered hereby
evidence undivided interests in certain assets of the CARCO Auto Loan
Master Trust (the "Trust") created pursuant to a Pooling and Servicing
Agreement among U.S. Auto Receivables Company ("USA" or the "Seller"),
Chrysler Credit Corporation, as servicer ("CCC" or the "Servicer"), and
Manufacturers and Traders Trust Company, as trustee. The Trust assets
include wholesale receivables (the "Receivables") generated from time to
time in a portfolio of revolving financing arrangements (the "Accounts")
with automobile dealers to finance their automobile and light duty truck
inventory and collections on the Receivables. Certain assets of the Trust
will be allocated to Series [199_-_] Certificateholders, including the
right to receive a varying percentage of each month's collections with
respect to the Receivables at the times and in the manner described
herein. The Seller will own the remaining interest in the Trust not
represented by the Series [199_-_] Certificates or the Certificates of any
other Series issued by the Trust (the "Seller's Interest"). The Trust
previously has issued [ ] other Series of Certificates (each, a
"Series"). From time to time, subject to certain conditions, the Seller
may offer other Series of Certificates, which may have terms significantly
different from the terms of the Series [199_-_] Certificates. The issuance
of additional Series of Certificates may impact the timing of payments
received by Series [199_-_] Certificateholders.
[Interest will accrue on the Series [199_-_] Certificates at the
rate of [ ]% per annum (the "Certificate Rate").] [Interest will accrue
on the Series [199_-_] Certificates at the rate of [ ]% per annum [above]
[below] [times] [ ] (the "Index") prevailing on the Adjustment Date
(as defined herein) [, subject to certain limitations described herein]
(the "Certificate Rate").] [Interest with respect to the Series [199_-_]
Certificates is payable on the [ ] day of each [month]
[quarter] [other] (or, if such day is not a business day, on the next
succeeding business day) (each, [a "Distribution Date"] [an "Interest
Payment Date"]), commencing on [ ,] 199[ ].
Principal with respect to the Series [199_-_] Certificates [is
scheduled to be paid on [ ]] [is scheduled to be distributed
on each Distribution Date commencing on the Distribution Date in
, and ending on the Distribution Date in ]
but may be paid earlier or later under certain circumstances described
herein.
The Seller's Interest will be subordinated to the rights of the
Series [199_-_] Certificateholders to the limited extent of the Available
Subordinated Amount as described herein. [Describe other Enhancement, if
any, and any additional subordination of the Seller's Interest, if
applicable.] Prospective investors should consider the factors set forth
under "Special Considerations" herein and in the Prospectus.
----------------
THE SERIES [199_-_] CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE
TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF THE
SELLER, THE SERVICER OR ANY AFFILIATE THEREOF. NEITHER THE SERIES
[199_-_] CERTIFICATES NOR THE RECEIVABLES ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to the
Public(1) Discount Seller(1)(2)
<S> <C> <C> <C>
Per Certificate............. % % %
Total....................... $ $ $
<FN>
(1) Plus accrued interest, if any, at the Certificate Rate from
[ ], 199[ ].
(2) Before deducting expenses, estimated to be $[ ].
</TABLE>
----------------
The Series [199_-_] Certificates are offered subject to prior sale,
and subject to the Underwriters' right to reject orders in whole or in
part. It is expected that delivery of the Series [199_-_] Certificates
will be made in book-entry form only through the Same Day Funds Settlement
System of The Depository Trust Company [, CEDEL S.A. and the Euroclear
System] on or about , 199 .
[Underwriters]
The date of this Prospectus Supplement is , 199 .
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES
[199_-_] CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION WITH
RESPECT TO THE OFFERING OF THE SERIES [199_-_] CERTIFICATES. ADDITIONAL
INFORMATION IS CONTAINED IN THE PROSPECTUS AND PURCHASERS ARE URGED TO
READ BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF
THE SERIES [199_-_] CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE
PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
SUMMARY OF SERIES TERMS
This summary of Series Terms sets forth and defines specific terms
of the Series [199_-_] Certificates offered in this Prospectus Supplement
and the Prospectus, but is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and
in the Prospectus. Reference is made to the Index of Principal Terms in
each of this Prospectus Supplement and the Prospectus for the location
herein and therein of the definitions of certain capitalized terms used
herein. Certain capitalized terms used but not defined herein have the
meanings assigned to such terms in the Prospectus.
Title of Securities .... [Floating Rate] [ %] Auto Loan Asset Backed
Certificates, Series [199_-_] (the "Series
[199_-_] Certificates").
The Series [199_-_]
Invested Amount ...... [The Series [199_-_] Invested Amount is expected
to be approximately $[ ] on the Series Issuance
Date (based on information as of the Series
Cut-Off Date) and represents the principal
amount of the Series [199_-_] Certificates
invested in Receivables as of the Series
Issuance Date.] [The Invested Amount is subject
to increase to the extent amounts are withdrawn
from the Excess Funding Account and paid to the
Seller. The Seller expects, although there can
be no assurance, that the Invested Amount of the
Series [199_-_] Certificates will equal the
outstanding principal balance of the Series
[199_-_] Certificates within [ ] months of the
Series Issuance Date.] [The Series [199_-_]
Invested Amount will be zero on the Series
Issuance Date and is expected to remain at zero
until [ ], the Expected Payment
Date for the [Floating Rate] [ %] Auto Loan
Asset Backed Certificates, Series [ ] (the
"Paired Series"), at which time the Series
[199_-_] Invested Amount is expected to equal
the initial principal amount of the Series
[199_-_] Certificates (the period from the
Series Issuance Date to the payment in full of
the Paired Series is referred to herein as the
"Prefunded Period").] [The Invested Amount is
subject to decrease to the extent funds are
deposited in the Excess Funding Account and,
subsequently, to increase to the extent amounts
are withdrawn from the Excess Funding Account
and paid to the Seller. The Invested Amount is
also subject to reduction during the
[Accumulation Period] [Controlled Amortization
Period], any Early Amortization Period [and any
Reinvestment Period] and at such other times as
deposits are made to the Excess Funding Account
in connection with the payment of Receivables.]
Interest ............... Interest on the principal balance of the Series
[199_-_] Certificates will accrue at the
Certificate Rate and will be payable to Series
[199_-_] Certificateholders on the day of
each [month] [quarter] [other] (or, if such day
is not a business day, on the next succeeding
business day) (each, a ["Distribution Date"]
["Interest Payment Date"]), commencing
[ ], 19[ ] [, provided that,
during any Early Amortization Period, interest
will be distributed to Series [19_-_]
Certificateholders on each Distribution Date,
commencing on the first Distribution Date
following the occurrence of an Early
Amortization Event. "Distribution Date" shall
mean the fifteenth day of each month (or, if
such date is not a business day, the next
succeeding business day). A portion of
Certificateholder Interest Collections and
certain other amounts will be deposited each
month into a trust account (the "Interest
Funding Account") and used to make interest
payments to the Series [199_-_]
Certificateholders on each Interest Payment Date
or, during an Early Amortization Period, each
Distribution Date.] Interest will accrue for the
period beginning on and including the most
recent [Distribution Date] [Interest Payment
Date] and ending on and including the day
preceding the next succeeding [Distribution
Date] [Interest Payment Date] (each an "Interest
Period"), except that the first Interest Period
will begin on and include the Series Issuance
Date. Interest for any [Interest Payment Date
or] Distribution Date due but not paid on such
[Interest Payment Date or] Distribution Date
will be due on the next [Interest Payment Date
or] Distribution Date, [as applicable,] together
with, to the extent permitted by applicable law,
interest on such amount at the Certificate Rate
plus [ ]%. [The Certificate Rate for each
[Interest Period] [other] will be determined on
the [ ] day preceding the first day of such
[Interest Period] [other] (each an "Adjustment
Date").] [The Certificate Rate will equal [ ]%
per annum and will be calculated on the basis of
a 360-day year of twelve 30-day months.] [The
Certificate Rate will equal [ ] (the
"Index") for the applicable Adjustment Date,
determined as provided herein, [plus] [minus]
[times] [ %][; provided that, if the
Certificate Rate for any Distribution Date
[other than a Distribution Date [with respect to
the Prefunded Period] [other]] calculated on the
basis of the Index is greater than the Assets
Receivables Rate, then the Certificate Rate for
such Distribution Date will be the Assets
Receivables Rate].] [Interest will be calculated
on the basis of the actual number of days in
each Interest Period divided by [360][other].]
[Yield Supplement
Account .............. On the Series Issuance Date, the Seller will
deposit $[ ] in a trust account which will
be established by the Seller with the Trustee
(the "Yield Supplement Account"). The Yield
Supplement Account will be funded, from time to
time as described herein, by the deposit thereto
of certain amounts otherwise distributable to
the Seller. See "Series Provisions --
Distributions from the Collection Account;
[Reserve Fund;] Yield Supplement Account --
Yield Supplement Account".]
[Expected Payment Date . [ ], [ ].]
[Excess Funding
Account .............. Except during any Early Amortization Period [or
Reinvestment Period] or the [Accumulation
Period] [Controlled Amortization Period], the
Excess Funded Amount will be maintained in the
Excess Funding Account.
Upon the earlier of (a) the commencement of any
Early Amortization Period [or Reinvestment
Period] and (b) [ ] [the [ ] Distribution
Date] [the Accumulation Period Commencement
Date], funds on deposit in the Excess Funding
Account will be distributed to the Series
[199_-_] Certificateholders as described herein
or deposited in the Principal Funding Account as
described herein.]
[Excluded Series;
Prefunded Period ..... During the Prefunded Period, Series [199_-_]
will be an Excluded Series and an amount equal
to the initial principal amount of the Series
[199_-_] Certificates will be maintained in a
trust account which will be established by the
Seller with the Trustee (the "Prefunding
Account"). As funds are accumulated in the
Principal Funding Account for the Paired Series
or distributed to holders of Certificates of
such Series, an equal amount of funds on deposit
in the Prefunding Account will be released
(which funds will be distributed to the Seller).
Until payment in full of the Paired Series, no
Interest Collections, Principal Collections,
Defaulted Amounts or Miscellaneous Payments will
be allocated to Series [199_-_]. During the
Prefunded Period interest on the Series [199_-_]
Certificates will be paid from (i) investment
earnings on amounts on deposit in the Prefunding
Account and (ii) amounts on deposit in the Yield
Supplement Account [other]. However, no
principal payments will be made with respect to
the Series [199_-_] Certificates until the
invested amount of the Paired Series has been
paid in full.]
[Accumulation Period]
[Controlled
Amortization
Period] .............. [Unless an Early Amortization Event [or
Reinvestment Event] that is not cured as
described herein shall have occurred, the Series
[199_-_] Certificates will have an Accumulation
Period of one, two, three, four or five month(s)
long as described in the following paragraph.
On the [ ] Distribution Date, the Servicer
shall determine the Accumulation Period Length.
The "Accumulation Period Length" will be one,
two, three, four or five month(s) and will be
calculated as the product, rounded upwards to
the nearest integer, of (a) [five] [one divided
by the lowest monthly payment rate on the
Receivables during the last [ ] months] and
(b) a fraction, the numerator of which is the
sum of (i) the Invested Amount as of the
[ ] Distribution Date (after
giving effect to all changes therein on such
date) and (ii) the invested amounts of all other
Series [(excluding certain Series)] currently in
their accumulation periods or expected to be in
their accumulation periods on the [ ]
Distribution Date and the denominator of which
is the sum of such Invested Amount and invested
amounts and the invested amounts as of the
[ ] Distribution Date (after
giving effect to all changes therein on such
date) of all other outstanding Series
[(excluding certain Series)] whose respective
revolving periods are not scheduled to end
before the last day of the [ , ]
Collection Period. The Servicer shall
recalculate the Accumulation Period Length on
each Distribution Date that occurs prior to the
Accumulation Period Commencement Date, which
will occur when the number of months in the
Accumulation Period is equal to the Accumulation
Period Length. If the Accumulation Period Length
is one month, two months, three months, four
months or five months, the "Accumulation Period
Commencement Date" shall be the first day of the
[ ] Collection Period, the
[ ] Collection Period, the
[ ] Collection Period, the
[ ] Collection Period or the
[ ] Collection Period,
respectively. Notwithstanding the foregoing, the
Accumulation Period Commencement Date shall be
[ ], if, prior to such date, any
other outstanding Series [(excluding certain
Series)] shall have entered into a reinvestment
period or an early amortization period. In
addition, if the Accumulation Period Length
shall have been determined to be less than five
months and, thereafter, any outstanding Series
[(excluding certain Series)] shall enter into a
reinvestment period or an early amortization
period, the Accumulation Period Commencement
Date shall be the earlier of (i) the date that
such outstanding Series shall have entered into
its reinvestment period or early amortization
period and (ii) the Accumulation Period
Commencement Date as previously determined. See
"Annex I -- Outstanding Series of Investor
Certificates".
The effect of the calculation described above is
to permit the reduction of the length of the
Accumulation Period based on the Invested
Amounts of certain other Series which are
scheduled to be in their revolving periods
during the Accumulation Period and on increases
in the principal payment rate, which, if
continued, would result in a shorter
Accumulation Period.]
[Unless an Early Amortization Event [or
Reinvestment Event] that is not cured as
described herein shall have occurred, the
Controlled Amortization Period will commence on
[ ].]
[Reinvestment Period ... The Series [199_-_] Certificates will have a
Reinvestment Period if a Reinvestment Event
occurs. [A Reinvestment Period will commence if
the Seller delivers a notice to the Trustee
stating that the Seller will no longer sell
Receivables to the Trust commencing on [ ]
or any yearly anniversary thereof and certain
other conditions are satisfied.] See "Series
Provisions -- Reinvestment Events" for a
description of the [other] events that might
result in the commencement of a Reinvestment
Period. See also "Series Provisions --
Distributions from the Collection Account
[;Reserve Fund] [;Yield Supplement Account] --
Principal Collections".]
[The Seller is required to add Receivables to
the Trust under certain circumstances described
under "Description of the Certificates --
Addition of Accounts" in the Prospectus. The
failure of the Seller to add Receivables when
required will result in the occurrence of a
Reinvestment Event. However, if no other
Reinvestment Event has occurred, the
Reinvestment Period resulting from such failure
will terminate and the Revolving Period will
recommence on the earlier of (i) when the Seller
would no longer be required to add Receivables
to the Trust or (ii) the conveyance of
Receivables to the Trust following written
confirmation from each Rating Agency that such
conveyance will not result in the withdrawal or
lowering of such Rating Agency's rating of the
Series [199_-_] Certificates, so long as neither
the scheduled termination date of the Revolving
Period nor an Early Amortization Event that is
not cured as described herein has occurred.]
[Notwithstanding the foregoing, in the event of
the occurrence of any Reinvestment Event,
provided that neither the scheduled termination
date of the Revolving Period nor an Early
Amortization Event that is not cured as
described herein has occurred, the Revolving
Period may recommence following written
confirmation from each Rating Agency that such
Rating Agency's rating of the Series [199_-_]
Certificates will not be withdrawn or lowered as
a result of such recommencement.] [Describe
other cures of Reinvestment Events and partial
Reinvestment Periods, if applicable.]]
Early Amortization
Period ............... The Series [199_-_] Certificates will have an
Early Amortization Period if an Early
Amortization Event occurs. See "Description of
the Certificates -- Reinvestment Events and
Early Amortization Events" in the Prospectus and
"Series Provisions -- Early Amortization Events"
herein for a description of the events that
might result in the commencement of an Early
Amortization Period. See also "Series Provisions
-- Distributions from the Collection Account [;
Reserve Fund] [; Yield Supplement Account] --
Principal Collections".
[The Seller is required to add Receivables to
the Trust under certain circumstances described
under "Description of the Certificates --
Addition of Accounts" in the Prospectus. The
failure of the Seller to add Receivables when
required will result in the occurrence of an
Early Amortization Event. However, if no other
Early Amortization Event has occurred, the Early
Amortization Period resulting from such failure
will terminate and the Revolving Period will
recommence on the earlier of (i) when the Seller
would no longer be required to add Receivables
to the Trust or (ii) the conveyance of
Receivables to the Trust following written
confirmation from each Rating Agency that such
conveyance will not result in the withdrawal or
lowering of such Rating Agency's rating of the
Series [199_-_] Certificates, so long as
[neither] the scheduled termination date of the
Revolving Period [nor a Reinvestment Event that
is not cured as described herein] has [not]
occurred.]
[Notwithstanding the foregoing, in the event of
the occurrence of any Early Amortization Event,
provided that [neither] the scheduled
termination date of the Revolving Period [nor a
Reinvestment Event that is not cured as
described herein] has [not] occurred, the
Revolving Period may recommence following
written confirmation from each Rating Agency
that such Rating Agency's rating of the Series
[199_-_] Certificates will not be withdrawn or
lowered as a result of such recommencement.]
[Describe other cures of Early Amortization
Events, if applicable.]
Subordination of the
Seller's Interest .... If [on or prior to the Fully Reinvested Date [or
thereafter if the Revolving Period has
recommenced] the Interest Collections,
Investment Proceeds[, certain amounts in the
Reserve Fund][, certain amounts in the Yield
Supplement Account] and certain other amounts
allocable to the Series [199_-_]
Certificateholders for any Collection Period are
not sufficient to cover the interest payable
with respect to the Series [199_-_] Certificates
on the next Distribution Date (plus any overdue
interest and interest thereon), the Monthly
Servicing Fee for such Distribution Date, any
Investor Default Amount for such Distribution
Date and certain other amounts, the Available
Subordinated Amount will be applied to make up
such deficiency. The Available Subordinated
Amount for a Determination Date is equal to (a)
the lesser of (i) the Available Subordinated
Amount for the preceding Determination Date,
minus, with certain limitations, the Draw Amount
for such preceding Determination Date, [minus
funds from the Reserve Fund applied to cover any
portion of the Investor Default Amount,] plus
the excess, if any, of the Required Subordinated
Amount for such Determination Date over the
Required Subordinated Amount for the immediately
preceding Determination Date, plus the amount of
Excess Servicing available to be paid to the
Seller as described under "Series Provisions --
Distributions from the Collection Account [;
Reserve Fund Account] [; Yield Supplement
Account] -- Excess Servicing", and (ii) the
product of the fractional equivalent of the
Subordinated Percentage and the Invested Amount
[minus (b) in the case of clause (a)(i), the
Incremental Subordinated Amount for such
preceding Determination Date, plus (c) the
Incremental Subordinated Amount for the current
Determination Date,] [plus (d) the Subordinated
Percentage of funds to be withdrawn from the
Excess Funding Account on the succeeding
Distribution Date and paid to the Seller or
allocated to one or more Series]; provided,
however, that, from and after the commencement
of [the [Accumulation Period] [Controlled
Amortization Period] or] any Early Amortization
Period [that is not cured as described herein]
until the payment in full of the Series
[199_-_], Certificates, the Available
Subordinated Amount shall be calculated based on
the Invested Amount as of the close of business
on the day preceding such [[Accumulation Period]
[Controlled Amortization Period] or] Early
Amortization Period [; and provided further that
from and after the commencement of any
Reinvestment Period [that is not cured as
described herein] until the earliest of the
commencement of any Early Amortization Period
[that is not cured as described herein], the
payment in full of the Series [19_-_]
Certificates and the Fully Reinvested Date, the
Available Subordinated Amount shall be
calculated based on the Invested Amount as of
the close of business on the day preceding such
Reinvestment Period [less [describe permitted
reductions, e.g., based on payment rates]]. The
Available Subordinated Amount for the first
Determination Date is equal to the Required
Subordinated Amount. The "Required Subordinated
Amount" shall mean, as of any date of
determination [, the sum of (a)] the product of
the initial Subordinated Percentage [as adjusted
from time to time as described herein other than
as a result of an increase therein at the option
of the Seller,] and the Invested Amount [and (b)
the Incremental Subordinated Amount].(1)<F1>
[The "Incremental Subordinated Amount" on any
Determination Date will equal the result obtained
by multiplying (a) a fraction, the numerator of
which is the sum of the Invested Amount on the
last day of the immediately preceding Collection
Period and the Available Subordinated Amount for
such Determination Date (calculated without
adding the Incremental Subordinated Amount for
such Determination Date as described in clause
(c) above), and the denominator of which is the
Pool Balance on such last day by (b) the excess,
if any, of (x) the sum of the Overconcentration
Amount, the Installment Balance Amount and the
aggregate amount of Ineligible Receivables on
such Determination Date over (y) the aggregate
amount of Ineligible Receivables, Receivables in
Accounts containing Dealer Overconcentrations and
Receivables in Installment Balances, in each case
that became Defaulted Receivables during the
preceding Collection Period and are not subject
to reassignment from the Trust, unless certain
insolvency events relating to the Seller or CCC
have occurred, as further described in the
Pooling and Servicing Agreement.]
The "Subordinated Percentage" will initially
equal the percentage equivalent of a fraction,
the numerator of which is the Subordination
Factor and the denominator of which will be the
excess of 100% over the Subordination Factor. The
Subordination Factor will [initially] be [ ]% [,
but will be subject to increase [by [ ]% when
the [Floating Rate] [ %] Auto Loan Asset Backed
Certificates, Series [ ] have been paid in full]
[by [ ]% in the event that the rating of CFC's
long-term unsecured debt is lowered below BBB- by
Standard & Poor's or withdrawn by Standard &
Poor's] [or if [describe other events that will
require an increase in the Subordination Factor]]
[; provided, however, that in no event will the
Subordination Factor be greater than [ ]%]. The
Seller may, in its sole discretion, increase at
any time the Available Subordinated Amount for so
long as the cumulative amount of such increases
does not exceed the lesser of (i) $[ ] or
(ii) [ ]% of the Invested Amount on such date.
The Seller is not under any obligation to
increase the Available Subordinated Amount at any
time[, except as described herein]. If [the sum
of] the Available Subordinated Amount [and the
Incremental Subordinated Amount] were reduced to
less than [the sum of] the Required Subordinated
Amount [and the Incremental Subordinated Amount],
a [Reinvestment Event] [Early Amortization Event]
would occur. The Seller could elect to increase
the Available Subordinated Amount at the time
such a [Reinvestment Event] [Early Amortization
Event] would otherwise occur, thus preventing or
delaying the occurrence of the [Reinvestment
Event] [Early Amortization Event]. [Describe
partial Reinvestment Periods resulting from a
failure to meet the test described above, if
applicable.]
[The Seller's Interest will be further
subordinated to the extent of the Available
Negative Carry Subordinated Amount. In the event
of the occurrence of [a Reinvestment Event,][an
Early Amortization Period][or the Accumulation
Period Commencement Date][the commencement of the
Controlled Amortization Period], certain Interest
Collections and Principal Collections allocated
to the Seller, not to exceed the Available
Negative Carry Subordinated Amount, will be
deposited to the Reserve Fund [and other] until
the amounts on deposit therein equal the Negative
Carry Required Amount [and other]. See "Series
Provisions -- Allocation of Collections; Limited
Subordination of Seller's Interest".] [Describe
any other subordination of the Seller's Interest,
if applicable.]
Required Participation
Percentage ........... "Required Participation Percentage" shall mean,
with respect to Series [199_-_], [ ]%;
provided, however, [that if the aggregate amount
of Principal Receivables due from any Dealer or
group of affiliated Dealers at the close of
business on the last day of any Collection
Period with respect to which such determination
is being made is greater than [ ]% of the Pool
Balance on such last day, the Required
Participation Percentage shall mean, as of such
last day and with respect to such Collection
Period and the immediately following Collection
Period only, [ ]%; provided, further,] that the
Seller may, upon ten days' prior notice to the
Trustee, the Rating Agencies and any Enhancement
Provider reduce the Required Participation
Percentage to not less than 100%, so long as the
Rating Agencies shall not have notified the
Seller or the Servicer that any such reduction
will result in a reduction or withdrawal of the
rating of the Series [199_-_] Certificates or
any other outstanding Series or Class of
Certificates.
Other Series
Issuances ............ As of the date hereof, [ ] other Series issued
by the Trust are outstanding. See "Annex I --
Outstanding Series of Investor Certificates" for
a summary of the terms of the outstanding
Series.
Allocations ............ Interest Collections, Principal Collections and
Defaulted Receivables allocated to Series
199[_-_] as described under "Description of the
Certificates -- Allocation Percentages --
Allocation among Series" in the Prospectus will
be further allocated between the Series [199_-_]
Certificateholders' Interest and the Seller's
Interest as described below.
Interest Collections and Defaulted Receivables
allocated to Series [199_-_] will be allocated
at all times to the Series [199_-_]
Certificateholders' Interest based on the
Floating Allocation Percentage applicable during
the related Collection Period [, provided that
during any Early Amortization Period, Interest
Collections will be allocated to the Series
[199_-_] Certificateholders' Interest based on
the Fixed Allocation Percentage as described
below]. The Floating Allocation Percentage for
any Collection Period is [the percentage
obtained by dividing the Invested Amount on the
last day of the immediately preceding Collection
Period by the product of (x) the Pool Balance on
the last day of the immediately preceding
Collection Period and (y) the Series Allocation
Percentage for the Collection Period in respect
of which the Floating Allocation Percentage is
being calculated] [other]. During the
[Accumulation Period] [Controlled Amortization
Period], any Early Amortization Period [and any
Reinvestment Period], Principal Collections
[and, in the case of any Early Amortization
Period, Interest Collections] allocated to
Series 199[_-_] will be allocated to the Series
[199_-_] Certificateholders' Interest based on
the Fixed Allocation Percentage. The Fixed
Allocation Percentage for a Collection Period
during [the Accumulation Period] [the Controlled
Amortization Period], any Early Amortization
Period [and any Reinvestment Period] is [the
percentage equivalent of a fraction, the
numerator of which is the Invested Amount on the
last day of the Revolving Period and the
denominator of which is the product of (x) the
Pool Balance on the last day of the immediately
preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period
in respect of which the Fixed Allocation
Percentage is being calculated] [other].
Excess Principal
Collections .......... [Describe Excess Principal Collection
allocations applicable to Series [199_-_].] See
"Series Provisions -- Allocation Percentages --
Principal Collections for all Series".
[Enhancement ........... The Trust will have the benefit of a [letter of
credit] [interest rate swap] [cash collateral
account] [guaranty] [surety bond] [insurance
policy] [spread account] [other enhancement]
[issued by [ ]] for the benefit of the
Series [199_-_] Certificateholders as described
herein. [Describe subordination of another
Series, if applicable.] See "Series Provisions
-- Enhancements" herein.]
Registration of
Series [199_-_]
Certificates ......... [The Series [199_-_] Certificates will initially
be represented by one or more Certificates
registered in the name of Cede, as the nominee
of DTC. No person acquiring an interest in the
Series [199_-_] Certificates will be entitled to
receive a definitive certificate representing
such person's interest except under certain
limited circumstances. Series [199_-_]
Certificateholders may elect to hold their
Series [199_-_] Certificates through DTC (in the
United States) [or CEDEL or Euroclear (in
Europe)]. See "Description of the Certificates
-- Definitive Certificates" in the Prospectus.]
Servicing Fee Rate ..... [ ]% or, if the Monthly Servicing Fee has been
waived as discussed under "Description of the
Certificates -- Servicing Compensation and
Payment of Expenses" in the Prospectus, 0% for
the Distribution Date in respect of which the
Monthly Servicing Fee has been waived.
[Optional Repurchase ... The Series [199_-_] Certificateholders' Interest
will be subject to optional repurchase by the
Seller on any Distribution Date after the
Invested Amount is reduced to an amount less
than or equal to $[ ] ([ ]% of the initial
outstanding principal amount of the Series
[199_-_] Certificates). The purchase price will
equal the sum of (i) the Invested Amount on the
Determination Date preceding the Distribution
Date on which the purchase is scheduled to be
made, (ii) accrued and unpaid interest on the
Series [199_-_] Certificates at the Certificate
Rate (together with interest on overdue
interest) [and (iii) any outstanding Carry-over
Amount (together with interest thereon].]
Series [199_-_]
Termination Date ..... [ , 199 ]. See "Series Provisions --
Series Termination".
ERISA Considerations ... [Series [199_-_] Certificates may be eligible
for purchase by employee benefit plans. See
"ERISA Considerations" in the Prospectus.]
[Other.]
Certificate Ratings .... It is a condition to the issuance of the Series
[199_-_] Certificates that they be rated in the
highest long-term rating category by at least
one nationally recognized rating agency. A
security rating is not a recommendation to buy,
sell or hold securities and is subject to
revision or withdrawal in the future by the
assigning rating agency. See "Special
Considerations -- Ratings of the Certificates"
in the Prospectus.
Series Issuance Date ... [ , 199 ].
Series Cut-Off Date .... [ , 199 ].
<F1>
- ---------------
(1) Modify, as appropriate, if Interest Collections, Investment Proceeds
and Available Sellers' Collections from one Series will be available
to cover interest or other shortfalls for related Series.
<PAGE>
SPECIAL CONSIDERATIONS
Payments. [The shorter the Accumulation Period Length the greater
the likelihood that payment of the Series [199_-_] Certificates in full by
the Expected Payment Date will be dependent on the reallocation of
Principal Collections which are initially allocated to other Series.] If
one or more other Series from which Principal Collections are expected to
be available to be reallocated to the payment of the Series [199_-_]
Certificates enters into an early amortization period or reinvestment
period after [ ] [the [ ] Distribution Date][the Accumulation
Period Commencement Date], Principal Collections allocated to such Series
generally will not be available to be reallocated to make payments of
principal of the Series [199_-_] Certificates and [the final payment of
principal of the Series [199_-_] Certificates may be later than the
Expected Payment Date] [the amount distributed in respect of principal of
the Series [199_-_] Certificates on any Distribution Date during the
Controlled Amortization Period may be less than the Controlled
Amortization Amount]. [In addition, no amounts will be paid in respect of
principal of the Series [199_-_] Certificates until the invested amount of
the Paired Series has been paid in full.] Upon written request, the Seller
will make available to Series [199_-_] Certificateholders Disclosure
Documents relating to the other outstanding Series which describe the
events which could result in the commencement of an early amortization
period or reinvestment period with respect to such outstanding Series. See
"Maturity and Principal Payment Considerations".
[In addition, a significant decline in the amount of Receivables
generated could cause an Early Amortization Event. However, such a decline
in the amount of Receivables generated would initially be absorbed by an
increase in the Excess Funded Amount. The Receivables Purchase Agreement
will provide that CCC will be required to designate additional Accounts,
the Receivables of which will be sold to the Seller, and the Pooling and
Servicing Agreement will provide that the Seller will be required to
transfer such Receivables to the Trust in the event that the amount of the
Pool Balance is not maintained at a certain minimum level. If additional
Accounts are not designated by CCC when required, an Early Amortization
Event will occur and result in the commencement of an Early Amortization
Period, although in certain circumstances the resulting Early Amortization
Period may terminate and the Revolving Period recommence. If an insolvency
event relating to CCC, CFC, the Seller or Chrysler were to occur, then an
Early Amortization Event would occur, additional Receivables would not be
transferred to the Trust and distributions of principal in respect of the
Series [199_-_] Certificates would not be subject to the [Controlled
Deposit Amount][Controlled Amortization Amount]. See "The Dealer Floorplan
Financing Business" in the Prospectus and "Maturity and Principal Payment
Considerations" herein and see also "Series Provisions -- Early
Amortization Events" for a discussion of other events which might lead to
the occurrence of an Early Amortization Period.]
Trust's Relationship to Chrysler and CCC; Financial Condition of
Chrysler. Certain aspects of the Trust's relationship to Chrysler
Corporation and CCC are described in the Prospectus under "Special
Considerations -- Trust's Relationship to Chrysler and CCC". Set forth
below is certain financial information with respect to Chrysler and CFC.
Chrysler reported earnings before income taxes of $1.6 billion for
the second quarter of 1994, compared with $1.1 billion for the second
quarter of 1993. For the first six months of 1994, Chrysler reported
earnings before income taxes and the cumulative effect of changes in
accounting principles of $3.1 billion, compared with $2.0 billion for the
comparable period of 1993. Pretax earnings for the second quarter and
first six months of 1993 included gains on sales of automotive assets and
investments of $171 million.
The improvement in operating results in the second quarter and first
six months of 1994 over the corresponding periods of 1993 resulted from an
increase in sales volume and pricing actions, including lower per unit
sales incentives, partially offset by increased employee costs. Chrysler's
worldwide factory car and truck sales for the three and six months ended
June 30, 1994 were 702,802 units, a 7 percent increase from the second
quarter of 1993, and 1,443,400 units, an 11 percent increase over the
first six months of 1993. Combined U.S. and Canadian dealers' days supply
of vehicle inventory decreased to 45 days at June 30, 1994 from 63 days at
December 31, 1993 and 50 days at June 30, 1993.
Net earnings for the second quarter of 1994 were $956 million, or
$2.61 per common share, compared with $685 million, or $1.86 per common
share, in the second quarter of 1993. Net earnings for the six months
ended June 30, 1994 were $1.9 billion, compared to a net loss of $3.8
billion for the comparable period of 1993. The net loss for the first six
months of 1993 resulted from a charge of $4.7 billion, or $13.86 per
common share, for the cumulative effect of a change in accounting
principle related to the adoption of Statement of Financial Accounting
Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions". Results for the first six months of 1993
also included a charge of $283 million, or $0.84 per common share, for the
cumulative effect of a change in accounting principle relating to the
adoption of SFAS No. 112, "Employers' Accounting for Postemployment
Benefits".
Chrysler reported earnings before income taxes and the cumulative
effect of changes in accounting principles of $3.8 billion in 1993,
compared with $934 million in 1992. The earnings in 1993 included a gain
on sales of automotive assets and investments of $265 million. Earnings in
1992 included a gain on the sale of an automotive investment of $142
million, a $110 million charge for reducing investments of Chrysler Canada
Ltd. and certain of its employee benefit plans in a real estate investment
concern to their estimated net realizable value, and a $101 million
restructuring charge related to the realignment of Chrysler's short-term
vehicle rental subsidiaries. Excluding the effect of these items,
Chrysler's pretax earnings for 1993 and 1992 were $3.6 billion and $1.0
billion, respectively.
The improvement in 1993 over 1992 was primarily the result of a
substantial increase in unit sales volume, pricing actions, including
significantly lower per unit sales incentives, and an improved mix of
higher-margin products, partially offset by increased labor and benefit
costs. Chrysler's worldwide factory car and truck sales during 1993
increased 14 percent to 2,475,738 units. U.S. and Canadian dealers' days
supply of vehicle inventory decreased to 63 days at December 31, 1993 from
72 days at December 31, 1992.
Including the provision for income taxes and the cumulative effect
of changes in accounting principles, Chrysler reported a net loss for 1993
of $2.6 billion, or $7.62 per common share, compared with net earnings of
$723 million, or $2.21 per common share for 1992. The net loss for 1993
resulted from a charge of $4.7 billion, or $13.57 per common share, for
the cumulative effect of a change in accounting principle related to the
adoption of SFAS No. 106. Also included in the 1993 results was a charge
of $283 million, or $0.82 per common share, for the cumulative effect of a
change in accounting principle relating to the adoption of SFAS No. 112.
Net earnings for 1992 included a $218 million, or $0.74 per common share,
favorable cumulative effect of a change in accounting principle relating
to the adoption of SFAS No. 109, "Accounting for Income Taxes".
During 1992 and 1993, Chrysler took various actions to strengthen
its financial condition, improve liquidity and add to its equity base in
order to ensure its ability to carry out its new product development and
facility modernization programs without significant interruption. In the
second and third quarters of 1993, Chrysler sold its remaining 50.3
million shares of Mitsubishi Motors Corporation ("MMC") stock for net
proceeds of $329 million and sold the plastics operations of its Acustar
division for net proceeds of $132 million. In February 1993, Chrysler
issued 52 million shares of common stock for net proceeds of $1.95
billion. In 1992, Chrysler sold 43.6 million shares of MMC stock for net
proceeds of $215 million and issued 1.7 million shares of convertible
preferred stock for net proceeds of $836 million.
CFC's earnings before taxes were $69 million and $144 million for
the three and six months ended June 30, 1994, which compares to $62
million and $112 million for the comparable periods of 1993, before the
cumulative effect of changes in accounting principles. The increase in
1994 earnings before taxes and accounting changes resulted from higher
levels of automotive financing and lower provisions for credit losses,
partially offset by reduced retail automotive margins.
CFC's net earnings were $44 million and $91 million for the three
and six months ended June 30, 1994, compared to $44 million and $51
million in the comparable periods of 1993. Net earnings for the six months
ended June 30, 1993 included charges totaling $30 million from the
adoption of SFAS No. 106 and SFAS No. 112.
CFC reported net earnings of $129 million for 1993, compared to $231
million for 1992. Accounting changes in 1993 and 1992 negatively impact
net earnings comparisons by $81 million. Net earnings for 1993 included a
$30 million after-tax charge from the adoption of SFAS No. 106 and SFAS
No. 112, while 1992 net earnings included a $51 million favorable
after-tax adjustment from the adoption of SFAS No. 109.
CFC's earnings before the cumulative effect of changes in accounting
principles were $159 million for 1993 and $180 million for 1992. The
decline in earnings before accounting changes resulted largely from higher
borrowing costs incurred under CFC's revolving credit agreements.
Both Chrysler and CFC regained investment grade credit ratings in
1993. The improved credit ratings reflect Chrysler's improved operating
results, the significant improvements in Chrysler's balance sheet
(including reductions in its outstanding debt and unfunded pension
obligation), and CFC's improved liquidity.
Chrysler and CFC are subject to the informational requirements of
the Exchange Act and in accordance therewith file reports and other
information with the Commission. For further information regarding
Chrysler and CFC reference is made to such reports and other information
which are available as described under "Available Information" in the
Prospectus.
Credit Enhancement. Credit enhancement of the Series [199_-_]
Certificates will be provided by the subordination of the Seller's
Interest to the extent of the Available Subordinated Amount as described
herein [and amounts in the Reserve Fund]. [Describe other subordination of
the Seller's Interest, if applicable.] [Describe any applicable
Enhancements.] The amount of such credit enhancement is limited and will
be reduced from time to time as described herein. See "Series Provisions
- -- Allocation of Collections; Limited Subordination of Seller's Interest"
[and " -- Enhancements"].
[Basis Risk. The Receivables bear interest at prime rates announced
by certain banks plus a margin currently ranging from [ ]% to [ ]%.
The Certificate Rate is based on the Index. If, in respect of any
Distribution Date [other than a Distribution Date [with respect to the
Prefunded Period] [other]], there does not exist a positive spread between
(a) the Assets Receivables Rate and (b) the Certificate Rate based on the
Index, the Certificate Rate for such Distribution Date will be the Assets
Receivables Rate. The Certificate Rate based on the Index may exceed the
Assets Receivables Rate as a result of (i) the Index exceeding the
applicable prime rate and (ii) if amounts are deposited in the Excess
Funding Account or the Principal Funding Account, the Index exceeding the
investment earnings on amounts on deposit therein. Any Carry-over Amount
will be reduced by the amounts, if any, on deposit in the Yield Supplement
Account. However, there can be no assurance that sufficient amounts, if
any, will be available in the Yield Supplement Account. In addition, the
amount required to be deposited in the Yield Supplement Account is not
designed to include amounts which would be required to pay any Carry-over
Amount resulting from the Index exceeding the applicable prime rate. See
"Series Provisions -- Interest" and " -- Distributions from the Collection
Account[; Reserve Fund]; Yield Supplement Account -- Yield Supplement
Account".
In addition, CCC may reduce the rates applicable to any of the
Receivables, so long as CCC does not reasonably expect any such reduction
to result in the creation of a Carry-over Amount. In any event, such a
reduction would have the effect of reducing or possibly eliminating the
positive spread, if any, between the Assets Receivables Rate and the
Certificate Rate.
Once amounts deposited from time to time in the Yield Supplement
Account are exhausted, any Carry-over Amount arising as a result of the
Certificate Rate being determined on the basis of the Assets Receivables
Rate will be paid to the extent funds are allocated and available therefor
after making all required distributions and deposits with respect to the
Series [199_-_] Certificates, including payments with respect to principal
[(including payments to the Excess Funding Account)], Monthly Interest,
the Monthly Servicing Fee, [the Reserve Fund Deposit Amount] and the
Investor Default Amount as described under "Series Provisions --
Distributions from the Collection Account; [Reserve Fund;] Yield
Supplement Account". However, if any Carry-over Amount is outstanding for
six consecutive Distribution Dates, an [Early Amortization Event]
[Reinvestment Event] will occur. See "Series Provisions -- [Early
Amortization Events"] [" -- Reinvestment Event"]. The rating of the Series
[199_-_] Certificates does not address the likelihood of payment of any
Carry-over Amount.]
<PAGE>
USE OF PROCEEDS
[After making the deposit of the Excess Funded Amount to the Excess
Funding Account, the balance of the] [The] net proceeds from the sale of
the Series [199_-_] Certificates will be [paid to USA] [deposited in the
Prefunding Account and released to USA from time to time as described
herein]. USA will use such proceeds (together with the subordinated loan
from CFC described under "U.S. Auto Receivables Company and the Trust --
U.S. Auto Receivables Company" in the Prospectus) to purchase Receivables
from CCC or to repay certain amounts previously borrowed to purchase
Receivables. CCC will use the portion of the proceeds paid to it for
[general corporate purposes] [other].
THE DEALER FLOORPLAN FINANCING BUSINESS
Information regarding the dealer floorplan financing business is set
forth under "The Dealer Floorplan Financing Business" in the Prospectus.
In addition, the Receivables sold to the Trust by the Seller pursuant to
the Pooling and Servicing Agreement were or will be selected from
extensions of credit and advances made by Chrysler and CCC to
approximately [ ] domestic motor "vehicle dealers". CCC financed [ ]%
of the total number of all Chrysler franchised dealers as of
[ ], 199[ ]. Furthermore, CCC has extended credit lines to
[ ] Chrysler-franchised dealers that also operate non-Chrysler
franchises (representing approximately [ ]% of the aggregate credit lines
of dealers in the U.S. Wholesale Portfolio as of [ ],
199[ ]) and [ ] non-Chrysler dealers (representing approximately [ ]% of
such aggregate credit lines). As of [ ], 199[ ], the balance
of Principal Receivables in the U.S. Wholesale Portfolio was approximately
$[ ] billion. CCC currently services the U.S. Wholesale Portfolio
through its home office and through a network of 86 branch offices located
throughout the United States.
THE ACCOUNTS
As of the Series Cut-Off Date, with respect to the Accounts in the
Trust: (a) there were [ ] Accounts and the Principal Receivables
balance was approximately $[ ] million; (b) the average credit lines per
Dealer for new and used vehicles (which include Auction Vehicles) were
approximately $[ ] million and $[ ] million, respectively, and the
average balance of Principal Receivables per Dealer was approximately
$[ ] million; (c) the aggregate total receivables balance as a
percentage of the aggregate total credit line was approximately [ ]%; (d)
[ ]% of the Receivables were in Accounts which the related credit lines
were initially established in 19[ ], [ ]% in 19[ ], [ ]% in 19[ ],
[ ]% in 19[ ], [ ]% in 19[ ] and [ ]% prior to 19[ ]; and (e) the
weighted average spread over the Prime Rate charged to Dealers was
approximately [ ]%. Unless otherwise indicated, the statistics included
under "The Accounts -- General" and " -- Geographic Distribution" with
respect to the Accounts and the Receivables in the Trust gives effect to
approximately $[ ] million of principal receivables balances with respect
to certain Dealers (the "Excluded Receivables" and the "Excluded Dealers",
respectively) that are in voluntary or involuntary bankruptcy proceedings
or voluntary or involuntary liquidation or that, subject to certain
limitations, are being voluntarily removed by the Seller (or the Servicer
on its behalf) from the Trust. A portion of such principal receivables was
created after such Dealers entered into such status or were designated by
the Seller (or the Servicer on its behalf) for removal from the Trust and,
as a result thereof, are owned by CFC and not the Trust. Principal
receivables balances created prior to such Dealers entering into such
status or being designated for removal from the Trust are included in the
Principal Receivables balance. See "Description of the Certificates --
Removal of Accounts" in the Prospectus for a description of the manner in
which an Account can be removed from the Trust.
LOSS EXPERIENCE
The following tables set forth CCC's average Principal Receivables
balance and loss experience for each of the periods shown on the U.S.
Wholesale Portfolio. Because the Eligible Accounts will be only a portion
of the entire U.S. Wholesale Portfolio, actual loss experience with
respect to the Eligible Accounts may be different. There can be no
assurance that the loss experience for the Receivables in the future will
be similar to the historical experience set forth below with respect to
the U.S. Wholesale Portfolio. In addition, the historical experience set
forth below reflects financial assistance provided by Chrysler to
Chrysler-franchised dealers as described in the Prospectus under "The
Dealer Floorplan Financing Business -- Relationship with Chrysler" in the
Prospectus. If Chrysler is not able to or elects not to provide such
assistance, the loss experience in respect of the U.S. Wholesale Portfolio
may be adversely affected. See "Special Considerations -- Trust's
Relationship to Chrysler and CCC" in the Prospectus and "Special
Considerations -- Trust's Relationship to Chrysler and CCC; Financial
Condition of Chrysler" in this Prospectus Supplement.
<TABLE>
<CAPTION>
LOSS EXPERIENCE FOR THE U.S. WHOLESALE PORTFOLIO
Six Months Ended
June 30, Year Ended December 31,
------------------ --------------------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Average
Principal
Receivables
Balance(1)..... $ 6,930 $6,603 $6,271 $5,344 $4,826 $4,726 $4,933 $4,129 $3,787 $2,991
Net Losses(2)... $ (1) $ 5 $ 12 $ 26 $ 36 $ 23 $ 13 $ 3 $ 2 $ 3
Net Losses/
Liquidations... (0.005)% 0.029% 0.035% 0.098% 0.163% 0.117% 0.060% 0.015% 0.015% 0.023%
Net Losses/
Average
Principal
Receivables
Balance (3).... (0.03)% 0.15% 0.19% 0.49% 0.75% 0.49% 0.26% 0.07% 0.06% 0.10%
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average
Principal
Receivables
Balance(1)..... $2,532 $2,098 $1,461 $1,451 $1,390 $1,622 $1,837
Net Losses(2)... $ 1 $ (2) $ 2 $ 14 $ 12 $ 18 $ 11
Net Losses/
Liquidations... 0.004% (.019)% 0.023% 0.239% 0.225% 0.338% 0.163%
Net Losses/
Average
Principal
Receivables
Balance........ 0.02% (0.09)% 0.12% 0.95% 0.85% 1.12% 0.58%
<FN>
(1) Average Principal Receivables Balance is the average of the month-end
principal balances for the thirteen months ending on the last day of
the period, except for the six months ended June 30, 1994 and June 30,
1993, which are based on a seven-month average.
(2) Net losses in any period are gross losses less recoveries for such
period.
(3) Percentages for the six months ended June 30, 1994 and 1993 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
As of As of
June 30, December 31,
------------ ------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1-120......... 79.0% 77.4% 82.4% 77.2% 75.9% 72.2% 71.3% 78.8% 73.0% 81.5%
121-180....... 9.5 9.8 9.6 13.8 12.9 13.7 14.5 11.0 13.9 9.2
181-270....... 7.4 7.4 4.6 4.8 4.8 7.1 6.4 4.7 6.8 4.4
Over 270...... 4.1 5.4 3.4 4.2 6.4 7.0 7.8 5.5 6.3 4.9
</TABLE>
<PAGE>
GEOGRAPHIC DISTRIBUTION
The following table provides the geographic distribution of the
vehicle inventory for all dealers in the Trust on the basis of receivables
outstanding and the number of dealers generating such portfolio.
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS IN THE TRUST
AS OF [ ], 199[ ]
Percentage
Receivables Percentage of Total of
Outstanding Receivables Number Number of
(thousands of Outstanding of Dealers
dollars)(2) (2)(4) Dealers(3) (3)(4)
<S> <C> <C> <C> <C>
California.......... % %
Texas............... % %
Florida............. % %
New York............ % %
Michigan............ % %
[ ]............. % %
Other(1)............ % %
<FN>
(1) No other state includes more than 5% of the outstanding Receivables.
(2) Includes Excluded Receivables.
(3) Includes Excluded Dealers.
(4) May not add to 100.0% due to rounding.
</TABLE>
CHRYSLER FINANCIAL CORPORATION AND
CHRYSLER CREDIT CORPORATION
Certain information regarding Chrysler Financial Corporation and
Chrysler Credit Corporation is set forth under "Chrysler Financial
Corporation and Chrysler Credit Corporation" in the Prospectus. In
addition, as of June 30, 1994, CFC had nearly 3,100 employees and was
servicing $30.2 billion in finance receivables. During the first six
months of 1994, CFC and CCC financed or leased approximately 429,000
vehicles at retail, including approximately 286,000 new Chrysler passenger
cars and light duty trucks representing 24% of Chrysler's U.S. retail and
fleet deliveries. CFC and CCC also financed at wholesale approximately
844,000 new Chrysler passenger cars and light duty trucks representing 73%
of Chrysler's U.S. factory unit sales for the six months ended June 30,
1994. Wholesale vehicle financing accounted for 74% of the total
automotive financing volume of CFC and CCC in the first six months of 1994
and represented 11% of gross automotive finance receivables outstanding at
June 30, 1994.
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal with respect to the Series [199_-_] Certificates will be
payable if an Early Amortization Event [that is not cured as described
herein] has occurred. Full amortization of the Series [199_-_]
Certificates by the [ ] Distribution Date (the "Expected
Payment Date") depends on, among other things, repayment by Dealers of the
Receivables and may not occur if Dealer payments are insufficient
therefor. Because the Receivables generally are paid upon retail sale of
the underlying Vehicle, the timing of such payments is uncertain. In
addition, there is no assurance that CCC will generate additional
Receivables under the Accounts or that any particular pattern of Dealer
payments will occur. See "Series Provisions -- Interest" and " --
Principal" herein and "The Dealer Floorplan Financing Business" in the
Prospectus and herein. [In addition, the shorter the Accumulation Period
Length the greater the likelihood that payment of the Series [199_-_]
Certificates in full by the Expected Payment Date will be dependent on the
reallocation of Principal Collections which are initially allocated to
other outstanding Series.] If one or more other Series from which
Principal Collections are expected to be available to be reallocated to
the payment of the Series [199_-_] Certificates enters into an early
amortization period or reinvestment period after [ ] [the [ ]
Distribution Date] [the Accumulation Period Commencement Date], Principal
Collections allocated to such Series generally will not be available to be
reallocated to make payments of principal of the Series [199_-_]
Certificates and [the final payment of principal of the Series [199_-_]
Certificates may be later than the Expected Payment Date] [the amount
distributed in respect of principal of the Series [199_-_] Certificates on
any Distribution Date during the Controlled Amortization Period may be
less than the Controlled Amortization Amount]. [In addition, no amounts
will be paid in respect of principal of the Series [199_-_] Certificates
until the invested amount of the Paired Series has been reduced to zero.]
Upon written request, the Seller will make available to Series [199_-_]
Certificateholders Disclosure Documents relating to the other outstanding
Series which describe the events which could result in the commencement of
an early amortization period or reinvestment period with respect to such
outstanding Series.]
Because an Early Amortization Event with respect to the Series
[199_-_] Certificates may occur which would initiate an Early Amortization
Period, the final distribution of principal on the Series [199_-_]
Certificates may be made prior to the scheduled termination of the
Revolving Period or prior to the Expected Payment Date. See "Series
Provisions -- Early Amortization Events".
[Several of the events which constitute Reinvestment Events with
respect to the Series [199_-_] Certificates may constitute early
amortization events with respect to other Series. Should such an event
occur, holders of Certificates of such other Series would receive monthly
distribution of principal, which distributions would not be limited to any
controlled amortization amount, while Certificateholder Principal
Collections would be retained in the Principal Funding Account and would
not be distributed to Series [199_-_] Certificateholders until the
Expected Payment Date or, if earlier, the first Distribution Date
following the occurrence of an Early Amortization Event. See "Series
Provisions -- Principal" and " -- Reinvestment Events".]
The amount of new Receivables generated in any month and monthly
payment rates on the Receivables may vary because of seasonal variations
in Vehicle sales and inventory levels, retail incentive programs provided
by Vehicle manufacturers and various economic factors affecting Vehicle
sales generally. The following table sets forth the highest and lowest
monthly payment rates for the U.S. Wholesale Portfolio during any month in
the periods shown and the average of the monthly payment rates for all
months during the periods shown, in each case calculated as the percentage
equivalent of a fraction, the numerator of which is the aggregate of all
collections of principal during the period and the denominator of which is
the average aggregate principal balance for such period. Monthly payment
rates reflected in the table include principal credit adjustments. The
monthly payment rates presented for 1980 through 1985 are calculated using
quarterly data while monthly payment rates for 1986 through 1994 reflect
actual monthly data. There can be no assurance that the rate of Principal
Collections will be similar to the historical experience set forth below.
Because the Eligible Accounts will be only a portion of the entire U.S.
Wholesale Portfolio, historical actual monthly payment rates with respect
to the Eligible Accounts may be different than those shown below.
<TABLE>
<CAPTION>
MONTHLY PAYMENT RATES FOR THE U.S. WHOLESALE PORTFOLIO
Six Months Ended
June 30, Year Ended December 31,
------------- ------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month......... 59.1% 53.4% 54.7% 50.6% 49.0% 42.1% 41.5% 48.7% 40.3% 56.7%
Lowest Month.......... 34.2 35.9 35.9 34.4 30.2 25.3 29.5 29.5 26.8 27.7
Average of the Months
in the Period........ 49.7 43.3 46.6 41.3 38.4 35.7 35.6 41.2 34.2 37.7
<CAPTION>
Year Ended December 31,
----------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month......... 45.9% 43.7% 45.9% 35.5% 34.3% 28.9% 36.5%
Lowest Month.......... 35.8 35.7 37.7 29.0 27.4 26.7 26.0
Average of the Months
in the Period........ 40.1 39.9 42.2 32.9 32.2 28.1 30.0
</TABLE>
SERIES PROVISIONS
GENERAL
The Series [199_-_] Certificates will be issued pursuant to the
Pooling and Servicing Agreement and a Series Supplement relating to the
Series [199_-_] Certificates (the "Series Supplement"). The Series
[199_-_] Certificates will consist of a single Class. The Trustee will
make available for inspection a copy of the Pooling and Servicing
Agreement (without exhibits or schedules) on request. Reference should be
made to the Prospectus for additional information concerning the Series
[199_-_] Certificates and the Pooling and Servicing Agreement.
INTEREST
Interest on the principal balance of the Series [199_-_]
Certificates will accrue at the Certificate Rate and will be payable to
the Series [199_-_] Certificateholders on each [Interest Payment Date]
[Distribution Date], commencing [ ], 199[ ][, provided that, during any
Early Amortization Period, interest will be distributed to Series [199_-_]
Certificateholders on each Distribution Date, commencing on the first
Distribution Date following the occurrence of an Early Amortization
Event]. Interest will accrue from and including the preceding [Interest
Payment Date] [Distribution Date] (or, in the case of the first [Interest
Payment Date] [Distribution Date], from and including the Series Issuance
Date) to but including such [Interest Payment Date] [Distribution Date].
Interest will be calculated on a basis of [the actual number of days in
each Interest Period divided by [360][other]] [a 360-day year of twelve
30-day months]. Interest due for any [Interest Payment Date or]
Distribution Date but not paid on such [Interest Payment Date or]
Distribution Date will be due on the next [Interest Payment Date or]
Distribution Date [, as applicable], together with interest on such amount
at the Certificate Rate plus [ ]%, to the extent permitted by applicable
law. Interest payments on the Series [199_-_] Certificates will generally
be derived from Certificateholder Interest Collections for a Collection
Period, [any withdrawals from the Reserve Fund,] [any withdrawals from the
Yield Supplement Account,] Investment Proceeds and, under certain
circumstances, Available Seller's Collections to the extent of the
Available Subordinated Amount [describe other sources].
[The Certificate Rate for each [Interest Period] [other] will be
determined on the Adjustment Date preceding such [Interest Period]
[other].] The "Certificate Rate" will be [ %] [equal to [the lesser of
(a)] the Index [plus] [minus] [times] [ ]% [and (b) [except with respect
to [the Prefunded Period [other]] the Assets Receivables Rate for the
related Distribution Date].
"Monthly Interest" for any Distribution Date means the amount of
interest accrued in respect of the Series [199_-_] Certificates as
described above for such Distribution Date.
[Describe Index and define Adjustment Date.]
[If the Certificate Rate for a Distribution Date [other than a
Distribution Date [with respect to the Prefunded Period] [other]]
calculated on the basis of the Index as described above is greater than
the Assets Receivable Rate, then the Certificate Rate for such
Distribution Date will be the Assets Receivables Rate.]
[The "Assets Receivables Rate" for any [Interest Period][period from
one Distribution Date to the immediately succeeding Distribution Date]
shall equal [the product of (a) the quotient obtained by dividing (i) 360
by (ii) the actual number of days elapsed in such period and (b) a
percentage, expressed as a fraction, (i) the numerator of which is the sum
of (A) Certificateholder Interest Collections for the Collection Period
immediately preceding the last day of such period (which for this purpose
only is based on interest amounts billed to the Dealers which are due
during such Collection Period) less, unless waived by the Servicer, the
Monthly Servicing Fee with respect to such immediately preceding
Collection Period and (B) the Investment Proceeds to be applied on the
Distribution Date related to such period and (ii) the denominator of which
is [the sum of (A)] the product of (I) the Floating Allocation Percentage,
(II) the Series Allocation Percentage and (III) the average Pool Balance
(after giving effect to any charge-offs) for such immediately preceding
Collection Period, [(B) the principal balance on deposit in the Excess
Funding Account on the first day of such period (after giving effect to
all deposits to and withdrawals therefrom on such first day)] and [(C) the
principal balance on deposit in the Principal Funding Account on the first
day of such period (after giving effect to all deposits to and withdrawals
therefrom on such first day)] [other].
If the Certificate Rate for any Distribution Date is based on the
Assets Receivables Rate, the excess of (a) the amount of interest on the
Series [199_-_] Certificates that would have accrued in respect of the
related [Interest Period][period from one Distribution Date to the
immediately succeeding Distribution Date] had interest been calculated
based on the Index over (b) the amount of interest on the Series [199_-_]
Certificates actually accrued in respect of such period based on the
Assets Receivables Rate (such excess, together with the unpaid portion of
any such excess from prior Distribution Dates (and interest accrued
thereon at the Certificate Rate calculated on the basis of the Index plus
[ ]%), is referred to as the "Carry-over Amount") will be paid on such
Distribution Date from amounts on deposit in the Yield Supplement Account
and, if such amounts are depleted, to the extent funds are allocated and
available therefor after making all required distributions and deposits
with respect to the Series [199_-_] Certificates, including payments with
respect to principal [(including payments to the Excess Funding Account)],
Monthly Interest, the Monthly Servicing Fee[, the Reserve Fund Deposit
Amount] and the Investor Default Amount as described below under
"Distributions from the Collection Account; [Reserve Fund;] Yield
Supplement Account". The rating of the Series [199_-_] Certificates does
not address the likelihood of payment of any Carry-over Amount.]
PRINCIPAL
In general, no principal payments will be made to the Series
[199_-_] Certificateholders until the [Expected Payment Date] [Principal
Commencement Date] or, upon the occurrence of an Early Amortization Event
[that is not cured as described herein], until the first Special Payment
Date[; provided, however, that notwithstanding the occurrence of an Early
Amortization Event, no principal payments will be made to the Series
[199_-_] Certificateholders during the Prefunded Period]. On each
Distribution Date with respect to the Revolving Period, collections of
Principal Receivables allocable to the Series [199_-_] Certificateholders'
Interest, subject to certain limitations, will either be (a) allocated to
one or more Series which are in amortization, early amortization or
accumulation periods to cover principal payments due to the
Certificateholders of any such Series or which provides for excess funding
accounts or similar arrangements or (b) if no such Series is then
amortizing or accumulating principal or otherwise does not provide for
excess funding accounts or similar arrangements, paid to the Seller to
maintain the Series [199_-_] Certificateholders' Interest or held as
Unallocated Principal Collections. See "Allocation Percentages --
Principal Collections for all Series" and "Distributions from the
Collection Account[; Reserve Fund][; Yield Supplement Account] --
Principal Collections".
Unless and until an Early Amortization Event [or Reinvestment Event]
[that is not cured as described herein] shall have occurred and until the
outstanding principal balance of the Series [199_-_] Certificates is paid
in full, on each Distribution Date with respect to the [Accumulation
Period] [Controlled Amortization Period], collections of Principal
Receivables allocable to the Series [199_-_] Certificateholders' Interest
plus certain other amounts comprising Monthly Principal will no longer be
paid for the benefit of another Series or to the Seller as described above
but instead an amount thereof up to the [Controlled Deposit Amount]
[Controlled Distribution Amount] for each such Distribution Date will be
[deposited in the Principal Funding Account] [distributed to Series
[19_-_] Certificateholders]. [The funds deposited in the Principal Funding
Account and any amounts in the Excess Funding Account will be used to pay
the outstanding principal balance of the Series [199_-_]Certificates on
the Expected Payment Date. If on such date the sum of the Principal
Funding Account Balance and any amounts in the Excess Funding Account is
less than the outstanding principal balance of the Series [199_-_]
Certificates, the Early Amortization Period will commence and on each
Special Payment Date the Series [199_-_] Certificateholders will receive
distributions of Monthly Principal and Monthly Interest until the
outstanding principal balance of the Series [199_-_] Certificates has been
paid in full or the Series Termination Date has occurred. Even if the sum
of the Principal Funding Account Balance and any amounts in the Excess
Funding Account on the Expected Payment Date is insufficient to pay the
outstanding principal balance of the Series [199_-_] Certificates in full,
such balances will be distributed to the Series [199_-_]
Certificateholders at such time.] [Notwithstanding the foregoing, no
payments of principal will be made in respect of the Series [199_-_]
Certificates during the Prefunded Period.]
It is expected that the final principal payment with respect to the
Series [199_-_] Certificates will be made on the Expected Payment Date,
but the principal of the Series [199_-_] Certificates may be paid earlier
or, depending on the actual payment rate on the Receivables, later, as
described under "Special Considerations -- Payments" herein and in the
Prospectus.
[EXCESS FUNDING ACCOUNT
Unless and until an Early Amortization Event [or Reinvestment Event]
shall have occurred, the Excess Funded Amount will be maintained in the
Excess Funding Account established with the Trustee. The Excess Funded
Amount will initially equal the excess of the initial principal balance of
the Series [199_-_] Certificates, if any, over the Initial Invested
Amount. Funds on deposit in the Excess Funding Account will be invested by
the Trustee at the direction of the Servicer generally in Eligible
Investments. Such investments must mature on or prior to the next
Distribution Date.
Funds on deposit in the Excess Funding Account will be withdrawn and
paid to the Seller or allocated to one or more Series which are in
amortization, early amortization or accumulation periods to the extent of
any increases in the Invested Amount as a result of the addition of
Receivables to the Trust, a reduction in the Seller's Interest, or a
reduction in the initial invested amount of any other Series. Additional
amounts will be deposited in the Excess Funding Account on a Distribution
Date to the extent that the sum of the Series [199_-_] Certificateholders'
Interest in Principal Receivables and the amount on deposit in the Excess
Funding Account prior to the deposit on such Distribution Date is less
than the outstanding principal balance of the Series [199_-_]
Certificates, but only to the extent that funds are available therefor as
described herein. In the event that other Series issued by the Trust
provide for excess funding accounts or other arrangements similar to the
Excess Funding Account involving fluctuating levels of investment in the
Receivables, the allocation of additional Receivables to increase the
Invested Amount will generally be based on the proportion that the amount
on deposit in the Excess Funding Account bears to the amounts on deposit
in the excess funding accounts of all Series providing for excess funding
accounts or such similar arrangements or to amounts otherwise similarly
available; and the deposit of amounts in the Excess Funding Account will
be based on the proportion that the Adjusted Invested Amount bears to the
adjusted invested amounts of all Series providing for excess funding
accounts or such similar arrangements.
On each Distribution Date, all investment income earned on amounts
in the Excess Funding Account since the preceding Distribution Date will
be withdrawn from the Excess Funding Account and applied as described
herein.
Any funds on deposit in the Excess Funding Account on the earlier of
(i) [ ] [the [ ] Distribution Date][the Accumulation Period
Commencement Date] and (ii) the commencement of an Early Amortization
Period [or Reinvestment Period] will be deposited in the Principal Funding
Account on such date. [In addition, on each Distribution Date with respect
to the Controlled Amortization Period an amount equal to the quotient
obtained by dividing the amount on deposit in the Excess Funding Account
as of the [ ] Distribution Date (after giving effect to any withdrawals
from or deposits to such account on such date) by [ ] will be distributed
to Series [199_-_] Certificateholders on such date in respect of principal
of the Series [199_-_] Certificates.] No funds will be deposited in the
Excess Funding Account during any Early Amortization Period [or
Reinvestment Period] or with respect to any Collection Period following
[ ] [the [ ] Distribution Date] [the Accumulation Period
Commencement Date].
ALLOCATION PERCENTAGES
Allocation between the Series [199_-_] Certificateholders and the
Seller. The Servicer will allocate amounts initially allocated to Series
[199_-_] as described under "Description of the Certificates -- Allocation
Percentages -- Allocations among Series" in the Prospectus between the
Series [199_-_] Certificateholders' Interest and the Seller's Interest for
each Collection Period as follows:
(i) Series Allocable Interest Collections and the Series
Allocable Defaulted Amount will be allocated to Series [199_-_]
Certificateholders based on the Floating Allocation Percentage [,
provided that during any Early Amortization Period, Series Allocable
Interest Collections will be allocated to the Series [199_-_]
Certificateholders based on the Fixed Allocation Percentage];
(ii) during the Revolving Period, Series Allocable Principal
Collections will be allocated to Series [199_-_] Certificateholders
based on the Floating Allocation Percentage;
(iii) during the [Accumulation Period] [Controlled
Amortization Period] and any Early Amortization Period [or
Reinvestment Period], Series Allocable Principal Collections will be
allocated to Series [199_-_] Certificateholders based on the Fixed
Allocation Percentage; and
(iv) Series Allocable Miscellaneous Payments will at all times
be allocated to Series [199_-_] Certificateholders.
Amounts not allocated to the Series [199_-_] Certificateholders as
described above will be allocated to the Seller.
"Floating Allocation Percentage" for any Collection Period
means [the percentage equivalent (which shall never exceed 100%) of
a fraction, the numerator of which is the Invested Amount as of the
last day of the immediately preceding Collection Period and the
denominator of which is the product of (x) the Pool Balance as of
such last day and (y) the Series Allocation Percentage for the
Collection Period in respect of which the Floating Allocation
Percentage is being calculated; provided, however, that, with
respect to the first Collection Period, the Floating Allocation
Percentage shall mean the percentage equivalent of a fraction, the
numerator of which is the Initial Invested Amount as of the Series
Issuance Date and the denominator of which is the Series Allocation
Percentage of the Pool Balance as of the Series Cut-Off Date]
[other].
"Fixed Allocation Percentage" for any Collection Period
generally means [the percentage equivalent (which shall never exceed
100%) of a fraction, the numerator of which is the Invested Amount
as of the last day of the Revolving Period and the denominator of
which is the product of (x) the Pool Balance as of the last day of
the immediately preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in respect of which
the Fixed Allocation Percentage is being calculated] [other].
"Invested Amount" means for any date [an amount equal to the
Initial Invested Amount, minus the amount, without duplication, of
principal payments (except principal payments made from the Excess
Funding Account) made to Series [199_-_] Certificateholders or
deposited to the Principal Funding Account prior to such date since
the Series Issuance Date, minus the excess, if any, of the aggregate
amount of Investor Charge-Offs for all Distribution Dates preceding
such date, over the aggregate amount of any reimbursements of
Investor Charge-Offs for all Distribution Dates preceding such date]
[other].
"Initial Invested Amount" means [[the portion of the initial
principal amount of the Series [199_-_] Certificates which is
invested in Principal Receivables on the Series Issuance Date, which
is expected to equal approximately $[ ] (based on information as
of the Series Cut-Off Date)] [during the Prefunded Period, zero and
thereafter [ ]], plus (x) the amount of any withdrawals from the
Excess Funding Account in connection with the purchase of an
additional interest in Principal Receivables since the Series
Issuance Date, minus (y) the amount of any additions to the Excess
Funding Account in connection with a reduction in the Principal
Receivables in the Trust since the Series Issuance Date] [other].
The Floating Allocation Percentage and the Fixed Allocation Percentage
will be adjusted for any Collection Period in which Additional Accounts
are designated to reflect the additional Receivables added to the Trust.
Principal Collections for all Series. Principal Collections
allocated to the Series [199_-_] Certificateholders' Interest, for any
Collection Period with respect to the [Accumulation Period] [Controlled
Amortization Period] or any Early Amortization Period [or Reinvestment
Period], will first be allocated [to make required payments of principal
[to the Principal Funding Account during the [Accumulation Period] [or
Reinvestment Period] and] to the Series [199_-_] Certificateholders during
[the Controlled Amortization Period and] any Early Amortization
Period][describe other applications, if applicable]. See "Distributions
from the Collection Account[; Reserve Fund][; Yield Supplement Account] --
Principal Collections". The Servicer will determine the amount of
Available Certificateholder Principal Collections for any Collection
Period remaining after such required payments, if any, and the amount of
any similar excess for any other Series ("Excess Principal Collections").
The Servicer will allocate Excess Principal Collections to cover any
principal distributions to Certificateholders for any Series which are
either scheduled or permitted and which have not been covered out of
Principal Collections and certain other amounts allocated to such Series
("Principal Shortfalls"). See "Maturity and Principal Payment
Considerations". Excess Principal Collections will generally not be used
to cover investor charge-offs for any Series. If Principal Shortfalls
exceed Excess Principal Collections for any Collection Period, Excess
Principal Collections will be allocated [pro rata among the applicable
Series based on the relative amounts of Principal Shortfalls] [describe
other method of applying, if applicable].
ALLOCATION OF COLLECTIONS; LIMITED SUBORDINATION OF SELLER'S INTEREST
[Except as otherwise described herein with respect to Interest
Collections and Principal Collections allocated to the Available Negative
Carry Subordinated Amount, [and [ ]] on] [On] any date on which
collections are deposited in the Collection Account, the Servicer will
distribute directly to the Seller an amount equal to (a) the Excess
Seller's Percentage for the related Collection Period of Series Allocable
Interest Collections for such date and (b) the Excess Seller's Percentage
for the related Collection Period of Series Allocable Principal
Collections for such date, if the Seller's Participation Amount
(determined after giving effect to any Principal Receivables transferred
to the Trust on such date) exceeds the Trust Available Subordinated Amount
for the immediately preceding Determination Date (after giving effect to
the allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date). In
addition, during the Revolving Period, subject to certain limitations, the
Servicer will distribute directly to the Seller on each such date of
deposit an amount equal to the Available Seller's Principal Collections
for such date, if the Seller's Participation Amount (determined after
giving effect to any Principal Receivables transferred to the Trust on
such date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date) [describe
exceptions, if any].
"Available Seller's Collections" for any date means the sum of
(a) the Available Seller's Interest Collections for such date and
(b) the Available Seller's Principal Collections for such date;
provided, however, that the Available Seller's Collections will be
zero for any Collection Period with respect to which the Available
Subordinated Amount is zero on the Determination Date immediately
following the end of such Collection Period.
"Available Seller's Interest Collections" for any date means
an amount equal to the result obtained by multiplying (a) the excess
of (i) the Seller's Percentage for the related Collection Period
over (ii) the Excess Seller's Percentage for such Collection Period
by (b) Series Allocable Interest Collections for such date.
"Available Seller's Principal Collections" for any date means
an amount equal to the product of (a) the excess of (i) the Seller's
Percentage for the related Collection Period over (ii) the Excess
Seller's Percentage for such Collection Period and (b) Series
Allocable Principal Collections for such date.
"Seller's Percentage" means 100% minus (a) the Floating
Allocation Percentage, when used with respect to Interest
Collections [(except during any Early Amortization Period)],
Defaulted Receivables and Principal Collections during the Revolving
Period, and (b) the Fixed Allocation Percentage, 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].
"Excess Seller's Percentage" for any Collection Period means a
percentage (which percentage shall never be less than 0% nor more
than 100%) equal to (a) 100% minus, when used with respect to
Interest Collections [(except during any Early Amortization Period)]
and Principal Collections during the Revolving Period, the sum of
(i) the Floating Allocation Percentage with respect to such
Collection Period and (ii) the percentage equivalent of a fraction,
the numerator of which is the Available Subordinated Amount as of
the Determination Date occurring in such Collection Period (after
giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date immediately following
such Determination Date), and the denominator of which is the
product of (x) the Pool Balance as of the last day of such
immediately preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in respect of which
the Excess Seller's Percentage is being calculated or (b) 100%
minus, when used with respect to [Interest Collections during any
Early Amortization Period and] Principal Collections during the
[Accumulation Period] [Controlled Amortization Period] and any Early
Amortization Period [or Reinvestment Period], the sum of (i) the
Fixed Allocation Percentage with respect to such Collection Period
and (ii) the percentage described in clause (a)(ii) above for such
Collection Period.
Deficiency Amount. [On each Determination Date [with respect to a
Distribution Date that occurs on or prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Revolving Period, if the
Revolving Period has recommenced]], the Servicer will determine for the
Series [199_-_] Certificates the amount (the "Deficiency Amount"), if any,
by which (a) the sum of (i) Monthly Interest for the following
Distribution Date, (ii) Monthly Interest accrued but not paid with respect
to prior Distribution Dates (and interest thereon), (iii) the Monthly
Servicing Fee for such Distribution Date, (iv) the Investor Default Amount
for such Distribution Date and (v) the amount of any Adjustment Payment
allocated to the Series [199_-_] Certificates for such Distribution Date
that has not been deposited in the Collection Account as required under
the Pooling and Servicing Agreement, exceeds (b) the sum of [(i)]
Certificateholder Interest Collections and Investment Proceeds for such
Distribution Date [and (ii) the amount of funds in the Reserve Fund on
such Determination Date available to fund any portion of the Deficiency
Amount as described under "Distributions from the Collection Account;
Reserve Fund[; Yield Supplement Account] -- Interest Collections"]. The
lesser of the Deficiency Amount and the Available Subordinated Amount is
the "Draw Amount".] [Include other sources of funds and applications of
the Draw Amount, as appropriate.](2)<F2>
<F2>
- ---------------
(2) Modify, as appropriate, if Interest Collections, Investment Proceeds
and Available Sellers' Collections from one Series will be available
to cover interest or other shortfalls for a related Series.
Available Subordinated Amount. The "Required Subordinated Amount"
shall mean, as of any date of determination, [the sum of (i)] the product
of the initial Subordinated Percentage [, as adjusted from time to time as
described herein other than as a result of an increase therein at the
option of the Seller,] and the Invested Amount [and (ii) the Incremental
Subordinated Amount]. Assuming that the Initial Invested Amount of the
Series [199_-_] Certificates is equal to the initial principal amount of
the Series [199_-_] Certificates, such amount would initially be
$[ ].
The Available Subordinated Amount for a Determination Date is equal
to (a) the lesser of (i) the Available Subordinated Amount for the
preceding Determination Date, minus, with certain limitations, the Draw
Amount for such preceding Determination Date, [minus funds from the
Reserve Fund applied to cover any portion of the Investor Default Amount,]
plus the excess, if any, of the Required Subordinated Amount for such
Determination Date over the Required Subordinated Amount for the
immediately preceding Determination Date, plus the amount of Excess
Servicing available to be paid to the Seller as described under
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account] -- Excess Servicing", and (ii) the product of the
fractional equivalent of the Subordinated Percentage and the Invested
Amount[, minus (b) in the case of clause (a) (i) the Incremental
Subordinated Amount for such preceding Determination Date, plus (c) the
Incremental Subordinated Amount for the current Determination Date,] [plus
(d) the Subordinated Percentage of funds to be withdrawn from the Excess
Funding Account on the succeeding Distribution Date and paid to the Seller
or allocated to one or more Series]; provided, however, that, once [the
[Accumulation Period] [Controlled Amortization Period] or] any Early
Amortization Period [that is not cured as described herein] shall have
commenced, the Available Subordinated Amount shall be calculated based on
the Invested Amount as of the close of business on the day preceding such
[[Accumulation Period] [Controlled Amortization Period] or] Early
Amortization Period [; and provided further that from and after the
commencement of any Reinvestment Period [that is not cured as described
herein] until the earliest of the commencement of any Early Amortization
Period that is not cured, as described herein, the payment in full of the
Series [199_-_] Certificates and the Fully Reinvested Date, the Available
Subordinated Amount shall be calculated based on the Invested Amount as of
the close of business on the day preceding such Reinvestment Period [less
[describe permitted reductions, e.g., based on payment rates]]. The
Available Subordinated Amount for the first Determination Date is equal to
the Required Subordinated Amount. [The "Incremental Subordinated Amount"
on any Determination Date will equal the result obtained by multiplying
(a) a fraction, the numerator of which is the sum of the Invested Amount
on the last day of the immediately preceding Collection Period and the
Available Subordinated Amount for such Determination Date (calculated
without adding the Incremental Subordinated Amount for such Determination
Date as described in clause (c) above), and the denominator of which is
the Pool Balance on such last day by (b) the excess, if any, of (x) the
sum of the Overconcentration Amount, the Instalment Balance Amount and the
aggregate amount of Ineligible Receivables on such Determination Date over
(y) the aggregate amount of Ineligible Receivables, Receivables in
Accounts containing Dealer Overconcentrations and Receivables in
Instalment Balances, in each case that became Defaulted Receivables during
the preceding Collection Period and are not subject to reassignment from
the Trust, unless certain insolvency events relating to the Seller or CCC
have occurred, as further described in the Pooling and Servicing
Agreement].
The "Subordinated Percentage" will initially equal the percentage
equivalent of a fraction, the numerator of which is the Subordination
Factor and the denominator of which will be the excess of 100% over the
Subordination Factor. The Seller may, in its sole discretion, at any time
increase the Available Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser of (i) $[ ] or
(ii) [ ]% of the Invested Amount. The Seller is not under any obligation
to increase the Available Subordinated Amount at any time. If [the sum of]
the Available Subordinated Amount [and the Incremental Subordinated
Amount] were reduced to less than the sum of the Required Subordinated
Amount [and the Incremental Subordinated Amount], a [Reinvestment Event]
[Early Amortization Event] would occur. The Seller could elect to increase
the Available Subordinated Amount at the time such a [Reinvestment Event]
[Early Amortization Event] would otherwise occur, thus preventing or
delaying the occurrence of the [Reinvestment Event] [Early Amortization
Event]. [Describe partial Reinvestment Periods resulting from a failure to
meet the test described above, if applicable.]
[Negative Carry Subordinated Amount. In the event of the occurrence
of [a Reinvestment Event,] [an Early Amortization Event] [or the
commencement of the Accumulation Period] [or the commencement of the
Controlled Amortization Period], Interest Collections and Principal
Collections otherwise distributed to the Seller in respect of the Excess
Seller's Percentage, in an amount not to exceed the Available Negative
Carry Subordinated Amount, will be deposited to the Reserve Fund [and
other] until the amounts on deposit therein equal the Negative Carry
Required Amount [and [ ]].
[Available Negative Carry Subordinated Amount" means, initially, the
Required Negative Carry Subordinated Amount and, on any subsequent date,
the Available Negative Carry Subordinated Amount at the open of business
on the immediately preceding date less the amount of Seller's Collections
deposited on such immediately preceding date to the Reserve Fund [and
other] in accordance with the preceding paragraph.]
[Required Negative Carry Subordinated Amount means [ ].]
[Negative Carry Required Amount means [ ].]
[Describe other subordination of the Seller's Interest, if
applicable.]
DISTRIBUTIONS FROM THE COLLECTION ACCOUNT[; RESERVE FUND] [;YIELD
SUPPLEMENT ACCOUNT]
Interest Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Invested Date [and each
Collection Period thereafter during the Revolving Period]], commencing
with the initial Distribution Date, the Servicer shall instruct the
Trustee to apply Certificateholder Interest Collections and Investment
Proceeds, if any, [other amounts] in respect of the related Collection
Period to make the following distributions in the following priority:
[(i) first, an amount equal to Monthly Interest for such
Distribution Date, plus the amount of any Monthly Interest
previously due but not [deposited to the Interest Funding Account
or] distributed on a prior Distribution Date (plus, but only to the
extent permitted under applicable law, interest at the Certificate
Rate plus [ ]% on Monthly Interest previously due but not so
[deposited or] distributed), shall be [deposited to the Interest
Funding Account] [distributed to the Series [199_-_]
Certificateholders];
[(ii) second, describe application, if any, to cover interest
or other shortfalls with respect to related Series;]
(iii) third, an amount equal to the Monthly Servicing Fee for
such Distribution Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection
Account as described in the Prospectus under "Description of the
Certificates -- Allocation of Collections; Deposits in Collection
Account" or waived by the Servicer);
[(iv) fourth, an amount equal to the Reserve Fund Deposit
Amount, if any, for such Distribution Date shall be deposited in the
Reserve Fund;]
(v) fifth, an amount equal to the Investor Default Amount, if
any, for such Distribution Date shall be treated as a portion of
Available Certificateholder Principal Collections for such
Distribution Date;
[(vi) sixth, an amount equal to any outstanding Carry-over
Amount (after giving effect to any withdrawals from the Yield
Supplement Account) shall be distributed to the Series [199_-_]
Certificateholders;]
[(vii) seventh, an amount equal to the Yield Supplement
Account Deposit Amount, if any, for such Distribution Date shall be
deposited in the Yield Supplement Account;]
[(viii) eighth, describe other applications, if any]; and
(ix) ninth, the balance shall constitute Excess Servicing].
[Describe application of Interest Collections, Investment Proceeds
and other amounts allocated to related Series to cover distributions
pursuant to clause (i), if applicable.]
[If, during the Prefunded Period, such Investment Proceeds [describe
other funds] are not sufficient to make the entire distributions required
by clause [(i)] above, the Trustee shall withdraw funds from the Yield
Supplement Account and apply such funds to complete the distributions
pursuant to such clause.]
[If such Certificateholder Interest Collections and Investment
Proceeds [describe other funds] are not sufficient to make the entire
distributions required by clauses [(i), (ii), (iii) and (v)], the Trustee
[after applying amounts on deposit in the Yield Supplement Account and
[describe other funds]]shall withdraw funds from the Reserve Fund and
apply such funds to complete the distributions pursuant to such clauses;
provided, however, that during any Early Amortization Period [or
Reinvestment Period] funds shall not be withdrawn from the Reserve Fund to
make distributions required by clause [(v)] to the extent that, after
giving effect to such withdrawal, the amount on deposit in the Reserve
Fund shall be less than $[ ].]
If there is a Draw Amount for such Distribution Date, the Trustee
shall apply the amount of Available Seller's Collections for the related
Collection Period on deposit in the Collection Account on such
Distribution Date, but only up to the Draw Amount, to make the
distributions required by clauses [(i), (ii), (iii) and (v)] above [that
have not been made through the application of funds from the Reserve Fund
[or the Yield Supplement Account] [or describe other funds] as described
in the preceding paragraph]. Additionally, Available Seller's Collections
will be applied to any unpaid Adjustment Payments. The Available
Subordinated Amount will be reduced by the amount of Available Seller's
Collections so applied. If the Draw Amount exceeds such Available Seller's
Collections, the Available Subordinated Amount will be reduced by the
amount of such excess, but not by more than the sum of the Investor
Default Amount and the portion of Adjustment Payments not paid by the
Seller, in order to maintain the Invested Amount, but not generally by
more than the Investor Default Amount for such Distribution Date.
"Certificateholder Interest Collections" for any Distribution
Date means the portion of Series Allocable Interest Collections for
the related Collection Period allocated to the Series [199_-_]
Certificateholders' Interest as described under "Allocation
Percentages -- Allocation Between the Series [199_-_]
Certificateholders and the Seller".
"Investment Proceeds" for any Distribution Date means an
amount equal to the sum of (a) [the investment earnings on the
related Determination Date with respect to funds held in the Reserve
Fund,] (b) the Series Allocation Percentage of investment earnings
on the related Determination Date with respect to funds held in the
Collection Account and (c) all investment income on amounts in [the
Excess Funding Account,] [the Principal Funding Account,] [the
Prefunding Account,] [the Interest Funding Account,] [the Yield
Supplement Account] [other accounts] since the preceding
Distribution Date.
[Investment Proceeds. On each Distribution Date with respect to a
Collection Period that ends after the Fully Reinvested Date [other than
any such Collection Period during the Revolving Period], the Servicer
shall instruct the Trustee to apply Investment Proceeds [describe other
funds], in respect of the related Collection Period to make the following
distributions in the following priority:
(i) first, (x) an amount equal to Monthly Interest for such
Distribution Date, plus, the amount of any Monthly Interest
previously due but not [deposited in the Interest Funding Account
or] distributed on a prior Distribution Date (plus, but only to the
extent permitted under applicable law, interest at the Certificate
Rate plus [ ]% on Monthly Interest previously due but not so
[deposited or] distributed), shall be [deposited to the Interest
Funding Account] [distributed to Series [199_-_] Certificateholders;
[(ii) second, describe other applications, including, if
applicable, to cover interest or other shortfalls with respect to
related Series; and]
(iii) third, the balance shall be distributed to the Seller.]
[Describe application of Interest Collections, Investment Proceeds
and other amounts allocated to related Series to cover distributions
pursuant to clause (i), if applicable.]
[If, on any Distribution Date, Investment Proceeds [describe other
funds] are not sufficient to make the entire distribution required in
clause (i) above [after applying [describe other funds]], the Trustee
shall withdraw funds from the Reserve Fund and apply such funds to
complete the distribution pursuant to such clause.]
[Reserve Fund. The "Reserve Fund" will be an Eligible Deposit
Account established and maintained in the name of the Trustee for the
benefit of the Series [199_-_] Certificateholders. On the Series Issuance
Date, the Seller will deposit $[ ] ([ ]% of the principal balance
of the Series [199_-_] Certificates) into the Reserve Fund. The "Reserve
Fund Required Amount" for any Distribution Date will equal []% of the
outstanding principal balance of the Series [19_-_] Certificates for such
Distribution Date (after giving effect to any change therein on such
Distribution Date). [Describe any increases in the Reserve Fund Required
Amount, e.g., as a result of the long-term rating of CFC falling below
BBB- or to cover any negative carry during a principal accumulation
period.] The "Reserve Fund Deposit Amount" is the amount, if any, by which
the Reserve Fund Required Amount exceeds the amount on deposit in the
Reserve Fund. Funds in the Reserve Fund will be invested in Eligible
Investments that will mature on or prior to the next Distribution Date. On
each Determination Date, the Servicer will apply any investment earnings
(net of losses and investment expenses) with respect to the Reserve Fund
as set forth under "Distributions from the Collection Account; Reserve
Fund[; Yield Supplement Account]". After the earlier of the payment in
full of the outstanding principal balance of the Series [199_-_]
Certificates and the Series Termination Date, any funds remaining on
deposit in the Reserve Fund will be paid to the Seller. [Describe other
applications, if any.]
If, after giving effect to the allocations, distributions and
deposits in the Reserve Fund described above under "Interest Collections",
the amount in the Reserve Fund is less than the Reserve Fund Required
Amount for the next following Distribution Date, the Trustee shall deposit
any remaining Available Seller's Collections for the related Collection
Period into the Reserve Fund until the amount in the Reserve Fund is equal
to such Reserve Fund Required Amount.
If, for any Distribution Date with respect to an Early Amortization
Period [or Reinvestment Period], after giving effect to the allocations,
distributions and deposits described in the preceding paragraph, the
amount in the Reserve Fund is less than the Excess Reserve Fund Required
Amount for such Distribution Date, the Trustee shall deposit the remaining
Available Seller's Collections for the related Collection Period into the
Reserve Fund until the amount in the Reserve Fund is equal to such Excess
Reserve Fund Required Amount. The "Excess Reserve Fund Required Amount"
for any such Distribution Date means an amount equal to the greater of (a)
[ ]% of the initial principal balance of the Series [199_-_] Certificates
and (b) the excess of (i) the sum of (x) the Available Subordinated Amount
on the preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on such
Distribution Date) and (y) an amount equal to (A) the excess of the
Required Participation Percentage over 100%, multiplied by (B) the
outstanding principal balance of the Series [199_-_] Certificates on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date) over (ii) the excess of (x) the Series Allocation
Percentage of the Pool Balance on the last day of the immediately
preceding Collection Period over (y) the Invested Amount on such
Distribution Date (after giving effect to changes therein on such
Distribution Date); provided that the Excess Reserve Fund Required Amount
shall not exceed such Available Subordinated Amount. [Describe
adjustments, if applicable.]]
[Yield Supplement Account. The Yield Supplement Account will be an
Eligible Deposit Account established and maintained in the name of the
Trustee for the benefit of the Series [199_-_] Certificateholders. On the
Series Issuance Date, the Seller will deposit $[ ] ([ ]% of the
principal balance of the Series [199_-_] Certificates) into the Yield
Supplement Account. The "Yield Supplement Account Required Amount" for any
Distribution Date [(i) that occurs during the Prefunded Period will equal
[ ],] [(ii) that occurs [thereafter and] prior to the Fully
Reinvested Date [or any Distribution Date thereafter during the Revolving
Period]] will equal [ ]% of the outstanding principal balance of the
Series [199_-_] Certificates for such Distribution Date (after giving
effect to any change therein on such Distribution Date) [and (iii) for any
[other] Distribution Date that occurs on or after the Fully Reinvested
Date, zero]. [On any Distribution Date with respect to the Prefunded
Period on which Investment Proceeds [describe other funds] are
insufficient to make the entire distributions required by clause [(i)]
under "Interest Collections" above, the amount on deposit in the Yield
Supplement Account on such Distribution Date shall be applied by the
Trustee up to the amount of such insufficiency to satisfy such
insufficiency.] [On any Distribution Date on which there is a Carry-over
Amount, the amount on deposit in the Yield Supplement Account on such
Distribution Date shall be applied by the Trustee up to the amount of such
Carry-over Amount to satisfy such Carry-over Amount.] [Describe other
applications, e.g., to pay Monthly Interest [other than during a Prefunded
Period].] The "Yield Supplement Account Deposit Amount" is the amount, if
any, by which the Yield Supplement Account Required Amount exceeds the
amount on deposit in the Yield Supplement Account. Funds in the Yield
Supplement Account will be invested [in Eligible Investments that mature
on or prior to the next Distribution Date] [in any investments consisting
of financial assets that by their terms convert to cash within a finite
period of time that mature on or prior to the next Distribution Date]. On
each Determination Date, the Servicer will apply any investment earnings
(net of losses and investment expenses) with respect to the Yield
Supplement Account as set forth under "Distributions from the Collection
Account; [Reserve Fund;] Yield Supplement Account". After the earlier of
the payment in full of the outstanding principal balance of the Series
[199_-_] Certificates and the Series Termination Date, any funds remaining
on deposit in the Yield Supplement Account will be paid to the Seller.
[Describe other applications.]]
Excess Servicing. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any
such Collection Period thereafter during the Revolving Period]], the
Servicer will allocate Excess Servicing with respect to the Collection
Period immediately preceding such Distribution Date, in the following
priority:
[(a) first, an amount equal to the aggregate amount of
Investor Charge-Offs which have not been previously reimbursed
(after giving effect to the allocation on such Distribution Date of
Series Allocable Miscellaneous Payments with respect to such
Distribution Date) will be allocated in the same manner as Available
Certificateholder Principal Collections for such Distribution Date;
(b) second, an amount equal to the aggregate outstanding
amounts of the Monthly Servicing Fee which have been previously
waived as described under "Servicing Compensation and Payment of
Expenses" in the Prospectus will be distributed to the Servicer;
[(c) third, describe other applications; and]
(d) fourth, the balance, if any, shall be distributed to the
Seller and shall increase the Available Subordinated Amount as
described in the definition thereof].
Principal Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any
such Collection Period thereafter during the Revolving Period]], the
Servicer will allocate Available Certificateholder Principal Collections
as follows:
(a) for each Distribution Date with respect to the Revolving
Period, all Available Certificateholder Principal Collections will
be allocated [first, to make a deposit to the Excess Funding Account
if the sum of (i) the Series [199_-_] Certificateholders' Interest
in Principal Receivables and (ii) the amount on deposit in the
Excess Funding Account prior to the allocation on such Distribution
Date is less than the outstanding principal balance of the Series
[199_-_] Certificates and second] to Excess Principal Collections as
described under "Allocation Percentages -- Principal Collections for
all Series"; and
(b) for each Distribution Date with respect to the
[Accumulation Period] [Controlled Amortization Period] or any Early
Amortization Period [or Reinvestment Period]:
(i) an amount equal to Monthly Principal for such
Distribution Date will be [deposited to the Principal Funding
Account, in the case of the Accumulation Period or any
Reinvestment Period, or] distributed to Series [199_-_]
Certificateholders; and
(ii) the balance, if any, will be allocated to Excess
Principal Collections.
[In the event that the aggregate Invested Amount is greater than
zero on the Series Termination Date, any funds remaining in the Reserve
Fund (after the application of funds in the Reserve Fund as described
above under "Interest Collections") will be treated as a portion of
Available Certificateholder Principal Collections for the Distribution
Date occurring on the Series Termination Date.]
"Available Certificateholder Principal Collections" for any
Distribution Date means the sum of (a) the product of (i) the
Floating Allocation Percentage, with respect to the Revolving
Period, or the Fixed Allocation Percentage, with respect to the
[Accumulation Period] [Controlled Amortization Period] or any Early
Amortization Period [or Reinvestment Period], for the related
Collection Period and (ii) Series Allocable Principal Collections
deposited in the Collection Account for the related Collection
Period, (b) the amount, if any, of Interest Collections, [funds in
the Reserve Fund,] Available Seller's Collections and Excess
Servicing allocated to cover the Investor Default Amount or
reimburse Investor Charge-Offs, (c) Series Allocable Miscellaneous
Payments on deposit in the Collection Account for such Distribution
Date and (d) Excess Principal Collections, if any, from other Series
allocated to Series [199_-_].
"Monthly Principal" with respect to any Distribution Date
relating to the [Accumulation Period] [Controlled Amortization
Period] or any Early Amortization Period [or Reinvestment Period]
will equal Available Certificateholder Principal Collections for
such Distribution Date; provided, however, that for each
Distribution Date [with respect to the Accumulation Period, Monthly
Principal may not exceed the Controlled Deposit Amount] [with
respect to the Controlled Amortization Period, Monthly Principal may
not exceed the Controlled Distribution Amount] for such Distribution
Date; and provided, further, that Monthly Principal shall not exceed
the Invested Amount of the Series [199_-_] Certificates.
["Controlled Deposit Amount" for a Distribution Date means the
excess, if any, of (a) [the sum of (i)] the product of the
Controlled Accumulation Amount and the number of Distribution Dates
from and including the first Distribution Date with respect to the
Accumulation Period through and including such Distribution Date
(but not in excess of the Accumulation Period Length) [and (ii) the
amount on deposit in the Excess Funding Account as of the
[ ] Distribution Date (after giving effect to any
withdrawals from or deposits to such account on such date (other
than the transfer to the Principal Funding Account of the amounts on
deposit therein on such date))] over (b) the sum of amounts on
deposit in [the Excess Funding Account and] the Principal Funding
Account, in each case before giving effect to any withdrawals from
or deposits to such accounts on such Distribution Date.]
["Controlled Accumulation Amount" means an amount equal to the
Invested Amount as of the [ ] Distribution Date (after giving
effect to any changes therein on such date) divided by [the
Accumulation Period Length].]
["Controlled Distribution Amount" for a Distribution Date
means the sum of (a) [the excess, if any, of (i)] the Controlled
Amortization Amount for such Distribution Date [over (ii) the
quotient obtained by dividing the amount on deposit in the Excess
Funding Account as of the [ ] Distribution Date (after giving
effect to any withdrawals from or deposits to such account on such
date) by [ ],] plus (b) any Controlled Distribution Amount for a
prior Distribution Date not previously distributed to Series
[199_-_] Certificateholders.]
["Controlled Amortization Amount" for a Distribution Date
means an amount equal to the Invested Amount as of the [ ]
Distribution Date (after giving effect to any changes therein on
such date) divided by [ ].]
[ENHANCEMENTS
The Series [199_-_] Certificates will have the benefit of the
[Letter of Credit] [Interest Rate Swap] [Cash Collateral Account]
[Guaranty] [Surety Bond] [Insurance Policy] [Spread Account] [other]
[issued by [ ] (the "Enhancement Provider")] in the initial
amount of $[ ].
With respect to any Distribution Date, the amount available to be
drawn under the [Letter of Credit] [Interest Rate Swap] [Cash Collateral
Account] [Guaranty] [Surety Bond] [Insurance Policy] [Spread Account]
[other] (the "Available Credit Enhancement Amount") will equal
[ ].]
[Describe subordination of other Series of Certificates to the
Series [199_-_] Certificates, if applicable.]
[Information with respect to Enhancement.]
[ENHANCEMENT PROVIDER
Information to be provided by Enhancement Provider.]
[INTEREST FUNDING ACCOUNT
The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account for the benefit of the
Series [199_-_] Certificateholders (the "Interest Funding Account"). On
each Distribution Date Monthly Interest will be deposited in the Interest
Funding Account as provided above under "Distributions from the Collection
Account[; Reserve Fund] [; Yield Supplement Account]; provided that if an
Early Amortization Event [that is not cured as described herein] shall
have occurred, interest will be distributed to the Series [199_-_]
Certificateholders on the first Distribution Date following such Early
Amortization Event.
All amounts on deposit in the Interest Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Interest Funding Account Balance") will be
invested from the date of their deposit by the Trustee at the direction of
the Servicer in Eligible Investments that will mature on or prior to the
next succeeding Distribution Date. The Servicer may select an appropriate
agent as representative of the Servicer for the purpose of designating
such investments. On each Distribution Date, the interest and other
investment income on the Interest Funding Account Balance will be applied
as provided above under "Distributions from the Collection Account[;
Reserve Fund][; Yield Supplement Account].]
[PRINCIPAL FUNDING ACCOUNT
The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account for the benefit of the
Series [199_-_] Certificateholders (the "Principal Funding Account"). On
each Distribution Date with respect to the [Accumulation Period] [or any
Reinvestment Period], Monthly Principal will be deposited in the Principal
Funding Account as provided above under "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account] -- Principal
Collections"; provided, that, if an Early Amortization Event [that is not
cured as described herein] occurs during the [Accumulation Period] [or any
Reinvestment Period], the Principal Funding Account Balance shall be paid
to the Series [199_-_] Certificateholders on the first Special Payment
Date.
All amounts on deposit in the Principal Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Principal Funding Account Balance") will be
invested from the date of their deposit to on or prior to the Expected
Payment Date by the Trustee at the direction of the Servicer in Eligible
Investments that will mature on or prior to the following Distribution
Date. The Servicer may select an appropriate agent as representative of
the Servicer for the purpose of designating such investments. On each
Distribution Date, the interest and other investment income on the
Principal Funding Account Balance will be applied as provided above under
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account]".]
[PREFUNDING ACCOUNT
The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account for the benefit of the
Series [199_-_] Certificateholders (the "Prefunding Account"). On the
Series Issuance Date an amount equal to the initial principal amount of
the Series [199_-_] Certificates will be deposited in the Prefunding
Account. As funds are accumulated in the Principal Funding Account for the
Paired Series or distributed to holders of Certificates of such Series, an
equal amount of funds on deposit in the Prefunding Account will be
released (which funds will be distributed to the Seller).
All amounts on deposit in the Prefunding Account on any Distribution
Date (after giving effect to distributions to be made on such Distribution
Date) (the "Prefunding Account Balance") will be invested from the date of
their deposit by the Trustee at the direction of the Servicer in Eligible
Investments that will mature on or prior to the following Distribution
Date. The Servicer may select an appropriate agent as representative of
the Servicer for the purpose of designating such investments. On each
Distribution Date, the interest and other investment income on the
Prefunding Account Balance will be applied as provided above under
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account]".]
[Describe other Series [199_-_] Accounts, if applicable.]
DISTRIBUTIONS
Payments to Series [199_-_] Certificateholders will be made from the
Collection Account, [the Reserve Fund,] [the Principal Funding Account,]
[the Interest Funding Account,] [the Yield Supplement Account,] [other]
and [the Excess Funding Account].
(a) The Servicer shall instruct the Trustee to apply funds on
deposit in the Collection Account, [the Reserve Fund,] [the Interest
Funding Account,] [the Yield Supplement Account,] [other] and shall
instruct the Trustee to make the following distributions at the
following times:
(i) on each [Distribution Date] [Interest Payment Date
or Special Payment Date] all amounts on deposit in the
Collection Account, [the Reserve Fund,] [the Interest Funding
Account,] [the Yield Supplement Account] [other] as are
payable to the Series [199_-_] Certificateholders with respect
to accrued interest will be distributed to the Series [199_-_]
Certificateholders.
(b) The Servicer shall instruct the Trustee to apply the funds
on deposit in the [Collection Account,] [the Principal Funding
Account,] [other] and [the Excess Funding Account] and shall
instruct the Trustee to make, without duplication, the following
distributions at the following times:
[(i) on each Distribution Date during the Controlled
Amortization Period all amounts on deposit in the Collection
Account [and the Excess Funding Account] [other] as are
payable to the Series [199_-_] Certificateholders with respect
to principal will be distributed to the Series [199_-_]
Certificateholders; and]
[(ii) on each Special Payment Date and on the Expected
Payment Date, the Principal Funding Account Balance [and the
amount on deposit in the Excess Funding Account] [other] shall
be distributed to the Series [199_-_] Certificateholders up to
a maximum amount on any such date equal to the excess of the
outstanding principal amount of the Series [199_-_]
Certificates over unreimbursed Investor Charge-Offs, each on
such date].
[(c) On each Distribution Date on which there is an unpaid
Carry-over Amount (or unpaid interest thereon), the Servicer shall
instruct the Trustee to distribute to the Series [199_-_]
Certificateholders such Carry-over Amount (or unpaid interest
thereon) to the extent funds are available therefor first from
amounts on deposit in the Yield Supplement Account and second to the
extent funds are available therefor after making all required
distributions and deposits with respect to the Series [199_-_]
Certificates as provided above under "Distributions from the
Collection Account[; Reserve Fund]; Yield Supplement Account".]
INVESTOR CHARGE-OFFS
If the Available Subordinated Amount is reduced to zero and on any
Distribution Date the Deficiency Amount is greater than zero, the
outstanding principal balance of the Series [199_-_] Certificates will be
reduced by the Deficiency Amount, but not by more than the Investor
Default Amount for such Distribution Date (an "Investor Charge-Off"). Any
reduction in the outstanding principal balance of the Series [199_-_]
Certificates will have the effect of slowing or reducing the return of
principal to the Series [199_-_] Certificateholders. If the outstanding
principal balance of the Series [199_-_] Certificates has been reduced by
any Investor Charge-Offs, it will thereafter be increased on any
Distribution Date (but not by an amount in excess of the aggregate
unreimbursed Investor Charge-Offs) by the sum of (a) Series Allocable
Miscellaneous Payments for such Distribution Date and (b) the amount of
Excess Servicing allocated and available for such purpose as described
above.
[REINVESTMENT EVENTS
The Reinvestment Events with respect to the Series [199_-_]
Certificates are the following:
[1. failure on the part of USA, the Servicer or CCC, as
applicable, (i) to make any payment or deposit required by the
Pooling and Servicing Agreement or the Receivables Purchase
Agreement, including but not limited to any Transfer Deposit Amount
or Adjustment Payment, on or before the date occurring two business
days after the date such payment or deposit is required to be made
therein; or (ii) to deliver a Distribution Date Statement on the
date required under the Pooling and Servicing Agreement (or within
the applicable grace period which will not exceed five business
days); (iii) to comply with its covenant not to create any lien on a
Receivable; or (iv) to observe or perform in any material respect
any other covenants or agreements set forth in the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, which
failure continues unremedied for a period of 45 days after written
notice of such failure;
2. any representation or warranty made by CCC in the
Receivables Purchase Agreement or by USA in the Pooling and
Servicing Agreement or any information required to be given by USA
to the Trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after
written notice and as a result the interests of the
Certificateholders are materially and adversely affected; provided,
however, that a Reinvestment Event shall not be deemed to occur
thereunder if USA has repurchased the related Receivables or all
such Receivables, if applicable, during such period in accordance
with the provisions of the Pooling and Servicing Agreement;
3. the occurrence of certain events of bankruptcy, insolvency
or receivership relating to any of CFC, CCC or Chrysler;
4. a failure by USA to convey Receivables in Additional
Accounts to the Trust within five business days after the day on
which it is required to convey such Receivables pursuant to the
Pooling and Servicing Agreement;
5. on any Determination Date, the Available Subordinated
Amount for the next Distribution Date will be reduced to an amount
less than the Required Subordinated Amount on such Determination
Date after giving effect to the distributions to be made on the next
Distribution Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds [ ]% of the Pool
Balance on such last day;
8. on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods, is less than
[ ]%;
9. the delivery by the Seller to the Trustee, of a notice
stating that the Seller will no longer continue to sell Receivables
to the Trust commencing on [ ] or any yearly anniversary
thereof; provided, however, that the Seller shall have delivered to
the Trustee an opinion of counsel to the effect that, following such
discontinuation of sales of Receivables, the Trust shall not become
an investment company within the meaning of the Investment Company
Act of 1940, as amended;
10. on any Determination Date, the quotient obtained by
dividing (i) the sum of (x) the amount on deposit in the Yield
Supplement Account on the next Distribution Date, after giving
effect to the distribution to be made on such Distribution Date, and
(y) the amount on deposit in the Yield Supplement Account on the
immediately preceding Distribution Date, after giving effect to the
distributions made on such Distribution Date, by (ii) the sum of (A)
the outstanding principal balance of the Series [199_-_]
Certificates on the next Distribution Date, after giving effect to
all distributions and payments to be made on such Distribution Date,
and (B) the outstanding principal balance of the Series [199_-_]
Certificates on the immediately preceding Distribution Date, after
giving effect to all distributions and payments made on such
Distribution Date, is less than [ ]%;
11. interest at the Certificate Rate is not paid on the Series
[199_-_] Certificate on any Interest Payment Date;
12. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
13. [other].](3)<F3>
<F3>
- ---------------
(3) Delete or modify, as appropriate.
[In the case of any event described in clause [1, 2 or 6] above, a
Reinvestment Event with respect to Series [199_-_] will be deemed to have
occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given
by Certificateholders) declare that a Reinvestment Event has occurred as
of the date of such notice. In the case of any event described in clause
[3, 4, 5, 7, 8, 9, 10, 11, 12 or 13] above, a Reinvestment Event with
respect to Series [199_-_] will be deemed to have occurred without any
notice or other action on the part of the Trustee or the Series [199_-_]
Certificateholders immediately upon the occurrence of such event.]
[Under certain limited circumstances, a Reinvestment Period which
commences prior to the scheduled end of the Revolving Period may terminate
and the Revolving Period recommence. If a Reinvestment Period results from
the failure by USA to convey Receivables in Additional Accounts to the
Trust, as described in paragraph 4 above, during the Revolving Period and
no other Reinvestment Event or Early Amortization Event [that has not been
cured as described herein] has occurred, the Reinvestment Period resulting
from such failure will terminate and the Revolving Period will recommence
(unless the scheduled termination date of the Revolving Period has
occurred) as of the earlier of (i) the conveyance of Receivables in
Additional Accounts to the Trust following written confirmation by the
Rating Agencies that such conveyance will not result in the withdrawal or
lowering of the rating of the Series [199_-_] Certificates, and (ii) the
end of the first Collection Period during which the Seller would no longer
be required to convey Receivables to the Trust. The Seller may no longer
be required to convey Receivables as described above as a result of a
reduction in the Invested Amount occurring due to principal payments made
in respect of the Series [199_-_] Certificates and the Certificates of
other outstanding Series during the Reinvestment Period or as a result of
the subsequent addition of Receivables to the Trust. Notwithstanding the
foregoing, if any Reinvestment Event occurs, the Revolving Period will
recommence following written confirmation by each Rating Agency that its
rating of the Series [199_-_] Certificates will not be withdrawn or
lowered as a result of such recommencement, provided that no other
Reinvestment Event or Early Amortization Event [that has not been cured as
described herein] has occurred and the scheduled termination of the
Revolving Period has not occurred.]
[Describe other cures of Reinvestment Events and partial
Reinvestment Periods, if applicable.]
EARLY AMORTIZATION EVENTS
[The Early Amortization Events with respect to the Series [199_-_]
Certificates will include each of the events so defined in the Prospectus,
plus the following:
1. failure on the part of USA, the Servicer or CCC, as
applicable, (i) to make any payment or deposit required by the
Pooling and Servicing Agreement or the Receivables Purchase
Agreement, including but not limited to any Transfer Deposit Amount
or Adjustment Payment, on or before the date occurring two business
days after the date such payment or deposit is required to be made
therein; or (ii) to deliver a Distribution Date Statement on the
date required under the Pooling and Servicing Agreement (or within
the applicable grace period which will not exceed five business
days); (iii) to comply with its covenant not to create any lien on a
Receivable; or (iv) to observe or perform in any material respect
any other covenants or agreements set forth in the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, which
failure continues unremedied for a period of 45 days after written
notice of such failure;
2. any representation or warranty made by CCC in the
Receivables Purchase Agreement or by USA in the Pooling and
Servicing Agreement or any information required to be given by USA
to the Trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after
written notice and as a result the interests of the
Certificateholders are materially and adversely affected; provided,
however, that an Early Amortization Event shall not be deemed to
occur thereunder if USA has repurchased the related Receivables or
all such Receivables, if applicable, during such period in
accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency
or receivership relating to any of CFC, CCC or Chrysler;
4. a failure by USA to convey Receivables in Additional
Accounts to the Trust within five business days after the day on
which it is required to convey such Receivables pursuant to the
Pooling and Servicing Agreement;
5. on any Determination Date, the Available Subordinated
Amount for the next Distribution Date will be reduced to an amount
less than the Required Subordinated Amount on such Determination
Date after giving effect to the distributions to be made on the next
Distribution Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds [ ]% of the Pool
Balance on such last day;
8. on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods, is less than
[ ]%;
9. on any Determination Date, the quotient obtained by
dividing (i) the sum of (x) the amount on deposit in the Yield
Supplement Account on the next Distribution Date, after giving
effect to the distributions to be made on such Distribution Date,
and (y) the amount on deposit in the Yield Supplement Account on the
immediately preceding Distribution Date, after giving effect to the
distributions made on such Distribution Date, by (ii) the sum of (A)
the outstanding principal balance of the Series [199_-_]
Certificates on the next Distribution Date, after giving effect to
all distributions and payments to be made on such Distribution Date
and (B) the outstanding principal balance of the Series [199_-_]
Certificates on the immediately preceding Distribution Date, after
giving effect to all distributions and payments made on such
Distribution Date, is less than [ ];
10. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
11. [other].](4)<F4>
<F4>
- ---------------
(4) Delete or modify, as appropriate.
[In the case of any event described in clause [1, 2 or 6] above, an
Early Amortization Event with respect to Series [199_-_] will be deemed to
have occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given
by Certificateholders) declare that an Early Amortization Event has
occurred as of the date of such notice. In the case of any Early
Amortization Event described in the Prospectus or any event described in
clause [3, 4, 5, 7, 8, 9, 10 or 11] above, an Early Amortization Event
with respect to Series [199_-_] will be deemed to have occurred without
any notice or other action on the part of the Trustee or the Series
[199_-_] Certificateholders immediately upon the occurrence of such
event.]
[Under certain limited circumstances, an Early Amortization Period
which commences prior to the scheduled end of the Revolving Period may
terminate and the Revolving Period recommence. If an Early Amortization
Period results from the failure by USA to convey Receivables in Additional
Accounts to the Trust, as described in paragraph 4 above, during the
Revolving Period and no other [Reinvestment Event or] Early Amortization
Event [that has not been cured as described herein] has occurred, the
Early Amortization Period resulting from such failure will terminate and
the Revolving Period will recommence (unless the scheduled termination
date of the Revolving Period has occurred) as of the earlier of (i) the
conveyance of Receivables in Additional Accounts to the Trust following
written confirmation by the Rating Agencies that such conveyance will not
result in the withdrawal or lowering of the rating of the Series [19_-_]
Certificates, and (ii) the end of the first Collection Period during which
the Seller would no longer be required to convey Receivables to the Trust.
The Seller may no longer be required to convey Receivables as described
above as a result of a reduction in the Invested Amount occurring due to
principal payments made in respect of the Series [199_-_] Certificates and
the Certificates of other outstanding Series during the Early Amortization
Period or as a result of the subsequent addition of Receivables to the
Trust. Notwithstanding the foregoing, if any Early Amortization Event
occurs, the Revolving Period will recommence following written
confirmation by each Rating Agency that its rating of the Series [199_-_]
Certificates will not be withdrawn or lowered as a result of such
recommencement, provided that no other [Reinvestment Event or] Early
Amortization Event [that has not been cured as described herein] has
occurred and the scheduled termination of the Revolving Period has not
occurred.]
[Describe other cures of Early Amortization Events, if applicable.]
SERIES TERMINATION
The last payment of principal and interest on the Series [199_-_]
Certificates will be due and payable no later than the [
] Distribution Date (the "Series Termination Date"). In the
event that the aggregate Invested Amount is greater than zero on the
Series Termination Date (after giving effect to deposits and distributions
otherwise to be made on such Series Termination Date), the Trustee will
sell or cause to be sold (and apply the proceeds to the extent necessary
to pay such remaining amounts to all Series [199_-_] Certificateholders)
an interest in the Receivables or certain Receivables, as specified in the
Pooling and Servicing Agreement, in an amount equal to (a) 110% of the
aggregate Invested Amount on such Series Termination Date (after giving
effect to such deposits and distributions) and (b) the Available
Subordinated Amount on the preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to be
made on the Distribution Date following such Determination Date);
provided, however, that in no event shall such amount exceed the Series
Allocation Percentage (for the Collection Period in which such Series
Termination Date occurs) of Receivables on such Series Termination Date.
The net proceeds of such sale and any collections on the Receivables will
be paid pro rata to Series [199_-_] Certificateholders on the Series
Termination Date as the final payment of the Series [199_-_] Certificates.
REPORTS
On each Distribution Date (including each Distribution Date that
corresponds to the Expected Payment Date or any Special Payment Date),
commencing with the initial Distribution Date, the Trustee will forward to
each Series [199_-_] Certificateholder of record a statement (the
"Distribution Date Statement") prepared by the Servicer setting forth the
following information (which, in the case of (c), (d) and (e) below, will
be stated on the basis of an original principal amount of $1,000 per
Series [199_-_] Certificate if the [Accumulation Period] [Controlled
Amortization Period] or an Early Amortization Period [or Reinvestment
Period] has commenced): (a) the aggregate amount of collections, the
aggregate amount of Interest Collections and the aggregate amount of
Principal Collections processed during the immediately preceding
Collection Period; (b) the Series Allocation Percentage, the Floating
Allocation Percentage and the Fixed Allocation Percentage for such
Collection Period; (c) the total amount, if any, distributed on the Series
[199_-_] Certificates; (d) the amount of such distribution allocable to
principal on the Series [199_-_] Certificates; (e) the amount of such
distribution allocable to interest on the Series [199_-_] Certificates;
(f) the Investor Default Amount for such Distribution Date; (g) the Draw
Amount, if any, for such Collection Period; (h) the amount of the Investor
Charge-Offs and the amounts of reimbursements thereof for such Collection
Period; (i) the amount of the Monthly Servicing Fee for such Collection
Period; (j) the [Controlled Distribution Amount] [Controlled Deposit
Amount] for the following Distribution Date; (k) the Invested Amount[, the
Excess Funding Amount] and the outstanding principal balance of the Series
[199_-_] Certificates for such Distribution Date (after giving effect to
all distributions which will occur on such Distribution Date); (1) the
"pool factor" for the Series [199_-_] Certificates as of the Determination
Date with respect to such Distribution Date (consisting of an eleven-digit
decimal expressing the Invested Amount as of such Determination Date
(determined after taking into account any reduction in the Invested Amount
which will occur on such Distribution Date) as a proportion of the Initial
Invested Amount); (m) the Available Subordinated Amount for such
Determination Date; [(n) the Reserve Fund balance for such date;] (o) [the
Principal Funding Account Balance,] [the Interest Funding Account
Balance,] [the Prefunding Account Balance] and [the Yield Supplement
Account balance] with respect to such date; [(p) during any Reinvestment
Period, information with respect to the Eligible Investments in the
accounts for the Series [199_-_] Certificates;] and (q) [other] [;
provided, that after the Fully Reinvested Date, [unless the Revolving
Period has recommenced,] such statement will not include the information
in clauses [(a), (b), (f), (g), (h), (i), (k) or (m) above].
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement"), the Seller has agreed to sell to
the underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Seller, the
principal amount of the Series [199_-_] Certificates set forth opposite
its name:
<TABLE>
<CAPTION>
Series [199_-_]
Underwriters Certificates
<S> <C>
[ ]........................................ $[ ]
[ ]........................................ [ ]
Total......................................... $[ ]
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all the Series
[199_-_] Certificates offered hereby if any of the Series [199_-_]
Certificates are purchased.
The Seller has been advised by the Underwriters that the
Underwriters propose to initially offer the Series [199_-_] Certificates
to the public at the price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price less a concession not in
excess of [ ]% of the Certificate denominations. The Underwriters may
allow and such dealers may reallow a concession not in excess of [ ]% of
the Certificate denominations to certain other dealers. After the initial
public offering, the public offering price and such concessions may be
changed.
The Underwriting Agreement provides that USA and CFC will indemnify
the Underwriters against certain liabilities, including liabilities under
the Securities Act, or contribute to payments which the Underwriters may
be required to make in respect thereof.
[In the ordinary course of their businesses, the Underwriters and
their respective affiliates have engaged and may engage in investment
banking transactions with the Seller and its affiliates.]
LEGAL MATTERS
Certain legal matters relating to the Series [199_-_] Certificates
will be passed upon for the Underwriters by [ ]. Certain federal
income tax and ERISA matters will be passed upon for USA and the Trust by
[ ]. [In addition to representing the Underwriters, [ ] from time
to time represents Chrysler Financial Corporation and its affiliates.] See
"Legal Matters" in the Prospectus.
<PAGE>
INDEX OF PRINCIPAL TERMS
Term Page
Accounts.......................................................... 1
Accumulation Period Commencement Date............................. 6
Accumulation Period Length........................................ 5
Adjustment Date................................................... 4
Assets Receivables Rate........................................... 21
Available Certificateholder Principal Collections................. 30
Available Credit Enhancement Amount............................... 31
Available Negative Carry Subordinated Amount...................... 27
Available Seller's Collections.................................... 24
Available Seller's Interest Collections........................... 25
Available Seller's Principal Collections.......................... 25
Carry-over Amount................................................. 21
CCC............................................................... 1
Certificate Rate.................................................. 1
Certificateholder Interest Collections............................ 28
Controlled Accumulation Amount.................................... 31
Controlled Amortization Amount.................................... 31
Controlled Deposit Amount......................................... 31
Controlled Distribution Amount.................................... 31
Deficiency Amount................................................. 25
Distribution Date................................................. 1
Distribution Date Statement....................................... 37
Draw Amount....................................................... 25
Early Amortization Period......................................... 7
Enhancement Provider.............................................. 31
Excess Funding Account............................................ 4
Excess Principal Collections...................................... 24
Excess Reserve Fund Required Amount............................... 29
Excess Seller's Percentage........................................ 25
Excluded Dealers.................................................. 16
Excluded Receivables.............................................. 16
Expected Payment Date............................................. 19
Fixed Allocation Percentage....................................... 23
Floating Allocation Percentage.................................... 23
Incremental Subordinated Amount................................... 26
Index............................................................. 1
Initial Invested Amount........................................... 24
Interest Funding Account.......................................... 4
Interest Funding Account Balance.................................. 32
Interest Payment Date............................................. 1
Interest Period................................................... 4
Invested Amount................................................... 23
Investment Proceeds............................................... 28
Investor Charge-Off............................................... 33
MMC............................................................... 14
Monthly Interest.................................................. 21
Monthly Principal................................................. 31
Negative Carry Required Amount.................................... 27
Paired Series..................................................... 3
Prefunded Period.................................................. 3
Prefunding Account................................................ 5
Prefunding Account Balance........................................ 32
Principal Funding Account......................................... 32
Principal Funding Account Balance................................. 32
Principal Shortfalls.............................................. 24
Receivables....................................................... 1
Registration of Series 199_-_ Certificates........................ 11
Required Negative Carry Subordinated Amount....................... 27
Required Participation Percentage................................. 10
Required Subordinated Amount...................................... 25
Reserve Fund...................................................... 28
Reserve Fund Deposit Amount....................................... 29
Reserve Fund Required Amount...................................... 28
Seller............................................................ 1
Seller's Interest................................................. 1
Seller's Percentage............................................... 25
Series............................................................ 1
Series 199_-_ Certificates........................................ 1
Series 199_-_ Termination Date.................................... 12
Series Cut-Off Date............................................... 12
Series Issuance Date.............................................. 12
Series Supplement................................................. 20
<PAGE>
Term Page
Series Termination Date........................................... 36
Servicer.......................................................... 1
Servicing Fee Rate................................................ 11
SFAS.............................................................. 14
Subordinated Percentage........................................... 26
Trust............................................................. 1
Underwriters...................................................... 38
Underwriting Agreement............................................ 38
USA............................................................... 1
Yield Supplement Account.......................................... 4
Yield Supplement Account Deposit Amount........................... 29
Yield Supplement Account Required Amount.......................... 29
<PAGE>
ANNEX I
OUTSTANDING SERIES OF INVESTOR CERTIFICATES
[to be provided]
<PAGE>
[Outside back cover, left-hand column]
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Seller or the Underwriters. Neither this
Prospectus Supplement nor the accompanying Prospectus constitutes an offer or
solicitation by anyone in any state in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus Supplement or the
accompanying Prospectus, nor any sale made hereunder or thereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Seller since the date hereof or thereof or that the information
contained or incorporated by reference herein or therein is correct as of any
time subsequent to its date.
----------------
TABLE OF CONTENTS
Page
Prospectus Supplement
Summary of Series Terms........................................... S-3
Special Considerations............................................ S-13
Use of Proceeds................................................... S-16
The Dealer Floorplan Financing Business........................... S-16
The Accounts...................................................... S-16
Chrysler Financial Corporation and Chrysler Credit Corporation.... S-19
Maturity and Principal Payment Considerations..................... S-19
Series Provisions................................................. S-20
Underwriting...................................................... S-38
Legal Matters..................................................... S-38
Index of Principal Terms.......................................... S-39
Annex I........................................................... A-1
Prospectus
Available Information............................................. 2
Reports to Certificateholders..................................... 2
Incorporation of Certain Documents by Reference................... 2
Prospectus Summary................................................ 3
Special Considerations............................................ 15
U.S. Auto Receivables Company and the Trust....................... 18
Use of Proceeds................................................... 20
The Dealer Floorplan Financing Business........................... 20
The Accounts...................................................... 24
Chrysler Financial Corporation and Chrysler Credit Corporation.... 24
Description of the Certificates................................... 25
Description of the Receivables Purchase Agreement................. 51
Certain Legal Aspects of the Receivables.......................... 52
Certain Tax Matters............................................... 55
ERISA Considerations.............................................. 58
Experts........................................................... 60
Plan of Distribution.............................................. 60
Legal Matters..................................................... 61
Index of Principal Terms.......................................... 62
Annex I...........................................................
----------------
Until [ ], 199[ ] (90 days after the date of this Prospectus
Supplement), all dealers effecting transactions in the Series [199_-_]
Certificates, whether or not participating in this distribution, may be
required to deliver a Prospectus. This is in addition to the obligation of
dealers to deliver a Prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
<PAGE>
[Outside back cover, right-hand column]
CARCO
Auto Loan Master Trust
$[ ]
[Floating Rate] [ %] Auto Loan Asset
Backed Certificates, Series [199_-_]
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER CREDIT CORPORATION
Servicer
PROSPECTUS SUPPLEMENT
[Underwriters]
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
[Dual Class -- Money Market]
Subject to Completion Dated October 5, 1994
PROSPECTUS SUPPLEMENT
To Prospectus dated , 1994
$
CARCO AUTO LOAN MASTER TRUST
AUTO LOAN
ASSET BACKED CERTIFICATES, SERIES [199_-_]
----------------
$[ ] Floating Rate Class A-1 Money Market Extendible
Certificates,
Series [199_-_]
$[ ] [Floating Rate] [ %] Class A-2 [Medium Term] [ ]
Certificates,
Series [199_-_]
----------------
U.S. AUTO RECEIVABLES COMPANY, SELLER
CHRYSLER CREDIT CORPORATION, SERVICER
The Auto Loan Asset Backed Certificates, Series [199_-_] (the
"Series [199_-_] Certificates") offered hereby evidence undivided
interests in certain assets of the CARCO Auto Loan Master Trust (the
"Trust") created pursuant to a Pooling and Servicing Agreement among U.S.
Auto Receivables Company ("USA" or the "Seller"), Chrysler Credit
Corporation, as servicer ("CCC" or the "Servicer"), and Manufacturers and
Traders Trust Company, as trustee. The Series [199_-_] Certificates will
be issued in two Classes, the Floating Rate Class A-1 Money Market
Extendible Certificates, Series [199_-_] (the "Class A-1 Certificates"),
and the [Floating Rate] [ %] Class A-2 [Medium Term] [ ]
Certificates, Series [199_-_] (the "Class A-2 Certificates"). The Trust
assets include wholesale receivables (the "Receivables") generated from
time to time in a portfolio of revolving financing arrangements (the
"Accounts") with automobile dealers to finance their automobile and light
duty truck inventory and collections on the Receivables. Certain assets of
the Trust will be allocated to Series [199_-_] Certificateholders,
including the right to receive a varying percentage of each month's
collections with respect to the Receivables at the times and in the manner
described herein. The Seller will own the remaining interest in the Trust
not represented by the Series [199_-_] Certificates or the Certificates of
any other Series issued by the Trust (the "Seller's Interest"). The Trust
previously has issued [ ] other Series of Certificates (each, a
"Series"). From time to time, subject to certain conditions, the Seller
may offer other Series of Certificates, which may have terms significantly
different from the terms of the Series [199_-_] Certificates. The issuance
of additional Series of Certificates may impact the timing of payments
received by Series [199_-_] Certificateholders.
Interest will accrue on the Class A-1 Certificates at the rate of
[ ]% per annum [above] [below] [times] [ ] (the "Class A-1 Index")
prevailing on the Class A-1 Adjustment Date (as defined herein) [, subject
to certain limitations described herein] (the "Class A-1 Certificate
Rate"), and on the Class A-2 Certificates at the rate of [[ ]% per
annum] [[ ]% [above] [below] [times] [ ] (the "Class A-2 Index")
prevailing on the Class A-2 Adjustment Date (as defined herein) [, subject
to certain limitations described herein]](the "Class A-2 Certificate
Rate"). Interest with respect to the Class A-1 Certificates is payable on
the [ ] day of each month (or, if such day is not a business day, on
the next succeeding business day) (each, [a "Distribution Date" and]a
"[Class A-1] Interest Payment Date"), commencing on [ ,] 199[ ], and
interest with respect to the Class A-2 Certificates is payable on [each
Interest Payment Date] [the [ ] day of each [quarter] [other] (or,
if such day is not a business day, on the next succeeding business day)
(each, a "Class A-2 Interest Payment Date")].
Principal is payable on each Class A-1 Certificate monthly on each
Distribution Date commencing on the [ ], 199[ ] Distribution Date
unless the Class A-1 Revolving Period with respect to such Class A-1
Certificate is automatically extended. The holder of each Class A-1
Certificate will have the option to elect not to extend the Class A-1
Revolving Period with respect to such Certificate by delivering an
election notice during a specified period in each month prior to the month
preceding the month in which the [Accumulation Period Commencement Date]
[Principal Commencement Date] occurs. If the Class A-1 Certificateholder
does not so elect, the Class A-1 Revolving Period for such Certificate
will automatically be extended from month to month, but not beyond the day
immediately preceding the [Accumulation Period Commencement Date]
[Principal Commencement Date]. [ ] ([an "Underwriter" and] the
"Remarketing Broker-Dealer") will have the right but not the obligation to
remarket any Class A-1 Certificate for which an election notice has been
delivered and the right to purchase any such Certificate in the manner
described herein. If the Remarketing Broker-Dealer chooses not to exercise
such right, principal will be payable monthly with respect to such Class
A-1 Certificate commencing on the second Distribution Date after the
election notice is given. If the Class A-1 Revolving Period for a Class
A-1 Certificate does not end in or prior to the month that is two months
prior to the month in which the [Accumulation Period Commencement Date]
[Principal Commencement Date] occurs, the principal of such Certificate
will be payable on [[ ] (the "Expected Payment Date")] [each
Distribution Date, commencing on the Distribution Date in [ ] and
ending on the Distribution Date in [ ]], but may be paid earlier or
later as described herein.
Principal with respect to the Class A-2 Certificates [is scheduled
to be paid on the Expected Payment Date] [is scheduled to be distributed
on each Distribution Date commencing on the Distribution Date in [ ,
] and ending on the Distribution Date in [ ] but may be paid
earlier or later under certain circumstances described herein. In
addition, no principal will be paid with respect to the Class A-2
Certificates until principal of the Class A-1 Certificates has been paid
in full, except in certain limited circumstances described herein.
The Seller's Interest will be subordinated to the rights of the
Series [199_-_] Certificateholders to the limited extent of the Available
Subordinated Amount as described herein. [Describe other Enhancement, if
any, and any additional subordination of the Seller's Interest, if
applicable.] Prospective investors should consider the factors set forth
under "Special Considerations" herein and in the Prospectus.
----------------
THE SERIES [199_-_] CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE
TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF THE
SELLER, THE SERVICER OR ANY AFFILIATE THEREOF. NEITHER THE SERIES
[199_-_] CERTIFICATES NOR THE RECEIVABLES ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to the
Public(1) Discount Seller(1)(2)
<S> <C> <C> <C>
Per Class A-1 Certificate... % % %
Per Class A-2 Certificate .. % % %
Total....................... $ $ $
<FN>
(1) Plus accrued interest, if any, at the applicable Certificate Rate from
[ ], 199[ ].
(2) Before deducting expenses, estimated to be $[ ].
</TABLE>
----------------
The Series [199_-_] Certificates are offered subject to prior sale,
and subject to the Underwriters' right to reject orders in whole or in
part. It is expected that delivery of the Series [199_-_] Certificates
will be made in book-entry form only through the Same Day Funds Settlement
System of The Depository Trust Company [, CEDEL S.A. and the Euroclear
System] on or about , 199 .
[Underwriters]
The date of this Prospectus Supplement is , 199 .
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES
[199_-_] CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION WITH
RESPECT TO THE OFFERING OF THE SERIES [199_-_] CERTIFICATES. ADDITIONAL
INFORMATION IS CONTAINED IN THE PROSPECTUS AND PURCHASERS ARE URGED TO
READ BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL. SALES OF
THE SERIES [199_-_] CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE
PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
SUMMARY OF SERIES TERMS
This summary of Series Terms sets forth and defines specific terms
of the Series [199_-_] Certificates offered in this Prospectus Supplement
and the Prospectus, but is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and
in the Prospectus. Reference is made to the Index of Principal Terms in
each of this Prospectus Supplement and the Prospectus for the location
herein and therein of the definitions of certain capitalized terms used
herein. Certain capitalized terms used but not defined herein have the
meanings assigned to such terms in the Prospectus.
Title of Securities .... Auto Loan Asset Backed Certificates, Series
[199_-_] (the "Series [199_-_] Certificates").
The Series [199_-_] Certificates will be issued
in two Classes: the Floating Rate Class A-1
Money Market Extendible Certificates, Series
[199_-_] (the "Class A-1 Certificates"), and the
[Floating Rate] [ %] Class A-2 [Medium Term]
[ ] Certificates, Series [199_-_] (the "Class
A-2 Certificates").
Remarketing
Broker-Dealer ........ [ ]
The Series [199_-_]
Invested Amount ...... The aggregate Series [199_-_] Invested Amount is
expected to be approximately $[ ] on the Series
Issuance Date (based on information as of the
Series Cut-Off Date) and represents the
principal amount of the Series [199_-_]
Certificates invested in Receivables as of the
Series Issuance Date. [The Invested Amount is
subject to increase to the extent amounts are
withdrawn from the Excess Funding Account and
paid to the Seller. The Seller expects, although
there can be no assurance, that the Invested
Amount of the Series [199_-_] Certificates will
equal the outstanding principal balance of the
Series [199_-_] Certificates within [ ] months
of the Series Issuance Date.] [The Invested
Amount is subject to decrease to the extent
funds are deposited in the Excess Funding
Account and, subsequently, to increase to the
extent amounts are withdrawn from the Excess
Funding Account and paid to the Seller. The
Invested Amount is also subject to reduction
during the [Accumulation Period] [Controlled
Amortization Period], any Early Amortization
Period [and any Reinvestment/Early Payoff
Period] and at such other times as deposits are
made to the Excess Funding Account in connection
with the payment of Receivables.] Any such
increases or decreases in the aggregate Invested
Amount will be allocated to the Class A-1
Certificates and the Class A-2 Certificates pro
rata based on the Class A-1 Allocation
Percentage and the Class A-2 Allocation
Percentage, respectively, for the related
Collection Period. The Class A-1 Allocation
Percentage for any Collection Period is the
percentage obtained by dividing the outstanding
principal amount of the Class A-1 Certificates
as of the last day of the immediately preceding
Collection Period (after giving effect to any
reduction thereof to occur on the immediately
following Distribution Date) by the aggregate
outstanding principal amount of all the Series
[199_-_] Certificates as of such last day (after
giving effect to any reduction thereof to occur
on the immediately following Distribution Date);
and the Class A-2 Allocation Percentage for any
Collection Period is the percentage obtained by
subtracting from 100% the Class A-1 Allocation
Percentage.
Interest ............... Interest on the principal balance of the Class
A-1 Certificates will accrue at the Class A-1
Certificate Rate and will be payable to Class
A-1 Certificateholders on the [ ] day of
each month (or, if such day is not a business
day, on the next succeeding business day) (each,
[a "Distribution Date" and] a "[Class A-1]
Interest Payment Date") commencing [ ],
19[ ]. Interest on the principal balance of the
Class A-2 Certificates will accrue at the Class
A-2 Certificate Rate and will be payable to
Class A-2 Certificateholders on [each Interest
Payment Date] [the day of each [quarter]
[other] (or, if such day is not a business day,
on the next succeeding business day) (each, a
"Class A-2 Interest Payment Date"), provided
that, during any Early Amortization Period,
interest will be distributed to Class A-2
Certificateholders on each Distribution Date,
commencing on the first Distribution Date
following the occurrence of an Early
Amortization Event. A portion of
Certificateholder Interest Collections and
certain other amounts will be deposited each
month into a trust account (the "Interest
Funding Account") and used to make interest
payments to the Class A-2 Certificateholders on
each Class A-2 Interest Payment Date or, during
an Early Amortization Period, each Distribution
Date]. Interest [on the Class A-1 Certificates]
will accrue for the period beginning on and
including the most recent [Class A-1] Interest
Payment Date and ending on and including the day
preceding the next succeeding [Class A-1]
Interest Date (each, a "[Class A-1] Interest
Period"), except that the first [Class A-1]
Interest Period will begin on and include the
Series Issuance Date. [Interest on the Class A-2
Certificates will accrue for the period
beginning on and including the most recent Class
A-2 Interest Payment Date and ending on and
including the day preceding the next succeeding
Class A-2 Interest Payment Date (each, a "Class
A-2 Interest Period"), except that the first
Class A-2 Interest Period will begin on and
include the Series Issuance Date.] Interest for
any [Class A-1] Interest Payment Date [or Class
A-2 Interest Payment Date] due but not paid on
such [Class A-1] Interest Payment Date [or Class
A-2 Interest Payment Date] will be due on the
next [Class A-1] Interest Payment Date [or Class
A-2 Interest Payment Date, as applicable],
together with, to the extent permitted by
applicable law, interest on such amount at the
applicable Certificate Rate plus [ ]%. The
Class A-1 Certificate Rate for each [[Class A-1]
Interest Period] [other] will be determined on
the [ ] day preceding the first day of such
[[Class A-1] Interest Period] [other] (each, a
"Class A-1 Adjustment Date"); [and the Class A-2
Certificate Rate for each [[Class A-2] Interest
Period] [other] will be determined on the [ ]
day preceding the first day of such [[Class A-2]
Interest Period]] [other] (each, a "Class A-2
Adjustment Date")]. The Class A-1 Certificate
Rate will equal [ ] (the "Class A-1 Index")
for the applicable Class A-1 Adjustment Date,
determined as provided herein, [plus] [minus]
[times] [__%][; provided that, if the Class A-1
Certificate Rate for any Distribution Date
calculated on the basis of the Class A-1 Index
is greater than the Assets Receivables Rate,
then the Class A-1 Certificate Rate for such
Distribution Date will be the Assets Receivables
Rate]. The Class A-2 Certificate Rate will equal
[[ ]% per annum][ ] (the "Class A-2
Index") for the applicable Class A-2 Adjustment
Date, determined as provided herein, [plus]
[minus] [times] [ %][; provided that, if the
Class A-2 Certificate Rate for any Distribution
Date calculated on the basis of the Class A-2
Index is greater than the Assets Receivables
Rate, then the Class A-2 Certificate Rate for
such Distribution Date will be the Assets
Receivables Rate]. Interest on the Class A-1
Certificates will be calculated on the basis of
the actual number of days in each [Class A-1]
Interest Period divided by [360] [other].
Interest on the Class A-2 Certificates will be
calculated on the basis of [a 360-day year of
twelve 30-day months] [the actual number of days
in each [Class A-2] Interest Period divided by
[360] [other]].
[Yield Supplement
Account .............. On the Series Issuance Date, the Seller will
deposit $[ ] in a trust account which will
be established by the Seller with the Trustee
(the "Yield Supplement Account"). The Yield
Supplement Account will be funded, from time to
time as described herein, by the deposit thereto
of certain amounts otherwise distributable to
the Seller. See "Series Provisions --
Distributions from the Collection Account;
[Reserve Fund;] Yield Supplement Account --
Yield Supplement Account".]
[[Class A-1] Expected
Payment Date ......... [ ], [ ].]
[Class A-2 Expected
Payment Date ......... [ ], [ ].]
[Excess Funding
Account .............. Unless and until a Special Payoff Period with
respect to any Class A-1 Certificate, any Early
Amortization Period [or Reinvestment/Early
Payoff Period] or the [Accumulation Period]
[Controlled Amortization Period] shall have
commenced, the Excess Funded Amount will be
maintained in the Excess Funding Account.
Upon the earliest of (a) the commencement of a
Special Payoff Period with respect to any Class
A-1 Certificate, (b) the commencement of any
Early Amortization Period [or Reinvestment/
Early Payoff Period] and (c) [ ] [the
[ ] Distribution Date] [the Accumulation
Period Commencement Date], some or all of the
funds on deposit in the Excess Funding Account
will be distributed to the Series [199_-_]
Certificateholders as described herein or
deposited into the Principal Funding Account as
described herein.]
Class A-1 Revolving
Periods; Automatic
Extension of Class A-1
Revolving Periods .... Principal will be payable monthly to the holder
of each Class A-1 Certificate commencing not
later than the second Distribution Date
following the end of the Class A-1 Revolving
Period with respect to such Class A-1
Certificate. During the Class A-1 Revolving
Period with respect to a Class A-1 Certificate,
Principal Collections otherwise allocable to
such Certificate will, subject to certain
limitations, be paid to the holders of Class A-1
Certificates that are in their Special Payoff
Periods or paid to the Seller[, deposited to the
Excess Funding Account] or allocated to another
Series (in effect, in exchange for the
allocation to the interest of such
Certificateholder of an equal interest in the
Receivables balances that are new or would
otherwise be part of the Seller's Interest or
the interest of such other Certificateholders)
in order to maintain [the sum of] the Invested
Amount of such Certificateholder's Certificate
[and such Certificateholder's pro rata share of
the Excess Funded Amount] at a constant level.
The "Class A-1 Revolving Period" for each Class
A-1 Certificate shall be the period beginning on
the Series Cut-Off Date and ending on the last
day of the Collection Period ending in [ ],
199[ ], unless such Revolving Period is
automatically extended. The holder of each Class
A-1 Certificate will have the option of electing
not to extend the Revolving Period with respect
to such Certificate in each Collection Period,
commencing with the Collection Period ending in
[ ], 199[ ], by delivering an election
notice at the time and in the manner described
below. If the holder does not so elect, the
Class A-1 Revolving Period with respect to such
Certificate will be automatically extended from
each Collection Period to the next succeeding
Collection Period. The Revolving Periods for all
Class A-1 Certificates will in any event end
upon the termination of the Series Revolving
Period.
Election Not to Extend
Class A-1 Revolving
Period ............... During the period beginning on and including the
[ ] business day of each month and ending on
and including the [ ] business day of such
month (each, an "Election Period"), commencing
in [ ], 199[ ], each Class A-1
Certificateholder may deliver to its Indirect
Participant or its Participant, as applicable,
with copies to the Remarketing Coordinator and
the Remarketing Broker-Dealer, a notice in which
the Class A-1 Certificateholder elects not to
extend the Revolving Period with respect to its
Class A-1 Certificate effective as of the
beginning of the next succeeding Collection
Period (an "Election Notice"). Delivery of an
Election Notice by a Class A-1 Certificateholder
(each an "Electing Certificateholder") will be
irrevocable and the Electing Certificateholder
will either (x) receive payment in full of the
unpaid principal amount of the related Class A-1
Certificate on the next succeeding Distribution
Date if the Remarketing Broker-Dealer chooses to
purchase such Class A-1 Certificate as described
below or (y) begin receiving monthly payments of
principal as described below. If the Remarketing
Broker-Dealer chooses to purchase the Class A-1
Certificate subject to an Election Notice and
the purchase price with respect thereto is paid,
the Class A-1 Revolving Period for such Class
A-1 Certificate (which would then be held by a
new Class A-1 Certificateholder) will be
automatically extended as if an election not to
extend such Revolving Period had not been made.
Remarketing; Purchase of
Class A-1 Certificates
Subject to an Election
Notice ............... During the period beginning on and including the
first day of any Election Period and ending on
and including the [ ] business day of the
month in which such Election Period occurs (the
"Remarketing Period"), the Remarketing
Broker-Dealer will be entitled to remarket any
Class A-1 Certificates as to which an Election
Notice has been delivered during such Election
Period and the Remarketing Broker-Dealer will be
entitled, but will not be obligated, to purchase
any or all of the Class A-1 Certificates which
are the subject of an Election Notice by
notifying the Remarketing Coordinator of such
purchase by the last day of the related
Remarketing Period with respect to such
Certificates. If the Remarketing Broker-Dealer
chooses to acquire a Class A-1 Certificate
subject to an Election Notice, such Certificate
will be automatically transferred to or upon the
order of the Remarketing Broker-Dealer for
settlement on the Distribution Date following
the Remarketing Period. The purchase price for
any Class A-1 Certificate so purchased will be
equal to the unpaid principal amount of the
subject Certificate. The Electing
Certificateholder will be entitled to receive
the applicable interest payment on the Class A-1
Certificate on the Distribution Date on which
such Certificate is purchased. Following the
delivery of an Election Notice, the Electing
Certificateholder may not transfer the Class A-1
Certificates to which such Election Notice
applies, except (i) pursuant to the remarketing
procedures or (ii) after receipt of notice that
such Certificates will not be purchased by the
Remarketing Broker-Dealer.
Class A-1 Special Payoff
Period ............... During the period beginning on the day
immediately following the last day of the Class
A-1 Revolving Period with respect to a Class A-1
Certificate as to which the Class A-1 Revolving
Period ends in or prior to the month that is
[ ] months prior to the month in which the
[Accumulation Period Commencement Date]
[Principal Commencement Date] occurs and prior
to the commencement of an Early Amortization
Period [or Reinvestment/Early Payoff Period]
[that is not terminated as described herein] and
ending on the earlier of the payment in full of
the outstanding principal balance of such
Certificate and the Termination Date (a "Special
Payoff Period"), the holder of such Class A-1
Certificate will receive principal payments on
its Certificate monthly on each Distribution
Date, commencing not later than the [ ]
Distribution Date following the commencement of
such Special Payoff Period in an amount equal to
the Special Class A-1 Monthly Principal with
respect to such Certificate for such
Distribution Date plus, in certain
circumstances, certain additional amounts. The
amount of such principal will not be subject to
any controlled amortization amount. In the event
that principal of such Class A-1 Certificate
will not be paid in full by the eleventh
Distribution Date after the commencement of the
Special Payoff Period with respect thereto, the
holder thereof will have the option to direct
the Trustee to sell on such eleventh
Distribution Date such Certificateholder's pro
rata share of the Receivables and apply the
proceeds thereof to pay principal of such
holder's Class A-1 Certificate on such
Distribution Date. The holders of any Class A-1
Certificate the principal of which will not be
paid in full by the eleventh Distribution Date
following the commencement of the [Accumulation
Period] [Controlled Amortization Period] or any
Early Amortization Period [or Reinvestment/Early
Payoff Period] will have the same option on such
Distribution Date. Principal of a Class A-1
Certificate is payable in full (provided that
the holder exercises, if necessary, its right to
direct the Trustee to sell a portion of the
Receivables corresponding to such holder's
interest in the Trust and the proceeds of such
sale are sufficient) by not later than the
eleventh Distribution Date after the end of the
Class A-1 Revolving Period with respect to such
Class A-1 Certificate.
Series Revolving
Period ............... During the Series Revolving Period, Principal
Collections allocable to the Series [199_-_]
Certificateholders' Interest generally will be
paid to the holders of Class A-1 Certificates
that are in their Special Payoff Periods or paid
to the Seller[, deposited in the Excess Funding
Account] or allocated to another Series (in
effect, in exchange for the allocation to the
Series [199_-_] Certificateholders' Interest of
an equal interest in the Receivables balances
that are new or that would otherwise be part of
the Seller's Interest or the interest of the
Certificateholders of such other Series) in
order to maintain [the sum of] the aggregate
Invested Amount [and the Excess Funded Amount]
at a constant level, subject to reduction to
reflect payment of principal of Class A-1
Certificates that are in their Special Payoff
Periods. The "Series Revolving Period" shall be
the period beginning on the Series Cut-Off Date
and ending on the earlier of (a) the day
immediately preceding the [Accumulation Period
Commencement Date] [Principal Commencement Date]
and (b) the business day immediately preceding
the day on which an Early Amortization Event [or
Reinvestment/Early Payoff Event] occurs. See
"Series Provisions -- Early Amortization Events"
and " -- Reinvestment/Early Payoff Events" for a
discussion of certain events which might lead to
the early termination of the Series Revolving
Period and, in certain limited circumstances,
the recommencement of the Series Revolving
Period.
[Accumulation Period]
[Controlled
Amortization Period] . [Unless an Early Amortization Event [or
Reinvestment/Early Payoff Event] that is not
cured as described herein shall have occurred,
the Regular Payoff Certificates will have an
Accumulation Period of one, two, three, four or
five month(s) as described in the following
paragraph.
On the [ ] Distribution Date, the Servicer
shall determine the Accumulation Period Length.
The "Accumulation Period Length" will be one,
two, three, four or five month(s) and will be
calculated as the product, rounded upwards to
the nearest integer, of (a) [five] [one divided
by the lowest monthly payment rate on the
Receivables during the last [ ] months] and (b)
a fraction, the numerator of which is the sum of
(i) the Invested Amount as of the [ ]
Distribution Date (after giving effect to all
changes therein on such date) and (ii) the
invested amounts of all other Series [(excluding
certain Series)] currently in their accumulation
periods or expected to be in their accumulation
periods on the [ ] Distribution Date and the
denominator of which is the sum of such Invested
Amount and invested amounts and the invested
amounts as of the [ ] Distribution
Date (after giving effect to all changes therein
on such date) of all other outstanding Series
[(excluding certain Series)] whose respective
revolving periods are not scheduled to end
before the last day of the [ , ]
Collection Period. The Servicer shall
recalculate the Accumulation Period Length on
each Distribution Date that occurs prior to the
Accumulation Period Commencement Date, which
will occur when the number of months in the
Accumulation Period is equal to the Accumulation
Period Length. If the Accumulation Period Length
is one month, two months, three months, four
months or five months, the "Accumulation Period
Commencement Date" shall be the first day of the
[ ] Collection Period, the [ ]
Collection Period, the [ ] Collection
Period, the [ ] Collection Period or
the [ ] Collection Period,
respectively. Notwithstanding the foregoing, the
Accumulation Period Commencement Date shall be
[ ], if, prior to such date, any other
outstanding Series [(excluding certain Series)]
shall have entered into a reinvestment period or
an early amortization period. In addition, if
the Accumulation Period Length shall have been
determined to be less than five months and,
thereafter, any outstanding Series [(excluding
certain Series)] shall enter into a reinvestment
period or an early amortization period, the
Accumulation Period Commencement Date shall be
the earlier of (i) the date that such
outstanding Series shall have entered into its
reinvestment period or early amortization period
and (ii) the Accumulation Period Commencement
Date as previously determined. See "Annex I --
Outstanding Series of Investor Certificates".
The effect of the calculation described above is
to permit the reduction of the length of the
Accumulation Period based on the Invested
Amounts of certain other Series which are
scheduled to be in their revolving periods
during the Accumulation Period and on increases
in the principal payment rate, which, if
continued, would result in a shorter
Accumulation Period.]
[Unless an Early Amortization Event [or
Reinvestment/Early Payoff Event] that is not
cured as described herein shall have occurred,
the Controlled Amortization Period will commence
on [ ] (the "Principal Commencement Date").]
[Reinvestment/Early
Payoff Period ........ If a Reinvestment Event (referred to herein as a
"Reinvestment/Early Payoff Event") occurs the
Class A-1 Certificates that are Regular Payoff
Certificates will have an early payoff period,
during which principal will be paid to the
holders of such Certificates monthly on each
Distribution Date, and the Class A-2
Certificates will have a Reinvestment Period
(such periods being referred to herein
collectively as a "Reinvestment/Early Payoff
Period"). [A Reinvestment/Early Payoff Period
will commence if the Seller delivers a notice to
the Trustee stating that the Seller will no
longer sell Receivables to the Trust commencing
on [ ] or any yearly anniversary thereof and
certain other conditions are satisfied.] See
"Series Provisions -- Reinvestment/Early Payoff
Events" for a description of the [other] events
that might result in the commencement of a
Reinvestment/Early Payoff Period. See also
"Series Provisions -- Distributions from the
Collection Account [; Reserve Fund] [; Yield
Supplement Account] -- Principal Collections".]
[The Seller is required to add Receivables to
the Trust under certain circumstances described
under "Description of the Certificates --
Addition of Accounts" in the Prospectus. The
failure of the Seller to add Receivables when
required will result in the occurrence of a
Reinvestment/Early Payoff Event. However, if no
other Reinvestment/Early Payoff Event has
occurred, the Reinvestment/Early Payoff Period
resulting from such failure will terminate and
the Series Revolving Period and any Class A-1
Revolving Period that terminated as a result of
such Reinvestment/Early Payoff Event will
recommence on the earlier of (i) when the Seller
would no longer be required to add Receivables
to the Trust or (ii) the conveyance of
Receivables to the Trust following written
confirmation from each Rating Agency that such
conveyance will not result in the withdrawal or
lowering of such Rating Agency's rating of
either Class of the Series [199_-_]
Certificates, so long as neither the scheduled
termination date of the Series Revolving Period
nor an Early Amortization Event that is not
cured as described herein has occurred.]
[Notwithstanding the foregoing, in the event of
the occurrence of any Reinvestment/Early Payoff
Event, provided that neither the scheduled
termination date of the Series Revolving Period
nor an Early Amortization Event that is not
cured as described herein has occurred, the
Series Revolving Period and any Class A-1
Revolving Period that terminated as a result of
such Reinvestment/Early Payoff Event may
recommence following written confirmation from
each Rating Agency that such Rating Agency's
rating of either Class of the Series [199_-_]
Certificates will not be withdrawn or lowered as
a result of such recommencement.] [Describe
other cures of Reinvestment/Early Payoff Events
and partial Reinvestment/Early Payoff Periods,
if applicable.]]
Early Amortization
Period ............... Upon the commencement of any Early Amortization
Period that is not cured as described herein,
any Class A-1 Revolving Period and the Series
Revolving Period or the [Accumulation Period]
[Controlled Amortization Period], as the case
may be, will terminate and Principal Collections
and certain other amounts allocable to the
Series [199_-_] Certificateholders' Interest
will no longer be paid to the Seller or the
holders of any other outstanding Series as
described above but instead will be distributed
monthly on each Distribution Date beginning with
the Distribution Date following the Collection
Period in which an Early Amortization Period
commences. Any such amounts allocable to the
interest of holders of the Regular Payoff
Certificates will be paid first to the holders
of Class A-1 Certificates until such
Certificates have been paid in full and then to
the holders of Class A-2 Certificates. See
"Description of the Certificates -- Reinvestment
Events and Early Amortization Events" in the
Prospectus and "Series Provisions -- Early
Amortization Events" herein for a description of
the events that might result in the commencement
of an Early Amortization Period. See also
"Series Provisions -- Distributions from the
Collection Account [;Reserve Fund] [; Yield
Supplement Account] -- Principal Collections".
In addition, on the first Special Payment Date
any amounts on deposit in the Principal Funding
Account [and any amounts on deposit in the
Excess Funding Account not allocable to the
Special Payoff Class A-1 Certificates], up to
the outstanding principal balance of the Regular
Payoff Certificates, will be paid in the same
manner.
[The Seller is required to add Receivables to
the Trust under certain circumstances described
under "Description of the Certificates --
Addition of Accounts" in the Prospectus. The
failure of the Seller to add Receivables when
required will result in the occurrence of an
Early Amortization Event. However, if no other
Early Amortization Event has occurred, the Early
Amortization Period resulting from such failure
will terminate and the Series Revolving Period
and any Class A-1 Revolving Period that
terminated as a result of such Early
Amortization Event will recommence on the
earlier of (i) when the Seller would no longer
be required to add Receivables to the Trust or
(ii) the conveyance of Receivables to the Trust
following written confirmation from each Rating
Agency that such conveyance will not result in
the withdrawal or lowering of such Rating
Agency's rating of either Class of the Series
[199_-_] Certificates, so long as [neither] the
scheduled termination date of the Series
Revolving Period [nor a Reinvestment/Early
Payoff Event that is not cured as described
herein] has [not] occurred.]
[Notwithstanding the foregoing, in the event of
the occurrence of any Early Amortization Event,
provided that [neither] the scheduled
termination date of the Series Revolving Period
[nor a Reinvestment/Early Payoff Event that is
not cured as described herein] has [not]
occurred, the Series Revolving Period and any
Class A-1 Revolving Period that terminated as a
result of such Early Amortization Event may
recommence following written confirmation from
each Rating Agency that such Rating Agency's
rating of the Series [199_-_] Certificates will
not be withdrawn or lowered as a result of such
recommencement.] [Describe other cures of Early
Amortization Events, if applicable.]
Subordination of the
Seller's Interest .... If [on or prior to the Fully Reinvested Date [or
thereafter if the Series Revolving Period has
recommenced] the Interest Collections,
Investment Proceeds[, certain amounts in the
Reserve Fund] and certain other amounts
allocable to the Series [199_-_]
Certificateholders for any Collection Period are
not sufficient to cover the interest payable
with respect to the Series [199_-_] Certificates
on the next Distribution Date (plus any overdue
interest and interest thereon), the Monthly
Servicing Fee for such Distribution Date, any
Investor Default Amount for such Distribution
Date and certain other amounts, the Available
Subordinated Amount will be applied to make up
such deficiency. The Available Subordinated
Amount for a Determination Date is equal to (a)
the lesser of (i) the Available Subordinated
Amount for the preceding Determination Date,
minus, with certain limitations, the Draw Amount
for such preceding Determination Date, [minus
funds from the Reserve Fund applied to cover any
portion of the Investor Default Amount,] plus
the excess, if any, of the Required Subordinated
Amount for such Determination Date over the
Required Subordinated Amount for the immediately
preceding Determination Date, plus the amount of
Excess Servicing available to be paid to the
Seller as described under "Series Provisions --
Distributions from the Collection Account [;
Reserve Fund Account] [; Yield Supplement
Account] -- Excess Servicing", and (ii) the
product of the fractional equivalent of the
Subordinated Percentage and the Invested Amount
[minus (b) in the case of clause (a)(i), the
Incremental Subordinated Amount for such
preceding Determination Date, plus (c) the
Incremental Subordinated Amount for the current
Determination Date,] [plus (d) the Subordinated
Percentage of funds to be withdrawn from the
Excess Funding Account on the succeeding
Distribution Date and paid to the Seller or
allocated to one or more Series]; provided,
however, that, from and after the commencement
of [the [Accumulation Period] [Controlled
Amortization Period] or] any Early Amortization
Period [that is not cured as described herein]
until the payment in full of the Series [199_-_]
Certificates, the Available Subordinated Amount
shall be calculated based on the Invested Amount
as of the close of business on the day preceding
such [[Accumulation Period] [Controlled
Amortization Period] or] Early Amortization
Period [; and provided further that from and
after the commencement of any Reinvestment/
Early Payoff Period [that is not cured as
described herein] until the earliest of the
commencement of any Early Amortization Period
[that is not cured as described herein], the
payment in full of the Series [19_-_]
Certificates and the Fully Reinvested Date, the
Available Subordinated Amount shall be
calculated based on the Invested Amount as of
the close of business on the day preceding such
Reinvestment/Early Payoff Period [less [describe
permitted reductions, e.g., based on payment
rates]]. The Available Subordinated Amount for
the first Determination Date is equal to the
Required Subordinated Amount. The "Required
Subordinated Amount" shall mean, as of any date
of determination [, the sum of (a)] the product
of the initial Subordinated Percentage [as
adjusted from time to time as described herein
other than as a result of an increase therein at
the option of the Seller,] and the Invested
Amount [and (b) the Incremental Subordinated
Amount].
[The "Incremental Subordinated Amount" on any
Determination Date will equal the result
obtained by multiplying (a) a fraction, the
numerator of which is the sum of the Invested
Amount on the last day of the immediately
preceding Collection Period and the Available
Subordinated Amount for such Determination Date
(calculated without adding the Incremental
Subordinated Amount for such Determination Date
as described in clause (c) above), and the
denominator of which is the Pool Balance on such
last day by (b) the excess, if any, of (x) the
sum of the Overconcentration Amount, the
Installment Balance Amount and the aggregate
amount of Ineligible Receivables on such
Determination Date over (y) the aggregate amount
of Ineligible Receivables, Receivables in
Accounts containing Dealer Overconcentrations
and Receivables in Installment Balances, in each
case that became Defaulted Receivables during
the preceding Collection Period and are not
subject to reassignment from the Trust, unless
certain insolvency events relating to the Seller
or CCC have occurred, as further described in
the Pooling and Servicing Agreement.]
The "Subordinated Percentage" will initially
equal the percentage equivalent of a fraction,
the numerator of which is the Subordination
Factor and the denominator of which will be the
excess of 100% over the Subordination Factor.
The Subordination Factor will [initially] be
[ ]% [, but will be subject to increase [by
[ ]% when the [Floating Rate] [ %] Auto Loan
Asset Backed Certificates, Series [ ] have been
paid in full] [by [ ]% in the event that the
rating of CFC's long-term unsecured debt is
lowered below BBB- by Standard & Poor's or
withdrawn by Standard & Poor's] [or if [describe
other events that will require an increase in
the Subordination Factor]] [; provided, however,
that in no event will the Subordination Factor
be greater than [ ]%]. The Seller may, in its
sole discretion, increase at any time the
Available Subordinated Amount for so long as the
cumulative amount of such increases does not
exceed the lesser of (i) $[ ] or (ii) [ ]%
of the Invested Amount on such date. The Seller
is not under any obligation to increase the
Available Subordinated Amount at any time[,
except as described herein]. If [the sum of] the
Available Subordinated Amount [and the
Incremental Subordinated Amount] were reduced to
less than [the sum of] the Required Subordinated
Amount [and the Incremental Subordinated
Amount], a [Reinvestment/Early Payoff Event]
[Early Amortization Event] would occur. The
Seller could elect to increase the Available
Subordinated Amount at the time such a
[Reinvestment/Early Payoff Event] [Early
Amortization Event] would otherwise occur, thus
preventing or delaying the occurrence of the
[Reinvestment/Early Payoff Event] [Early
Amortization Event]. [Describe partial
Reinvestment/Early Payoff Periods resulting from
a failure to meet the test described above, if
applicable.]
[The Seller's Interest will be further
subordinated to the extent of the Available
Negative Carry Subordinated Amount. In the event
of the occurrence of [a Reinvestment/Early
Payoff Event,] [an Early Amortization Event] or
the [Accumulation Period Commencement Date]
[commencement of the Controlled Amortization
Period], certain Interest Collections and
Principal Collections allocated to the Seller,
not to exceed the Available Negative Carry
Subordinated Amount, will be deposited to the
Reserve Fund [and other] until the amounts on
deposit therein equal the Negative Carry
Required Amount [and other]. See "Series
Provisions -- Allocation of Collections; Limited
Subordination of Seller's Interest".] [Describe
any other subordination of the Seller's
Interest, if applicable.]
Required Participation
Percentage ........... "Required Participation Percentage" shall mean,
with respect to Series [199_-_], [ ]%;
provided, however, [that if the aggregate amount
of Principal Receivables due from any Dealer or
group of affiliated Dealers at the close of
business on the last day of any Collection
Period with respect to which such determination
is being made is greater than [ ]% of the Pool
Balance on such last day, the Required
Participation Percentage shall mean, as of such
last day and with respect to such Collection
Period and the immediately following Collection
Period only, [ ]%; provided, further,] that the
Seller may, upon ten days' prior notice to the
Trustee, the Rating Agencies and any Enhancement
Provider reduce the Required Participation
Percentage to not less than 100%, so long as the
Rating Agencies shall not have notified the
Seller or the Servicer that any such reduction
will result in a reduction or withdrawal of the
rating of either Class of the Series [199_-_]
Certificates or any other outstanding Series or
Class of Certificates.
Other Series
Issuances ............ As of the date hereof, [ ] other Series issued
by the Trust are out- standing. See "Annex I --
Outstanding Series of Investor Certi- ficates"
for a summary of the terms of the outstanding
Series.
Allocations ............ Interest Collections, Principal Collections and
Defaulted Receivables allocated to Series
[199_-_] as described under "Description of the
Certificates -- Allocation Percentages --
Allocation among Series" in the Prospectus will
be further allocated between the Series [199_-_]
Certificateholders' Interest and the Seller's
Interest as described below.
Interest Collections and Defaulted Receivables
allocated to Series [199_-_] will be allocated
at all times to the Series [199_-_]
Certificateholders' Interest based on the
Floating Allocation Percentage applicable during
the related Collection Period [, provided that
during any Early Amortization Period, Interest
Collections will be allocated to the Series
[199_-_] Certificateholders' Interest based on
the Fixed Allocation Percentage as described
below]. The Floating Allocation Percentage for
any Collection Period is [the percentage
obtained by dividing the Invested Amount on the
last day of the immediately preceding Collection
Period by the product of (x) the Pool Balance on
the last day of the immediately preceding
Collection Period and (y) the Series Allocation
Percentage for the Collection Period in respect
of which the Floating Allocation Percentage is
being calculated] [other]. Principal Collections
will also be allocated to Series [199_-_]
Certificateholders' Interest based on the
Floating Allocation Percentage during any period
(a "Nonprincipal Period") that is not the
Special Payoff Period for any Class A-1
Certificate the [Accumulation Period]
[Controlled Amortization Period] or an Early
Amortization Period [or Reinvestment/Early
Payoff Period].
During the Special Payoff Period for any Class
A-1 Certificate, the [Accumulation Period]
[Controlled Amortization Period] and any Early
Amortization Period [or Reinvestment/Early
Payoff Period], Principal Collections allocated
to Series [199_-_] will be allocated to the
Series [199_-_] Certificateholders' Interest
based on the Fixed Allocation Percentage. The
Fixed Allocation Percentage for a Collection
Period during Special Payoff Period for any
Class A-1 Certificate, the [Accumulation Period]
[Controlled Amortization Period], any Early
Amortization Period [and any Reinvestment/Early
Payoff Period] is [the percentage equivalent of
a fraction, the numerator of which is the sum of
(x) the Invested Amount of each Class A-1
Certificate that is in its Special Payoff Period
as of the last day of its Class A-1 Revolving
Period and (y) the Invested Amount of each other
Class A-1 Certificate as of the last day of the
Series Revolving Period and the Invested Amount
of each Class A-2 Certificate as of the last day
of the Series Revolving Period, if such last day
has occurred or, if such last day has not
occurred, the Invested Amount of each such other
Class A-1 Certificate and Class A-2 Certificate
as of the last day of the immediately preceding
Collection Period and the denominator of which
is the product of (x) the Pool Balance on the
last day of the immediately preceding Collection
Period and (y) the Series Allocation Percentage
for the Collection Period in respect of which
the Fixed Allocation Percentage is being
calculated] [other].
Principal Collections allocated to the Series
[199_-_] Certificateholders' Interest will be
further allocated between the interest of each
holder of a Class A-1 Certificate that is in a
Special Payoff Period (each, a "Special Payoff
Class A-1 Certificate"), and the interest of
holders of other Series [199_-_] Certificates
(the "Regular Payoff Certificates") based on
their respective Certificate Principal
Percentages. The Certificate Principal
Percentage for any Collection Period and any
Special Payoff Class A-1 Certificate is [the
percentage obtained by dividing the Invested
Amount of such Certificate as of the last day of
its Class A-1 Revolving Period by the sum of (x)
the aggregate Invested Amount of all Special
Payoff Certificates as of the last day of their
respective Class A-1 Revolving Periods and (y)
the aggregate Invested Amount of all Regular
Payoff Certificates as of the last day of the
Series Revolving Period, if such last day has
occurred or, if such last day has not occurred,
the aggregate Invested Amount of such
Certificates as of the last day of the
immediately preceding Collection Period]
[other]; and the Certificate Principal
Percentage for any Collection Period and all
Regular Payoff Certificates in the aggregate is
100% minus the sum of the Certificate Principal
Percentages for all Special Payoff Class A-1
Certificates.
During any Special Payoff Period for any Special
Payoff Class A-1 Certificates that does not
occur during the [Accumulation Period]
[Controlled Amortization Period] or any Early
Amortization Period [or Reinvestment/Early
Payoff Period] Principal Collections allocated
to the interest of the Series [199_-_]
Certificateholders other than that of the
holders of such Special Payoff Class A-1
Certificates will be reallocated and paid to the
holders of such Class A-1 Certificates. In
addition, unless an Early Amortization Event [or
Reinvestment/Early Payoff Event] [that is not
cured as described herein] shall have occurred,
monthly [deposits of principal to the Principal
Funding Account with respect to] [payments of
principal of] the Regular Payoff Certificates
during the [Accumulation Period] [Controlled
Amortization Period] will not exceed the
[Controlled Deposit Amount] [Controlled
Distribution Amount] and, subject to certain
limitations, any Principal Collections allocated
to such Certificates but not paid to [the
Principal Funding Account] [the holders of such
Certificates] will be reallocated to the Special
Payoff Class A-1 Certificates. Finally, during
any Special Payoff Period for any Special Payoff
Class A-1 Certificate, any Principal Collections
allocated to such Certificate and not needed to
pay principal of such Certificate will be
reallocated and paid to holders of other Special
Payoff Class A-1 Certificates or, during the
[Accumulation Period] [Controlled Amortization
Period] or any Early Amortization Period [or
Reinvestment/Early Payoff Period], reallocated
to the Regular Payoff Certificates and paid to
the Principal Funding Account or the holders of
other Series [199_-_] Certificates. Any excess
after such reallocations will be paid to the
Seller or allocated to any other Series. See
"Series Provisions -- Allocation Percentages --
Principal Collections for All Series [199_-_]
Certificates" and " -- Principal Collections for
All Series".
Excess Principal
Collections .......... [Describe Excess Principal Collection
allocations applicable to Series [199_-_]]. See
"Series Provisions -- Allocation Percentages --
Principal Collections for All Series".
[Enhancement ........... The Trust will have the benefit of a [letter of
credit] [interest rate swap] [cash collateral
account] [guaranty] [surety bond] [insurance
policy] [spread account] [other enhancement]
[issued by [ ]] for the benefit of the
Series [199_-_] Certificateholders as described
herein. [Describe subordination of another
Series, if applicable.] See "Series Provisions
-- Enhancements" herein.]
Registration of
Series [199_-_]
Certificates ......... [The Series [199_-_] Certificates will initially
be represented by one or more Certificates
registered in the name of Cede, as the nominee
of DTC. No person acquiring an interest in the
Series [199_-_] Certificates will be entitled to
receive a definitive certificate representing
such person's interest except under certain
limited circumstances. Series [199_-_]
Certificateholders may elect to hold their
Series [199_-_] Certificates through DTC (in the
United States) [or CEDEL or Euroclear (in
Europe)]. See "Description of the Certificates
-- Definitive Certificates" in the Prospectus.]
Servicing Fee Rate ..... [ ]% or, if the Monthly Servicing Fee has been
waived as discussed under "Description of the
Certificates -- Servicing Compensation and
Payment of Expenses" in the Prospectus, 0% for
the Distribution Date in respect of which the
Monthly Servicing Fee has been waived.
[Optional Repurchase ... The Series [199_-_] Certificateholders' Interest
will be subject to optional repurchase by the
Seller on any Distribution Date after the
aggregate Invested Amount is reduced to an
amount less than or equal to $[ ] ([ ]% of
the initial outstanding principal amount of the
Series [199_-_] Certificates). The purchase
price will equal the sum of (i) the Invested
Amount on the Determination Date preceding the
Distribution Date on which the purchase is
scheduled to be made, (ii) accrued and unpaid
interest on the Series [199_-_] Certificates at
the applicable Certificate Rate (together with
interest on overdue interest) [and (iii) any
outstanding Carry-over Amount (together with
interest thereon].]
Series [199_-_]
Termination Date ..... [ , 199 ]. See "Series Provisions -- Series
Termination".
Legal Investment ....... The Class A-1 Certificates will be eligible
securities for purchase by money market funds
under Rule 2a-7 under the Investment Company Act
of 1940, as amended. See "Special Considerations
-- Legal Investment".
ERISA Considerations ... [Series [199_-_] Certificates may be eligible
for purchase by employee benefit plans. See
"ERISA Considerations" in the Prospectus.]
[Other.]
Certificate Ratings .... It is a condition to the issuance of the Class
A-1 Certificates that they be rated in the
highest short-term rating category by at least
one nationally recognized rating agency and a
condition to the issuance of the Class A-2
Certificates that they be rated in the highest
long-term category by at least one such rating
agency. A security rating is not a
recommendation to buy, sell or hold securities
and is subject to revision or withdrawal in the
future by the assigning rating agency. The
rating of the Series [199_-_] Certificates
addresses the likelihood of the ultimate payment
of the principal and interest, at the applicable
Certificate Rate, on the Series [199_-_]
Certificates. However, the rating agencies do
not evaluate, and the rating of the Series
[199_-_] Certificates does not address the
likelihood of payment of the outstanding
principal of the Series [199_-_] Certificates by
any date, including the Expected Payment Date,
other than (i) in the case of a Class A-1
Certificate, the eleventh Distribution Date
after the termination of the Class A-1 Revolving
Period with respect thereto or (ii) in the case
of the Class A-2 Certificates, the Series
Termination Date. [The rating of a Class of
Certificates also does not address the
likelihood of payment of any Carry-over Amount.]
See "Special Considerations -- Ratings of the
Certificates".
Series Issuance Date ... [ , 199 ].
Series Cut-Off Date .... [ , 199 ].
<PAGE>
SPECIAL CONSIDERATIONS
Payments. The payment of principal on the Series [199_-_]
Certificates is dependent on Dealer repayments. Accordingly, the Series
[199_-_] Certificates may not be fully amortized by the Expected Payment
Date and no assurances can be given as to the timing of the final
principal payment on a Class A-1 Certificate as to which a Special Payoff
Period commences prior to the [Accumulation Period Commencement Date]
[Principal Commencement Date]. [In addition, the shorter the Accumulation
Period Length the greater the likelihood that payment of the Series
[199_-_] Certificates in full by the Expected Payment Date will be
dependent on the reallocation of Principal Collections which are initially
allocated to other Series.] If one or more other Series from which
Principal Collections are expected to be available to be reallocated to
the payment of the Series [199_-_] Certificates enters into an early
amortization period or reinvestment period after [ ] [the [ ]
Distribution Date][the Accumulation Period Commencement Date], Principal
Collections allocated to such Series generally will not be available to be
reallocated to make payments of principal of the Series [199_-_]
Certificates and [the final payment of principal of the Series [199_-_]
Certificates may be later than the Expected Payment Date] [the amount
distributed in respect of principal of the Series [199_-_] Certificates on
any Distribution Date during the Controlled Amortization Period may be
less than the Controlled Amortization Amount]. Upon written request, the
Seller will make available to Series [199_-_] Certificateholders
Disclosure Documents relating to the other outstanding Series which
describe the events which could result in the commencement of an early
amortization period or reinvestment period with respect to such
outstanding Series. Also, if an Early Amortization Period [or
Reinvestment/Early Payoff Period] [that is not terminated as described
herein] commences with respect to the Series [199_-_] Certificates prior
to the [Accumulation Period Commencement Date] [Principal Commencement
Date], Principal Collections allocated to the interest of holders of
Regular Payoff Certificates generally will not be available to be
reallocated to make payments of principal of the Special Payoff Class A-1
Certificates except as described herein and the final payment of principal
of such Class A-1 Certificates may be later than expected. Although the
holder of each Class A-1 Certificate will have the right to direct the
Trustee to sell a portion of the Receivables corresponding to such
holder's interest in the Trust if principal of such Class A-1 Certificate
will not be paid in full by the eleventh Distribution Date after the
commencement of the related Special Payoff Period or the eleventh
Distribution Date following the commencement of the [Accumulation Period]
[Controlled Amortization Period] or an Early Amortization Period [or
Reinvestment/Early Payoff Period], no assurances can be given as to the
price at which such Receivables could be sold. See "Maturity and Principal
Payment Considerations".
[In addition, a significant decline in the amount of Receivables
generated could cause an [Early Amortization Event] [Reinvestment/Early
Payoff Event]. However, such a decline in the amount of Receivables
generated would initially be absorbed by an increase in the Excess Funded
Amount. The Receivables Purchase Agreement will provide that CCC will be
required to designate additional Accounts, the Receivables of which will
be sold to the Seller, and the Pooling and Servicing Agreement will
provide that the Seller will be required to transfer such Receivables to
the Trust in the event that the amount of the Pool Balance is not
maintained at a certain minimum level. If additional Accounts are not
designated by CCC when required, an [Early Amortization Event]
[Reinvestment/Early Payoff Event] will occur and result in the
commencement of an [Early Amortization Period] [Reinvestment/Early Payoff
Period], although in certain circumstances the resulting [Early
Amortization Period] [Reinvestment/Early Payoff Period] may terminate and
the Series Revolving Period and any Class A-1 Revolving Period that
terminated as a result of such [Early Amortization Event]
[Reinvestment/Early Payoff Event] recommence. If an insolvency event
relating to CCC, CFC, the Seller or Chrysler were to occur, then an Early
Amortization Event [or Reinvestment/Early Payoff Event] would occur,
additional Receivables would not be transferred to the Trust and
distributions of principal in respect of the Regular Payoff Certificates
[or the Regular Payoff Certificates that are Class A-1 Certificates, in
the case of a Reinvestment/Early Payoff Event,] would not be subject to
the [Controlled Deposit Amount][Controlled Amortization Amount]. See "The
Dealer Floorplan Financing Business" in the Prospectus and "Maturity and
Principal Payment Considerations" herein and see also "Series Provisions
- -- Early Amortization Events" [and " -- "Reinvestment/Early Payoff
Events"] for a discussion of other events which might lead to the
occurrence of an Early Amortization Period [or Reinvestment/Early Payoff
Period].]
Trust's Relationship to Chrysler and CCC; Financial Condition of
Chrysler. Certain aspects of the Trust's relationship to Chrysler
Corporation and CCC are described in the Prospectus under "Special
Considerations -- Trust's Relationship to Chrysler and CCC". Set forth
below is certain financial information with respect to Chrysler and CFC.
Chrysler reported earnings before income taxes of $1.6 billion for
the second quarter of 1994, compared with $1.1 billion for the second
quarter of 1993. For the first six months of 1994, Chrysler reported
earnings before income taxes and the cumulative effect of changes in
accounting principles of $3.1 billion, compared with $2.0 billion for the
comparable period of 1993. Pretax earnings for the second quarter and
first six months of 1993 included gains on sales of automotive assets and
investments of $171 million.
The improvement in operating results in the second quarter and first
six months of 1994 over the corresponding periods of 1993 resulted from an
increase in sales volume and pricing actions, including lower per unit
sales incentives, partially offset by increased employee costs. Chrysler's
worldwide factory car and truck sales for the three and six months ended
June 30, 1994 were 702,802 units, a 7 percent increase from the second
quarter of 1993, and 1,443,400 units, an 11 percent increase over the
first six months of 1993. Combined U.S. and Canadian dealers' days supply
of vehicle inventory decreased to 45 days at June 30, 1994 from 63 days at
December 31, 1993 and 50 days at June 30, 1993.
Net earnings for the second quarter of 1994 were $956 million, or
$2.61 per common share, compared with $685 million, or $1.86 per common
share, in the second quarter of 1993. Net earnings for the six months
ended June 30, 1994 were $1.9 billion, compared to a net loss of $3.8
billion for the comparable period of 1993. The net loss for the first six
months of 1993 resulted from a charge of $4.7 billion, or $13.86 per
common share, for the cumulative effect of a change in accounting
principle related to the adoption of Statement of Financial Accounting
Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions". Results for the first six months of 1993
also included a charge of $283 million, or $0.84 per common share, for the
cumulative effect of a change in accounting principle relating to the
adoption of SFAS No. 112, "Employers' Accounting for Postemployment
Benefits".
Chrysler reported earnings before income taxes and the cumulative
effect of changes in accounting principles of $3.8 billion in 1993,
compared with $934 million in 1992. The earnings in 1993 included a gain
on sales of automotive assets and investments of $265 million. Earnings in
1992 included a gain on the sale of an automotive investment of $142
million, a $110 million charge for reducing investments of Chrysler Canada
Ltd. and certain of its employee benefit plans in a real estate investment
concern to their estimated net realizable value, and a $101 million
restructuring charge related to the realignment of Chrysler's short-term
vehicle rental subsidiaries. Excluding the effect of these items,
Chrysler's pretax earnings for 1993 and 1992 were $3.6 billion and $1.0
billion, respectively.
The improvement in 1993 over 1992 was primarily the result of a
substantial increase in unit sales volume, pricing actions, including
significantly lower per unit sales incentives, and an improved mix of
higher-margin products, partially offset by increased labor and benefit
costs. Chrysler's worldwide factory car and truck sales during 1993
increased 14 percent to 2,475,738 units. U.S. and Canadian dealers' days
supply of vehicle inventory decreased to 63 days at December 31, 1993 from
72 days at December 31, 1992.
Including the provision for income taxes and the cumulative effect
of changes in accounting principles, Chrysler reported a net loss for 1993
of $2.6 billion, or $7.62 per common share, compared with net earnings of
$723 million, or $2.21 per common share for 1992. The net loss for 1993
resulted from a charge of $4.7 billion, or $13.57 per common share, for
the cumulative effect of a change in accounting principle related to the
adoption of SFAS No. 106. Also included in the 1993 results was a charge
of $283 million, or $0.82 per common share, for the cumulative effect of a
change in accounting principle relating to the adoption of SFAS No. 112.
Net earnings for 1992 included a $218 million, or $0.74 per common share,
favorable cumulative effect of a change in accounting principle relating
to the adoption of SFAS No. 109, "Accounting for Income Taxes".
During 1992 and 1993, Chrysler took various actions to strengthen
its financial condition, improve liquidity and add to its equity base in
order to ensure its ability to carry out its new product development and
facility modernization programs without significant interruption. In the
second and third quarters of 1993, Chrysler sold its remaining 50.3
million shares of Mitsubishi Motors Corporation ("MMC") stock for net
proceeds of $329 million and sold the plastics operations of its Acustar
division for net proceeds of $132 million. In February 1993, Chrysler
issued 52 million shares of common stock for net proceeds of $1.95
billion. In 1992, Chrysler sold 43.6 million shares of MMC stock for net
proceeds of $215 million and issued 1.7 million shares of convertible
preferred stock for net proceeds of $836 million.
CFC's earnings before taxes were $69 million and $144 million for
the three and six months ended June 30, 1994, which compares to $62
million and $112 million for the comparable periods of 1993, before the
cumulative effect of changes in accounting principles. The increase in
1994 earnings before taxes and accounting changes resulted from higher
levels of automotive financing and lower provisions for credit losses,
partially offset by reduced retail automotive margins.
CFC's net earnings were $44 million and $91 million for the three
and six months ended June 30, 1994 compared to $44 million and $51 million
in the comparable periods of 1993. Net earnings for the six months ended
June 30, 1993 included charges totaling $30 million from the adoption of
SFAS No. 106 and SFAS No. 112.
CFC reported net earnings of $129 million for 1993 compared to $231
million for 1992. Accounting changes in 1993 and 1992 negatively impact
net earnings comparisons by $81 million. Net earnings for 1993 included a
$30 million after-tax charge from the adoption of SFAS No. 106 and SFAS
No. 112, while 1992 net earnings included a $51 million favorable
after-tax adjustment from the adoption of SFAS No. 109.
CFC's earnings before the cumulative effect of changes in accounting
principles were $159 million for 1993 and $180 million for 1992. The
decline in earnings before accounting changes resulted largely from higher
borrowing costs incurred under CFC's revolving credit agreements.
Both Chrysler and CFC regained investment grade credit ratings in
1993. The improved credit ratings reflect Chrysler's improved operating
results, the significant improvements in Chrysler's balance sheet
(including reductions in its outstanding debt and unfunded pension
obligation), and CFC's improved liquidity.
Chrysler and CFC are subject to the informational requirements of
the Exchange Act and in accordance therewith file reports and other
information with the Commission. For further information regarding
Chrysler and CFC reference is made to such reports and other information
which are available as described under "Available Information" in the
Prospectus.
Credit Enhancement. Credit enhancement of the Series [199_-_]
Certificates will be provided by the subordination of the Seller's
Interest to the extent of the Available Subordinated Amount as described
herein [and amounts in the Reserve Fund]. [Describe other subordination of
the Seller's Interest, if applicable.] [Describe any applicable
Enhancements.] The amount of such credit enhancement is limited and will
be reduced from time to time as described herein. See "Series Provisions
- -- Allocation of Collections; Limited Subordination of Seller's Interest"
[and " -- Enhancements"].
Timing of Payments of Principal of Class A-2 Certificates. The
Class A-2 Certificateholders will not receive distributions of principal
until the later of (i) the Distribution Date on which the Class A-1
Certificates have been paid in full and (ii) [the Expected Payment Date]
[the [ ] Distribution Date], except in certain limited circumstances
described herein.
[Control. Subject to certain limited circumstances, Series [199_-_]
Certificateholders holding a specified percentage of the aggregate unpaid
principal amount of the Series [199_-_] Certificates may take certain
actions, or direct certain actions to be taken, under the Pooling and
Servicing Agreement or the Series Supplement, including amending the
Series Supplement and declaring certain Early Amortization Events. In such
cases (subject to certain exceptions), when determining whether the
required percentage of Series [199_-_] Certificateholders have given their
approval or consent, the Class A-1 Certificateholders and the Class A-2
Certificateholders will be treated as a single class. Accordingly, the
Class A-[ ] Certificateholders will have the power to determine whether
any such action is taken without regard to the position or interests of
the Class A-[ ] Certificateholders. The Class A-[ ] Certificateholders
will not have similar power. In order to make such determinations, the
Class A-[ ] Certificateholders will need the approval or consent of the
Class A-[ ] Certificateholders owning a substantial portion of the Class
A-[ ] Certificateholders' Interest.]
[Basis Risk. The Receivables bear interest at prime rates announced
by certain banks plus a margin currently ranging from [ ]% to [ ]%.
[The Class A-1 Certificate Rate is based on the Class A-1 Index. [The
Class A-2 Certificate Rate is based on the Class A-2 Index.] If, in
respect of any Distribution Date, there does not exist a positive spread
between (a) the Assets Receivables Rate and (b) the Class A-1 Certificate
Rate based on the Class A-1 Index [or the Class A-2 Certificate Rate based
on the Class A-2 Index], the Class A-1 Certificate Rate for such
Distribution Date [or the Class A-2 Certificate Rate for such Distribution
Date, as the case may be,] will be the Assets Receivables Rate. The Class
A-1 Certificate Rate based on the Class A-1 Index [or the Class A-2
Certificate Rate based on the Class A-2 Index] may exceed the Assets
Receivables Rate as a result of (i) the Class A-1 Index [or the Class A-2
Index, as the case may be,] exceeding the applicable prime rate [and (ii)
if amounts are deposited in [the Excess Funding Account or] the Principal
Funding Account, the Class A-1 Index [or the Class A-2 Index, as the case
may be,] exceeding the investment earnings on amounts on deposit therein].
[Any Carry-over Amount will be reduced by the amounts, if any, on deposit
in the Yield Supplement Account. However, there can be no assurance that
sufficient amounts, if any, will be available in the Yield Supplement
Account. In addition, the amount required to be deposited in the Yield
Supplement Account is not designed to include amounts which would be
required to pay any Class A-1 Carry-over Amount resulting from the Class
A-1 Index exceeding the applicable prime rate [or any Class A-2 Carry-over
Amount resulting from the Class A-2 Index exceeding such prime rate]. See
"Series Provisions -- Interest" and " -- Distributions from the Collection
Account[; Reserve Fund]; Yield Supplement Account -- Yield Supplement
Account".
In addition, CCC may reduce the rates applicable to any of the
Receivables, so long as CCC does not reasonably expect any such reduction
to result in the creation of a Carry-over Amount. In any event, such a
reduction would have the effect of reducing or possibly eliminating the
positive spread, if any, between the Assets Receivables Rate and the
[related] [Class A-1] Certificate Rate.
Once amounts deposited from time to time in the Yield Supplement
Account are exhausted, any Carry-over Amount arising as a result of the
[Class A-1] Certificate Rate [for either Class of Series [199_-_]
Certificates] being determined on the basis of the Assets Receivables Rate
will be paid to the extent funds are allocated and available therefor
after making all required distributions and deposits with respect to the
Series [199_-_] Certificates, including payments with respect to principal
[(including payments to the Excess Funding Account)], Monthly Interest,
the Monthly Servicing Fee, [the Reserve Fund Deposit Amount] and the
Investor Default Amount as described under "Series Provisions --
Distributions from the Collection Account; [Reserve Fund;] Yield
Supplement Account". However, if any Carry-over Amount is outstanding for
six consecutive Distribution Dates an [Early Amortization Event]
[Reinvestment/Early Payoff Event] will occur. See "Series Provisions --
[Early Amortization Events"] [" -- Reinvestment/Early Payoff Event"]. The
ratings of the Series [199_-_] Certificates do not address the likelihood
of payment of any Carry-over Amount.]
Legal Investment. The Class A-1 Certificates will be eligible
securities for purchase by money market funds under Rule 2a-7 under the
Investment Company Act of 1940, as amended, for so long as they are rated
in one of the two highest short-term rating categories by each of two
nationally recognized statistical rating organizations. Money market funds
should note that the Class A-1 Certificates satisfy the requirement of
Rule 2a-7 because the holder has the right (a) to give an Election Notice,
thereby terminating the Class A-1 Revolving Period with respect thereto,
and (b) to direct the Trustee to sell a portion of the Receivables
corresponding to such holder's interest in the Trust, if the principal of
a Class A-1 Certificate would not otherwise be paid in full on or before
the eleventh Distribution Date after the end of the Class A-1 Revolving
Period with respect thereto. Money market funds should be prepared at all
times to take these steps.
Ratings of the Certificates. It is a condition of the Class A-1
Certificates that they be rated in the highest short-term rating category
by at least one Rating Agency and a condition to issuance of the Class A-2
Certificates that they be rated in the highest long-term rating category
by at least one Rating Agency. A rating is not a recommendation to buy,
sell or hold securities, inasmuch as such rating does not comment as to
the market price or the suitability for a particular investor. There is no
assurance that a rating will remain for any given period of time or that a
rating will not be lowered or withdrawn entirely by a Rating Agency if in
its judgment circumstances in the future so warrant. The rating of the
Series [199_-_] Certificates addresses the likelihood of the ultimate
payment of principal and interest, at the applicable Certificate Rate, on
the Series [199_-_] Certificates. However, a Rating Agency does not
evaluate, and the rating of the Series [199_-_] Certificates does not
address, the likelihood that the outstanding principal amount of the
Series [199_-_] Certificates will be paid by any date, including the
Expected Payment Date, other than (1) in the case of a Class A-1
Certificate, the eleventh Distribution Date after the termination of the
Class A-1 Revolving Period with respect thereto or (ii) in the case of the
Class A-2 Certificates, the Series Termination Date. [In addition, a
Rating Agency does not evaluate, and the rating of a Class of Series
[199_-_] Certificates does not address, the likelihood that any Carry-over
amount will be paid.]
USE OF PROCEEDS
[After making the deposit of the Excess Funded Amount to the Excess
Funding Account, the balance of the] [The] net proceeds from the sale of
the Series [199_-_] Certificates will be paid to USA. USA will use such
proceeds (together with the subordinated loan from CFC described under
"U.S. Auto Receivables Company and the Trust -- U.S. Auto Receivables
Company" in the Prospectus) to purchase Receivables from CCC or to repay
certain amounts previously borrowed to purchase Receivables. CCC will use
the portion of the proceeds paid to it for [general corporate purposes]
[other].
THE DEALER FLOORPLAN FINANCING BUSINESS
Information regarding the dealer floorplan financing business is set
forth under "The Dealer Floorplan Financing Business" in the Prospectus.
In addition, the Receivables sold to the Trust by the Seller pursuant to
the Pooling and Servicing Agreement were or will be selected from
extensions of credit and advances made by Chrysler and CCC to
approximately [ ] domestic motor "vehicle dealers". CCC financed [ ]%
of the total number of all Chrysler franchised dealers as of [ ],
199[ ]. Furthermore, CCC has extended credit lines to [ ]
Chrysler-franchised dealers that also operate non-Chrysler franchises
(representing approximately [ ]% of the aggregate credit lines of dealers
in the U.S. Wholesale Portfolio as of [ ], 199[ ]) and [ ]
non-Chrysler dealers (representing approximately [ ]% of such aggregate
credit lines). As of [ ], 199[ ], the balance of Principal
Receivables in the U.S. Wholesale Portfolio was approximately $[ ]
billion. CCC currently services the U.S. Wholesale Portfolio through its
home office and through a network of 86 branch offices located throughout
the United States.
THE ACCOUNTS
As of the Series Cut-Off Date, with respect to the Accounts in the
Trust: (a) there were [ ] Accounts and the Principal Receivables
balance was approximately $[ ] million; (b) the average credit lines per
Dealer for new and used vehicles (which include Auction Vehicles) were
approximately $[ ] million and $[ ] million, respectively, and the
average balance of Principal Receivables per Dealer was approximately
$[ ] million; (c) the aggregate total receivables balance as a
percentage of the aggregate total credit line was approximately [ ]%; (d)
[ ]% of the Receivables were in Accounts which the related credit lines
were initially established in 19[ ], [ ]% in 19[ ] [ ]% in 19[ ],
[ ]% in 19[ ], [ ]% in 19[ ] and [ ]% prior to 19[ ]; and (e) the
weighted average spread over the Prime Rate charged to Dealers was
approximately [ ]%. Unless otherwise indicated, the statistics included
under "The Accounts -- General" and " -- Geographic Distribution" with
respect to the Accounts and the Receivables in the Trust gives effect to
approximately $[ ] million of principal receivables balances with respect
to certain Dealers (the "Excluded Receivables" and the "Excluded Dealers",
respectively) that are in voluntary or involuntary bankruptcy proceedings
or voluntary or involuntary liquidation or that, subject to certain
limitations, are being voluntarily removed by the Seller (or the Servicer
on its behalf) from the Trust. A portion of such principal receivables was
created after such Dealers entered into such status or were designated by
the Seller (or the Servicer on its behalf) for removal from the Trust and,
as a result thereof, are owned by CFC and not the Trust. Principal
receivables balances created prior to such Dealers entering into such
status or being designated for removal from the Trust are included in the
Principal Receivables balance. See "Description of the Certificates --
Removal of Accounts" in the Prospectus for a description of the manner in
which an Account can be removed from the Trust.
LOSS EXPERIENCE
The following tables set forth CCC's average Principal Receivables
balance and loss experience for each of the periods shown on the U.S.
Wholesale Portfolio. Because the Eligible Accounts will be only a portion
of the entire U.S. Wholesale Portfolio, actual loss experience with
respect to the Eligible Accounts may be different. There can be no
assurance that the loss experience for the Receivables in the future will
be similar to the historical experience set forth below with respect to
the U.S. Wholesale Portfolio. In addition, the historical experience set
forth below reflects financial assistance provided by Chrysler to
Chrysler-franchised dealers as described in the Prospectus under "The
Dealer Floorplan Financing Business -- Relationship with Chrysler" in the
Prospectus. If Chrysler is not able to or elects not to provide such
assistance, the loss experience in respect of the U.S. Wholesale Portfolio
may be adversely affected. See "Special Considerations -- Trust's
Relationship to Chrysler and CCC" in the Prospectus and "Special
Considerations -- Trust's Relationship to Chrysler and CCC; Financial
Condition of Chrysler" in this Prospectus Supplement.
<PAGE>
<TABLE>
<CAPTION>
LOSS EXPERIENCE FOR THE U.S. WHOLESALE PORTFOLIO
Six Months Ended
June 30, Year Ended December 31,
------------------ ---------------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Average
Principal
Receivables
Balance(1)..... $ 6,930 $6,603 $6,271 $5,344 $4,826 $4,726 $4,933 $4,129 $3,787 $2,991
Net Losses(2)... $ (1) $ 5 $ 12 $ 26 $ 36 $ 23 $ 13 $ 3 $ 2 $ 3
Net Losses/
Liquidations .. (0.005)% 0.029% 0.035% 0.098% 0.163% 0.117% 0.060% 0.015% 0.015% 0.023%
Net Losses/
Average
Principal
Receivables
Balance(3)..... (0.03)% 0.15% 0.19% 0.49% 0.75% 0.49% 0.26% 0.07% 0.06% 0.10%
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average
Principal
Receivables
Balance(1)..... $2,532 $2,098 $1,461 $1,451 $1,390 $1,622 $1,837
Net Losses(2)... $ 1 $ (2) $ 2 $ 14 $ 12 $ 18 $ 11
Net Losses/
Liquidations .. 0.004% (.019)% 0.023% 0.239% 0.225% 0.338% 0.163%
Net Losses/
Average
Principal
Receivables
Balance........ 0.02% (0.09)% 0.12% 0.95% 0.85% 1.12% 0.58%
<FN>
(1) Average Principal Receivables Balance is the average of the month-end
principal balances for the thirteen months ending on the last day of
the period, except for the six months ended June 30, 1994 and June 30,
1993, which are based on a seven-month average.
(2) Net losses in any period are gross losses less recoveries for such
period.
(3) Percentages for the six months ended June 30, 1994 and 1993 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
As of As of
June 30, December 31,
----------- -----------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1-120......... 79.0% 77.4% 82.4% 77.2% 75.9% 72.2% 71.3% 78.8% 73.0% 81.5%
121-180....... 9.5 9.8 9.6 13.8 12.9 13.7 14.5 11.0 13.9 9.2
181-270....... 7.4 7.4 4.6 4.8 4.8 7.1 6.4 4.7 6.8 4.4
Over 270...... 4.1 5.4 3.4 4.2 6.4 7.0 7.8 5.5 6.3 4.9
</TABLE>
<PAGE>
GEOGRAPHIC DISTRIBUTION
The following table provides the geographic distribution of the
vehicle inventory for all dealers in the Trust on the basis of receivables
outstanding and the number of dealers generating such portfolio.
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS IN THE TRUST AS OF [ ], 199[ ]
Percentage
Receivables Percentage of Total of
Outstanding Receivables Number Number of
(thousands of Outstanding of Dealers
dollars)(2) (2)(4) Dealers(3) (3)(4)
<S> <C> <C> <C> <C>
California.......... % %
Texas............... % %
Florida............. % %
New York............ % %
Michigan............ % %
[ ]............. % %
Other(1)............ % %
<FN>
(1) No other state includes more than 5% of the outstanding Receivables.
(2) Includes Excluded Receivables.
(3) Includes Excluded Dealers.
(4) May not add to 100.0% due to rounding.
</TABLE>
CHRYSLER FINANCIAL CORPORATION AND
CHRYSLER CREDIT CORPORATION
Certain information regarding Chrysler Financial Corporation and
Chrysler Credit Corporation is set forth under "Chrysler Financial
Corporation and Chrysler Credit Corporation" in the Prospectus. In
addition, as of June 30, 1994, CFC had nearly 3,100 employees and was
servicing $30.2 billion in finance receivables. During the first six
months of 1994, CFC and CCC financed or leased approximately 429,000
vehicles at retail, including approximately 286,000 new Chrysler passenger
cars and light duty trucks representing 24% of Chrysler's U.S. retail and
fleet deliveries. CFC and CCC also financed at wholesale approximately
844,000 new Chrysler passenger cars and light duty trucks representing 73%
of Chrysler's U.S. factory unit sales for the six months ended June 30,
1994. Wholesale vehicle financing accounted for 74% of the total
automotive financing volume of CFC and CCC in the first six months of 1994
and represented 11% of gross automotive finance receivables outstanding at
June 30, 1994.
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal with respect to the Series [199_-_] Certificates will be
payable if an Early Amortization Event [that is not cured as described
herein] has occurred and, in the case of a Class A-1 Certificate, will be
payable if [a Reinvestment/Early Payoff Event [that is not cured as
described herein] occurs or] the Class A-1 Revolving Period with respect
thereto terminates prior to the [Accumulation Period Commencement Date]
[Principal Commencement Date]. Full amortization of the Series [199_-_]
Certificates by the [ ] Distribution Date (the "Expected Payment
Date") and of any Class A-1 Certificate as to which a Special Payoff
Period commences by the eleventh Distribution Date after such commencement
depends on, among other things, repayment by Dealers of the Receivables
and may not occur if Dealer payments are insufficient therefor. Because
the Receivables generally are paid upon retail sale of the underlying
Vehicle, the timing of such payments is uncertain. In addition, there is
no assurance that CCC will generate additional Receivables under the
Accounts or that any particular pattern of Dealer payments will occur. See
"Series Provisions -- Interest" and "-- Principal" herein and "The Dealer
Floorplan Financing Business" in the Prospectus and herein. [In addition,
the shorter the Accumulation Period Length the greater the likelihood that
payment of the Series [199_-_] Certificates in full by the Expected
Payment Date will be dependent on the reallocation of Principal
Collections which are initially allocated to other outstanding Series.] If
one or more other Series from which Principal Collections are expected to
be available to be reallocated to the payment of the Series [199_-_]
Certificates enters into an early amortization period or reinvestment
period after [ ] [the [ ] Distribution Date] [the Accumulation
Period Commencement Date], Principal Collections allocated to such Series
generally will not be available to be reallocated to make payments of
principal of the Series [199_-_] Certificates and [the final payment of
principal of the Series [199_-_] Certificates may be later than the
Expected Payment Date] [the amount distributed in respect of principal of
the Series [199_-_] Certificates on any Distribution Date during the
Controlled Amortization Period may be less than the Controlled
Amortization Amount]. Upon written request, the Seller will make available
to Series [199_-_] Certificateholders Disclosure Documents relating to the
other outstanding Series which describe the events which could result in
the commencement of an early amortization period or reinvestment period
with respect to such outstanding Series.] Also, if an Early Amortization
Period [or Reinvestment/Early Payoff Period] commences with respect to the
Series [199_-_] Certificates prior to the [Accumulation Period
Commencement Date] [Principal Commencement Date], Principal Collections
allocated to the interest of holders of Regular Payoff Certificates
generally will not be available to be reallocated to make payments of
principal of Special Payoff Class A-1 Certificates except as described
herein and the final payment of principal of such Class A-1 Certificates
may be later than expected. Although the holder of each Class A-1
Certificate will have the right to direct the Trustee to sell a portion of
the Receivables corresponding to such holder's interest in the Trust if
the principal of such Class A-1 Certificate is not paid in full by the
eleventh Distribution Date after the commencement of the [Accumulation
Period] [Controlled Amortization Period] or an Early Amortization Period
[or Reinvestment/Early Payoff Period], no assurances can be given as the
price at which such Receivables could be sold.
Because an Early Amortization Event [or Reinvestment/Early Payoff
Event] with respect to the Series [199_-_] Certificates may occur which
would initiate an Early Amortization Period [or Reinvestment/Early Payoff
Period], the final distribution of principal on the Series [199_-_]
Certificates [or, in the case of a Reinvestment/Early Payoff Period, the
Class A-1 Certificates] may be made prior to the scheduled termination of
the Series Revolving Period or prior to the Expected Payment Date. See
"Series Provisions -- Early Amortization Events" [and "--
Reinvestment/Early Payoff Events"].
[Several of the events which constitute Reinvestment/Early Payoff
Events with respect to the Series [199_-_] Certificates may constitute
early amortization events with respect to other Series. Should such an
event occur, holders of Certificates of such other Series and holders of
Class A-1 Certificates would receive monthly distribution of principal,
which distributions would not be limited to any controlled amortization
amount, while no distributions in respect of principal would be made to
the Class A-2 Certificateholders until the Expected Payment Date or, if
earlier, the first Distribution Date following the occurrence of an Early
Amortization Event. See "Series Provisions -- Principal" and "--
Reinvestment/Early Payoff Events".]
The amount of new Receivables generated in any month and monthly
payment rates on the Receivables may vary because of seasonal variations
in Vehicle sales and inventory levels, retail incentive programs provided
by Vehicle manufacturers and various economic factors affecting Vehicle
sales generally. The following table sets forth the highest and lowest
monthly payment rates for the U.S. Wholesale Portfolio during any month in
the periods shown and the average of the monthly payment rates for all
months during the periods shown, in each case calculated as the percentage
equivalent of a fraction, the numerator of which is the aggregate of all
collections of principal during the period and the denominator of which is
the average aggregate principal balance for such period. Monthly payment
rates reflected in the table include principal credit adjustments. The
monthly payment rates presented for 1980 through 1985 are calculated using
quarterly data while monthly payment rates for 1986 through 1994 reflect
actual monthly data. There can be no assurance that the rate of Principal
Collections will be similar to the historical experience set forth below.
Because the Eligible Accounts will be only a portion of the entire U.S.
Wholesale Portfolio, historical actual monthly payment rates with respect
to the Eligible Accounts may be different than those shown below.
MONTHLY PAYMENT RATES FOR THE U.S. WHOLESALE PORTFOLIO
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
------------- ------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month......... 59.1% 53.4% 54.7% 50.6% 49.0% 42.1% 41.5% 48.7% 40.3% 56.7%
Lowest Month.......... 34.2 35.9 35.9 34.4 30.2 25.3 29.5 29.5 26.8 27.7
Average of the Months
in the Period........ 49.7 43.3 46.6 41.3 38.4 35.7 35.6 41.2 34.2 37.7
<CAPTION>
Year Ended December 31,
----------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month......... 45.9% 43.7% 45.9% 35.5% 34.3% 28.9% 36.5%
Lowest Month.......... 35.8 35.7 37.7 29.0 27.4 26.7 26.0
Average of the Months
in the Period........ 40.1 39.9 42.2 32.9 32.2 28.1 30.0
/TABLE
<PAGE>
SERIES PROVISIONS
GENERAL
The Series [199_-_] Certificates will be issued pursuant to the
Pooling and Servicing Agreement and a Series Supplement relating to the
Series [199_-_] Certificates (the "Series Supplement"). The Series
[199_-_] Certificates will consist of two Classes. The Trustee will enter
into a Remarketing Agreement with respect to the Class A-1 Certificates
with the Remarketing Broker-Dealer, the Remarketing Coordinator, the
Seller, and CFC (the "Remarketing Agreement") which provides, among other
things, that the Trustee and the Remarketing Broker-Dealer will follow
certain procedures for remarketing and purchasing Class A-1 Certificates.
The Remarketing Agreement will be substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus Supplement
is a part. The Trustee will make available for inspection a copy of the
Pooling and Servicing Agreement (without exhibits or schedules) and the
Remarketing Agreement to Series [199_-_] Certificateholders on written
request. Reference should be made to the Prospectus for additional
information concerning the Series [199_-_] Certificates and the Pooling
and Servicing Agreement.
The Class A-1 Certificates and the Class A-2 Certificates will
evidence undivided beneficial interests in certain assets of the Trust
allocated to the Class A-1 Certificateholders' Interest and the Class A-2
Certificateholders' Interest, respectively, representing the right to
receive from such Trust assets funds up to (but not in excess of) the
amounts required to make payments of interest on and principal of the
Class A-1 Certificates and the Class A-2 Certificates, respectively,
pursuant to the Pooling and Servicing Agreement.
INTEREST
Interest on the principal balance of the Class A-1 Certificates will
accrue at the Class A-1 Certificate Rate and will be payable to the Class
A-1 Certificateholders on each [Class A-1] Interest Payment Date,
commencing [ ], 199[ ]. Interest on the principal balance of the Class
A-2 Certificates will accrue at the Class A-2 Certificate Rate and will be
payable to the Class A-2 Certificateholders on each [Class A-2] Interest
Payment Date, commencing [ ] 199[ ] [; provided that, during any Early
Amortization Period, interest will be distributed to Class A-2
Certificateholders on each Distribution Date, commencing on the first
Distribution Date following the occurrence of an Early Amortization
Event]. Interest [on the Class A-1 Certificates] will accrue from and
including the preceding [Class A-1] Interest Payment Date (or, in the case
of the first [Class A-1] Interest Payment Date, from and including the
Series Issuance Date) to but including such [Class A-1] Interest Payment
Date. [Interest on the Class A-2 Certificates will accrue from and
including the preceding Class A-2 Interest Payment Date (or in the case of
the first Class A-2 Interest Payment Date, from and including the Series
Issuance Date) to but including such Class A-2 Interest Payment Date.]
Interest on the Class A-1 Certificates will be calculated on a basis of
[the actual number of days in each [Class A-1] Interest Period divided by
[360][other]]. Interest on the Class A-2 Certificates will be calculated
on a basis of [a 360-day year of twelve 30-day months] [the actual number
of days in each [Class A-2] Interest Period divided by [360] [other]].
Interest due for any [Class A-1] Interest Payment Date [or Class A-2
Interest Payment Date] but not paid on such [Class A-1] Interest Payment
Date [or Class A-2 Interest Payment Date] will be due on the next [Class
A-1] Interest Payment Date [or Class A-2 Interest Payment Date, as
applicable], together with interest on such amount at the applicable
Certificate Rate plus [ ]%, to the extent permitted by applicable law.
Interest payments on the Series [199_-_] Certificates will generally be
derived from Certificateholder Interest Collections for a Collection
Period, [any withdrawals from the Reserve Fund,] Investment Proceeds and,
under certain circumstances, Available Seller's Collections to the extent
of the Available Subordinated Amount [describe other sources].
The Class A-1 Certificate Rate for each [[Class A-1] Interest
Period] [other] will be determined on the Class A-1 Adjustment Date
preceding such [[Class A-1] Interest Period] [other]. The "Class A-1
Certificate Rate" will be equal to [the lesser of (a)] the Class A-1 Index
[plus] [minus] [times] [ ]% [and (b) the Assets Receivables Rate for the
related Distribution Date].
[The Class A-2 Certificate Rate for each [[Class A-2] Interest
Period] [other] will be determined on the Class A-2 Adjustment Date
preceding such [[Class A-2] Interest Period] [other].] The "Class A-2
Certificate Rate" will be [ %] [equal to [the lesser of (a)] the Class
A-2 Index [plus] [minus] [times] [ ]% [and (b) the Assets Receivables
Rate for the related Distribution Date].
"Class A-1 Monthly Interest" for any Distribution Date means the
amount of interest accrued in respect of the Class A-1 Certificates as
described above for such Distribution Date; and "Class A-2 Monthly
Interest" for any Distribution Date means the amount of interest accrued
in respect of the Class A-2 Certificates as described above for such
Distribution Date. Class A-1 Monthly Interest and Class A-2 Monthly
Interest are referred to collectively as "Monthly Interest".
[Describe Class A-1 Index [and Class A-2 Index] and define Class A-1
Adjustment Date [and Class A-2 Adjustment Date].]
[If the Class A-1 Certificate Rate for a Distribution Date
calculated on the basis of the Class A-1 Index as described above is
greater than the Assets Receivable Rate, then the Class A-1 Certificate
Rate for such Distribution Date will be the Assets Receivables Rate; and
if the Class A-2 Certificate Rate for a Distribution Date as calculated on
the basis of the Class A-2 Index as described above is greater than the
Assets Receivables Rate, then the Class A-2 Certificate Rate for such
Distribution Date will be the Assets Receivables Rate.]
[The "Assets Receivables Rate" for any [Interest Period][period from
one Distribution Date to the immediately succeeding Distribution Date]
shall equal [the product of (a) the quotient obtained by dividing (i) 360
by (ii) the actual number of days elapsed in such period and (b) a
percentage, expressed as a fraction, (i) the numerator of which is the sum
of (A) Certificateholder Interest Collections for the Collection Period
immediately preceding the last day of such period (which for this purpose
only is based on interest amounts billed to the Dealers which are due
during such Collection Period) less, unless waived by the Servicer, the
Monthly Servicing Fee with respect to such immediately preceding
Collection Period and (B) the Investment Proceeds to be applied on the
Distribution Date related to such period and (ii) the denominator of which
is [the sum of (A)] the product of (I) the Floating Allocation Percentage,
(II) the Series Allocation Percentage and (III) the average Pool Balance
(after giving effect to any charge-offs) for such immediately preceding
Collection Period, [(B) the principal balance on deposit in the Excess
Funding Account on the first day of such period (after giving effect to
all deposits to and withdrawals therefrom on such first day)] and [(C) the
principal balance on deposit in the Principal Funding Account on the first
day of such period (after giving effect to all deposits to and withdrawals
therefrom on such first day)] [other].
If the Class A-1 Certificate Rate [or the Class A-2 Certificate
Rate] for any Distribution Date is based on the Assets Receivables Rate,
the excess of (a) the amount of interest on the Class A-1 Certificates [or
the Class A-2 Certificates] that would have accrued in respect of the
related [[Class A-1] Interest Period [or Class A-2 Interest Period]
[period from one Distribution Date to the immediately succeeding
Distribution Date] had interest been calculated based on the Class A-1
Index [or the Class A-2 Index, as the case may be,] over (b) the amount of
interest on the Class A-1 Certificates [or the Class A-2 Certificates, as
the case may be,] actually accrued in respect of such period based on the
Assets Receivables Rate (such excess, together with the unpaid portion of
any such excess from prior Distribution Dates (and interest accrued
thereon at the [applicable] [Class A-1] Certificate Rate calculated on the
basis of the Class A-1 Index [or the Class A-2 Index, as the case may be,]
plus [ ]%), is referred to as the "Class A-1 Carry-over Amount" [or the
"Class A-2 Carry-over Amount", as applicable]) will be paid on such
Distribution Date from amounts on deposit in the Yield Supplement Account
and, if such amounts are depleted, to the extent funds are allocated and
available therefor after making all required distributions and deposits
with respect to the Series [199_-_] Certificates, including payments with
respect to principal [(including payments to the Excess Funding Account)],
Monthly Interest, the Monthly Servicing Fee[, the Reserve Fund Deposit
Amount] and the Investor Default Amount as described below under
"Distributions from the Collection Account; [Reserve Fund;] Yield
Supplement Account". The rating of the Series [199_-_] Certificates does
not address the likelihood of payment of any Carry-over Amount.]
PRINCIPAL
Principal on each Class A-1 Certificate is payable monthly on each
Distribution Date commencing on the [ ] 199[ ] Distribution Date
unless the Class A-1 Revolving Period with respect to such Class A-1
Certificate is automatically extended. The holder of each Class A-1
Certificate shall have the option to elect not to extend the Revolving
Period with respect to such Certificate by delivering a notice in the form
of Exhibit A hereto to its Indirect Participant or its Participant, as
applicable, with copies to the Remarketing Coordinator and the Remarketing
Broker-Dealer (an "Election Notice") during the period commencing on the
[ ] business day of each month prior to the month preceding the
month in which the [Accumulation Period Commencement Date] [Principal
Commencement Date] occurs or, if earlier, the commencement of an Early
Amortization Period [or Reinvestment/Early Payoff Period] and ending on
and including the [ ] day of such month (each an "Election
Period"), commencing in [ ] 199[ ]. If such Class A-1
Certificateholder does not so elect, the Class A-1 Revolving Period for
such Certificate will be automatically extended from month to month, but
not beyond the end of the Series Revolving Period. If the holder of a
Class A-1 Certificate delivers an Election Notice (each, an "Electing
Certificateholder"), the Remarketing Broker-Dealer will have the right to
remarket such Class A-1 Certificate during the period beginning on and
including the first day of any Election Period and ending on and including
the [ ] business day of the month in which such Election Period
occurs (each a "Remarketing Period") and the right but not the obligation
to purchase any such Certificate in the manner described herein. See
"Remarketing; Purchase of Class A-1 Certificates Subject to an Election
Notice". Any Class A-1 Certificate which the Remarketing Broker-Dealer
chooses to purchase will be purchased on the Distribution Date following
the Remarketing Period. If the Remarketing Broker-Dealer does not purchase
a Class A-1 Certificate which is the subject of an Election Notice, the
Special Payoff Period with respect to such Certificate will commence and
principal with respect to such Certificate will be payable monthly
commencing on the second Distribution Date following the Election Period
in which the Election Notice is given. In the event that the entire
principal amount of such Certificate will not be paid in full by the
eleventh Distribution Date after the commencement of the related Special
Payoff Period, the holder thereof will have the right to direct the
Trustee to sell on such eleventh Distribution Date a portion of the
Receivables corresponding to such holder's interest in the Trust. The
Revolving Period for all Class A-1 Certificates will in any event end,
however, on the earlier (x) the day immediately preceding the
[Accumulation Period Commencement Date] [Principal Commencement Date] and
(y) the business day preceding the day on which an Early Amortization
Event [or Reinvestment/Early Payoff Event] [that is not cured as described
herein] occurs. See "Early Amortization Events" [and "Reinvestment/Early
Payoff Events"] for a discussion of certain events which might lead to the
early termination of the Revolving Period for all Series [199_-_]
Certificates. Principal of any Class A-1 Certificate the Revolving Period
for which does not end in or prior to the month that is two months prior
to the month in which the [Accumulation Period Commencement
Date][Controlled Amortization Period] occurs will be payable on [the
Expected Payment Date][each Distribution Date, commencing on the
[ ] Distribution Date], but may be paid earlier or later in
certain circumstances described herein. The holder of any such Class A-1
Certificate principal of which will not be paid in full by the eleventh
Distribution Date following the commencement of the [Accumulation
Period][Controlled Amortization Period] or an Early Amortization Period
[or Reinvestment/Early Payoff Period] will have the right to direct the
Trustee to sell on such Distribution Date a portion of the Receivables
corresponding to such holder's interest in the Trust. Principal of a Class
A-1 Certificate is payable in full (provided that the holder exercises, if
necessary, its right to direct the Trustee to sell a portion of the
Receivables corresponding to such holder's interest in the Trust and the
proceeds of such sale are sufficient) by no later than the eleventh
Distribution Date after the end of the Class A-1 Revolving Period with
respect to such Class A-1 Certificate.
The following sets forth an example of the application of the
foregoing provisions to a hypothetical Class A-1 Certificate. The example
would be applicable to any Class A-1 Certificate issued during any month.
For purposes of the example, it is assumed that every date is a business
day.
[ ] ...... The Election Period and Remarketing Period
Commence. Class A-1 Certificateholders may elect
to deliver an Election Notice with respect to
one or more of their Class A-1 Certificates and
the Remarketing Broker-Dealer may acquire the
Class A-1 Certificates as to which Election
Notices have been delivered.
[ ] ...... Election Period ends. Class A-1
Certificateholders may no longer elect not to
extend the Class A-1 Revolving Period with
respect to their Class A-1 Certificates after
this date.
[ ] ...... Remarketing Period ends. Any Class A-1
Certificates with respect to which Election
Notices have been delivered and which the
Remarketing Broker-Dealer has decided to
purchase will be purchased on the [ ]
Distribution Date. Any Class A-1 Certificates
which the Remarketing Broker-Dealer has decided
not to purchase will begin to receive principal
payments on the [ ] Distribution Date.
[ ] ...... Class A-1 Adjustment Date. The Class A-1
Certificate Rate (calculated on the assumption
that the Class A-1 Index formula will apply) for
the [Class A-1] Interest Period which is to
begin on the [ ] Distribution Date is
determined by the Trustee as of this date.
[ ] ...... Record Date. Distributions on [ ] will
be made to Series [199_-_] Certificateholders of
record as of the close of business on this
Record Date.
[ ] ...... Distribution Date. The Servicer distributes the
allocable portion of collections to the Series
[199_-_] Certificateholders pursuant to the
Pooling and Servicing Agreement. The [Class A-1]
Interest Period for the [ ] Distribution
Date commences on this date. Any Class A-1
Certificates subject to an Election Notice which
the Remarketing Broker-Dealer has chosen to
purchase during the Remarketing Period which
began on [ ] will be purchased on this
date.
[ ] ...... Distribution Date. Any Class A-1 Certificates
subject to an Election Notice which the
Remarketing Broker-Dealer has chosen not to
purchase during the Remarketing Period which
began on [ ] will receive principal
payments on this date.
In general, except as described above with respect to Class A-1
Certificates as to which a Special Payoff Period has begun ("Special
Payoff Class A-1 Certificates") no principal payments will be made to the
Series [199_-_] Certificateholders until the [Expected Payment Date]
[Principal Commencement Date] or, upon the occurrence of an Early
Amortization Event [that is not cured as described herein] [or, in the
case of the Class A-1 Certificates, the occurrence of a Reinvestment/Early
Payoff Event [that is not cured as described herein]], until the first
[Distribution Date with respect to the Early Amortization Period or
Reinvestment/Early Payoff Period (a "Special Payment Date")] [Special
Payment Date]. On each Distribution Date with respect to the Series
Revolving Period, collections of Principal Receivables allocable to the
interest of holders of Class A-1 Certificates that are not Special Payoff
Class A-1 Certificates and Class A-2 Certificates (collectively, "Regular
Payoff Certificates"), subject to certain limitations, will either be
(a) allocated to one or more Special Payoff Class A-1 Certificates, (b)
allocated to one or more Series which are in amortization, early
amortization or accumulation periods to cover principal payments due to
the Certificateholders of any such Series or which provides for excess
funding accounts or similar arrangements or (c) if no such Class A-1
Certificate is in its Special Payoff Period and no such Series is then
amortizing or accumulating principal or otherwise does not provide for
excess funding accounts or similar arrangements, paid to the Seller to
maintain the Series [199_-_] Certificateholders' Interest or held as
Unallocated Principal Collections. See "Allocation Percentages --
Principal Collections for all Series [199_-_] Certificates", "Principal
Collections for all Series" and "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account] -- Principal
Collections".
Unless and until an Early Amortization Event [or Reinvestment/Early
Payoff Event] [that is not cured as described herein] shall have occurred
and until the outstanding principal balance of the Series [199_-_]
Certificates is paid in full, on each Distribution Date with respect to
the [Accumulation Period] [Controlled Amortization Period], collections of
Principal Receivables allocable to the interest of holders of Regular
Payoff Certificates plus certain other amounts comprising Regular Class
A-1/A-2 Monthly Principal will no longer be paid for the benefit of
Special Payoff Class A-1 Certificates or another Series or to the Seller
as described above but instead an amount thereof up to the [Controlled
Deposit Amount] [Controlled Distribution Amount] for each such
Distribution Date will be [deposited in the Principal Funding Account]
[distributed to Series [19_-_] Certificateholders]. [The funds deposited
in the Principal Funding Account and any amounts in the Excess Funding
Account not allocable to any Special Payoff Class A-1 Certificate will be
used to pay the outstanding principal balance of the Series [199_-_]
Certificates on the Expected Payment Date with such amounts being applied
first to pay principal of the Class A-1 Certificates until such
Certificates have been paid in full and then to pay principal of the Class
A-2 Certificates. If on such date the sum of the Principal Funding Account
Balance, any such amounts in the Excess Funding Account and other amounts
available to pay principal of the Special Payoff Class A-1 Certificates is
less than the outstanding principal balance of the Series [199_-_]
Certificates, the Early Amortization Period will commence and on each
Special Payment Date the holders of Regular Payoff Certificates will
receive distributions of principal and interest until the outstanding
principal balance of such Certificates has been paid in full or the Series
Termination Date has occurred. Even if the sum of the Principal Funding
Account Balance, any such amounts in the Excess Funding Account and other
amounts available to pay principal of the Special Payoff Class A-1
Certificates on the Expected Payment Date is insufficient to pay the
outstanding principal balance of the Series [199_-_] Certificates in full,
such balances will be distributed to the Series [199_-_]
Certificateholders at such time. Any such distribution of amounts on
deposit in the Principal Funding Account and the Excess Funding Account
will be made first to the holders of the Class A-1 Certificates until the
Class A-1 Certificates have been paid in full and then to the Class A-2
Certificateholders.]
It is expected that the final principal payment with respect to the
Series [199_-_] Certificates will be made on the Expected Payment Date,
but the principal of the Series [199_-_] Certificates may be paid earlier
or, depending on the actual payment rate on the Receivables, later, as
described under "Special Considerations -- Payments" herein and in the
Prospectus.
REMARKETING; PURCHASE OF CLASS A-1 CERTIFICATES SUBJECT TO AN ELECTION
NOTICE
General. If a Class A-1 Certificateholder delivers an Election
Notice during any Election Period, the Remarketing Broker-Dealer will be
entitled to remarket the Class A-1 Certificates to which the Election
Notice has been delivered during the related Remarketing Period. While the
Remarketing Broker-Dealer has no obligation to remarket Class A-1
Certificates, the Remarking Broker-Dealer will be required to make a
payment to the Seller with respect to Class A-1 Certificates which enter
into a Special Payoff Period prior to [ ] on account of the
delivery of an Election Notice. [See "Underwriting".] The Remarketing
Broker-Dealer may purchase Class A-1 Certificates for its own account
either pursuant to the Remarketing Agreement or otherwise and may sell
Class A-1 Certificates which it owns without giving preference to Class
A-1 Certificates which are subject to Election Notices.
The delivery of an Election Notice by a Class A-1 Certificateholder
shall be irrevocable (unless waived by the Remarketing Broker-Dealer) and
shall be made by written notice to its Indirect Participant or its
Participant, as applicable, with a copy to the Remarketing Coordinator,
prior to the end of the related Election Period. Each Class A-1
Certificateholder will agree by accepting its Class A-1 Certificate that
the Remarketing Broker-Dealer may purchase any Class A-1 Certificate which
is the subject of an Election Notice on the Distribution Date following
the Election Period in which the Election Notice is given. The Remarketing
Broker-Dealer may choose to purchase any or all of the Class A-1
Certificates which are the subject of an Election Notice. The Remarketing
Broker-Dealer may purchase the Class A-1 Certificates of some Electing
Certificateholders and not others without regard to the time at which the
Election Notices are delivered, the amount of Class A-1 Certificates which
are subject to the Election Notices or any other factors. The Remarketing
Broker-Dealer may choose to purchase a Class A-1 Certificate which is the
subject of an Election Notice by notifying the Remarketing Coordinator in
writing on or before the last day of the related Remarketing Period.
Each Election Notice will specifically authorize the Remarketing
Coordinator, DTC and all Participants and Indirect Participants in the DTC
system to transfer any Class A-1 Certificate which is the subject of an
Election Notice. If the Remarketing Broker-Dealer does not choose to
purchase any such Certificate, monthly payments of principal will commence
with respect to such Certificate on the second Distribution Date following
the end of the related Remarketing Period.
Settlement Procedures. If the Remarketing Broker-Dealer notifies the
Remarketing Coordinator of its desire to purchase a Class A-1 Certificate
which is the subject of an Election Notice (each a "Purchased Class A-1
Certificate") on or before the last day of the Remarketing Period, the
Remarketing Coordinator will notify the Electing Certificateholder of such
exercise by written notice on or about the business day following such
last day. The Election Notice from an Electing Certificateholder will
irrevocably instruct and authorize the Remarketing Coordinator, DTC and
all Participants and Indirect Participants in the DTC system to deliver
any Purchased Class A-1 Certificates, by book entry against payment
therefor through DTC on the Distribution Date following the Remarketing
Period, at the election of the Remarketing Broker-Dealer (the "Settlement
Date"). The Remarketing Broker-Dealer will pay the purchase price against
delivery of the Purchased Class A-1 Certificates received by DTC. The
purchase price for any Class A-1 Certificate so purchased will be equal to
the unpaid principal amount of the Purchased Class A-1 Certificate. The
Electing Certificateholder will be entitled to receive the applicable
monthly interest payment on the Purchased Class A-1 Certificate on the
Distribution Date on which such Certificate is purchased.
In accordance with DTC's normal procedures, the transactions
described above will be executed on each Settlement Date through DTC and
the accounts of the respective Participants will be debited and credited
and Class A-1 Certificates delivered by book entry as necessary to effect
the purchases and sales of Class A-1 Certificates in the remarketing.
Purchasers of the Class A-1 Certificates will be required to make payment
in same-day funds to DTC, DTC is required to make payment to the Electing
Certificateholder in same-day funds. [Modify as appropriate for CEDEL and
Euroclear settlement, if applicable.]
The Remarketing Broker-Dealer. The Remarketing Broker-Dealer will be
[ ]. The Remarketing Broker-Dealer may resign at any time by
delivering written notice to the Remarketing Coordinator. If the
Remarketing Broker-Dealer resigns, an Electing Certificateholder will
receive monthly payments of principal commencing on the second
Distribution Date following the end of the related Election Period unless
a replacement Remarketing Broker-Dealer is appointed.
CFC and the Seller have agreed to indemnify the Remarketing
Broker-Dealer against certain liabilities arising out of or in connection
with its activities under the Remarketing Agreement.
The Remarketing Coordinator. The "Remarketing Coordinator" will be
[the corporate trust department of the Trustee][other].
[EXCESS FUNDING ACCOUNT
Unless and until an Early Amortization Event [or Reinvestment/Early
Payoff Event] shall have occurred, the Excess Funded Amount will be
maintained in the Excess Funding Account established with the Trustee. The
Excess Funded Amount will initially equal the excess of the initial
principal balance of the Series [199_-_] Certificates, if any, over the
Initial Invested Amount. Funds on deposit in the Excess Funding Account
will be invested by the Trustee at the direction of the Servicer generally
in Eligible Investments. Such investments must mature on or prior to the
next Distribution Date.
Funds on deposit in the Excess Funding Account will be withdrawn and
paid to the Seller or allocated to one or more Series which are in
amortization, early amortization or accumulation periods to the extent of
any increases in the Invested Amount as a result of the addition of
Receivables to the Trust, a reduction in the Seller's Interest, or a
reduction in the initial invested amount of any other Series. Additional
amounts will be deposited in the Excess Funding Account on a Distribution
Date to the extent that the sum of the Series [199_-_] Certificateholders'
Interest in Principal Receivables and the amount on deposit in the Excess
Funding Account prior to the deposit on such Distribution Date is less
than the outstanding principal balance of the Series [199_-_]
Certificates, but only to the extent that funds are available therefor as
described herein. In the event that other Series issued by the Trust
provide for excess funding accounts or other arrangements similar to the
Excess Funding Account involving fluctuating levels of investment in the
Receivables, the allocation of additional Receivables to increase the
Invested Amount will generally be based on the proportion that the amount
on deposit in the Excess Funding Account bears to the amounts on deposit
in the excess funding accounts of all Series providing for excess funding
accounts or such similar arrangements or to amounts otherwise similarly
available; and the deposit of amounts in the Excess Funding Account will
be based on the proportion that the Adjusted Invested Amount bears to the
adjusted invested amounts of all Series providing for excess funding
accounts or such similar arrangements.
On each Distribution Date, all investment income earned on amounts
in the Excess Funding Account since the preceding Distribution Date will
be withdrawn from the Excess Funding Account and applied as described
herein.
Any funds on deposit in the Excess Funding Account on the earlier of
(i) [ ] [the [ ] Distribution Date] [the Accumulation Period
Commencement Date] and (ii) the commencement of an Early Amortization
Period [or Reinvestment/Early Payoff Period] and not allocable to the
holders of Special Payoff Class A-1 Certificates [or the holders of other
Class A-1 Certificates, in the case of a Reinvestment/Early Payoff
Period,] will be deposited in the Principal Funding Account on such date.
In addition, on the second Distribution Date during the Special Payoff
Period for any Class A-1 Certificate [and on the first Special Payment
Date with respect to any Reinvestment/Early Payoff Period] the portion of
the amount on deposit in the Excess Funding Account allocable to that
Certificate [or each Class A-1 Certificate, in the case of a
Reinvestment/Early Payoff Period] (based on a fraction the numerator of
which is the initial principal amount of such Certificate [or each such
Certificate] and the denominator of which is the aggregate initial
principal amount of the Series [199_-_] Certificates (other than any
Special Payoff Class A-1 Certificate that was entitled to begin receiving
principal on a prior Distribution Date)), up to the amount necessary to
pay the principal balance of that Certificate [or each such Certificate]
taking into account Principal Collections available for such payment, will
be applied to pay principal of that Certificate [or each such
Certificate]. [In addition, on each Distribution Date with respect to the
Controlled Amortization Period an amount equal to the quotient obtained by
dividing the amount on deposit in the Excess Funding Account as of the [ ]
Distribution Date (after giving effect to any withdrawals from or deposits
to such account on such date) and not allocable to the holders of Special
Payoff Class A-1 Certificates by [ ] will be distributed to Series
[199_-_] Certificateholders on such date in respect of principal of the
Series [199_-_] Certificates.] No funds will be deposited in the Excess
Funding Account during any Early Amortization Period [or
Reinvestment/Early Payoff Period] or with respect to any Collection Period
following [ ] [the [ ] Distribution Date] [the Accumulation
Period Commencement Date].
ALLOCATION PERCENTAGES
Allocation between the Series [199_-_] Certificateholders and the
Seller. The Servicer will allocate amounts initially allocated to Series
[199_-_] as described under "Description of the Certificates -- Allocation
Percentages -- Allocations among Series" in the Prospectus between the
Series [199_-_] Certificateholders' Interest and the Seller's Interest for
each Collection Period as follows:
(i) Series Allocable Interest Collections and the Series
Allocable Defaulted Amount will be allocated to Series [199_-_]
Certificateholders based on the Floating Allocation Percentage [,
provided that during any Early Amortization Period, Series Allocable
Interest Collections will be allocated to the Series [199_-_]
Certificateholders based on the Fixed Allocation Percentage];
(ii) during any period that is not a Special Payoff Period
with respect to any Class A-1 Certificate, the [Accumulation Period]
[Controlled Amortization Period] or an Early Amortization Period [or
Reinvestment/Early Payoff Period] (a "Nonprincipal Period"), Series
Allocable Principal Collections will be allocated to
Certificateholders based on the Floating Allocation Percentage;
(iii) during the Special Payoff Period with respect to any
Class A-1 Certificate, the [Accumulation Period] [Controlled
Amortization Period] and any Early Amortization Period [or
Reinvestment/Early Payoff Period], Series Allocable Principal
Collections will be allocated to Series [199_-_] Certificateholders
based on the Fixed Allocation Percentage; and
(iv) Series Allocable Miscellaneous Payments will at all times
be allocated to Series [199_-_] Certificateholders.
Amounts not allocated to the Series [199_-_] Certificateholders as
described above will be allocated to the Seller.
"Floating Allocation Percentage" for any Collection Period
means [the percentage equivalent (which shall never exceed 100%) of
a fraction, the numerator of which is the Invested Amount as of the
last day of the immediately preceding Collection Period and the
denominator of which is the product of (x) the Pool Balance as of
such last day and (y) the Series Allocation Percentage for the
Collection Period in respect of which the Floating Allocation
Percentage is being calculated; provided, however, that, with
respect to the first Collection Period, the Floating Allocation
Percentage shall mean the percentage equivalent of a fraction, the
numerator of which is the Initial Invested Amount as of the Series
Issuance Date and the denominator of which is the Series Allocation
Percentage of the Pool Balance as of the Series Cut-Off Date]
[other].
"Fixed Allocation Percentage" for any Collection Period
generally means [the percentage equivalent (which shall never exceed
100%) of a fraction, the numerator of which is the sum of (x) the
Invested Amount of each Special Payoff Class A-1 Certificate as of
the last term of its Class A-1 Revolving Period, and (y) the
Invested Amount of each Regular Payoff Certificate as of the last
day of the Series Revolving Period, if such last day has occurred
or, if such last day has not occurred, the Invested Amount of each
Regular Payoff Certificate as of the last day of the immediately
preceding Collection Period and the denominator of which is the
product of (x) the Pool Balance as of the last day of the
immediately preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in respect of which
the Fixed Allocation Percentage is being calculated] [other].
"Invested Amount" means for any date an amount equal to the
sum of the Class A-1 Invested Amount and the Class A-2 Invested
Amount, in each case for such date.
"Class A-1 Invested Amount" means for any date [an amount
equal to the Initial Class A-1 Invested Amount, minus the amount,
without duplication, of principal payments [(except principal
payments made from the Excess Funding Account)] made to Class A-1
Certificateholders or deposited to the Principal Funding Account in
respect of the Class A-1 Certificates prior to such date since the
Series Issuance Date other than any such payments made to the
holders of [Special Payoff] Class A-1 Certificates that have been
paid in full, minus the excess, if any, of the aggregate amount of
Class A-1 Investor Charge-Offs for all Distribution Dates preceding
such date, over the aggregate amount of any reimbursements of Class
A-1 Investor Charge-Offs for all Distribution Dates preceding such
date] [other].
"Class A-2 Invested Amount" means for any date [an amount
equal to the Class A-2 Initial Invested Amount, minus the amount,
without duplication, of principal payments [(except principal
payments made from the Excess Funding Account)] made to Class A-2
Certificateholders or deposited to the Principal Funding Account in
respect of the Class A-2 Certificates prior to such date since the
Series Issuance Date minus the excess, if any, of the aggregate
amount of Class A-2 Investor Charge-Offs for all Distribution Dates
preceding such date, over the aggregate amount of any reimbursements
of Class A-2 Investor Charge-Offs for all Distribution Dates
preceding such date][other].
"Initial Invested Amount" means the sum of the Class A-1
Initial Invested Amount and the Class A-2 Initial Invested Amount.
"Class A-1 Initial Invested Amount" means [the portion of the
initial principal amount of the Class A-1 Certificates which is
invested in Principal Receivables on the Series Issuance Date, which
is expected to equal approximately $[ ] (based on information as
of the Series Cut-Off Date), plus (x) the product of the Class A-1
Allocation Percentage and the amount of any withdrawals from the
Excess Funding Account in connection with the purchase of an
additional interest in Principal Receivables since the Series
Issuance Date, minus (y) the product of the Class A-1 Allocation
Percentage and the amount of any additions to the Excess Funding
Account in connection with a reduction in the Principal Receivables
in the Trust since the Series Issuance Date, minus (z) principal
payments (except principal payments made from the Excess Funding
Account) made to the holders of any [Special Payoff] Class A-1
Certificates that have been paid in full][other].
"Class A-2 Initial Invested Amount" means [the portion of the
initial principal amount of the Class A-2 Certificates which is
invested in Principal Receivables on the Series Issuance Date, which
is expected to equal approximately $[ ] (based on information as
of the Series Cut-off Date), plus (x) the product of the Class A-2
Allocation Percentage and the amount of any withdrawals from the
Excess Funding Account in connection with the purchase of an
additional interest in Principal Receivables since the Series
Issuance Date, minus (y) the product of the Class A-2 Allocation
Percentage and the amount of any additions to the Excess Funding
Account in connection with a reduction in the Principal Receivables
in the Trust since the Series Issuance Date] [other].
The Floating Allocation Percentage and the Fixed Allocation Percentage
will be adjusted for any Collection Period in which Additional Accounts
are designated to reflect the additional Receivables added to the Trust.
Allocation Between the Class A-1 Certificateholders and the Class
A-2 Certificateholders. The Servicer will allocate Available
Certificateholder Principal Collections between the interest of holders of
each Special Payoff Class A-1 Certificate and the interest of holders of
Regular Payoff Certificates for each Collection Period based on their
respective Certificate Principal Percentages.
"Available Certificateholder Principal Collections" for any
Distribution Date means the sum of (a) the product of (i) the
Floating Allocation Percentage, with respect to any Nonprincipal
Period, or the Fixed Allocation Percentage, with respect to the
Special Payoff Period with respect to any Class A-1 Certificate, the
[Accumulation Period][Controlled Amortization Period] or any Early
Amortization Period [or Reinvestment/Early Payoff Period], for the
related Collection Period and (ii) Series Allocable Principal
Collections deposited in the Collection Account for the related
Collection Period, (b) the amount, if any, of Interest Collections,
[funds in the Reserve Fund,] Available Seller's Collections and
Excess Servicing allocated to cover the Investor Default Amount or
reimburse Investor Charge-Offs, (c) Series Allocable Miscellaneous
Payments on deposit in the Collection Account for such Distribution
Date and (d) Excess Principal Collections, if any, from other Series
allocated to Series [199_-_].
"Certificate Principal Percentage" means (a) for any
Collection Period and any Special Payoff Class A-1 Certificate, the
percentage equivalent (which shall never exceed 100%) of a fraction,
the numerator of which is the Invested Amount of such Certificate as
of the last day of its Class A-1 Revolving Period and the
denominator of which is the sum of (i) the aggregate Invested Amount
of all Special Payoff Class A-1 Certificates as of the last day of
their respective Class A-1 Revolving Periods and (ii) the aggregate
Invested Amount of all Regular Payoff Certificates as of the last
day of the Series Revolving Period, if such last day has occurred,
or if such last day has not occurred, the aggregate Invested Amount
of such Certificates as of the last day of the immediately preceding
Collection Period; and (b) for any Collection Period and all Regular
Payoff Certificates in the aggregate, 100% minus the sum of the
Certificate Principal Percentages for all Special Payoff Class A-1
Certificates.
Principal Collections for All Series [199_-_]
Certificates. Principal Collections allocated to any Special Payoff Class
A-1 Certificate, for any Collection Period, will first be allocated to
make required payments of principal of such Certificate; and all Available
Certificateholder Principal Collections allocated to the Regular Payoff
Certificates for any Collection Period with respect to the [Accumulation
Period] [Controlled Amortization Period] or any Early Amortization Period
[or Reinvestment/Early Payoff Period] will first be allocated to make
required payments of principal to the Principal Funding Account [during
the Accumulation Period], [to make required payments of principal to the
Principal Funding Account and to the holders of Regular Payoff
Certificates that are Class A-1 Certificates during any Reinvestment/Early
Payoff Period] and to the holders of Series [199_-_] Certificates during
the [Controlled Amortization Period or] Early Amortization Period, in each
case as described herein. The Servicer will determine the amount of
Available Certificateholder Principal Collections for any Collection
Period remaining after such required payments, if any ("Series Excess
Principal Collections"). The Servicer will allocate Series Excess
Principal Collections first to cover any principal distributions to the
holder of any Special Payoff Class A-1 Certificate which have not been
covered out of Principal Collections and certain other amounts allocated
or reallocated to such Class A-1 Certificate ("Class A-1 Principal
Shortfalls") and second, during the [Accumulation Period] [Controlled
Amortization Period] or any Early Amortization Period [or
Reinvestment/Early Payoff Period], to make any required payment of
principal in respect of the Regular Payoff Certificates to the Principal
Funding Account or any required payment of principal to the holders of
Series [199_-_] Certificates as described herein which have not been
covered out of Principal Collections and certain other amounts allocated
to the Series [199_-_] Certificates ("Regular Class A-1/A-2 Principal
Shortfalls"). See "Maturity and Principal Payment Considerations". Series
Excess Principal Collections will generally not be used to cover Investor
Chart-Offs for any Series [199_-_] Certificate. If Class A-1 Principal
Shortfalls exceed Series Excess Principal Collections for any Collection
Period, Series Excess Principal Collections will be allocated pro rata
among the applicable Special Payoff Class A-1 Certificates based on the
relative amounts of Class A-1 Principal Shortfalls. To the extent that
Series Excess Principal Collections exceed the sum of (a) Class A-1
Principal Shortfalls and (b) Regular Class A-1/A-2 Principal Shortfalls,
the balance will be applied first to make any required deposit to the
Excess Funding Account and then treated as Excess Principal Collections
for all Series as described below.
Principal Collections for All Series. Principal Collections
allocated to the interest of the holder of any Special Payoff Class A-1
Certificate, for any Collection Period with respect to the Special Payoff
Period for such Certificate, will first be allocated to make required
payments of principal in respect of such Class A-1 Certificate or
reallocated to make payments in respect of other Special Payoff Class A-1
Certificates or Regular Payoff Certificates as described above. Principal
Collections allocated to the interest of holders of Regular Payoff
Certificates, for any Collection Period with respect to the [Accumulation
Period] [Controlled Amortization Period] or the Early Amortization Period
[or Reinvestment/Early Payoff Period], will first be allocated to make
required payments of principal to the Principal Funding Account during the
Accumulation Period[, to make required payments of principal to the
Principal Funding Account and to the holders of Regular Payoff
Certificates that are Class A-1 Certificates during any Reinvestment/Early
Payoff Period] and to the holders of Series [199_-_] Certificates during
the Early Amortization Period [or Controlled Amortization Period] or
reallocated to make payments in respect of Special Payoff Class A-1
Certificates as described above. See "Distributions from the Collection
Account; [Reserve Fund;] [Yield Supplement Account] -- Principal
Collections". The Servicer will determine the amount of Available
Certificateholder Principal Collections for any Collection Period
remaining after such required payments, if any, and the amount of any
similar excess for any other Series ("Excess Principal Collections"). The
Servicer will allocate Excess Principal Collections to cover any principal
distributions to Certificateholders for any Series which are either
scheduled or permitted and which have not been covered out of Principal
Collections and certain other amounts allocated to such Series ("Principal
Shortfalls"). See "Maturity and Principal Payment Considerations". Excess
Principal Collections will generally not be used to cover investor
charge-offs for any Series. If Principal Shortfalls exceed Excess
Principal Collections for any Collection Period, Excess Principal
Collections will be allocated [pro rata among the applicable Series based
on the relative amounts of Principal Shortfalls] [describe other method of
applying, if applicable].
ALLOCATION OF COLLECTIONS; LIMITED SUBORDINATION OF SELLER'S INTEREST
[Except as otherwise described herein with respect to Interest
Collections and Principal Collections allocated to the Available Negative
Carry Subordinated Amount, [and [ ]] on] [On] any date on which
collections are deposited in the Collection Account, the Servicer will
distribute directly to the Seller an amount equal to (a) the Excess
Seller's Percentage for the related Collection Period of Series Allocable
Interest Collections for such date and (b) the Excess Seller's Percentage
for the related Collection Period of Series Allocable Principal
Collections for such date, if the Seller's Participation Amount
(determined after giving effect to any Principal Receivables transferred
to the Trust on such date) exceeds the Trust Available Subordinated Amount
for the immediately preceding Determination Date (after giving effect to
the allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date). In
addition, during any Nonprincipal Period, subject to certain limitations,
the Servicer will distribute directly to the Seller on each such date of
deposit an amount equal to the Available Seller's Principal Collections
for such date, if the Seller's Participation Amount (determined after
giving effect to any Principal Receivables transferred to the Trust on
such date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date) [describe
exceptions, if any].
"Available Seller's Collections" for any date means the sum of
(a) the Available Seller's Interest Collections for such date and
(b) the Available Seller's Principal Collections for such date;
provided, however, that the Available Seller's Collections will be
zero for any Collection Period with respect to which the Available
Subordinated Amount is zero on the Determination Date immediately
following the end of such Collection Period.
"Available Seller's Interest Collections" for any date means
an amount equal to the result obtained by multiplying (a) the excess
of (i) the Seller's Percentage for the related Collection Period
over (ii) the Excess Seller's Percentage for such Collection Period
by (b) Series Allocable Interest Collections for such date.
"Available Seller's Principal Collections" for any date means
an amount equal to the product of (a) the excess of (i) the Seller's
Percentage for the related Collection Period over (ii) the Excess
Seller's Percentage for such Collection Period and (b) Series
Allocable Principal Collections for such date.
"Seller's Percentage" means 100% minus (a) the Floating
Allocation Percentage, when used with respect to Interest
Collections [(except during any Early Amortization Period)],
Defaulted Receivables and Principal Collections during a
Nonprincipal Period, and (b) the Fixed Allocation Percentage, when
used with respect to [Interest Collections during any Early
Amortization Period and] Principal Collections during the Special
Payoff Period with respect to any Class A-1 Certificate, the
[Accumulation Period] [Controlled Amortization Period] and any Early
Amortization Period [or Reinvestment/Early Payoff Period].
"Excess Seller's Percentage" for any Collection Period means a
percentage (which percentage shall never be less than 0% nor more
than 100%) equal to (a) 100% minus, when used with respect to
Interest Collections [(except during any Early Amortization Period)]
and Principal Collections during a Nonprincipal Period, the sum of
(i) the Floating Allocation Percentage with respect to such
Collection Period and (ii) the percentage equivalent of a fraction,
the numerator of which is the Available Subordinated Amount as of
the Determination Date occurring in such Collection Period (after
giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date immediately following
such Determination Date), and the denominator of which is the
product of (x) the Pool Balance as of the last day of such
immediately preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in respect of which
the Excess Seller's Percentage is being calculated or (b) 100%
minus, when used with respect to [Interest Collections during any
Early Amortization Period and] Principal Collections during the
Special Payoff Period with respect to any Class A-1 Certificate, the
[Accumulation Period] [Controlled Amortization Period] and any Early
Amortization Period [or Reinvestment/Early Payoff Period], the sum
of (i) the Fixed Allocation Percentage with respect to such
Collection Period and (ii) the percentage described in clause
(a)(ii) above for such Collection Period.
Deficiency Amount. [On each Determination Date [with respect to a
Distribution Date that occurs on or prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Series Revolving Period, if
the Series Revolving Period has recommenced,]], the Servicer will
determine for the Series [199_-_] Certificates the amount (the "Deficiency
Amount"), if any, by which (a) the sum of (i) Class A-1 Monthly Interest
and Class A-2 Monthly Interest for the following Distribution Date, (ii)
Class A-1 Monthly Interest and Class A-2 Monthly Interest accrued but not
paid with respect to prior Distribution Dates (and interest thereon),
(iii) the Monthly Servicing Fee for such Distribution Date, (iv) the
Investor Default Amount for such Distribution Date and (v) the amount of
any Adjustment Payment allocated to the Series [199_-_] Certificates for
such Distribution Date that has not been deposited in the Collection
Account as required under the Pooling and Servicing Agreement, exceeds (b)
the sum of [(i)] Certificateholder Interest Collections and Investment
Proceeds for such Distribution Date [and (ii) the amount of funds in the
Reserve Fund on such Determination Date available to fund any portion of
the Deficiency Amount or described under "Distributions from the
Collection Account; Reserve Fund[; Yield Supplement Account] -- Interest
Collections"]. The lesser of the Deficiency Amount and the Available
Subordinated Amount is the "Draw Amount".] [Include other sources of funds
and applications of the Draw Amount, as appropriate.]
Available Subordinated Amount. The "Required Subordinated Amount"
shall mean, as of any date of determination, [the sum of (i)] the product
of the initial Subordinated Percentage [, as adjusted from time to time as
described herein other than as a result of an increase therein at the
option of the Seller,] and the Invested Amount [and (ii) the Incremental
Subordinated Amount]. Assuming that the Initial Invested Amount of the
Series [199_-_] Certificates is equal to the initial principal amount of
the Series [199_-_] Certificates, such amount would initially be
$[ ].
The Available Subordinated Amount for a Determination Date is equal
to (a) the lesser of (i) the Available Subordinated Amount for the
preceding Determination Date, minus, with certain limitations, the Draw
Amount for such preceding Determination Date, [minus funds from the
Reserve Fund applied to cover any portion of the Investor Default Amount,]
plus the excess, if any, of the Required Subordinated Amount for such
Determination Date over the Required Subordinated Amount for the
immediately preceding Determination Date, plus the amount of Excess
Servicing available to be paid to the Seller as described under
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account] -- Excess Servicing", and (ii) the product of the
fractional equivalent of the Subordinated Percentage and the Invested
Amount, [minus (b) in the case of clause (a) (i) the Incremental
Subordinated Amount for such preceding Determination Date, plus (c) the
Incremental Subordinated Amount for the current Determination Date,] [plus
(d) the Subordinated Percentage of funds to be withdrawn from the Excess
Funding Account on the succeeding Distribution Date and paid to the Seller
or allocated to one or more Series]; provided, however, that, once [the
[Accumulation Period] [Controlled Amortization Period] or] any Early
Amortization Period [that is not cured as described herein] shall have
commenced, the Available Subordinated Amount shall be calculated based on
the Invested Amount as of the close of business on the day preceding such
[[Accumulation Period] [Controlled Amortization Period] or] Early
Amortization Period[; and provided further that from and after the
commencement of any Reinvestment/Early Payoff Period [that is not cured as
described herein] until the earliest of the commencement of any Early
Amortization Period [that is not cured, as described herein,] the payment
in full of the Series [199_-_] Certificates and the Fully Reinvested Date,
the Available Subordinated Amount shall be calculated based on the
Invested Amount as of the close of business on the day preceding such
Reinvestment/Early Payoff Period [less [describe permitted reductions,
e.g., based on payment rates]]. The Available Subordinated Amount for the
first Determination Date is equal to the Required Subordinated Amount.
[The "Incremental Subordinated Amount" on any Determination Date will
equal the result obtained by multiplying (a) a fraction, the numerator of
which is the sum of the Invested Amount on the last day of the immediately
preceding Collection Period and the Available Subordinated Amount for such
Determination Date (calculated without adding the Incremental Subordinated
Amount for such Determination Date as described in clause (c) above), and
the denominator of which is the Pool Balance on such last day by (b) the
excess, if any, of (x) the sum of the Overconcentration Amount, the
Instalment Balance Amount and the aggregate amount of Ineligible
Receivables on such Determination Date over (y) the aggregate amount of
Ineligible Receivables, Receivables in Accounts containing Dealer
Overconcentrations and Receivables in Instalment Balances, in each case
that became Defaulted Receivables during the preceding Collection Period
and are not subject to reassignment from the Trust, unless certain
insolvency events relating to the Seller or CCC have occurred, as further
described in the Pooling and Servicing Agreement].
The "Subordinated Percentage" will initially equal the percentage
equivalent of a fraction, the numerator of which is the Subordination
Factor and the denominator of which will be the excess of 100% over the
Subordination Factor. The Seller may, in its sole discretion, at any time
increase the Available Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser of (i) $[ ] or
(ii) [ ]% of the Invested Amount. The Seller is not under any obligation
to increase the Available Subordinated Amount at any time. If [the sum of]
the Available Subordinated Amount [and the Incremental Subordinated
Amount] were reduced to less than the sum of the Required Subordinated
Amount [and the Incremental Subordinated Amount], a [Reinvestment/Early
Payoff Event] [Early Amortization Event] would occur. The Seller could
elect to increase the Available Subordinated Amount at the time such a
[Reinvestment/Early Payoff Event] [Early Amortization Event] would
otherwise occur, thus preventing or delaying the occurrence of the
[Reinvestment/Early Payoff Event] [Early Amortization Event]. [Describe
partial Reinvestment/Early Payoff Periods resulting from a failure to meet
the test described above, if applicable.]
[Negative Carry Subordinated Amount. In the event of the occurrence
of [a Reinvestment/Early Payoff Event,] [an Early Amortization Event] [or
the commencement of the Accumulation Period] [or the commencement of the
Controlled Amortization Period], Interest Collections and Principal
Collections otherwise distributed to the Seller in respect of the Excess
Seller's Percentage, in an amount not to exceed the Available Negative
Carry Subordinated Amount, will be deposited to the Reserve Fund [and
other] until the amounts on deposit therein equal the Negative Carry
Required Amount [and [ ]].
["Available Negative Carry Subordinated Amount" means, initially,
the Required Negative Carry Subordinated Amount and, on any subsequent
date, the Available Negative Carry Subordinated Amount at the open of
business on the immediately preceding date less the amount of Seller's
Collections deposited on such immediately preceding date to the Reserve
Fund [and other] in accordance with the preceding paragraph.]
"Required Negative Carry Subordinated Amount" means [ ].
"Negative Carry Required Amount" means [ ].]
[Describe other subordination of the Seller's Interest, if
applicable.]
DISTRIBUTIONS FROM THE COLLECTION ACCOUNT[; RESERVE FUND] [;YIELD
SUPPLEMENT ACCOUNT]
Interest Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Invested Date [and each
Collection Period thereafter during the Series Revolving Period]],
commencing with the initial Distribution Date, the Servicer shall instruct
the Trustee to apply Certificateholder Interest Collections and Investment
Proceeds, if any, [other amounts] in respect of the related Collection
Period to make the following distributions in the following priority:
[(i) first, an amount equal to Class A-1 Monthly Interest for
such Distribution Date, plus the amount of any Class A-1 Monthly
Interest previously due but not distributed on a prior Distribution
Date (plus, but only to the extent permitted under applicable law,
interest at the Class A-1 Certificate Rate plus [ ]% on Class A-1
Monthly Interest previously due but not so distributed), shall be
distributed to the Class A-1 Certificateholders, and an amount equal
to Class A-2 Monthly Interest for such Distribution Date, plus the
amount of any Class A-2 Monthly Interest previously due but not
[deposited to the Interest Funding Account or] distributed on a
prior Distribution Date (plus, but only to the extent permitted
under applicable law, interest at the Class A-2 Certificate Rate
plus [ ]% on Class A-2 Monthly Interest previously due but not so
[deposited or] distributed), shall be [deposited to the Interest
Funding Account] [distributed to the Class A-2 Certificateholders];
(ii) second, an amount equal to the Monthly Servicing Fee for
such Distribution Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection
Account as described in the Prospectus under "Description of the
Certificates -- Allocation of Collections; Deposits in Collection
Account" or waived by the Servicer);
[(iii) third, an amount equal to the Reserve Fund Deposit
Amount, if any, for such Distribution Date shall be deposited in the
Reserve Fund;]
(iv) fourth, an amount equal to the Investor Default Amount,
if any, for such Distribution Date shall be treated as a portion of
Available Certificateholder Principal Collections for such
Distribution Date;
[(v) fifth, an amount equal to any outstanding Class A-1
Carry-over Amount (after giving effect to any withdrawals from the
Yield Supplement Account) shall be distributed to the Class A-1
Certificateholders and, an amount equal to any outstanding Class A-2
Carry-over Amount (after giving effect to any withdrawals from the
Yield Supplement Account) shall be distributed to the Class A-2
Certificateholders;]
[(vi) sixth, an amount equal to the Yield Supplement Account
Deposit Amount, if any, for such Distribution Date shall be
deposited in the Yield Supplement Account;]
[(vii) seventh, describe other applications, if any;] and
(viii) eighth, the balance shall constitute Excess Servicing.]
In the event Certificateholder Interest Collections and Investment
Proceeds [describe other funds] are insufficient to make the entire amount
of any distribution described in clause [(i) or (v)] above, funds
available for such distribution will be applied to make such distribution
to the Class A-1 Certificateholders and the Class A-2 Certificateholders
pro rata based on the Class A-1 Allocation Percentage and the Class A-2
Allocation Percentage, respectively, for the related Collection Period.
Any excess in the amount allocated to make distributions to the holders of
either Class of Series [199_-_] Certificates pursuant to either such
clause over the amount required to make such distribution will be applied
to cover any shortfalls in the amount available to make distributions to
holders of Series [199_-_] Certificates of the other Class pursuant to
such clause.
[If, on any Distribution Date, Certificateholder Interest
Collections and Investment Proceeds [describe other funds] are not
sufficient to make the entire distributions required by clauses [(i), (ii)
and (iv)] above, the Trustee shall withdraw funds from the Reserve Fund
and apply such funds to complete the distributions pursuant to such
clauses; provided, however, that during any Early Amortization Period [or
Reinvestment/Early Payoff Period] funds shall not be withdrawn from the
Reserve Fund to make distributions required by clause [(iv)] to the extent
that, after giving effect to such withdrawal, the amount on deposit in the
Reserve Fund shall be less than $[ ].]
If there is a Draw Amount for such Distribution Date, the Trustee
shall apply the amount of Available Seller's Collections for the related
Collection Period on deposit in the Collection Account on such
Distribution Date, but only up to the Draw Amount, to make the
distributions required by clauses [(i), (ii) and (iv)] above [that have
not been made through the application of funds from the Reserve Fund as
described in the preceding paragraph]. Additionally, Available Seller's
Collections will be applied to any unpaid Adjustment Payments. The
Available Subordinated Amount will be reduced by the amount of Available
Seller's Collections so applied. If the Draw Amount exceeds such Available
Seller's Collections, the Available Subordinated Amount will be reduced by
the amount of such excess, but not by more than the sum of the Investor
Default Amount and the portion of Adjustment Payments not paid by the
Seller, in order to maintain the Invested Amount, but not generally by
more than the Investor Default Amount for such Distribution Date.
"Certificateholder Interest Collections" for any Distribution
Date means the portion of Series Allocable Interest Collections for
the related Collection Period allocated to the Series [199_-_]
Certificateholders' Interest as described under "Allocation
Percentages -- Allocation Between the Series [199_-_]
Certificateholders and the Seller".
"Investment Proceeds" for any Distribution Date means an
amount equal to the sum of (a) [the investment earnings on the
related Determination Date with respect to funds held in the Reserve
Fund,] (b) the Series Allocation Percentage of investment earnings
on the related Determination Date with respect to funds held in the
Collection Account and (c) all investment income on amounts in [the
Excess Funding Account,] [the Principal Funding Account,] [the
Interest Funding Account,] [the Yield Supplement Account] [other
accounts] since the preceding Distribution Date.
"Class A-1 Allocation Percentage" for any Collection Period
means the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the outstanding principal amount
of the Class A-1 Certificates as of the last day of the immediately
preceding Collection Period (after giving effect to any reduction
thereof to occur on the immediately following Distribution Date) and
the denominator of which is the aggregate outstanding principal
amount of all the Series [199_-_] Certificates as of such last day
(after giving effect to any reduction thereof to occur on the
immediately following Distribution Date).
"Class A-2 Allocation Percentage" for any Collection Period
means the percentage obtained by subtracting from 100% the Class A-1
Allocation Percentage for such Collection Period.
[Investment Proceeds. On each Distribution Date with respect to a
Collection Period that ends after the Fully Reinvested Date [other than
any such Collection Period during the Series Revolving Period], the
Servicer shall instruct the Trustee to apply Investment Proceeds [describe
other funds], in respect of the related Collection Period to make the
following distributions in the following priority:
(i) first, an amount equal to Class A-1 Monthly Interest for
such Distribution Date, plus, the amount of any Class A-1 Monthly
Interest previously due but not distributed on a prior Distribution
Date (plus, but only to the extent permitted under applicable law,
interest at the Class A-1 Certificate Rate plus [ ]% on Class A-1
Monthly Interest previously due but not so distributed), shall be
distributed to Class A-1 Certificateholders, and an amount equal to
Class A-2 Monthly Interest for such Distribution Date, plus the
amount of any Class A-2 Monthly Interest previously due but not
[deposited in the Interest Funding Account or] distributed on a
prior Distribution Date (plus, but only to the extent permitted
under applicable law, interest at the Class A-2 Certificate Rate
plus [ ]% on Class A-2 Monthly Interest previously due but not so
deposited or distributed shall be [deposited to the Interest Funding
Account][distributed to Class A-2 Certificateholders];
[(ii) second, describe other applications; and]
(iii) third, the balance shall be distributed to the Seller.]
In the event Investment Proceeds [and describe other funds] are
insufficient to make the entire amount of any distribution described in
clause (i) above, funds available for such distribution will be applied to
make such distribution to the Class A-1 Certificateholders and the Class
A-2 Certificateholders pro rata based on the Class A-1 Allocation
Percentage and the Class A-2 Allocation Percentage, respectively, for the
related Collection Period. Any excess in the amount allocated to make
distributions to the holders of either Class of Series [199_-_]
Certificates pursuant to such clause over the amount required to make such
distributions will be applied to cover any shortfalls in the amount
available to make distributions to holders of Series [199_-_]
Certificateholders of the other Class pursuant to such clause.
[If, on any Distribution Date, Investment Proceeds [describe other
funds] are not sufficient to make the entire distributions required in
clause (i) above, the Trustee shall withdraw funds from the Reserve Fund
and apply such funds to complete the distributions pursuant to such
clause.]
[Reserve Fund. The "Reserve Fund" will be an Eligible Deposit
Account established and maintained in the name of the Trustee for the
benefit of the Series [199_-_] Certificateholders. On the Series Issuance
Date, the Seller will deposit $[ ] ([ ]% of the principal balance
of the Series [199_-_] Certificates) into the Reserve Fund. The "Reserve
Fund Required Amount" for any Distribution Date will equal [ ]% of the
outstanding principal balance of the Series [19_-_] Certificates for such
Distribution Date (after giving effect to any change therein on such
Distribution Date). [Describe any increases in the Reserve Fund Required
Amount, e.g., as a result of the long-term rating of CFC falling below
BBB- or to cover any negative carry during a principal accumulation
period.] The "Reserve Fund Deposit Amount" is the amount, if any, by which
the Reserve Fund Required Amount exceeds the amount on deposit in the
Reserve Fund. Funds in the Reserve Fund will be invested in Eligible
Investments that will mature on or prior to the next Distribution Date. On
each Determination Date, the Servicer will apply any investment earnings
(net of losses and investment expenses) with respect to the Reserve Fund
as set forth under "Distributions from the Collection Account; Reserve
Fund[; Yield Supplement Account]". After the earlier of the payment in
full of the outstanding principal balance of the Series [199_-_]
Certificates and the Series Termination Date, any funds remaining on
deposit in the Reserve Fund will be paid to the Seller. [Describe other
applications, if any.]
If, after giving effect to the allocations, distributions and
deposits in the Reserve Fund described above under "Interest Collections",
the amount in the Reserve Fund is less than the Reserve Fund Required
Amount for the next following Distribution Date, the Trustee shall deposit
any remaining Available Seller's Collections for the related Collection
Period into the Reserve Fund until the amount in the Reserve Fund is equal
to such Reserve Fund Required Amount.
If, for any Distribution Date with respect to an Early Amortization
Period [or Reinvestment/Early Payoff Period], after giving effect to the
allocations, distributions and deposits described in the preceding
paragraph, the amount in the Reserve Fund is less than the Excess Reserve
Fund Required Amount for such Distribution Date, the Trustee shall deposit
the remaining Available Seller's Collections for the related Collection
Period into the Reserve Fund until the amount in the Reserve Fund is equal
to such Excess Reserve Fund Required Amount. The "Excess Reserve Fund
Required Amount" for any such Distribution Date means an amount equal to
the greater of (a) [ ]% of the initial principal balance of the Series
[199_-_] Certificates and (b) the excess of (i) the sum of (x) the
Available Subordinated Amount on the preceding Determination Date (after
giving effect to the allocations, distributions, withdrawals and deposits
to be made on such Distribution Date) and (y) an amount equal to (A) the
excess of the Required Participation Percentage over 100%, multiplied by
(B) the outstanding principal balance of the Series [199_-_] Certificates
on such Distribution Date (after giving effect to any changes therein on
such Distribution Date) over (ii) the excess of (x) the Series Allocation
Percentage of the Pool Balance on the last day of the immediately
preceding Collection Period over (y) the Invested Amount on such
Distribution Date (after giving effect to changes therein on such
Distribution Date); provided that the Excess Reserve Fund Required Amount
shall not exceed such Available Subordinated Amount. [Describe
adjustments, if applicable.]]
[Yield Supplement Account. The Yield Supplement Account will be an
Eligible Deposit Account established and maintained in the name of the
Trustee for the benefit of the Series [199_-_] Certificateholders. On the
Series Issuance Date, the Seller will deposit $[ ] ([ ]% of the
principal balance of the Series [199_-_] Certificates) into the Yield
Supplement Account. The "Yield Supplement Account Required Amount" for any
Distribution Date [(i) that occurs prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Series Revolving Period]] will
equal [ ]% of the outstanding principal balance of the Series [199_-_]
Certificates for such Distribution Date (after giving effect to any change
therein on such Distribution Date) [and (ii) for any [other] Distribution
Date that occurs on or after the Fully Reinvested Date, zero]. [On any
Distribution Date on which there is a Class A-1 Carry-over Amount or a
Class A-2 Carry-over Amount, the amount on deposit in the Yield Supplement
Account on such Distribution Date shall be applied by the Trustee up to
the amount of such Carry-over Amount to satisfy such Carry-over Amount. In
the event of any insufficiency of funds on deposit in the Yield Supplement
Account to satisfy all such Carry-over Amounts, such funds shall be
applied to the Class A-1 Carry-over Amount and the Class A-2 Carry-over
Amount pro rata based on the Class A-1 Allocation Percentage and the Class
A-2 Allocation Percentage, respectively, for the related Collection
Period. Any excess in the amount so allocated to pay a Class A-1
Carry-over Amount or a Class A-2 Carry-over Amount over the amount of such
Carry-over Amount will be applied to cover any shortfall in the amount
available to pay a Carry-over Amount with respect to the other Class of
Series [199_-_] Certificates.] [Describe other applications, e.g., to pay
Monthly Interest.] The "Yield Supplement Account Deposit Amount" is the
amount, if any, by which the Yield Supplement Account Required Amount
exceeds the amount on deposit in the Yield Supplement Account. Funds in
the Yield Supplement Account will be invested [in Eligible Investments
that mature on or prior to the next Distribution Date] [in any investments
consisting of financial assets that by their terms convert to cash within
a finite period of time that mature on or prior to the next Distribution
Date]. On each Determination Date, the Servicer will apply any investment
earnings (net of losses and investment expenses) with respect to the Yield
Supplement Account as set forth under "Distributions from the Collection
Account; [Reserve Fund;] Yield Supplement Account". After the earlier of
the payment in full of the outstanding principal balance of the Series
[199_-_] Certificates and the Series Termination Date, any funds remaining
on deposit in the Yield Supplement Account will be paid to the Seller.
[Describe other applications.]]
Excess Servicing. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any
such Collection Period thereafter during the Series Revolving Period]],
the Servicer will allocate Excess Servicing with respect to the Collection
Period immediately preceding such Distribution Date, in the following
priority:
[(a) first, an amount equal to the aggregate amount of
Investor Charge-Offs which have not been previously reimbursed
(after giving effect to the allocation on such Distribution Date of
Series Allocable Miscellaneous Payments with respect to such
Distribution Date) will be allocated in the same manner as Available
Certificateholder Principal Collections for such Distribution Date;
(b) second, an amount equal to the aggregate outstanding
amounts of the Monthly Servicing Fee which have been previously
waived as described under "Servicing Compensation and Payment of
Expenses" in the Prospectus will be distributed to the Servicer;
[(c) third, describe other applications; and]
(d) fourth, the balance, if any, shall be distributed to the
Seller and shall increase the Available Subordinated Amount as
described in the definition thereof].
Principal Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any
such Collection Period thereafter during the Series Revolving Period]],
the Servicer will allocate Available Certificateholder Principal
Collections as follows:
(a) Special Class A-1 Available Principal Collections with
respect to any Special Payoff Class A-1 Certificate in its Special
Payoff Period shall be distributed as follows:
(i) first, an amount equal to the Special Class A-1
Monthly Principal for such Distribution Date and such Class
A-1 Certificate shall be distributed to the holder of such
Certificate;
(ii) second, to cover any Class A-1 Principal Shortfalls
for other Special Payoff Class A-1 Certificates;
(iii) third, if such Distribution Date relates to the
Series Revolving Period, to make any required deposit to the
Excess Funding Account or, if such Distribution Date relates
to the [Accumulation Period] [controlled Amortization Period]
or any Early Amortization Period [or Reinvestment/Early Payoff
Period], to cover any Regular Class A-1/A-2 Principal
Shortfalls; and
(iv) fourth, to Excess Principal Collections as
described under "Allocation Percentages -- Principal
Collections for All Series";
(b) for each Distribution Date with respect to the Series
Revolving Period, all Regular Class A-1/A-2 Available Principal
Collections will be allocated as follows:
(i) first, to cover any Class A-1 Principal Shortfalls
for Special Payoff Class A-1 Certificates;
(ii) second, to make any required deposit to the Excess
Funding Account; and
(iii) third, to Excess Principal Collections;
(c) for each Distribution Date with respect to the
[Accumulation Period] [Controlled Amortization Period] or any Early
Amortization Period all Regular Class A-1/A-2 Available Principal
Collections shall be distributed as follows:
(i) first, an amount equal to the Regular Class A-1/A-2
Monthly Principal for such Distribution Date will be
[deposited to the Principal Funding Account, in the case of
the Accumulation Period or] distributed to Series [199_-_]
Certificateholders[, in the case of the Controlled
Amortization Period or Early Amortization Period];
(ii) second, to cover any Class A-1 Principal Shortfalls
for Special Payoff Class A-1 Certificates; and
(iii) third, the balance, if any, will be allocated to
Excess Principal Collections; and
[(d) for each Distribution Date with respect to the
Reinvestment/Early Payoff Period all Regular Class A-1/A-2 Available
Principal Collections shall be distributed as follows:
(i) first, an amount equal to the Regular Class A-1
Monthly Principal for such Distribution Date will be
distributed to holders of Regular Payoff Certificates that are
Class A-1-Certificates;
(ii) second, an amount equal to the Regular Class A-2
Monthly Principal for such Distribution Date will be deposited
to the Principal Funding Account;
(iii) third, to cover any Class A-1 Principal Shortfalls
for Special Payoff Class A-1 Certificates; and
(iv) fourth, the balance if any will be allocated to
Excess Principal Collections].
[In the event that the aggregate Invested Amount is greater than
zero on the Series Termination Date, any funds remaining in the Reserve
Fund (after the application of funds in the Reserve Fund as described
above under "Interest Collections") will be treated as a portion of
Available Certificateholder Principal Collections for the Distribution
Date occurring on the Series Termination Date.]
"Special Class A-1 Available Principal Collections" for any
Distribution Date and any Special Payoff Class A-1 Certificate means
the sum of (a) the amount of Available Certificateholder Principal
Collections allocated to such Certificate with respect to such
Distribution Date as described under "Allocation Percentages --
Allocation Between the Class A-1 Certificateholders and the Class
A-2 Certificateholders" and (b) Series Excess Principal Collections,
if any, allocated to such Certificate.
"Special Class A-1 Monthly Principal" with respect to any
Distribution Date and Special Payoff Class A-1 Certificate will
equal the Special Class A-1 Available Principal Collection for such
Certificate and Distribution Date; provided, however, that Special
Class A-1 Monthly Principal for such Certificate shall not exceed
the Invested Amount of such Certificate.
"Regular Class A-1/A-2 Available Principal Collections" for
any Distribution Date means the sum of (a) the amount of Available
Certificateholder Principal Collections allocated to the Regular
Payoff Certificates with respect to such Distribution Date as
described under "Allocation Percentages -- Allocation Between the
Class A-1 Certificateholders and the Class A-2 Certificateholders"
and (b) Series Excess Principal Collections, if any, allocated to
the Regular Payoff Certificates.
"Regular Class A-1/A-2 Monthly Principal" with respect to any
Distribution Date relating to the [Accumulation Period][Controlled
Amortization Period] or any Early Amortization Period will equal
Regular Class A-1/A-2 Available Principal Collections for such
Distribution Date; provided, however, that for each Distribution
Date [with respect to the Accumulation Period, Regular Class A-1/A-2
Monthly Principal may not exceed the Controlled Deposit Amount][with
respect to the Controlled Amortization Period, Regular Class A-1/A-2
Monthly Principal may not exceed the Controlled Distribution Amount]
for such Distribution Date; and provided, further, that Regular
Class A-1/A-2 Monthly Principal shall not exceed the aggregate
Invested Amount of the Regular Payoff Certificates.
["Controlled Deposit Amount" for a Distribution Date means the
excess, if any, of (a) [the sum of (i)] the product of the
Controlled Accumulation Amount and the number of Distribution Dates
from and including the first Distribution Date with respect to the
Accumulation Period through and including such Distribution Date
(but not in excess of the Accumulation Period Length) [and (ii) the
amount on deposit in the Excess Funding Account as of [ ] [the
[ ] Distribution Date] (after giving effect to any
withdrawals from or deposits to such account on such date (other
than the transfer to the Principal Funding Account of the amounts on
deposit therein on such date))] over (b) the sum of amounts on
deposit in [the Excess Funding Account and] the Principal Funding
Account, in each case before giving effect to any withdrawals from
or deposits to such accounts on such Distribution Date other than
any such withdrawal with respect to a Special Payoff Class A-1
Certificate.]
["Controlled Accumulation Amount" means an amount equal to the
Invested Amount of the Regular Payoff Certificates as of [ ]
[the [ ] Distribution Date] (after giving effect to any
changes therein on such date) divided by the Accumulation Period
Length.]
["Controlled Distribution Amount" for a Distribution Date
means the sum of (a) [the excess, if any, of (i)] the Controlled
Amortization Amount for such Distribution Date [over (ii) the
quotient obtained by dividing the amount on deposit in the Excess
Funding Account as of the [ ] Distribution Date (after giving
effect to any withdrawals from or deposits to such account on such
date) by [ ],] plus (b) any Controlled Distribution Amount for a
prior Distribution Date not previously distributed to Series
[199_-_] Certificateholders.]
["Controlled Amortization Amount" for a Distribution Date
means an amount equal to the Invested Amount of the Regular Payoff
Certificates as of the [ ] Distribution Date (after giving effect
to any changes therein on such date) divided by [ ].]
["Regular Class A-1 Monthly Principal" with respect to any
Distribution Date relating to any Reinvestment/Early Payoff Period
will equal Regular Class A-1/A-2 Available Principal Collections for
such Distribution Date; provided, however, that Regular Class A-1
Monthly Principal shall not exceed the aggregate Invested Amount of
the Regular Payoff Certificates that are Class A-1 Certificates.]
["Regular Class A-2 Monthly Principal" with respect to any
Distribution Date relating to any Reinvestment/Early Payoff Period
will equal the excess, if any, of Regular Class A-1/A-2 Available
Principal Collections for such Distribution Date over Regular Class
A-1 Monthly Principal for such Distribution Date; provided, however,
that Regular Class A-2 Monthly Principal shall not exceed the
aggregate Invested Amount of the Class A-2 Certificates.]
[ENHANCEMENTS
The Series [199_-_] Certificates will have the benefit of the
[Letter of Credit] [Interest Rate Swap] [Cash Collateral Account]
[Guaranty] [Surety Bond] [Insurance Policy] [Spread Account] [other]
[issued by [ ] (the "Enhancement Provider")] in the initial
amount of $[ ].
With respect to any Distribution Date, the amount available to be
drawn under the [Letter of Credit] [Interest Rate Swap] [Cash Collateral
Account] [Guaranty] [Surety Bond] [Insurance Policy] [Spread Account]
[other] (the "Available Credit Enhancement Amount") will equal
[ ].]
[Describe subordination of other Series of Certificates to the
Series [199_-_] Certificates, if applicable.]
[Information with respect to Enhancement.]
[ENHANCEMENT PROVIDER
Information to be provided by Enhancement Provider.]
[INTEREST FUNDING ACCOUNT
The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account for the benefit of the
Class A-2 Certificateholders (the "Interest Funding Account"). On each
Distribution Date Class A-2 Monthly Interest will be deposited in the
Interest Funding Account as provided above under "Distributions from the
Collection Account[; Reserve Fund] [; Yield Supplement Account]; provided
that if an Early Amortization Event [that is not cured as described
herein] shall have occurred, interest will be distributed to the Class A-2
Certificateholders on the first Distribution Date following such Early
Amortization Event.
All amounts on deposit in the Interest Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Interest Funding Account Balance") will be
invested from the date of their deposit by the Trustee at the direction of
the Servicer in Eligible Investments that will mature on or prior to the
next succeeding Distribution Date. The Servicer may select an appropriate
agent as representative of the Servicer for the purpose of designating
such investments. On each Distribution Date, the interest and other
investment income on the Interest Funding Account Balance will be applied
as provided above under "Distributions from the Collection Account[;
Reserve Fund][; Yield Supplement Account].]
[PRINCIPAL FUNDING ACCOUNT
The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account for the benefit of the
holders of Regular Payoff Certificates (the "Principal Funding Account").
[On each Distribution Date with respect to the Accumulation Period,
Regular Class A-1/A-2 Monthly Principal will be deposited in the Principal
Funding Account] [and on each Distribution Date with respect to any
Reinvestment/Early Payoff Period, Regular Class A-2 Monthly Principal will
be deposited in the Principal Funding Account, in each case] as provided
above under "Distributions from the Collection Account[; Reserve Fund][;
Yield Supplement Account] -- Principal Collections"; provided that, if an
Early Amortization Event [that is not cured as described herein] occurs
during the [Accumulation Period] [or any Reinvestment/Early Payoff
Period], the Principal Funding Account Balance shall be paid to the Series
[199_-_] Certificateholders on the first Special Payment Date [and, if a
Reinvestment/Early Payoff Event [that is not cured as described herein]
occurs during the Accumulation Period, funds on deposit in the Principal
Funding Account in an amount equal to the Invested Amount of the Class A-1
Certificates that are Regular Payoff Certificates shall be paid to the
holders of such Certificates on the first Special Payment Date].
All amounts on deposit in the Principal Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Principal Funding Account Balance") will be
invested from the date of their deposit to on or prior to the Expected
Payment Date by the Trustee at the direction of the Servicer in Eligible
Investments that will mature on or prior to the following Distribution
Date. The Servicer may select an appropriate agent as representative of
the Servicer for the purpose of designating such investments. On each
Distribution Date, the interest and other investment income on the
Principal Funding Account Balance will be applied as provided above under
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account]".]
[Describe other Series [199_-_] Accounts, if applicable.]
DISTRIBUTIONS
Payments to Series [199_-_] Certificateholders will be made from the
Collection Account, [the Reserve Fund,] [the Principal Funding Account,]
[the Interest Funding Account,] [other] and [the Excess Funding Account].
(a) The Servicer shall instruct the Trustee to apply funds on
deposit in the Collection Account, [the Reserve Fund,] [the Interest
Funding Account,] [other] and shall instruct the Trustee to make the
following distributions at the following times:
(i) on each Interest Payment Date[, Class A-2 Interest
Payment Date] or Special Payment Date] all amounts on deposit
in the Collection Account[, Reserve Fund] [Interest Funding
Account] [other] as are payable to the Class A-1
Certificateholders or Class A-2 Certificateholders with
respect to accrued interest will be distributed to such
Certificateholders.
(b) The Servicer shall instruct the Trustee to apply the funds
on deposit in the [Collection Account,] [the Principal Funding
Account,] [other] and [the Excess Funding Account] and shall
instruct the Trustee to make, without duplication, the following
distributions at the following times:
(i) on each Distribution Date all amounts on deposit in
the Collection Account [other] as are payable to the holder of
any Special Payoff Class A-1 Certificate with respect to
principal of such Certificate will be distributed to such
Certificateholder;
[(ii) on each Distribution Date during the Controlled
Amortization Period all amounts on deposit in the Collection
Account [and the Excess Funding Account (other than amounts to
be distributed to holders of Special Payoff Class A-1
Certificates as described in clause [(iv)] below)] as are
payable to Regular Payoff Certificates with respect to
principal will be distributed first to the holders of Regular
Payoff Certificates that are Class A-1 Certificates up to a
maximum amount equal to the excess of the outstanding
principal amount of such Certificates over unreimbursed
Investor Charge-Offs allocated to such Certificates, each on
such date, and then to the holders of Class A-2 Certificates
up to a maximum amount equal to the excess of the outstanding
principal amount of such Certificates over unreimbursed
Investor Charge-Offs allocated to such Certificates, each on
such date;]
[(iii) on each Special Payment Date and on the Expected
Payment Date the Principal Funding Account Balance[, the
amount on deposit in the Excess Funding Account (other than
amounts to be distributed to holders of [Special Payoff] Class
A-1 Certificates as described in clause (iv) below)] and all
amounts on deposit in the Collection Account as are payable to
Regular Payoff Certificateholders with respect to principal
shall be distributed first to the holders of the Class A-1
Certificates up to a maximum amount equal to the excess of the
outstanding principal amount of such Certificates over
unreimbursed Investor Charge-Offs allocated to such
Certificates, each on such date, and then[, except in the case
of a Special Payment Date with respect to a Reinvestment/Early
Payoff Period,] to the holders of Class A-2 Certificates up to
a maximum amount equal to the excess of the outstanding
principal amount of such Certificates over unreimbursed
Investor Charge-Offs allocated to such Certificates, each on
such date;] and
(iv) on the second Distribution Date in the Special
Payoff Period with respect to any Special Payoff Class A-1
Certificate [and on the first Special Payment Date with
respect to any Reinvestment/Early Payoff Period], amounts on
deposit in the Excess Funding Account and allocable to that
Certificate [or each Regular Payoff Certificate that is a
Class A-1 Certificate] will be distributed to the holder
thereof up to a maximum amount (taking into account any
distribution with respect to that Certificate pursuant to
clause (a) (i) or (iii) above) equal to the excess of the
outstanding principal amount of such Certificate over
unreimbursed Investor Charge-offs allocated to such
Certificate, each on such date;)
[(c) On each Distribution Date on which there is an unpaid
Class A-1 Carry-over Amount or Class A-2 Carry-over Amount (or
unpaid interest thereon), the Servicer shall instruct the Trustee to
distribute to the Class A-1 Certificateholders or Class A-2
Certificateholders, as the case may be, such Carry-over Amount (or
unpaid interest thereon) to the extent funds are available therefor
first from amounts on deposit in the Yield Supplement Account and
second to the extent funds are available therefor after making all
required distributions and deposits with respect to the Series
[199_-_] Certificates as provided above under "Distributions from
the Collection Account[; Reserve Fund]; Yield Supplement Account".]
INVESTOR CHARGE-OFFS
If the Available Subordinated Amount is reduced to zero and on any
Distribution Date the Deficiency Amount is greater than zero, the
outstanding principal balance of the Series [199_-_] Certificates will be
reduced by the Deficiency Amount, but not by more than the Investor
Default Amount for such Distribution Date (an "Investor Charge-Off"). Any
such reduction shall be applied to reduce the outstanding principal
balance of the Class A-1 Certificates (a "Class A-1 Investor Charge-Off")
and the Class A-2 Certificates (a "Class A-2 Investor Charge Off") pro
rata based on the Class A-1 Allocation Percentage and the Class A-2
Allocation Percentage, respectively, in each case for the related
Collection Period. Any reduction in the outstanding principal balance of
the Series [199_-_] Certificates will have the effect of slowing or
reducing the return of principal to the Series [199_-_]
Certificateholders. If the outstanding principal balance of the Series
[199_-_] Certificates has been reduced by any Investor Charge-Offs, it
will thereafter be increased on any Distribution Date (but not by an
amount in excess of the aggregate unreimbursed Investor Charge-Offs) by
the sum of (a) Series Allocable Miscellaneous Payments for such
Distribution Date and (b) the amount of Excess Servicing allocated and
available for such purpose as described above. Any such increase shall be
applied pro rata between the Class A-1 Certificates and the Class A-2
Certificates as described above.
[REINVESTMENT/EARLY PAYOFF EVENTS
The Reinvestment/Early Payoff Events with respect to the Series
[199_-_] Certificates are the following:
[1. failure on the part of USA, the Servicer or CCC, as
applicable, (i) to make any payment or deposit required by the
Pooling and Servicing Agreement or the Receivables Purchase
Agreement, including but not limited to any Transfer Deposit Amount
or Adjustment Payment, on or before the date occurring two business
days after the date such payment or deposit is required to be made
therein; or (ii) to deliver a Distribution Date Statement on the
date required under the Pooling and Servicing Agreement (or within
the applicable grace period which will not exceed five business
days); (iii) to comply with its covenant not to create any lien on a
Receivable; or (iv) to observe or perform in any material respect
any other covenants or agreements set forth in the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, which
failure continues unremedied for a period of 45 days after written
notice of such failure;
2. any representation or warranty made by CCC in the
Receivables Purchase Agreement or by USA in the Pooling and
Servicing Agreement or any information required to be given by USA
to the Trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after
written notice and as a result the interests of the
Certificateholders are materially and adversely affected; provided,
however, that a Reinvestment Event shall not be deemed to occur
thereunder if USA has repurchased the related Receivables or all
such Receivables, if applicable, during such period in accordance
with the provisions of the Pooling and Servicing Agreement;
3. the occurrence of certain events of bankruptcy, insolvency
or receivership relating to any of CFC, CCC or Chrysler;
4. a failure by USA to convey Receivables in Additional
Accounts to the Trust within five business days after the day on
which it is required to convey such Receivables pursuant to the
Pooling and Servicing Agreement;
5. on any Determination Date, the Available Subordinated
Amount for the next Distribution Date will be reduced to an amount
less than the Required Subordinated Amount on such Determination
Date after giving effect to the distributions to be made on the next
Distribution Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds [ ]% of the Pool
Balance on such last day;
8. on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods, is less than
[ ]%;
9. the delivery by the Seller to the Trustee, of a notice
stating that the Seller will no longer continue to sell Receivables
to the Trust commencing on [ ] or any yearly anniversary
thereof; provided, however, that the Seller shall have delivered to
the Trustee an opinion of counsel to the effect that, following such
discontinuation of sales of Receivables, the Trust shall not become
an investment company within the meaning of the Investment Company
Act of 1940, as amended;
10. on any Determination Date, the quotient obtained by
dividing (i) the sum of (x) the amount on deposit in the Yield
Supplement Account on the next Distribution Date, after giving
effect to the distribution to be made on such Distribution Date, and
(y) the amount on deposit in the Yield Supplement Account on the
immediately preceding Distribution Date, after giving effect to the
distributions made on such Distribution Date, by (ii) the sum of (A)
the outstanding principal balance of the Series [199_-_]
Certificates on the next Distribution Date, after giving effect to
all distributions and payments to be made on such Distribution Date,
and (B) the outstanding principal balance of the Series [199_-_]
Certificates on the immediately preceding Distribution Date, after
giving effect to all distributions and payments made on such
Distribution Date, is less than [ ]%;
11. interest at the Class A-1 Certificate Rate is not paid on
the Class A-1 Certificates on any Distribution Date or interest at
the Class A-2 Certificate Rate is not paid on the Class A-2
Certificates on any [Class A-2] Interest Payment Date;
12. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
13. [other].](1)<F1>
<F1>
- ---------------
(1) Delete or modify, as appropriate.
[In the case of any event described in clause [1, 2 or 6] above, a
Reinvestment/Early Payoff Event with respect to Series [199_-_] will be
deemed to have occurred only if, after the applicable grace period
described in such clauses, if any, either the Trustee or Series [199_-_]
Certificateholders holding Series [199_-_] Certificates evidencing more
than 50% of the aggregate unpaid principal amount of the Series [199_-_]
Certificates by written notice to the Seller and the Servicer (and the
Trustee, if given by Certificateholders) declare that a Reinvestment/Early
Payoff Event has occurred as of the date of such notice. In the case of
any event described in clause [3, 4, 5, 7, 8, 9, 10, 11, 12 or 13] above,
a Reinvestment/Early Payoff Event with respect to Series [199_-_] will be
deemed to have occurred without any notice or other action on the part of
the Trustee or the Series [199_-_] Certificateholders immediately upon the
occurrence of such event.]
[Under certain limited circumstances, a Reinvestment/Early Payoff
Period which commences prior to the scheduled end of the Revolving Period
may terminate and the Series Revolving Period recommence. If a
Reinvestment/Early Payoff Period results from the failure by USA to convey
Receivables in Additional Accounts to the Trust, as described in paragraph
4 above, during the Series Revolving Period and no other
Reinvestment/Early Payoff Event or Early Amortization Event [that has not
been cured as described herein] has occurred, the Reinvestment/Early
Payoff Period resulting from such failure will terminate and the Series
Revolving Period will recommence (unless the scheduled termination date of
the Series Revolving Period has occurred) as of the earlier of (i) the
conveyance of Receivables in Additional Accounts to the Trust following
written confirmation by the Rating Agencies that such conveyance will not
result in the withdrawal or lowering of the rating of either Class of the
Series [199_-_] Certificates, and (ii) the end of the first Collection
Period during which the Seller would no longer be required to convey
Receivables to the Trust. In addition, the Class A-1 Revolving Period with
respect to any Class A-1 Certificate that terminated as a result of such
Reinvestment/Payoff Event will recommence. The Seller may no longer be
required to convey Receivables as described above as a result of a
reduction in the Invested Amount occurring due to principal payments made
in respect of the Series [199_-_] Certificates and the Certificates of
other outstanding Series during the Reinvestment/Early Payoff Period or as
a result of the subsequent addition of Receivables to the Trust.
Notwithstanding the foregoing, if any Reinvestment/Early Payoff Event
occurs, the Series Revolving Period and any Class A-1 Revolving Period
that terminated as a result of such Reinvestment/Payoff Event will
recommence following written confirmation by each Rating Agency that its
rating of the Series [199_-_] Certificates will not be withdrawn or
lowered as a result of such recommencement, provided that no other
Reinvestment/Early Payoff Event or Early Amortization Event [that has not
been cured as described herein] has occurred and the scheduled termination
of the Series Revolving Period has not occurred.]
[Describe other cures of Reinvestment/Early Payoff Events and
partial Reinvestment/Early Payoff Periods, if applicable.]
EARLY AMORTIZATION EVENTS
[The Early Amortization Events with respect to the Series [199_-_]
Certificates will include each of the events so defined in the Prospectus,
plus the following:
1. failure on the part of USA, the Servicer or CCC, as
applicable, (i) to make any payment or deposit required by the
Pooling and Servicing Agreement or the Receivables Purchase
Agreement, including but not limited to any Transfer Deposit Amount
or Adjustment Payment, on or before the date occurring two business
days after the date such payment or deposit is required to be made
therein; or (ii) to deliver a Distribution Date Statement on the
date required under the Pooling and Servicing Agreement (or within
the applicable grace period which will not exceed five business
days); (iii) to comply with its covenant not to create any lien on a
Receivable; or (iv) to observe or perform in any material respect
any other covenants or agreements set forth in the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, which
failure continues unremedied for a period of 45 days after written
notice of such failure;
2. any representation or warranty made by CCC in the
Receivables Purchase Agreement or by USA in the Pooling and
Servicing Agreement or any information required to be given by USA
to the Trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after
written notice and as a result the interests of the
Certificateholders are materially and adversely affected; provided,
however, that an Early Amortization Event shall not be deemed to
occur thereunder if USA has repurchased the related Receivables or
all such Receivables, if applicable, during such period in
accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency
or receivership relating to any of CFC, CCC or Chrysler;
4. a failure by USA to convey Receivables in Additional
Accounts to the Trust within five business days after the day on
which it is required to convey such Receivables pursuant to the
Pooling and Servicing Agreement;
5. on any Determination Date, the Available Subordinated
Amount for the next Distribution Date will be reduced to an amount
less than the Required Subordinated Amount on such Determination
Date after giving effect to the distributions to be made on the next
Distribution Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds [ ]% of the Pool
Balance on such last day;
8. on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods, is less than
[ ]%
9. on any Determination Date, the quotient obtained by
dividing (i) the sum of (x) the amount on deposit in the Yield
Supplement Account on the next Distribution Date, after giving
effect to the distributions to be made on such Distribution Date,
and (y) the amount on deposit in the Yield Supplement Account on the
immediately preceding Distribution Date, after giving effect to the
distributions made on such Distribution Date, by (ii) the sum of (A)
the outstanding principal balance of the Series [199_-_]
Certificates on the next Distribution Date, after giving effect to
all distributions and payments to be made on such Distribution Date
and (B) the outstanding principal balance of the Series [199_-_]
Certificates on the immediately preceding Distribution Date, after
giving effect to all distributions and payments made on such
Distribution Date, is less than [ ];
10. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
11. [other].](2)<F2>
<F2>
- ---------------
(2) Delete or modify, as appropriate.
[In the case of any event described in clause [1, 2 or 6] above, an
Early Amortization Event with respect to Series [199_-_] will be deemed to
have occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given
by Certificateholders) declare that an Early Amortization Event has
occurred as of the date of such notice. In the case of any Early
Amortization Event described in the Prospectus or any event described in
clause [3, 4, 5, 7, 8, 9, 10 or 11] above, an Early Amortization Event
with respect to Series [199_-_] will be deemed to have occurred without
any notice or other action on the part of the Trustee or the Series
[199_-_] Certificateholders immediately upon the occurrence of such
event.]
[Under certain limited circumstances, an Early Amortization Period
which commences prior to the scheduled end of the Series Revolving Period
may terminate and the Series Revolving Period recommence. If an Early
Amortization Period results from the failure by USA to convey Receivables
in Additional Accounts to the Trust, as described in paragraph 4 above,
during the Series Revolving Period and no other [Reinvestment/Early Payoff
Event or] Early Amortization Event [that has not been cured as described
herein] has occurred, the Early Amortization Period resulting from such
failure will terminate and the Series Revolving Period will recommence
(unless the scheduled termination date of the Series Revolving Period has
occurred) as of the earlier of (i) the conveyance of Receivables in
Additional Accounts to the Trust following written confirmation by the
Rating Agencies that such conveyance will not result in the withdrawal or
lowering of the rating of either Class of the Series [19_-_] Certificates,
and (ii) the end of the first Collection Period during which the Seller
would no longer be required to convey Receivables to the Trust. In
addition, the Class A-1 Revolving Period with respect to any Class A-1
Certificate that terminated as a result of such Early Amortization Event
will recommence. The Seller may no longer be required to convey
Receivables as described above as a result of a reduction in the Invested
Amount occurring due to principal payments made in respect of the Series
[199_-_] Certificates and the Certificates of other outstanding Series
during the Early Amortization Period or as a result of the subsequent
addition of Receivables to the Trust. Notwithstanding the foregoing, if
any Early Amortization Event occurs, the Series Revolving Period and any
Class A-1 Revolving Period that terminated as a result of such Early
Amortization Event will recommence following written confirmation by each
Rating Agency that its rating of the Series [199_-_] Certificates will not
be withdrawn or lowered as a result of such recommencement, provided that
no other Early Amortization Event [or Reinvestment/Early Payoff Event]
[that has not been cured as described herein] has occurred and the
scheduled termination of the Series Revolving Period has not occurred.]
[Describe other cures of Early Amortization Events, if applicable.]
If the portion of proceeds of the sale of the Receivables following
the occurrence of an insolvency event with respect to USA or a breach by
USA of its covenant not to create any lien on any Receivable, as described
in the Prospectus under "Description of the Certificates -- Reinvestment
Events and Early Amortization Events", allocated to the Series [199_-_]
Certificateholders' Interest and proceeds of any collections on the
Receivables in the Collection Account allocable to the Series [199_-_]
Certificateholders' Interest are not sufficient to pay the aggregate
unpaid principal amount of the Series [199_-_] Certificates in full plus
accrued and unpaid interest thereon, such amounts will be paid to the
holders of the Class A-1 Certificates and the Class A-2 Certificates pro
rata based on the Class A-1 Allocation Percentage and the Class A-2
Percentage, respectively, and the Series [199_-_] Certificateholders will
incur a loss.
SERIES TERMINATION
The last payment of principal and interest on the Series [199_-_]
Certificates will be due and payable no later than the
[ ] Distribution Date (the "Series Termination Date"). In
the event that the aggregate Invested Amount is greater than zero on the
Series Termination Date (after giving effect to deposits and distributions
otherwise to be made on such Series Termination Date), the Trustee will
sell or cause to be sold (and apply the proceeds to the extent necessary
to pay such remaining amounts to all Series [199_-_] Certificateholders)
an interest in the Receivables or certain Receivables, as specified in the
Pooling and Servicing Agreement, in an amount equal to (a) 110% of the
aggregate Invested Amount on such Series Termination Date (after giving
effect to such deposits and distributions) and (b) the Available
Subordinated Amount on the preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to be
made on the Distribution Date following such Determination Date);
provided, however, that in no event shall such amount exceed the Series
Allocation Percentage (for the Collection Period in which such Series
Termination Date occurs) of Receivables on such Series Termination Date.
The net proceeds of such sale and any collections on the Receivables will
be paid pro rata to Class A-1 Certificateholders and the Class A-2
Certificateholders based on the Class A-1 Allocation Percentage and the
Class A-2 Allocation Percentage, respectively, on the Series Termination
Date as the final payment of the Series [199_-_] Certificates.
In the event that principal of any Class A-1 Certificate will not be
paid in full by the eleventh Distribution Date after the commencement of
the related Special Payoff Period or the eleventh Distribution Date
following the commencement of the [Accumulation Period] [Controlled
Amortization Period] or an Early Amortization Period [or
Reinvestment/Early Payoff Period], the holder of such Class A-1
Certificate will have the option to direct the Trustee to sell on such
Distribution Date such Certificateholder's pro rata share of the
Receivables and apply proceeds thereof to pay principal of such holder's
Class A-1 Certificate on such Distribution Date.
REPORTS
On each Distribution Date (including each Distribution Date that
corresponds to the Expected Payment Date or any Special Payment Date),
commencing with the initial Distribution Date, the Trustee will forward to
each Series [199_-_] Certificateholder of record a statement (the
"Distribution Date Statement") prepared by the Servicer setting forth the
following information (which, in the case of (c), (d) and (e) below, will
be stated on the basis of an original principal amount of $1,000 per
Series [199_-_] Certificate if the [Accumulation Period] [Controlled
Amortization Period] or an Early Amortization Period [or
Reinvestment/Early Payoff Period] has commenced): (a) the aggregate amount
of collections, the aggregate amount of Interest Collections and the
aggregate amount of Principal Collections processed during the immediately
preceding Collection Period; (b) the Series Allocation Percentage, the
Floating Allocation Percentage, the Fixed Allocation Percentage, the
Certificate Principal Percentages, the Class A-1 Allocation Percentage and
the Class A-2 Allocation Percentage for such Collection Period; (c) the
total amount, if any, distributed on the Class A-1 Certificates and the
Class A-2 Certificates; (d) the amount of such distribution allocable to
principal on each Class of Series [199_-_] Certificates; (e) the amount of
such distribution allocable to interest on each Class of the Series
[199_-_] Certificates; (f) the Investor Default Amount for such
Distribution Date; (g) the Draw Amount, if any, for such Collection
Period; (h) the amount of the Class A-1 Investor Charge-Offs and the Class
A-2 Investor Charge-Offs and the amounts of reimbursements thereof for
such Collection Period; (i) the amount of the Monthly Servicing Fee for
such Collection Period; [(j) the Controlled Distribution Amount for the
following Distribution Date;] (k) the Class A-1 Invested Amount and the
Class A-2 Invested Amount[, the Excess Funding Amount] and the outstanding
principal balance of the Series [199_-_] Certificates for such
Distribution Date (after giving effect to all distributions which will
occur on such Distribution Date); (1) the "pool factor" for the Series
[199_-_] Certificates as of the Determination Date with respect to such
Distribution Date (consisting of an eleven-digit decimal expressing the
Invested Amount as of such Determination Date (determined after taking
into account any reduction in the Invested Amount which will occur on such
Distribution Date) as a proportion of the Initial Invested Amount); (m)
the Available Subordinated Amount for such Determination Date; [(n) the
Reserve Fund balance for such date;] (o) [the Principal Funding Account
Balance,] [the Interest Funding Account Balance] and [the Yield Supplement
Account balance] with respect to such date; [(p) during any
Reinvestment/Early Payoff Period, information with respect to the Eligible
Investments in the accounts for the Series [199_-_] Certificates;] and (q)
[other] [; provided, that after the Fully Reinvested Date, [unless the
Series Revolving Period has recommenced,] such statement will not include
the information in clauses [(a), (b), (f), (g), (h), (i), (k) or (m)
above].
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement"), the Seller has agreed to sell to
the underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Seller, the
principal amount of the Class A-1 Certificates and the Class A-2
Certificates set forth opposite its name:
<TABLE>
<CAPTION>
Class A-1 Class A-2
Underwriters Certificates Certificates
<S> <C> <C>
[ ]............................ $[ ] $[ ]
[ ]............................ [ ] [ ]
Total............................. $[ ] $[ ]
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all the Series
[199_-_] Certificates offered hereby if any of the Series [199_-_]
Certificates are purchased.
The Seller has been advised by the Underwriters that the
Underwriters propose to initially offer the Class A-1 Certificates to the
public at the price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price less a concession not in
excess of [ ]% of the Class A-1 Certificate denominations. The
Underwriters may allow and such dealers may reallow a concession not in
excess of [ ]% of the Class A-1 Certificate denominations to certain
other dealers. After the initial public offering, the public offering
price and such concessions may be changed.
The Seller has been advised by the Underwriters that the
Underwriters propose to initially offer the Class A-2 Certificates to the
public at the price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price less a concession not in
excess of [ ]% of the Class A-2 Certificate denominations. The
Underwriters may allow and such dealers may reallow a concession not in
excess of [ ]% of the Class A-2 Certificate denominations to certain
other dealers. After the initial public offering, the public offering
price and such concessions may be changed.
[Under the Remarketing Agreement, the Underwriters have agreed to
pay the Seller, on the first business day in The City of New York
following the Distribution Dates occurring in [ ], [ ]
and [ ] an amount equal to [ ]%, [ ]% and [ ]%, respectively,
of the aggregate initial principal amount of the Class A-1 Certificates,
if any, in respect of which the automatic extension of the Class A-1
Revolving Period has been terminated since the Distribution Date occurring
in [ ] of the immediately preceding year. No amount shall be
payable in respect of a Class A-1 Certificate for which the first
distribution of principal is due on the Distribution Date occurring in
[ ] or after an Early Amortization Event [or
Reinvestment/Early Payoff Event].]
The Underwriting Agreement provides that USA and CFC will indemnify
the Underwriters against certain liabilities, including liabilities under
the Securities Act, or contribute to payments which the Underwriters may
be required to make in respect thereof.
[In the ordinary course of their businesses, the Underwriters and
their respective affiliates have engaged and may engage in investment
banking transactions with the Seller and its affiliates.]
LEGAL MATTERS
Certain legal matters relating to the Series [199_-_] Certificates
will be passed upon for the Underwriters by [ ]. Certain federal
income tax and ERISA matters will be passed upon for USA and the Trust by
[ ]. [In addition to representing the Underwriters, [ ] from time
to time represents Chrysler Financial Corporation and its affiliates.] See
"Legal Matters" in the Prospectus.
<PAGE>
INDEX OF PRINCIPAL TERMS
Term Page
Accounts.......................................................... 1
Accumulation Period Commencement Date............................. 9
Accumulation Period Length........................................ 9
Assets Receivables Rate........................................... 30
Available Certificateholder Principal Collections................. 37
Available Credit Enhancement Amount............................... 46
Available Negative Carry Subordinated Amount...................... 40
Available Seller's Collections.................................... 38
Available Seller's Interest Collections........................... 38
Available Seller's Principal Collections.......................... 38
CCC............................................................... 1
Certificate Principal Percentage.................................. 37
Certificateholder Interest Collections............................ 42
Class A-1 Adjustment Date......................................... 4
Class A-1 Allocation Percentage................................... 42
Class A-1 Carry-over Amount....................................... 30
Class A-1 Certificate Rate........................................ 1
Class A-1 Certificates............................................ 1
Class A-1 Expected Payment Date................................... 5
Class A-1 Index................................................... 1
Class A-1 Initial Invested Amount................................. 36
Class A-1 Interest Payment Date................................... 1
Class A-1 Interest Period......................................... 4
Class A-1 Invested Amount......................................... 36
Class A-1 Investor Charge-Off..................................... 49
Class A-1 Monthly Interest........................................ 29
Class A-1 Principal Shortfalls.................................... 37
Class A-1 Revolving Period........................................ 6
Class A-2 Adjustment Date......................................... 4
Class A-2 Allocation Percentage................................... 42
Class A-2 Carry-over Amount....................................... 30
Class A-2 Certificate Rate........................................ 1
Class A-2 Certificates............................................ 1
Class A-2 Expected Payment Date................................... 5
Class A-2 Invested Amount......................................... 36
Class A-2 Index................................................... 1
Class A-2 Initial Invested Amount................................. 36
Class A-2 Interest Payment Date................................... 1
Class A-2 Interest Period......................................... 4
Class A-2 Investor Charge-Off..................................... 49
Class A-2 Monthly Interest........................................ 29
Controlled Accumulation Amount.................................... 46
Controlled Amortization Amount.................................... 46
Controlled Deposit Amount......................................... 46
Controlled Distribution Amount.................................... 46
Deficiency Amount................................................. 39
Distribution Date................................................. 1
Distribution Date Statement....................................... 53
Draw Amount....................................................... 39
Early Amortization Period......................................... 10
Electing Certificateholder........................................ 6
Election Notice................................................... 6
Election Period................................................... 6
Enhancement....................................................... 16
Enhancement Provider.............................................. 46
Excess Funding Account............................................ 5
Excess Principal Collections...................................... 38
Excess Reserve Fund Required Amount............................... 43
Excess Seller's Percentage........................................ 39
Excluded Dealers.................................................. 24
Excluded Receivables.............................................. 24
Expected Payment Date............................................. 1
Fixed Allocation Percentage....................................... 35
Floating Allocation Percentage.................................... 35
Incremental Subordinated Amount................................... 13
Initial Invested Amount........................................... 36
Interest Funding Account.......................................... 4
Interest Funding Account Balance.................................. 47
Invested Amount................................................... 36
Investment Proceeds............................................... 42
Investor Charge-Off............................................... 49
<PAGE>
Term Page
MMC............................................................... 21
Monthly Interest.................................................. 29
Negative Carry Required Amount.................................... 40
Nonprincipal Period............................................... 15
Principal Commencement Date....................................... 9
Principal Funding Account......................................... 47
Principal Funding Account Balance................................. 47
Principal Shortfalls.............................................. 38
Purchased Class A-1 Certificate................................... 33
Regular Class A-1/A-2 Available Principal Collections............. 45
Receivables....................................................... 1
Regular Class A-1/A-2 Monthly Principal........................... 46
Regular Class A-1/A-2 Principal Shortfalls........................ 37
Regular Class A-1 Monthly Principal............................... 46
Regular Class A-2 Monthly Principal............................... 46
Regular Payoff Certificates....................................... 15
Reinvestment/Early Payoff Event................................... 10
Reinvestment/Early Payoff Period.................................. 10
Remarketing Agreement............................................. 28
Remarketing Broker -- Dealer...................................... 1
Remarketing Coordinator........................................... 34
Remarketing Period................................................ 7
Required Negative Carry Subordinated Amount....................... 40
Required Participation Percentage................................. 14
Required Subordinated Amount...................................... 13
Reserve Fund...................................................... 43
Reserve Fund Deposit Amount....................................... 43
Reserve Fund Required Amount...................................... 43
Seller............................................................ 1
Seller's Interest................................................. 1
Seller's Percentage............................................... 38
Series............................................................ 1
Series 199_-_ Certificates........................................ 1
Series 199_-_ Termination Date.................................... 17
Series Cut-Off Date............................................... 18
Series Excess Principal Collections............................... 37
Series Issuance Date.............................................. 18
Series Revolving Period........................................... 8
Series Supplement................................................. 28
Series Termination Date........................................... 52
Servicer.......................................................... 1
Servicing Fee Rate................................................ 17
Settlement Date................................................... 33
SFAS.............................................................. 20
Special Class A-1 Available Principal Collections................. 45
Special Class A-1 Monthly Principal............................... 45
Special Class A-1/A-2 Monthly Available Principal Collections..... 45
Special Payment Date.............................................. 32
Special Payoff Class A-1 Certificate.............................. 15
Special Payoff Period............................................. 7
Subordinated Percentage........................................... 13
Trust............................................................. 1
Underwriters...................................................... 53
Underwriting Agreement............................................ 53
USA............................................................... 1
Yield Supplement Account.......................................... 5
Yield Supplement Account Deposit Amount........................... 43
Yield Supplement Account Required Amount.......................... 43
<PAGE>
ANNEX I
OUTSTANDING SERIES OF INVESTOR CERTIFICATES
[to be provided]
<PAGE>
EXHIBIT A
ELECTION NOTICE
[Part A. To be completed by the Class A-1 Certificateholder and
delivered to its Participant or Indirect Participant, as applicable, with
a copy to the Remarketing Coordinator.] [Revise, as necessary to reflect
CEDEL and Euroclear settlement]
[Name and address of Participant or Indirect Participant] with a copy to:
[ ]
[ ]
[ ]
Attention: CARCO Auto Loan Master Trust Series [199_-_], Class A-1
Remarketing Coordinator
(Facsimile: [ ])
(Telephone: [ ])
Gentlemen:
Reference is made to the Pooling and Servicing Agreement dated as of
May 31, 1991, as assigned by Chrysler Auto Receivables Company ("CARCO")
to U.S. Auto Receivables Company (the "Seller") on August 8, 1991 (as
assigned and as supplemented and amended from time to time, the "P&S"),
among CARCO, the Seller, Chrysler Credit Corporation ("CCC"), as Servicer,
and Manufacturers and Traders Trust Company (the "Trustee") and the Series
[199_-_] Supplement to the P&S dated as of September 30, 1993 (the
"Supplement"), among the Seller, the Servicer and the Trustee (the P&S and
the Supplement taken together referred to herein as the "Pooling and
Servicing Agreement") pursuant to which $[ ] aggregate principal
amount of Class A-1 Floating Rate Money Market Extendible Certificates,
Series [199_-_] (the "Certificates") have been issued. Capitalized terms
used but not defined herein shall have the meanings ascribed to such terms
in the Pooling and Servicing Agreement.
The undersigned, the beneficial owner of $ principal amount
of Certificates (bearing CUSIP Number ) (the "Subject
Certificates") hereby notifies you that it desires to terminate the Class
A-1 Revolving Period with respect to the Subject Certificates in
accordance with the terms of the Pooling and Servicing Agreement.
The undersigned hereby irrevocably authorizes and instructs you, The
Depository Trust Company ("DTC"), Cede & Co., the Remarketing Coordinator,
the Trustee and all DTC's participating organizations ("Participants") or
other persons that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly ("Indirect Participants"), to
transfer any or all of the Subject Certificates to the Remarketing
Broker-Dealer in the event the Remarketing Broker-Dealer elects, at its
option, to purchase such Subject Certificates against delivery of the
purchase price for such Subject Certificates, which purchase price shall
be equal to the unpaid principal amount thereof.
The undersigned hereby irrevocably authorizes and instructs you,
DTC, Cede & Co., the Remarketing Coordinator, the Trustee and all
Participants or Indirect Participants in the DTC system on receipt of
notice from the Remarketing Coordinator that any or all of the Subject
Certificates will not be purchased by the Remarketing Broker-Dealer, to
take or cause to be taken any and all actions necessary to cause the Class
A-1 Revolving Period for the Subject Certificates to be terminated in
accordance with DTC's procedures.
We agree that, during the applicable period as described in the
Pooling and Servicing Agreement, ownership of Certificates shall be
represented by one or more global certificates registered in the name of
the applicable securities depository or its nominee, that we will not be
entitled to receive any certificate representing the Certificates and that
our ownership of any Certificates will be maintained in book entry form by
the securities depository for the account of our agent member, which in
turn will maintain records of our beneficial ownership. We further agree
that we will not sell, assign, transfer, convey or otherwise dispose of
the subject Certificates at any time following the transmittal of this
Election Notice, except (i) pursuant to the Remarketing Procedures or (ii)
following receipt by us of notice that the Subject Certificates will not
be purchased by the Remarketing Broker-Dealer. We authorize and instruct
our agent member to disclose to the applicable securities depository such
information concerning our beneficial ownership of Certificates as such
securities depository shall request.
Very truly yours,
[Name of Certificate Owner]
[Part B. To be completed by the Participant or Indirect Participant,
as applicable, and delivered to the Remarketing Coordinator.]
On behalf of the above-signed Certificate Owner, we hereby certify
that at the time this Election Notice is delivered to you we hold in our
name on behalf of such Certificate Owner a settled position in the Subject
Certificates. We acknowledge that this Election Notice, completed as
required by the Certificate Owner must be received by you at 3:00 p.m. New
York City time on the Business Day following the receipt of this Election
Notice by us.
We hereby certify that we are a Participant or an Indirect
Participant of DTC with, in the case of a Participant, the present right
to use and receive DTC's services or, in the case of an Indirect
Participant, to exercise such rights through a Participant.
We hereby agree that: (i) if notified by you that any or all of the
Subject Certificates will be remarketed by the Remarketing Broker-Dealer,
we will take or cause to be taken all actions necessary to cause the
transfer of any or all of the Subject Certificates through DTC to the
Remarketing Broker-Dealer against delivery of the purchase price for such
Subject Certificates, which purchase price shall be equal to the unpaid
principal amount thereof, and (ii) if we receive notice from you that such
Subject Certificates will not be purchased, we will promptly take all
actions necessary, in accordance with DTC's procedures to cause the Class
A-1 Revolving Period with respect to such Subject Certificates to be
terminated.
We hereby certify that the beneficial holder of the Subject
Certificates is: [Name and address of Certificate Owner].
Any notice from you to us regarding this matter should be delivered
to:
[Name of Contact]
Facsimile No.: [Facsimile No.]
Telephone Number: [Telephone No.]
Dated: , 19
[Name of DTC Participant or
Indirect Participant] DTC
Number:
by ____________________________
Authorized Signature
[Address]
Telephone Number: [ ]
Facsimile Number: [ ]
With a copy to:
[ ]
Attention: CARCO Auto Loan Master Trust, Series [199_-_]
(Facsimile: [ ])
(Telephone: [ ])
<PAGE>
[Outside back cover, left-hand column]
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Seller or the Underwriters. Neither this
Prospectus Supplement nor the accompanying Prospectus constitutes an offer or
solicitation by anyone in any state in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus Supplement or the
accompanying Prospectus, nor any sale made hereunder or thereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Seller since the date hereof or thereof or that the information
contained or incorporated by reference herein or therein is correct as of any
time subsequent to its date.
----------------
TABLE OF CONTENTS
Page
Prospectus Supplement
Summary of Series Terms........................................... S-3
Special Considerations............................................ S-19
Use of Proceeds................................................... S-23
The Dealer Floorplan Financing Business........................... S-23
The Accounts...................................................... S-23
Chrysler Financial Corporation and Chrysler Credit Corporation.... S-26
Maturity and Principal Payment Considerations..................... S-26
Series Provisions................................................. S-27
Underwriting...................................................... S-53
Legal Matters..................................................... S-53
Index of Principal Terms.......................................... S-54
Annex I........................................................... A-1
Exhibit A......................................................... E-1
Prospectus
Available Information............................................. 2
Reports to Certificateholders..................................... 2
Incorporation of Certain Documents by Reference................... 2
Prospectus Summary................................................ 3
Special Considerations............................................ 15
U.S. Auto Receivables Company and the Trust....................... 18
Use of Proceeds................................................... 20
The Dealer Floorplan Financing Business........................... 20
The Accounts...................................................... 24
Chrysler Financial Corporation and Chrysler Credit Corporation.... 24
Description of the Certificates................................... 25
Description of the Receivables Purchase Agreement................. 51
Certain Legal Aspects of the Receivables.......................... 52
Certain Tax Matters............................................... 55
ERISA Considerations.............................................. 58
Experts........................................................... 60
Plan of Distribution.............................................. 60
Legal Matters..................................................... 61
Index of Principal Terms.......................................... 62
Annex I...........................................................
----------------
Until [ ], 199[ ] (90 days after the date of this Prospectus
Supplement), all dealers effecting transactions in the Series [199_-_]
Certificates, whether or not participating in this distribution, may be
required to deliver a Prospectus. This is in addition to the obligation of
dealers to deliver a Prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
<PAGE>
[Outside back cover, right-hand column]
CARCO
Auto Loan Master Trust
$[ ]
Auto Loan Asset
Backed Certificates, Series [199_-_]
$[ ] Floating Rate Class A-1
Money Market Extendible Certificates,
Series [199_-_]
$[ ] [Floating Rate] [ %] Class A-2
[Medium Term] Certificates,
Series [199_-_]
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER CREDIT CORPORATION
Servicer
PROSPECTUS SUPPLEMENT
[Underwriters]
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
[Senior-Subordinated Series]
Subject to Completion
Dated October 5, 1994
PROSPECTUS SUPPLEMENT
To Prospectus dated , 1994
$
CARCO AUTO LOAN MASTER TRUST
AUTO LOAN
ASSET BACKED CERTIFICATES, SERIES [199_-_]
----------------
$[ ] [Floating Rate] [ %] Class A Certificates,
Series [199_-_]
$[ ] [Floating Rate] [ %] Class B Certificates,
Series [199_-_]
----------------
U.S. AUTO RECEIVABLES COMPANY, SELLER
CHRYSLER CREDIT CORPORATION, SERVICER
The Auto Loan Asset Backed Certificates, Series [199_-_] (the
"Series [199_-_] Certificates") offered hereby evidence undivided
interests in certain assets of the CARCO Auto Loan Master Trust (the
"Trust") created pursuant to a Pooling and Servicing Agreement among U.S.
Auto Receivables Company ("USA" or the "Seller"), Chrysler Credit
Corporation, as servicer ("CCC" or the "Servicer"), and Manufacturers and
Traders Trust Company, as trustee. The Series [199_-_] Certificates will
be issued in two Classes, the [Floating Rate] [ %] Class A Certificates,
Series [199_-_] (the "Class A Certificates"), and the [Floating Rate]
[ %] Class B Certificates, Series [199_-_] (the "Class B Certificates").
The Trust assets include wholesale receivables (the "Receivables")
generated from time to time in a portfolio of revolving financing
arrangements (the "Accounts") with automobile dealers to finance their
automobile and light duty truck inventory and collections on the
Receivables. Certain assets of the Trust will be allocated to Series
[199_-_] Certificateholders, including the right to receive a varying
percentage of each month's collections with respect to the Receivables at
the times and in the manner described herein. The Seller will own the
remaining interest in the Trust not represented by the Series [199_-_]
Certificates or the Certificates of any other Series issued by the Trust
(the "Seller's Interest"). The Trust previously has issued [ ] other
Series of Certificates (each a "Series"). From time to time, subject to
certain conditions, the Seller may offer other Series of Certificates,
which may have terms significantly different from the terms of the Series
[199_-_] Certificates. The issuance of additional Series of Certificates
may impact the timing of payments received by Series [199_-_]
Certificateholders.
Interest will accrue on the Class A Certificates at the rate of
[[ ]% per annum] [[ ]% [above] [below] [times] [ ] (the "Class A
Index") prevailing on the Class A Adjustment Date (as defined herein) [,
subject to certain limitations described herein]] (the "Class A
Certificate Rate"), and on the Class B Certificates at the rate of [[ ]%
per annum] [[ ]% [above] [below] [times] [ ] (the "Class B Index")
prevailing on the Class B Adjustment Date (as defined herein) [, subject
to certain limitations described herein]](the "Class B Certificate Rate").
Interest with respect to the Class A Certificates is payable on the
[ ] day of each [month] [quarter] [other] (or, if such day is not
a business day, on the next succeeding business day) (each, [a
"Distribution Date" and] a "[Class A] Interest Payment Date"), commencing
on [ ,] 199[ ], and interest with respect to the Class B
Certificates is payable on [each Interest Payment Date] [the [ ]
day of each [month] [quarter] [other] (or, if such day is not a business
day, on the next succeeding business day) (each, [a "Distribution Date"
and] a "Class B Interest Payment Date")].
Principal with respect to the Class A Certificates [is scheduled to
be paid on [ ]] [is scheduled to be distributed on
each Distribution Date commencing on the [ ]
Distribution Date and ending on the Distribution Date in [
]] but may be paid earlier or later under certain
circumstances described herein. Principal with respect to the Class B
Certificates [is scheduled to be paid on [ ]] [is
scheduled to be distributed on each Distribution Date [commencing on the
Distribution Date in [ , ]] [commencing with the
Distribution Date following the Distribution Date on which the Class A
Certificates have been paid in full] [other] and ending on the
Distribution Date in [ ]] but may be paid earlier or later under
certain circumstances described herein. [In addition, no principal will be
paid with respect to the Class B Certificates until [principal of the
Class A Certificates has been paid in full] [principal payments then due
in respect of the Class A Certificates have been made].]
The fractional undivided interest in the Trust represented by the
Class B Certificates will be subordinated to the extent necessary to fund
payments with respect to the Class A Certificates to the extent described
herein.
The Seller's Interest will be subordinated to the rights of the
Series [199_-_] Certificateholders to the limited extent of the Available
Subordinated Amount as described herein. [Describe other Enhancement, if
any, and any additional subordination of the Seller's Interest, if
applicable.] Prospective investors should consider the factors set forth
under "Special Considerations" herein and in the Prospectus.
----------------
THE SERIES [199_-_] CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE
TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF THE
SELLER, THE SERVICER OR ANY AFFILIATE THEREOF. NEITHER THE SERIES
[199_-_] CERTIFICATES NOR THE RECEIVABLES ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to the
Public(1) Discount Seller(1)(2)
<S> <C> <C> <C>
Per Class A Certificate....... % % %
Per Class B Certificate ...... % % %
Total......................... $ $ $
<FN>
(1) Plus accrued interest, if any, at the applicable Certificate Rate from
[ ], 199[ ].
(2) Before deducting expenses, estimated to be $[ ].
</TABLE>
----------------
The Series [199_-_] Certificates are offered subject to prior sale,
and subject to the Underwriters' right to reject orders in whole or in
part. It is expected that delivery of the Series [199_-_] Certificates
will be made in book-entry form only through the Same Day Funds Settlement
System of The Depository Trust Company [, CEDEL S.A. and the Euroclear
System] on or about , 199 .
[Underwriters]
The date of this Prospectus Supplement is , 199 .
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SERIES [199_-_] CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
THIS PROSPECTUS SUPPLEMENT DOES NOT CONTAIN COMPLETE INFORMATION
WITH RESPECT TO THE OFFERING OF THE SERIES [199_-_] CERTIFICATES.
ADDITIONAL INFORMATION IS CONTAINED IN THE PROSPECTUS AND PURCHASERS ARE
URGED TO READ BOTH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN FULL.
SALES OF THE SERIES [199_-_] CERTIFICATES MAY NOT BE CONSUMMATED UNLESS
THE PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS.
SUMMARY OF SERIES TERMS
This summary of Series Terms sets forth and defines specific terms
of the Series [199_-_] Certificates offered in this Prospectus Supplement
and the Prospectus, but is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and
in the Prospectus. Reference is made to the Index of Principal Terms in
each of this Prospectus Supplement and the Prospectus for the location
herein and therein of the definitions of certain capitalized terms used
herein. Certain capitalized terms used but not defined herein have the
meanings assigned to such terms in the Prospectus.
Title of Securities .... Auto Loan Asset Backed Certificates, Series
[199_-_] (the "Series [199_-_] Certificates").
The [Series [199_-_] Certificates will be issued
in two Classes: the [Floating Rate] [ %] Class
A Certificates, Series [199_-_] (the "Class A
Certificates"), and the [Floating Rate] [ %]
Class B Certificates, Series [199_-_] (the
"Class B Certificates").
The Series [199_-_]
Invested Amount ...... The aggregate Series [199_-_] Invested Amount is
expected to be approximately $[ ] on the Series
Issuance Date (based on information as of the
Series Cut-Off Date) and represents the
principal amount of the Series [199_-_]
Certificates invested in Receivables as of the
Series Issuance Date. [The Invested Amount is
subject to increase to the extent amounts are
withdrawn from the Excess Funding Account and
paid to the Seller. The Seller expects, although
there can be no assurance, that the Invested
Amount of the Series [199_-_] Certificates will
equal the outstanding principal balance of the
Series [199_-_] Certificates within [ ] months
of the Series Issuance Date.] [The Invested
Amount is subject to decrease to the extent
funds are deposited in the Excess Funding
Account and, subsequently, to increase to the
extent amounts are withdrawn from the Excess
Funding Account and paid to the Seller. The
Invested Amount is also subject to reduction
during [the [Class A] [Class B] Accumulation
Period] [, the [Class A] [Class B] Controlled
Amortization Period], any Early Amortization
Period [and any Reinvestment Period] and at such
other times as deposits are made to the Excess
Funding Account in connection with the payment
of Receivables.] Any such increases or decreases
in the aggregate Invested Amount will be
allocated between the Class A Certificates and
the Class B [ ] Certificates [pro rata based
on the Class A Allocation Percentage and the
Class B Allocation Percentage, respectively, for
the related Collection Period] [other].
The Class B Invested Amount will [also] be
reduced in certain circumstances as a result of
(i) the allocation to the Class B Certificates
of Defaulted Amounts otherwise allocable to the
Class A Certificates and (ii) the reallocation
of Principal Collections otherwise allocable to
the Class B Certificates to fund certain
payments in respect of the Class A Certificates.
Any such reductions in the Class B Invested
Amount may be reimbursed out of Excess Servicing
and certain other amounts as described herein.
Interest ............... Interest on the principal balance of the Class A
Certificates will accrue at the Class A
Certificate Rate and will be payable to Class A
Certificateholders on the [ ] day of each
[month] [quarter] [other] (or, if such day is
not a business day, on the next succeeding
business day) (each, [a "Distribution Date" and]
[a "[Class A] Interest Payment Date"),
commencing [ ], 19[ ][, provided
that, during any Early Amortization Period,
interest will be distributed to the Class A
Certificateholders on each Distribution Date,
commencing on the first Distribution Date
following the occurrence of an Early
Amortization Event. "Distribution Date" shall
mean the fifteenth day of each month (or, if
such date is not a business day, the next
succeeding business day). A portion of Class A
Certificateholder Interest Collections and
certain other amounts will be deposited each
month into a trust account (the "Class A
Interest Funding Account") and used to make
interest payments to the Class A
Certificateholders on each [Class A] Interest
Payment Date or, during Early Amortization
Period, each Distribution Date. Interest on the
principal balance of the Class B Certificates
will accrue at the Class B Certificate Rate and
will be payable to Class B Certificateholders on
[each Interest Payment Date] [the [ ] day of
each [month] [quarter] [other] (or, if such day
is not a business day, on the next succeeding
business day) (each, a ["Distribution Date" and
a] "Class B Interest Payment Date")[, provided
that, during any Early Amortization Period,
interest will be distributed to the Class B
Certificateholders on each Distribution Date,
commencing on the first Distribution Date
following the occurrence of an Early
Amortization Event. A portion of Class B
Certificateholder Interest Collections and
certain other amounts will be deposited each
month into a trust account (the "Class B
Interest Funding Account") and used to make
interest payments to the Class B
Certificateholders on each Class B Interest
Payment Date or, during an Early Amortization
Period, each Distribution Date]. Interest [on
the Class A Certificates] will accrue for the
period beginning on and including the most
recent [Class A] Interest Payment Date and
ending on and including the day preceding the
next succeeding [Class A] Interest Payment Date
(each, a "[Class A] Interest Period"), except
that the first [Class A] Interest Period will
begin on and include the Series Issuance Date.
[Interest on the Class B Certificates will
accrue for the period beginning on and including
the most recent Class B Interest Payment Date
and ending on and including the day preceding
the next succeeding Class B Interest Payment
Date (each, a "Class B Interest Period"), except
that the first Class B Interest Period will
begin on and include the Series Issuance Date.]
Interest for any [Class A] Interest Payment Date
[or Class B Interest Payment Date] due but not
paid on such [Class A] Interest Payment Date [or
Class B Interest Payment Date] will be due on
the next [Class A] Interest Payment Date [or
Class B Interest Payment Date, as applicable],
together with, to the extent permitted by
applicable law, interest on such amount at the
applicable Certificate Rate plus [ ]%. [The
Class A Certificate Rate for each [[Class A]
Interest Period] [other] will be determined on
the [ ] day preceding the first day of such
[[Class A] Interest Period] [other] (each, a
"Class A Adjustment Date"); [and the Class B
Certificate Rate for each [[Class B] Interest
Period] [other] will be determined on the [ ]
day preceding the first day of such [[Class B]
Interest Period]] [other] (each, a "Class B
Adjustment Date")].] The Class A Certificate
Rate will equal [[ ]% per annum] [[ ] (the
"Class A Index") for the applicable Class A
Adjustment Date, determined as provided herein,
[plus] [minus] [times] [ %][; provided that, if
the Class A Certificate Rate for any
Distribution Date calculated on the basis of the
Class A Index is greater than the Assets
Receivables Rate, then the Class A Certificate
Rate for such Distribution Date will be the
Assets Receivables Rate]]. The Class B
Certificate Rate will equal [[ ]% per
annum][[ ] (the "Class B Index") for the
applicable Class B Adjustment Date, determined
as provided herein, [plus] [minus] [times]
[ %][; provided that, if the Class B
Certificate Rate for any Distribution Date
calculated on the basis of the Class B Index is
greater than the Assets Receivables Rate, then
the Class B Certificate Rate for such
Distribution Date will be the Assets Receivables
Rate]]. Interest on the Class A Certificates
will be calculated on the basis of [a 360-day
year of twelve 30-day months] [the actual number
of days in each [Class A] Interest Period
divided by [360] [other]]. Interest on the
Class B Certificates will be calculated on the
basis of [a 360-day year of twelve 30-day
months] [the actual number of days in each
[Class B] Interest Period divided by [360]
[other]].
[Yield Supplement
Account .............. On the Series Issuance Date, the Seller will
deposit $[ ] in a trust account which
will be established by the Seller with the
Trustee (the "Yield Supplement Account"). The
Yield Supplement Account will be funded, from
time to time as described herein, by the deposit
thereto of certain amounts otherwise
distributable to the Seller. See "Series
Provisions -- Distributions from the Collection
Account; [Reserve Fund;] Yield Supplement
Account -- Yield Supplement Account".]
[Class A Expected
Payment Date ......... [ ], [ ].]
[Class B Expected
Payment Date ......... [ ], [ ].]
[Excess Funding
Account .............. Unless and until any Early Amortization Period
[or Reinvestment Period] or the [Class A]
[Accumulation Period] [Class A] [Controlled
Amortization Period] shall have commenced, the
Excess Funded Amount will be maintained in the
Excess Funding Account.
Upon the earliest of (a) the commencement of any
Early Amortization Period [or Reinvestment
Period] and (b) [ ] [the [ ]
Distribution Date] [the [Class A] Accumulation
Period Commencement Date], some or all of the
funds on deposit in the Excess Funding Account
will be distributed to the Series [199_-_]
Certificateholders as described herein or
deposited into the Principal Funding Account as
described herein.]
Revolving Period ....... The Revolving Period with respect to Series
[199_-_] will commence on the Series Cut-Off
Date and end on the earlier of (a) the day
immediately preceding [the [Class A]
Accumulation Period Commencement Date] [the
[Class A] Principal Commencement Date] and
(b) the business day immediately preceding the
day on which an Early Amortization Event [or
Reinvestment Event] occurs. See "Series
Provisions -- Early Amortization Events" [and
"-- Reinvestment Events"] for a discussion of
certain events which might lead to the early
termination of the Revolving Period and, in
certain circumstances, the recommencement of the
Revolving Period. During the Revolving Period,
Principal Collections (other than Principal
Collections allocated to the Class B
Certificates ("Reallocated Principal
Collections") that are used to pay any
deficiency in the Class A Required Amount)
generally will be paid to the Seller[,
deposited, to the Excess Funding Account] or
allocated to another Series.
[Class A][Class B]
Accumulation Period]
[Class A] [Class B]
Controlled
Amortization Period] . [Unless an Early Amortization Event [or
Reinvestment Event] that is not cured as
described herein shall have occurred, the [Class
A] [Class B] [Series [199_-_]] Certificates will
have an Accumulation Period (the "[Class A]
[Class B] Accumulation Period") of one, two,
three, four or five month(s) as described in the
following paragraph [, which will include
separate Accumulation Periods for the Class A
Certificates (the "Class A Accumulation Period")
and the Class B Certificates (the "Class B
Accumulation Period")].
On the [ ] Distribution Date, the Servicer
shall determine the [Class A] Accumulation
Period Length. The "[Class A] Accumulation
Period Length" will be one, two, three, four or
five month(s) and will be calculated as the
product, rounded upwards to the nearest integer,
of (a) [five] [one divided by the lowest monthly
payment rate on the Receivables during the last
[ ] months] and (b) a fraction, the numerator
of which is the sum of (i) the [Class A]
Invested Amount as of the [ ]
Distribution Date (after giving effect to all
changes therein on such date) and (ii) the
invested amounts of all other Series [(excluding
certain Series)] currently in their accumulation
periods or expected to be in their accumulation
periods as of the [ ] Distribution
Date and the denominator of which is the sum of
the aggregate Invested Amount, the invested
amounts of all such other Series and the
invested amounts as of the [ ]
Distribution Date (after giving effect to all
changes therein on such date) of all other
outstanding Series [(excluding certain Series)]
whose respective revolving periods are not
scheduled to end before the last day of the
[ , ] Collection Period. The
Servicer shall recalculate the [Class A]
Accumulation Period Length on each Distribution
Date that occurs prior to the [Class A]
Accumulation Period Commencement Date, which
will occur when the number of months in the
[Class A] Accumulation Period is equal to the
[Class A] Accumulation Period Length. If the
[Class A] Accumulation Period Length is one
month, two months, three months, four months or
five months, the "[Class A] Accumulation Period
Commencement Date" shall be the first day of the
[ ] Collection Period, the
[ ] Collection Period, the
[ ] Collection Period, the
[ ] Collection Period or the
[ ] Collection Period,
respectively. Notwithstanding the foregoing, the
[Class A] Accumulation Period Commencement Date
shall be [ ], if, prior to such
date, any other outstanding Series [(excluding
certain Series)] shall have entered into a
reinvestment period or an early amortization
period. In addition, if the [Class A]
Accumulation Period Length shall have been
determined to be less than five months and,
thereafter, any outstanding Series [(excluding
certain Series)] shall enter into a reinvestment
period or an early amortization period, the
[Class A] Accumulation Period Commencement Date
shall be the earlier of (i) the date that such
outstanding Series shall have entered into its
reinvestment period or early amortization period
and (ii) the [Class A] Accumulation Period
Commencement Date as previously determined. See
"Annex I -- Outstanding Series of Investor
Certificates".]
The effect of the calculation described above is
to permit the reduction of the length of the
[Class A] Accumulation Period based on the
invested amounts of certain other Series which
are scheduled to be in their revolving periods
during the [Class A] Accumulation Period and on
increases in the principal payment rate, which,
if continued, would result in a shorter [Class
A] Accumulation Period.
[The Class A Accumulation Period [and the Class
B Accumulation Period] will commence on the
Accumulation Period Commencement Date.] [The
Class B Accumulation Period will commence on the
date on which [principal of the Class A
Certificates has been [paid in full] [deposited
to the Principal Funding Account].]
[Unless an Early Amortization Event [or
Reinvestment Event] that is not cured as
described herein shall have occurred, the
[Series [199_-_] Certificates] [Class A
Certificates] [Class B Certificates] will have a
Controlled Amortization Period (the "[Class A]
[Class B] Controlled Amortization Period") [,
which will include separate Controlled
Amortization Periods for the Class A
Certificates (the "Class A Controlled
Amortization Period") and the Class B
Certificates (the "Class B Controlled
Amortization Period")]. [The [Class A]
Controlled Amortization Period will commence on
[ ] (the "[Class A] Principal Commencement
Date") and] [the Class B Controlled Amortization
Period will commence on [ ] [the date on
which principal of the Class A Certificates has
been [paid in full] [deposited to the Principal
Funding Account]].]
[Reinvestment Period ... The Series [199_-_] Certificates will have a
Reinvestment Period if a Reinvestment Event
occurs. [A Reinvestment Period will commence if
the Seller delivers a notice to the Trustee
stating that the Seller will no longer sell
Receivables to the Trust commencing on [ ]
or any yearly anniversary thereof and certain
other conditions are satisfied.] See "Series
Provisions -- Reinvestment Events" for a
description of the [other] events that might
result in the commencement of a Reinvestment
Period. See also "Series Provisions --
Distributions from the Collection Account
[;Reserve Fund] [;Yield Supplement Account] --
Principal Collections".]
[The Seller is required to add Receivables to
the Trust under certain circumstances described
under "Description of the Certificates --
Addition of Accounts" in the Prospectus. The
failure of the Seller to add Receivables when
required will result in the occurrence of a
Reinvestment Event. However, if no other
Reinvestment Event has occurred, the
Reinvestment Period resulting from such failure
will terminate and the Revolving Period will
recommence on the earlier of (i) when the Seller
would no longer be required to add Receivables
to the Trust or (ii) the conveyance of
Receivables to the Trust following written
confirmation from each Rating Agency that such
conveyance will not result in the withdrawal or
lowering of such Rating Agency's rating of the
Series [199_-_] Certificates, so long as neither
the scheduled termination date of the Revolving
Period nor an Early Amortization Event that is
not cured as described herein has occurred.]
[Notwithstanding the foregoing, in the event of
the occurrence of any Reinvestment Event,
provided that neither the scheduled termination
date of the Revolving Period nor an Early
Amortization Event that is not cured as
described herein has occurred, the Revolving
Period may recommence following written
confirmation from each Rating Agency that such
Rating Agency's rating of the Series [199_-_]
Certificates will not be withdrawn or lowered as
a result of such recommencement.] [Describe
other cures of Reinvestment Events and partial
Reinvestment Periods, if applicable.]]
Early Amortization
Period ............... The Series [199_-_] Certificates will have an
Early Amortization Period if an Early
Amortization Event occurs. See "Description of
the Certificates -- Reinvestment Events and
Early Amortization Events" in the Prospectus and
"Series Provisions -- Early Amortization Events"
herein for a description of the events that
might result in the commencement of an Early
Amortization Period. See also "Series Provisions
-- Distributions from the Collection Account
[;Reserve Fund] [;Yield Supplement Account] --
Principal Collections". During any Early
Amortization Period no principal payments will
be made to Class B Certificateholders until the
principal amount of the Class A Certificates has
been paid in full.
[The Seller is required to add Receivables to
the Trust under certain circumstances described
under "Description of the Certificates --
Addition of Accounts" in the Prospectus. The
failure of the Seller to add Receivables when
required will result in the occurrence of an
Early Amortization Event. However, if no other
Early Amortization Event has occurred, the Early
Amortization Period resulting from such failure
will terminate and the Revolving Period will
recommence on the earlier of (i) when the Seller
would no longer be required to add Receivables
to the Trust or (ii) the conveyance of
Receivables to the Trust following written
confirmation from each Rating Agency that such
conveyance will not result in the withdrawal or
lowering of such Rating Agency's rating of the
Series [199_-_] Certificates, so long as
[neither] the scheduled termination date of the
Revolving Period [nor a Reinvestment Event that
is not cured as described herein] has [not]
occurred.]
[Notwithstanding the foregoing, in the event of
the occurrence of any Early Amortization Event,
provided that [neither] the scheduled
termination date of the Revolving Period [nor a
Reinvestment Event that is not cured as
described herein] has [not] occurred, the
Revolving Period may recommence following
written confirmation from each Rating Agency
that such Rating Agency's rating of the Series
[199_-_] Certificates will not be withdrawn or
lowered as a result of such recommencement.]
[Describe other cures of Early Amortization
Events, if applicable.]
Subordination of the
Seller's Interest .... If [on or prior to the Fully Reinvested Date [or
thereafter if the Revolving Period has
recommenced] the Interest Collections,
Investment Proceeds, Excess Servicing[, certain
amounts in the Reserve Fund] and certain other
amounts allocable to the [Series [199_-_]
Certificateholders for any Collection Period are
not sufficient to cover the interest payable
with respect to the Class A Certificates and the
Class B Certificates on the next Distribution
Date (plus any overdue interest and interest
thereon), the Class A Monthly Servicing Fee and
the Class B Monthly Servicing Fee for such
Distribution Date, any Class A Investor Default
Amount and Class B Investor Default Amount for
such Distribution Date and certain other
amounts, the Available Subordinated Amount will
be applied to make up such deficiency, with such
amount being applied first to cover any such
deficiency with respect to the Class A
Certificates and second to cover any such
deficiency with respect to the Class B
Certificates. The Available Subordinated Amount
for a Determination Date is equal to (a) the
lesser of (i) the Available Subordinated Amount
for the preceding Determination Date, minus,
with certain limitations, the Class A Draw
Amount and the Class B Draw Amount for such
preceding Determination Date, [minus funds from
the Reserve Fund applied to cover any portion of
the Class A Investor Default Amount or Class B
Investor Default Amount,] plus the excess, if
any, of the Required Subordinated Amount for
such Determination Date over the Required
Subordinated Amount for the immediately
preceding Determination Date plus the amount of
Excess Servicing available to be paid to the
Seller as described under "Series Provisions --
Distributions from the Collection Account [;
Reserve Fund Account] [; Yield Supplement
Account] -- Excess Servicing", and (ii) the
product of the fractional equivalent of the
Subordinated Percentage and the Invested Amount
[minus (b) in the case of clause (a)(i), the
Incremental Subordinated Amount for such
preceding Determination Date, plus (c) the
Incremental Subordinated Amount for the current
Determination Date,] [plus (d) the Subordinated
Percentage of funds to be withdrawn from the
Excess Funding Account on the succeeding
Distribution Date and paid to the Seller or
allocated to one or more Series]; provided,
however, that, from and after the commencement
of [the [Class A] Accumulation Period] [the
[Class A] Controlled Amortization Period] or]
any Early Amortization Period [that is not cured
as described herein] until the payment in full
of the Series [199_-_] Certificates, the
Available Subordinated Amount shall be
calculated based on the Invested Amount as of
the close of business on the day preceding such
[[[Class A] Accumulation Period] [[Class A]
Controlled Amortization Period] or] Early
Amortization Period [; and provided further that
from and after the commencement of any
Reinvestment Period [that is not cured as
described herein] until the earliest of the
commencement of any Early Amortization Period
[that is not cured as described herein], the
payment in full of the Series [19_-_]
Certificates and the Fully Reinvested Date, the
Available Subordinated Amount shall be
calculated based on the Invested Amount as of
the close of business on the day preceding such
Reinvestment Period [less [describe permitted
reductions, e.g., based on payment rates]]. The
Available Subordinated Amount for the first
Determination Date is equal to the Required
Subordinated Amount. The "Required Subordinated
Amount" shall mean, as of any date of
determination [, the sum of (a)] the product of
the initial Subordinated Percentage [as adjusted
from time to time as described herein other than
as a result of an increase therein at the option
of the Seller,] and the Invested Amount [and (b)
the Incremental Subordinated Amount].
[The "Incremental Subordinated Amount" on any
Determination Date will equal the result
obtained by multiplying (a) a fraction, the
numerator of which is the sum of the Invested
Amount on the last day of the immediately
preceding Collection Period and the Available
Subordinated Amount for such Determination Date
(calculated without adding the Incremental
Subordinated Amount for such Determination Date
as described in clause (c) above), and the
denominator of which is the Pool Balance on such
last day by (b) the excess, if any, of (x) the
sum of the Overconcentration Amount, the
Installment Balance Amount and the aggregate
amount of Ineligible Receivables on such
Determination Date over (y) the aggregate amount
of Ineligible Receivables, Receivables in
Accounts containing Dealer Overconcentrations
and Receivables in Installment Balances, in each
case that became Defaulted Receivables during
the preceding Collection Period and are not
subject to reassignment from the Trust, unless
certain insolvency events relating to the Seller
or CCC have occurred, as further described in
the Pooling and Servicing Agreement.]
The "Subordinated Percentage" will initially
equal the percentage equivalent of a fraction,
the numerator of which is the Subordination
Factor and the denominator of which will be the
excess of 100% over the Subordination Factor.
The Subordination Factor will [initially] be
[ ]% [, but will be subject to increase [by [ ]%
when the [Floating Rate] [ %] Auto Loan Asset
Backed Certificates, Series [ ] have been paid
in full] [by [ ]% in the event that the rating
of CFC's long-term unsecured debt is lowered
below BBB- by Standard & Poor's or withdrawn by
Standard & Poor's] [or if [describe other events
that will require an increase in the
Subordination Factor]] [; provided, however,
that in no event will the Subordination Factor
be greater than [ ]%]. The Seller may, in its
sole discretion, increase at any time the
Available Subordinated Amount for so long as the
cumulative amount of such increases does not
exceed the lesser of (i) $[ ] or (ii) [ ]%
of the Invested Amount on such date. The Seller
is not under any obligation to increase the
Available Subordinated Amount at any time[,
except as described herein]. If [the sum of] the
Available Subordinated Amount [and the
Incremental Subordinated Amount] were reduced to
less than [the sum of] the Required Subordinated
Amount [and the Incremental Subordinated
Amount], a [Reinvestment Event] [Early
Amortization Event] would occur. The Seller
could elect to increase the Available
Subordinated Amount at the time such a
[Reinvestment Event] [Early Amortization Event]
would otherwise occur, thus preventing or
delaying the occurrence of the [Reinvestment
Event] [Early Amortization Event]. [Describe
partial Reinvestment Periods resulting from a
failure to meet the test described above, if
applicable.]
[The Seller's Interest will be further
subordinated to the extent of the Available
Negative Carry Subordinated Amount. In the event
of the occurrence of [a Reinvestment Event,] [an
Early Amortization Event] or the [[Class A]
Accumulation Period Commencement Date]
[commencement of the [Class A] Controlled
Amortization Period], certain Interest
Collections and Principal Collections allocated
to the Seller, not to exceed the Available
Negative Carry Subordinated Amount, will be
deposited to the Reserve Fund [and other] until
the amounts on deposit therein equal the
Negative Carry Required Amount [and other]. See
"Series Provisions -- Allocation of Collections;
Limited Subordination of Seller's Interest and
Class B Certificateholders' Interest".]
[Describe any other subordination of the
Seller's Interest, if applicable.]
Required Participation
Percentage ........... "Required Participation Percentage" shall mean,
with respect to Series [199_-_], [ ]%; provided,
however, [that if the aggregate amount of
Principal Receivables due from any Dealer or
group of affiliated Dealers at the close of
business on the last day of any Collection
Period with respect to which such determination
is being made is greater than [ ]% of the Pool
Balance on such last day, the Required
Participation Percentage shall mean, as of such
last day and with respect to such Collection
Period and the immediately following Collection
Period only, [ ]%; provided, further,] that the
Seller may, upon ten days' prior notice to the
Trustee, the Rating Agencies and any Enhancement
Provider reduce the Required Participation
Percentage to not less than 100%, so long as the
Rating Agencies shall not have notified the
Seller or the Servicer that any such reduction
will result in a reduction or withdrawal of the
rating of either Class of the Series [199_-_]
Certificates or any other outstanding Series or
Class of Certificates.
Other Series
Issuances ............ As of the date hereof, [ ] other Series issued
by the Trust are outstanding. See "Annex I --
Outstanding Series of Investor Certificates" for
a summary of the terms of the outstanding
Series.
Allocations ............ Interest Collections, Principal Collections and
Defaulted Receivables allocated to Series
199[_-_] as described under "Description of the
Certificates -- Allocation Percentages --
Allocation among Series" in the Prospectus will
be further allocated between the Series [199_-_]
Certificateholders' Interest and the Seller's
Interest as described below.
Interest Collections and Defaulted Receivables
allocated to Series [199_-_] will be allocated
at all times to the Series [199_-_]
Certificateholders' Interest based on the
Floating Allocation Percentage applicable during
the related Collection Period [, provided that
during any Early Amortization Period, Interest
Collections will be allocated to the Series
[199_-_] Certificateholders' Interest based on
the Fixed Allocation Percentage as described
below]. The Floating Allocation Percentage for
any Collection Period is [the percentage
obtained by dividing the Invested Amount on the
last day of the immediately preceding Collection
Period by the product of (x) the Pool Balance on
the last day of the immediately preceding
Collection Period and (y) the Series Allocation
Percentage for the Collection Period in respect
of which the Floating Allocation Percentage is
being calculated] [other]. During the [Class A]
[Class B] [Accumulation Period] [Class A] [Class
B] [Controlled Amortization Period], any Early
Amortization Period [and any Reinvestment
Period], Principal Collections [and, in the case
of any Early Amortization Period, Interest
Collections] allocated to Series 199[_-_] will
be allocated to the Series [199_-_]
Certificateholders' Interest based on the Fixed
Allocation Percentage. The Fixed Allocation
Percentage for a Collection Period during the
[Class A] [Class B] [Accumulation Period]
[Class A] [Class B] [Controlled Amortization
Period], any Early Amortization Period [and any
Reinvestment Period] is [the percentage
equivalent of a fraction, the numerator of which
is the Invested Amount on the last day of the
Revolving Period and the denominator of which is
the product of (x) the Pool Balance on the last
day of the immediately preceding Collection
Period and (y) the Series Allocation Percentage
for the Collection Period in respect of which
the Fixed Allocation Percentage is being
calculated] [other].
Interest Collections, Principal Collections and
Defaulted Receivables allocated to the Series
[199_-_] Certificateholders' Interest will be
further allocated between the interest of
holders of Class A Certificates (the "Class A
Certificateholders") and the interest of holders
of Class B Certificates (the "Class B
Certificateholders") based on the Class A
Allocation Percentage and the Class B Allocation
Percentage, respectively, for the related
Collection Period. The Class A Allocation
Percentage for any Collection Period is the
percentage obtained by dividing the Class A
Invested Amount as of the last day of the
immediately preceding Collection Period (after
giving effect to any reduction thereof to occur
on the immediately following Distribution Date)
by the aggregate Invested Amount of the Series
[199_-_] Certificates as of such last day (after
giving effect to any reduction thereof to occur
on the immediately following Distribution Date);
and the Class B Allocation Percentage for any
Collection Period is the percentage obtained by
subtracting from 100% the Class A Allocation
Percentage.
[Additional Amounts
Available to Class A
Certificateholders ... If [on or prior to the Fully Reinvested Date [or
thereafter if the Revolving Period has
recommenced]] the Interest Collections and
Investment Proceeds allocable to the Class A
Certificates for any Collection Period, Excess
Servicing for such Collection Period[, certain
amounts in the Reserve Fund], the Available
Subordinated Amount and certain other amounts
allocable to the Class A Certificateholders for
such Collection Period are not sufficient to
cover the interest payable with respect to the
Class A Certificates on the next Distribution
Date (plus overdue interest and interest
thereon), the Class A Monthly Servicing Fee for
such Distribution Date, any Class A Investor
Default Amount for such Distribution Date and
certain other amounts, Reallocated Principal
Collections with respect to the related
Collection Period will be applied to cover such
deficiency. If Reallocated Principal Collections
with respect to such Collection Period are
insufficient to fund such deficiency, then a
portion of the Class B Invested Amount will be
reduced by the amount of such deficiency (but
not by more than the Class A Investor Default
Amount for such Collection Period). If such
reduction would cause the Class B Invested
Amount to be reduced below zero, the Class A
Invested Amount will be reduced by the amount by
which the Class B Invested Amount would have
been reduced below zero (but not by more than
the excess of the Class A Investor Default
Amount for such Collection Period over the
amount of such reduction in the Class B Invested
Amount) and the Class A Certificateholders will
bear directly the credit and other risks
associated with their undivided interest in the
Trust. See "Series Provisions -- Allocation of
Collections; Limited Subordination of Seller's
Interest and Class B Certificateholders'
Interest" and "-- Investor Charge-Offs".]
Subordination of
the Class B
Certificates ......... The Class B Certificates will be subordinated to
the extent necessary to fund payments with
respect to the Class A Certificates as described
herein. To the extent the Class B Invested
Amount is reduced, the percentage of Interest
Collections and Principal Collections allocable
to the Class B Certificateholders with respect
to subsequent Collection Periods will be
reduced. Moreover, to the extent the amount of
such reduction in the Class B Invested Amount is
not reimbursed, the amount of principal
distributable to the Class B Certificateholders
will be reduced. See "Series Provisions --
Allocation of Collections; Limited Subordination
of Seller's Interest and Class B
Certificateholders' Interest".
Excess Principal
Collections .......... [Describe Excess Principal Collection
allocations applicable to Series [199_-_].] See
"Series Provisions -- Allocation Percentages --
Principal Collections for all Series".
[Enhancement ........... The Trust will have the benefit of a [letter of
credit] [interest rate swap] [cash collateral
account] [guaranty] [surety bond] [insurance
policy] [spread account] [other enhancement]
[issued by [ ]] for the benefit of the
[Class A] [Class B] [Series [199_-_]]
Certificateholders as described herein.
[Describe subordination of another Series, if
applicable.] See "Series Provisions --
Enhancements" herein.]
Registration of
Series [199_-_]
Certificates ......... [The Series [199_-_] Certificates will initially
be represented by one or more Certificates
registered in the name of Cede, as the nominee
of DTC. No person acquiring an interest in the
Series [199_-_] Certificates will be entitled to
receive a definitive certificate representing
such person's interest except under certain
limited circumstances. Series [199_-_]
Certificateholders may elect to hold their
Series [199_-_] Certificates through DTC (in the
United States) [or CEDEL or Euroclear (in
Europe)]. See "Description of the Certificates
-- Definitive Certificates" in the Prospectus.]
Servicing Fee Rate ..... [ ]% or, if the Monthly Servicing Fee has been
waived as discussed under "Description of the
Certificates -- Servicing Compensation and
Payment of Expenses" in the Prospectus, 0% for
the Distribution Date in respect of which the
Monthly Servicing Fee has been waived. The share
of the Monthly Servicing Fee allocable to the
Class A Certificateholders with respect to any
Distribution Date (the "Class A Monthly
Servicing Fee") shall generally be equal to
one-twelfth of the product of (i) the Servicing
Fee Rate, (ii) the Invested Amount as of the
last day of the second preceding Collection
Period and (iii) the Class A Allocation
Percentage; and the share of the Monthly
Servicing Fee allocable to the Class B
Certificateholders with respect to any
Distribution Date (the "Class B Monthly
Servicing Fee") shall generally be equal to
one-twelfth of the product of (i) the Servicing
Fee Rate, (ii) the Invested Amount as of the
last day of the second preceding Collection
Period and (iii) the Class B Allocation
Percentage.
[Optional Repurchase ... The Series [199_-_] Certificateholders' Interest
will be subject to optional repurchase by the
Seller on any Distribution Date after the
aggregate Invested Amount is reduced to an
amount less than or equal to $[ ] ([ ]% of
the initial outstanding principal amount of the
Series [199_-_] Certificates). The purchase
price will equal the sum of (i) the Invested
Amount on the Determination Date preceding the
Distribution Date on which the purchase is
scheduled to be made, (ii) accrued and unpaid
interest on the Series [199_-_] Certificates at
the applicable Certificate Rate (together with
interest on overdue interest) [and (iii) any
outstanding Carry-over Amount (together with
interest thereon].]
Series [199_-_]
Termination Date ..... [ , 199 ]. See "Series Provisions --
Series Termination".
ERISA Considerations ... [Class A] [Class B] Certificates may be eligible
for purchase by employee benefit plans. See
"ERISA Considerations" in the Prospectus.]
[Other.]
Certificate Ratings .... It is a condition to the issuance of the Class A
Certificates that they be rated in the highest
long-term rating category by at least one
nationally recognized rating agency and a
condition to the issuance of the Class B
Certificates that they be rated in one of the
[three] highest long-term rating categories by
at least one such rating agency. A security
rating is not a recommendation to buy, sell or
hold securities and is subject to revision or
withdrawal in the future by the assigning rating
agency. The rating of the Series [199_-_]
Certificates addresses the likelihood of the
ultimate payment of the principal and interest,
at the applicable Certificate Rate, on the
Series [199_-_] Certificates. However, the
rating agencies do not evaluate, and the rating
of the Series [199_-_] Certificates does not
address the likelihood of payment of the
outstanding principal of the Series [199_-_]
Certificates by any date, including the [Class
A] Expected Payment Date [or Class B Expected
Payment Date], other than the Series Termination
Date. [The rating of a Class of Certificates
also does not address the likelihood of payment
of any Carry-over Amount.] See "Special
Considerations -- Ratings of the Certificates".
Series Issuance Date ... [ , 199 ].
Series Cut-Off Date .... [ , 199 ].
<PAGE>
SPECIAL CONSIDERATIONS
Payments. [The shorter the [Class A] Accumulation Period Length the
greater the likelihood that payment of the Class A Certificates [and the
Class B Certificates] in full by [the] [their respective] Expected Payment
Date[s] will be dependent on the reallocation of Principal Collections
which are initially allocated to other Series.] If one or more other
Series from which Principal Collections are expected to be available to be
reallocated to the payment of the Series [199_-_] Certificates enters into
an early amortization period or reinvestment period after [ ] [the
[ ] Distribution Date][the [Class A] Accumulation Period
Commencement Date], Principal Collections allocated to such Series
generally will not be available to be reallocated to make payments of
principal of the [Series [199_-_] Certificates and [the final payment of
principal of the [Series [199_-_]] [Class A and Class B] Certificates may
be later than the [Class A Expected Payment Date and Class B] Expected
Payment Date [, respectively]] [the amount distributed in respect of
principal of the [Series [199_-_]] [Class A] [Class B] Certificates on any
Distribution Date during the [Class A] [Class B] Controlled Amortization
Period may be less than the [applicable] Controlled Amortization Amount].
Upon written request, the Seller will make available to Series [199_-_]
Certificateholders Disclosure Documents relating to the other outstanding
Series which describe the events which could result in the commencement of
an early amortization period or reinvestment period with respect to such
outstanding Series. See "Maturity and Principal Payment Considerations".
[In addition, a significant decline in the amount of Receivables
generated could cause an Early Amortization Event. However, such a decline
in the amount of Receivables generated would initially be absorbed by an
increase in the Excess Funded Amount. The Receivables Purchase Agreement
will provide that CCC will be required to designate additional Accounts,
the Receivables of which will be sold to the Seller, and the Pooling and
Servicing Agreement will provide that the Seller will be required to
transfer such Receivables to the Trust in the event that the amount of the
Pool Balance is not maintained at a certain minimum level. If additional
Accounts are not designated by CCC when required, an Early Amortization
Event will occur and result in the commencement of an Early Amortization
Period, although in certain circumstances the resulting Early Amortization
Period may terminate and the Revolving Period recommence. If an insolvency
event relating to CCC, CFC, the Seller or Chrysler were to occur, then an
Early Amortization Event would occur, additional Receivables would not be
transferred to the Trust and distributions of principal in respect of the
Series [199_-_] Certificates would not be subject to any [Controlled
Deposit Amount][Controlled Amortization Amount]. See "The Dealer Floorplan
Financing Business" in the Prospectus and "Maturity and Principal Payment
Considerations" herein and see also "Series Provisions -- Early
Amortization Events" for a discussion of other events which might lead to
the occurrence of an Early Amortization Period.]
Trust's Relationship to Chrysler and CCC; Financial Condition of
Chrysler. Certain aspects of the Trust's relationship to Chrysler
Corporation and CCC are described in the Prospectus under "Special
Considerations -- Trust's Relationship to Chrysler and CCC". Set forth
below is certain financial information with respect to Chrysler and CFC.
Chrysler reported earnings before income taxes of $1.6 billion for
the second quarter of 1994, compared with $1.1 billion for the second
quarter of 1993. For the first six months of 1994, Chrysler reported
earnings before income taxes and the cumulative effect of changes in
accounting principles of $3.1 billion, compared with $2.0 billion for the
comparable period of 1993. Pretax earnings for the second quarter and
first six months of 1993 included gains on sales of automotive assets and
investments of $171 million.
The improvement in operating results in the second quarter and first
six months of 1994 over the corresponding periods of 1993 resulted from an
increase in sales volume and pricing actions, including lower per unit
sales incentives, partially offset by increased employee costs. Chrysler's
worldwide factory car and truck sales for the three and six months ended
June 30, 1994 were 702,802 units, a 7 percent increase from the second
quarter of 1993, and 1,443,400 units, an 11 percent increase over the
first six months of 1993. Combined U.S. and Canadian dealers' days supply
of vehicle inventory decreased to 45 days at June 30, 1994 from 63 days at
December 31, 1993 and 50 days at June 30, 1993.
Net earnings for the second quarter of 1994 were $956 million, or
$2.61 per common share, compared with $685 million, or $1.86 per common
share, in the second quarter of 1993. Net earnings for the six months
ended June 30, 1994 were $1.9 billion, compared to a net loss of $3.8
billion for the comparable period of 1993. The net loss for the first six
months of 1993 resulted from a charge of $4.7 billion, or $13.86 per
common share, for the cumulative effect of a change in accounting
principal related to the adoption of Statement of Financial Accounting
Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions". Results for the first six months of 1993
also included a charge of $283 million, or $0.84 per common share, for the
cumulative effect of a change in accounting principle relating to the
adoption of SFAS No. 112, "Employers Accounting for Postemployment
Benefits".
Chrysler reported earnings before income taxes and the cumulative
effect of changes in accounting principles of $3.8 billion in 1993,
compared with $934 million in 1992. The earnings in 1993 included a gain
on sales of automotive assets and investments of $265 million. Earnings in
1992 included a gain on the sale of an automotive investment of $142
million, a $110 million charge for reducing investments of Chrysler Canada
Ltd. and certain of its employee benefit plans in a real estate investment
concern to their estimated net realizable value, and a $101 million
restructuring charge related to the realignment of Chrysler's short-term
vehicle rental subsidiaries. Excluding the effect of these items,
Chrysler's pretax earnings for 1993 and 1992 were $3.6 billion and $1.0
billion, respectively.
The improvement in 1993 over 1992 was primarily the result of a
substantial increase in unit sales volume, pricing actions, including
significantly lower per unit sales incentives, and an improved mix of
higher-margin products, partially offset by increased labor and benefit
costs. Chrysler's worldwide factory car and truck sales during 1993
increased 14 percent to 2,475,738 units. U.S. and Canadian dealers' days
supply of vehicle inventory decreased to 63 days at December 31, 1993 from
72 days at December 31, 1992.
Including the provision for income taxes and the cumulative effect
of changes in accounting principles, Chrysler reported a net loss for 1993
of $2.6 billion, or $7.62 per common share, compared with net earnings of
$723 million, or $2.21 per common share for 1992. The net loss for 1993
resulted from a charge of $4.7 billion, or $13.57 per common share, for
the cumulative effect of a change in accounting principle related to the
adoption of SFAS No. 106. Also included in the 1993 results was a charge
of $283 million, or $0.82 per common share, for the cumulative effect of a
change in accounting principle relating to the adoption of SFAS No. 112.
Net earnings for 1992 included a $218 million, or $0.74 per common share,
favorable cumulative effect of a change in accounting principle relating
to the adoption of SFAS No. 109, "Accounting for Income Taxes".
During 1992 and 1993, Chrysler took various actions to strengthen
its financial condition, improve liquidity and add to its equity base in
order to ensure its ability to carry out its new product development and
facility modernization programs without significant interruption. In the
second and third quarters of 1993, Chrysler sold its remaining 50.3
million shares of Mitsubishi Motors Corporation ("MMC") stock for net
proceeds of $329 million and sold the plastics operations of its Acustar
division for net proceeds of $132 million. In February 1993, Chrysler
issued 52 million shares of common stock for net proceeds of $1.95
billion. In 1992, Chrysler sold 43.6 million shares of MMC stock for net
proceeds of $215 million and issued 1.7 million shares of convertible
preferred stock for net proceeds of $836 million.
CFC's earnings before taxes were $69 million and $144 million for
the three and six months ended June 30, 1994, which compares to $62
million and $112 million for the comparable periods of 1993, before the
cumulative effect of changes in accounting principles. The increase in
1994 earnings before taxes and accounting changes resulted from higher
levels of automotive financing and lower provisions for credit losses,
partially offset by reduced retail automotive margins.
CFC's net earnings were $44 million and $91 million for the three
and six months ended June 30, 1994 compared to $44 million and $51 million
in the comparable periods of 1993. Net earnings for the six months ended
June 30, 1993 included charges totaling $30 million from the adoption of
SFAS No. 106 and SFAS No. 112.
CFC reported net earnings of $129 million for 1993 compared to $231
million for 1992. Accounting changes in 1993 and 1992 negatively impact
net earnings comparisons by $81 million. Net earnings for 1993 included a
$30 million after-tax charge from the adoption of SFAS No. 106 and SFAS
No. 112, while 1992 net earnings included a $51 million favorable
after-tax adjustment from the adoption of SFAS No. 109.
CFC's earnings before the cumulative effect of changes in accounting
principles were $159 million for 1993 and $180 million for 1992. The
decline in earnings before accounting changes resulted largely from higher
borrowing costs incurred under CFC's revolving credit agreements.
Both Chrysler and CFC regained investment grade credit ratings in
1993. The improved credit ratings reflect Chrysler's improved operating
results, the significant improvements in Chrysler's balance sheet
(including reductions in its outstanding debt and unfunded pension
obligation), and CFC's improved liquidity.
Chrysler and CFC are subject to the informational requirements of
the Exchange Act and in accordance therewith file reports and other
information with the Commission. For further information regarding
Chrysler and CFC reference is made to such reports and other information
which are available as described under "Available Information" in the
Prospectus.
Credit Enhancement. Credit enhancement of the Series [199_-_]
Certificates will be provided by the subordination of the Seller's
Interest to the extent of the Available Subordinated Amount as described
herein [and amounts in the Reserve Fund]. Additional credit enhancement of
the Class A Certificates will be provided by the subordination of the
interests of the Class B Certificateholders. [Describe other subordination
of the Seller's Interest, if applicable.] [Describe any applicable
Enhancements.] The amount of such credit enhancement is limited and will
be reduced from time to time as described herein. See "Series Provisions
- -- Allocation of Collections; Limited Subordination of Seller's Interest
and Class B Certificateholders' Interest" [and " -- Enhancements"].
Effect of Subordination of Class B Certificates; Principal
Payments. The Class B Certificates are subordinated in right of payment of
principal to the Class A Certificates to the extent described herein.
[Payments of principal in respect of the Class B Certificates will not
commence until after the final principal payment with respect to the Class
A Certificates has been made as described herein.] [No principal payments
will be made in respect of the Class B Certificates unless all principal
payments then due with respect to the Class A Certificates have been
made.] Moreover, the Class B Invested Amount is subject to reduction if
the Class A Required Amount for any Collection Period is not funded from
Interest Collections and Investment Proceeds allocable to the Class A
Certificates, Excess Servicing, [amounts on deposit in the Reserve Fund]
or Available Seller's Collections. To the extent the Class B Invested
Amount is reduced, the percentage of Interest Collections and Principal
Collections allocable to the Class B Certificateholders' Interest in
future Collection Periods will be reduced. Moreover, to the extent the
amount of such reduction in the Class B Invested Amount is not reimbursed,
the amount of principal distributable to the Class B Certificateholders
will be reduced. See "Series Provisions -- Allocation of Collections;
Limited Subordination of Seller's Interest and Class B Certificateholders'
Interest" herein. If the Class B Invested Amount is reduced to zero, the
Class A Certificateholders will bear directly the credit and other risks
associated with their undivided interest in the Trust.
[Control. Subject to certain limited circumstances, Series [199_-_]
Certificateholders holding a specified percentage of the aggregate unpaid
principal amount of the Series [199_-_] Certificates may take certain
actions, or direct certain actions to be taken, under the Pooling and
Servicing Agreement or the Series Supplement, including amending the
Series Supplement and declaring certain Early Amortization Events. In such
cases (subject to certain exceptions), when determining whether the
required percentage of Series [199_-_] Certificateholders have given their
approval or consent, the Class A Certificateholders and the Class B
Certificateholders will be treated as a single class. Accordingly, the
Class [ ] Certificateholders will have the power to determine whether
any such action is taken without regard to the position or interests of
the Class [ ] Certificateholders. The Class [ ] Certificateholders
will not have similar power. In order to make such determinations, the
Class [ ] Certificateholders will need the approval or consent of the
Class [ ] Certificateholders owning a substantial portion of the Class
[ ] Certificateholders' Interest.]
[Basis Risk. The Receivables bear interest at prime rates announced
by certain banks plus a margin currently ranging from [ ]% to [ ]%.
[The Class A Certificate Rate is based on the Class A Index.] [The Class B
Certificate Rate is based on the Class B Index.] If, in respect of any
Distribution Date, there does not exist a positive spread between (a) the
Assets Receivables Rate and (b) [the Class A Certificate Rate based on the
Class A Index] [or the Class B Certificate Rate based on the Class B
Index], [the Class A Certificate Rate for such Distribution Date] [or the
Class B Certificate Rate for such Distribution Date, as the case may be,]
will be the Assets Receivables Rate. [The Class A Certificate Rate based
on the Class A Index] [or the Class B Certificate Rate based on the Class
B Index] may exceed the Assets Receivables Rate as a result of (i) [the
Class A Index] [or the Class B Index, as the case may be,] exceeding the
applicable prime rate [and (ii) if amounts are deposited in [the Excess
Funding Account or] the Principal Funding Account, [the Class A Index] [or
the Class B Index, as the case may be,] exceeding the investment earnings
on amounts on deposit therein]. [Any Carry-over Amount will be reduced by
the amounts, if any, on deposit in the Yield Supplement Account. However,
there can be no assurance that sufficient amounts, if any, will be
available in the Yield Supplement Account. In addition, the amount
required to be deposited in the Yield Supplement Account is not designed
to include amounts which would be required to pay [any Class A Carry-over
Amount resulting from the Class A Index exceeding the applicable prime
rate] [or any Class B Carry-over Amount resulting from the Class B Index
exceeding such prime rate]. See "Series Provisions -- Interest" and
"Distributions from the Collection Account[; Reserve Fund]; Yield
Supplement Account -- Yield Supplement Account".
In addition, CCC may reduce the rates applicable to any of the
Receivables, so long as CCC does not reasonably expect any such reduction
to result in the creation of a Carry-over Amount. In any event, such a
reduction would have the effect of reducing or possibly eliminating the
positive spread, if any, between the Assets Receivables Rate and the
[related] [Class A] [Class B] Certificate Rate.
Once amounts deposited from time to time in the Yield Supplement
Account are exhausted, any Carry-over Amount arising as a result of [the
Class A Certificate Rate] [or the Class B Certificate Rate] being
determined on the basis of the Assets Receivables Rate will be paid to the
extent funds are allocated and available therefor after making certain
required distributions and deposits with respect to the Series [199_-_]
Certificates, including payments with respect to principal [(including
payments to the Excess Funding Account)], Class A Monthly Interest, Class
B Monthly Interest, the Class A Monthly Servicing Fee, the Class B
Servicing Fee, [the Reserve Fund Deposit Amount], the Class A Investor
Default Amount and the Class B Investor Default Amount as described under
"Series Provisions -- Distributions from the Collection Account; [Reserve
Fund;] Yield Supplement Account". However, if any Carry-over Amount is
outstanding for six consecutive Distribution Dates an [Early Amortization
Event] [Reinvestment Event] will occur. See "Series Provisions -- [Early
Amortization Events"] [ -- Reinvestment Events"]. The ratings of the
Series [199_-_] Certificates do not address the likelihood of payment of
any Carry-over Amount.](1)<F1>
<F1>
- ---------------
(1) Modify to reflect other sources, if any, for payment of Carry-over
Amounts.
Ratings of the Certificates. It is a condition of the Class A
Certificates that they be rated in the highest long-term rating category
by at least one Rating Agency and a condition to issuance of the Class B
Certificates that they be rated in one of the [three] highest long-term
rating categories by at least one Rating Agency. A rating is not a
recommendation to buy, sell or hold securities, inasmuch as such rating
does not comment as to the market price or the suitability for a
particular investor. There is no assurance that a rating will remain for
any given period of time or that a rating will not be lowered or withdrawn
entirely by a Rating Agency if in its judgment circumstances in the future
so warrant. The rating of the Series [199_-_] Certificates addresses the
likelihood of the ultimate payment of principal and interest, at the
applicable Certificate Rate, on the Series [199_-_] Certificates. However,
a Rating Agency does not evaluate, and the rating of the Series [199_-_]
Certificates does not address, the likelihood that the outstanding
principal amount of the Series [199_-_] Certificates will be paid by any
date, including the [Class A] Expected Payment Date [or the Class B
Expected Payment Date], other than the Series Termination Date. [In
addition, a Rating Agency does not evaluate, and the rating of a Class of
Series [199_-_] Certificates does not address, the likelihood that any
Carry-over Amount will be paid.]
USE OF PROCEEDS
[After making the deposit of the Excess Funded Amount to the Excess
Funding Account, the balance of the] [The] net proceeds from the sale of
the Series [199_-_] Certificates will be paid to USA. USA will use such
proceeds (together with the subordinated loan from CFC described under
"U.S. Auto Receivables Company and the Trust -- U.S. Auto Receivables
Company" in the Prospectus) to purchase Receivables from CCC or to repay
certain amounts previously borrowed to purchase Receivables. CCC will use
the portion of the proceeds paid to it for [general corporate purposes]
[other].
THE DEALER FLOORPLAN FINANCING BUSINESS
Information regarding the dealer floorplan financing business is set
forth under "The Dealer Floorplan Financing Business" in the Prospectus.
In addition, the Receivables sold to the Trust by the Seller pursuant to
the Pooling and Servicing Agreement were or will be selected from
extensions of credit and advances made by Chrysler and CCC to
approximately [ ] domestic motor "vehicle dealers". CCC financed [ ]%
of the total number of all Chrysler franchised dealers as of
[ ], 199[ ]. Furthermore, CCC has extended credit lines to
[ ] Chrysler-franchised dealers that also operate non-Chrysler
franchises (representing approximately [ ]% of the aggregate credit lines
of dealers in the U.S. Wholesale Portfolio as of [ ],
199[ ]) and [ ] non-Chrysler dealers (representing approximately [ ]% of
such aggregate credit lines). As of [ ], 199[ ], the balance
of Principal Receivables in the U.S. Wholesale Portfolio was approximately
$[ ] billion. CCC currently services the U.S. Wholesale Portfolio
through its home office and through a network of 86 branch offices located
throughout the United States.
THE ACCOUNTS
As of the Series Cut-Off Date, with respect to the Accounts in the
Trust: (a) there were [ ] Accounts and the Principal Receivables
balance was approximately $[ ] million; (b) the average credit lines per
Dealer for new and used vehicles (which include Auction Vehicles) were
approximately $[ ] million and $[ ] million, respectively, and the
average balance of Principal Receivables per Dealer was approximately
$[ ] million; (c) the aggregate total receivables balance as a
percentage of the aggregate total credit line was approximately [ ]%; (d)
[ ]% of the Receivables were in Accounts which the related credit lines
were initially established in 19[ ], [ ]% in 19[ ], [ ]% in 19[ ],
[ ]% in 19[ ], [ ]% in 19[ ] and [ ]% prior to 19[ ]; and (e) the
weighted average spread over the Prime Rate charged to Dealers was
approximately [ ]%. Unless otherwise indicated, the statistics included
under "The Accounts -- General" and " -- Geographic Distribution" with
respect to the Accounts and the Receivables in the Trust gives effect to
approximately $[ ] million of principal receivables balances with respect
to certain Dealers (the "Excluded Receivables" and the "Excluded Dealers",
respectively) that are in voluntary or involuntary bankruptcy proceedings
or voluntary or involuntary liquidation or that, subject to certain
limitations, are being voluntarily removed by the Seller (or the Servicer
on its behalf) from the Trust. A portion of such principal receivables was
created after such Dealers entered into such status or were designated by
the Seller (or the Servicer on its behalf) for removal from the Trust and,
as a result thereof, are owned by CFC and not the Trust. Principal
receivables balances created prior to such Dealers entering into such
status or being designated for removal from the Trust are included in the
Principal Receivables balance. See "Description of the Certificates --
Removal of Accounts" in the Prospectus for a description of the manner in
which an Account can be removed from the Trust.
LOSS EXPERIENCE
The following tables set forth CCC's average Principal Receivables
balance and loss experience for each of the periods shown on the U.S.
Wholesale Portfolio. Because the Eligible Accounts will be only a portion
of the entire U.S. Wholesale Portfolio, actual loss experience with
respect to the Eligible Accounts may be different. There can be no
assurance that the loss experience for the Receivables in the future will
be similar to the historical experience set forth below with respect to
the U.S. Wholesale Portfolio. In addition, the historical experience set
forth below reflects financial assistance provided by Chrysler to
Chrysler-franchised dealers as described in the Prospectus under "The
Dealer Floorplan Financing Business -- Relationship with Chrysler" in the
Prospectus. If Chrysler is not able to or elects not to provide such
assistance, the loss experience in respect of the U.S. Wholesale Portfolio
may be adversely affected. See "Special Considerations -- Trust's
Relationship to Chrysler and CCC" in the Prospectus and "Special
Considerations -- Trust's Relationship to Chrysler and CCC; Financial
Condition of Chrysler" in this Prospectus Supplement.
<PAGE>
<TABLE>
<CAPTION>
LOSS EXPERIENCE FOR THE U.S. WHOLESALE PORTFOLIO
Six Months Ended
June 30, Year Ended December 31,
---------------- -------------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Average
Principal
Receivables
Balance(1)..... $ 6,930 $6,603 $6,271 $5,344 $4,826 $4,726 $4,933 $4,129 $3,787 $2,991
Net Losses(2)... $ (1) $ 5 $ 12 $ 26 $ 36 $ 23 $ 13 $ 3 $ 2 $ 3
Net Losses/
Liquidations .. (0.005)% 0.029% 0.035% 0.098% 0.163% 0.117% 0.060% 0.015% 0.015% 0.023%
Net Losses/
Average
Principal
Receivables
Balance(3)..... (0.03)% 0.15% 0.19% 0.49% 0.75% 0.49% 0.26% 0.07% 0.06% 0.10%
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Average
Principal
Receivables
Balance(1)..... $2,532 $2,098 $1,461 $1,451 $1,390 $1,622 $1,837
Net Losses(2)... $ 1 $ (2) $ 2 $ 14 $ 12 $ 18 $ 11
Net Losses/
Liquidations .. 0.004% (.019)% 0.023% 0.239% 0.225% 0.338% 0.163%
Net Losses/
Average
Principal
Receivables
Balance........ 0.02% (0.09)% 0.12% 0.95% 0.85% 1.12% 0.58%
<FN>
(1) Average Principal Receivables Balance is the average of the month-end
principal balances for the thirteen months ending on the last day of
the period, except for the six months ended June 30, 1994 and June 30,
1993, which are based on a seven-month average.
(2) Net losses in any period are gross losses less recoveries for such
period.
(3) Percentages for the six months ended June 30, 1994 and 1993 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
As of As of
June 30, December 31,
------------- -----------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1-120......... 79.0% 77.4% 82.4% 77.2% 75.9% 72.2% 71.3% 78.8% 73.0% 81.5%
121-180....... 9.5 9.8 9.6 13.8 12.9 13.7 14.5 11.0 13.9 9.2
181-270....... 7.4 7.4 4.6 4.8 4.8 7.1 6.4 4.7 6.8 4.4
Over 270...... 4.1 5.4 3.4 4.2 6.4 7.0 7.8 5.5 6.3 4.9
</TABLE>
<PAGE>
GEOGRAPHIC DISTRIBUTION
The following table provides the geographic distribution of the
vehicle inventory for all dealers in the Trust on the basis of receivables
outstanding and the number of dealers generating such portfolio.
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS IN THE TRUST AS OF [ ], 199[ ]
Percentage
Receivables Percentage of Total of
Outstanding Receivables Number Number of
(thousands of Outstanding of Dealers
dollars)(2) (2)(4) Dealers(3) (3)(4)
<S> <C> <C> <C> <C>
California.......... % %
Texas............... % %
Florida............. % %
New York............ % %
Michigan............ % %
[ ]............. % %
Other(1)............ % %
<FN>
(1) No other state includes more than 5% of the outstanding Receivables.
(2) Includes Excluded Receivables.
(3) Includes Excluded Dealers.
(4) May not add to 100.0% due to rounding.
</TABLE>
CHRYSLER FINANCIAL CORPORATION AND
CHRYSLER CREDIT CORPORATION
Certain information regarding Chrysler Financial Corporation and
Chrysler Credit Corporation is set forth under "Chrysler Financial
Corporation and Chrysler Credit Corporation" in the Prospectus. In
addition, as of June 30, 1994, CFC had nearly 3,100 employees and was
servicing $30.2 billion in finance receivables. During the first six
months of 1994, CFC and CCC financed or leased approximately 429,000
vehicles at retail, including approximately 286,000 new Chrysler passenger
cars and light duty trucks representing 24% of Chrysler's U.S. retail and
fleet deliveries. CFC and CCC also financed at wholesale approximately
844,000 new Chrysler passenger cars and light duty trucks representing 73%
of Chrysler's U.S. factory unit sales for the six months ended June 30,
1994. Wholesale vehicle financing accounted for 74% of the total
automotive financing volume of CFC and CCC in the first six months of 1994
and represented 11% of gross automotive finance receivables outstanding at
June 30, 1994.
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
Principal with respect to the Series [199_-_] Certificates will be
payable if an Early Amortization Event [that is not cured as described
herein] has occurred. Full amortization of [the Swiss [199_-_]
Certificates by the [ ] Distribution Date (the "Expected Payment
Date")] [the Class A Certificates by the [ ] Distribution Date
(the "Class A Expected Payment Date") and the Class B Certificates by the
[ ] Distribution Date (the "Class B Expected Payment Date")] depends
on, among other things, repayment by Dealers of the Receivables and may
not occur if Dealer payments are insufficient therefor. Because the
Receivables generally are paid upon retail sale of the underlying Vehicle,
the timing of such payments is uncertain. In addition, there is no
assurance that CCC will generate additional Receivables under the Accounts
or that any particular pattern of Dealer payments will occur. See "Series
Provisions -- Interest" and " -- Principal" herein and "The Dealer
Floorplan Financing Business" in the Prospectus and herein. [In addition,
the shorter the [Class A] Accumulation Period Length the greater the
likelihood that payment of [the Series [199_-_] Certificates by the
Expected Payment Date] [the Class A Certificates [and the Class B
Certificates] in full by [their respective] [the Class A] Expected Payment
Date[s]] will be dependent on the reallocation of Principal Collections
which are initially allocated to other outstanding Series.] If one or more
other Series from which Principal Collections are expected to be available
to be reallocated to the payment of the Series [199_-_] Certificates
enters into an early amortization period or reinvestment period after
[ ] [the [ ] Distribution Date] [the [Class A] Accumulation
Period Commencement Date], Principal Collections allocated to such Series
generally will not be available to be reallocated to make payments of
principal of the Series [199_-_] Certificates and [the final payment of
principal of the Series [199_-_] Certificates may be later than the
Expected Payment Date] [the final payment of principal of the Class A
Certificates and the Class B Certificates may be later than the Class A
Expected Payment Date and the Class B Expected Payment Date, respectively]
[the amount distributed in respect of principal of the Class A
Certificates on any Distribution Date during the Class A Controlled
Amortization Period may be less than the Class A Controlled Amortization
Amount] [the amount distributed in respect of principal of the Class B
Certificates on any Distribution Date with respect to the Class B
Controlled Amortization Period may be less than the Class B Controlled
Amortization Amount]. Upon written request, the Seller will make available
to Series [199_-_] Certificateholders Disclosure Documents relating to the
other outstanding Series which describe the events which could result in
the commencement of an early amortization period or reinvestment period
with respect to such outstanding Series.]
Because an Early Amortization Event with respect to the Series
[199_-_] Certificates may occur which would initiate an Early Amortization
Period, the final distribution of principal on the Series [199_-_]
Certificates may be made prior to the scheduled termination of the
Revolving Period or prior to the Expected Payment Date[s] [for the Class A
Certificates and the Class B Certificates, respectively]. See "Series
Provisions -- Early Amortization Events".
[Several of the events which constitute Reinvestment Events with
respect to the Series [199_-_] Certificates may constitute early
amortization events with respect to other Series. Should such an event
occur, holders of Certificates of such other Series would receive monthly
distribution of principal, which distributions would not be limited to any
controlled amortization amount, while Certificateholder Principal
Collections would be retained in the Principal Funding Account and would
not be distributed to Series [199_-_] Certificateholders until [the
Expected Payment Date] [the Class A Expected Payment Date, in the case of
the Class A Certificates, and the Class B Expected Payment Date, in the
case of the Class B Certificates] or, if earlier, the first Distribution
Date following the occurrence of an Early Amortization Event. See "Series
Provisions -- Principal" and " -- Reinvestment Events".]
The amount of new Receivables generated in any month and monthly
payment rates on the Receivables may vary because of seasonal variations
in Vehicle sales and inventory levels, retail incentive programs provided
by Vehicle manufacturers and various economic factors affecting Vehicle
sales generally. The following table sets forth the highest and lowest
monthly payment rates for the U.S. Wholesale Portfolio during any month in
the periods shown and the average of the monthly payment rates for all
months during the periods shown, in each case calculated as the percentage
equivalent of a fraction, the numerator of which is the aggregate of all
collections of principal during the period and the denominator of which is
the average aggregate principal balance for such period. Monthly payment
rates reflected in the table include principal credit adjustments. The
monthly payment rates presented for 1980 through 1985 are calculated using
quarterly data while monthly payment rates for 1986 through 1994 reflect
actual monthly data. There can be no assurance that the rate of Principal
Collections will be similar to the historical experience set forth below.
Because the Eligible Accounts will be only a portion of the entire U.S.
Wholesale Portfolio, historical actual monthly payment rates with respect
to the Eligible Accounts may be different than those shown below.
<TABLE>
<CAPTION>
MONTHLY PAYMENT RATES FOR THE U.S. WHOLESALE PORTFOLIO
Six Months Ended
June 30, Year Ended December 31,
------------- ------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Highest Month......... 59.1% 53.4% 54.7% 50.6% 49.0% 42.1% 41.5% 48.7% 40.3% 56.7%
Lowest Month.......... 34.2 35.9 35.9 34.4 30.2 25.3 29.5 29.5 26.8 27.7
Average of the Months
in the Period........ 49.7 43.3 46.6 41.3 38.4 35.7 35.6 41.2 34.2 37.7
<CAPTION>
Year Ended December 31,
----------------------------------------------------
1985 1984 1983 1982 1981 1980 1979
<S> <C> <C> <C> <C> <C> <C> <C>
Highest Month......... 45.9% 43.7% 45.9% 35.5% 34.3% 28.9% 36.5%
Lowest Month.......... 35.8 35.7 37.7 29.0 27.4 26.7 26.0
Average of the Months
in the Period........ 40.1 39.9 42.2 32.9 32.2 28.1 30.0
</TABLE>
<PAGE>
SERIES PROVISIONS
GENERAL
The Series [199_-_] Certificates will be issued pursuant to the
Pooling and Servicing Agreement and a Series Supplement relating to the
Series [199_-_] Certificates (the "Series Supplement"). The Series
[199_-_] Certificates will consist of two Classes. The Trustee will make
available for inspection a copy of the Pooling and Servicing Agreement
(without exhibits or schedules) on written request. Reference should be
made to the Prospectus for additional information concerning the Series
[199_-_] Certificates and the Pooling and Servicing Agreement.
The Class A Certificates and the Class B Certificates will evidence
undivided beneficial interests in certain assets of the Trust allocated to
the Class A Certificateholders' Interest and the Class B
Certificateholders' Interest, respectively, representing the right to
receive from such Trust assets funds up to (but not in excess of) the
amounts required to make payments of interest on and principal of the
Class A Certificates and the Class B Certificates, respectively, pursuant
to the Pooling and Servicing Agreement.
INTEREST
Interest on the principal balance of the Class A Certificates will
accrue at the Class A Certificate Rate and will be payable to the Class A
Certificateholders on each [Class A] Interest Payment Date, commencing
[ ], 199[ ] [, provided that, during any Early Amortization Period,
interest will be distributed to Class A Certificateholders on each
Distribution Date, commencing on the first Distribution Date following the
occurrence of an Early Amortization Event]. Interest on the principal
balance of the Class B Certificates will accrue at the Class B Certificate
Rate and will be payable to the Class B Certificateholders on each [Class
B] Interest Payment Date, commencing [ ], 199[ ][, provided that, during
any Early Amortization Period, interest will be distributed to Class B
Certificateholders on each Distribution Date, commencing on the first
Distribution Date following the occurrence of an Early Amortization
Event]. Interest on the [Class A] Certificates will accrue from and
including the preceding [Class A] Interest Payment Date (or, in the case
of the first [Class A] Interest Payment Date, from and including the
Series Issuance Date) to but including such [Class A] Interest Payment
Date. [Interest on the Class B Certificates will accrue from and including
the preceding Class B Interest Payment Date (or, in the case of the first
Class B Interest Payment Date, from and including the Series Issuance
Date) to but including such Class B Interest Payment Date.] Interest on
the Class A Certificates will be calculated on a basis of [a 360-day year
of twelve 30-day months] [the actual number of days in each [Class A]
Interest Period divided by [360] [other]]. Interest on the Class B
Certificates will be calculated on a basis of [a 360-day year of twelve
30-day months] [the actual number of days in each [Class B] Interest
Period divided by [360] [other]]. Interest due for any [Class A] Interest
Payment Date [or Class B Interest Payment Date] but not paid on such
[Class A] Interest Payment Date [or Class B Interest Payment Date] will be
due on the next [Class A] Interest Payment Date [or Class B Interest
Payment Date, as applicable], together with interest on such amount at the
applicable Certificate Rate plus [ ]%, to the extent permitted by
applicable law. Interest payments on the Series [199_-_] Certificates will
generally be derived from Certificateholder Interest Collections for a
Collection Period, [any withdrawals from the Reserve Fund,] Investment
Proceeds, and, under certain circumstances, Available Seller's Collections
to the extent of the Available Subordinated Amount and, in the case of the
Class A Certificates, Reallocated Principal Collections [describe other
sources].
[The Class A Certificate Rate for each [[Class A] Interest Period]
[other] will be determined on the Class A Adjustment Date preceding such
[[Class A] Interest Period] [other].] The "Class A Certificate Rate" will
be [ %] [equal to [the lesser of (a)] the Class A Index [plus] [minus]
[times] [ ]% [and (b) the Assets Receivables Rate for the related
Distribution Date].
[The Class B Certificate Rate for each [[Class B] Interest Period]
[other] will be determined on the Class B Adjustment Date preceding such
Class B Interest Period] [other].] The "Class B Certificate Rate" will be
[ %] [equal to [the lesser of (a)] the Class B Index [plus] [minus]
[times] [ ]% [and (b) the Assets Receivables Rate for the related
Distribution Date].
"Class A Monthly Interest" for any Distribution Date means the
amount of interest accrued in respect of the Class A Certificates as
described above for such Distribution Date; and "Class B Monthly Interest"
for any Distribution Date means the amount of interest accrued in respect
of the Class B Certificates as described above for such Distribution Date.
Class A Monthly Interest and Class B Monthly Interest are referred to
collectively as "Monthly Interest".
[Describe [Class A Index] [and Class B Index] and define [Class A
Adjustment Date] [and Class B Adjustment Date].]
[If the Class A Certificate Rate for a Distribution Date calculated
on the basis of the Class A Index as described above is greater than the
Assets Receivable Rate, then the Class A Certificate Rate for such
Distribution Date will be the Assets Receivables Rate; and if the Class B
Certificate Rate for a Distribution Date as calculated on the basis of the
Class B Index as described above is greater than the Assets Receivables
Rate, then the Class B Certificate Rate for such Distribution Date will be
the Assets Receivables Rate.]
[The "Assets Receivables Rate" for any [Interest Period][period from
one Distribution Date to the immediately succeeding Distribution Date]
shall equal [the product of (a) the quotient obtained by dividing (i) 360
by (ii) the actual number of days elapsed in such period and (b) a
percentage, expressed as a fraction, (i) the numerator of which is the sum
of (A) Certificateholder Interest Collections for the Collection Period
immediately preceding the last day of such period (which for this purpose
only is based on interest amounts billed to the Dealers which are due
during such Collection Period) less, unless waived by the Servicer, the
Monthly Servicing Fee with respect to such immediately preceding
Collection Period and (B) the Investment Proceeds to be applied on the
Distribution Date related to such period and (ii) the denominator of which
is the sum of (A) the product of (I) the Floating Allocation Percentage,
(II) the Series Allocation Percentage and (III) the average Pool Balance
(after giving effect to any charge-offs) for such immediately preceding
Collection Period, [(B) the principal balance on deposit in the Excess
Funding Account on the first day of such period (after giving effect to
all deposits to and withdrawals therefrom on such first day)] and [(C) the
principal balance on deposit in the Principal Funding Account on the first
day of such period (after giving effect to all deposits to and withdrawals
therefrom on such first day)] [other].
[If [the Class A Certificate Rate] [or the Class B Certificate Rate]
for any Distribution Date is based on the Assets Receivables Rate, the
excess of (a) the amount of interest on [the Class A Certificates] [or the
Class B Certificates] that would have accrued in respect of the related
[[Class A] Interest Period [or Class B Interest Period] [period from one
Distribution Date to the immediately succeeding Distribution Date] had
interest been calculated based on the [Class A Index] [or the Class B
Index, as the case may be,] over (b) the amount of interest on [the Class
A Certificates] [or the Class B Certificates, as the case may be,]
actually accrued in respect of such period based on the Assets Receivables
Rate (such excess, together with the unpaid portion of any such excess
from prior Distribution Dates (and interest accrued thereon at the
applicable Certificate Rate calculated on the basis of [the Class A Index]
[or the Class B Index, as the case may be,] plus [ ]%), is referred to as
[the "Class A Carry-over Amount"] [or the "Class B Carry-over Amount", as
applicable]) will be paid on such Distribution Date from amounts on
deposit in the Yield Supplement Account and, if such amounts are depleted,
to the extent funds are allocated and available therefor after making
certain required distributions and deposits with respect to the Series
[199_-_] Certificates, including payments with respect to principal
[(including payments to the Excess Funding Account)], Class A Monthly
Interest, Class B Monthly Interest, the Class A Monthly Servicing Fee, the
Class B Monthly Servicing Fee[, the Reserve Fund Deposit Amount], the
Class A Investor Default Amount and the Class B Investor Default Amount as
described below under "Distributions from the Collection Account; [Reserve
Fund;] Yield Supplement Account". The rating of the Series [199_-_]
Certificates does not address the likelihood of payment of any Carry-over
Amount.]
PRINCIPAL
In general, no principal payments will be made to [the Series
[199_-_] Certificateholders until the [Expected Payment Date] [Principal
Commencement Date]] [the Class A Certificateholders until the [Class A
Expected Payment Date] [Class A Principal Commencement Date] or to the
Class B Certificateholders until the [Class B Expected Payment Date]
[Class B Principal Commencement Date]] or, upon the occurrence of an Early
Amortization Event [that is not cured as described herein], until the
first Special Payment Date. On each Distribution Date with respect to the
Revolving Period, collections of Principal Receivables allocable to the
Series [199_-_] Certificateholders' Interest other than Reallocated
Principal Collections applied to the Class A Required Amount, subject to
certain limitations, will either be (a) allocated to one or more Series
which are in amortization, early amortization or accumulation periods to
cover principal payments due to the Certificateholders of any such Series
or which provides for excess funding accounts or similar arrangements or
(b) if no such Series is then amortizing or accumulating principal or
otherwise does not provide for excess funding accounts or similar
arrangements, paid to the Seller to maintain the Series [199_-_]
Certificateholders' Interest or held as Unallocated Principal Collections.
See "Allocation Percentages -- Principal Collections for all Series" and
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account] -- Principal Collections".
Unless and until an Early Amortization Event [or Reinvestment Event]
[that is not cured as described herein] shall have occurred and until the
outstanding principal balance of the Series [199_-_] Certificates is paid
in full, on each Distribution Date with respect to the [Class A] [Class B]
[Accumulation Period] [Class A] [Class B] [Controlled Amortization
Period], collections of Principal Receivables allocable to the Series
[199_-_] Certificateholders' Interest not applied to the Class A Required
Amount plus certain other amounts comprising Class A Monthly Principal
and/or Class B Monthly Period will no longer be paid for the benefit of
another Series or to the Seller as described above but instead an amount
thereof up to [the Class A Controlled Deposit Amount, in the case of the
Class A Accumulation Period,] [and the Class B Controlled Deposit Amount,
in the case of the Class B Accumulation Period] for each such Distribution
Date will be [deposited in the Principal Funding Account [, in respect of
the Class A Certificates and the Class B Certificates, respectively,] [and
an amount thereof up to [the Class A Controlled Distribution Amount, in
the case of the Class A Controlled Amortization Period] [and the Class B
Controlled Distribution Amount, in the case of the Class B Controlled
Amortization Period]] distributed to Class A Certificateholders and Class
B Certificateholders, respectively]. [The funds deposited in the Principal
Funding Account and any amounts in the Excess Funding Account will be used
to pay the outstanding principal balance of [the Series [199_-_]
Certificates on the Expected Payment Date], [the Class A Certificates on
the Class A Expected Payment Date and the Class B Certificates on the
Class B Expected Payment Date]. If on [either] such date the sum of the
Principal Funding Account Balance and any amounts in the Excess Funding
Account is less than the outstanding principal balance of [such Class of]
the Series [199_-_] Certificates, the Early Amortization Period will
commence and on each Special Payment Date the Class A Certificateholders
will receive distributions of Class A Monthly Principal until the
outstanding principal balance of the Class A Certificates has been paid in
full or the Series Termination Date has occurred and on each Special
Payment Date after the Class A Certificates have been paid in full the
Class B Certificateholders will receive distributions of Class B Monthly
Principal until the outstanding principal balance of the Class B
Certificates has been paid in full or the Series Termination Date has
occurred. Even if the sum of the Principal Funding Account Balance and any
amounts in the Excess Funding Account on the [Expected Payment Date] [the
Class A Expected Payment Date or Class B Expected Date, as the case may
be,] is insufficient to pay the outstanding principal balance of [such
Class of] the Series [199_-_] Certificates in full, such balances will be
distributed to the Series [199_-_] Certificateholders at such time.]
It is expected that the final principal payment with respect to [the
Series [199_-_] Certificates] [the Class A Certificates and the Class B
Certificates] will be made on the [Class A] Expected Payment Date [and the
Class B Expected Payment Date, respectively], but the principal of the
Series [199_-_] Certificates may be paid earlier or, depending on the
actual payment rate on the Receivables, later, as described under "Special
Considerations -- Payments" herein and in the Prospectus.
[EXCESS FUNDING ACCOUNT
Unless and until an Early Amortization Event [or Reinvestment Event]
shall have occurred, the Excess Funded Amount will be maintained in the
Excess Funding Account established with the Trustee. The Excess Funded
Amount will initially equal the excess of the initial principal balance of
the Series [199_-_] Certificates, if any, over the Initial Invested
Amount. Funds on deposit in the Excess Funding Account will be invested by
the Trustee at the direction of the Servicer generally in Eligible
Investments. Such investments must mature on or prior to the next
Distribution Date.
Funds on deposit in the Excess Funding Account will be withdrawn and
paid to the Seller or allocated to one or more Series which are in
amortization, early amortization or accumulation periods to the extent of
any increases in the Invested Amount as a result of the addition of
Receivables to the Trust, a reduction in the Seller's Interest, or a
reduction in the initial invested amount of any other Series. Additional
amounts will be deposited in the Excess Funding Account on a Distribution
Date to the extent that the sum of the Series [199_-_] Certificateholders'
Interest in Principal Receivables and the amount on deposit in the Excess
Funding Account prior to the deposit on such Distribution Date is less
than the outstanding principal balance of the Series [199_-_]
Certificates, but only to the extent that funds are available therefor as
described herein. In the event that other Series issued by the Trust
provide for excess funding accounts or other arrangements similar to the
Excess Funding Account involving fluctuating levels of investment in the
Receivables, the allocation of additional Receivables to increase the
Invested Amount will generally be based on the proportion that the amount
on deposit in the Excess Funding Account bears to the amounts on deposit
in the excess funding accounts of all Series providing for excess funding
accounts or such similar arrangements or to amounts otherwise similarly
available; and the deposit of amounts in the Excess Funding Account will
be based on the proportion that the Adjusted Invested Amount bears to the
adjusted invested amounts of all Series providing for excess funding
accounts or such similar arrangements.
On each Distribution Date, all investment income earned on amounts
in the Excess Funding Account since the preceding Distribution Date will
be withdrawn from the Excess Funding Account and applied as described
herein.
[Describe application of funds on deposit in the Excess Funding
Account during an Accumulation Period for one or both Classes or a
Controlled Amortization Period for one or both Classes.]
No funds will be deposited in the Excess Funding Account during any
Early Amortization Period [or Reinvestment Period] or with respect to any
Collection Period following [ ] [the [ ] Distribution Date]
[the Accumulation Period Commencement Date].
ALLOCATION PERCENTAGES
Allocation between the Series [199_-_] Certificateholders and the
Seller. The Servicer will allocate amounts initially allocated to Series
[199_-_] as described under "Description of the Certificates -- Allocation
Percentages -- Allocations among Series" in the Prospectus between the
Series [199_-_] Certificateholders' Interest and the Seller's Interest for
each Collection Period as follows:
(i) Series Allocable Interest Collections and the Series
Allocable Defaulted Amount will be allocated to Series [199_-_]
Certificateholders based on the Floating Allocation Percentage [;
provided that during any Early Amortization Period, Series Allocable
Interest Collections will be allocated to the Series [199_-_]
Certificateholders based on the Fixed Allocation Percentage];
(ii) during the Revolving Period, Series Allocable Principal
Collections will be allocated to Certificateholders based on the
Floating Allocation Percentage;
(iii) during the [Class A] [Class B] [Accumulation Period]
[Class A] [Class B] [Controlled Amortization Period] and any Early
Amortization Period [or Reinvestment Period], Series Allocable
Principal Collections will be allocated to Series [199_-_]
Certificateholders based on the Fixed Allocation Percentage; and
(iv) Series Allocable Miscellaneous Payments will at all times
be allocated to Series [199_-_] Certificateholders.
Amounts not allocated to the Series [199_-_] Certificateholders as
described above will be allocated to the Seller.
"Floating Allocation Percentage" for any Collection Period
means [the percentage equivalent (which shall never exceed 100%) of
a fraction, the numerator of which is the Invested Amount as of the
last day of the immediately preceding Collection Period and the
denominator of which is the product of (x) the Pool Balance as of
such last day and (y) the Series Allocation Percentage for the
Collection Period in respect of which the Floating Allocation
Percentage is being calculated; provided, however, that, with
respect to the first Collection Period, the Floating Allocation
Percentage shall mean the percentage equivalent of a fraction, the
numerator of which is the Initial Invested Amount as of the Series
Issuance Date and the denominator of which is the Series Allocation
Percentage of the Pool Balance as of the Series Cut-Off Date]
[other].
"Fixed Allocation Percentage" for any Collection Period
generally means [the percentage equivalent (which shall never exceed
100%) of a fraction, the numerator of which is the Invested Amount
as of the last day of the Revolving Period and the denominator of
which is the product of (x) the Pool Balance as of the last day of
the immediately preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in respect of which
the Fixed Allocation Percentage is being calculated] [other].
"Invested Amount" means for any date an amount equal to the
sum of the Class A Invested Amount and the Class B Invested Amount,
in each case for such date.
"Class A Invested Amount" means for any date [an amount equal
to (i) the Class A Initial Invested Amount, minus (ii) the amount,
without duplication, of principal payments [(except principal
payments made from the Excess Funding Account)] made to Class A
Certificateholders or deposited to the Principal Funding Account in
respect of the Class A Certificates prior to such date since the
Series Issuance Date, minus (iii) the excess, if any, of the
aggregate amount of Class A Investor Charge-Offs for all
Distribution Dates preceding such date, over the aggregate amount of
any reimbursements of Class A Investor Charge-Offs for all
Distribution Dates preceding such date] [other].
"Class B Invested Amount" means for any date [an amount equal
to (i) the Class B Initial Invested Amount, minus (ii) the amount,
without duplication, of principal payments [(except principal
payments made from the Excess Funding Account)] made to Class B
Certificateholders or deposited to the Principal Funding Account in
respect of the Class B Certificates prior to such date since the
Series Issuance Date (other than any such amounts applied to pay
principal of the Class A Certificates), minus (iii) the excess, if
any, of the aggregate amount of Class B Investor Charge-Offs for all
Distribution Dates preceding such date over the aggregate amount of
any reimbursements of Class B Investor Charge-Offs for all
Distribution Dates preceding such date, minus (iv) the aggregate
amount of Reallocated Principal Collections for all prior
Distribution Dates which have been used to fund the Class A-1
Required Amount with respect to such Distribution Date, minus (v) an
amount equal to the amount in which the Class B Invested Amount has
been reduced to fund the Class A Investor Default Amount on all
prior Distribution Dates as described under "Investor Charge-Offs"
and plus (vi) the aggregate amount of Excess Spread [other amounts]
applied on prior Distribution Dates for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (iii), (iv) and
(v)][other].
"Initial Invested Amount" means the sum of the Class A Initial
Invested Amount and the Class B Initial Invested Amount.
"Class A Initial Invested Amount" means [the portion of the
initial principal amount of the Class A Certificates which is
invested in Principal Receivables on the Series Issuance Date, which
is expected to equal approximately $[ ] (based on information as
of the Series Cut-Off Date), plus (x) the product of the Class A
Allocation Percentage and the amount of any withdrawals from the
Excess Funding Account in connection with the purchase of an
additional interest in Principal Receivables since the Series
Issuance Date, minus (y) the product of the Class A Allocation
Percentage and the amount of any additions to the Excess Funding
Account in connection with a reduction in the Principal Receivables
in the Trust since the Series Issuance Date][other].
"Class B Initial Invested Amount" means [the portion of the
initial principal amount of the Class B Certificates which is
invested in Principal Receivables on the Series Issuance Date, which
is expected to equal approximately $[ ] (based on information as
of the Series Cut-off Date), plus (x) the product of the Class B
Allocation Percentage and the amount of any withdrawals from the
Excess Funding Account in connection with the purchase of an
additional interest in Principal Receivables since the Series
Issuance Date, minus (y) the product of the Class B Allocation
Percentage and the amount of any additions to the Excess Funding
Account in connection with a reduction in the Principal Receivables
in the Trust since the Series Issuance Date] [other].
The Floating Allocation Percentage and the Fixed Allocation Percentage
will be adjusted for any Collection Period in which Additional Accounts
are designated to reflect the additional Receivables added to the Trust.
Allocation Between the Class A Certificateholders and the Class B
Certificateholders. The Servicer will allocate Available Certificateholder
Principal Collections and Available Certificateholder Interest Collections
between the interest of holders of Class A Certificates and the interest
of holders of Class B Certificates for each Collection Period based on the
Class A Allocation Percentage and the Class B Allocation Percentage,
respectively.
"Available Certificateholder Principal Collections" for any
Distribution Date means the sum of (a) the product of (i) the
Floating Allocation Percentage, with respect to any Revolving
Period, or the Fixed Allocation Percentage, with respect to the
[Class A] [Class B] [Accumulation Period] [Class A] [Class B]
[Controlled Amortization Period] or any Early Amortization Period
[or Reinvestment Period], for the related Collection Period and (ii)
Series Allocable Principal Collections deposited in the Collection
Account for the related Collection Period, (b) the amount, if any,
of Interest Collections, [funds in the Reserve Fund,] Available
Seller's Collections and Excess Servicing allocated to cover the
Investor Default Amount or reimburse Investor Charge-Offs, (c)
Series Allocable Miscellaneous Payments on deposit in the Collection
Account for such Distribution Date and (d) Excess Principal
Collections, if any, from other Series allocated to Series [199_-_].
"Available Certificateholder Interest Collections" for any
Distribution Date means the portion of Series Allocable Interest
Collections for the related Collection Period allocated to the
Series [199_-_] Certificateholders' Interest as described under
"Allocation Between the Series [199_-_] Certificateholders and the
Seller".
"Class A Allocation Percentage" for any Collection Period is
the percentage obtained by dividing the Class A Invested Amount as
of the last day of the immediately preceding Collection Period
(after giving effect to any reduction thereof to occur on the
immediately following Distribution Date) by the aggregate Invested
Amount of the Series [199_-_] Certificates as of such last day
(after giving effect to any reduction thereof to occur on the
immediately following Distribution Date).
"Class B Allocation Percentage" for any Collection Period is
the percentage obtained by subtracting from 100% the Class A
Allocation Percentage.
Principal Collections for All Series. Principal Collections
allocated to the Series [199_-_] Certificateholders' Interest for any
Collection Period with respect to the [Class A] [Class B] [Accumulation
Period] [Controlled Amortization Period] or the Early Amortization Period
[or Reinvestment Period], other than Reallocated Principal Collections
applied to the Class A Required Amount, will first be allocated to make
required payments of principal to the Principal Funding Account during the
[Class A] [Class B] Accumulation Period [or any Reinvestment Period] and
to the holders of Series [199_-_] Certificates during the Early
Amortization Period [or [Class A] [Class B] Controlled Amortization
Period]. See "Distributions from the Collection Account; [Reserve Fund;]
[Yield Supplement Account] -- Principal Collections". The Servicer will
determine the amount of Unreallocated Certificateholder Principal
Collections for any Collection Period remaining after such required
payments, if any, and the amount of any similar excess for any other
Series ("Excess Principal Collections"). The Servicer will allocate Excess
Principal Collections to cover any principal distributions to
Certificateholders for any Series which are either scheduled or permitted
and which have not been covered out of Principal Collections and certain
other amounts allocated to such Series ("Principal Shortfalls"). See
"Maturity and Principal Payment Considerations". Excess Principal
Collections will generally not be used to cover investor charge-offs for
any Series. If Principal Shortfalls exceed Excess Principal Collections
for any Collection Period, Excess Principal Collections will be allocated
[pro rata among the applicable Series based on the relative amounts of
Principal Shortfalls] [describe other method of applying, if applicable].
ALLOCATION OF COLLECTIONS; LIMITED SUBORDINATION OF SELLER'S INTEREST AND
CLASS B CERTIFICATEHOLDERS' INTEREST
Allocation of Collections. [Except as otherwise described herein
with respect to Interest Collections and Principal Collections allocated
to the Available Negative Carry Subordinated Amount, [and [ ]] on] [On]
any date on which collections are deposited in the Collection Account, the
Servicer will distribute directly to the Seller an amount equal to (a) the
Excess Seller's Percentage for the related Collection Period of Series
Allocable Interest Collections for such date and (b) the Excess Seller's
Percentage for the related Collection Period of Series Allocable Principal
Collections for such date, if the Seller's Participation Amount
(determined after giving effect to any Principal Receivables transferred
to the Trust on such date) exceeds the Trust Available Subordinated Amount
for the immediately preceding Determination Date (after giving effect to
the allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date). In
addition, during the Revolving Period, subject to certain limitations, the
Servicer will distribute directly to the Seller on each such date of
deposit an amount equal to the Available Seller's Principal Collections
for such date, if the Seller's Participation Amount (determined after
giving effect to any Principal Receivables transferred to the Trust on
such date) exceeds the Trust Available Subordinated Amount for the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date) [describe
exceptions, if any].
"Available Seller's Collections" for any date means the sum of
(a) the Available Seller's Interest Collections for such date and
(b) the Available Seller's Principal Collections for such date;
provided, however, that the Available Seller's Collections will be
zero for any Collection Period with respect to which the Available
Subordinated Amount is zero on the Determination Date immediately
following the end of such Collection Period.
"Available Seller's Interest Collections" for any date means
an amount equal to the result obtained by multiplying (a) the excess
of (i) the Seller's Percentage for the related Collection Period
over (ii) the Excess Seller's Percentage for such Collection Period
by (b) Series Allocable Interest Collections for such date.
"Available Seller's Principal Collections" for any date means
an amount equal to the product of (a) the excess of (i) the Seller's
Percentage for the related Collection Period over (ii) the Excess
Seller's Percentage for such Collection Period and (b) Series
Allocable Principal Collections for such date.
"Seller's Percentage" means 100% minus (a) the Floating
Allocation Percentage, when used with respect to Interest
Collections [(except during any Early Amortization Period)],
Defaulted Receivables and Principal Collections during the Revolving
Period, and (b) the Fixed Allocation Percentage, when used with
respect to [Interest Collections during any Early Amortization
Period and] Principal Collections during the [Class A] [Class B]
[Accumulation Period] [Class A] [Class B] [Controlled Amortization
Period] and any Early Amortization Period [or Reinvestment Period].
"Excess Seller's Percentage" for any Collection Period means a
percentage (which percentage shall never be less than 0% nor more
than 100%) equal to (a) 100% minus, when used with respect to
Interest Collections [(except during any Early Amortization Period)]
and Principal Collections during the Revolving Period, the sum of
(i) the Floating Allocation Percentage with respect to such
Collection Period and (ii) the percentage equivalent of a fraction,
the numerator of which is the Available Subordinated Amount as of
the Determination Date occurring in such Collection Period (after
giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date immediately following
such Determination Date), and the denominator of which is the
product of (x) the Pool Balance as of the last day of such
immediately preceding Collection Period and (y) the Series
Allocation Percentage for the Collection Period in respect of which
the Excess Seller's Percentage is being calculated or (b) 100%
minus, when used with respect to [Interest Collections during any
Early Amortization Period and] Principal Collections during the
[Class A] [Class B] [Accumulation Period] [Class A] [Class B]
[Controlled Amortization Period] and any Early Amortization Period
[or Reinvestment Period], the sum of (i) the Fixed Allocation
Percentage with respect to such Collection Period and (ii) the
percentage described in clause (a)(ii) above for such Collection
Period.
Deficiency Amounts. [On each Determination Date [with respect to a
Distribution Date that occurs on or prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Revolving Period, if the
Revolving Period has recommenced]], the Servicer will determine for the
Class A Certificates the amount (the "Class A Deficiency Amount"), if any,
by which (a) the sum of (i) Class A Monthly Interest for the following
Distribution Date, (ii) Class A Monthly Interest accrued but not paid with
respect to prior Distribution Dates (and interest thereon), (iii) the
Class A Monthly Servicing Fee for such Distribution Date, (iv) the Class A
Investor Default Amount for such Distribution Date (the sum of the amounts
in clauses (i), (ii), (iii) and (iv) being referred to herein as the
"Class A Required Amount") and (v) the product of the Class A Allocation
Percentage and the amount of any Adjustment Payment allocated to the
Series [199_-_] Certificates for such Distribution Date that has not been
deposited in the Collection Account as required under the Pooling and
Servicing Agreement, exceeds (b) the sum of (i) Class A Certificateholder
Interest Collections and Class A Investment Proceeds for such Distribution
Date, (ii) the amount of Excess Servicing available to fund any portion of
the Class A Deficiency Amount as described under "Distributions from the
Collection Account[; Reserve Fund][; Yield Supplement Account] -- Excess
Servicing" and (iii) the amount of funds in the Reserve Fund on such
Determination Date available to fund any portion of the Class A Deficiency
Amount as described under "Distributions from the Collection Account[;
Reserve Fund][; Yield Supplement Account] -- Interest Collections -- Class
A"]. The lesser of the Class A Deficiency Amount and the Available
Subordinated Amount is the "Class A Draw Amount".] [Include other sources
of funds and applications of the Class A Draw Amount, as appropriate.]
[On each Determination Date [with respect to a Distribution Date
that occurs on or prior to the Fully Reinvested Date [or any Distribution
Date thereafter during the Revolving Period, if the Revolving Period has
recommenced]], the Servicer will determine for the Class B Certificates,
the amount (the "Class B Deficiency Amount"), if any, by which (a) the sum
of (i) Class B Monthly Interest for the following Distribution Date, (ii)
Class B Monthly Interest accrued but not paid with respect to prior
Distribution Dates (and interest thereon), (iii) the Class B Monthly
Servicing Fee for such Distribution Date, (iv) the Class B Investor
Default Amount for such Distribution Date (the sum of the amounts in
clauses (i), (ii), (iii) and (iv) being referred to herein as the "Class B
Required Amount") and (v) the product of the Class B Allocation Percentage
and the amount of any Adjustment Payment allocated to the Series [199_-_]
Certificates for such Distribution Date that has not been deposited in the
Collection Account as required under the Pooling and Servicing Agreement,
exceeds (b) the sum of (i) Class B Certificateholder Interest Collections
and Class B Investment Proceeds for such Distribution Date, (ii) the
amount of Excess Servicing available to fund any portion of the Class B
Deficiency Amount as described under "Distributions from the Collection
Account[; Reserve Fund][;Yield Supplement Account] -- Excess Servicing"
[and (iii) the amount of funds in the Reserve Fund on such Determination
Date available to fund any portion of the Class B Deficiency Amount as
described under "Distributions from the Collection Account; Reserve Fund[;
Yield Supplement Account] -- Interest Collections -- Class B"]. The lesser
of the Class B Deficiency Amount and the excess of the Available
Subordinated Amount over the Class A Draw Amount is the "Class B Draw
Amount".] [Include other sources of funds and applications of the Class B
Draw Amount, as appropriate.]
Available Subordinated Amount. The "Required Subordinated Amount"
shall mean, as of any date of determination, [the sum of (i)] the product
of the initial Subordinated Percentage [, as adjusted from time to time as
described herein other than as a result of an increase therein at the
option of the Seller,] and the Invested Amount [and (ii) the Incremental
Subordinated Amount]. Assuming that the Initial Invested Amount of the
Series [199_-_] Certificates is equal to the initial principal amount of
the Series [199_-_] Certificates, such amount would initially be
$[ ].
The Available Subordinated Amount for a Determination Date is equal
to (a) the lesser of (i) the Available Subordinated Amount for the
preceding Determination Date, minus, with certain limitations, the Class A
Draw Amount and the Class B Draw Amount for such preceding Determination
Date, [minus funds from the Reserve Fund applied to cover any portion of
the Investor Default Amount,], plus the excess, if any, of the Required
Subordinated Amount for such Determination Date over the Required
Subordinated Amount for the immediately preceding Determination Date, plus
the amount of Excess Servicing available to be paid to the Seller as
described under "Distributions from the Collection Account[; Reserve
Fund][; Yield Supplement Account] -- Excess Servicing", and (ii) the
product of the fractional equivalent of the Subordinated Percentage and
the Invested Amount, [minus (b) in the case of clause (a) (i) the
Incremental Subordinated Amount for such preceding Determination Date,
plus (c) the Incremental Subordinated Amount for the current Determination
Date,] [plus (d) the Subordinated Percentage of funds to be withdrawn from
the Excess Funding Account on the succeeding Distribution Date and paid to
the Seller or allocated to one or more Series]; provided, however, that,
once [the [[Class A] Accumulation Period] [[Class A] Controlled
Amortization Period] or] any Early Amortization Period [that is not cured
as described herein] shall have commenced, the Available Subordinated
Amount shall be calculated based on the Invested Amount as of the close of
business on the day preceding such [[[Class A] Accumulation Period]
[[Class A] Controlled Amortization Period] or] Early Amortization Period[;
and provided further that from and after the commencement of any
Reinvestment Period [that is not cured as described herein] until the
earliest of the commencement of any Early Amortization Period [that is not
cured, as described herein,] the payment in full of the Series [199_-_]
Certificates and the Fully Reinvested Date, the Available Subordinated
Amount shall be calculated based on the Invested Amount as of the close of
business on the day preceding such Reinvestment Period [less [describe
permitted reductions, e.g., based on payment rates]]. The Available
Subordinated Amount for the first Determination Date is equal to the
Required Subordinated Amount. [The "Incremental Subordinated Amount" on
any Determination Date will equal the result obtained by multiplying (a) a
fraction, the numerator of which is the sum of the Invested Amount on the
last day of the immediately preceding Collection Period and the Available
Subordinated Amount for such Determination Date (calculated without adding
the Incremental Subordinated Amount for such Determination Date as
described in clause (c) above), and the denominator of which is the Pool
Balance on such last day by (b) the excess, if any, of (x) the sum of the
Overconcentration Amount, the Instalment Balance Amount and the aggregate
amount of Ineligible Receivables on such Determination Date over (y) the
aggregate amount of Ineligible Receivables, Receivables in Accounts
containing Dealer Overconcentrations and Receivables in Instalment
Balances, in each case that became Defaulted Receivables during the
preceding Collection Period and are not subject to reassignment from the
Trust, unless certain insolvency events relating to the Seller or CCC have
occurred, as further described in the Pooling and Servicing Agreement].
The "Subordinated Percentage" will initially equal the percentage
equivalent of a fraction, the numerator of which is the Subordination
Factor and the denominator of which will be the excess of 100% over the
Subordination Factor. The Seller may, in its sole discretion, at any time
increase the Available Subordinated Amount for so long as the cumulative
amount of such increases does not exceed the lesser of (i) $[ ] or
(ii) [ ] of the Invested Amount. The Seller is not under any obligation
to increase the Available Subordinated Amount at any time. If [the sum of]
the Available Subordinated Amount [and the Incremental Subordinated
Amount] were reduced to less than the sum of the Required Subordinated
Amount [and the Incremental Subordinated Amount], a [Reinvestment Event]
[Early Amortization Event] would occur. The Seller could elect to increase
the Available Subordinated Amount at the time such a [Reinvestment Event]
[Early Amortization Event] would otherwise occur, thus preventing or
delaying the occurrence of the [Reinvestment Event] [Early Amortization
Event]. [Describe partial Reinvestment Periods resulting from a failure to
meet the test described above, if applicable.]
[Negative Carry Subordinated Amount. In the event of the occurrence
of [a Reinvestment Event,] [an Early Amortization Event] [or the
commencement of the [Class A] Accumulation Period] [or the commencement of
the [Class A] Controlled Amortization Period], Interest Collections and
Principal Collections otherwise distributed to the Seller in respect of
the Excess Seller's Percentage, in an amount not to exceed the Available
Negative Carry Subordinated Amount, will be deposited to the Reserve Fund
[and other] until the amounts on deposit therein equal the Negative Carry
Required Amount [and [ ]].
"Available Negative Carry Subordinated Amount" means, initially, the
Required Negative Carry Subordinated Amount and, on any subsequent date,
the Available Negative Carry Subordinated Amount at the open of business
on the immediately preceding date less the amount of Seller's Collections
deposited on such immediately preceding date to the Reserve Fund [and
other] in accordance with the preceding paragraph.]
"Required Negative Carry Subordinated Amount" means [
].
"Negative Carry Required Amount" means [ ].]
[Describe other subordination of the Seller's Interest, if
applicable.]
Subordination of Class B Certificateholders' Interest. The
fractional undivided interest in the Trust represented by the Class B
Certificates will be subordinated to the extent described herein to fund
payments with respect to the Class A Certificates. The Class B Invested
Amount represents the Class B Certificateholders' allocable interest in
the Trust assets and represents the subordinated amount which, in addition
to the Available Subordinated Amount, is available to fund payments with
respect to the Class A Certificates.
[On each Determination Date [with respect to a Distribution Date
that occurs on or prior to the Fully Reinvested Date [or any Distribution
Date thereafter during the Revolving Period, if the Revolving Period has
recommenced]], the Servicer will determine for the Class A Certificates,
the amount (the "Reallocation Deficiency Amount"), if any, by which (a)
the Class A Required Amount exceeds the sum of (i) Class A
Certificateholder Interest Collections and Class A Investment Proceeds for
such Distribution Date, (ii) the amount of Excess Servicing available to
fund any portion of the Reallocation Deficiency Amount as described under
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account] -- Excess Servicing", [(iii) the amount of funds in
the Reserve Fund on such Determination Date available to fund any portion
of the Reallocation Deficiency Amount as described under "Distributions
from the Collection Account; Reserve Fund[; Yield Supplement Account] --
Interest Collections -- Class A"] and (iv) the amount of Available
Seller's Collections available to fund any portion of the Reallocation
Deficiency Amount.
On each Distribution Date on which there is a Reallocation
Deficiency Amount, Reallocated Principal Collections will be applied to
fund the Class A Required Amount as described under "Distributions from
the Collection Account[; Reserve Fund][; Yield Supplement Account] --
Interest Collection -- Class A" and the Class B Invested Amount will be
reduced by the amount of Reallocated Principal Collections so applied. If
Reallocated Principal Collections with respect to such Collection Period
are insufficient to fund such Reallocation Deficiency Amount, then a
portion of the Class B Invested Amount will be reduced by the amount of
such deficiency (but not by more than the Class A Investor Default Amount
for such Collection Period). If such reduction would cause the Class B
Invested Amount to be reduced below zero, the Class A Invested Amount will
be reduced by the amount by which the Class B Invested Amount would have
been reduced below zero (but not by more than the excess of the Class A
Investor Default Amount for such Collection Period over the amount of such
reduction in the Class B Invested Amount) and the Class A
Certificateholders will bear directly the credit and other risks
associated with their undivided interest in the Trust. To the extent the
Class B Invested Amount is reduced, the percentage of Interest Collections
and Principal Collections allocable to the Class B Certificateholders with
respect to subsequent Collection Periods will be reduced. Moreover, to the
extent the amount of such reduction in the Class B Invested Amount is not
reimbursed, the amount of principal distributable to the Class B
Certificateholders will be reduced.
DISTRIBUTIONS FROM THE COLLECTION ACCOUNT[; RESERVE FUND] [; YIELD
SUPPLEMENT ACCOUNT]
Interest Collections -- Class A. On each Distribution Date [with
respect to a Collection Period that ends prior to the Fully Invested Date
[and each Collection Period thereafter during the Revolving Period]],
commencing with the initial Distribution Date, the Servicer shall instruct
the Trustee to apply Class A Certificateholder Interest Collections and
Class A Investment Proceeds, if any, [other amounts] in respect of the
related Collection Period to make the following distributions in the
following priority:
[(i) first, an amount equal to Class A Monthly Interest for
such Distribution Date, plus the amount of any Class A Monthly
Interest previously due but not [deposited to the Class A Interest
Funding Account or] distributed on a prior Distribution Date (plus,
but only to the extent permitted under applicable law, interest at
the Class A Certificate Rate plus [ ]% on Class A Monthly Interest
previously due but not so [deposited or] distributed), shall be
[deposited to the Class A Interest Funding Account or] distributed
to the Class A Certificateholders;
(ii) second, an amount equal to the Class A Monthly Servicing
Fee for such Distribution Date shall be distributed to the Servicer
(unless such amount has been netted against deposits to the
Collection Account as described in the Prospectus under "Description
of the Certificates -- Allocation of Collections; Deposits in
Collection Account" or waived by the Servicer);
[(iii) third, an amount equal to the Reserve Fund Deposit
Amount, if any, for such Distribution Date shall be deposited in the
Reserve Fund;]
(iv) fourth, an amount equal to the Class A Investor Default
Amount, if any, for such Distribution Date shall be treated as a
portion of Available Certificateholder Principal Collections for
such Distribution Date;
[(v) fifth, an amount equal to any outstanding Class A
Carry-over Amount (after giving effect to any withdrawals from the
Yield Supplement Account) shall be distributed to the Class A
Certificateholders;] and
(vi) sixth, the balance shall constitute Excess Servicing.]
If, on any Distribution Date, Class A Certificateholder Interest
Collections and Class A Investment Proceeds [describe other funds] are not
sufficient to make the entire distributions required by clauses [(i), (ii)
and (iv)] above, Excess Servicing shall be applied to complete such
distributions pursuant to such clauses as described below under "Excess
Servicing".
[If, on any Distribution Date, Class A Certificateholder Interest
Collections, Class A Investment Proceeds [describe other funds] and Excess
Servicing are not sufficient to make the entire distributions required by
clauses [(i), (ii) and (iv)] above, the Trustee shall withdraw funds from
the Reserve Fund and apply such funds to complete the distributions
pursuant to such clauses; provided, however, that during any Early
Amortization Period [or Reinvestment Period] funds shall not be withdrawn
from the Reserve Fund to make distributions required by clause [(iv)] to
the extent that, after giving effect to such withdrawal, the amount on
deposit in the Reserve Fund shall be less than $[ ].]
If there is a Class A Draw Amount for such Distribution Date, the
Trustee shall apply the amount of Available Seller's Collections for the
related Collection Period on deposit in the Collection Account on such
Distribution Date, but only up to the Class A Draw Amount, to make the
distributions required by clauses [(i), (ii) and (iv)] above that have not
been made through the application of Excess Servicing [or funds from the
Reserve Fund] as described in the preceding [two] paragraph[s].
Additionally, Available Seller's Collections will be applied to any unpaid
Adjustment Payments allocated to the Class A Certificates. The Available
Subordinated Amount will be reduced by the amount of Available Seller's
Collections so applied. If the Class A Draw Amount exceeds such Available
Seller's Collections, the Available Subordinated Amount will be reduced by
the amount of such excess, but not by more than the sum of the Class A
Investor Default Amount and the portion of such Adjustment Payments not
paid by the Seller, in order to maintain the Class A Invested Amount, but
not generally by more than the Class A Investor Default Amount for such
Distribution Date.
If, on any Distribution Date, the Available Subordinated Amount is
zero, any remaining portion of the Class A Required Amount that has not
been funded as described above will be funded through the application of
Reallocated Principal Collections. The Class B Invested Amount will be
reduced by the amount of Reallocated Principal Collections so applied. If
the remaining Class A Required Amount exceeds such Reallocated Principal
Collections the Class B Invested Amount will be reduced by the amount of
such excess, but not by more than the Class A Investor Default Amount.
"Class A Certificateholder Interest Collections" for any
Distribution Date means the portion of Certificateholder Available
Interest Collections allocated to the Class A Certificateholders'
Interest as described under "Allocation Percentages -- Allocation
Between the Class A Certificateholders and the Class B
Certificateholders".
"Class A Investment Proceeds" for any Distribution Date means
an amount equal to the sum of (a) the Class A Allocation Percentage
of the investment earnings on the related Determination Date with
respect to funds held in [the Reserve Fund,] [the Excess Funding
Account] [the Yield Supplement Account] [other accounts], (b) the
Class A Allocation Percentage of the Series Allocation Percentage of
investment earnings on the related Determination Date with respect
to funds held in the Collection Account, (c) all investment income
on amounts in [the Principal Funding Account with respect to the
Class A Certificates,] [the Class A Interest Funding Account,]
[other accounts] since the preceding Distribution Date.
"Excess Servicing" means the amounts referred to in clause
[(vi)] above and clause ([v]) under "Interest Collections -- Class
B".
Interest Collections -- Class B. On each Distribution Date [with
respect to a Collection Period that ends prior to the Fully Invested Date
[and each Collection Period thereafter during the Revolving Period]],
commencing with the initial Distribution Date, the Servicer shall instruct
the Trustee to apply Class B Certificateholder Interest Collections and
Class B Investment Proceeds, if any, [other amounts] in respect of the
related Collection Period to make the following distributions in the
following priority:
[(i) first, an amount equal to Class B Monthly Interest for
such Distribution Date, plus the amount of any Class B Monthly
Interest previously due but not [deposited to the Class B Interest
Funding Account or] distributed on a prior Distribution Date (plus,
but only to the extent permitted under applicable law, interest at
the Class B Certificate Rate plus [ ]% on Class B Monthly Interest
previously due but not so [deposited or] distributed), shall be
[deposited to the Class B Interest Funding Account or] distributed
to the Class B Certificateholders;
(ii) second, an amount equal to the Class B Monthly Servicing
Fee for such Distribution Date shall be distributed to the Servicer
(unless such amount has been netted against deposits to the
Collection Account as described in the Prospectus under "Description
of the Certificates -- Allocation of Collections; Deposits in
Collection Account" or waived by the Servicer);
(iii) third, an amount equal to the Class B Investor Default
Amount, if any, for such Distribution Date shall be treated as a
portion of Available Certificateholder Principal Collections for
such Distribution Date;
[(iv) fourth, an amount equal to any outstanding Class B
Carry-over Amount (after giving effect to any withdrawals from the
Yield Supplement Account) shall be distributed to the Class B
Certificateholders;] and
(v) fifth, the balance shall constitute Excess Servicing.]
If, on any Distribution Date, Class B Certificateholder Interest
Collections and Class B Investment Proceeds [describe other funds] are not
sufficient to make the entire distributions required by clauses [(i)
through (iii)] above, Excess Servicing shall be applied to complete such
distributions pursuant to such clauses as described below under "Excess
Servicing".
[If, on any Distribution Date, Class B Certificateholder Interest
Collections, Class B Investment Proceeds [describe other funds] and Excess
Servicing are not sufficient to make the entire distributions required by
clauses [(i) through (iii)] above, the Trustee shall withdraw funds from
the Reserve Fund not applied to fund the Class A Required Amount and apply
such funds to complete the distributions pursuant to such clauses;
provided, however, that during any Early Amortization Period [or
Reinvestment Period] funds shall not be withdrawn from the Reserve Fund to
make distributions required by clause [(iii)] to the extent that, after
giving effect to such withdrawal, the amount on deposit in the Reserve
Fund shall be less than $[ ].]
If there is a Class B Draw Amount for such Distribution Date, the
Trustee shall apply the amount of Available Seller's Collections for the
related Collection Period on deposit in the Collection Account on such
Distribution Date and not applied in respect of the Class A Required
Amount, but only up to the Class B Draw Amount, to make the distributions
required by clauses [(i) through (iii)] above that have not been made
through the application of Excess Servicing [or funds from the Reserve
Fund] as described in the preceding [two] paragraph[s]. Additionally,
Available Seller's Collections will be applied to any unpaid Adjustment
Payments allocated to the Class B Certificates. The Available Subordinated
Amount will be reduced by the amount of Available Seller's Collections so
applied. If the Class B Draw Amount exceeds such Available Seller's
Collections, the Available Subordinated Amount will be reduced by the
amount of such excess, but not by more than the sum of the Class B
Investor Default Amount and the portion of such Adjustment Payments not
paid by the Seller, in order to maintain the Class B Invested Amount, but
not generally by more than the Class B Investor Default Amount for such
Distribution Date.
"Class B Certificateholder Interest Collections" for any
Distribution Date means the portion of Certificateholder Available
Interest Collections allocated to the Class B Certificateholders' Interest
as described under "Allocation Percentages -- Allocation Between the Class
A Certificateholders and the Class B Certificateholders".
"Class B Investment Proceeds" for any Distribution Date means an
amount equal to the sum of (a) the Class B Allocation Percentage of the
investment earnings on the related Determination Date with respect to
funds held in [the Reserve Fund,] [the Excess Funding Account] [the Yield
Supplement Account] [other accounts], (b) the Class B Allocation
Percentage of the Series Allocation Percentage of investment earnings on
the related Determination Date with respect to funds held in the
Collection Account, (c) all investment income on amounts in [the Principal
Funding Account with respect to the Class B Certificates,] [the Class B
Interest Funding Account,] [other accounts] since the preceding
Distribution Date.
[Investment Proceeds -- Class A. On each Distribution Date with
respect to a Collection Period that ends after the Fully Reinvested Date
[other than any such Collection Period during the Revolving Period], the
Servicer shall instruct the Trustee to apply Class A Investment Proceeds
[describe other funds], in respect of the related Collection Period to
make the following distributions in the following priority:
(i) first, an amount equal to Class A Monthly Interest for
such Distribution Date, plus, the amount of any Class A Monthly
Interest previously due but not [deposited to the Class A Interest
Funding Account or] distributed on a prior Distribution Date (plus,
but only to the extent permitted under applicable law, interest at
the Class A Certificate Rate plus [ ]% on Class A Monthly Interest
previously due but not so [deposited or] distributed), shall be
[deposited to the Class A Interest Funding Account or] distributed
to the Class A Certificateholders;
[(ii) second, describe other applications; and]
(iii) third, the balance shall be distributed to the Seller.
[If, on any Distribution Date, Class A Investment Proceeds [describe
other funds] are not sufficient to make the entire distributions required
in clause (i) above, the Trustee shall withdraw funds from the Reserve
Fund and apply such funds to complete the distributions pursuant to such
clause.]
Investment Proceeds -- Class B. On each Distribution Date with
respect to a Collection Period that ends after the Fully Reinvested Date
[other than any such Collection Period during the Revolving Period], the
Servicer shall instruct the Trustee to apply Class B Investment Proceeds
[describe other funds], in respect of the related Collection Period to
make the following distributions in the following priority:
(i) first, an amount equal to Class B Monthly Interest for
such Distribution Date, plus the amount of any Class B Monthly
Interest previously due but not [deposited to the Class B Interest
Funding Account or] distributed on a prior Distribution Date (plus,
but only to the extent permitted by applicable law, interest at the
Class B Certificate Rate plus [ ]% on Class B Monthly Interest
previously due but not so [deposited or] distributed, shall be
[deposited to the Class B Interest Funding Account or] distributed
to the Class B Certificateholders;
[(ii) second, describe other applications; and]
(iii) third, the balance shall be distributed to the Seller.
[If, on any Distribution Date, Class B Investment Proceeds [describe
other funds] are not sufficient to make the entire distributions required
in clause (i) above, the Trustee shall withdraw funds from the Reserve
Fund not applied to make distributions in respect of the Class A
Certificates as described above and apply such funds to complete the
distributions pursuant to such clause.]
[Reserve Fund. The "Reserve Fund" will be an Eligible Deposit
Account established and maintained in the name of the Trustee for the
benefit of the Series [199_-_] Certificateholders. On the Series Issuance
Date, the Seller will deposit $[ ] ([ ]% of the principal balance
of the Series [199_-_] Certificates) into the Reserve Fund. The "Reserve
Fund Required Amount" for any Distribution Date will equal [ ]% of the
outstanding principal balance of the Series [19_-_] Certificates for such
Distribution Date (after giving effect to any change therein on such
Distribution Date). [Describe any increases in the Reserve Fund Required
Amount, e.g., as a result of the long-term rating of CFC by Standard &
Poor's falling below BBB- or to cover any negative carry during a
principal accumulation period.] The "Reserve Fund Deposit Amount" is the
amount, if any, by which the Reserve Fund Required Amount exceeds the
amount on deposit in the Reserve Fund. Funds in the Reserve Fund will be
invested in Eligible Investments that will mature on or prior to the next
Distribution Date. On each Determination Date, the Servicer will apply any
investment earnings (net of losses and investment expenses) with respect
to the Reserve Fund as set forth under "Interest Collections -- Class A",
"Interest Collections -- Class B", "Investment Proceeds -- Class A" and
"Investment Proceeds -- Class B". After the earlier of the payment in full
of the outstanding principal balance of the Series [199_-_] Certificates
and the Series Termination Date, any funds remaining on deposit in the
Reserve Fund will be paid to the Seller. [Describe other applications, if
any.]
If, after giving effect to the allocations, distributions and
deposits in the Reserve Fund described above under "Interest Collections
- -- Class A" and "Interest Collections -- Class B", the amount in the
Reserve Fund is less than the Reserve Fund Required Amount for the next
following Distribution Date, the Trustee shall deposit any remaining
Available Seller's Collections for the related Collection Period into the
Reserve Fund until the amount in the Reserve Fund is equal to such Reserve
Fund Required Amount.
If, for any Distribution Date with respect to an Early Amortization
Period [or Reinvestment Period], after giving effect to the allocations,
distributions and deposits described in the preceding paragraph, the
amount in the Reserve Fund is less than the Excess Reserve Fund Required
Amount for such Distribution Date, the Trustee shall deposit the remaining
Available Seller's Collections for the related Collection Period into the
Reserve Fund until the amount in the Reserve Fund is equal to such Excess
Reserve Fund Required Amount. The "Excess Reserve Fund Required Amount"
for any such Distribution Date means an amount equal to the greater of (a)
[ ]% of the initial principal balance of the Series [199_-_] Certificates
and (b) the excess of (i) the sum of (x) the Available Subordinated Amount
on the preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on such
Distribution Date) and (y) an amount equal to (A) the excess of the
Required Participation Percentage over 100%, multiplied by (B) the
outstanding principal balance of the Series [199_-_] Certificates on such
Distribution Date (after giving effect to any changes therein on such
Distribution Date) over (ii) the excess of (x) the Series Allocation
Percentage of the Pool Balance on the last day of the immediately
preceding Collection Period over (y) the Invested Amount on such
Distribution Date (after giving effect to changes therein on such
Distribution Date); provided that the Excess Reserve Fund Required Amount
shall not exceed such Available Subordinated Amount. [Describe
adjustments, if applicable.]]
[Yield Supplement Account. The Yield Supplement Account will be an
Eligible Deposit Account established and maintained in the name of the
Trustee for the benefit of the Series [199_-_] Certificateholders. On the
Series Issuance Date, the Seller will deposit $[ ] ([ ]% of the
principal balance of the Series [199_-_] Certificates) into the Yield
Supplement Account. The "Yield Supplement Account Required Amount" for any
Distribution Date [(i) that occurs prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Series Revolving Period]] will
equal [ ]% of the outstanding principal balance of the Series [199_-_]
Certificates for such Distribution Date (after giving effect to any change
therein on such Distribution Date) [and (ii) for any [other] Distribution
Date that occurs on or after the Fully Reinvested Date, zero]. [On any
Distribution Date on which there is a Class A Carry-over Amount or a Class
B Carry-over Amount, the amount on deposit in the Yield Supplement Account
on such Distribution Date shall be applied by the Trustee up to the amount
of such Carry-over Amount to satisfy such Carry-over Amount. In the event
of any insufficiency of funds on deposit in the Yield Supplement Account
to satisfy all such Carry-over Amounts, such funds shall be applied first
to the Class A Carry-over Amount until such Carry-over Amount is fully
satisfied and then to Class B Carry-over Amount.] [Describe other
applications, e.g., to pay Monthly Interest.] The "Yield Supplement
Account Deposit Amount" is the amount, if any, by which the Yield
Supplement Account Required Amount exceeds the amount on deposit in the
Yield Supplement Account. Funds in the Yield Supplement Account will be
invested [in Eligible Investments that mature on or prior to the next
Distribution Date] [in any investments consisting of financial assets that
by their terms convert to cash within a finite period of time that mature
on or prior to the next Distribution Date]. On each Determination Date,
the Servicer will apply any investment earnings (net of losses and
investment expenses) with respect to the Yield Supplement Account as set
forth under "Interest Collections -- Class A" and "Interest Collections --
Class B". After the earlier of the payment in full of the outstanding
principal balance of the Series [199_-_] Certificates and the Series
Termination Date, any funds remaining on deposit in the Yield Supplement
Account will be paid to the Seller. [Describe other applications.]]
Excess Servicing. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any
such Collection Period thereafter during the Revolving Period]], the
Servicer will allocate Excess Servicing with respect to the Collection
Period immediately preceding such Distribution Date, in the following
priority:
[(a) first, to fund any deficiency in the Class A Required
Amount pursuant to clauses [(i), (ii) and (iv)] under "Interest
Collections -- Class A";
(b) second, an amount equal to the Yield Supplement Account
Deposit Amount, if any, for such Distribution Date shall be
deposited in the Yield Supplement Account;
[(c) third, describe other applications, if any;]
[(d) fourth, an amount equal to the aggregate amount of Class
A Investor Charge-Offs which have not been previously reimbursed
(after giving effect to the allocation on such Distribution Date of
Series Allocable Miscellaneous Payments with respect to such
Distribution Date) will be allocated in the same manner as Available
Certificateholder Principal Collections for such Distribution Date;
(e) fifth, to fund any deficiency in the Class B Required
Amount pursuant to clauses [(i) through (iii)] under "Interest
Collections -- Class B";
(f) sixth, an amount equal to the aggregate amount by which
the Class B Invested Amount has been reduced pursuant to clauses
(iii), (iv) and (v) of the definition of "Class B Invested Amount"
under "Allocation Percentages -- Allocation between the Series
[199_-_] Certificateholders and the Seller" above (but not in excess
of the aggregate amount of such reductions which have not previously
been reimbursed) will be allocated in the same manner as Available
Certificateholder Principal Collection for such Distribution Date;
(g) seventh, an amount equal to the aggregate outstanding
amounts of the Monthly Servicing Fee which have been previously
waived as described under "Servicing Compensation and Payment of
Expenses" in the Prospectus will be distributed to the Servicer; and
(h) eighth, the balance, if any, shall be distributed to the
Seller and shall increase the Available Subordinated Amount as
described in the definition thereof].
Principal Collections. On each Distribution Date [with respect to a
Collection Period that ends prior to the Fully Reinvested Date [or any
Collection Period thereafter during the Revolving Period]], the Servicer
will allocate Available Certificateholder Principal Collections not
applied to cover the Class A Required Amount ("Unreallocated Available
Certificateholder Principal Collections") as follows:
(a) for each Distribution Date with respect to the Revolving
Period, all Unreallocated Available Certificateholder Principal
Collections will be allocated as follows:
[(i) first, to make any required deposit to the Excess
Funding Account; and
(ii) second, to Excess Principal Collections;]
(b) for each Distribution Date with respect to the [Class A]
[Class B] [Accumulation Period] [Controlled Amortization Period] or
any Early Amortization Period [or Reinvestment Period] all
Unreallocated Available Certificateholder Principal Collections
shall be distributed as follows:
[(i) first, an amount equal to the Class A Monthly
Principal for such Distribution Date will be [deposited to the
Principal Funding Account, in the case of the [Class A]
Accumulation Period [or the Reinvestment Period] or]
distributed to Class A Certificateholders[, in the case of
[the [Class A] Controlled Amortization Period or] any Early
Amortization Period];
(ii) second, an amount equal to the Class B Monthly
Principal for such Distribution Date will be [deposited to the
Principal Funding Account, in the case of the [Class B]
Accumulation Period][or the Reinvestment Period or]
distributed to Class B Certificateholders[, in the case of the
[Class B] Controlled Amortization Period or any Early
Amortization Period]; and
(iii) third, the balance, if any, will be allocated to
Excess Principal Collections].
[In the event that the aggregate Invested Amount is greater than
zero on the Series Termination Date, any funds remaining in the Reserve
Fund (after the application of funds in the Reserve Fund as described
above under "Interest Collections -- Class A" and "Interest Collections --
Class B") will be treated as a portion of Available Certificateholder
Principal Collections for the Distribution Date occurring on the Series
Termination Date.]
"Class A Monthly Principal" with respect to any Distribution
Date relating to the [[Class A] Accumulation Period][[Class A]
Controlled Amortization Period] or any Early Amortization Period [or
Reinvestment Period] will equal Unreallocated Available
Certificateholder Principal Collections for such Distribution Date;
provided, however, that for each Distribution Date [with respect to
the [Class A] Accumulation Period, Class A Monthly Principal may not
exceed the [Class A] Controlled Deposit Amount][with respect to the
[Class A] Controlled Amortization Period, Class A Monthly Principal
may not exceed the Class A Controlled Distribution Amount] for such
Distribution Date; and provided, further, that Class A Monthly
Principal shall not exceed the aggregate Invested Amount of the
Class A Certificates.
"Class B Monthly Principal" with respect to any Distribution
Date relating to the [[Class B] Accumulation Period] [[Class B]
Controlled Amortization Period] or any Early Amortization Period [or
Reinvestment Period] will equal the excess of Unreallocated
Available Certificateholder Principal Collections over Class A
Monthly Principal, in each case for such Distribution Date;
provided, however, that for each Distribution Date [with respect to
the [Class B] Accumulation Period, Class B Monthly Principal may not
exceed the Class B Controlled Deposit Amount] [with respect to the
[Class B] Controlled Amortization Period, Class B Monthly Principal
may not exceed the Class B Controlled Distribution Amount] for such
Distribution Date; and provided, further, that Class B Monthly
Principal shall not exceed the aggregate Invested Amount of the
Class B Certificates.
["Class A Controlled Deposit Amount" for a Distribution Date
means [ ]].
["Class A Controlled Accumulation Amount" means [
].]
["Class A Controlled Distribution Amount" for a Distribution
Date means [ ].]
["Class A Controlled Amortization Amount" for a Distribution
Date means [ ].]
["Class B Controlled Deposit Amount" for a Distribution Date
means [ ].]
["Class B Controlled Accumulation Amount" means [
].]
["Class B Controlled Distribution Amount" for a Distribution
Date means [ ].]
["Class B Controlled Amortization Amount" means [
].]
[ENHANCEMENTS
The [Series [199_-_]] [Class A] [Class B] Certificates will have the
benefit of the [Letter of Credit] [Interest Rate Swap] [Cash Collateral
Account] [Guaranty] [Surety Bond] [Insurance Policy] [Spread Account]
[other] [issued by [ ] (the "Enhancement Provider")] in the
initial amount of $[ ].
With respect to any Distribution Date, the amount available to be
drawn under the [Letter of Credit] [Interest Rate Swap] [Cash Collateral
Account] [Guaranty] [Surety Bond] [Insurance Policy] [Spread Account]
[other] (the "Available Credit Enhancement Amount") will equal
[ ].]
[Describe subordination of other Series of Certificates to the
Series [199_-_] Certificates, if applicable.]
[Information with respect to Enhancement.]
[ENHANCEMENT PROVIDER
Information to be provided by Enhancement Provider.]
[INTEREST FUNDING ACCOUNTS
[The Servicer will establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account for the
benefit of the Class A Certificateholders (the "Class A Interest Funding
Account"). On each Distribution Date Class A Monthly Interest will be
deposited in the Class Interest Funding Account as provided above under
"Distributions from the Collection Account[; Reserve Fund] [; Yield
Supplement Account]; provided that if an Early Amortization Event [that is
not cured as described herein] shall have occurred, interest will be
distributed to the Class A Certificateholders on the first Distribution
Date following such Early Amortization Event.
All amounts on deposit in the Class A Interest Funding Account on
any Distribution Date (after giving effect to distributions to be made on
such Distribution Date) (the "Class A Interest Funding Account Balance")
will be invested from the date of their deposit by the Trustee at the
direction of the Servicer in Eligible Investments that will mature on or
prior to the next succeeding Distribution Date. The Servicer may select an
appropriate agent as representative of the Servicer for the purpose of
designating such investments. On each Distribution Date, the interest and
other investment income on the Class A Interest Funding Account Balance
will be applied as provided above under "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account].]
[The Servicer will establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account for the
benefit of the Class B Certificateholders (the "Class B Interest Funding
Account"). On each Distribution Date Class B Monthly Interest will be
deposited in the Class B Interest Funding Account as provided above under
"Distributions from the Collection Account[; Reserve Fund] [; Yield
Supplement Account]; provided that if an Early Amortization Event [that is
not cured as described herein] shall have occurred, interest will be
distributed to the Class B Certificateholders on the first Distribution
Date following such Early Amortization Event.
All amounts on deposit in the Class B Interest Funding Account on
any Distribution Date (after giving effect to distributions to be made on
such Distribution Date) (the "Class B Interest Funding Account Balance")
will be invested from the date of their deposit by the Trustee at the
direction of the Servicer in Eligible Investments that will mature on or
prior to the next succeeding Distribution Date. The Servicer may select an
appropriate agent as representative of the Servicer for the purpose of
designating such investments. On each Distribution Date, the interest and
other investment income on the Class B Interest Funding Account Balance
will be applied as provided above under "Distributions from the Collection
Account[; Reserve Fund][; Yield Supplement Account].]
[PRINCIPAL FUNDING ACCOUNT
The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account for the benefit of the
holders of Series [199_-_] Certificates (the "Principal Funding Account").
[On each Distribution Date with respect to the Class A Accumulation Period
[or any Reinvestment Period], Class A Monthly Principal will be deposited
in the Principal Funding Account] [and on each Distribution Date with
respect to the Class B Accumulation Period [or any Reinvestment Period],
Class B Monthly Principal will be deposited in the Principal Funding
Account, in each case] as provided above under "Distributions from the
Collection Account[; Reserve Fund][; Yield Supplement Account] --
Principal Collections"; provided, that, if an Early Amortization Event
[that is not cured as described herein] occurs during [the Class A
Accumulation Period] [the Class B Accumulation Period] [or any
Reinvestment Period], the Principal Funding Account Balance shall be paid
to the Series [199_-_] Certificateholders on the first Special Payment
Date.
All amounts on deposit in the Principal Funding Account on any
Distribution Date (after giving effect to distributions to be made on such
Distribution Date) (the "Principal Funding Account Balance") will be
invested from the date of their deposit to on or prior to the Expected
Payment Date by the Trustee at the direction of the Servicer in Eligible
Investments that will mature on or prior to the following Distribution
Date. The Servicer may select an appropriate agent as representative of
the Servicer for the purpose of designating such investments. On each
Distribution Date, the interest and other investment income on the
Principal Funding Account Balance will be applied as provided above under
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account]".]
[Describe other Series [199_-_] Accounts, if applicable.]
DISTRIBUTIONS
Payments to Series [199_-_] Certificateholders will be made from the
Collection Account, [the Reserve Fund,] [the Principal Funding Account,]
[the Class A Interest Funding Account,] [the Class B Interest Funding
Account] [other] and [the Excess Funding Account].
(a) The Servicer shall instruct the Trustee to apply funds on
deposit in the Collection Account, [the Reserve Fund,] [the Class A
Interest Funding Account,] [the Class B Interest Funding Account]
[other] and shall instruct the Trustee to make the following
distributions at the following times:
(i) on each [Class A] Interest Payment Date or Special
Payment Date, all amounts on deposit in the Collection
Account[, Reserve Fund] [Class A Interest Funding Account]
[other] as are payable to the Class A Certificateholders with
respect to accrued interest will be distributed to such
Certificateholders; and
(ii) on each [Class B] Interest Payment Date or Special
Payment Date, all amounts on deposit in the Collection
Account[, Reserve Fund] [Class B Interest Funding Account]
[other] as are payable to the Class B Certificateholders with
respect to accrued interest will be distributed to such
Certificateholders.
(b) The Servicer shall instruct the Trustee to apply the funds
on deposit in the [Collection Account,] [the Principal Funding
Account,] [other] and [the Excess Funding Account] and shall
instruct the Trustee to make, without duplication, the following
distributions at the following times:
[(i) [on each Distribution Date during the [Class A]
Controlled Amortization Period all amounts on deposit in the
Collection Account [and the Excess Funding Account] as are
payable to Class A Certificateholders with respect to
principal will be distributed to the holders of Class A
Certificates up to a maximum amount equal to the excess of the
outstanding principal amount of such Certificates over
unreimbursed Investor Charge-Offs allocated to such
Certificates, each on such date;]
[(ii) [on each Distribution Date during the Class B
Controlled Amortization Period all amounts on deposit in the
Collection Account [and the Excess Funding Account] as are
payable to Class B Certificateholders with respect to
principal will be distributed to the holders of Class B
Certificates up to a maximum amount equal to the excess of the
outstanding principal amount of such Certificates over
unreimbursed Investor Charge-Offs allocated to such
Certificates, each on such date;]
[(iii) on each Special Payment Date and on the Expected
Payment Date the Principal Funding Account Balance[, the
amount on deposit in the Excess Funding Account] and all
amounts on deposit in the Collection Account as are payable to
Series [199_-_] Certificateholders with respect to principal
shall be distributed first to the holders of the Class A
Certificates up to a maximum amount equal to the excess of the
outstanding principal amount of such Certificates over
unreimbursed Investor Charge-Offs allocated to such
Certificates, each on such date, and then to the holders of
Class B Certificates up to a maximum amount equal to the
excess of the outstanding principal amount of such
Certificates over unreimbursed Investor Charge-Offs allocated
to such Certificates, each on such date;]
[(iv) on the Class A Expected Payment Date, all amounts
on deposit in the Principal Funding Account[, the Excess
Funding Account] and the Collection Account as are payable to
Class A Certificateholders in respect of principal will be
distributed to the holders of Class A Certificates up to a
maximum amount equal to the excess of the outstanding
principal amount of such Certificates over unreimbursed
Investor Charge-offs allocated to such Certificates, each on
such date;]
[(v) on the Class B Expected Payment Date, all amounts
on deposit in the Principal Funding Account[, the Excess
Funding Account] and the Collection Account as are payable to
Class B Certificateholders in respect of principal will be
distributed to the holders of Class B Certificates up to a
maximum amount equal to the excess of the outstanding
principal amount of such Certificates over unreimbursed
Investor Charge-Offs allocated to such Certificates, each on
such date].
[(c) On each Distribution Date on which there is an unpaid
Class A Carry-over Amount or Class B Carry-over Amount (or unpaid
interest thereon), the Servicer shall instruct the Trustee to
distribute to the Class A Certificateholders or Class B
Certificateholders, as the case may be, such Carry-over Amount (or
unpaid interest thereon) to the extent funds are available therefor
first from amounts on deposit in the Yield Supplement Account and
second to the extent funds are available therefor after making all
required distributions and deposits with respect to the Series
[199_-_] Certificates as provided above under "Distributions from
the Collection Account[; Reserve Fund]; Yield Supplement Account".]
INVESTOR CHARGE-OFFS
If the Available Subordinated Amount is reduced to zero and on any
Distribution Date the Class A Deficiency Amount is greater than zero, the
Class B Invested Amount will be reduced by the Class A Deficiency Amount,
but not by more than the Class A Investor Default Amount for such
Distribution Date. In the event that such reduction would cause the Class
B Invested Amount to be a negative number, the Class B Invested Amount
will be reduced to zero and the Class A Invested Amount will be reduced by
the amount by which the Class B Invested Amount would have been reduced
below zero, but not by more than the excess, if any, of the Class A
Investor Default Amount for such Distribution Date over the amount of the
reductions of the Class B Invested Amount with respect to such
Distribution Date as described above (a "Class A Investor Charge-Off"),
which will have the effect of slowing or reducing the return of principal
to the Class A Certificateholders. If the Class A Invested Amount has been
reduced by any Class A Investor Charge-Offs, it will thereafter be
increased on any Distribution Date (but not by an amount in excess of the
aggregate unreimbursed Class A Investor Charge-Offs) by the sum of (a) the
Class A Allocation Percentage of Series Allocable Miscellaneous Payments
for such Distribution Date and (b) the amount of Excess Servicing
allocated and available for such purpose as described above under
"Distributions from the Collection Account[; Reserve Fund][; Yield
Supplement Account] -- Excess Servicing".
If the Available Subordinated Amount is reduced to zero and on any
Distribution Date the Class B Deficiency Amount is greater than zero, the
Class B Invested Amount will be reduced by the Class B Deficiency Amount,
but not by more than the Class B Investor Default Amount for such
Distribution Date (a "Class B Investor Charge-Off"). If on any
Distribution Date Reallocated Principal Collections for such Distribution
Date are applied to fund the Class A Required Amount, the Class B Invested
Amount will be reduced by the amount of such Reallocated Principal
Collections. If the Class B Invested Amount has been reduced as described
above, it will thereafter be increased on any Distribution Date by the sum
of (a) the Class B Allocation Percentage of Series Allocable Miscellaneous
Payments for such Distribution Date and (b) the amount of Excess Servicing
available for that purpose as described above under "Distributions from
the Collection Account[; Reserve Fund][; Yield Supplement Account] --
Excess Servicing".
[REINVESTMENT EVENTS
The Reinvestment Events with respect to the Series [199_-_]
Certificates are the following:
[1. failure on the part of USA, the Servicer or CCC, as
applicable, (i) to make any payment or deposit required by the
Pooling and Servicing Agreement or the Receivables Purchase
Agreement, including but not limited to any Transfer Deposit Amount
or Adjustment Payment, on or before the date occurring two business
days after the date such payment or deposit is required to be made
therein; or (ii) to deliver a Distribution Date Statement on the
date required under the Pooling and Servicing Agreement (or within
the applicable grace period which will not exceed five business
days); (iii) to comply with its covenant not to create any lien on a
Receivable; or (iv) to observe or perform in any material respect
any other covenants or agreements set forth in the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, which
failure continues unremedied for a period of 45 days after written
notice of such failure;
2. any representation or warranty made by CCC in the
Receivables Purchase Agreement or by USA in the Pooling and
Servicing Agreement or any information required to be given by USA
to the Trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after
written notice and as a result the interests of the
Certificateholders are materially and adversely affected; provided,
however, that a Reinvestment Event shall not be deemed to occur
thereunder if USA has repurchased the related Receivables or all
such Receivables, if applicable, during such period in accordance
with the provisions of the Pooling and Servicing Agreement;
3. the occurrence of certain events of bankruptcy, insolvency
or receivership relating to any of CFC, CCC or Chrysler;
4. a failure by USA to convey Receivables in Additional
Accounts to the Trust within five business days after the day on
which it is required to convey such Receivables pursuant to the
Pooling and Servicing Agreement;
5. on any Determination Date, the Available Subordinated
Amount for the next Distribution Date will be reduced to an amount
less than the Required Subordinated Amount on such Determination
Date after giving effect to the distributions to be made on the next
Distribution Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds [ ]% of the Pool
Balance on such last day;
8. on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods, is less than
[ ]%;
9. the delivery by the Seller to the Trustee, of a notice
stating that the Seller will no longer continue to sell Receivables
to the Trust commencing on [ ] or any yearly anniversary
thereof; provided, however, that the Seller shall have delivered to
the Trustee an opinion of counsel to the effect that, following such
discontinuation of sales of Receivables, the Trust shall not become
an investment company within the meaning of the Investment Company
Act of 1940, as amended;
10. on any Determination Date, the quotient obtained by
dividing (i) the sum of (x) the amount on deposit in the Yield
Supplement Account on the next Distribution Date, after giving
effect to the distribution to be made on such Distribution Date, and
(y) the amount on deposit in the Yield Supplement Account on the
immediately preceding Distribution Date, after giving effect to the
distributions made on such Distribution Date, by (ii) the sum of (A)
the outstanding principal balance of the Series [199_-_]
Certificates on the next Distribution Date, after giving effect to
all distributions and payments to be made on such Distribution Date,
and (B) the outstanding principal balance of the Series [199_-_]
Certificates on the immediately preceding Distribution Date, after
giving effect to all distributions and payments made on such
Distribution Date, is less than [ ]%;
11. interest at the Class A Certificate Rate is not paid on
the Class A Certificates on any [Class A] Interest Payment Date or
interest at the Class B Certificate Rate is not paid on the Class B
Certificates on any [Class B] Interest Payment Date;
12. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
13. [other].](2)<F2>
<F2>
- ---------------
(2) Delete or modify, as appropriate.
[In the case of any event described in clause [1, 2 or 6] above, a
Reinvestment Event with respect to Series [199_-_] will be deemed to have
occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given
by Certificateholders) declare that a Reinvestment Event has occurred as
of the date of such notice. In the case of any event described in clause
[3, 4, 5, 7, 8, 9, 10, 11, 12 or 13] above, a Reinvestment Event with
respect to Series [199_-_] will be deemed to have occurred without any
notice or other action on the part of the Trustee or the Series [199_-_]
Certificateholders immediately upon the occurrence of such event.]
[Under certain limited circumstances, a Reinvestment Period which
commences prior to the scheduled end of the Revolving Period may terminate
and the Revolving Period recommence. If a Reinvestment Period results from
the failure by USA to convey Receivables in Additional Accounts to the
Trust, as described in paragraph 4 above, during the Revolving Period and
no other Reinvestment Event or Early Amortization Event [that has not been
cured as described herein] has occurred, the Reinvestment Period resulting
from such failure will terminate and the Revolving Period will recommence
(unless the scheduled termination date of the Revolving Period has
occurred) as of the earlier of (i) the conveyance of Receivables in
Additional Accounts to the Trust following written confirmation by the
Rating Agencies that such conveyance will not result in the withdrawal or
lowering of the rating of the Series [199_-_] Certificates, and (ii) the
end of the first Collection Period during which the Seller would no longer
be required to convey Receivables to the Trust. The Seller may no longer
be required to convey Receivables as described above as a result of a
reduction in the Invested Amount occurring due to principal payments made
in respect of the Series [199_-_] Certificates and the Certificates of
other outstanding Series during the Reinvestment Period or as a result of
the subsequent addition of Receivables to the Trust. Notwithstanding the
foregoing, if any Reinvestment Event occurs, the Revolving Period will
recommence following written confirmation by each Rating Agency that its
rating of the Series [199_-_] Certificates will not be withdrawn or
lowered as a result of such recommencement, provided that no other
Reinvestment Event or Early Amortization Event [that has not been cured as
described herein] has occurred and the scheduled termination of the
Revolving Period has not occurred.]
[Describe other cures of Reinvestment Events and partial
Reinvestment Periods, if applicable.]
EARLY AMORTIZATION EVENTS
[The Early Amortization Events with respect to the Series [199_-_]
Certificates will include each of the events so defined in the Prospectus,
plus the following:
1. failure on the part of USA, the Servicer or CCC, as
applicable, (i) to make any payment or deposit required by the
Pooling and Servicing Agreement or the Receivables Purchase
Agreement, including but not limited to any Transfer Deposit Amount
or Adjustment Payment, on or before the date occurring two business
days after the date such payment or deposit is required to be made
therein; or (ii) to deliver a Distribution Date Statement on the
date required under the Pooling and Servicing Agreement (or within
the applicable grace period which will not exceed five business
days); (iii) to comply with its covenant not to create any lien on a
Receivable; or (iv) to observe or perform in any material respect
any other covenants or agreements set forth in the Pooling and
Servicing Agreement or the Receivables Purchase Agreement, which
failure continues unremedied for a period of 45 days after written
notice of such failure;
2. any representation or warranty made by CCC in the
Receivables Purchase Agreement or by USA in the Pooling and
Servicing Agreement or any information required to be given by USA
to the Trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after
written notice and as a result the interests of the
Certificateholders are materially and adversely affected; provided,
however, that an Early Amortization Event shall not be deemed to
occur thereunder if USA has repurchased the related Receivables or
all such Receivables, if applicable, during such period in
accordance with the provisions of the Pooling and Servicing
Agreement;
3. the occurrence of certain events of bankruptcy, insolvency
or receivership relating to any of CFC, CCC or Chrysler;
4. a failure by USA to convey Receivables in Additional
Accounts to the Trust within five business days after the day on
which it is required to convey such Receivables pursuant to the
Pooling and Servicing Agreement;
5. on any Determination Date, the Available Subordinated
Amount for the next Distribution Date will be reduced to an amount
less than the Required Subordinated Amount on such Determination
Date after giving effect to the distributions to be made on the next
Distribution Date;
6. any Service Default with respect to the Series [199_-_]
Certificates occurs;
7. on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds [ ]% of the Pool
Balance on such last day;
8. on any Determination Date, the average of the Monthly
Payment Rates for the two preceding Collection Periods, is less than
[ ]%;
9. on any Determination Date, the quotient obtained by
dividing (i) the sum of (x) the amount on deposit in the Yield
Supplement Account on the next Distribution Date, after giving
effect to the distributions to be made on such Distribution Date,
and (y) the amount on deposit in the Yield Supplement Account on the
immediately preceding Distribution Date, after giving effect to the
distributions made on such Distribution Date, by (ii) the sum of (A)
the outstanding principal balance of the Series [199_-_]
Certificates on the next Distribution Date, after giving effect to
all distributions and payments to be made on such Distribution Date
and (B) the outstanding principal balance of the Series [199_-_]
Certificates on the immediately preceding Distribution Date, after
giving effect to all distributions and payments made on such
Distribution Date, is less than [ ];
10. any Carry-over Amount is outstanding on six consecutive
Distribution Dates; and
11. [other].](3)<F3>
<F3>
- ---------------
(3) Delete or modify, as appropriate.
[In the case of any event described in clause [1, 2 or 6] above, an
Early Amortization Event with respect to Series [199_-_] will be deemed to
have occurred only if, after the applicable grace period described in such
clauses, if any, either the Trustee or Series [199_-_] Certificateholders
holding Series [199_-_] Certificates evidencing more than 50% of the
aggregate unpaid principal amount of the Series [199_-_] Certificates by
written notice to the Seller and the Servicer (and the Trustee, if given
by Certificateholders) declare that an Early Amortization Event has
occurred as of the date of such notice. In the case of any Early
Amortization Event described in the Prospectus or any event described in
clause [3, 4, 5, 7, 8, 9, 10 or 11] above, an Early Amortization Event
with respect to Series [199_-_] will be deemed to have occurred without
any notice or other action on the part of the Trustee or the Series
[199_-_] Certificateholders immediately upon the occurrence of such
event.]
[Under certain limited circumstances, an Early Amortization Period
which commences prior to the scheduled end of the Revolving Period may
terminate and the Revolving Period recommence. If an Early Amortization
Period results from the failure by USA to convey Receivables in Additional
Accounts to the Trust, as described in paragraph 4 above, during the
Revolving Period and no other [Reinvestment Event or] Early Amortization
Event [that has not been cured as described herein] has occurred, the
Early Amortization Period resulting from such failure will terminate and
the Revolving Period will recommence (unless the scheduled termination
date of the Revolving Period has occurred) as of the earlier of (i) the
conveyance of Receivables in Additional Accounts to the Trust following
written confirmation by the Rating Agencies that such conveyance will not
result in the withdrawal or downgrade of the rating of the Series [19__-_]
Certificates, and (ii) the end of the first Collection Period during which
the Seller would no longer be required to convey Receivables to the Trust.
The Seller may no longer be required to convey Receivables as described
above as a result of a reduction in the Invested Amount occurring due to
principal payments made in respect of the Series [199_-_] Certificates and
the Certificates of other outstanding Series during the Early Amortization
Period or as a result of the subsequent addition of Receivables to the
Trust. Notwithstanding the foregoing, if any Early Amortization Event
occurs, the Revolving Period will recommence following written
confirmation by each Rating Agency that its rating of the Series [199_-_]
Certificates will not be withdrawn or downgraded as a result of such
recommencement, provided that no other Early Amortization Event [or
Reinvestment Event] [that has not been cured as described herein] has
occurred and the scheduled termination of the Revolving Period has not
occurred.]
[Describe other cures of Early Amortization Events, if applicable.]
If the portion of proceeds of the sale of the Receivables following
the occurrence of an insolvency event with respect to USA or a breach by
USA of its covenant not to create any lien on any Receivable, as described
in the Prospectus under "Description of the Certificates -- Reinvestment
Events and Early Amortization Events", allocated to the Series [199_-_]
Certificateholders' Interest and proceeds of any collections on the
Receivables in the Collection Account allocable to the Series [199_-_]
Certificateholders' Interest are not sufficient to pay the aggregate
unpaid principal amount of the Series [199_-_] Certificates in full plus
accrued and unpaid interest thereon, such amounts will be paid first to
the holders of the Class A Certificates until all amounts due with respect
to such Certificates are paid in full and then to the holders of the Class
B Certificates and the Class B Certificateholders will incur a loss.
SERIES TERMINATION
The last payment of principal and interest on the Series [199_-_]
Certificates will be due and payable no later than the [
] Distribution Date (the "Series Termination Date"). In the
event that the aggregate Invested Amount is greater than zero on the
Series Termination Date (after giving effect to deposits and distributions
otherwise to be made on such Series Termination Date), the Trustee will
sell or cause to be sold (and apply the proceeds to the extent necessary
to pay such remaining amounts to all Series [199_-_] Certificateholders)
an interest in the Receivables or certain Receivables, as specified in the
Pooling and Servicing Agreement, in an amount equal to (a) 110% of the
aggregate Invested Amount on such Series Termination Date (after giving
effect to such deposits and distributions) and (b) the Available
Subordinated Amount on the preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to be
made on the Distribution Date following such Determination Date);
provided, however, that in no event shall such amount exceed the Series
Allocation Percentage (for the Collection Period in which such Series
Termination Date occurs) of Receivables on such Series Termination Date.
The net proceeds of such sale and any collections on the Receivables will
be paid first to Class A Certificateholders until all amounts due on the
Class A Certificates are paid in full, and then to the Class B
Certificateholders, in each case on the Series Termination Date as the
final payment of the Series [199_-_] Certificates.
REPORTS
On each Distribution Date (including each Distribution Date that
corresponds to [an] [the] Expected Payment Date or any Special Payment
Date), commencing with the initial Distribution Date, the Trustee will
forward to each Series [199_-_] Certificateholder of record a statement
(the "Distribution Date Statement") prepared by the Servicer setting forth
the following information (which, in the case of (c), (d) and (e) below,
will be stated on the basis of an original principal amount of $1,000 per
Series [199_-_] Certificate if the [Class A] [Class B] [Accumulation
Period] [Class A] [Class B] [Controlled Amortization Period] or an Early
Amortization Period [or Reinvestment Period] has commenced): (a) the
aggregate amount of collections, the aggregate amount of Interest
Collections and the aggregate amount of Principal Collections processed
during the immediately preceding Collection Period; (b) the Series
Allocation Percentage, the Floating Allocation Percentage, the Fixed
Allocation Percentage, the Class A Allocation Percentage and the Class B
Allocation Percentage for such Collection Period; (c) the total amount, if
any, distributed on the Class A Certificates and the Class B Certificates;
(d) the amount of such distribution allocable to principal on each Class
of Series [199_-_] Certificates; (e) the amount of such distribution
allocable to interest on each Class of the Series [199_-_] Certificates;
(f) the Class A Investor Default Amount and the Class B Investor Default
Amount for such Distribution Date; (g) the Class A Draw Amount and the
Class B Draw Amount, if any, for such Collection Period; (h) the amount of
the Class A Investor Charge-Offs and the Class B Investor Charge-Offs and
the amounts of reimbursements thereof for such Collection Period; (i) the
amount of the Class A Monthly Servicing Fee and the Class B Monthly
Servicing Fee for such Collection Period; [(j) the Class A Controlled
Distribution Amount and the Class B Controlled Distribution Amount for the
following Distribution Date;] (k) the Class A Invested Amount and the
Class B Invested Amount[, the Excess Funding Amount] and the outstanding
principal balance of the Class A Certificates and the Class B Certificates
for such Distribution Date (after giving effect to all distributions which
will occur on such Distribution Date); (1) the "pool factor" for the
Series [199_-_] Certificates as of the Determination Date with respect to
such Distribution Date (consisting of an eleven-digit decimal expressing
the Invested Amount as of such Determination Date (determined after taking
into account any reduction in the Invested Amount which will occur on such
Distribution Date) as a proportion of the Initial Invested Amount); (m)
the Available Subordinated Amount for such Determination Date; [(n) the
Reserve Fund balance for such date;] (o) [the Principal Funding Account
Balance,] [the Class A Interest Funding Account Balance,] [the Class B
Interest Funding Account Balance] and [the Yield Supplement Account
balance] with respect to such date; [(p) during any Reinvestment Period,
information with respect to the Eligible Investments in the accounts for
the Series [199_-_] Certificates;] and (q) [other] [; provided, that after
the Fully Reinvested Date, [unless the Revolving Period has recommenced,]
such statement will not include the information in clauses [(a), (b), (f),
(g), (h), (i), (k) or (m) above].
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement"), the Seller has agreed to sell to
the underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Seller, the
principal amount of the Class A Certificates and the Class B Certificates
set forth opposite its name:
<TABLE>
<CAPTION>
Class A Class B
Underwriters Certificates Certificates
<S> <C> <C>
[ ]................................ $[ ] $[ ]
[ ]................................ [ ] [ ]
Total................................. $[ ] $[ ]
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all the Series
[199_-_] Certificates offered hereby if any of the Series [199_-_]
Certificates are purchased.
The Seller has been advised by the Underwriters that the
Underwriters propose to initially offer the Class A Certificates to the
public at the price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price less a concession not in
excess of [ ]% of the Class A Certificate denominations. The
Underwriters may allow and such dealers may reallow a concession not in
excess of [ ]% of the Class A Certificate denominations to certain other
dealers. After the initial public offering, the public offering price and
such concessions may be changed.
The Seller has been advised by the Underwriters that the
Underwriters propose to initially offer the Class B Certificates to the
public at the price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price less a concession not in
excess of [ ]% of the Class B Certificate denominations. The
Underwriters may allow and such dealers may reallow a concession not in
excess of [ ]% of the Class B Certificate denominations to certain other
dealers. After the initial public offering, the public offering price and
such concessions may be changed.
The Underwriting Agreement provides that USA and CFC will indemnify
the Underwriters against certain liabilities, including liabilities under
the Securities Act, or contribute to payments which the Underwriters may
be required to make in respect thereof.
[In the ordinary course of their businesses, the Underwriters and
their respective affiliates have engaged and may engage in investment
banking transactions with the Seller and its affiliates.]
LEGAL MATTERS
Certain legal matters relating to the Series [199_-_] Certificates
will be passed upon for the Underwriters by [ ]. Certain federal
income tax and ERISA matters will be passed upon for USA and the Trust by
[ ]. [In addition to representing the Underwriters, [ ] from
time to time represents Chrysler Financial Corporation and its
affiliates.] See "Legal Matters" in the Prospectus.
<PAGE>
INDEX OF PRINCIPAL TERMS
Term Page
Accounts.......................................................... 1
Assets Receivables Rate........................................... 25
Available Certificateholder Interest Collections.................. 30
Available Certificateholder Principal Collections................. 29
Available Credit Enhancement Amount............................... 40
Available Negative Carry Subordinated Amount...................... 33
Available Seller's Collections.................................... 31
Available Seller's Interest Collections........................... 31
Available Seller's Principal Collections.......................... 31
CCC............................................................... 1
Class A Accumulation Period....................................... 6
Class A Accumulation Period Commencement Date..................... 7
Class A Accumulation Period Length................................ 6
Class A Adjustment Date........................................... 5
Class A Allocation Percentage..................................... 30
Class A Carry-over Amount......................................... 26
Class A Certificateholders........................................ 13
Class A Certificates.............................................. 1
Class A Certificate Rate.......................................... 1
Class A Certificateholder Interest Collections.................... 35
Class A Controlled Accumulation Amount............................ 40
Class A Controlled Amortization Amount............................ 40
Class A Controlled Amortization Period............................ 7
Class A Controlled Deposit Amount................................. 40
Class A Controlled Distribution Amount............................ 40
Class A Draw Amount............................................... 31
Class A Deficiency Amount......................................... 31
Class A Expected Payment Date..................................... 5
Class A Index..................................................... 1
Class A Initial Invested Amount................................... 29
Class A Interest Funding Account.................................. 4
Class A Interest Funding Account Balance.......................... 40
Class A Interest Payment Date..................................... 1
Class A Invested Amount........................................... 28
Class A Investment Proceeds....................................... 35
Class A Investor Charge-Off....................................... 43
Class A Interest Period........................................... 4
Class A Monthly Interest.......................................... 25
Class A Monthly Principal......................................... 39
Class A Monthly Servicing Fee..................................... 14
Class A Principal Commencement Date............................... 7
Class A Required Amount........................................... 31
Class B Allocation Percentage..................................... 30
Class B Accumulation Period Commencement Date..................... 7
Class B Accumulation Period....................................... 6
Class B Adjustment Date........................................... 5
Class B Carry-over Amount......................................... 26
Class B Certificate Rate.......................................... 1
Class B Certificateholder Interest Collections.................... 36
Class B Certificateholders........................................ 13
Class B Certificates.............................................. 1
Class B Controlled Accumulation Amount............................ 40
Class B Controlled Amortization Amount............................ 40
Class B Controlled Amortization Period............................ 7
Class B Controlled Deposit Amount................................. 40
Class B Controlled Distribution Amount............................ 40
Class B Deficiency Amount......................................... 32
Class B Draw Amount............................................... 32
Class B Expected Payment Date..................................... 5
Class B Index..................................................... 1
Class B Initial Invested Amount................................... 29
Class B Interest Funding Account.................................. 4
Class B Interest Funding Account Balance.......................... 41
Class B Interest Payment Date..................................... 1
Class B Interest Period........................................... 4
Class B Invested Amount........................................... 29
Class B Investment Proceeds....................................... 36
Class B Investor Charge-Off....................................... 43
Class B Monthly Interest.......................................... 25
Class B Monthly Principal......................................... 40
Class B Monthly Servicing Fee..................................... 15
Class B Required Amount........................................... 32
<PAGE>
Term Page
Distribution Date................................................. 1
Distribution Date Statement....................................... 47
Enhancement Provider.............................................. 40
Excess Principal Collections...................................... 30
Excess Reserve Fund Required Amount............................... 38
Excess Seller's Percentage........................................ 31
Excess Servicing.................................................. 35
Excluded Dealers.................................................. 20
Excluded Receivables.............................................. 20
Expected Payment Date............................................. 23
Fixed Allocation Percentage....................................... 28
Floating Allocation Percentage.................................... 28
Incremental Subordinated Amount................................... 10
Initial Invested Amount........................................... 29
Invested Amount................................................... 28
MMC............................................................... 17
Monthly Interest.................................................. 25
Negative Carry Required Amount.................................... 33
Principal Funding Account......................................... 41
Principal Funding Account Balance................................. 41
Principal Shortfalls.............................................. 30
Reallocated Principal Collections................................. 6
Reallocation Deficiency Amount.................................... 33
Receivables....................................................... 1
Required Negative Carry Subordinated Amount....................... 33
Required Participation Percentage................................. 12
Required Subordinated Amount...................................... 10
Reserve Fund...................................................... 37
Reserve Fund Deposit Amount....................................... 37
Reserve Fund Required Amount...................................... 37
Seller............................................................ 1
Seller's Interest................................................. 1
Seller's Percentage............................................... 31
Series............................................................ 1
Series 199_-_ Certificates........................................ 1
Series 199_-_ Termination Date.................................... 15
Series Cut-Off Date............................................... 15
Series Issuance Date.............................................. 15
Series Supplement................................................. 24
Series Termination Date........................................... 46
Servicer.......................................................... 1
Servicing Fee Rate................................................ 14
SFAS.............................................................. 17
Subordinated Percentage........................................... 11
Trust............................................................. 1
Underwriting Agreement............................................ 47
Underwriters...................................................... 47
Unreallocated Available Certificateholder Principal Collections... 39
USA............................................................... 1
Yield Supplement Account.......................................... 5
Yield Supplement Account Deposit Amount........................... 38
Yield Supplement Account Required Amount.......................... 38
<PAGE>
ANNEX I
OUTSTANDING SERIES OF INVESTOR CERTIFICATES
[to be provided]
<PAGE>
[Outside back cover, left-hand column]
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Seller or the Underwriters. Neither this
Prospectus Supplement nor the accompanying Prospectus constitutes an offer or
solicitation by anyone in any state in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus Supplement or the
accompanying Prospectus, nor any sale made hereunder or thereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Seller since the date hereof or thereof or that the information
contained or incorporated by reference herein or therein is correct as of any
time subsequent to its date.
----------------
TABLE OF CONTENTS
Page
Prospectus Supplement
Summary of Series Terms........................................... S-3
Special Considerations............................................ S-16
Use of Proceeds................................................... S-20
The Dealer Floorplan Financing Business........................... S-20
The Accounts...................................................... S-20
Chrysler Financial Corporation and Chrysler Credit Corporation.... S-23
Maturity and Principal Payment Considerations..................... S-23
Series Provisions................................................. S-24
Underwriting...................................................... S-48
Legal Matters..................................................... S-48
Index of Principal Terms.......................................... S-49
Annex I........................................................... A-1
Prospectus
Available Information............................................. 2
Reports to Certificateholders..................................... 2
Incorporation of Certain Documents by Reference................... 2
Prospectus Summary................................................ 3
Special Considerations............................................ 15
U.S. Auto Receivables Company and the Trust....................... 18
Use of Proceeds................................................... 20
The Dealer Floorplan Financing Business........................... 20
The Accounts...................................................... 24
Chrysler Financial Corporation and Chrysler Credit Corporation.... 24
Description of the Certificates................................... 25
Description of the Receivables Purchase Agreement................. 51
Certain Legal Aspects of the Receivables.......................... 52
Certain Tax Matters............................................... 55
ERISA Considerations.............................................. 58
Experts........................................................... 60
Plan of Distribution.............................................. 60
Legal Matters..................................................... 61
Index of Principal Terms.......................................... 62
Annex I...........................................................
----------------
Until [ ], 199[ ] (90 days after the date of this Prospectus
Supplement), all dealers effecting transactions in the Series [199_-_]
Certificates, whether or not participating in this distribution, may be
required to deliver a Prospectus. This is in addition to the obligation of
dealers to deliver a Prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
<PAGE>
[Outside back cover, right-hand column]
CARCO
Auto Loan Master Trust
$[ ]
Auto Loan Asset
Backed Certificates, Series [199_-_]
$[ ] [Floating Rate] [ %]
Class A Certificates
Series [199_-_]
$[ ] [Floating Rate] [ %]
Class B Certificates
Series [199_-_]
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER CREDIT CORPORATION
Servicer
PROSPECTUS SUPPLEMENT
[Underwriters]
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS (Subject to Completion)
DATED OCTOBER 5, 1994
CARCO Auto Loan Master Trust
Auto Loan Asset Backed Certificates
----------------
U.S. AUTO RECEIVABLES COMPANY, Seller
CHRYSLER CREDIT CORPORATION, Servicer
----------------
U.S. Auto Receivables Company ("USA" or the "Seller") has previously
sold and may sell from time to time one or more series (each a "Series")
of auto loan asset backed certificates (the "Certificates") evidencing
undivided interests in certain assets of Carco Auto Loan Master Trust (the
"Trust") created pursuant to a Pooling and Servicing Agreement among USA,
Chrysler Credit Corporation, as servicer ("CCC" or the "Servicer"), and
Manufacturers and Traders Trust Company, as trustee. The Trust assets
include wholesale receivables (the "Receivables") generated from time to
time in a portfolio of revolving financing arrangements (the "Accounts")
with automobile dealers to finance their automobile and light duty truck
inventory and collections on the Receivables, as more fully described
herein and, with respect to any Series, in an accompanying prospectus
supplement (a "Prospectus Supplement") relating to such Series.
Certificates have previously been sold by the Trust and additional
Certificates will be sold from time to time under this Prospectus on terms
determined for each Series or Class at the time of the sale and described
in the related Prospectus Supplement. Each Series will consist of one or
more classes of Certificates (each a "Class"). Certain assets of the Trust
will be allocated to the Certificateholders of each Series or Class
including the right to receive a varying percentage of each month's
collections with respect to the Receivables at the times and in the manner
described herein and, with respect to any Series offered hereby, in the
related Prospectus Supplement. The Seller will own the remaining interest
in the Trust not represented by the Certificates (the "Seller's
Interest"). The Seller's Interest will be subordinated to the rights of
the Certificateholders of each Series to the limited extent described,
with respect to any Series offered hereby, in the related Prospectus
Supplement. In addition, each Series offered hereby may be entitled to the
benefits of a letter of credit, surety bond, cash collateral account or
other form of enhancement as specified in the Prospectus Supplement
relating to such Series.
While the specific terms of any Series in respect of which this
Prospectus is being delivered will be described in the related Prospectus
Supplement, the terms of such Series will not be subject to prior review
by, or consent of, the holders of the Certificates of any previously
issued Series.
Prospective investors should consider, among other things, the
information set forth in "Special Considerations" herein.
----------------
THE CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE TRUST ONLY AND DO
NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF THE SELLER, THE SERVICER
OR ANY AFFILIATE THEREOF. NEITHER THE CERTIFICATES NOR THE
RECEIVABLES ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
Certificates may be sold by the Seller directly to purchasers,
through agents designated from time to time, through underwriting
syndicates led by one or more managing underwriters or through one or more
underwriters acting alone. If underwriters or agents are involved in the
offering of the Certificates of any Series offered hereby, the name of the
managing underwriter or underwriters or agents will be set forth in the
related Prospectus Supplement. If an underwriter, agent or dealer is
involved in the offering of the Certificates of any Series offered hereby,
the underwriter's discount, agent's commission or dealer's purchase price
will be set forth in, or may be calculated from, the related Prospectus
Supplement, and the net proceeds to the Seller from such offering will be
the public offering price of such Certificates less such discount in the
case of an underwriter, the purchase price of such Certificates less such
commissions in the case of an agent or the purchase price of such
Certificates in the case of a dealer, and less, in each case, the other
expenses of the Seller associated with the issuance and distribution of
such Certificates. See "Plan of Distribution".
This Prospectus may not be used to consummate sales of Certificates of any
Series unless accompanied by the related Prospectus Supplement.
The date of this Prospectus is September [ ], 1994.
<PAGE>
AVAILABLE INFORMATION
The Seller has filed a Registration Statement (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with the Securities and Exchange Commission (the "Commission") with
respect to the Certificates offered pursuant to this Prospectus. This
Prospectus, which forms part of the Registration Statement, does not
contain all of the information contained in the Registration Statement and
the exhibits thereto. For further information, reference is made to the
Registration Statement and amendments thereof and exhibits thereto, which
are available for inspection without charge at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; 75 Park Place, New York, New York 10007; and
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661. Copies of the Registration Statement and amendments thereof and
exhibits thereto may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and
annual unaudited reports, containing information concerning the Trust and
prepared by the Servicer, will be sent on behalf of the Trust to Cede &
Co. ("Cede"), as nominee of The Depository Trust Company ("DTC") and
registered holder of the Certificates, pursuant to the Pooling and
Servicing Agreement. Such reports may be available to holders of interests
in the Certificates (the "Certificateholders") upon request to their
respective Participants. See "Description of the Certificates -- Reports"
and " -- Evidence as to Compliance". The Trust will file with the
Commission such periodic reports with respect to the Trust as are required
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Servicer, on
behalf of the Trust, are incorporated in this Prospectus by reference: the
Trust's Annual Report on Form 10-K for the year ended December 31, 1993;
and the Trust's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1994 and June 30, 1994. All reports and other documents filed by the
Seller, as originator of any Trust, pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Certificates offered hereby
shall be deemed to be incorporated by reference in this Prospectus and to
be part hereof. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Seller will provide without charge to each person, including any
beneficial owner of Certificates, to whom a copy of this Prospectus is
delivered, on the written or oral request of any such person, a copy of
any or all of the documents incorporated herein or in any related
Prospectus Supplement by reference, except the exhibits to such documents
(unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Secretary,
Chrysler Financial Corporation, 27777 Franklin Road, Southfield, Michigan
48034-8286 (telephone: 810-948-3060).
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to
the detailed information appearing elsewhere in this Prospectus and by
reference to the information with respect to the Certificates of any
Series or Class offered hereby contained in the related Prospectus
Supplement to be prepared and delivered in connection with the offering of
such Certificates. Reference is made to the Index of Principal Terms for
the location herein of the definitions of certain capitalized terms used
herein.
Title of Securities .... Auto Loan Asset Backed Certificates (the
"Certificates").
Issuer ................. CARCO Auto Loan Master Trust (the "Trust").
Seller ................. The "Seller" is U.S. Auto Receivables Company
("USA"), a special-purpose wholly-owned
subsidiary of Chrysler Financial Corporation
("CFC").
Servicer ............... Chrysler Credit Corporation ("CCC"), a
wholly-owned subsidiary of CFC.
Trustee ................ Manufacturers and Traders Trust Company (the
"Trustee").
The Trust .............. The Trust was formed pursuant to a Pooling and
Servicing Agreement dated as of May 31, 1991, as
assigned by Chrysler Auto Receivables Company
("CARCO") to USA on August 8, 1991, among USA,
CCC, as Servicer, and the Trustee (as
supplemented and amended from time to time, the
"Pooling and Servicing Agreement"). The assets
of the Trust include (a) certain Receivables
existing under the Accounts at the close of
business on May 31, 1991 (the "Initial Cut-Off
Date"), certain Receivables generated under the
Accounts from time to time thereafter during the
term of the Trust as well as certain Receivables
generated under any Accounts added to the Trust
from time to time (but excluding Receivables
generated in any Accounts removed from the Trust
from time to time after the Initial Cut-Off
Date), (b) all funds collected or to be
collected in respect of such Receivables, (c)
all funds on deposit in certain accounts of the
Trust, (d) any other Enhancement issued with
respect to any particular Series or Class and
(e) a security interest in certain motor
vehicles (the "Vehicles") and certain parts
inventory, equipment, fixtures, service accounts
and, in some cases, realty and/or a personal
guarantee (collectively, the "Collateral
Security") securing the Receivables. The term
"Enhancement" shall mean, with respect to any
Series or Class, any letter of credit, surety
bond, cash collateral account, spread account,
guaranteed rate agreement, swap or other
interest rate protection agreement, maturity
liquidity facility, tax protection agreement, or
other arrangement for the benefit of
Certificateholders of such Series or Class.
CARCO Transfer ......... On August 8, 1991, CARCO, in accordance with the
terms of the Pooling and Servicing Agreement and
the Receivables Purchase Agreement, transferred
the Seller's Interest and all its rights and
obligations under (a) the Pooling and Servicing
Agreement (including rights and obligations as
seller thereunder) and (b) the Receivables
Purchase Agreement (including rights and
obligations as buyer thereunder) to USA, such
transfer being the "CARCO Transfer". See "U.S.
Auto Receivables Company and the Trust".
The Accounts ........... The Accounts pursuant to which the Receivables
have been or will be generated are revolving
credit agreements entered into with CCC by
dealers to finance the purchase of their
automobile and light duty truck inventory. The
Accounts are selected from all such credit
agreements of CCC which meet the criteria
provided in the Pooling and Servicing Agreement
(the "Eligible Accounts"). Under certain
circumstances Accounts may be added to, or
removed from, the Trust. See "The Accounts",
"Description of the Certificates -- Eligible
Accounts and Eligible Receivables", " --
Addition of Accounts" and " -- Removal of
Accounts".
The Receivables ........ The Receivables have arisen or will arise in the
Accounts. The Receivables consist of advances
made directly or indirectly by CCC to domestic
automobile dealers franchised by Chrysler
Corporation ("Chrysler") and/or other automobile
manufacturers (the "Dealers"). Such advances are
used by the Dealers to purchase the Vehicles,
which consist primarily of new automobiles,
light duty trucks and certain other vehicles
manufactured or distributed by such automobile
manufacturers. Generally, the principal amount
of an advance in respect of a Vehicle is equal
to the wholesale purchase price of the Vehicle
plus destination charges and, subject to certain
exceptions, is due upon the retail sale of the
Vehicle. See "The Dealer Floorplan Financing
Business -- Creation of Receivables" and " --
Payment Terms". Collections of principal under
the Receivables are herein referred to as
"Principal Collections", and collections of
interest and other nonprincipal charges
(including insurance service fees, amounts
recovered with respect to Defaulted Receivables
and insurance proceeds) are referred to herein
as "Interest Collections". The Receivables bear
interest at a floating rate based on the prime
rates of certain United States banks plus a
spread generally based on the amount of the
related Dealer's credit line. See "The Dealer
Floorplan Financing Business -- Revenue
Experience".
USA has entered into a Receivables Purchase
Agreement, dated as of the date of the Pooling
and Servicing Agreement, between USA, as
purchaser, and CCC, as seller (the "Receivables
Purchase Agreement"). Pursuant to the
Receivables Purchase Agreement, CCC has (a) sold
to USA all of its right, title and interest in
and to all Receivables meeting certain
eligibility criteria contained in the
Receivables Purchase Agreement and the Pooling
and Servicing Agreement ("Eligible Receivables")
and (b) assigned its interests in the Vehicles
and the Collateral Security to USA. USA in turn
transferred such Receivables and Collateral
Security to the Trust pursuant to the Pooling
and Servicing Agreement. USA has also assigned
to the Trust its rights with respect to the
Receivables under the Receivables Purchase
Agreement. See "Description of the Receivables
Purchase Agreement".
All new Receivables arising under the Accounts
during the term of the Trust will be sold by CCC
to USA and transferred by USA to the Trust.
Accordingly, the aggregate amount of Receivables
in the Trust will fluctuate from day to day as
new Receivables are generated and as existing
Receivables are collected, charged off as
uncollectible or otherwise adjusted.
The Certificates ....... The Certificates will be issued in Series, each
of which will consist of one or more Classes.
While the specific terms of any Series or Class
offered hereby will be described in the related
Prospectus Supplement, the terms of such Series
or Class will not be subject to prior review by,
or consent of, the holders of the Certificates
of any previously issued Series. There can be no
assurance that the terms of any Series issued
from time to time hereafter might not have an
impact on the timing or amount of payments
received by a Certificateholder. See
"Description of the Certificates -- New
Issuances".
Unless otherwise specified in the related
Prospectus Supplement, the Certificates of a
Series offered hereby will be available for
purchase in minimum denominations of $1,000 and
in integral multiples thereof and will only be
available in book-entry form except in certain
limited circumstances as described herein under
"Description of the Certificates -- Definitive
Certificates". The Trust's assets will be
allocated in part to the Certificateholders of
each Series (with respect to any particular
Series or all Series, the "Certificateholders'
Interest"), with the remainder allocated to the
Seller (the "Seller's Interest"). A portion of
the Seller's Interest will be subordinated to
the Certificateholders' Interest of each Series
to the extent described, with respect to any
Series offered hereby, in the related Prospectus
Supplement. The Certificates of each Series will
evidence an undivided beneficial interest in the
assets of the Trust allocated to the
Certificateholders' Interest of such Series and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of interest on
and principal of such Series as described, with
respect to any Series offered hereby, in the
related Prospectus Supplement.
The principal amount of the Seller's Interest
may fluctuate as the aggregate amount of the
Receivables balance changes from time to time,
as new Series are issued and as outstanding
Series amortize.
The Certificates will represent beneficial
interests in the Trust only and will not
represent interests in or obligations of CCC,
CFC or USA or any affiliate thereof. Neither the
Certificates nor the Receivables are insured or
guaranteed by CFC, CCC or USA or any affiliate
thereof or any governmental agency.
Registration of
Certificates ......... Unless otherwise specified in the related
Prospectus Supplement, the Certificates of a
Series offered hereby will initially be
represented by one or more Certificates
registered in the name of Cede & Co., as the
nominee of DTC. Unless otherwise specified in
the related Prospectus Supplement,
Certificateholders may elect to hold their
Certificates through DTC (in the United States)
or CEDEL or Euroclear (in Europe) and no person
acquiring an interest in the Certificates will
be entitled to receive a definitive certificate
representing such person's interest except in
the event that Definitive Certificates are
issued under certain limited circumstances. See
"Description of the Certificates -- Definitive
Certificates".
Issuances of
New Series ........... The Pooling and Servicing Agreement provides
that, pursuant to any one or more supplements
thereto (each, a "Series Supplement"), the
Seller may cause the Trustee to issue one or
more new Series of Certificates (a "New
Issuance"). However, at all times, the interest
in the balance of principal Receivables
("Principal Receivables") represented by the
Seller's Interest must equal or exceed a
specified amount. The Pooling and Servicing
Agreement also provides that the Seller may
specify, with respect to any Series, the
Principal Terms of the Series. The Seller may
offer any Series to the public or other
investors under a prospectus or other disclosure
document in transactions either registered under
the Securities Act or exempt from registration
thereunder, directly or through one or more
underwriters or placement agents.
Under the Pooling and Servicing Agreement and
pursuant to a Series Supplement, a New Issuance
may only occur upon delivery to the Trustee of,
among other things, the following: (a) a Series
Supplement specifying the Principal Terms of
such Series, (b) an opinion of counsel to the
effect that, for federal income and Michigan
income and single business tax purposes, (x)
such issuance will not adversely affect the
characterization of the Certificates of any
outstanding Series or Class as debt of the
Seller, (y) such issuance will not cause or
constitute a taxable event to any
Certificateholders and (z) such new Series will
be characterized as debt of the Seller and (c)
letters from the Rating Agencies confirming that
the issuance of the new Series will not result
in the reduction or withdrawal of the rating of
any other Series or Class of Certificates then
outstanding. See "Description of the
Certificates -- New Issuances".
Allocations ............ The Certificateholders' Interest of each Series
will include the right to receive (but only to
the extent needed to make required payments
under the Pooling and Servicing Agreement)
varying percentages of Interest Collections and
Principal Collections allocated to such
Certificates during each calendar month (a
"Collection Period"). Interest Collections,
Principal Collections and Defaulted Receivables
for any Collection Period will be allocated to
each Series based on that Series' Series
Allocation Percentage. The Series Allocation
Percentage for any Collection Period and any
Series is the percentage obtained by dividing
(x) the Adjusted Invested Amount for that Series
as of the last day of the immediately preceding
Collection Period by (y) the sum of the
aggregate Adjusted Invested Amounts for all
outstanding Series as of such last day. The
Adjusted Invested Amount for any Collection
Period and any Series is the sum of (x) the
Initial Invested Amount of such Series, minus
unreimbursed investor charge-offs allocated to
that Series as of the last day of the
immediately preceding Collection Period and (y)
the Available Subordinated Amount with respect
to such Series on the Determination Date
occurring in such Collection Period (after
giving effect to the allocations, distributions,
withdrawals and deposits to be made on the
Distribution Date following such Determination
Date). Interest Collections, Principal
Collections and Defaulted Receivables allocated
to a Series will be further allocated between
the Certificateholders' Interest of that Series
(and, if applicable, of each Class thereof) and
the Seller's Interest as provided in the related
Series Supplement and, with respect to any
Series offered hereby, described in the related
Prospectus Supplement.
Interest ............... Interest on the principal balance of
Certificates of a Series or Class offered hereby
will accrue at the per annum rate either
specified in or determined in the manner
specified in the related Prospectus Supplement
and will be payable to Certificateholders of
such Series or Class as and on the dates
("Interest Payment Dates") specified in the
related Prospectus Supplement. If the Prospectus
Supplement for a Series or Class of Certificates
offered hereby so specifies, the interest rate
and Interest Payment Dates applicable to each
Certificate of that Series or Class may be
subject to adjustment from time to time,
including as a result of a decline in the
interest rate borne by the Receivables. Except
as otherwise provided herein or in the related
Prospectus Supplement, Interest Collections and
certain other amounts allocable to the
Certificateholders' Interest of a Series offered
hereby will be used to make interest payments to
Certificateholders of such Series on each
Interest Payment Date with respect thereto,
provided that during any Early Amortization
Period with respect to such Series, interest
will be distributed to such Certificateholders
monthly on each Special Payment Date.
If the Interest Payment Dates for a Series or
Class occur less frequently than monthly, such
collections or other amounts (or the portion
thereof allocable to such Class) will be
deposited in one or more trust accounts (each an
"Interest Funding Account") and used to make
interest payments to Certificateholders of such
Series or Class on the following Interest
Payment Date with respect thereto. If a Series
has more than one Class of Certificates, each
such Class may have a separate Interest Funding
Account.
Principal .............. The principal of the Certificates of each Series
offered hereby will be scheduled to be paid
either in full on an expected date specified in
the related Prospectus Supplement (the "Expected
Payment Date"), in which case such Series will
have an Accumulation Period as described below
under "Accumulation Period", or in installments
commencing on a date specified in the related
Prospectus Supplement (the "Principal
Commencement Date"), in which case such Series
will have a Controlled Amortization Period as
described below under "Controlled Amortization
Period". If a Series has more than one Class of
Certificates, a different method of paying
principal, Expected Payment Date and/or
Principal Commencement Date may be assigned to
each Class. The payment of principal with
respect to the Certificates of a Series or Class
offered hereby may commence earlier than the
applicable Expected Payment Date or Principal
Commencement Date, and the final principal
payment with respect to the Certificates of a
Series or Class may be made later than the
applicable Expected Payment Date or other
expected date if an Early Amortization Event
occurs with respect to such Series or Class or
under certain other circumstances described
herein or in the related Prospectus Supplement.
Certificates of a Series or Class offered hereby
may also be subject to purchase from time to
time, generally at their respective principal
amounts, in connection with a remarketing
thereof if so specified in the related
Prospectus Supplement. A purchase of
Certificates of such a Series or Class may
result in a decrease in the outstanding
principal amount of such Series or Class prior
to the commencement of the Controlled
Amortization Period or Early Amortization Period
with respect thereto or the Expected Payment
Date therefor. The Prospectus Supplement for any
Series subject to purchase as described above
will describe the conditions to and procedures
for any such purchase. The proceeds of any such
purchase would be paid to the holders of the
Certificates so purchased.
Excess Funding Account . If and to the extent described in the Prospectus
Supplement relating to a Series offered hereby,
and, except to the extent so described, during
any Early Amortization Period, Reinvestment
Period, Accumulation Period or Controlled
Amortization Period with respect to such Series
or any Class thereof, proceeds of the issuance
of the Certificates of such Series not invested
in Receivables (the "Excess Funded Amount"), if
any, will be maintained in a trust account to be
established with the Trustee for the benefit of
such Series (an "Excess Funding Account"). The
Excess Funded Amount for a Series will initially
equal the excess, if any, of the initial
principal amount of such Series over the Initial
Invested Amount of such Series on the Series
Issuance Date therefor.
Except as provided below, any funds on deposit
in the Excess Funding Account for a Series will
be withdrawn and paid to the Seller or allocated
to one or more other Series which are in
amortization, early amortization, reinvestment
or accumulation periods to the extent of any
increases in the Invested Amount of the Series
in question generally as a result of the
addition of Receivables to the Trust. Under
certain circumstances, a portion of Principal
Collections allocable to a Series will be
deposited into the Excess Funding Account
therefor. Upon the earliest of (a) the
commencement of a Reinvestment Period with
respect to a Series, (b) the commencement of an
Early Amortization Period with respect to a
Series and (c) the Distribution Date or
Distribution Dates, if any, specified in or
determined in the manner provided in the Series
Supplement for such Series, funds on deposit in
the Excess Funding Account for such Series will
be distributed to the Certificateholders of such
Series or a Class thereof or deposited into the
Principal Funding Account for such Series or a
Class thereof, if and to the extent the Series
Supplement for such Series so provides.
Revolving Period ....... The Certificates of each Series offered hereby
will have a revolving period (the "Revolving
Period"). During the Revolving Period with
respect to a Series, Principal Collections and
certain other amounts otherwise allocable to the
Certificateholders' Interest of such Series
generally will be paid to the Seller, deposited
to the Excess Funding Account, if any, for such
Series or allocated to another Series (in
effect, in exchange for the allocation to the
Certificateholders' Interest of the Series in
question of an equal interest in the Receivables
balances that are new or that would otherwise be
part of the Seller's Interest or the interest of
the Certificateholders of such other Series) in
order to maintain the sum of the Invested Amount
of such Series and the Excess Funded Amount, if
any, with respect to such Series at a constant
level. The "Revolving Period" with respect to a
Series offered hereby shall be the period
beginning on the date specified in the related
Prospectus Supplement (the "Series Cut-off
Date") and ending on the earlier of (a) the day
immediately preceding the Accumulation Period
Commencement Date or the Principal Commencement
Date for such Series and (b) the business day
immediately preceding the day on which an Early
Amortization Event or a Reinvestment Event
occurs with respect to such Series. See
"Description of the Certificates -- Reinvestment
Events and Early Amortization Events" for a
discussion of certain events which might lead to
the early termination of the Revolving Period
and, in certain circumstances, the
recommencement of the Revolving Period. If a
Series has more than one Class of Certificates,
each such Class may have a different Revolving
Period.
Accumulation Period .... If the related Prospectus Supplement so
specifies, unless an Early Amortization Period
or Reinvestment Period that is not terminated in
accordance with the provisions of the related
Series Supplement commences with respect to a
Series offered hereby, the Certificates of such
Series will have an accumulation period (the
"Accumulation Period"), which will commence at
the close of business on the date specified in
or determined in the manner specified in such
Prospectus Supplement and continue until the
earliest of (a) the commencement of a
Reinvestment Period with respect to such Series,
(b) the commencement of an Early Amortization
Period with respect to such Series and (c)
payment in full of the outstanding principal
amount of the Certificates of such Series.
During the Accumulation Period with respect to a
Series, Principal Collections and certain other
amounts allocable to the Certificateholders'
Interest of such Series will be deposited on
each Distribution Date in a trust account
established for the benefit of the
Certificateholders of such Series (a "Principal
Funding Account") and, together, to the extent
provided in the related Series Supplement, with
any amounts in the Excess Funding Account, if
any, for such Series, used to make principal
distributions to the Certificateholders of such
Series when due. The amount to be deposited in
the Principal Funding Account for any Series
offered hereby on any Distribution Date during
the Accumulation Period for such Series may, but
will not necessarily, be limited to an amount
(the "Controlled Deposit Amount") equal to an
amount specified in the related Prospectus
Supplement plus, in the case of the Distribution
Date or Distribution Dates specified in or
determined in the manner provided in the related
Series Supplement, amounts in the Excess Funding
Account, if any, for such Series (after giving
effect to any changes therein on such date), if
and to the extent so provided in the related
Series Supplement. If a Series has more than one
Class of Certificates, each Class may have a
different Accumulation Period and a separate
Principal Funding Account and Controlled Deposit
Amount. In addition, the related Prospectus
Supplement may describe certain priorities among
such Classes with respect to deposits of
principal into such Principal Funding Accounts.
Controlled Amortization
Period ............... If the related Prospectus Supplement so
specifies, unless an Early Amortization Period
or Reinvestment Period that is not terminated in
accordance with the provisions of the related
Series Supplement commences with respect to a
Series offered hereby, the Certificates of such
Series will have an amortization period (the
"Controlled Amortization Period"), which will
commence at the close of business on the date
specified in or determined in the manner
specified in such Prospectus Supplement and
continue until the earliest of (a) the
commencement of a Reinvestment Period with
respect to such Series, (b) the commencement of
an Early Amortization Period with respect to
such Series and (c) payment in full of the
outstanding principal amount of the Certificates
of such Series. During the Controlled
Amortization Period with respect to a Series,
Principal Collections and certain other amounts
allocable to the Certificateholders' Interest of
such Series, together with, to the extent
provided in the related Series Supplement,
amounts in the Excess Funding Account, if any,
for such Series, will be used on each
Distribution Date to make principal
distributions to Certificateholders of such
Series or any Class of such Series then
scheduled to receive such distributions. The
amount to be distributed to Certificateholders
of any Series offered hereby on any Distribution
Date may, but will not necessarily, be limited
to an amount (the "Controlled Amortization
Amount") equal to an amount specified in the
related Prospectus Supplement. If a Series has
more than one Class of Certificates, each Class
may have a different Controlled Amortization
Period and a separate Controlled Amortization
Amount. In addition, the related Prospectus
Supplement may describe certain priorities among
such Classes with respect to such distributions.
Reinvestment Period .... If the related Prospectus Supplement so
specifies, unless an Early Amortization Period
that is not terminated in accordance with the
provisions of the related Series Supplement
commences with respect to a Series, if a
Reinvestment Event occurs with respect to such
Series, the Certificates of that Series will
have a reinvestment period (the "Reinvestment
Period") which will commence on the day (the
"Reinvestment Period Commencement Date") on
which such event has occurred and continue until
the earliest of (a) the commencement of an Early
Amortization Period with respect to such Series,
(b) the recommencement of the Revolving Period
with respect to such Series in accordance with
the related Series Supplement and (c) payment of
the outstanding principal amount of the
Certificates of such Series in full. Unless
otherwise provided in the related Series
Supplement, during the Reinvestment Period with
respect to a Series, Principal Collections and
certain other amounts allocable to the
Certificateholders' Interest of that Series will
be deposited on each Distribution Date in the
Principal Funding Account for such Series and,
together with, to the extent provided in the
related Series Supplement, amounts in the Excess
Funding Account, if any, for such Series, will
be used to make principal distributions to
Certificateholders of that Series when due. The
amount to be deposited in the Principal Funding
Account for any Series on any Distribution Date
during the Reinvestment Period for such Series
will not be limited to any Controlled Deposit
Amount. If a Series has more than one Class of
Certificates, the related Prospectus Supplement
may describe certain priorities among such
Classes with respect to deposits of principal
into the Principal Funding Accounts therefor.
After the date on which the amount on deposit in
the Principal Funding Account with respect to a
Series equals the outstanding principal amount
of the Certificates of such Series (the "Fully
Reinvested Date"), Certificateholders of such
Series will no longer have any interest in the
Receivables and all the representations and
covenants of the Seller and the Servicer
relating to the Receivables, as well as certain
other provisions of the Pooling and Servicing
Agreement and all remedies for breaches thereof,
will no longer accrue to the benefit of the
Certificateholders of such Series, in each case
unless the Revolving Period with respect to such
Series recommences as provided in the related
Series Supplement. In addition, upon the
occurrence of the Fully Reinvested Date with
respect to a Series, no Interest Collections,
Principal Collections, Defaulted Receivables or
Miscellaneous Payments will be allocated to that
Series unless the Revolving Period with respect
thereto recommences as described above.
Notwithstanding the foregoing, when the final
distribution has been made with respect to each
Series of Certificates or the Fully Reinvested
Date has occurred with respect thereto, all
right, title and interest in the Receivables
will be conveyed and transferred to USA. See
"Description of the Certificates -- Termination;
Fully Reinvested Date".
Early Amortization
Period ............... During the period beginning on the day on which
an Early Amortization Event has occurred with
respect to a Series offered hereby and ending on
the earliest of the payment in full of the
outstanding principal balance of the
Certificates of such Series, the recommencement
of the Revolving Period with respect to such
Series in accordance with the related Series
Supplement and the Termination Date for such
Series (the "Early Amortization Period"), the
Revolving Period, the Reinvestment Period, the
Controlled Amortization Period or the
Accumulation Period, as the case may be, with
respect to such Series, will terminate and
Principal Collections and certain other amounts
allocable to the Certificateholders' Interest of
that Series will no longer be paid to the Seller
or the holders of any other outstanding Series
or deposited in a Principal Funding Account as
described above but instead will be distributed
to the Certificateholders of such Series monthly
on each Distribution Date beginning with the
Distribution Date following the Collection
Period in which an Early Amortization Period
commences with respect to such Series. See
"Description of the Certificates -- Reinvestment
Events and Early Amortization Events" for a
description of events that might result in the
commencement of an Early Amortization Period
with respect to a Series of Certificates. During
an Early Amortization Period with respect to a
Series, distributions of principal on the
Certificates of that Series will not be subject
to a Controlled Distribution Amount. In
addition, on the first Special Payment Date with
respect to a Series amounts on deposit in the
Excess Funding Account, if any, to the extent
provided in the related Series Supplement, and
the Principal Funding Account with respect to
such Series or a Class thereof will be paid to
the Certificateholders of such Series or Class
up to the outstanding principal balance of the
Certificates of such Series or Class. Each
Distribution Date with respect to any Early
Amortization Period is defined as a "Special
Payment Date".
Subordination of the
Seller's Interest;
Enhancements ......... The Seller's Interest will be subordinated to
the rights of the Certificateholders of each
Series offered hereby to the limited extent
described in the related Prospectus Supplement.
If and to the extent specified in the related
Series Supplement, additional credit enhancement
with respect to a Series or Class of
Certificates may include any one or more of the
following: letters of credit, surety bonds, cash
collateral accounts, spread accounts, guaranteed
rate agreements, swaps or other interest rate
protection agreements, repurchase obligations,
other agreements with respect to third party
payments or other support, cash deposits or
other arrangements. Enhancement may also be
provided to a Series or Class of a Series by
subordination provisions which require that
distributions of principal and/or interest be
made with respect to the Certificates of that
Series or Class before distributions are made to
another Series or Class. Unless otherwise
specified in the related Prospectus Supplement,
any form of Enhancement will have certain
limitations and exclusions from coverage
thereunder, which will be described in the
related Prospectus Supplement.
Excluded Series ........ A Series of Certificates may be designated as an
excluded series (an "Excluded Series") with
respect to a Series of Certificates previously
issued by the Trust as to which the Accumulation
Period or Controlled Amortization Period has
commenced (a "Paired Series").
Each Excluded Series will be prefunded with an
initial deposit to a prefunding account in an
amount equal to the initial principal balance of
such Excluded Series and primarily from the
proceeds of the offering of such Excluded
Series. Any such prefunding account will be held
for the benefit of such Excluded Series and not
for the benefit of the Paired Series. As funds
are accumulated in the Principal Funding Account
for such Paired Series or distributed to holders
of Certificates of such Paired Series, an equal
amount of funds on deposit in any prefunding
account for such prefunded Excluded Series will
be released (which funds will be distributed to
the Seller). Until payment in full of the Paired
Series, no Interest Collections, Principal
Collections, Defaulted Amounts or Miscellaneous
Payments will be allocated to the related
Excluded Series. In addition, it is expected
that any Excluded Series will be excluded from
the calculation of the Required Participation
Amount as described under "Description of the
Certificates -- Addition of Accounts".
Servicing .............. The Servicer (initially, CCC) is responsible for
servicing, managing and making collections on
the Receivables and will, in most circumstances,
deposit such collections in the Collection
Account within two business days following the
receipt thereof, generally up to the amount of
such collections required to be distributed to
Certificateholders with respect to the related
Collection Period. In certain limited
circumstances, the Servicer will be permitted to
use for its own benefit and not segregate
collections on the Receivables received by it
during each Collection Period until no later
than the business day prior to the related
Distribution Date or, provided that no Series
issued prior to the date of this Prospectus is
outstanding, no later than such Distribution
Date. See "Description of the Certificates --
Allocation of Collections; Deposits in
Collection Account".
On the second business day preceding each
Distribution Date (each a "Determination Date"),
the Servicer will calculate the amounts to be
allocated in respect of collections on
Receivables received with respect to the related
Collection Period to the Certificateholders of
each outstanding Series or Class or to the
Seller in accordance with the Series
Supplements. See "Description of the
Certificates -- Allocation of Collections;
Deposits in Collection Account" and "Special
Considerations -- Certain Legal Aspects".
In certain limited circumstances CCC may resign
or be removed as Servicer, in which event either
the Trustee or, so long as it meets certain
eligibility standards set forth in the Pooling
and Servicing Agreement, a third-party servicer
may be appointed as successor servicer (CCC or
any such successor Servicer is referred to
herein as the "Servicer"). CCC is permitted to
delegate any of its duties as Servicer to any of
its affiliates, but any such delegation will not
relieve the Servicer of its obligations under
the Pooling and Servicing Agreement. The
Servicer will receive a monthly servicing fee
and certain other amounts as described herein as
servicing compensation from the Trust. See
"Description of the Certificates -- Servicing
Compensation and Payment of Expenses".
Mandatory Reassignment
and Transfer of
Certain Receivables .. The Seller has made certain representations and
warranties in the Pooling and Servicing
Agreement with respect to the Receivables in its
capacity as Seller and CCC has made certain
representations and warranties in the Pooling
and Servicing Agreement in its capacity as
Servicer. Such representations and warranties
will be reaffirmed as of each Series Cut-Off
Date. If the Seller breaches certain of its
representations and warranties with respect to
any Receivables and such breach remains uncured
for a specified period and has a materially
adverse effect on the Certificateholders'
Interest, the Certificateholders' Interest in
such Receivables will, subject to certain
conditions specified herein, be reassigned to
the Seller. If CCC, as Servicer, fails to comply
in all material respects with certain covenants
or warranties with respect to any Receivables
and such noncompliance is not cured within a
specified period after CCC becomes aware or
receives notice thereof from the Trustee and
such noncompliance has a materially adverse
effect on the Certificateholders' Interest
therein, the Certificateholders' Interest in all
Receivables affected will be purchased by CCC.
In the event of a transfer of servicing
obligations to a successor Servicer, such
successor Servicer, rather than CCC, would be
responsible for any failure to comply with the
Servicer's covenants and warranties arising
thereafter.
Tax Matters ............ In the opinion of special tax counsel for the
Seller and the Trust, the Certificates of each
Series offered hereby will be characterized as
debt of the Seller for federal income tax
purposes and, in the opinion of Michigan counsel
for the Seller and the Trust, the Certificates
will be characterized as debt of the Seller for
Michigan income and single business tax
purposes. Each Certificateholder, by the
acceptance of a Certificate offered hereby, will
agree to treat such Certificates as indebtedness
of the Seller for federal, state and local
income and single business tax purposes. The
Certificates might be issued with original issue
discount. See "Certain Tax Matters" for
additional information concerning the
application of federal and Michigan tax laws.
ERISA Considerations ... Under a regulation issued by the Department of
Labor, and unless otherwise specified in the
related Prospectus Supplement, the Trust's
assets would not be deemed "plan assets" of any
employee benefit plan holding interests in the
Certificates of any Series offered hereby or, if
such Series has more than one Class, any such
Class if certain conditions are met, including
that interests in the Certificates of such
Series or, in the case of a Series with more
than one Class, such Class be held by at least
100 independent persons upon completion of the
public offering of such Certificates being made
hereby. Based on information provided by the
underwriter or placement agent for a Series, the
Seller will notify the Trustee as to whether or
not Certificates of that Series or, in the case
of a Series with more than one Class, each such
Class will be held by at least 100 separately
named persons at the conclusion of the offering
thereof. The Seller will not, however, determine
whether the 100-investor requirement of the
exception for publicly offered securities is
satisfied as to the Certificates of any Series
or Class. If the Trust's assets were deemed to
be "plan assets" of such a plan, there is
uncertainty as to whether existing exemptions
from the "prohibited transaction" rules of the
Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), would apply to all
transactions involving the Trust's assets.
Accordingly, employee benefit plans
contemplating purchasing interests in the
Certificates of any Series or Class should
consult their counsel before making a purchase.
See "ERISA Considerations".
Certificate Ratings .... Unless otherwise specified in the related
Prospectus Supplement, it will be a condition to
the issuance of the Certificates of each Series
offered hereby that they be rated in the highest
long-term rating category by at least one
nationally recognized rating agency. A security
rating is not a recommendation to buy, sell or
hold securities and is subject to revision or
withdrawal in the future by the assigning rating
agency. See "Special Considerations -- Ratings
of the Certificates".
<PAGE>
SPECIAL CONSIDERATIONS
Limited Liquidity. It is anticipated that, to the extent permitted,
the underwriters of any Series of Certificates offered hereby will make a
market in such Certificates, but will not be under any obligation to do
so. There can be no assurance that a secondary market will develop with
respect to the Certificates of any Series offered hereby or, if such a
secondary market does develop, that it will provide the holders of such
Certificates with liquidity of investment or that it will continue for the
life of such Certificates.
Certain Legal Aspects. There are certain limited circumstances under
the Uniform Commercial Code (the "UCC") and applicable federal law in
which prior or subsequent transferees of Receivables could have an
interest in such Receivables with priority over the Trust's interest. See
"Certain Legal Aspects of the Receivables -- Transfer of Receivables".
Under the Receivables Purchase Agreement, CCC has warranted to the Seller
and, under the Pooling and Servicing Agreement, the Seller has warranted
to the Trust that the Receivables have been or will be transferred free
and clear of the lien of any third party. Each of CCC and the Seller has
also covenanted that it will not sell, pledge, assign, transfer or grant
any lien on any Receivable or, except as described under "Description of
the Certificates -- The Seller's Certificate", the Seller's Certificate
(or any interest therein) other than to the Trust.
CCC has warranted to the Seller in the Receivables Purchase
Agreement that the sale of the Receivables by it to the Seller is a valid
sale of the Receivables to the Seller. In addition, CCC, CFC and the
Seller have and will treat the transactions described herein as a sale of
the Receivables to the Seller and CCC has and will take all actions that
are required under Michigan law to perfect the Seller's ownership interest
in the Receivables. See "Certain Legal Aspects of the Receivables --
Transfer of Receivables". Notwithstanding the foregoing, if CCC or CFC
were to become a debtor in a bankruptcy case and a creditor or
trustee-in-bankruptcy of such debtor or such debtor itself were to take
the position that the sale of Receivables to the Seller should be
recharacterized as a pledge of such Receivables to secure a borrowing of
such debtor, then delays in payments of collections of Receivables to the
Seller could occur or (should the court rule in favor of any such trustee,
debtor or creditor) reductions in the amount of such payments could
result. If the transfer of Receivables to the Seller is recharacterized as
a pledge, a tax or government lien on the property of CCC or CFC arising
before any Receivables come into existence may have priority over the
Seller's interest in such Receivables. See "Certain Legal Aspects of the
Receivables -- Certain Matters Relating to Bankruptcy". If the
transactions contemplated herein are treated as a sale, except in certain
limited circumstances, the Receivables would not be part of either CFC's
or CCC's bankruptcy estate and would not be available to CFC's or CCC's
creditors.
In addition, if CFC or CCC were to become a debtor in a bankruptcy
case and a creditor or trustee-in-bankruptcy of such debtor or such debtor
itself were to request a bankruptcy court to order that CFC and/or CCC be
substantively consolidated with the Seller, delays in and reductions in
the amount of distributions on the Certificates could occur.
The Seller has warranted in the Pooling and Servicing Agreement that
the transfer of the Receivables to the Trust is a sale of the Receivables
to the Trust. The Seller has and will take all actions that are required
under Michigan law to perfect the Trust's interest in the Receivables and
the Seller has warranted that the Trust will at all times have a first
priority perfected ownership interest therein and, with certain
exceptions, in the proceeds thereof. However, the transfer of the
Receivables to the Trust could be deemed to create a security interest
therein. If the transfer of the Receivables to the Trust were deemed to
create a security interest therein under the UCC as in effect in Michigan,
a tax or statutory lien on property of CCC, CFC or the Seller arising
before a Receivable is transferred to the Trust may have priority over the
Trust's interest in such Receivables. If the Seller were to become a
debtor in a bankruptcy case and a bankruptcy trustee or the Seller as
debtor in possession or a creditor of the Seller were to take the position
that the transfer of the Receivables from the Seller to the Trust should
be recharacterized as a pledge of such Receivables, then delays in
distributions on the Certificates or, should the bankruptcy court rule in
favor of any such trustee, debtor in possession or creditor, reductions in
such distributions could result.
In a recent 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 rationale behind
the Octagon holding is equally applicable 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 CCC 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 CCC's bankruptcy
estate and would be subject to claims of certain creditors, and delays and
reductions in payments to the Seller and Certificateholders could result.
See "Certain Legal Aspects of the Receivables -- Certain Matters Relating
to Bankruptcy".
If certain events relating to the bankruptcy of Chrysler, CFC, CCC
or the Seller were to occur, then a Reinvestment Event or Early
Amortization Event would occur with respect to each Series and, pursuant
to the terms of the Pooling and Servicing Agreement, additional
Receivables would not be transferred to the Trust. See "Certain Legal
Aspects of the Receivables -- Transfer of Receivables" and " -- Certain
Matters Relating to Bankruptcy".
Payments made in respect of repurchases of Receivables by CCC or the
Seller pursuant to the Pooling and Servicing Agreement may be recoverable
by CCC or the Seller as debtor in possession or by a creditor or a
trustee-in-bankruptcy of CCC or the Seller as a preferential transfer from
CCC or the Seller if such payments are made within one year prior to the
filing of a bankruptcy case in respect of CCC or the Seller.
Application of federal and state bankruptcy and debtor relief laws
could affect the interests of the Certificateholders in the Receivables if
such laws result in any Receivables being written off as uncollectible or
result in delays in payments due on such Receivables. See "Description of
the Certificates -- Defaulted Receivables and Recoveries".
The Seller has represented and warranted in the Pooling and
Servicing Agreement that each Receivable is at the time of creation
secured by a first priority perfected security interest in the related
Vehicle. Generally, under applicable state laws, a security interest in an
automobile or light duty truck which secures wholesale financing
obligations may be perfected by the filing of UCC financing statements.
CCC takes all actions necessary under applicable state laws to perfect
CCC's security interest in the Vehicles. However, at the time a Vehicle is
sold, CCC's security interest in the Vehicle will terminate. Therefore, if
a Dealer fails to remit to CCC amounts owed with respect to Vehicles that
have been sold, the related Receivables will no longer be secured by
Vehicles.
Payments. Receivables are generally paid by Dealers upon retail sale
of the underlying Vehicle. The timing of such sales is uncertain. In
addition, there is no assurance that there will be additional Receivables
created under the Accounts or that any particular pattern of Dealer
repayments will occur. The payment of principal on the Certificates is
dependent on Dealer repayments. As a result the Certificates of any Series
or Class may not be fully amortized by the Expected Payment Date, if any,
with respect to such Series or Class and the payment to Certificateholders
or deposit in a Principal Funding Account of principal during the
Controlled Amortization Period or Accumulation Period, if any, with
respect to a Series of Certificates or a Class thereof may not equal the
Controlled Amortization Amount or Controlled Deposit Amount, if any, with
respect to such Series or Class.
Social, Economic and Other Factors. Payment of the Receivables is
largely dependent upon the retail sale of the related Vehicles. The level
of retail sales of cars and light duty trucks may change as the result of
a variety of social and economic factors. Economic factors include
interest rates, unemployment levels, the rate of inflation and consumer
perception of economic conditions generally. The use of incentive programs
(e.g., manufacturers' rebate programs) may affect retail sales. However,
the Seller is unable to determine and has no basis to predict whether or
to what extent economic or social factors will affect the level of Vehicle
sales.
Trust's Relationship to Chrysler and CCC. Neither CFC, CCC nor
Chrysler is obligated to make any payments in respect of the Certificates
of any Series or the Receivables (other than the obligation of CCC to
purchase certain Receivables from the Trust due to the failure to comply
with certain covenants, as described under "Description of the
Certificates -- Servicer Covenants"). However, the Trust is completely
dependent upon CCC for the generation of new Receivables. The ability of
CCC to generate Receivables is in turn dependent to a large extent on the
sales of automobiles and light duty trucks manufactured or distributed by
Chrysler. There can, therefore, be no assurance that CCC will continue to
generate Receivables at the same rate as in prior years. In addition, if
CCC were to cease acting as Servicer, delays in processing payments on the
Receivables and information in respect thereof could occur and result in
delays in payments to the Certificateholders.
In connection with the transfer of Receivables by CCC to the Seller
and the transfer of such Receivables by the Seller to the Trust, each of
CCC and the Seller make representations and warranties with respect to the
characteristics of such Receivables. CCC and the Seller are required to
determine the accuracy of such representations and warranties and, in
certain circumstances, they are required to purchase Receivables with
respect to which such representations and warranties have been breached.
See "Description of the Certificates -- Representations and Warranties"
and "Description of the Receivables Purchase Agreement -- Representations
and Warranties". In addition, subject to certain limitations, CCC has the
ability to change the terms of the Accounts, including the rate and the
credit line, as well as change its underwriting procedures.
Under franchise agreements between Chrysler and Chrysler-franchised
dealers, Chrysler is committed to purchase unmiled vehicles from such
dealers upon dealership termination. In addition, Chrysler has
historically provided certain financial assistance to Chrysler-franchised
dealers, but has no obligation to do so. If Chrysler is unable, or elects
not, to provide any such financial assistance to Dealers or is unable to
fulfill the terms of the franchise agreements with Dealers, losses with
respect to the Receivables may increase. See "The Dealer Floorplan
Financing Business -- Relationship with Chrysler". In addition, because a
substantial number of the Vehicles to be sold by the Dealers are
manufactured or distributed by Chrysler, if Chrysler were temporarily or
permanently no longer manufacturing or distributing vehicles, the rate of
sales of Chrysler-manufactured Vehicles owned by the Dealers would
decrease, adversely affecting payment rates with respect to the
Receivables, and the loss experience with respect to the Receivables will
be adversely affected. See "The Dealer Floorplan Financing Business".
The Prospectus Supplement for any Series offered hereby may set
forth certain additional information regarding CFC, CCC and Chrysler. In
addition, Chrysler and CFC are subject to the informational requirements
of the Exchange Act and in accordance therewith file reports and other
information with the Commission. For further information regarding
Chrysler and CFC reference is made to such reports and other information
which are available as described under "Available Information".
Credit Enhancement. Credit enhancement of each Series of
Certificates offered hereby will be provided by the subordination of the
Seller's Interest to the extent of the Available Subordinated Amount for
such Series as described in the related Prospectus Supplement. The amount
of such credit enhancement is limited and will be reduced from time to
time as described in the related Prospectus Supplement. In addition, any
Enhancement provided with respect to a Series or Class of Certificates is
expected to be limited. See "Limited Subordination of Seller's Interest;
Enhancements".
Control. Under certain circumstances, the consent or approval of the
holders of a specified percentage of the aggregate unpaid principal amount
of all outstanding Certificates of all outstanding Series will be required
to direct certain actions, including amending the Pooling and Servicing
Agreement in certain circumstances and directing a reassignment of the
entire portfolio of Receivables. In addition, following the occurrence of
an insolvency event with respect to the Seller, the holders of
Certificates evidencing more than 50% of the aggregate unpaid principal
amount of each Series or each Class of each Series (and any holder of a
Supplemental Certificate) will be required to direct the Trustee not to
sell or otherwise liquidate the Receivables.
Additional Series. The Trust, as a master trust, previously issued
Series and is expected to issue additional Series (which may be
represented by different Classes within a Series) from time to time. A
Series Supplement delivered in connection with the issuance of other
Series will specify certain Principal Terms applicable to such Series.
Such Principal Terms may include methods for determining applicable
allocation percentages and allocating collections, provisions creating
different or additional security or other credit enhancement, different
Classes of Certificates (including subordinated Classes of Certificates)
and any other amendment or supplement to the Pooling and Servicing
Agreement which is made applicable only to such Series. No Series
Supplement, however, may change the terms of the Certificates of another
Series or the terms of the Pooling and Servicing Agreement as applied to
the Certificate of another Series. See "Description of the Certificates --
New Issuances". As long as the Certificates of any Series are outstanding,
a condition to the execution of any Series Supplement will be that the
Rating Agencies shall have advised the Trustee that the issuance of such
Additional Series will not result in the reduction or withdrawal of their
rating of the Certificates of any outstanding Series or Class of
Certificates. There can be no assurance, however, that the terms of any
one Series might not have an impact on the timing or amount of payments
received by a Certificateholder of any other Series. The issuance of an
additional Series does not require the consent of any Certificateholders.
Ratings of the Certificates. Unless otherwise specified in the
related Prospectus Supplement, it will be a condition to the issuance of
the Certificates of each Series offered hereby that they be rated in the
highest long-term rating category by at least one nationally recognized
rating agency (such rating agency and each other rating agency designated
by the Seller in the related Series Supplement in respect of any
outstanding Series or Class, a "Rating Agency"). Any rating assigned to
the Certificates of a Series or a Class by a Rating Agency will reflect
such Rating Agency's assessment of the likelihood that Certificateholders
of such Series or Class will receive the payments of interest and
principal required to be made under the Pooling and Servicing Agreement
and will be based primarily on the value of the Receivables in the Trust,
the level of subordination of the Seller's Interest and the availability
of any Enhancement with respect to such Series or Class. However, any such
rating will not, unless otherwise specified in the related Prospectus
Supplement with respect to any Series or Class offered hereby, address the
likelihood that the principal of, or interest on, any Certificates of such
Series or Class will be paid on a scheduled date. The rating will not be a
recommendation to buy, hold or sell Certificates of such Series or Class,
inasmuch as such rating will not comment as to the market price or
suitability for a particular investor. There is no assurance that a rating
will remain for any given period of time or that a rating will not be
lowered or withdrawn by a Rating Agency if in its judgment circumstances
in the future so warrant.
Book-Entry Registration. Unless otherwise specified in the
Prospectus Supplement relating to a Series of Certificates offered hereby,
the Certificates of each such Series will be initially represented by one
or more certificates registered in the name of Cede, the nominee for DTC,
and will not be registered in the names of the Certificateholders or their
nominees. Accordingly, unless and until Definitive Certificates are issued
Certificateholders will not be recognized by the Trustee as
"Certificateholders" (as that term is used in the Pooling and Servicing
Agreement) and will only be able to exercise the rights of
Certificateholders indirectly through DTC and its participating
organizations, and unless the Prospectus Supplement for a Series offered
hereby provides otherwise, through Euroclear or CEDEL and their respective
participating organizations. See "Description of the Certificates --
General", " -- Book-Entry Registration" and " -- Definitive Certificates".
U.S. AUTO RECEIVABLES COMPANY AND THE TRUST
U.S. AUTO RECEIVABLES COMPANY
USA was incorporated in the State of Delaware on June 18, 1991, as a
wholly owned subsidiary of CFC. USA is organized for the limited purpose
of purchasing wholesale, retail and other receivables from either CFC, CCC
or CARCO and transferring such receivables to third parties or issuing
indebtedness secured by receivables to third parties. Similarly, CARCO was
incorporated in the State of Delaware on May 30, 1986, for the limited
purpose of purchasing wholesale and retail receivables from either CFC or
CCC and transferring such receivables to third parties. On August 8, 1991,
CARCO transferred the Seller's Interest and all its rights and obligations
under the Pooling and Servicing Agreement and the Receivables Purchase
Agreement to USA. Such transfer (the "CARCO Transfer") was made in
accordance with the terms of the Pooling and Servicing Agreement and the
Receivables Purchase Agreement and was subject to certain conditions,
including, among others that (a) CARCO, USA and the Trustee execute and
deliver an assignment and assumption agreement; (b) CARCO deliver certain
required opinions of counsel (including an opinion of counsel that the
CARCO Transfer would not adversely affect the characterization of any
outstanding Series or Class of Certificates as debt of USA); (c) the CARCO
Transfer would not result in a reduction or withdrawal of the rating of
any outstanding Series or Class of Certificates; and (d) all filings
required to continue the perfected interest of the Trustee in the
Receivables and the Collateral Security be made.
On August 8, 1991, USA was deemed to have made all representations
and warranties of the Seller in the Pooling and Servicing Agreement and
any Series Supplement with respect to any Series or Class of Certificates
outstanding at such time. In addition, upon such transfer, USA assumed the
obligations of CARCO under the Certificates with respect to any
outstanding Series, the Pooling and Servicing Agreement and the
Receivables Purchase Agreement and agreed to hold CARCO harmless from any
liability related to such obligations. Obligations transferred to and
assumed by USA include CARCO's obligation with respect to the subordinated
note issued to CFC (the owner of all the common stock of CARCO), the
proceeds of which note were used to fund a portion of the purchase price
of Receivables from CCC on the Initial Closing Date. CFC has made
additional subordinated loans to USA to fund a portion of the purchase
price of the Receivables arising in the Additional Accounts added to the
Trust on Addition Dates subsequent to the Initial Closing Date and may
make additional subordinated loans to USA in the future.
In addition to purchasing the Receivables in connection with the
offering of the Certificates, the Seller has also purchased other
receivables from CFC and CCC in connection with other financings.
The Seller has taken steps in structuring the transactions
contemplated hereby that are intended to insure that the voluntary or
involuntary application for relief by CFC or CCC 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 or CCC. These steps include the creation of the
Seller as a separate, limited-purpose subsidiary pursuant to a certificate
of incorporation containing certain limitations (including restrictions on
the nature of the Seller's business, as described above, and restrictions
on the Seller's ability to commence a voluntary case or proceeding under
any Insolvency Law without the unanimous affirmative vote of all its
directors). However, there can be no assurance that the activities of the
Seller would not result in a court concluding that the assets and
liabilities of the Seller should be consolidated with those of CFC or CCC
in a proceeding under any Insolvency Law. See "Special Considerations --
Certain Legal Aspects" and "Certain Legal Aspects of the Receivables --
Certain Matters Relating to Bankruptcy".
In addition, tax and certain other statutory liabilities, such as
liabilities to the Pension Benefit Guaranty Corporation relating to the
underfunding of pension plans, of Chrysler, CFC or CCC can be asserted
against the Seller. To the extent that any such liabilities arise after
the transfer of Receivables to the Trust, the Trust's interest in the
Receivables would be prior to the interest of the claimant with respect to
any such liabilities. However, the existence of a claim against the Seller
could permit the claimant to subject the Seller to an involuntary
proceeding under the Bankruptcy Code or other Insolvency Law. See "Special
Considerations -- Certain Legal Aspects" and "Certain Legal Aspects of the
Receivables -- Certain Matters Relating to Bankruptcy" and "Special
Considerations -- Trust's Relationship to Chrysler and CCC".
USA's executive offices are located at 27777 Franklin Road,
Southfield, Michigan 48034-8286, and its telephone number is (810)
948-3031.
THE TRUST
The Trust was formed in accordance with the laws of the State of New
York pursuant to the Pooling and Servicing Agreement. CARCO, as the
initial Seller, and USA, as CARCO's assignee, have conveyed to the Trust,
without recourse, the Receivables arising under the Accounts. The property
of the Trust consists of the Receivables existing in the Accounts on the
Initial Cut-Off Date, all Receivables generated in the Accounts from time
to time thereafter during the term of the Trust as well as Receivables
generated in any Accounts added to the Trust from time to time (but
excluding Receivables in any Accounts that are removed from the Trust from
time to time after the Initial Cut-Off Date), an assignment of all the
Seller's rights and remedies under the Receivables Purchase Agreement, all
funds collected or to be collected in respect of the Receivables, all
funds on deposit in certain accounts of the Trust, any Enhancement issued
with respect to any particular Series or Class of Certificates and a
security interest in the Vehicles and any other Collateral Security. See
"Description of the Certificates -- Addition of Accounts". See
"Description of the Receivables Purchase Agreement" for a summary of
certain terms of the Receivables Purchase Agreement.
CCC will generally not convey to the Trust receivables ("Fleet
Receivables") originated in connection with multiple new vehicle orders of
at least five vehicles by certain specified Dealers. The terms Receivables
and Principal Receivables as used herein will not refer to Fleet
Receivables.
The property of the Trust may also include Enhancements for the
benefit of Certificateholders of a particular Series or Class. The
Certificateholders of a particular Series or Class will not have any
interest in any Enhancements provided for the benefit of the
Certificateholders of another Series or Class, unless so provided in the
related Series Supplement or Series Supplements. Pursuant to the Pooling
and Servicing Agreement, the Seller will be allowed (subject to certain
limitations and conditions), and in some circumstances will be obligated,
to designate from time to time Additional Accounts to be included as
Accounts and to convey to the Trust the Receivables of such Additional
Accounts, and to designate from time to time certain Accounts to be
removed and to require the Trustee to convey receivables in such Removed
Accounts to the Seller.
The Trust was formed for this and like transactions pursuant to the
Pooling and Servicing Agreement and prior to formation had no assets or
obligations. The Trust will not engage in any business activity other than
acquiring and holding the Receivables and the other assets of the Trust
and proceeds therefrom, issuing the Certificates and the Seller's
Certificate (and any Supplemental Certificates) and making payments
thereon and related activities. As a consequence, the Trust is not
expected to have any need for, or source of, capital resources other than
the assets of the Trust.
USE OF PROCEEDS
Unless otherwise provided in the related Prospectus Supplement: (i)
the net proceeds from the sale of the Certificates of a given Series
offered hereby will be paid to USA and used to make the deposit of the
Excess Funded Amount, if any, for such Series, to the Excess Funding
Account for such Series; (ii) USA will use the portion of such proceeds
paid to it (together with the subordinated loan from CFC described under
"U.S. Auto Receivables Company and the Trust -- U.S. Auto Receivables
Company") to purchase Receivables from CCC or to repay certain amounts
previously borrowed to purchase Receivables; and (iii) CCC will use the
portion of the proceeds paid to it for general corporate purposes.
THE DEALER FLOORPLAN FINANCING BUSINESS
GENERAL
The Receivables sold to the Trust by the Seller pursuant to the
Pooling and Servicing Agreement were or will be selected from extensions
of credit and advances (known generally as "wholesale" or "floorplan"
financing) made by Chrysler and CCC to domestic motor "vehicle dealers".
Funds so advanced are used by dealers to purchase new and used vehicles
manufactured or distributed by Chrysler and other manufacturers pending
sale to retail buyers. As described herein, receivables sold to the Trust
are secured by the Vehicles and, in many cases, certain parts inventory,
equipment, fixtures and service accounts of the vehicle dealers. In some
cases, the Receivables are also secured by realty owned by, and/or a
personal guarantee of, a vehicle dealer.
CCC is the primary wholesale financing source for
Chrysler-franchised dealers in the United States. Chrysler vehicles for
which CCC provides wholesale financing include vehicles manufactured under
the CHRYSLER, PLYMOUTH, DODGE, JEEP and EAGLE trademarks. CCC has extended
credit lines to Chrysler-franchised dealers that also operate non-Chrysler
franchises and non-Chrysler dealers. CCC services the accounts of domestic
dealers financed by it (the "U.S. Wholesale Portfolio") through its home
office located in Southfield, Michigan and through a network of branch
offices located throughout the United States.
Vehicles financed by any dealer under the floor plan program are
categorized by CCC, under its policies and procedures, as New Vehicles or
Used Vehicles based on whether such vehicles qualify for the new or used
wholesale and retail interest rate chargeable to such dealer in connection
with the vehicles financed. Currently, (a) "New Vehicles" consist of (i)
current and prior model year unmiled vehicles and (ii) current model year
miled vehicles purchased at a closed auction conducted by Chrysler and (b)
"Used Vehicles" consist of previously owned vehicles (other than current
model year miled vehicles purchased at a closed auction conducted by
Chrysler). Vehicles purchased by a dealer at a closed auction conducted by
Chrysler are referred to, collectively, as "Auction Vehicles". The
categorization of New Vehicles and Used Vehicles may change in the future
based on CCC's practices and policies.
CREATION OF RECEIVABLES
CCC finances 100% of the wholesale invoice price of new vehicles,
including destination charges. Receivables in respect of
Chrysler-manufactured or distributed vehicles are originated by Chrysler
concurrently with the shipment of such vehicles to the financed dealer.
Such receivables are sold by Chrysler to CCC on a daily basis. In the case
of new vehicles not manufactured by Chrysler, CCC advances funds directly
to the manufacturer on behalf of the dealer. At the end of each day, all
receivables owned by CCC (i.e., receivables which have not been sold to
nonaffiliated parties) are sold to CFC.
Once a dealer has commenced the floorplanning of a manufacturer's
vehicles through CCC, CCC will finance all purchases of vehicles by such
dealer from such manufacturer. CCC will cancel this arrangement, however,
if a dealer's inventory is considered by CCC to be seriously overstocked,
if a dealer is experiencing financial difficulties or if a dealer requests
controlled vehicle releases. In such circumstances (known as "finance
hold"), the branch or area office of CCC assumes control of vehicle
releases to the dealer. Special arrangements are made by CCC to finance
inter-dealer sales of vehicles.
CREDIT UNDERWRITING PROCESS
CCC extends credit to dealers from time to time based upon
established credit lines. Lines of credit may be established by dealers to
finance purchases of new, used and auction vehicles. All
Chrysler-franchised dealers that have a new vehicle line of credit in
place are also eligible for a used vehicle and an auction vehicle credit
line. A new vehicle credit line relates to New Vehicles (other than
current model year miled vehicles purchased at a closed auction conducted
by Chrysler); a used vehicle credit line relates to Used Vehicles; and an
auction vehicle credit line relates to Auction Vehicles.
A newly franchised dealer requesting the establishment of a new
vehicle credit line must submit an application to a CCC branch office.
After receipt of such application, the local branch office investigates
the prospective dealer by reviewing the prospective dealer's credit
reports and bank references and evaluating the dealer's marketing
capabilities and start-up financial resources and credit requirements.
When an existing dealer requests the establishment of a wholesale new
vehicle credit line, the local branch office reviews the dealer's credit
reports (including the experience of the dealer's current financing
source) and bank references and investigates the dealer's current state of
operations and management (including evaluating a factory reference) and
marketing capabilities. The local branch office prepares a written
recommendation either approving or disapproving the dealer's request and
transmits such recommendation with the requisite documentation to the area
office for final approval or disapproval. CCC applies the same
underwriting standards for dealers franchised by other manufacturers.
Upon approval, dealers execute a series of financing agreements with
CCC and, in the case of Chrysler-franchised dealers, Chrysler. Such
agreements provide CCC a first priority security interest in the vehicles
and certain other collateral and a demand master promissory note in favor
of CCC. Pursuant to such agreements, all dealers are required by CCC to
maintain insurance coverage for each vehicle for which it provided
floorplan financing, with CCC 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 CCC based
upon such dealer's average new vehicle sales during the prior 180 days and
is, generally, in an amount sufficient to finance a 75-day supply of
vehicles. The amount of a dealer's credit line for used vehicles is also
adjusted periodically based upon such dealer's average used vehicle sales
for the prior 180 days and is, generally, in an amount sufficient to
finance 50% of a 30 to 45-day supply of vehicles. The size of a dealer's
auction vehicle credit line is determined on a case by case basis and is
adjusted periodically based on CCC's practices and procedures.
The aggregate amount advanced for each Used Vehicle is equal to the
National Automotive Dealers Association's Official Wholesale Used Car
Trade-in Guide wholesale book value for such vehicle. However, the
aggregate amount of the credit line for such used vehicles may not exceed
50% of the value of such dealer's total inventory of used vehicles. The
amount advanced for New Vehicles and all Auction Vehicles is equal to the
amount invoiced with respect to such vehicles and the auction purchase
price (including auction fees) of such Auction Vehicles, respectively.
PAYMENT TERMS
Upon the sale of a vehicle for which it has provided floorplan
financing, CCC generally is entitled to receive payment in full of the
related advance. Under an available instalment payment plan for new
Chrysler vehicles, eligible Chrysler-franchised dealers are obligated to
remit to CCC only 90% of the amount of the related advance upon retail
sale of the related vehicle. Payment of the remaining 10% balance (the
"Instalment Balance") is due in the second month following the date of
sale of such related vehicles. The security interest in the vehicle is
terminated at the time of its sale. A dealer has the option to pay the
Instalment Balance to CCC at the time of sale of the related vehicle. In
such case, CCC credits such amount to a cash management account maintained
for such dealer and automatically applies such credit to the payment of
the Instalment Balance on the due date thereof. Pursuant to an agreement
with Chrysler, CCC has two options with respect to the Instalment
Balances. CCC may elect to sell to Chrysler, without recourse, the
Instalment Balance of each such receivable when the related vehicle is
sold at retail. Alternatively, CCC may elect not to sell the Instalment
Balances to Chrysler and to retain a portion of the credit risk associated
therewith. In the latter case, Chrysler has agreed to absorb the credit
losses on Instalment Balances in each month in an amount equal to 15% of
the aggregate Instalment Balances created in such calendar month.
BILLING AND COLLECTION PROCEDURES
A statement setting forth billing and related account information is
prepared by CCC and distributed on a monthly basis to each dealer. Each
dealer's bills are generated and mailed on the sixth or seventh calendar
day of the month. Interest and other nonprincipal charges are required to
be paid by the end of the month in which they are billed. Interest and
handling fees are billed by CCC in arrears, while insurance costs are
billed in advance. Dealers remit payments by check directly to CCC's local
branch offices.
REVENUE EXPERIENCE
CCC charges dealers interest at a floating rate based on the rate
(the "Prime Rate") designated as the "prime rate" from time to time by
certain financial institutions selected by CFC, plus a designated spread
ranging from 0.50% to 1.25% on New Vehicles. The Prime Rate is reset by
CCC 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 such dealer's
credit lines. CCC generally increases the spreads charged on Used Vehicle
balances by an additional 0.75%; however, previously owned vehicles
purchased at a Chrysler closed auction are financed at the applicable New
Vehicle rate.
RELATIONSHIP WITH CHRYSLER
Chrysler provides to certain Chrysler-franchised dealers financial
assistance in the form of working capital loans and real estate financing.
Chrysler has recently increased the aggregate amount of its working
capital and other loans to such dealers. In addition, Chrysler provides
floorplan assistance to all Chrysler-franchised dealers through a number
of formal and informal programs. On all new vehicle financings, Chrysler
reimburses dealers directly for the finance costs for a specified period
from the date of shipment. Chrysler also has a supplemental floorplan
assistance program, whereby dealers are reimbursed, at the time of retail
sale, for a specified amount depending upon the vehicle model.
Under an agreement between Chrysler and each Chrysler-franchised
dealer, Chrysler commits to repurchase unsold new vehicles in inventory
upon dealership termination, at such vehicles' wholesale prices less a
specified margin. Chrysler only repurchases current model year vehicles
that are new, undamaged and unused. Chrysler also agrees to repurchase
from dealers, at the time of franchise termination, parts inventory at
specified percentages of the invoice price. If CCC takes possession of a
dealer's parts inventory, Chrysler is only obligated to pay CCC 55% of the
invoice price of such inventory. All of such assistance, however, is
provided by Chrysler for the benefit of its dealers, and does not relieve
such dealers of any of their obligations to CCC.
Much of such assistance is provided at the option of Chrysler, which
may terminate any of such optional programs in whole or in part at any
time. If Chrysler is unable to or elects not to provide such assistance,
the loss experience of CCC in respect of the U.S. Wholesale Portfolio may
be adversely affected. In addition, because a substantial number of the
vehicles sold by the dealers are manufactured or distributed by Chrysler,
if Chrysler were temporarily or permanently no longer in such business,
the rate of sales of Chrysler-manufactured vehicles would decrease,
adversely affecting payment rates and the loss experience of the U.S.
Wholesale Portfolio. See "Payment Terms" for a discussion of an instalment
payment plan made available to dealers. See also "Special Considerations
- -- Trust's Relationship to Chrysler and CCC".
DEALER MONITORING
The level of each dealer's wholesale credit line is monitored on a
periodic basis by CCC's local branch offices. Dealers are permitted to
exceed such lines on a temporary basis. For example, a dealer may,
immediately prior to a seasonal sales peak, purchase more vehicles than it
is otherwise permitted to finance under its existing credit lines. As
another example, because of slow inventory turnover, a dealer's credit
lines may be reduced prior to its liquidating a sufficient portion of its
vehicle inventory. If at any time CCC learns that a dealer's balance
exceeds its approved credit lines, CCC will evaluate such dealer's
financial position and may temporarily increase such dealer's credit lines
or place such dealer in a disciplinary category known as "finance hold".
See "Creation of Receivables".
Audits of dealer vehicle inventories are conducted on a regular
basis by branch office personnel. The timing of each visit is varied and
no advance notice is given to the audited dealer. Auditors review dealers'
financial records and conduct a physical inventory of the vehicles on the
dealers' premises. Through the audit process, CCC 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 CCC in
determining in such instance whether a dealer received sale proceeds but
diverted such proceeds to uses other than the repayment of the obligations
to CCC.
"DEALER TROUBLE" STATUS AND CCC'S WRITE-OFF POLICY
Under certain circumstances, CCC will classify a dealer under
"Dealer Trouble" status. Such circumstances include failure to remit any
principal or interest payment when due, any notifications of liens, levies
or attachments and a general deterioration of its financial condition.
Once a dealer is assigned to Dealer Trouble status, any further extension
of credit is determined by CCC on a case-by-case basis.
CCC attempts to work with dealers to resolve instances of Dealer
Trouble status. If, however, a dealer remains on such status, it can
result in one of the following: (a) an orderly liquidation in which the
dealer voluntarily liquidates its inventory through normal sales to retail
customers, (b) a forced liquidation in which the dealer's inventory is
repossessed and, in the case of Chrysler-franchised dealers, the franchise
is closed, (c) a voluntary surrender of the dealer's inventory and, in the
case of Chrysler-franchised dealers, franchise closure, or (d) a forced
sale of the dealership. Generally, CCC works with franchised dealers to
find third parties to purchase a troubled dealership. The proceeds of such
sales are used to repay amounts due to CCC. Once liquidation has
commenced, CCC performs an analysis of its position, writes off any
amounts identified at such time as uncollectible and attempts to liquidate
all possible collateral remaining. During the course of a liquidation, CCC
may recognize additional losses or recoveries.
ADDITIONAL INFORMATION
The Prospectus Supplement for each Series offered hereby will set
forth additional information with respect to the Dealer Floorplan
Financing Business.
THE ACCOUNTS
GENERAL
The Receivables arise in the Accounts. The Accounts were selected
from all the wholesale accounts in the U.S. Wholesale Portfolio that are
Eligible Accounts (the "Eligible Portfolio"). In order to be included in
the Eligible Portfolio, each Account must be an account established by CCC
in the ordinary course of business and meet certain other criteria
provided in the Pooling and Servicing Agreement. See "Description of the
Certificates -- Representations and Warranties". CCC 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 CCC in cash management
accounts, limited in amount to the amount of the wholesale accounts. Funds
deposited by a Dealer in its cash management account are applied to reduce
the Dealer's outstanding Principal Receivables balance and may, under
certain circumstances, be reborrowed by the Dealer.
Pursuant to the Pooling and Servicing Agreement, the Seller, and
pursuant to the Receivables Purchase Agreement, CCC, has the right
(subject to certain limitations and conditions), and in some circumstances
is obligated, to designate from time to time additional qualifying
wholesale accounts to be included as Accounts and to convey to the Trust
certain of the Receivables of such Additional Accounts, including
Receivables thereafter created. These accounts must meet the eligibility
criteria set forth above as of the date such accounts are designated as
Additional Accounts. CCC will convey the Receivables then existing, with
certain exceptions, or thereafter created under such Additional Accounts
to the Seller, which will in turn convey them to the Trust. See
"Description of the Certificates -- Addition of Accounts". In addition, as
of any Additional Cut-off Date in respect of Additional Accounts and the
date any new Receivables are generated, CCC will represent and warrant to
the Seller, and the Seller will represent and warrant to the Trust, that
the Receivables meet the eligibility requirements set forth in the Pooling
and Servicing Agreement. See "Description of the Certificates --
Conveyance of Receivables". Under certain circumstances specified in the
Pooling and Servicing Agreement, the Seller has the right to remove
Accounts, and the Receivables arising therefrom, from the Trust. See
"Description of the Certificates -- Removal of Accounts". Throughout the
term of the Trust, the Accounts from which the Receivables arise will be
the same Accounts designated by the Seller on the Initial Cut-Off Date
plus any Additional Accounts, minus any Accounts removed from the Trust.
Information with respect to the Accounts will be set forth in each
Prospectus Supplement.
CHRYSLER FINANCIAL CORPORATION AND
CHRYSLER CREDIT CORPORATION
CFC is a financial services organization, all of the common stock of
which is owned by Chrysler. CFC, a Michigan corporation, is the continuing
corporation resulting from a merger on June 1, 1967, of a financial
services subsidiary of Chrysler into a newly acquired, previously
nonaffiliated finance company incorporated in 1926. CFC is engaged in
automotive retail, wholesale and fleet financing, servicing commercial
leases and loans, secured small business financing, and property, casualty
and other insurance and automotive dealership facility development and
management. CFC's business is substantially dependent upon the operations
of Chrysler. In particular, lower levels of production and sale of
Chrysler's automotive products could result in a reduction in the level of
finance and insurance operations of CFC. See "Special Considerations --
Trust's Relationship to Chrysler and CCC". CFC's executive offices are
located at 27777 Franklin Road, Southfield, Michigan 48034-8286 and its
telephone number is (810) 948-3060.
CCC, a wholly owned subsidiary of CFC, provides retail, wholesale
and lease financing services to automobile dealers and their customers
throughout the United States.
The Prospectus Supplement for each Series offered hereby will set
forth certain additional information with respect to CFC and CCC.
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates of a Series will be issued pursuant to a Pooling
and Servicing Agreement (as supplemented and amended from time to time,
the "Pooling and Servicing Agreement"), among USA, as seller of the
Receivables, CCC, as servicer of the Receivables, and the Trustee,
substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Trustee will make
available for inspection a copy of the Pooling and Servicing Agreement
(without exhibits or schedules) to Certificateholders of a Series offered
hereby on written request. The following summary describes certain terms
generally applicable to the Certificates of each Series, does not purport
to be complete and is qualified in its entirety by reference to the
Pooling and Servicing Agreement and the applicable Series Supplement.
The Certificates of each Series offered hereby will evidence
undivided beneficial interests in certain assets of the Trust allocated to
the Certificateholders' Interest of such Series, representing the right to
receive from such Trust assets funds up to (but not in excess of) the
amounts required to make payments of interest on and principal of the
Certificates of such Series pursuant to the Pooling and Servicing
Agreement as described in the related Prospectus Supplement.
The Certificates of each Series offered hereby will initially be
represented by Certificates registered in the name of the nominee of DTC
(together with any successor depository selected by the Seller, the
"Depository"), except as set forth below. Unless otherwise specified in
the related Prospectus Supplement, the Certificates of each Series offered
hereby will be available for purchase in minimum denominations of $1,000
and integral multiples thereof in book-entry form only. The Seller has
been informed by DTC that DTC's nominee will be Cede. Accordingly, Cede is
expected to be the holder of record of the Certificates. Unless and until
Definitive Certificates are issued under the limited circumstances
described herein, no Certificateholder will be entitled to receive a
physical certificate representing a Certificate. All references herein to
actions by Certificateholders shall refer to actions taken by DTC upon
instructions from Participants and all references herein to distributions,
notices, reports and statements to Certificateholders shall refer to
distributions, notices, reports and statements to DTC or Cede, as the
registered holder of the Certificates, as the case may be. See "Book-Entry
Registration" and "Definitive Certificates".
INTEREST
Interest on the principal balance of the Certificates of a Series or
Class offered hereby will accrue at the per annum rate either specified in
or determined in the manner specified in the related Prospectus Supplement
and will be payable to the Certificateholders of such Series or Class as
and on the Interest Payment Dates specified in the related Prospectus
Supplement. If the Prospectus Supplement for a Series or Class of
Certificates so provides, the interest rate and the Interest Payment Dates
applicable to each Certificate of that Series or Class may be subject to
adjustment from time to time, including as a result of a decline in the
interest rate borne by the Receivables.
Except as otherwise provided herein or in the related Prospectus
Supplement, Interest Collections and certain other amounts allocable to
the Certificateholders' Interest of a Series offered hereby will be used
to make interest payments to Certificateholders of such Series on each
Interest Payment Date with respect thereto, provided that during any Early
Amortization Period with respect to such Series, interest will be
distributed to such Certificateholders monthly on each Special Payment
Date.
If the Interest Payment Dates for a Series or Class occur less
frequently than monthly, such collections or other amounts (or the portion
thereof allocable to such Class) will be deposited in one or more trust
accounts (each an "Interest Funding Account") and used to make interest
payments to Certificateholders of such Series or Class on the following
Interest Payment Date with respect thereto. If a Series has more than one
Class of Certificates, each such Class may have a separate Interest
Funding Account.
PRINCIPAL
The Certificates of each Series and Class will have a Revolving
Period during which Principal Collections and certain other amounts
otherwise allocable to the Certificateholders' Interest of such Series or
Class will be paid to the Seller, deposited to the Excess Funding Account,
if any, for such Series or distributed to, or for the benefit of, the
Certificateholders of other Classes or Series. Unless a Reinvestment
Period or an Early Amortization Period, in each case that is not
terminated in accordance with the provisions of the related Series
Supplement, commences with respect to a Series, following the Revolving
Period with respect to such Series or a Class thereof, such Series or
Class will have either an Accumulation Period or a Controlled Amortization
Period.
During the Accumulation Period, if any, with respect to a Series,
Principal Collections and certain other amounts allocable to the
Certificateholders' Interest of such Series (including, if and to the
extent the Series Supplement therefor so provides, Excess Principal
Collections, if any, allocable to such Series) will be deposited on each
Distribution Date in a Principal Funding Account and, together, to the
extent provided in the related Series Supplement, with any amounts in the
Excess Funding Account, if any, for such Series, used to make principal
distributions to the Certificateholders of such Series when due. The
amount to be deposited in a Principal Funding Account for any Series
offered hereby on any Distribution Date may, but will not necessarily, be
limited to the Controlled Deposit Amount specified in the related
Prospectus Supplement. If a Series has more than one Class of
Certificates, each Class may have a different Accumulation Period and a
separate Principal Funding Account and Controlled Deposit Amount. In
addition, the related Prospectus Supplement may describe certain
priorities among such Classes with respect to deposits of principal into
such Principal Funding Accounts.
During the Controlled Amortization Period, if any, with respect to a
Series, Principal Collections and certain other amounts allocable to the
Certificateholders' Interest of such Series (including, if and to the
extent the Supplement for such Series so provides, Excess Principal
Collections, if any, allocable to such Series) will be used, together, to
the extent provided in the related Series Supplement, with any amounts in
the Excess Funding Account, if any, for such Series, on each Distribution
Date to make principal distributions to any Class of Certificateholders of
such Series then scheduled to receive such distributions. The amount to be
distributed to Certificateholders of any Series offered hereby on any
Distribution Date may, but will not necessarily, be limited to the
Controlled Amortization Amount for such Series specified in the related
Prospectus Supplement. If a Series has more than one Class of
Certificates, each Class may have a different Controlled Amortization
Period and a separate Controlled Amortization Amount. In addition, the
related Prospectus Supplement may describe certain priorities among such
Classes with respect to such distributions.
During the Reinvestment Period, if any, with respect to a Series,
Principal Collections and certain other amounts allocable to the
Certificateholders' Interest of such Series (including, if and to the
extent the Series Supplement for such Series so provides, Excess Principal
Collections, if any, allocable to such Series) will be deposited on each
Distribution Date in a Principal Funding Account and, together, to the
extent provided in the related Series Supplement, with any amounts in the
Excess Funding Account, if any, for such Series, used to make principal
distributions to the Certificateholders of such Series when due, in each
case unless the related Series Supplement provides otherwise. The amount
to be deposited in a Principal Funding Account for any Series offered
hereby on any Distribution Date will not be limited to any Controlled
Deposit Amount or Controlled Amortization Amount. If a Series has more
than one Class of Certificates, each Class may have a separate Principal
Funding Account and the related Prospectus Supplement may describe certain
priorities among such Classes with respect to deposits of principal into
such Principal Funding Accounts.
During the Early Amortization Period, if any, with respect to a
Series, Principal Collections and certain other amounts allocable to the
Certificateholders' Interest of such Series (including, if and to the
extent the Series Supplement for such Series so provides, Excess Principal
Collections, if any, allocable to such Series) will be distributed as
principal payments to the applicable Certificateholders monthly on each
Distribution Date beginning with the first Special Payment Date. During
the Early Amortization Period with respect to a Series, distributions of
principal to Certificateholders of such Series will not be limited to any
Controlled Deposit Amount or Controlled Amortization Amount. In addition,
with respect to any Series, to the extent provided in the related Series
Supplement, any funds on deposit in the Excess Funding Account, if any,
with respect to such Series and any funds on deposit in the Principal
Funding Account with respect to such Series will be paid to the
Certificateholders of the relevant Class or Series. See "Reinvestment
Events and Early Amortization Events" for a discussion of the events which
might lead to the commencement of the Early Amortization Period with
respect to a Series.
Funds on deposit in any Principal Funding Account established with
respect to a Class or Series offered hereby will be invested in Eligible
Investments, and may be subject to a guarantee or guaranteed investment
contract or other mechanism specified in the related Prospectus Supplement
intended to assure a minimum rate of return on the investment of such
funds. In order to enhance the likelihood of the payment in full of the
principal amount of a Series or Class of Certificates offered hereby at
the end of an Accumulation Period with respect thereto, such Series or
Class may be subject to a maturity liquidity facility or other similar
mechanism specified in the relevant Prospectus Supplement. A maturity
liquidity facility is a financial contract that generally provides that
sufficient principal will be available to retire the Certificates at a
certain date.
Certificates of a Series or Class offered hereby may also be subject
to purchase from time to time, generally at their respective principal
amounts, in connection with a remarketing thereof if so specified in the
related Prospectus Supplement. A purchase of Certificates of such a Series
or Class may result in a decrease in the outstanding principal amount of
such Series or Class prior to the commencement of any Controlled
Amortization Period or Early Amortization Period with respect thereto. The
Prospectus Supplement for any Series offered hereby subject to purchase as
described in this paragraph will describe the conditions to and procedures
for any such purchase. The proceeds of any such purchase would be paid to
the holders of the Certificates so purchased.
BOOK-ENTRY REGISTRATION
Unless otherwise specified in the related Prospectus Supplement,
Certificateholders may hold Certificates of a Series offered hereby
through DTC (in the United States) or CEDEL or Euroclear (in Europe) if
they are participants of such systems, or indirectly through organizations
which are participants in such systems.
Cede, as nominee for DTC, will be the registered holder of the
global Certificates. Except as described herein, no Certificateholder will
be entitled to receive a certificate representing such person's interest
in the Certificates. Unless and until Definitive Certificates are issued
under the limited circumstances described below, all references herein to
actions by Certificateholders shall refer to actions taken by DTC upon
instructions from its Participants, and all references herein to
distributions, notices, reports and statements to Certificateholders shall
refer to distributions, notices, reports and statements to Cede, as the
registered holder of the Certificates, for distribution to the
Certificateholders in accordance with DTC procedures.
CEDEL and Euroclear will hold omnibus positions on behalf of their
participants through customers' securities accounts in CEDEL's and
Euroclear's names on the books of their respective depositaries which in
turn will hold such positions in customers' securities accounts in the
depositaries' names on the books of DTC. Citibank, N.A. ("Citibank") will
act as depositary for CEDEL and Morgan Guaranty Trust Company of New York
("Morgan") will act as depositary for Euroclear (in such capacities, the
"Foreign Agency Depositaries").
Transfers between DTC participants will occur in the ordinary way in
accordance with DTC rules. Transfers between CEDEL Participants and
Euroclear Participants will occur in the ordinary way in accordance with
their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or
indirectly through DTC, on the one hand, and directly or indirectly
through CEDEL or Euroclear participants, on the other, will be effected in
DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by its Foreign Agency Depositary; however,
such cross-market transactions will require delivery of instructions to
the relevant European international clearing system by the counterparty in
such system in accordance with its rules and procedures and within its
established deadlines (European time). The relevant European international
clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its Foreign Agency Depositary to
take action to effect final settlement on its behalf by delivering or
receiving securities in DTC, and making or receiving payment in accordance
with normal procedures for same-day funds settlement applicable to DTC.
CEDEL Participants and Euroclear Participants may not deliver instructions
directly to the Foreign Agency Depositaries.
Because of time-zone difference, credits of securities received in
CEDEL or Euroclear as a result of a transaction with a DTC participant
will be made during subsequent securities settlement processing and dated
the business day following the DTC settlement date. Such credits or any
transactions in such securities settled during such processing will be
reported to the relevant Euroclear or CEDEL participant on such business
day. Cash received in CEDEL or Euroclear as a result of sales of
securities by or through a CEDEL Participant or a Euroclear Participant to
a DTC participant will be received with value on the DTC settlement date
but will be available in the relevant CEDEL or Euroclear cash account only
as of the business day following settlement in DTC. For additional
information regarding clearance and settlement procedures for the
Certificates, see Annex I hereto and for information with respect to tax
documentation procedures relating to the Certificates, see Annex I hereto
and "Tax Matters -- Certain Federal Income Tax Consequences -- Foreign
Investors".
DTC is a limited-purpose trust company organized under the laws of
the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the UCC and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act.
DTC was created to hold securities for its participating organizations
("Participants") and facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entry changes in
their accounts, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and may include certain other
organizations. Indirect access to the DTC system also is available to
others such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly ("Indirect Participants").
Certificateholders that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership
of, or other interests in, Certificates may do so only through
Participants and Indirect Participants. In addition, Certificateholders
will receive all distributions of principal of and interest on the
Certificates from the Trustee through DTC and its Participants. Under a
book-entry format, Certificateholders will receive payments after the
related Distribution Date because, while payments are required to be
forwarded to Cede, as nominee for DTC, on each such date, DTC will forward
such payments to its Participants which thereafter will be required to
forward them to Indirect Participants or Certificateholders. It is
anticipated that the only "Certificateholder" (as such term is used in the
Pooling and Servicing Agreement) will be Cede, as nominee of DTC, and that
Certificateholders will not be recognized by the Trustee as
Certificateholders under the Pooling and Servicing Agreement.
Certificateholders will only be permitted to exercise the rights of
Certificateholders under the Pooling and Servicing Agreement indirectly
through DTC and its Participants who in turn will exercise their rights
through DTC.
Under the rules, regulations and procedures creating and affecting
DTC and its operations, DTC is required to make book-entry transfers among
Participants on whose behalf it acts with respect to the Certificates and
is required to receive and transmit distributions of principal of and
interest on the Certificates. Participants and Indirect Participants with
which Certificateholders have accounts with respect to the Certificates
similarly are required to make book-entry transfers and receive and
transmit such payments on behalf of their respective Certificateholders.
Because DTC can only act on behalf of Participants, who in turn act
on behalf of Indirect Participants and certain banks, the ability of a
Certificateholder to pledge Certificates to persons or entities that do
not participate in the DTC system, or otherwise take actions in respect of
such Certificates, may be limited due to the lack of a physical
certificate for such Certificates.
DTC has advised the Seller that it will take any action permitted to
be taken by a Certificateholder under the Pooling and Servicing Agreement
only at the direction of one or more Participants to whose account with
DTC the Certificates are credited.
CEDEL, Societe Anonyme ("CEDEL"), 67 Bd Grande-Duchesse Charlotte,
L-1420, Luxembourg (R.C. Luxembourg B9248) was incorporated in 1970 as a
limited company under Luxembourg law. CEDEL is owned by banks, securities
dealers, and financial institutions and currently has over 100
shareholders, including U.S. financial institutions or their subsidiaries.
No single entity may own more than five percent of CEDEL's stock.
CEDEL is registered as a "Depositaire professional de titre" in
Luxembourg, and as such is subject to regulation by the Luxembourg
Monetary Authority ("IML"), which also supervises Luxembourg's banks.
CEDEL provides clearance and settlement services for its customers
and currently accepts over 40,000 securities issues for clearance,
settlement, and custody. CEDEL's customers consist of broker-dealers,
financial institutions, and other securities professionals involved in the
movement and/or custody of securities. CEDEL's U.S. customers are limited
to brokers, dealers, and banks. Currently, CEDEL has approximately 3,000
customers located in over 60 countries, including all major European
countries, Canada, and the United States.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("Euroclear Participants") and to
clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk
from lack of simultaneous transfers of securities and cash. Transactions
may now be settled in any of 27 currencies, including United States
dollars. The Euroclear System includes various other services, including
securities lending and borrowing, and interfaces with domestic markets in
several countries generally similar to the arrangements for cross-market
transfers with DTC described above. The Euroclear System is operated by
Morgan Guaranty Trust Company of New York, Brussels, Belgium office (the
"Euroclear Operator" or "Euroclear"), under contract with Euroclear S.C.,
a Belgian cooperative corporation (the "Cooperative"). All operations are
conducted by the Euroclear Operator, and all Euroclear securities
clearance accounts and Euroclear Clearance System cash accounts are
accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central
banks), securities brokers and dealers and other professional financial
intermediaries and may include any underwriters, agents or dealers
involved in the distribution of the Certificates. Indirect access to the
Euroclear System is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear Participant, either
directly or indirectly.
The Euroclear Operator is the Belgian branch of New York banking
corporation which is a member of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of
Euroclear and the related Operative Procedures of the Euroclear System,
and applicable Belgian law (collectively, the "Terms and Conditions"). The
Terms and Conditions govern transfers of securities and cash within the
Euroclear System, withdrawals of securities and cash from the Euroclear
System, and receipts of payments with respect to securities in the
Euroclear System. All securities in the Euroclear System are held on a
fungible basis without attribution of specific certificates to specific
securities clearance accounts. The Euroclear Operator acts under the Terms
and Conditions only on behalf of Euroclear Participants, and has no record
of or relationship with persons holding through Euroclear Participants.
Distributions with respect to Certificates held through CEDEL or
Euroclear will be credited to the cash accounts of CEDEL Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Foreign Agency Depositary. Such
distributions will be subject to tax reporting in accordance with relevant
United States tax laws and regulations. See "Certain Tax Matters". CEDEL
or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by a Certificateholder under the Pooling and
Servicing Agreement or the applicable Series Supplement on behalf of a
CEDEL Participant or Euroclear Participant only in accordance with its
relevant rules and procedures and subject to its Foreign Agency
Depositary's ability to effect such actions on its behalf through DTC.
Although DTC, CEDEL and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Certificates among
participants of DTC, CEDEL and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such procedures may be
discontinued at any time.
DEFINITIVE CERTIFICATES
Unless otherwise stated in the related Prospectus Supplement, the
Certificates of a Series or Class offered hereby will be issued in fully
registered, certificated form to Certificateholders or their nominees
("Definitive Certificates"), rather than to DTC or its nominee only if (i)
the Seller advises the Trustee in writing that DTC is no longer willing or
able to properly discharge its responsibilities as Depository with respect
to the Certificates of such Series or Class and the Seller is unable to
locate a qualified successor, (ii) the Seller, at its option, elects to
terminate the book-entry system through DTC with respect to such Series or
Class or (iii) after the occurrence of a Service Default,
Certificateholders representing not less than 50% of the aggregate unpaid
principal amount of the Certificates of such Series or Class advise the
Trustee and DTC through Participants in writing that the continuation of a
book-entry system through DTC (or a successor thereto) is no longer in the
best interests of such Certificateholders.
Upon the occurrence of any of the events described in the
immediately preceding paragraph, DTC is required to notify all
Participants of the availability through DTC of Definitive Certificates
for such Certificates. Upon surrender by DTC of the certificate or
certificates representing such Certificates and instructions for
re-registration, the Trustee will issue such Certificates in the form of
Definitive Certificates, and thereafter the Trustee will recognize the
holders of such Definitive Certificates as Certificateholders under the
Pooling and Servicing Agreement ("Holders"). In the event that Definitive
Certificates are issued or DTC ceases to be the clearing agency for any
Series or Class of Certificates, the Pooling and Servicing Agreement
provides that the applicable Certificateholders will be notified of such
event.
Distributions of principal of and interest on the Certificates will
be made by the Trustee directly to Holders in accordance with the
procedures set forth herein and in the Pooling and Servicing Agreement.
Distributions on each Distribution Date will be made to Holders in whose
names the Definitive Certificates were registered at the close of business
on the related record date. Distributions will be made by check mailed to
the address of such Holder as it appears on the register maintained by the
Trustee. The final distribution on any Certificate (whether Definitive
Certificates or the certificate or certificates registered in the name of
Cede representing the Certificates), however, will be made only upon
presentation and surrender of such Certificate on the final payment date
at such office or agency as is specified in the notice of final
distribution to Certificateholders. The Trustee will provide such notice
to registered Certificateholders not later than the fifth day of the month
of the final distribution.
Definitive Certificates will be transferable and exchangeable at the
offices of the Trustee, which shall initially be 50 Broadway (7th Floor),
New York, New York 10004. No service charge will be imposed 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 therewith.
THE SELLER'S CERTIFICATE
The Pooling and Servicing Agreement provides that the Seller may
exchange a portion of the certificate evidencing the Seller's Interest
(the "Seller's Certificate") for another certificate (a "Supplemental
Certificate") for transfer or assignment to a person designated by the
Seller upon the execution and delivery of a supplement to the Pooling and
Servicing Agreement (which supplement shall be subject to the amendment
section of the Pooling and Servicing Agreement to the extent that it
amends any of the terms of the Pooling and Servicing Agreement); provided
that (a) the Seller shall at the time of such exchange and after giving
effect thereto have an interest in the Pool Balance of not less than 2% of
the aggregate amount of the principal balances of the Receivables (the
"Pool Balance"), (b) the Seller shall have delivered to the Trustee, the
Rating Agencies and any Enhancement Provider a Tax Opinion with respect to
such exchange and (c) the Seller shall have delivered to the Trustee
written confirmation from the applicable Rating Agencies that such
exchange will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class of Certificates. Any subsequent transfer or
assignment of a Supplemental Certificate is also subject to the conditions
described in clauses (b) and (c) in the preceding sentence.
NEW ISSUANCES
The Pooling and Servicing Agreement provides that pursuant to any
one or more Supplements, the Trustee may issue two types of certificates:
(i) one or more Series of Certificates which are transferable and have the
characteristics described below and (ii) the Seller's Certificate (and any
Supplemental Certificate) which will evidence the Seller's Interest and
will be transferable only upon the satisfaction of certain conditions
described under "The Seller's Certificate". The Pooling and Servicing
Agreement also provides that, pursuant to one or more Supplements, the
Seller may cause the Trustee to issue one or more new Series. Under the
Pooling and Servicing Agreement, the Seller may specify, among other
things, with respect to any Series: (a) its name or designation, (b) its
initial principal amount (or method for calculating such amount), (c) its
certificate rate (or the method for determining its certificate rate), (d)
a date on which it will begin its Accumulation Period or Controlled
Amortization Period, if any, (e) the method for allocating principal and
interest to Certificateholders of such Series, (f) the percentage used to
calculate monthly servicing fees, (g) the issuer and terms of any
Enhancement with respect thereto or the level of subordination provided by
the Seller's Interest, (h) the terms on which the Certificates of such
Series may be exchanged for Certificates of another Series, be subject to
repurchase, optional redemption or mandatory redemption by the Seller or
be remarketed by any remarketing agent, (i) the Series Termination Date
and (j) any other terms permitted by the Pooling and Servicing Agreement
(all such terms, the "Principal Terms" of such Series). The Seller may
offer any Series to the public under a prospectus or other disclosure
document (a "Disclosure Document") in transactions either registered under
the Securities Act or exempt from registration thereunder, directly or
through one or more underwriters or placement agents. There is no limit to
the number of Series that may be issued under the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may
specify Principal Terms of a new Series such that each Series has a
Controlled Amortization Period or Accumulation Period which may have a
different length and begin on a different date than the Controlled
Amortization Period or Accumulation Period for any other Series. Further,
one or more Series may be in their Reinvestment Periods, Early
Amortization Periods, Controlled Amortization Periods or Accumulation
Periods while other Series are not. Thus, certain Series may be amortizing
or accumulating principal, while other Series are not. Moreover, different
Series may have the benefits of different forms of Enhancement issued by
different entities. Under the Pooling and Servicing Agreement, the Trustee
will hold each form of Enhancement only on behalf of the Series (or a
particular Class within a Series) with respect to which it relates, unless
otherwise provided in the related Series Supplement or Series Supplements.
The Pooling and Servicing Agreement also provides that the Seller may
specify different certificate rates and Monthly Servicing Fees with
respect to each Series (or a particular Class within a Series). In
addition, the Seller has the option under the Pooling and Servicing
Agreement to vary among Series (or Classes within a Series) the terms upon
which a Series (or Classes within a Series) may be repurchased by the
Seller.
Under the Pooling and Servicing Agreement and pursuant to a Series
Supplement, a new Series may be issued only upon the satisfaction of
certain specified conditions. The Seller may cause the issuance of a new
Series by notifying the Trustee at least five business days in advance of
the applicable Series Issuance Date. The notice shall state the
designation of any Series (and Classes within a Series, if any). The
Pooling and Servicing Agreement provides that the Trustee will issue any
such Series only upon delivery to it of the following: (i) a Series
Supplement in form satisfactory to the Trustee signed by the Seller and
the Servicer and specifying the Principal Terms of such Series, (ii) the
form of any Enhancement and any related agreement, (iii) an opinion of
counsel to the effect that, for federal income and Michigan income and
single business tax purposes, (x) such issuance will not adversely affect
the characterization of the Certificates of any outstanding Series or
Class as debt of the Seller, (y) such issuance will not cause a taxable
event to any Certificateholders (an opinion of counsel to the effect
referred to in clauses (x) and (y) with respect to any action is referred
to herein as a "Tax Opinion") and (z) such new Series will be
characterized as debt of the Seller, and (iv) written confirmation from
the applicable Rating Agencies that such issuance will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class
of Certificates. Such issuance is also subject to the conditions that (a)
the Seller shall have represented and warranted that such issuance shall
not, in the reasonable belief of the Seller, cause an Early Amortization
Event or Reinvestment Event to occur with respect to any outstanding
Series and (b) after giving effect to such issuance, the Seller's interest
in the Pool Balance shall not be less than 2% of the Pool Balance. Upon
satisfaction of all such conditions, the Trustee will issue such Series.
CONVEYANCE OF RECEIVABLES AND COLLATERAL SECURITY
On the date on which the Certificates related to the Series 1991-1
were originally issued (the "Initial Closing Date"), CARCO sold and
assigned to the Trust all of its right, title and interest in and to the
Receivables and the related Collateral Security as of the Initial Cut-Off
Date, all Receivables thereafter created in the Accounts and its interests
in the related Collateral Security and the Receivables Purchase Agreement,
and the proceeds of all of the foregoing. On August 8, 1991, CARCO, in
accordance with the terms of the Pooling and Servicing Agreement and the
Receivables Purchase Agreement, transferred the Seller's Interest and all
its rights and obligations under the Pooling and Servicing Agreement and
the Receivables Purchase Agreement to USA. See "U.S. Auto Receivables
Company and the Trust". In addition, the Seller has previously designated
Additional Accounts to be added to the Accounts and has previously
conveyed to the Trust the Receivables in such Additional Accounts
(together with the related Collateral Security) as of the applicable
Additional Cut-Off Date and all Receivables (and related Collateral
Security) created thereafter.
In connection with the sale of the Receivables to the Seller by CCC
and the transfer of the Receivables to the Trust, USA, CFC and CCC are
required to indicate in their computer records that the Receivables in the
Accounts and the related Collateral Security have been conveyed to the
Trust. In addition, the Seller is required to provide to the Trustee a
computer file or microfiche or written list containing a true and complete
list showing for each Account, as of the Initial Cut-Off Date and the
applicable Additional Cut-Off Date, (i) its account number, (ii) the
outstanding balance of the Receivables in such Account and (iii) the
outstanding balance of Principal Receivables in such Account. CCC and CFC
will retain and will not deliver to the Trustee any other records or
agreements relating to the Receivables. Except as set forth above, the
records and agreements relating to the Receivables have not and will not
be segregated from those relating to other accounts of CCC and CFC, and
the physical documentation relating to the Receivables has not and will
not be stamped or marked 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 thereof. See "Special Considerations" and "Certain Legal
Aspects of the Receivables".
As contemplated above and as described below under "Addition of
Accounts", the Seller has the right (subject to certain limitations and
conditions), and in some circumstances is obligated, to designate from
time to time additional accounts to be included as Additional Accounts, to
purchase from CCC the Receivables then existing or thereafter created in
such Additional Accounts and to convey such Receivables to the Trust. Each
such Additional Account must be an Eligible Account. In respect of any
conveyance of Receivables in Additional Accounts, the Seller will follow
the procedures set forth in the preceding paragraph, except the list will
show information for such Additional Accounts as of the date such
Additional Accounts are identified and selected (the "Additional Cut-Off
Date").
REPRESENTATIONS AND WARRANTIES
The Seller will make representations and warranties to the Trust
relating to the Accounts, the Receivables and the Collateral Security to
the effect, among other things, that (a) as of each Series Cut-Off Date,
and the date of issuance of any Series (a "Series Issuance Date") (or, in
the case of the Additional Accounts, as of the Additional Cut-Off Date and
the date the related Receivables are transferred to the Trust (an
"Addition Date")), each Account or Additional Account was an Eligible
Account, (b) as of the Series Cut-Off Date (or as of the Additional
Cut-Off Date, in the case of any Additional Accounts) or as of the date
any future Receivable is generated (a "Transfer Date"), each Receivable is
an Eligible Receivable or, if such Receivable is not an Eligible
Receivable, such Receivable is conveyed to the Trust as described below
under "Ineligible Receivables, the Instalment Balance Amount and the
Overconcentration Amount", (c) each Receivable and all Collateral Security
conveyed to the Trust on the Transfer Date or, in the case of Additional
Accounts, on the Addition Date, and all of the Seller's right, title and
interest in the Receivables Purchase Agreement, have been conveyed to the
Trust free and clear of any liens and (d) all appropriate consents and
governmental authorizations required to be obtained by the Seller in
connection with the conveyance of each such Receivable or Collateral
Security have been duly obtained. If the Seller breaches any
representation and warranty described in this paragraph and such breach
remains uncured for 30 days or such longer period as may be agreed to by
the Trustee, after the earlier to occur of the discovery of such breach by
the Seller or the Servicer or receipt of written notice of such breach by
the Seller or the Servicer, and such breach has a materially adverse
effect on the Certificateholders' Interest in any Receivable or Account,
the Certificateholders' Interest in such Receivable or, in the case of a
breach relating to an Account, all Receivables in the related Account
("Ineligible Receivables") will be reassigned to the Seller on the terms
and conditions set forth below and such Account shall no longer be
included as an Account.
Each such Receivable shall be reassigned to the Seller on or before
the end of the Collection Period in which such reassignment obligation
arises by the Seller directing the Servicer to deduct the principal
balance of such Receivable from the Pool Balance. In the event that such
deduction would cause the Seller's Participation Amount, which is an
amount equal to the Pool Balance minus the aggregate Invested Amounts for
all outstanding Series, to be less than the aggregate Available
Subordinated Amounts for all Outstanding Series (the "Trust Available
Subordinated Amount") on the preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to be
made on such Distribution Date), on the date on which such reassignment is
to occur the Seller will be obligated to make a deposit into the
Collection Account in immediately available funds in an amount equal to
the amount by which the Seller's Participation Amount would be less than
the Trust Available Subordinated Amount (the amount of any such deposit
being referred to herein as a "Transfer Deposit Amount"), provided that if
the Transfer Deposit Amount is not so deposited, the principal balance of
the related Receivables will be deducted from the Pool Balance only to the
extent the Seller's Participation Amount is not reduced below the Trust
Available Subordinated Amount and any principal balance not so deducted
will not be reassigned and will remain part of the Trust. The reassignment
of any such Receivable to the Seller and the payment of any related
Transfer Deposit Amount will be the sole remedy respecting any breach of
the representations and warranties described in the preceding paragraph
with respect to such Receivable available to Certificateholders or the
Trustee on behalf of Certificateholders.
The Seller will also make representations and warranties to the
Trust to the effect, among other things, that as of each Series Issuance
Date (a) it is duly incorporated and in good standing, it has the
authority to consummate the transactions contemplated by the Pooling and
Servicing Agreement and the Pooling and Servicing Agreement constitutes a
valid, binding and enforceable agreement of the Seller and (b) the Pooling
and Servicing Agreement constitutes a valid sale, transfer and assignment
to the Trust of all right, title and interest of the Seller in the
Receivables and the Collateral Security, whether then existing or
thereafter created, the Receivables Purchase Agreement, and the proceeds
thereof (including proceeds in any of the accounts established for the
benefit of the Certificateholders of any Series), subject to the rights of
the Purchasers with respect to certain of the Collateral Security, under
the UCC as then in effect in the State of Michigan, which is effective as
to each Receivable existing on the Initial Closing Date (or as of the
Addition Date, if applicable) or, as to each Receivable arising
thereafter, upon the creation thereof and until termination of the Trust.
In the event that the breach of any of the representations and warranties
described in this paragraph has a materially adverse effect on the
Certificateholders' Interest in the Receivables, either the Trustee or the
holders of Certificates of all outstanding Series evidencing not less than
a majority of the aggregate unpaid principal amount of all outstanding
Series, by written notice to the Seller and the Servicer (and to the
Trustee and the issuer or provider of any Enhancement (an "Enhancement
Provider") if given by Certificateholders), may direct the Seller to
accept the reassignment of the Certificateholders' Interest of all Series
within 60 days of such notice, or within such longer period specified in
such notice. The Seller will be obligated to accept the reassignment of
the Certificateholders' Interest on a Distribution Date occurring within
such 60-day period. Such reassignment will not be required to be made,
however, if at the end of such applicable period, the representations and
warranties shall then be true and correct in all material respects and any
materially adverse effect caused by such breach shall have been cured. The
price for such reassignment will generally be equal to the aggregate
"Invested Amounts" (as specified in the related Series Supplements) of all
Series on the Determination Date preceding the Distribution Date on which
the purchase is scheduled to be made plus accrued and unpaid interest on
the unpaid principal amount of the Certificates at the applicable
certificate rate (together with interest on overdue interest) plus, with
respect to any particular Series, any other amounts specified in the
Series Supplement therefor. The payment of the reassignment price for all
outstanding Series, in immediately available funds, will be considered a
payment in full of the Certificateholders' Interest. Such funds will be
distributed to the Certificateholders entitled thereto upon presentation
and surrender of the Certificates. If the Trustee or the
Certificateholders give a notice as provided above, the obligation of the
Seller to make any such deposit will constitute the sole remedy respecting
a breach of the representations and warranties available to
Certificateholders or the Trustee on behalf of the Certificateholders.
As of the effective date of the CARCO Transfer, USA was deemed to
have made all the representations and warranties of the Seller (including
the Seller's representations and warranties set forth above) in the
Pooling and Servicing Agreement and in any Series Supplement with respect
to any Series or Class of Certificates.
ELIGIBLE ACCOUNTS AND ELIGIBLE RECEIVABLES
An "Eligible Account" is defined to mean each wholesale financing
line of credit extended by CCC to a Dealer, which line of credit, as of
the date of determination thereof: (a) is established by CCC in the
ordinary course of business pursuant to a floorplan financing agreement,
(b) is in favor of an Eligible Dealer, (c) is in existence and maintained
and serviced by CCC and (d) in respect of which no amounts have been
charged off as uncollectible or are classified as past due or delinquent.
An "Eligible Dealer" is a Dealer: (a) which is located in the United
States of America (including its territories and possessions), (b) which
has not been identified by the Servicer as being the subject of any
voluntary or involuntary bankruptcy proceeding or in voluntary or
involuntary liquidation, (c) in which Chrysler or any affiliate thereof
does not have an equity investment and (d) which has not been classified
by the Servicer as being under Dealer Trouble status.
An "Eligible Receivable" is defined to mean each Receivable: (a)
which was originated or acquired by CCC in the ordinary course of
business, (b) which has arisen under an Eligible Account and is payable in
United States dollars, (c) which is owned by CCC at the time of sale by
CCC to the Seller, (d) which represents the obligation of a Dealer to
repay an advance made to such Dealer to finance the acquisition of
Vehicles, (e) which at the time of creation and at the time of transfer to
the Trust is secured by a perfected first priority security interest in
the Vehicle relating thereto, (f) which was created in compliance in all
respects with all requirements of law applicable thereto and pursuant to a
floorplan financing agreement which complies in all respects with all
requirements of law applicable to any party thereto, (g) with respect to
which all consents and governmental authorizations required to be obtained
by Chrysler, CCC, CFC or the Seller in connection with the creation of
such Receivable or the transfer thereof to the Trust or the performance by
CCC of the floorplan financing agreement pursuant to which such Receivable
was created, have been duly obtained, (h) as to which at all times
following the transfer of such Receivable to the Trust, the Trust will
have good and marketable title thereto free and clear of all liens arising
prior to the transfer or arising at any time, other than liens permitted
pursuant to the Pooling and Servicing Agreement, (i) which has been the
subject of a valid transfer and assignment from the Seller to the Trust of
all the Seller's interest therein (including any proceeds thereof), (j)
which will at all times be the legal and assignable payment obligation of
the Dealer relating thereto, enforceable against such Dealer in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy or other similar laws, (k) which at the time of transfer to the
Trust is not subject to any right of rescission, setoff, or any other
defense (including defenses arising out of violations of usury laws) of
the Dealer, (1) as to which, at the time of transfer of such Receivable to
the Trust, Chrysler, CCC, CFC and the Seller have satisfied all their
respective obligations with respect to such Receivable required to be
satisfied at such time, (m) as to which, at the time of transfer of such
Receivable to the Trust, neither Chrysler, CCC, CFC nor the Seller has
taken or failed to take any action which would impair the rights of the
Trust or the Certificateholders therein, (n) which constitutes "chattel
paper" as defined in Article 9 of the UCC as then in effect in the State
of Michigan and (o) which was transferred to the Trust with all applicable
governmental authorization.
The Trustee did not and it is not required or anticipated that the
Trustee will make any initial or periodic general examination of the
Receivables or any records relating to the Receivables for the purpose of
establishing the presence or absence of defects, compliance with
representations and warranties of the Seller or for any other purpose. In
addition, it is not anticipated or required that the Trustee will make any
initial or periodic general examination of the Servicer for the purpose of
establishing the compliance by the Servicer with its representations or
warranties, the observation of its obligations under the Pooling and
Servicing Agreement or for any other purpose. The Servicer, however, will
deliver to the Trustee on or before March 31 of each calendar year, an
opinion of counsel with respect to the validity of the interest of the
Trust in and to the Receivables and certain other components of the Trust.
INELIGIBLE RECEIVABLES, THE INSTALMENT BALANCE AMOUNT AND THE
OVERCONCENTRATION AMOUNT
For the purpose of facilitating the administration and reporting
requirements of the Servicer under the Pooling and Servicing Agreement,
all Ineligible Receivables arising in an Eligible Account shall be
transferred to the Trust, provided that, if the Series Supplement for a
Series so provides, the Incremental Subordinated Amount for such Series
will be adjusted by the portion of the aggregate principal amount of
Receivables included therein allocable to the Certificateholders' Interest
of such Series. In addition, if the Series Supplement for a Series so
provides, the Incremental Subordinated Amount for such Series shall be
adjusted to reflect, on each Distribution Date, the aggregate principal
amount of Receivables in the Trust on such Distribution Date which are
Dealer Overconcentrations (the "Overconcentration Amount") allocable to
the Certificateholders' Interest of such Series and the portion of the
aggregate amount of Instalment Balances in respect of which CCC has not
received an offsetting payment from the related Dealer on such
Distribution Date (the "Instalment Balance Amount") allocable to the
Certificateholders' Interest of such Series. As used herein, "Dealer
Overconcentrations" on any Distribution Date means, with respect to any
Dealer or group of affiliated Dealers, the excess of (x) the aggregate
principal amount of Receivables due from such Dealer or group of
affiliated Dealers on the last day of the Collection Period immediately
preceding such Distribution Date over (y) 2% of the Pool Balance on the
last day of such immediately preceding Collection Period.
ADDITION OF ACCOUNTS
Subject to the conditions described below, the Seller has the right
to designate from time to time additional accounts to be included as
Accounts (the "Additional Accounts"). In addition, the Seller is required
to add the Receivables of Additional Accounts if the Pool Balance on the
last day of any Collection Period is less than the Required Participation
Amount as of the following Distribution Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on such
Distribution Date). In that case, unless certain insolvency events have
occurred with respect to the Seller, CCC, CFC or Chrysler, CCC under the
Receivables Purchase Agreement will be required to sell to the Seller, and
the Seller under the Pooling and Servicing Agreement will be required to
transfer and assign to the Trust, within 10 business days after the end of
such Collection Period, interests in all Receivables arising in such
Additional Accounts, whether such Receivables are then existing or
thereafter created. Any designation of Additional Accounts is subject to
the following conditions, among others: (i) each such Additional Account
must be an Eligible Account; (ii) the Seller shall represent and warrant
that the addition of such Additional Accounts shall not, in the reasonable
belief of the Seller, cause an Early Amortization Event or Reinvestment
Event to occur with respect to any Series; (iii) the Seller shall not
select such Additional Accounts in a manner that it believes is adverse to
the interests of the Certificateholders or any Enhancement Provider; (iv)
the Seller shall deliver a Tax Opinion, other than in the case of a
required addition, and certain other opinions of counsel with respect to
the addition of such Additional Accounts to the Trustee, the Rating
Agencies and any Enhancement Provider; and (v) the applicable Rating
Agencies shall have provided written confirmation that such addition will
not result in a reduction or withdrawal of the rating of any outstanding
Series or Class of Certificates.
Notwithstanding the foregoing, from and after the date on which no
Series issued prior to the date of this Prospectus is outstanding the
Seller may from time to time, at its discretion, and subject only to the
limitations specified in this paragraph, designate Additional Accounts.
(Additional Accounts designated in accordance with the provisions
described in this paragraph are referred to herein as "Automatic
Additional Accounts".) Unless each Rating Agency otherwise consents, the
number of Automatic Additional Accounts designated with respect to any of
the three consecutive Collection Periods beginning in January, April, July
and October of each calendar year shall not exceed 8% of the number of
Accounts as of the first day of the calendar year during which such
Collection Periods commence and the number of Automatic Additional
Accounts designated during any such calendar year shall not exceed 20%
of the number of Accounts as of the first day of such calendar year. On or
before the first business day of each Collection Period beginning in
January, April, July and October of each calendar year, the Seller shall
have requested and obtained notification from each Rating Agency of any
limitations to the right of the Seller to designate Eligible Accounts as
Automatic Additional Accounts during any period which includes such
Collection Period. On or before January 31, April 30, July 31, October 31
of each calendar year, the Trustee shall have received confirmation from
each Rating Agency that the addition of all Automatic Additional Accounts
included as Accounts during the three consecutive Collection Periods
ending in the calendar month prior to such date shall not have resulted in
any applicable Rating Agency reducing or withdrawing its rating of any
outstanding Series or Class of Certificates. On or before January 31 and
July 31 of each calendar year (or on or before the last day of each month
in certain circumstances), the Seller shall have delivered to the Trustee,
each Rating Agency and any Enhancement Provider an opinion of counsel with
respect to the Automatic Additional Accounts included as Accounts during
the preceding calendar year confirming the validity and perfection of each
transfer of such Automatic Additional Accounts. If such Rating Agency
confirmation or opinion of counsel with respect to any Automatic
Additional Accounts is not so received, such Automatic Additional Accounts
will be removed 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 and CFC, they may not be of the same credit quality as
the initial Accounts. Additional Accounts may have been originated by CCC
and CFC at a later date using credit criteria different from those which
were applied to the initial Accounts or may have been acquired by CCC or
CFC from another wholesale lender that had different credit criteria. In
addition, the Seller will be permitted to designate as Additional Accounts
accounts which contain receivables that have been sold or pledged to third
parties; however, following the applicable Additional Cut-Off Date, no
Receivables thereafter arising in any such accounts shall be sold or
pledged to any third parties.
"Required Participation Amount" for any date means an amount
equal to (a) the sum of the amounts for each Series (other than any
Series or portion thereof which is designated in the relevant Series
Supplement as being an Excluded Series until the Invested Amount of
the Series relating to such Excluded Series is reduced to $0)
obtained by multiplying the Required Participation Percentage for
such Series by the Initial Invested Amount for such Series at such
time, plus (b) the Trust Available Subordinated Amount on the
immediately preceding Determination Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on
the Distribution Date following such Determination Date).
"Required Participation Percentage" shall mean, with respect
to a particular Series, the percentage provided in the related
Series Supplement.
REMOVAL OF ACCOUNTS
The Seller shall have the right at any time to require the removal
from the Trust of Eligible Accounts. To remove any Eligible Account, the
Seller (or the Servicer on its behalf) shall, among other things,
(a) furnish to the Trustee, any Enhancement Provider and the Rating
Agencies a written notice (the "Removal Notice") specifying the
Determination Date on which removal of one or more Accounts will commence
(a "Removal Commencement Date") and the Accounts to be removed from the
Trust (the "Designated Accounts"), (b) determine on the Removal
Commencement Date the aggregate principal balance of Receivables in
respect of each such Designated Account (the "Designated Balance"), (c)
from and after such Removal Commencement Date, cease to transfer to the
Trust all Receivables arising in the Designated Accounts, (d) from and
after such Removal Commencement Date, allocate all Principal Collections
in respect of each Designated Account, first to the oldest outstanding
principal balance of such Designated Account, until the Determination Date
on which the Designated Balance in such Designated Account is reduced to
zero (the "Removal Date"), (e) on each business day from and after such
Removal Commencement Date to and until the related Removal Date, allocate
(i) to the Trust (to be further allocated pursuant to the Pooling and
Servicing Agreement), Interest Collections in respect of each Designated
Account with respect to Receivables in all Designated Accounts sold to the
Trust and (ii) to the Seller the remainder of the Interest Collections in
all such Designated Accounts, (f) represent and warrant that the removal
of any such Eligible Account on any Removal Date shall not, in the
reasonable belief of the Seller, cause an Early Amortization Event or
Reinvestment Event to occur with respect to any Series or cause the Pool
Balance to be less than the Required Participation Amount, (g) represent
and warrant that no selection procedures believed by the Seller to be
adverse to the interests of the Certificateholders were utilized in
selecting the Designated Accounts, (h) represent and warrant that such
removal will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class of Certificates and (i) on or before the
related Removal Date, deliver to the Trustee and any Enhancement Provider
an officers' certificate confirming the items set forth in clauses (f),
(g) and (h) above and a Tax Opinion with respect to such removal. No
Designated Accounts shall be removed if such removal will result in a
reduction or withdrawal of the rating of any outstanding Series or Class
of Certificates.
On any date on which an Account becomes an Ineligible Account (which
date will be deemed the Removal Commencement Date for such Account), the
Seller will commence the removal of such Account from the Trust by taking
each of the actions specified in clauses (a) through (e) of the preceding
paragraph with respect to such Ineligible Account.
Upon satisfaction of the above conditions, on the Removal Date with
respect to any such Designated Account, the Seller will cease such
allocation of collections of Receivables therefrom and such Designated
Account shall be deemed removed from the Trust for all purposes (a
"Removed Account").
In addition to the removal rights described above, the Seller shall
have the right at any time to remove Accounts from the Trust and, in
connection therewith, repurchase the then existing Receivables in such
Accounts. To remove Accounts and repurchase the then existing Receivables
in such Accounts, the Seller (or the Servicer on its behalf) shall, among
other things: (a) furnish to the Trust, each Enhancement Provider and the
Rating Agencies a Removal Notice specifying the Designated Accounts which
are to be removed, and the then existing Receivables in such Designated
Accounts (the "Designated Receivables") which are to be repurchased from
the Trust and the Determination Date on which the removal of such
Designated Accounts and the purchase of such Designated Receivables will
occur (a "Removal and Repurchase Date"), (b) deliver to the Trustee on the
Removal and Repurchase Date a computer file or microfiche or written list
containing a true and complete list of the Removed Accounts specifying for
each such Account its account number and the aggregate amount of
Receivables outstanding in such Account, (c) if any Series issued prior to
the date hereof is then outstanding, deposit into the Collection Account
on the Removal and Repurchase Date funds in an amount equal to the
aggregate outstanding balance of the Designated Receivables on such date
(the "Repurchased Receivables Purchase Price"), (d) represent and warrant
that the removal of any such Eligible Account and the repurchase of the
Receivables then existing in such Account on any Removal and Repurchase
Date shall not, in the reasonable belief of the Seller, cause an Early
Amortization Event or Reinvestment Event to occur with respect to any
Series or cause the Pool Balance to be less than the Required
Participation Amount, (e) represent and warrant that no selection
procedures believed by the Seller to be adverse to the interests of the
Certificateholders were utilized in selecting the Designated Accounts, (f)
represent and warrant as of the Removal and Repurchase Date that the list
of Removed Accounts delivered pursuant to clause (b) above, as of the
Removal and Repurchase Date, is true and complete in all material
respects, (g) represent and warrant that such removal and repurchase will
not result in a reduction or withdrawal of the rating of any outstanding
Series or Class of Certificates by the applicable Rating Agency, (h)
deliver to the Trustee, each Rating Agency and any Enhancement Providers a
Tax Opinion, dated the Removal and Repurchase Date, with respect to such
removal and repurchase, and (i) deliver to the Trustee and any Enhancement
Providers an officers' certificate confirming the items set forth in
clauses (d) through (g) above. No Designated Accounts shall be removed and
no Designated Receivables shall be repurchased unless each Rating Agency
shall have notified the Seller, the Servicer and the Trustee in writing
that such removal and repurchase will not result in a reduction or
withdrawal of such Rating Agency's rating of any outstanding Series or
Class of Certificates.
Upon satisfaction of the above conditions, on the Removal and
Repurchase Date with respect to any such Designated Account and Designated
Receivables, such Designated Account shall be deemed removed, and such
Designated Receivables ("Repurchased Receivables") shall be deemed
repurchased, from the Trust for all purposes.
On each Distribution Date, any amounts on deposit in the Collection
Account on such Distribution Date resulting from payment by the Seller of
the Repurchased Receivables Purchase Price will be applied first, to fund
any unpaid Miscellaneous Payment due on or prior to such Distribution Date
and second, an amount equal to the product of (i) the amount of any
Repurchased Receivables Purchase Price initially deposited by the Seller
in the Collection Account pursuant to such repurchase and (ii) the Monthly
Payment Rate for the immediately preceding Collection Period, which is the
percentage obtained by dividing Principal Collections for such Collection
Period by the daily average Pool Balance for such Collection Period, shall
be treated as Principal Collections collected in the immediately preceding
Collection Period.
Notwithstanding the provisions described above, from and after the
date on which no Series issued prior to the date of this Prospectus is
outstanding, the Seller shall have the right to require the reassignment
to it of all the Trust's right, title and interest in, to and under the
Receivables then existing and thereafter created, all monies due or to
become due and all amounts received with respect thereto and all proceeds
thereof in or with respect to the Accounts ("Automatic Removed Accounts")
designated by the Seller, upon satisfaction of the following conditions:
(a) on or before the fifth business day immediately preceding the date
upon which such Accounts are to be removed, the Seller shall have given
the Trust, each Enhancement Provider and the Rating Agencies a Removal
Notice specifying the date for removal of the Automatic Removed Accounts
(the "Automatic Removal Date"); (b) on or prior to the date that is five
business days after the Automatic Removal Date, the Seller shall have
delivered to the Trustee a computer file or microfiche or written list
containing a true and complete list of the Automatic Removed Accounts
specifying for each such Account, as of the removal notice date, its
account number and the aggregate amount of Receivables outstanding in such
Account; (c) the Seller shall have represented and warranted as of each
Automatic Removal Date that the list of Automatic Removed Accounts
delivered pursuant to clause (b) above, as of the Automatic Removal Date,
is true and complete in all material respects; (d) the Trustee shall have
received confirmation from each Rating Agency that such removal will not
result in a reduction or withdrawal of such Ratings Agency's rating of any
outstanding Series or Class of Certificates; (e) the Seller shall have
delivered to the Trustee, each Rating Agency and any Enhancement Providers
an officers' certificate, dated the Automatic Removal Date, to the effect
that the Seller reasonably believes that such removal will not cause an
Early Amortization Event or Reinvestment Event to occur with respect to
any Series; and (f) the Seller shall have delivered to the Trustee, each
Rating Agency and any Enhancement Providers a Tax Opinion, dated the
Automatic Removal Date, with respect to such removal.
Upon satisfaction of the above conditions, on the Automatic Removal
Date all the right, title and interest of the Trust in and to the
Receivables arising in the Automatic Removed Accounts, all monies due and
to become due and all amounts received with respect thereto and all
proceeds thereof shall be deemed removed from the Trust for all purposes.
EXCLUDED SERIES
A Series of Certificates may be designated as an excluded series (an
"Excluded Series") with respect to a Series of Certificates previously
issued by the Trust as to which the Accumulation Period or Controlled
Amortization Period has commenced (a "Paired Series").
Each Excluded Series will be prefunded with an initial deposit to a
prefunding account in an amount equal to the initial principal balance of
such Excluded Series and primarily from the proceeds of the offering of
such Excluded Series. Any such prefunding account will be held for the
benefit of such Excluded Series and not for the benefit of the Paired
Series. As funds are accumulated in the Principal Funding Account for such
Paired Series or distributed to holders of Certificates of such Paired
Series, an equal amount of funds on deposit in any prefunding account for
such prefunded Excluded Series will be released (which funds will be
distributed to the Seller). Until payment in full of the Paired Series, no
Interest Collections, Principal Collections, Defaulted Amounts or
Miscellaneous Payments will be allocated to the related Excluded Series.
In addition, it is expected that any Excluded Series will be excluded from
the calculation of the Required Participation Amount as described under
" -- Addition of Accounts".
COLLECTION ACCOUNT
The Servicer has established and will maintain an Eligible Deposit
Account for the benefit of the Certificateholders in the name of the
Trustee, on behalf of the Trust (the "Collection Account"). "Eligible
Deposit Account" means either (a) a segregated account with an Eligible
Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the
United States or any one of the states thereof (or any domestic branch of
a foreign bank), having corporate trust powers and acting as trustee for
funds deposited in such account, so long as any of the securities of such
depository institution has a credit rating from each Rating Agency in one
of its generic rating categories which signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Trustee or (b) a depository institution organized under the laws of the
United States or any one of the states thereof, or the District of
Columbia (or a domestic branch of a foreign bank), which at all times (i)
has either (x) a long-term unsecured debt rating of A2 or better by
Moody's Investors Service, Inc. ("Moody's") and of AAA or better by
Standard & Poor's Ratings Group ("Standard & Poor's") or (y) a certificate
of deposit rating of P-1 by Moody's or A-1+ by Standard & Poor's and (ii)
is a member of the FDIC. Funds in the Collection Account generally will be
invested in Eligible Investments. "Eligible Investments" are:
(a) book-entry securities, negotiable instruments or
securities represented by instruments in bearer or registered form
having original or remaining maturities of 30 days or less, but in
no event occurring later than the Distribution Date next succeeding
the Trustee's acquisition thereof, except as otherwise provided,
with respect to any Series offered hereby, in the related Series
Supplement, which evidence:
(i) direct obligations of, and obligations fully guaranteed
as to timely payment by, the United States of America;
(ii) demand deposits, time deposits or certificates of
deposit of any depositary institution or trust company incorporated
under the laws of the United States of America or any state thereof
(or any domestic branch of a foreign bank) and subject to
supervision and examination by Federal or state banking or
depository institution authorities; provided, however, that at the
time of the Trust's investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is
based on the credit of a person or entity other than such depository
institution or trust company) thereof shall have a credit rating
from each of the Rating Agencies in the highest investment category
granted thereby;
(iii) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating
from each of the Rating Agencies in the highest investment category
granted thereby;
(iv) except during a Reinvestment Period with respect to any
Series, investments in money market funds having a rating from each
of the Rating Agencies in the highest investment category granted
thereby or otherwise approved in writing thereby;
(v) bankers' acceptances issued by any depository
institution or trust company referred to in clause (ii) above; and
(vi) certain repurchase obligations, including those of
appropriately rated broker-dealers and financial institutions; and
(b) any other investment consisting of a financial asset that
by its terms converts to cash within a finite period of time,
provided that each Rating Agency shall have notified the Seller, the
Servicer and the Trustee that the Trust's investment therein will
not result in a reduction or withdrawal of the rating of any
outstanding Class or Series with respect to which it is a Rating
Agency.
The foregoing notwithstanding, so long as any Series previously
issued by the Trust remains outstanding, funds in the Collection Account
will be invested only in (i) obligations fully guaranteed by the United
States, (ii) demand deposits, time deposits or certificates of deposit of
depository institutions or trust companies, the commercial paper of which
has the highest rating from the applicable Rating Agency, (iii) commercial
paper having at the time of the Trust's investment, a rating in the
highest rating category from the applicable Rating Agency, (iv) demand
deposits, time deposits and certificates of deposit which are fully
insured by the FDIC, (v) bankers' acceptances issued by any depository
institution or trust company described in (ii) above, (vi) except during a
Reinvestment Period with respect to any Series, investments in money
market funds which have the highest rating from, or have otherwise been
approved in writing by, each Rating Agency and (vii) certain repurchase
obligations (collectively, "Eligible Investments"). Any earnings (net of
losses and investment expenses) on funds in the Collection Account will be
credited to the Collection Account. The Servicer will have the revocable
power to instruct the Trustee to make withdrawals and payments from the
Collection Account for the purpose of carrying out its duties under the
Pooling and Servicing Agreement. The Servicer may select an appropriate
agent as representative of the Servicer for the purpose of designating
such investments.
EXCESS FUNDING ACCOUNT
Except, to the extent provided in the related Series Supplement,
during an Early Amortization Period or Reinvestment Period with respect to
a Series, the Excess Funded Amount, if any, for such Series will be
maintained in the Excess Funding Account established with the Trustee with
respect to such Series. The Excess Funded Amount with respect to a Series
will initially equal the excess, if any, of the initial principal balance
of the Certificates of such Series over the Initial Invested Amount
thereof. Funds on deposit in the Excess Funding Account for a Series will
be invested by the Trustee at the direction of the Servicer generally in
Eligible Investments. Such investments must mature on or prior to the next
Distribution Date. The Servicer may select an appropriate agent as
representative of the Servicer for the purpose of designating such
investments.
Funds on deposit in the Excess Funding Account for a Series will be
withdrawn and paid to the Seller or allocated to one or more other Series
which are in Controlled Amortization, Early Amortization, Reinvestment or
Accumulation Periods to the extent of any increases in the Invested Amount
of the Series in question as a result of the addition of Receivables to
the Trust, a reduction in the Seller's Interest, or a reduction in the
Initial Invested Amount of any other Series. Additional amounts will be
deposited in the Excess Funding Account for a Series on a Distribution
Date to the extent that the sum of the Certificateholders' Interest of
such Series in Principal Receivables and the amount on deposit in the
Excess Funding Account, if any, for such Series prior to the deposit on
such Distribution Date is less than the outstanding principal balance of
the Certificates of such Series, but only to the extent that funds are
available therefor as provided in the related Series Supplement. The
allocation of additional Receivables to increase the Invested Amount of
each Series that provides for an Excess Funding Account or similar
arrangement involving fluctuating levels of investment in the Receivables
will generally be based on the proportion that the amount on deposit in
the Excess Funding Account for that Series bears to the amounts on deposit
in the Excess Funding Accounts of all Series providing for Excess Funding
Accounts or such similar arrangements or to amounts otherwise similarly
available; and the deposit of amounts in the Excess Funding Accounts for
each such Series will be based on the proportion that the Adjusted
Invested Amount of that Series bears to the Adjusted Invested Amounts of
all Series providing for Excess Funding Accounts or such similar
arrangements.
On each Distribution Date, all investment income earned on amounts
in the Excess Funding Account for any Series since the preceding
Distribution Date will be withdrawn from such Excess Funding Account and
applied as described herein and in the related Prospectus Supplement.
Funds on deposit in the Excess Funding Account for a Series on the
earliest of (i) the commencement of a Reinvestment Period with respect to
such Series, (ii) the commencement of an Early Amortization Period with
respect to such Series and (iii) the Distribution Date or Distribution
Dates specified in or determined in the manner provided in the Series
Supplement for such Series will be distributed to the Certificateholders
of such Series or a Class thereof or deposited in the Principal Funding
Account for such Series or a Class thereof, in each case if and to the
extent the related Series Supplement so provides. In addition, except as
otherwise provided in the related Series Supplement, no funds will be
deposited in the Excess Funding Account for a Series during any Early
Amortization Period or Reinvestment Period with respect to such Series or
with respect to any Collection Period following the Collection Period
specified in or determined in the manner provided in the Series Supplement
for such Series.
ALLOCATION PERCENTAGES
Allocations among Series. Pursuant to the Pooling and Servicing
Agreement, during each Collection Period the Servicer will allocate to
each outstanding Series its share of Interest Collections, Principal
Collections, Defaulted Receivables and Miscellaneous Payments based on the
applicable Series Allocable Interest Collections, Series Allocable
Principal Collections, Series Allocable Defaulted Amount and Series
Allocable Miscellaneous Payments.
"Series Allocable Interest Collections", "Series Allocable
Principal Collections", "Series Allocable Defaulted Amount" and
"Series Allocable Miscellaneous Payments" mean, with respect to any
Series of Certificates for any Collection Period, the product of the
Series Allocation Percentage for such Series and the amount of
Interest Collections and Principal Collections, the Defaulted Amount
and Miscellaneous Payments, respectively, with respect to such
Collection Period.
"Miscellaneous Payments" for any Collection Period means the
sum of (a) Adjustment Payments and Transfer Deposit Amounts received
with respect to such Collection Period and (b) Unallocated Principal
Collections on such Distribution Date available to be treated as
Miscellaneous Payments as described below under "Principal
Collections for all Series".
"Series Allocation Percentage" means, with respect to a Series
of Certificates for any Collection Period, the percentage equivalent
of a fraction, the numerator of which is the Adjusted Invested
Amount of such Series as of the last day of the immediately
preceding Collection Period and the denominator of which is the
Trust Adjusted Invested Amount as of such last day.
"Adjusted Invested Amount" means, with respect to a Series for
any date, an amount equal to the sum of (a) the Initial Invested
Amount of such Series, minus unreimbursed Investor Charge-Offs for
such Series and (b) the Available Subordinated Amount with respect
to such Series (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the
Distribution Date during the Collection Period in which such date
occurs).
"Trust Adjusted Invested Amount" means, with respect to any
Collection Period, the sum of the Adjusted Invested Amounts for all
outstanding Series.
"Initial Invested Amount" means, with respect to any Series
and for any date, the amount specified in the related Series
Supplement. The Initial Invested Amount for any Series may be
increased or decreased from time to time as specified in the related
Series Supplement, including as a result of deposits to or
withdrawals from the Excess Funding Account, if any, for such
Series.
Allocation Between the Certificateholders and the Seller. The
Servicer will allocate amounts initially allocated to each Series between
the Certificateholders' Interest and the Seller's Interest for each
Collection Period as provided in the related Series Supplement and, with
respect to a Series offered hereby, described in the related Prospectus
Supplement. If a Series consists of more than one Class, such amounts
allocated to the Certificateholders' Interest of such Series will be
further allocated between such Classes as provided in the related Series
Supplement and, with respect to a Series offered hereby, as described in
the related Prospectus Supplement.
Principal Collections for all Series. Principal Collections
allocated to the Certificateholders' Interest of any Series, for any
Collection Period with respect to any Accumulation Period, Controlled
Amortization Period, Reinvestment Period or Early Amortization Period with
respect to such Series or a Class thereof, will first be allocated to make
required payments of principal to the Principal Funding Account or to the
Certificateholders of such Series or a Class thereof, in each case if and
to the extent specified in the Series Supplement for such Series. The
Servicer will determine the amount of available certificateholder
principal collections for each Series and any Collection Period remaining
after such required payments, if any ("Excess Principal Collections"). The
Servicer will allocate Excess Principal Collections to cover any principal
distributions to Certificateholders of any Series which are either
scheduled or permitted and which have not been covered out of Principal
Collections and certain other amounts allocated to such Series ("Principal
Shortfalls"). Excess Principal Collections will generally not be used to
cover Investor Charge-Offs for any Series. If Principal Shortfalls exceed
Excess Principal Collections for any Collection Period, Excess Principal
Collections will be allocated pro rata among the applicable Series based
on the relative amounts of Principal Shortfalls, unless otherwise provided
in the applicable Series Supplements. To the extent that Excess Principal
Collections exceed Principal Shortfalls, the balance will be paid to the
Seller if the Seller's Participation Amount (determined after giving
effect to any Principal Receivables transferred to the Trust on such date)
exceeds the Trust Available Subordinated Amount for the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution
Date immediately following such Determination Date). Any amount not
allocated to the Seller because the Seller's Participation Amount does not
exceed the Trust Available Subordinated Amount will be held unallocated
("Unallocated Principal Collections") until the Seller's Participation
Amount exceeds the Trust Available Subordinated Amount, at which time such
amount will be allocated to the Seller, or until an Early Amortization
Period, Accumulation Period, Controlled Amortization Period or
Reinvestment Period commences for any Series, after which such amount will
be treated as a Series Allocable Miscellaneous Payment.
ALLOCATION OF COLLECTIONS; DEPOSITS IN COLLECTION ACCOUNT
The Servicer, no later than two business days after the processing
date, will deposit all collections received with respect to the
Receivables (excluding, with certain exceptions, certain portions thereof
allocable to the Seller) in each Collection Period into the Collection
Account. Notwithstanding the foregoing requirement for daily deposits, for
so long as (i) CCC remains the Servicer under the Pooling and Servicing
Agreement, (ii) no Service Default has occurred and is continuing and
(iii) (x) CCC is a wholly-owned subsidiary of CFC and CFC has and
maintains a short-term debt rating of at least A-1 by Standard & Poor's
and P-1 by Moody's, (y) CCC arranges for and maintains a letter of credit
or other form of Enhancement in respect of the Servicer's obligation to
make deposits of collections on the Receivables in the Collection Account
that is acceptable in form and substance to each Rating Agency or (z) CCC
otherwise obtains the Rating Agency confirmations described below, then,
subject to any limitations in the confirmations referred to below, CCC
need not deposit collections into the Collection Account on the day
indicated in the preceding sentence but may use for its own benefit all
such collections until the business day immediately preceding the related
Distribution Date or, provided that no Series issued prior to the date of
this Prospectus is outstanding, until such Distribution Date, at which
time CCC will make such deposits in an amount equal to the net amount of
such deposits and withdrawals which would have been made had the
conditions of this sentence not applied; provided, however, that prior to
ceasing daily deposits as described above the Seller shall have delivered
to the Trustee written confirmation from the applicable Rating Agencies
that the failure by CCC to make daily deposits will not result in a
reduction or withdrawal of the rating of any outstanding Series or Class
of Certificates. In addition, during any Collection Period the Servicer
will generally be required to deposit Interest Collections and Principal
Collections into the Collection Account only to the extent of the
distributions required to be made to Certificateholders, the amounts
required to be deposited into any deposit, trust, reserve or similar
account maintained for the benefit of Certificateholders of any Series and
certain other parties and the amounts required to be paid to any
Enhancement Provider on the Distribution Date relating to such Collection
Period and if, at any time prior to such Distribution Date, the amount of
collections deposited in the Collection Account exceeds the amount
required to be deposited, the Servicer will be permitted to withdraw such
excess from the Collection Account.
On any date on which collections are deposited in the Collection
Account, the Servicer will distribute directly to the Seller the amount of
such Interest Collections allocable to each Series specified in the
related Series Supplement and, with respect to a Series offered hereby,
described in the related Prospectus Supplement if the Seller's
Participation Amount (determined after giving effect to any Principal
Receivables transferred to the Trust on such date) exceeds the Trust
Available Subordinated Amount for the immediately preceding Determination
Date (after giving effect to the allocations, distributions, withdrawals
and deposits to be made on the Distribution Date immediately following
such Determination Date). In addition, during the Revolving Period for any
Series, subject to certain limitations, the Servicer will distribute
directly to the Seller on each such date of deposit the amount of
Principal Collections allocable to each Series specified in the related
Series Supplement and, with respect to a Series offered hereby, described
in the related Prospectus Supplement if the Seller's Participation Amount
(determined after giving effect to any Principal Receivables transferred
to the Trust on such date) exceeds the Trust Available Subordinated Amount
for the immediately preceding Determination Date (after giving effect to
the allocations, distributions, withdrawals and deposits to be made on the
Distribution Date immediately following such Determination Date).
LIMITED SUBORDINATION OF SELLER'S INTEREST; ENHANCEMENTS.
SUBORDINATION OF SELLER'S INTEREST. Credit enhancement with respect
to any Series of Certificates offered hereby will be provided by
subordination of the Seller's Interest to the rights of Certificateholders
of such Series to the extent described in the related Prospectus
Supplement. The amount of such subordination with respect to any Series is
referred to herein as the Available Subordinated Amount for such Series.
The Available Subordinated Amount for any Series offered hereby will be
subject to decrease and increase from time to time if and to the extent
described in the related Prospectus Supplement. The Prospectus Supplement
for each Series offered hereby will describe the manner in which
collections attributable to the Available Subordinated Amount for such
Series may be drawn upon to make payments to or for the benefit of the
holders of Certificates of such Series. If so provided in the related
Series Supplements, the Available Subordinated Amount for a Series may be
structured so as to be available to more than one Series of Certificates.
ENHANCEMENTS. In addition to the subordination described above, for
any Series, Enhancements may be provided with respect to one or more
Classes thereof. Enhancements with respect to one or more Classes of a
Series offered hereby may include a letter of credit, surety bond, cash
collateral account, spread account, guaranteed rate agreement, swap or
other interest protection agreement, repurchase obligation, cash deposit
or another form of credit enhancement described in the related Prospectus
Supplement or any combination of the foregoing. Enhancements may also be
provided to a Series or Class or Classes of a Series by subordination
provisions which require that distributions of principal and/or interest
be made with respect to the Certificates of such Series or such Class or
Classes before distributions are made to one or more Series or one or more
Classes of such Series, if the Series Supplements with respect thereto so
provide. If so specified in the related Prospectus Supplement, any form of
Enhancement may be structured so as to be available to more than one Class
or Series to the extent described therein.
If Enhancement is provided with respect to a Series offered hereby,
the related Prospectus Supplement will include a description of (a) the
amount payable under such Enhancement, (b) any conditions to payment
thereunder not otherwise described herein, (c) the conditions (if any)
under which the amount payable under such Enhancement may be reduced and
under which such Enhancement may be terminated or replaced and (d) any
material provisions of any agreement applicable relating to such Credit
Enhancement. Additionally, in certain cases, the related Prospectus
Supplement may set forth certain information with respect to the
applicable Enhancement Provider, including (i) a brief description of its
principal business activities, (ii) its principal place of business, place
of incorporation and the jurisdiction under which it is chartered or
licensed to do business, (iii) if applicable, the identity of regulatory
agencies which exercise primary jurisdiction over the conduct of its
business and (iv) its total assets, and its stockholders' equity or
policyholders' surplus, if applicable, as of a date specified in the
Prospectus Supplement.
LIMITATIONS ON SUBORDINATION AND ENHANCEMENTS. The presence of an
Available Subordinated Amount and/or Enhancement with respect to a Series
or Class is intended to enhance the likelihood of receipt by
Certificateholders of such Series or Class of the full amount of principal
and interest with respect thereto and to decrease the likelihood that such
Certificateholders will experience losses. However, unless otherwise
specified in the Prospectus Supplement for a Series offered hereby,
neither subordination of the Seller's Interest nor the Enhancement, if
any, with respect thereto will provide protection against all risks of
loss or will guarantee repayment of the entire principal balance of the
Certificates and interest thereon. If losses occur which exceed the amount
covered by such subordination or Enhancement or which are not covered by
such subordination or Enhancement, Certificateholders will bear their
allocable share of deficiencies. In addition, if specific Enhancement is
provided for the benefit of more than one Class or Series,
Certificateholders of any such Class or Series will be subject to the risk
that such Enhancement will be exhausted by the claims of
Certificateholders of other Classes or Series.
DISTRIBUTIONS
Payments to Certificateholders of a Series offered hereby or a Class
thereof will be made from the Collection Account and any accounts
established for the benefit of such Certificateholders as described in the
related Prospectus Supplement.
DEFAULTED RECEIVABLES AND RECOVERIES
"Defaulted Receivables" on any Determination Date are (i) all
Receivables which were charged off as uncollectible in respect of the
immediately preceding Collection Period and (ii) all Receivables which
were Eligible Receivables when transferred to the Trust, which arose in an
Account which became an Ineligible Account after the date of transfer of
such Receivables to the Trust and which were not Eligible Receivables for
any six consecutive Determination Dates thereafter. The "Defaulted Amount"
for any Collection Period will be an amount (which shall not be less than
zero) equal to (a) the principal amount of Receivables that became
Defaulted Receivables during the preceding Collection Period minus (b) the
sum of (i) the full amount of any Defaulted Receivables subject to
reassignment to the Seller or purchase by the Servicer for such Collection
Period unless certain events of bankruptcy, insolvency or receivership
have occurred with respect to either of the Seller or the Servicer, in
which event the Defaulted Amount will not be reduced for those Defaulted
Receivables and (ii) the excess, if any, for the immediately preceding
Determination Date of the amount determined pursuant to this clause (b)
for such Determination Date over the amount determined pursuant to clause
(a) for such Determination Date. Receivables will be charged off as
uncollectible in accordance with the Servicer's customary and usual
policies and procedures for servicing its own comparable revolving dealer
wholesale loan accounts. A portion of the Series Allocable Defaulted
Amount for each Series and Collection Period will be allocated between the
Certificateholders of such Series and the Seller as provided in the
related Series Supplement. The portion of the Defaulted Amount allocated
to the Certificateholders of a Series is referred to as the "Investor
Default Amount" for such Series. The Investor Default Amount for any
Series that consists of more than one Class will be further allocated
between such Classes as provided in the related Series Supplement.
If the Servicer adjusts the amount of any Receivable because of a
rebate, billing error or certain other noncash items to a Dealer, or
because such Receivable was created in respect of inventory which was
refused or returned by a Dealer, the principal amount of each of the
Seller's Interest and the Pool Balance will be reduced by the amount of
the adjustment or charge-off. Furthermore, to the extent that the
reduction in the Seller's Interest would reduce the Seller's Participation
Amount below the Trust Available Subordinated Amount for the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution
Date immediately following such Determination Date), the Seller will
deposit a cash amount equal to such deficiency into the Collection Account
in immediately available funds (an "Adjustment Payment") on the day on
which such adjustment occurs.
OPTIONAL REPURCHASE
If so provided in a Prospectus Supplement relating to a Series of
Certificates offered hereby, on any Distribution Date occurring after the
Invested Amount of the Certificates of such Series is reduced to the
percentage of the initial outstanding principal amount of the Certificates
of such Series specified therein, the Seller will have the option, subject
to certain conditions, to repurchase the Certificateholders' Interest of
such Series. The purchase price will generally be equal to the Invested
Amount of such Series on the Determination Date preceding the Distribution
Date on which such repurchase will be made plus accrued and unpaid
interest on the unpaid principal amount of the Certificates of such Series
at the applicable certificate rate (together with interest on overdue
interest), plus any other amounts specified in the related Series
Supplement. The purchase price will be deposited in the Collection Account
in immediately available funds on the Distribution Date on which the
Seller exercises such option. Following any such purchase, the
Certificateholders of such Series will have no further rights with respect
to the Certificateholders' Interest of such Series, other than the right
to receive the final distribution on the Certificates of that Series. In
the event that the Seller fails for any reason to deposit such purchase
price, payments will continue to be made to the Certificateholders of such
Series as described in the related Prospectus Supplement.
REINVESTMENT EVENTS AND EARLY AMORTIZATION EVENTS
Commencing on the first Distribution Date following the Collection
Period in which a Reinvestment Event has occurred with respect to any
Series, Principal Collections allocable to the Certificateholders'
Interest of such Series will no longer be paid to USA or allocated to any
other Series but instead will be deposited to the Principal Funding
Account for such Series monthly on each Distribution Date, and the
Controlled Deposit Amount or Controlled Amortization Amount, if any, will
no longer apply to distributions of principal in respect of the
Certificates of such Series, in each case except as described below or
provided in the related Series Supplement. A "Reinvestment Event" refers
to, for any Series, any of the events so defined in the Series Supplement
relating to that Series and, with respect to any Series offered hereby,
described in the related Prospectus Supplement.
Upon the occurrence of any event so defined, a Reinvestment Event
will be deemed to have occurred with respect to such Series without any
notice or other action on the part of any other party immediately upon the
occurrence of such event. The Reinvestment Period with respect to such
Series will commence as of the close of business on the business day
immediately preceding the day on which the Reinvestment Event is deemed to
have occurred. Monthly deposits of principal to the Principal Funding
Account for such Series will, except as described below or provided in the
related Series Supplement, begin on the first Distribution Date following
the Collection Period in which a Reinvestment Period has commenced with
respect to such Series.
Commencing on the first Distribution Date following the Collection
Period in which an Early Amortization Event has occurred with respect to
any Series, Principal Collections allocable to the Certificateholders'
Interest of such Series will no longer be paid to USA, allocated to any
other Series or retained in the Principal Funding Account for such Series
but instead will be distributed to Certificateholders of such Series
monthly on each Distribution Date and the Controlled Deposit Amount or
Controlled Amortization Amount, if any, will no longer apply to
distributions of principal on the Certificates of such Series, in each
case except as described below or provided in the related Series
Supplement. An "Early Amortization Event" refers to, for any Series, any
of the events so defined in the Series Supplement relating to the Series
and, with respect to any Series offered hereby, described in the related
Prospectus Supplement, as well as either of the following events:
1. the occurrence of certain events of bankruptcy, insolvency
or receivership relating to the Trust or the Seller; and
2. the Trust or USA becomes an investment company within the
meaning of the Investment Company Act of 1940, as amended.
Upon the occurrence of any event described above or in the
Prospectus Supplement for a Series offered hereby, an Early Amortization
Event will be deemed to have occurred with respect to such Series without
any notice or other action on the part of any other party immediately upon
the occurrence of such event. The Early Amortization Period with respect
to such Series will commence as of the close of business on the business
day immediately preceding the day on which the Early Amortization Event is
deemed to have occurred. Monthly distributions of principal to the
Certificateholders of such Series will begin on the first Distribution
Date following the Collection Period in which an Early Amortization Period
has commenced with respect to such Series, except as described below. The
failure of the Trust to pay the outstanding principal amount of the
Certificates of any Series or Class by the Expected Payment Date therefor
will have the same consequences as the occurrence of an Early Amortization
Event with respect to such Series or Class; and all references herein to
Early Amortization Events shall be deemed to include such a failure.
Notwithstanding the commencement of a Reinvestment Period or an
Early Amortization Period with respect to Series of Certificates, such
period may terminate and the Revolving Period with respect to such Series
and any Class thereof may commence when the event giving rise to the
commencement of such Reinvestment Period or Early Amortization Period no
longer exists, whether as a result of the distribution of principal to
Certificateholders of such Series or otherwise, in each case if and to the
extent provided in the Series Supplement for such Series.
In addition to the consequences of a Reinvestment Event or Early
Amortization Event with respect to any Series discussed above, if an
insolvency event occurs with respect to USA, or USA violates its covenant
not to create any lien on any Receivable, in each case as provided in the
Pooling and Servicing Agreement, on the day of such insolvency event or
such violation, as applicable, USA will (subject to the actions of the
Certificateholders) immediately cease to transfer Receivables to the Trust
and promptly give notice to the Trustee of such insolvency event or
violation, as applicable. Under the terms of the Pooling and Servicing
Agreement, within 15 days the Trustee will publish a notice of such
insolvency event or violation stating that the Trustee intends to sell,
liquidate or otherwise dispose of the Receivables in a commercially
reasonable manner and on commercially reasonable terms, unless within a
specified period of time holders of Certificates of each outstanding
Series representing more than 50% of the aggregate unpaid principal amount
of the Certificates of each such Series (or, with respect to any Series
with two or more Classes, the Certificates of each such Class) and each
person holding a Supplemental Certificate, instruct the Trustee not to
sell, dispose of or otherwise liquidate the Receivables and to continue
transferring Receivables as before such insolvency event or violation, as
applicable. If the portion of such proceeds allocated to the
Certificateholders' Interest and the proceeds of any collections on the
Receivables in the Collection Account allocable to the Certificateholders'
Interest are not sufficient to pay the aggregate unpaid principal balance
of the Certificates in full plus accrued and unpaid interest thereon,
Certificateholders will incur a loss.
TERMINATION; FULLY REINVESTED DATE
TERMINATION. The Trust will terminate on the earlier to occur of (a)
the day following the Distribution Date on which the aggregate Invested
Amounts for all Series is zero, (b) May 31, 2012 and (c) the date on which
proceeds from the sale, disposal or other liquidation of the Receivables
are distributed to the Certificateholders following an insolvency event
with respect to USA or any violation by USA of its covenant not to create
any lien on any Receivable, in each case as provided in the Pooling and
Servicing Agreement and as described above under "Reinvestment Events and
Early Amortization Events". Upon termination of the Trust, all right,
title and interest in the Receivables and other funds of the Trust (other
than amounts in the Collection Account, any Principal Funding Account,
Interest Funding Account, Excess Funding Account or other account for the
final distribution of principal and interest to Certificateholders) will
be conveyed and transferred to USA.
In any event, the last payment of principal and interest on any
Series of Certificates will be due and payable no later than the date
specified in the related Prospectus Supplement (the "Series Termination
Date").
FULLY REINVESTED DATE. Following the occurrence of the Fully
Reinvested Date with respect to any Series, Certificateholders of that
Series will no longer have any interest in the Receivables and all the
representations and covenants of the Seller and the Servicer relating to
the Receivables, as well as certain other provisions of the Pooling and
Servicing Agreement and all remedies for breaches thereof, will no longer
accrue to the benefit of the Certificateholders of that Series, in each
case unless the Revolving Period with respect to such Series recommences
as provided in the related Series Supplement. Those representations,
covenants and other provisions include the conditions to the exchange of
the Seller's Certificate described under "The Seller's Certificate", the
conditions to the issuance of a new Series described under "New
Issuances", the representations described under "Representations and
Warranties" to the extent they relate to the Receivables and the
Collateral Security, the limitations on additions and removals of Accounts
described under "Addition of Accounts" and "Removal of Accounts",
respectively, and the obligations of the Servicer with respect to
servicing the Receivables described under "Collection and Other Servicing
Procedures" and "Servicer Covenants". In addition, upon the occurrence of
the Fully Reinvested Date with respect to any Series, no Interest
Collections, Principal Collections, Defaulted Receivables or Miscellaneous
Payments will be allocated to that Series, unless the Revolving Period
with respect thereto recommences as described above. Notwithstanding the
foregoing, when the final distribution has been made with respect to each
Series of Certificates or the Fully Reinvested Date has occurred with
respect thereto, all right, title and interest in the Receivables will be
conveyed and transferred to USA.
INDEMNIFICATION
The Pooling and Servicing Agreement provides that the Servicer will
indemnify the Trust and the Trustee from and against any loss, liability,
expense, damage or injury suffered or sustained arising out of any acts,
omissions or alleged acts or omissions arising out of activities of the
Trust, the Trustee or the Servicer pursuant to the Pooling and Servicing
Agreement; provided, that, the Trust or the Trustee will not be so
indemnified if such acts, omissions or alleged acts or omissions
constitute fraud, gross negligence, breach of fiduciary duty or willful
misconduct by the Trustee. However, the Servicer will not indemnify the
Trust, the Trustee or the Certificateholders for any act taken by the
Trustee at the request of the Certificateholders or for any tax required
to be paid by the Trust or the Certificateholders.
The Pooling and Servicing Agreement provides that, except as
described above and with certain other exceptions, neither the Seller, the
Servicer nor any of their directors, officers, employees or agents will be
under any liability to the Trust, the Trustee, the Certificateholders or
any other person for taking any action, or for refraining from taking any
action, pursuant to the Pooling and Servicing Agreement. However, neither
the Seller, the Servicer nor any of their directors, officers, employees
or agents will be protected against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence of
any such person in the performance of their duties or by reason of
reckless disregard of their obligations and duties thereunder.
In addition, the Pooling and Servicing Agreement provides that the
Servicer is not under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its servicing responsibilities
under the Pooling and Servicing Agreement. The Servicer may, in its sole
discretion, undertake any such legal action which it may deem necessary or
desirable for the benefit of the Certificateholders with respect to the
Pooling and Servicing Agreement and the rights and duties of the parties
thereto and the interest of the Certificateholders thereunder.
COLLECTION AND OTHER SERVICING PROCEDURES
Pursuant to the Pooling and Servicing Agreement, the Servicer is
responsible for servicing, collecting, enforcing and administering the
Receivables in accordance with customary and usual procedures for
servicing its own revolving credit line dealer wholesale loans, except
where the failure to so act would not materially and adversely affect the
rights of the Trust.
CCC covenants that it may only change the terms relating to the
Accounts if (i) in the Servicer's reasonable judgment, no Early
Amortization Event or Reinvestment Event will occur with respect to any
Series as a result of the change and (ii) the change is made applicable to
the comparable segment of the portfolio of revolving credit line dealer
wholesale loan accounts with similar characteristics owned or serviced by
CCC and not only to the Accounts.
Servicing activities to be performed by the Servicer include
collecting and recording payments, communicating with dealers,
investigating payment delinquencies, evaluating the increase of credit
limits, and maintaining internal records with respect to each Account.
Managerial and custodial services performed by the Servicer on behalf of
the Trust include providing assistance in any inspections of the documents
and records relating to the Accounts and Receivables by the Trustee
pursuant to the Pooling and Servicing Agreement, maintaining the
agreements, documents and files relating to the Accounts and Receivables
as custodian for the Trust and providing related data processing and
reporting services for Certificateholders and on behalf of the Trustee.
SERVICER COVENANTS
In the Pooling and Servicing Agreement the Servicer covenants that:
(a) it will duly satisfy all obligations on its part to be fulfilled under
or in connection with the Receivables and the Accounts, will maintain in
effect all qualifications required in order to service the Receivables and
the Accounts and will comply in all material respects with all
requirements of law in connection with servicing the Receivables and the
Accounts, the failure to comply with which would have a materially adverse
effect on the Certificateholders of any outstanding Series; (b) it will
not permit any rescission or cancellation of a Receivable except as
ordered by a court of competent jurisdiction or other government
authority; (c) it will do nothing to impair the rights of the
Certificateholders in the Receivables or the Accounts; and (d) it will not
reschedule, revise or defer payments due on any Receivable except in
accordance with its guidelines for servicing revolving credit line dealer
wholesale loans.
Under the terms of the Pooling and Servicing Agreement, if the
Seller or the Servicer discovers, or receives written notice, that any
covenant of the Servicer set forth above has not been complied with in all
material respects and such noncompliance has not been cured within 30 days
thereafter (or such longer period as the Trustee may agree to) and has a
materially adverse effect on the interests of all Certificateholders in
any Receivable or Account, CCC, as Servicer, will purchase such Receivable
or all Receivables in such Account, as applicable. If CCC is the Servicer,
such purchase will be made on the Determination Date following the
expiration of the 30-day cure period and the Servicer will be obligated to
deposit into the Collection Account an amount equal to the amount of such
Receivable plus accrued and unpaid interest thereon. The amount of such
deposit shall be deemed a Transfer Deposit Amount. The purchase by the
Servicer constitutes the sole remedy available to the Certificateholders
if such covenant or warranty of the Servicer is not satisfied and the
Trust's interest in any such purchased Receivables shall be automatically
assigned to the Servicer.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise provided in the related Series Supplement and, with
respect to a Series offered hereby, described in the related Prospectus
Supplement, the Servicer's compensation with respect to the Certificates
of a Series for its servicing activities and reimbursement for its
expenses will be a monthly servicing fee (the "Servicing Fee") in an
amount payable in arrears on each Distribution Date on or before the
Series Termination Date of that Series and the Fully Reinvested Date, if
any, of that Series (and thereafter during the Revolving Period with
respect to such Series, if such Revolving Period recommences) generally
equal to one-twelfth of the product of (a) the "Servicing Fee Rate" set
forth in such Series Supplement, (b) the Pool Balance as of the last day
of the second preceding Collection Period and (c) the Series Allocation
Percentage for such Series for the immediately preceding Collection
Period. Unless otherwise specified in a related Series Supplement and,
with respect to a Series offered hereby, described in the related
Prospectus Supplement, the share of the Servicing Fee allocable to
Certificateholders of any Series with respect to any Distribution Date
(the "Monthly Servicing Fee") shall generally be equal to one-twelfth of
the product of (a) the Servicing Fee Rate and (b) the Invested Amount of
such Series as of the last day of the second preceding Collection Period.
The remainder of the Servicing Fee with respect to any Series shall be
paid by the Seller. The Monthly Servicing Fee with respect to any Series
shall be payable to the Servicer solely to the extent amounts are
available for distribution therefor in accordance with the terms of the
Pooling and Servicing Agreement.
The Servicer will be permitted to waive its right to receive the
Servicing Fee with respect to any Series on any Distribution Date, so long
as it believes that sufficient Interest Collections will be available on a
future Distribution Date to pay the Monthly Servicing Fee relating to such
waived Servicing Fee, in which case the Servicing Fee and the Monthly
Servicing Fee for such Series and such Distribution Date shall be deemed
to be zero.
The Servicer will pay from its servicing compensation certain
expenses incurred in connection with servicing the Accounts and the
Receivables including, without limitation, payment of fees and
disbursements of the Trustee and independent accountants and all other
fees and expenses which are not expressly stated in the Pooling and
Servicing Agreement to be payable by the Trust or the Certificateholders
other than federal, state and local income and franchise taxes, if any, of
the Trust or the Certificateholders.
CERTAIN MATTERS REGARDING THE SERVICER
The Servicer may not resign from its obligations and duties under
the Pooling and Servicing Agreement, except upon determination that such
duties are no longer permissible under applicable law. No such resignation
will become effective until the Trustee or a successor to the Servicer has
assumed the Servicer's responsibilities and obligations under the Pooling
and Servicing Agreement.
Any person into which, in accordance with the Pooling and Servicing
Agreement, the Servicer may be merged or consolidated or any person
resulting from any merger or consolidation to which the Servicer is a
party, or any person succeeding to the business of the Servicer, will be
the successor to the Servicer under the Pooling and Servicing Agreement.
SERVICE DEFAULT
In the event of any Service Default (as defined below), the Trustee,
by written notice to the Servicer, may terminate all of the rights and
obligations of the Servicer, as servicer, under the Pooling and Servicing
Agreement and in and to the Receivables and the proceeds thereof and
appoint a new Servicer (a "Service Transfer"). The rights and interest of
the Seller under the Pooling and Servicing Agreement in the Seller's
Interest will not be affected by any Service Transfer. The Trustee shall
as promptly as possible appoint a successor Servicer and if no successor
Servicer has been appointed by the Trustee and has accepted such
appointment by the time the Servicer ceases to act as Servicer, all
rights, authority, power and obligations of the Servicer under the Pooling
and Servicing Agreement shall pass to and be vested in the Trustee. Prior
to any Service Transfer, the Trustee will review any bids obtained from
potential servicers meeting certain eligibility requirements set forth in
the Pooling and Servicing Agreement to serve as successor Servicer for
servicing compensation not in excess of the Servicing Fee, plus certain
excess amounts payable to the Seller.
A "Service Default" refers to any of the following events:
1. failure by the Servicer to make any payment, transfer or
deposit, or to give instructions to the Trustee to make any payment,
transfer or deposit, on the date the Servicer is required to do so
under the Pooling and Servicing Agreement, which is not cured within
a five business day grace period;
2. failure on the part of the Servicer duly to observe or
perform any other covenants or agreements of the Servicer in the
Pooling and Servicing Agreement which failure has a materially
adverse effect on the Certificateholders of any outstanding Series
and which continues unremedied for a period of 30 days after the
date written notice of such failure shall have been given to the
Servicer by the Trustee, or the Servicer delegates its duties under
the Pooling and Servicing Agreement, except as specifically
permitted thereunder;
3. any representation, warranty or certification made by the
Servicer in the Pooling and Servicing Agreement or in any
certificate delivered pursuant to the Pooling and Servicing
Agreement proves to have been incorrect in any material respect when
made, has a materially adverse effect on the rights of the
Certificateholders of any outstanding Series, and which materially
adverse effect continues for a period of 60 days after written
notice thereof shall have been given to the Servicer by the Trustee;
or
4. the occurrence of certain events of bankruptcy, insolvency
or receivership with respect to the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (1) above for a period of ten business days or
referred to under clauses (2) or (3) for a period of 60 business days,
shall not constitute a Service Default if such delay or failure was caused
by an act of God or other similar occurrence. Upon the occurrence of any
such event, the Servicer shall not be relieved from using its best efforts
to perform its obligations in a timely manner in accordance with the terms
of the Pooling and Servicing Agreement and the Servicer shall provide the
Trustee, any Enhancement Provider, the Seller and the Certificateholders
prompt notice of such failure or delay by it, together with a description
of its efforts to so perform its obligations. The Servicer shall
immediately notify the Trustee in writing of any Service Default.
REPORTS
On each Distribution Date (including each Distribution Date that
corresponds to an Interest Payment Date or any Special Payment Date), the
Trustee will forward to each Certificateholder of record of any Series a
statement (the "Distribution Date Statement") prepared by the Servicer
setting forth certain information with respect to the Trust and the
Certificates of such Series, as specified in the related Series Supplement
and, with respect to any Series offered hereby, described in the related
Prospectus Supplement.
With respect to each Interest Payment Date or Special Payment Date,
the Distribution Date Statement with respect to any Series will include
the following information with respect to the Certificates of such Series:
(a) the total amount distributed on the Certificates of such Series; (b)
the amount of such distribution allocable to principal on the Certificates
of such Series; and (c) the amount of such distribution allocable to
interest on the Certificates of such Series.
On or before January 31 of each calendar year, the Trustee will
furnish (or cause to be furnished) to each person who at any time during
the preceding calendar year was a Certificateholder of record a statement
containing the information required to be provided by an issuer of
indebtedness under the Code for such preceding calendar year or the
applicable portion thereof during which such person was a
Certificateholder, together with such other customary information as is
required to be provided by an issuer of indebtedness under the Code and
such other customary information as is necessary to enable the
Certificateholders to prepare their tax returns. See "Certain Tax
Matters".
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement provides that on or before March
31 of each calendar year, the Servicer will cause a firm of nationally
recognized independent public accountants (who will also render other
services to the Servicer or the Seller) to furnish a report relating to
certain matters in connection with the servicing of CCC's portfolio of
wholesale receivables.
The Pooling and Servicing Agreement provides for delivery to the
Trustee on or before March 31 of each calendar year, of a statement signed
by an officer of the Servicer to the effect that the Servicer has fully
performed, or caused to be fully performed its obligations in all material
respects under the Pooling and Servicing Agreement throughout the
preceding year or, if there has been a default in the performance of any
such obligation, specifying the nature and status of the default.
Copies of all statements, certificates and reports furnished to the
Trustee may be obtained by a request in writing delivered to the Trustee.
AMENDMENTS
The Pooling and Servicing Agreement and any Series Supplement may be
amended by the Seller, the Servicer and the Trustee, without
Certificateholder consent, so long as any such action shall not, as
evidenced by an opinion of counsel, adversely affect in any material
respect the interests of the Certificateholders.
The Pooling and Servicing Agreement and any Series Supplement may be
amended by the Seller, the Servicer and the Trustee with the consent of
the holders of Certificates evidencing not less than 66 2/3% of the
aggregate unpaid principal amount of the Certificates of all adversely
affected Series for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of the Pooling and
Servicing Agreement or of modifying in any manner the rights of
Certificateholders. No such amendment, however, may (a) reduce in any
manner the amount of or delay the timing of distributions required to be
made to Certificateholders or deposits of amounts to be so distributed
without the consent of each affected Certificateholder, (b) change the
definition or the manner of calculating any Certificateholders' Interest
without the consent of each affected Certificateholder, (c) reduce the
amount available under any Enhancement without the consent of each
affected Certificateholder, (d) adversely affect the rating of any Series
or Class by each Rating Agency without the consent of the holders of
Certificates of such Series or Class evidencing not less than 66 2/3% of
the aggregate unpaid principal amount of the Certificates of such Series
or Class or (e) reduce the aforesaid percentage of the unpaid principal
amount of Certificates the holders of which are required to consent to any
such amendment without the consent of each Certificateholder. Promptly
following the execution of any amendment to the Pooling and Servicing
Agreement (other than an amendment described in the preceding paragraph),
the Trustee will furnish written notice of the substance of such amendment
to each Certificateholder.
The foregoing notwithstanding, each holder of a Certificate offered
hereby, by its acceptance thereof, will be deemed to have consented to an
amendment to the Pooling and Servicing Agreement that (i) provides that
funds in the Collection Account may be invested in any Eligible
Investments, (ii) provides that the Seller need not make any deposit to
the Collection Account in respect of the Repurchased Receivables Price of
any Designated Receivables repurchased from the Trust, (iii) otherwise
changes the procedures for removing Receivables from the Trust as
described under "Removal of Accounts", (iv) provides that, subject to the
limitations described herein, CCC need not deposit collections with
respect to any Collection Period in the Collection Account until the
related Distribution Date and (v) permits the designation of Automatic
Additional Accounts as described herein.
The Pooling and Servicing Agreement may not be amended in any manner
which materially adversely affects the interests of any Enhancement
Provider without its prior consent.
LIST OF CERTIFICATEHOLDERS
Upon written request of any three or more Certificateholders of
record the Trustee will afford such Certificateholders access during
business hours to the current list of Certificateholders of a Series or
all outstanding Series, as applicable, for purposes of communicating with
other Certificateholders of such Series or all outstanding Series, as
applicable, with respect to their rights under the Pooling and Servicing
Agreement. See "Book-Entry Registration" and "Definitive Certificates".
The Pooling and Servicing Agreement will not provide for any annual
or other meetings of Certificateholders.
THE TRUSTEE
Manufacturers and Traders Trust Company, a New York banking
corporation, will act as Trustee under the Pooling and Servicing
Agreement. The Trustee is located at One M&T Plaza, Buffalo, New York
14203. The Seller, the Servicer and their respective affiliates may from
time to time enter into normal banking and trustee relationships with the
Trustee and its affiliates. The Trustee may hold Certificates in its own
name with the same rights it would have if it were not the Trustee. In
addition, for purposes of meeting the legal requirements of certain local
jurisdictions, the Trustee shall have the power to appoint a co-trustee or
separate trustees of all or a part of the Trust. In the event of such
appointments, all rights, powers, duties and obligations shall be
conferred or imposed upon the Trustee and such separate trustee or
co-trustee jointly, or, in any jurisdiction in which the Trustee shall be
incompetent or unqualified to perform certain acts, singly upon such
separate trustee or co-trustee, who shall exercise and perform such
rights, powers, duties and obligations solely at the direction of the
Trustee.
The Trustee may resign at any time, in which event the Seller will
be obligated to appoint a successor Trustee. The Servicer may also remove
the Trustee if the Trustee ceases to be eligible to continue as such under
the Pooling and Servicing Agreement or if the Trustee becomes insolvent.
In such circumstances, the Servicer may appoint a successor Trustee. Any
resignation or removal of the Trustee and appointment of a successor
Trustee does not become effective until the acceptance of the appointment
by the successor Trustee.
DESCRIPTION OF THE RECEIVABLES PURCHASE AGREEMENT
The Receivables initially transferred to the Trust by CARCO were
acquired by CARCO and, subsequent to the CARCO Transfer, were acquired by
USA from CCC pursuant to the Receivables Purchase Agreement. The following
summary describes certain terms of the Receivables Purchase Agreement and
is qualified in its entirety by reference to the Receivables Purchase
Agreement.
SALE OR TRANSFER OF RECEIVABLES
Pursuant to the Receivables Purchase Agreement, CCC sold or
transferred to the Seller all of its right, title and interest in and to
all of the Receivables and the Collateral Security as of the Initial
Cut-Off Date and all of the Receivables thereafter created. In addition,
CCC has previously designated Additional Accounts, and has previously
conveyed to the Seller the Principal Receivables in such Additional
Accounts (together with the related Collateral Security) as of the
applicable Additional Cut-Off Date and all Receivables (and related
Collateral Security) created thereafter. As described herein, pursuant to
the Pooling and Servicing Agreement, the Seller has transferred to the
Trust all of its right, title and interest in and to the Receivables
Purchase Agreement.
In connection with the sale or transfer of the Receivables to the
Seller, CCC is required to indicate in its computer files that the
Receivables have been sold or transferred to the Seller, and that such
Receivables have been transferred by the Seller to the Trust. In addition,
CCC is required to provide to the Seller a computer file or microfiche or
written list containing a true and complete list of all such Receivables.
The records and agreements relating to the Accounts and Receivables have
not and will not be segregated by CCC from other documents and agreements
relating to other accounts and receivables and are not and will not be
stamped or marked to reflect the sale or transfer of the Receivables to
the Seller, but the computer records of CCC have been and will be marked
to evidence such sale or transfer. CCC has filed UCC financing statements
with respect to the Receivables meeting the requirements of Michigan state
law. See "Special Considerations -- Certain Legal Aspects" and "Certain
Legal Aspects of the Receivables -- Transfer of Receivables".
REPRESENTATIONS AND WARRANTIES
CCC has or will make certain representations and warranties to the
Seller to the effect, among other things, that as of the Initial Closing
Date and each Series Issuance Date, it was duly incorporated and in good
standing and that it has the authority to consummate the transactions
contemplated by the Receivables Purchase Agreement.
CCC has or will also make representations and warranties to the
Seller relating to the Receivables to the effect, among other things, that
(a) as of the Initial Closing Date and each Series Issuance Date, each of
the Accounts is an Eligible Account and (b) as of the date any new
Receivable is created, such Receivable is an Eligible Receivable. In the
event of a breach of any representation and warranty set forth in this
paragraph which results in an Ineligible Receivable and the requirement
that the Seller accept retransfer of such Ineligible Receivable pursuant
to the Pooling and Servicing Agreement, CCC shall repurchase such
Ineligible Receivable from the Seller on the date of such retransfer. The
purchase price for such Ineligible Receivable shall be the face amount
thereof, of which at least the amount of any cash deposit required to be
made by the Seller under the Pooling and Servicing Agreement in respect of
the retransfer of such Ineligible Receivable shall be paid in cash.
CCC has or will also make representations and warranties to the
Seller to the effect, among other things, that as of the Initial Closing
Date and each Series Issuance Date (a) the Receivables Purchase Agreement
constitutes a legal, valid and binding obligation of CCC and (b) the
Receivables Purchase Agreement constitutes a valid sale or transfer to the
Seller of all right, title and interest of CCC in and to the Receivables,
whether then existing or thereafter created in the Accounts, the
Collateral Security and the proceeds thereof which is effective as to each
Receivable upon the creation thereof. If the breach of any of the
representations and warranties described in this paragraph results in the
obligation of the Seller under the Pooling and Servicing Agreement to
accept retransfer of the Receivables, CCC will repurchase the Receivables
retransferred to CCC for an amount of cash equal to the amount of cash the
Seller is required to deposit under the Pooling and Servicing Agreement in
connection with such retransfer.
CCC has agreed to indemnify the Seller and to hold the Seller
harmless from and against any and all losses, damages and expenses
(including reasonable attorneys' fees) suffered or incurred by the Seller
if the foregoing representations and warranties are materially false.
CERTAIN COVENANTS
In the Receivables Purchase Agreement, CCC 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.
CCC 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, CCC will not sell, pledge, assign or
transfer any interest in the Receivables to any other person. CCC 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 CCC of any
of its representations, warranties or covenants contained in the
Receivables Purchase Agreement.
In addition, CCC has expressly acknowledged and consented to the
Seller's assignment of its rights relating to the Receivables under the
Receivables Purchase Agreement to the Trustee.
TERMINATION
The Receivables Purchase Agreement will terminate immediately after
the Trust terminates. In addition, if pursuant to certain provisions of
federal law CCC becomes party to any bankruptcy or similar proceeding
(other than as a claimant) and, if such proceeding is not voluntary and is
not dismissed within 60 days of its institution, CCC will immediately
cease to sell or transfer Receivables to the Seller and will promptly give
notice of such event to the Seller and to the Trustee.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
On the Initial Closing Date, CCC sold and assigned the Receivables
to the Seller, which Receivables were immediately sold and assigned to the
Trust. The Seller has represented and warranted and will represent and
warranty on the Series Issuance Date with respect to each Series that such
sale to the Trust constituted a valid transfer and assignment to the Trust
of all right, title and interest of the Seller in and to the Receivables
and that, under the UCC (as in effect in Michigan), there exists a valid,
subsisting and enforceable first-priority perfected ownership interest in
the Receivables, in existence at the time of the formation of the Trust or
at the date of addition of any Additional Accounts, in favor of the Trust
and a valid, subsisting and enforceable first-priority perfected ownership
interest in the Receivables created thereafter in favor of the Trust on
and after their creation. However, the transfer of Receivables by the
Seller to the Trust could be deemed to create a security interest under
the UCC. For a discussion of the Trust's rights arising from these
representations and warranties not being satisfied, see "Description of
the Certificates -- Representations and Warranties".
Each of CCC and the Seller has represented that the Receivables are
"chattel paper" for purposes of the UCC as in effect in Michigan. If the
Receivables are deemed to be chattel paper and the transfer thereof by
either CCC to the Seller or by the Seller to the Trust is deemed either to
be a sale or to create a security interest, the UCC as in effect in
Michigan applies and the transferee must either take possession of the
chattel paper or file an appropriate financing statement or statements in
order to perfect its interest therein. Financing statements covering the
Receivables have been filed under the UCC as in effect in Michigan by both
the Seller and the Trust to perfect their respective interests in the
Receivables and continuation statements will be filed as required to
continue the perfection of such interests. The Receivables have not and
will not be stamped to indicate the interest of the Seller or the Trustee.
There are certain limited circumstances under the UCC and applicable
federal law in which prior or subsequent transferees of Receivables could
have an interest in such Receivables with priority over the Trust's
interest. A purchaser of the Receivables who gives new value and takes
possession of the instruments which evidence the Receivables (i.e., the
chattel paper) in the ordinary course of such purchaser's business may,
under certain circumstances, have priority over the interest of the Trust
in the Receivables. A tax or other government lien on property of CCC or
the Seller arising prior to the time a Receivable is conveyed to the Trust
may also have priority over the interest of the Trust in such Receivable.
Under the Receivables Purchase Agreement, CCC 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 CCC and the Seller has also
covenanted that it will not sell, pledge, assign, transfer or grant any
lien on any Receivable or, except as described under "Description of the
Certificates -- The Seller's Certificate", the Seller's Certificate (or
any interest therein) other than to the Trust. In addition, while CCC is
the Servicer, cash collections on the Receivables may, under certain
circumstances, be commingled with the funds of CCC prior to each
Distribution Date and, in the event of the bankruptcy of CCC, the Trust
may not have a perfected interest in such collections.
CERTAIN MATTERS RELATING TO BANKRUPTCY
CCC has warranted to the Seller in the Receivables Purchase
Agreement that the sale of the Receivables by it to the Seller is a valid
sale of the Receivables to the Seller. In addition, CFC, CCC and the
Seller have agreed to treat the transactions described herein as a sale of
the Receivables to the Seller, and CCC has or will take all actions that
are required under Michigan law to perfect the Seller's ownership interest
in the Receivables. Notwithstanding the foregoing, if CCC or CFC were to
become a debtor in a bankruptcy case and a creditor or
trustee-in-bankruptcy of such debtor or such debtor itself were to take
the position that the sale of Receivables from such debtor to the Seller
should be recharacterized as a pledge of such Receivables to secure a
borrowing from such debtor, then delays in payments of collections of
Receivables to the Seller could occur or (should the court rule in favor
of any such trustee, debtor in possession or creditor) reductions in the
amount of such payments could result. See "Special Considerations --
Certain Legal Aspects".
In a recent case decided by the U.S. Court of Appeals for the Tenth
Circuit, Octagon Gas System, Inc. v. Rimmer, the court determined that
"accounts", a 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 is equally
applicable 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 CCC
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 CCC's
bankruptcy estate and would be subject to claims of certain creditors, and
delays and reductions in payments to the Seller and Certificateholders
could result.
In addition, if CFC or CCC were to become a debtor in a bankruptcy
case and a creditor or trustee-in-bankruptcy of such debtor or such debtor
itself were to request a court to order that CFC and/or CCC should be
substantively consolidated with the Seller, delays in payments on the
Certificates could result. Should the bankruptcy court rule in favor of
any such creditor, trustee-in-bankruptcy or such debtor, reductions in
such payments could result.
The Seller has warranted to the Trust that the transfer of the
Receivables to the Trust is a sale of the Receivables to the Trust. The
Seller has or will take all actions that are required under Michigan law
to perfect the Trust's ownership interest in the Receivables and the
Seller has warranted to the Trust that the Trust will at all times have a
first priority perfected ownership interest therein and, with certain
exceptions, in proceeds thereof. Nevertheless, a tax or government lien on
property of CCC or the Seller arising prior to the time a Receivable is
conveyed to the Trust may have priority over the interest of the Trust in
such Receivable. Each of CARCO's and USA's certificate of incorporation
provides that it shall not file a voluntary application for relief under
Title 11 of the United States Code (the "Bankruptcy Code") without the
affirmative vote of its two independent directors. Pursuant to the Pooling
and Servicing Agreement, the Trustee, all Certificateholders and any
Enhancement Provider will covenant that they will not at any time
institute against the Seller any bankruptcy, reorganization or other
proceedings under any federal or state bankruptcy or similar law. In
addition, certain other steps will be taken to avoid the Seller's becoming
a debtor in a bankruptcy case. Notwithstanding such steps, if the Seller
were to become a debtor in a bankruptcy case, and a bankruptcy trustee for
the Seller or the Seller as debtor in possession or a creditor of the
Seller were to take the position that the transfer of the Receivables from
the Seller to the Trust should be recharacterized as a pledge of such
Receivables, then delays in payments on the Certificates or (should the
court rule in favor of any such trustee, debtor in possession or creditor)
reductions in the amount of such payments could result.
The Seller does not intend to file, and CFC has agreed that it will
not cause the Seller to file, a voluntary application for relief under the
Bankruptcy Code or any similar applicable state law with respect to the
Seller so long as the Seller is solvent and does not foresee becoming
insolvent.
If CFC, CCC or the Seller were to become a debtor in a bankruptcy
case causing a Reinvestment Event or an Early Amortization Event to occur
with respect to the Certificates of each Series, then, pursuant to the
Receivables Purchase Agreement, new Receivables would no longer be
transferred to the Seller and, pursuant to the Pooling and Servicing
Agreement, only collections on Receivables theretofore sold to the Seller
and transferred to the Trust would be available to be applied to pay
interest accruing on the Certificates and to pay the principal amount of
the Certificates. Under such circumstances, the Servicer is obligated to
allocate all collections on Principal Receivables to the oldest principal
balance first. If such allocation method were to be altered by the
bankruptcy court, the rate of payment on the Certificates might be
adversely affected. In addition, distributions in respect of principal on
each Certificate would not be subject to any applicable Controlled
Distribution Amount.
The occurrence of certain events of bankruptcy, insolvency or
receivership with respect to the Servicer will result in a Service
Default, which Service Default, in turn, may result in a Reinvestment
Event or an Early Amortization Event with respect to a Series. If no other
Service Default other than the commencement of such bankruptcy or similar
event exists, a trustee-in-bankruptcy of the Servicer may have the power
to prevent either the Trustee or the Certificateholders from appointing a
successor Servicer.
Payments made in respect of repurchases of Receivables by CCC or the
Seller pursuant to the Pooling and Servicing Agreement may be recoverable
by CCC or the Seller, as debtor in possession, or by a creditor or a
trustee-in-bankruptcy of CCC or the Seller as a preferential transfer from
CCC or the Seller if such payments are made within one year prior to the
filing of a bankruptcy case in respect of CCC.
CARCO does not intend to file, and CFC has agreed that it will not
cause CARCO to file, a voluntary application for relief under the
Bankruptcy Code or any similar applicable state law with respect to CARCO
so long as CARCO is solvent and does not foresee becoming insolvent.
CERTAIN TAX MATTERS
FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a discussion of federal income tax consequences
to holders of the Certificates. This discussion does not purport to deal
with all aspects of federal income taxation that may be relevant to
holders of the Certificates in light of their personal investment
circumstances, nor to certain types of holders subject to special
treatment under the federal income tax laws (for example, banks, life
insurance companies and tax-exempt organizations). Prospective investors
are advised to consult their own tax advisors with regard to the federal
income tax consequences of holding and disposing of the Certificates, as
well as the tax consequences arising under the laws of any state, foreign
country or other jurisdiction. This discussion is based upon present
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
the regulations promulgated thereunder, and judicial or ruling authority,
all of which are subject to change, which change may be retroactive. No
ruling on any of the issues discussed below will be sought from the
Internal Revenue Service (the "IRS").
The discussion assumes that a Certificate is issued in registered
form, has all payments denominated in U.S. dollars, has a term that
exceeds one year, and does not bear "contingent interest" as defined in
Section 871(h)(4) of the Code. Moreover, except as provided below, the
discussion assumes that the interest on the Certificate meets the
requirements for "qualified stated interest" under Treasury regulations
(the "OID regulations") relating to original issue discount ("OID"), and
that any OID on the Certificate (i.e., any excess of the principal amount
of the Certificate over its issue price) does not exceed a de minimis
amount (i.e., 1/4% of its principal amount multiplied by the number of
full years until its maturity date), all within the meaning of the OID
regulations. If those conditions are not satisfied, additional tax
considerations will be disclosed in the applicable Prospectus Supplement.
Treatment of the Certificates as Indebtedness of the Seller. The
Seller and the holders of Certificates offered hereby will express in the
Pooling and Servicing Agreement the intent that, for federal, state and
local income and franchise tax purposes and Michigan single business tax
purposes, the Certificates will be indebtedness of the Seller secured by
the Receivables and any other Trust assets allocable to the Certificates.
USA, by the acceptance of the assignment of the Pooling and Servicing
Agreement agreed, and each Certificateholder, by the acceptance of a
Certificate will agree, to treat the Certificates as indebtedness of the
Seller for federal, state and local income and franchise tax purposes and
Michigan single business tax purposes. However, the Pooling and Servicing
Agreement generally refers to the transfer of the Receivables as a "sale",
and because different criteria are used in determining the nontax
accounting treatment of the transaction, the Seller will treat the Pooling
and Servicing Agreement, for certain nontax purposes, as effecting a
transfer of an ownership interest in the Receivables and not as creating a
debt obligation of the Seller.
A basic premise of federal income tax law is that the economic
substance of a transaction generally determines the tax consequences. The
form of a transaction, while a relevant factor, is not conclusive evidence
of its economic substance. In appropriate circumstances, the courts have
allowed taxpayers, as well as the IRS, to treat a transaction in
accordance with its economic substance, as determined under federal income
tax law, even though the participants in the transaction have
characterized it differently for nontax purposes.
The determination of whether the economic substance of a property
transfer is a sale or a loan secured by the transferred property has been
made by the IRS and the courts on the basis of numerous factors designed
to determine whether the transferor has relinquished (and the transferee
has obtained) substantial incidents of ownership in the property. Among
those factors, the primary factors examined are whether the transferee has
the opportunity to gain if the property increases in value, and has the
risk of loss if the property decreases in value. Based upon its analysis
of such factors, Cravath, Swaine & Moore, special tax counsel to the
Seller and the Trust ("Tax Counsel"), is of the opinion that for federal
income tax purposes the Seller will properly be treated as the owner of
the Receivables and any other Trust assets allocable to the Certificates
and, accordingly, the Certificates will properly be characterized as
indebtedness of the Seller that is secured by the Receivables and such
other assets.
Interest Income to Certificateholders. Assuming the Certificates are
debt obligations for federal income tax purposes, they will not be
considered issued with OID (except as discussed below or in the applicable
Prospectus Supplement). Interest thereon will be taxable as ordinary
interest income when received by Certificateholders utilizing the
cash-basis method of accounting and when accrued by Certificateholders
utilizing the accrual method of accounting. Under the OID regulations, a
holder of a Certificate issued with a de minimis amount of OID must
include such OID in income, on a pro rata basis, as principal payments are
made on the Certificate. It is believed that any Asset Composition Premium
paid as a result of an Asset Composition Event will be taxable as
contingent interest when it becomes fixed and unconditionally payable. A
Certificateholder who buys a Certificate for less than its principal
amount will be subject to the "market discount" rules of the Code, and a
Certificateholder who buys a Certificate for more than its principal
amount will be subject to the premium amortization rules of the Code.
The Certificates of a particular Series or Class might be treated
under the OID regulations as being issued with OID if the interest rate
payable on the Certificates for any particular period is limited
(notwithstanding the otherwise applicable interest formula) to the average
interest rate currently payable on the Receivables. This result would not
significantly affect an accrual basis holder of Certificates but would
somewhat accelerate taxable income to a cash basis holder by in effect
requiring such holder to report interest income on the accrual basis.
The Trustee will be required to report annually to the IRS, and to
each Certificateholder of record, the amount of interest paid on the
Certificates (and the amount of interest withheld for federal income
taxes, if any) for each calendar year, except as to exempt holders
(generally, holders that are corporations, tax-exempt organizations,
qualified pension and profit-sharing trusts, individual retirement
accounts, or nonresident aliens who provide certification as to their
status as nonresidents). Accordingly, each nonexempt Certificateholder
will be required to provide, under penalties of perjury, a certificate on
IRS Form W-9 containing such holder's name, address, federal taxpayer
identification number and a statement that such holder is not subject to
backup withholding. Should a nonexempt Certificateholder fail to provide
the required certification, the Trustee (or the Participants or Indirect
Participants) will be required to withhold (or cause to be withheld) 31%
of the interest (and principal) otherwise payable to the holder, and remit
the withheld amounts to the IRS as a credit against the holder's federal
income tax liability.
Possible Classification of the Trust as a Partnership or
Association. As described above, it is the opinion of Tax Counsel that the
Certificates offered hereby will properly be characterized as debt of the
Seller for federal income tax purposes. However, such opinion is not
binding on the IRS and thus no assurance can be given that such a
characterization will prevail.
For example, if the IRS were to contend successfully that the
Certificates offered hereby were not debt of the Seller for federal income
tax purposes, the Trust might be classified for federal income tax
purposes as a partnership, an association taxable as a corporation or a
"publicly traded partnership" taxable as a corporation. If the
Certificates are treated as interests in such a partnership, the
partnership would in all likelihood be treated as a "publicly traded
partnership". A publicly traded partnership is, in general, taxable as a
corporation. If the partnership were nevertheless not taxable as a
corporation (because of an exception for an entity whose income is
interest income that is not derived in the conduct of a financial
business) it would not be subject to federal income tax. Rather, each item
of income, gain, loss, deduction and credit generated through the
ownership of the Receivables by the partnership would be passed through to
the partners in the partnership (including the Certificateholders)
according to their respective interests therein.
The income reportable by the Certificateholders as partners in such
a partnership could differ from the income reportable by the
Certificateholders as holders of debt. However, except as provided below,
it is not expected that such differences would be material. If the
Certificateholders were treated as partners, a cash basis
Certificateholder might be required to report income when it accrues to
the partnership rather than when it is received by the Certificateholder.
Moreover, if the Certificates are interests in a partnership, an
individual's share of expenses of the partnership would be miscellaneous
itemized deductions that in the aggregate are allowed only to the extent
they exceed two percent of the individual's adjusted gross income (and are
subject to certain other limitations), meaning that the individual might
be taxed on a greater amount of income than the stated interest on the
Certificates. Finally, if any Certificates are treated as equity interests
in a partnership in which other Certificates are debt, all or part of a
tax-exempt investor's share of income from the Certificates that are
treated as equity would be treated as unrelated debt-financed income under
the Code taxable to the investor.
If, alternatively, the Trust were treated as either an association
taxable as a corporation or a "publicly traded partnership" taxable as a
corporation, the resulting entity would be subject to federal income taxes
at corporate tax rates on its taxable income generated by ownership of the
Receivables. Moreover, distributions by the entity would probably not be
deductible in computing the entity's taxable income and all or part of
distributions to Certificateholders would probably be treated as dividend
income to the Certificateholders. Such an entity-level tax could result in
reduced distributions to Certificateholders and the Certificateholders
could be liable for a share of such a tax.
Because the Seller will treat the Certificates offered hereby as
indebtedness for federal income tax purposes, the Trustee (and
Participants and Indirect Participants) will not comply with the tax
reporting requirements that would apply under these alternative
characterizations of the Certificates.
Foreign Investors. Tax Counsel has given its opinion that the
Certificates will properly be classified as debt of the Seller for federal
income tax purposes. If the Certificates are so treated:
(a) interest paid or accrued to a nonresident alien or foreign
corporation or partnership would be exempt from U.S. withholding
taxes (including backup withholding taxes); provided that the holder
complies with applicable identification requirements (and does not
actually or constructively own 10% or more of the voting stock of
the Seller and is not a controlled foreign corporation with respect
to the Seller). Applicable identification requirements will be
satisfied if there is delivered to a securities clearing
organization (or bank or other financial institution that holds the
Certificates on behalf of the customer in the ordinary course of its
trade or business) (i) IRS Form W-8 signed under penalties of
perjury by the beneficial owner of such Certificates stating that
the holder is not a U.S. person and providing such holder's name and
address, (ii) IRS Form 1001 signed by the beneficial owner of such
Certificates or such owner's agent claiming exemption from
withholding under an applicable tax treaty, or (iii) IRS Form 4224
signed by the beneficial owner of such Certificates or such owner's
agent claiming exemption from withholding of tax on income connected
with the conduct of a trade or business in the United States;
provided that in any such case (x) the applicable form is delivered
pursuant to applicable procedures and is properly transmitted to the
United States entity otherwise required to withhold tax and (y) none
of the entities receiving the form has actual knowledge that the
holder is a U.S. person or that any certification on the form is
false;
(b) a holder of a Certificate who is a nonresident alien or
foreign corporation will not be subject to United States federal
income tax on gain realized on the sale, exchange or redemption of
such Certificate, provided that (i) such gain is not effectively
connected to a trade or business carried on by the holder in the
United States, (ii) in the case of a holder that is an individual,
such holder is not present in the United States for 183 days or more
during the taxable year in which such sale, exchange or redemption
occurs and (iii) in the case of gain representing accrued interest,
the conditions described in clause (a) are satisfied; and
(c) a Certificate held by an individual who at the time of
death is a nonresident alien will not be subject to United States
federal estate tax as a result of such individual's death if,
immediately before his death, (i) the individual did not actually or
constructively own 10% or more of the voting stock of the Seller and
(ii) the holding of such Certificate was not effectively connected
with the conduct by the decedent of a trade or business in the
United States.
If the IRS were to contend successfully that the Certificates are
interests in a partnership (not taxable as a corporation), a
Certificateholder that is a nonresident alien or foreign corporation might
be required to file a U.S. individual or corporate income tax return and
pay tax on its share of partnership income at regular U.S. rates,
including, in the case of a corporation, the branch profits tax (and would
be subject to withholding tax on its share of partnership income). If the
Certificates are recharacterized as interests in an association taxable as
a corporation or a "publicly traded partnership" taxable as a corporation,
to the extent distributions on the Certificates were treated as dividends,
a nonresident alien individual or foreign corporation would generally be
taxed on the gross amount of such dividends (and subject to withholding)
at a rate of 30% unless such rate were reduced by an applicable treaty.
STATE AND LOCAL TAX CONSEQUENCES
The activities to be undertaken by the Servicer in servicing and
collecting the Receivables will take place in Michigan. The State of
Michigan imposes a state individual income tax and a single business tax
which is based partially upon the net income of corporations, partnerships
and other entities doing business in the State of Michigan. This
discussion is based upon present provisions of Michigan statutes and the
regulations promulgated thereunder, and applicable judicial or ruling
authority, all of which are subject to change, which change may be
retroactive. No ruling on any of the issues discussed below will be sought
from the Michigan Department of Treasury.
If the Certificates are treated as debt of the Seller for federal
income tax purposes, in the opinion of Allan L. Ronquillo, Esq., Vice
President and General Counsel of the Seller, Michigan tax counsel to the
Seller and the Trust ("Michigan Tax Counsel"), this treatment will also
apply for Michigan tax purposes. Pursuant to this treatment, the Trust
will not be subject to the Michigan single business tax and
Certificateholders not otherwise subject to Michigan tax would not become
subject to such tax solely because of their ownership of the Certificates.
Certificateholders already subject to taxation in Michigan, however, could
be required to pay tax on the income generated from ownership of these
Certificates.
In the alternative, if the Trust is treated as a partnership (not
taxable as a corporation) for federal income tax purposes, in the opinion
of Michigan Tax Counsel, the same treatment should also apply for Michigan
tax purposes. In such case, the resulting constructive partnership should
not be treated as doing business in Michigan but rather should be treated
as a passive holder of investments and, as a result, should not be subject
to the Michigan single business tax (which, if applicable, could result in
reduced distributions to Certificateholders). The Certificateholders also
should not be subject to Michigan single business tax on the income
received through the partnership.
Under current law, Certificateholders that are nonresidents of
Michigan and that are not otherwise subject to Michigan income tax should
not be subject to Michigan income tax on the income from the constructive
partnership. Under current law corporate Certificateholders are not
subject to Michigan income tax. In any event, classification of the
arrangement as a "partnership" would not cause a Certificateholder not
otherwise subject to taxation in Michigan to pay Michigan tax on income
beyond that derived from the Certificates.
If the Certificates are instead treated as ownership interests in an
association or "publicly traded partnership", the hypothetical entity
should not be subject to the Michigan single business tax (which, if
applicable, could result in reduced distributions to Certificateholders).
A Certificateholder not otherwise subject to tax in Michigan would not
become subject to Michigan tax as a result of its mere ownership of such
an interest.
Because each state's income tax laws vary, it is impossible to
predict the income tax consequences to the Certificateholders in all of
the state taxing jurisdictions in which they are already subject to tax.
Certificateholders are urged to consult their own tax advisors with
respect to state income and franchise taxes.
ERISA CONSIDERATIONS
GENERAL
Section 406 of ERISA and Section 4975 of the Code prohibit a
pension, profit-sharing or other employee benefit plan from engaging in
certain transactions involving "plan assets" with persons that are
"parties in interest" under ERISA or "disqualified persons" under the Code
with respect to the plan. A violation of these "prohibited transaction"
rules may generate excise tax and other liabilities under ERISA and the
Code for such person. For example, a prohibited transaction would arise,
unless an exemption were available, if the Certificates of a Series or
Class were viewed as debt of the Seller and the Seller were a disqualified
person or party in interest with respect to a plan that acquired
Certificates of such Series or Class.
Moreover, additional prohibited transactions could arise if the
assets of the Trust were deemed to constitute assets of any plan that
owned Certificates. The Department of Labor ("DOL") has issued a final
regulation (the "Plan Assets Regulation") concerning the definition of
what constitutes the "plan assets" of an employee benefit plan subject to
ERISA, the Code or an individual retirement account ("IRA") (collectively
referred to as "Benefit Plans"). Under the Plan Assets Regulation the
assets and properties of certain corporations, partnerships and certain
other entities in which a Benefit Plan acquires an "equity interest" could
be deemed to be assets of the Benefit Plan in certain circumstances.
Accordingly, if Benefit Plans purchase Certificates, the Trust could be
deemed to hold plan assets of such Benefit Plan unless one of the
exceptions under the Plan Assets Regulation is applicable to the Trust.
The Plan Assets Regulation only applies to the purchase by a Benefit
Plan of an "equity interest" in an entity. Assuming that the Certificates
of a Series or Class are equity interests, the Plan Assets Regulation
contains an exception that provides that if a Benefit Plan acquires a
"publicly-offered security", the issuer of the security is not deemed to
hold plan assets. A publicly-offered security is a security that is (i)
freely transferable, (ii) part of a class of securities that is owned by
100 or more investors independent of the issuer and of one another and
(iii) either is (A) part of a class of securities registered under Section
12(b) or 12(g) of the Exchange Act or (B) sold to the plan as part of an
offering of securities to the public pursuant to an effective registration
statement under the Securities Act and the class of securities of which
such security is a part is registered under the Exchange Act within 120
days (or such later time as may be allowed by the Securities and Exchange
Commission) after the end of the fiscal year of the issuer during which
the offering of such securities to the public occurred.
The Certificates of each Series and Class must be separately tested
under, and may each meet, the criteria of publicly-offered securities as
described above. There are no restrictions imposed on the transfer of the
Certificates offered hereby; and such Certificates will be sold as part of
an offering pursuant to an effective registration statement under the
Securities Act, and then will be timely registered under the Exchange Act.
Based on information provided by the underwriter or placement agent for
Certificates of any Series or Class offered hereby, the Seller will notify
the Trustee as to whether or not Certificates of such Series or, if such
Series consists of more than one Class, each such Class will be held by at
least 100 separately named persons at the conclusion of the offering,
unless the related Prospectus Supplement otherwise provides. The Seller
will not determine whether the 100-investor requirement of the exception
for publicly offered securities is satisfied as to the Certificates of any
Series or Class. Prospective purchasers may obtain a copy of the
notification described in the third preceding sentence from the Trustee at
One M&T Plaza, Buffalo, New York 14203.
If the Certificates of any Series or Class offered hereby fail to
meet the criteria of publicly-offered securities and the Trust's assets
are deemed to include assets of Benefit Plans that are holders of such
Certificates, transactions involving the Trust and "parties in interest"
or "disqualified persons" with respect to such plans might be prohibited
under Section 406 of ERISA and Section 4975 of the Code unless an
exemption is applicable. Thus, for example, if a participant in any
Benefit Plan is an obligor or guarantor of one of the Receivables, under
DOL interpretations the purchase of such Certificates by such plan could
constitute a prohibited transaction. There are three class exemptions
issued by the DOL that may apply in such event: DOL Prohibited Transaction
Exemption 84-14 (Class Exemption for Plan Asset Transactions Determined by
Independent Qualified Professional Asset Managers), 91-38 (Class Exemption
for Certain Transactions Involving Bank Collective Investment Funds) and
90-1 (Class Exemption for Transactions Involving Insurance Company Pooled
Separate Accounts). There is no assurance that these exemptions, even if
all of the conditions specified therein are satisfied, will apply to all
transactions involving the Trust's assets.
In light of the foregoing, fiduciaries of a Benefit Plan considering
the purchase of Certificates of any Series or Class offered hereby should
consult their own counsel as to whether the assets of the Trust which are
represented by such Certificates would be considered plan assets, and the
consequences that would apply if the Trust's assets were considered plan
assets.
In addition, based on the reasoning of the United States Supreme
Court's recent decision in John Hancock Life Ins. Co. v. Harris Trust and
Sav. Bank, 144 S.Ct. 517 (1993), under certain circumstances assets in the
general account of an insurance company may be deemed to be plan assets
for certain purposes, and under such reasoning a purchase of Certificates
with assets of an insurance company's general account might be subject to
the prohibited transaction rules described above.
Unless otherwise provided in the applicable Prospectus Supplement,
if the Seller does not notify the Trustee, as described above, that the
Certificates of any particular Series or Class will be expected to be held
by at least 100 persons, the Certificates of such Series or Class, as the
case may be, may not be acquired by any Benefit Plan or by any entity
investing assets that are treated as assets of a Benefit Plan.
Furthermore, in that case, the Pooling and Servicing Agreement, the Series
Supplement and each such Certificate will provide that each holder of such
Certificate shall be deemed to have represented and warranted that it is
not a Benefit Plan and is not purchasing such Certificate on behalf of a
Benefit Plan or with assets that are treated as assets of a Benefit Plan.
EXPERTS
The financial statements of the Trust as of December 31, 1993 and
1992 and for each of the two years in the period ended December 31, 1993
and for the period May 31, 1991 (inception) through December 31, 1991
incorporated in this Prospectus by reference from the Trust's Annual
Report on Form 10-K for the year ended December 31, 1993, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
PLAN OF DISTRIBUTION
The Seller may sell Certificates offered hereby in any of three
ways: (i) through underwriters or dealers; (ii) directly to one or more
purchasers; or (iii) through agents. The related Prospectus Supplement
will set forth the terms of the offering of any Series Certificates
offered hereby, including, without limitation, the names of any
underwriters, the purchase price of such Certificates and the proceeds to
the Seller from such sale, any underwriting discounts and other items
constituting underwriter's compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers.
If underwriters are used in a sale of any Certificates of a Series
offered hereby, such Certificates will be acquired by the underwriters for
their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public
offering price or at varying prices to be determined at the time of sale
or at the time of commitment therefor. Such Certificates may be offered to
the public either through underwriting syndicates represented by managing
underwriters or by underwriters without a syndicate. Unless otherwise set
forth in the related Prospectus Supplement, the obligations of the
underwriters to purchase such Certificates will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase
all of such Certificates if any of such Certificates are purchased. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Certificates of a Series offered hereby may also be offered and
sold, if so indicated in the related Prospectus Supplement, in connection
with a remarketing upon their purchase, in accordance with a redemption or
repayment pursuant to their terms, by one or more firms ("remarketing
firms") acting as principals for their own accounts or as agents for the
seller. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Seller and its compensation will be described
in the related Prospectus Supplement. Remarketing firms may be deemed to
be underwriters in connection with the Certificates remarketed thereby.
Certificates may also be sold directly by the Seller or through
agents designated by the Seller from time to time. Any agent involved in
the offer or sale of Certificates will be named, and any commissions
payable by the Seller to such agent will be set forth, in the related
Prospectus Supplement. Unless otherwise indicated in the related
Prospectus Supplement, any such agent will act on a best efforts basis for
the period of its appointment.
Any underwriters, agents or dealers participating in the
distribution of Certificates may be deemed to be underwriters, and any
discounts or commissions received by them on the sale or resale of
Certificates may be deemed to be underwriting discounts and commissions,
under the Securities Act. Agents and underwriters may be entitled under
agreements entered into with the Seller and CFC to indemnification by the
Seller and CFC against certain civil liabilities, including liabilities
under the Securities Act, or to contribution with respect to payments that
the agents or underwriters may be required to make in respect thereof.
Agents and underwriters may be customers of, engage in transactions with,
or perform services for, the Seller or its affiliates in the ordinary
course of business.
LEGAL MATTERS
Certain legal matters relating to the Certificates offered hereby
will be passed upon for USA by Allan L. Ronquillo, Esq., Vice President
and General Counsel of Chrysler Financial Corporation, and for any
underwriters, agents or dealers by the counsel named in the applicable
Prospectus Supplement. Certain federal income tax and ERISA matters will
be passed upon for USA and the Trust by the counsel named in the
applicable Prospectus Supplement.
<PAGE>
INDEX OF PRINCIPAL TERMS
Term Page
Accounts.......................................................... 1
Accumulation Period............................................... 9
Addition Date..................................................... 32
Additional Accounts............................................... 35
Additional Cut-Off Date........................................... 32
Adjusted Invested Amount.......................................... 41
Adjustment Payment................................................ 44
Auction Vehicles.................................................. 21
Automatic Additional Accounts..................................... 35
Automatic Removal Date............................................ 38
Automatic Removed Accounts........................................ 38
Bankruptcy Code................................................... 54
Benefit Plans..................................................... 59
CARCO............................................................. 3
CARCO Transfer.................................................... 18
CCC............................................................... 1
Cede.............................................................. 2
CEDEL............................................................. 28
Certificateholder................................................. 28
Certificateholders................................................ 2
Certificateholders' Interest...................................... 5
Certificates...................................................... 1
CFC............................................................... 3
Chrysler.......................................................... 4
Citibank.......................................................... 27
Class............................................................. 1
Code.............................................................. 55
Collateral Security............................................... 3
Collection Account................................................ 38
Collection Period................................................. 6
Commission........................................................ 2
Controlled Amortization Amount.................................... 10
Controlled Amortization Period.................................... 9
Controlled Deposit Amount......................................... 9
Cooperative....................................................... 29
Dealer Overconcentrations......................................... 35
Dealer Trouble.................................................... 23
Dealers........................................................... 4
Defaulted Amount.................................................. 43
Defaulted Receivables............................................. 43
Definitive Certificates........................................... 30
Depository........................................................ 25
Designated Accounts............................................... 36
Designated Balance................................................ 36
Designated Receivables............................................ 37
Determination Date................................................ 12
Disclosure Document............................................... 31
Distribution Date Statement....................................... 49
DOL............................................................... 59
DTC............................................................... 2
Early Amortization Event.......................................... 45
Early Amortization Period......................................... 11
Eligible Account.................................................. 34
Eligible Accounts................................................. 4
Eligible Dealer................................................... 34
Eligible Deposit Account.......................................... 38
Eligible Institution.............................................. 38
Eligible Investments.............................................. 38
Eligible Portfolio................................................ 24
Eligible Receivable............................................... 34
Eligible Receivables.............................................. 4
Enhancement....................................................... 3
Enhancement Provider.............................................. 33
ERISA............................................................. 14
Euroclear......................................................... 29
Euroclear Operator................................................ 29
Euroclear Participants............................................ 29
Excess Funded Amount.............................................. 8
Excess Funding Account............................................ 8
Excess Principal Collections...................................... 41
Exchange Act...................................................... 2
Excluded Series................................................... 12
Expected Payment Date............................................. 7
finance hold...................................................... 21
<PAGE>
Term Page
Fleet Receivables................................................. 20
Foreign Agency Depositaries....................................... 27
Fully Reinvested Date............................................. 10
Holders........................................................... 30
IML............................................................... 28
Indirect Participants............................................. 28
Ineligible Receivables............................................ 32
Initial Closing Date.............................................. 31
Initial Cut-Off Date.............................................. 3
Initial Invested Amount........................................... 41
Insolvency Laws................................................... 19
Instalment Balance................................................ 22
Instalment Balance Amount......................................... 35
Interest Collections.............................................. 4
Interest Funding Account.......................................... 7
Interest Payment Dates............................................ 7
Invested Amounts.................................................. 33
Investor Defaulted Amount......................................... 44
IRA............................................................... 59
IRS............................................................... 55
Michigan Tax Counsel.............................................. 58
Miscellaneous Payments............................................ 40
Monthly Servicing Fee............................................. 47
Moody's........................................................... 38
Morgan............................................................ 27
New Issuance...................................................... 5
New Vehicles...................................................... 21
OID............................................................... 55
OID Regulations................................................... 55
Overconcentration Amount.......................................... 35
Paired Series..................................................... 12
Participants...................................................... 28
Plan Assets Regulation............................................ 59
Pool Balance...................................................... 30
Pooling and Servicing Agreement................................... 3
Prime Rate........................................................ 22
Principal Shortfalls.............................................. 41
Principal Collections............................................. 4
Principal Commencement Date....................................... 7
Principal Funding Account......................................... 9
Principal Receivables............................................. 6
Principal Terms................................................... 31
Prospectus Supplement............................................. 1
Rating Agency..................................................... 18
Receivables....................................................... 1
Receivables Purchase Agreement.................................... 4
Registration Statement............................................ 2
Reinvestment Event................................................ 44
Reinvestment Period............................................... 10
Reinvestment Period Commencement Date............................. 10
remarketing firms................................................. 60
Removal and Repurchase Date....................................... 37
Removal Commencement Date......................................... 36
Removal Date...................................................... 36
Removal Notice.................................................... 36
Removed Account................................................... 37
Repurchased Receivables........................................... 37
Repurchased Receivables Purchase Price............................ 37
Required Participation Amount..................................... 36
Required Participation Percentage................................. 36
Revolving Period.................................................. 8
Securities Act.................................................... 2
Seller............................................................ 1
Seller's Certificate.............................................. 30
Seller's Interest................................................. 1
Series............................................................ 1
Series Allocable Defaulted Amount................................. 40
Series Allocable Interest Collections............................. 40
Series Allocable Miscellaneous Payments........................... 40
Series Allocable Principal Collections............................ 40
Series Allocation Percentage...................................... 41
Series Cut-off Date............................................... 8
Series Issuance Date.............................................. 32
Series Supplement................................................. 5
Series Termination Date........................................... 46
Service Default................................................... 48
<PAGE>
Term Page
Service Transfer.................................................. 48
Servicer.......................................................... 1
Servicing Fee..................................................... 47
Special Payment Date.............................................. 11
Standard & Poor's................................................. 38
Supplemental Certificate.......................................... 30
Tax Counsel....................................................... 55
Tax Opinion....................................................... 31
Terms and Conditions.............................................. 29
Transfer Date..................................................... 32
Transfer Deposit Amount........................................... 33
Trust............................................................. 1
Trust Adjusted Invested Amount.................................... 41
Trust Available Subordinated Amount............................... 33
Trustee........................................................... 3
U.S. Wholesale Portfolio.......................................... 20
UCC............................................................... 15
Unallocated Principal Collections................................. 41
USA............................................................... 1
Used Vehicles..................................................... 21
Vehicles.......................................................... 3
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an estimate of the amount of fees and expenses
(other than underwriting discounts and commissions) to be incurred in
connection with the issuance and distribution of the Certificates.
<TABLE>
<S> <C>
SEC Filing Fee................................................ $ 600,000
Trustee's Fees and Expenses (including counsel fees).......... 60,000
Accounting Fees and Expenses.................................. 150,000
Legal Fees and Expenses....................................... 150,000
Printing and Engraving Expenses............................... 120,000
Rating Agency Fees............................................ 855,000
Miscellaneous................................................. 73,619
Total..................................................... $[ ]
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Chrysler Corporation (parent of Chrysler Financial Corporation and
therefore the indirect parent of the Registrant) and U.S. Auto Receivables
Company are incorporated under Delaware law. Section 145 of the Delaware
General Corporation Law provides that a Delaware corporation may indemnify
any persons, including officers and directors, who are, or are threatened
to be made, parties to any threatened, pending or completed legal action,
suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or
director of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such officer or director acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, for criminal proceedings, had no
reasonable cause to believe that his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the
right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any
action referred to above, the corporation must indemnify him against the
expenses which such officer or director actually and reasonably incurred.
Section B of Article VIII of the Certificate of Incorporation of
Chrysler Corporation, the indirect parent of the Registrant, provides, in
effect, that, subject to certain limited exceptions, Chrysler Corporation
will indemnify the officers and directors of Chrysler Corporation or its
subsidiaries to the extent permitted by Delaware law. In addition,
Chrysler Corporation maintains insurance providing for payment, subject to
certain exceptions, on behalf of officers and directors of Chrysler
Corporation and its subsidiaries of money damages incurred as a result of
legal actions instituted against them in their capacities as such officers
or directors.
Chrysler Financial Corporation is incorporated under Michigan law.
Sections 561 to 565, inclusive, and Sections 567 and 569 of the Michigan
Business Corporation Act provide, in effect, that a Michigan corporation
may indemnify any persons, including officers and directors, who are, or
are threatened to be made, parties to any threatened, pending or completed
legal action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or
director of such corporation, or is or was serving at the request of such
corporation as a director, officer, partner, trustee, employee or agent of
another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, penalties, fines and amounts paid
in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such officer or
director acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation or its
shareholders and, for criminal proceedings, had no reasonable cause to
believe that his conduct was illegal. A Michigan corporation may indemnify
officers and directors in an action by or in the right of the corporation
under the same conditions, except that no indemnification is permitted
without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on
the merits or otherwise in the defense of any action referred to above,
the corporation must indemnify him against the expenses which such officer
or director actually and reasonably incurred.
Article VII of the By-Laws of the Registrant provides, in effect,
that, subject to certain exceptions, such Registrant will indemnify its
officers and directors to the extent that they acted in good faith and in
a manner reasonably believed to be in the best interests of the
Registrant.
ITEM 16. EXHIBITS:
1.1 -- Form of Underwriting Agreement with respect to the
Certificates.
3.1 -- Certificate of Incorporation of the Registrant is incorporated
by reference from Exhibit 3.1 of the Registrant's Registration
Statement on Form S-1 (File No. 33-41177).
3.2 -- By-Laws of the Registrant are incorporated by reference from
Exhibit 3.2 of the Registrant's Registration Statement on Form
S-1 (File No. 33-41177).
4.1 -- Form of Pooling and Servicing Agreement among the Registrant,
the Servicer and the Trustee is incorporated by reference from
Exhibit 4.1 of the Registrant's Registration Statement on Form
S-1 (File No. 33-41177).
4.2 -- First Amendment to the Pooling and Servicing Agreement is
incorporated by reference from Exhibit 4.2 of the Registrant's
Registration Statement on Form S-1 (File No. 33-52990).
4.3 -- Second Amendment to the Pooling and Servicing Agreement is
incorporated by reference from Exhibit 4.3 of the Registrant's
Registration Statement on Form S-1 (File No. 33-70144).
4.4 -- Form of Series Supplement to the Pooling and Servicing
Agreement, including the form of the Certificates and other
exhibits thereto.
4.5 -- Form of Remarketing Agreement.
5.1 -- Opinion of Allan L. Ronquillo, Esq. with respect to certain
matters involving the Certificates.
8.1 -- Opinion of Cravath, Swaine & Moore with respect to federal tax
matters.
8.2 -- Opinion of Allan L. Ronquillo, Esq. with respect to tax
matters under Michigan law and the Certificates.
23.1 -- Consent of Allan L. Ronquillo, Esq. with respect to the
Certificates (included in opinions filed as Exhibits 5.1 and
8.2).
23.2 -- Consent of Cravath, Swaine & Moore with respect to the
Certificates (included in opinion filed as Exhibit 8.1).
23.3 -- Consent of Deloitte & Touche LLP
24.1 -- Power of Attorney.
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 registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Southfield, State of Michigan,
on the day of October 5, 1994.
U.S. AUTO RECEIVABLES COMPANY
By /s/ John P. Tierney
John P. Tierney
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Principal executive officer:
/s/ John P. Tierney Chairman of October 5, 1994
John P. Tierney the Board
Principal financial officer:
/s/ Dennis M. Cantwell Vice President -- October 5, 1994
Dennis M. Cantwell Corporate Finance
and Development
Principal accounting officer:
/s/ T.P. Dykstra Vice President and October 5, 1994
T.P. Dykstra Controller
<PAGE>
Board of Directors:
/s/ Dennis M. Cantwell* Director October 5, 1994
Dennis M. Cantwell
/s/ T.P. Dykstra* Director October 5, 1994
T.P. Dykstra
/s/ Jeremiah E. Farrell* Director October 5, 1994
Jeremiah E. Farrell
/s/ E.F. Langs* Director October 5, 1994
E.F. Langs
/s/ L.A. Neeb* Director October 5, 1994
L.A. Neeb
/s/ J.A. Sellgren* Director October 5, 1994
J.A. Sellgren
/s/ John P. Tierney* Director October 5, 1994
John P. Tierney
*By /s/ Robert A. Link
Robert A. Link
Attorney-in-Fact
October 5, 1994
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
1.1 -- Form of Underwriting Agreement with respect
to the Certificates.
3.1 -- Certificate of Incorporation of the
Registrant is incorporated by reference from
Exhibit 3.1 of the Registrant's Registration
Statement on Form S-1 (File No. 33-41177).
3.2 -- By-Laws of the Registrant are incorporated
by reference from Exhibit 3.2 of the
Registrant's Registration Statement on Form
S-1 (File No. 33-41177).
4.1 -- Form of Pooling and Servicing Agreement
among the Registrant, the Servicer and the
Trustee is incorporated by reference from
Exhibit 4.1 of the Registrant's Registration
Statement on Form S-1 (File No. 33-41177).
4.2 -- First Amendment to the Pooling and Servicing
Agreement is incorporated by reference from
Exhibit 4.2 of the Registrant's Registration
Statement on Form S-1 (File No. 33-52990).
4.3 -- Second Amendment to the Pooling and
Servicing Agreement is incorporated by
reference from Exhibit 4.3 of the
Registrant's Registration Statement on Form
S-1 (File No. 33-70144).
4.4 -- Form of Series Supplement to the Pooling and
Servicing Agreement, including the form of the
Certificates and other exhibits thereto.
4.5 -- Form of Remarketing Agreement.
5.1 -- Opinion of Allan L. Ronquillo, Esq. with
respect to certain matters involving the
Certificates.
8.1 -- Opinion of Cravath, Swaine & Moore with
respect to federal tax matters.
8.2 -- Opinion of Allan L. Ronquillo, Esq. with
respect to tax matters under Michigan law
and the Certificates.
23.1 -- Consent of Allan L. Ronquillo, Esq. with
respect to the Certificates (included in
opinions filed as Exhibits 5.1 and 8.2).
23.2 -- Consent of Cravath, Swaine & Moore with
respect to the Certificates (included in
opinion filed as Exhibit 8.1).
23.3 -- Consent of Deloitte & Touche LLP
24.1 -- Power of Attorney.
EXHIBIT 1.1
CARCO AUTO LOAN MASTER TRUST
[ %][FLOATING RATE] AUTO LOAN ASSET BACKED CERTIFICATES,
SERIES 199[_-_]
U.S. AUTO RECEIVABLES COMPANY
(SELLER)
FORM OF UNDERWRITING AGREEMENT
[ ], 199[ ]
[ ]
As Representatives of the
Several Underwriters
Dear Sirs:
1. Introductory. U.S. Auto Receivables Company, a Delaware
corporation (the "Seller"), proposes to cause CARCO Auto Loan Master Trust
(the "Trust") to sell $[ ] principal amount of its [Floating
Rate][ %] Auto Loan Asset Backed Certificates, Series 199[_-_] (the
"Certificates"), to the several underwriters set forth on Schedule I hereto
(the "Underwriters"), for whom you are acting as representative (the
"Representative"). Each Certificate will represent a fractional undivided
ownership interest in the Trust. The assets of the Trust include, among
other things, a pool of receivables (the "Receivables") generated from time
to time pursuant to wholesale automobile loan revolving credit agreements
of Chrysler Credit Corporation, a Delaware corporation ("CCC"), and the
related Collateral Security. The Receivables were sold to the Trust by the
Seller and are serviced for the Trust by CCC (in such capacity, the
"Servicer"). The Certificates will be issued pursuant to a pooling and
servicing agreement dated as of May 31, 1991, as assigned by Chrysler Auto
Receivables Company ("CARCO") to the Seller on August 8, 1991 (as assigned
and as supplemented and amended from time to time, the "P&S"), among CARCO,
the Seller, the Servicer and Manufacturers and Traders Trust Company (the
"Trustee"), and the Series 199[_-_] Supplement to the P&S to be dated as of
[ ], 199[ ] (the "Supplement"), among the Seller, the Servicer and
the Trustee. The P&S and the Supplement are collectively referred to as
the "Pooling and Servicing Agreement".
Capitalized terms used and not otherwise defined herein shall
have the meanings given them in the Pooling and Servicing Agreement.
2. Representations and Warranties of the Seller. The Seller
represents and warrants to, and agrees with, you that:
(a) The Seller meets the requirements for use of Form S-3 under
the Securities Act and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration
No. [ ]), including a related preliminary prospectus, on such Form
for the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the Certificates. The Seller may have filed one or
more amendments thereto, including the related preliminary prospectus, each
of which has previously been furnished to you. The Seller will next file
with the Commission either (i) prior to the effectiveness of such
registration statement, a further amendment thereto (including the form of
final prospectus) or (ii) a final prospectus in accordance with Rules 430A
and 424(b)(1) or (4) or (iii) a final prospectus in accordance with
Rules 415 and 424(b)(2) or (5). In the case of clause (ii), the Seller has
included in such registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required by the
Securities Act and the rules thereunder to be included in the prospectus
with respect to the Certificates and the offering thereof. As filed, such
amendment and form of final prospectus, or such final prospectus, shall
include all Rule 430A Information, together with all other such required
information, with respect to the Certificates and, except to the extent
that you shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest preliminary prospectus which has previously been
furnished to you) as the Seller has advised you, prior to the Execution
Time, will be included or made therein. If the Registration Statement
contains the undertaking specified by Regulation S-k Item 512(2), the
Registration Statement, at the Execution Time, meets the requirements set
forth in Rule 415(a)(1)(x).
For purposes of this Agreement, "Effective Time" means the date
and time as of which such registration statement, or the most recent post-
effective amendment thereto, if any, was declared effective by the
Commission, and "Effective Date" means the date of the Effective Time.
Such registration statement, as amended at the Effective Time, including
all information deemed to be a part of such registration statement as of
the Effective Time pursuant to Rule 430A(b) under the Securities Act, and
including the exhibits thereto and any material incorporated by reference
therein, is hereinafter referred to as the "Registration Statement", and
the form of prospectus relating to the Certificates as first filed with the
Commission pursuant to and in accordance with Rule 424(b) under the
Securities Act or, if no filing pursuant to Rule 424(b) is required, the
form of final prospectus included in the Registration Statement at the
Effective Date, is hereinafter referred to as the "Prospectus". "Execution
Time" shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Preliminary Prospectus" shall mean any
preliminary prospectus referred to above and any preliminary prospectus
included in the Registration Statement which at the Effective Date omits
Rule 430A Information. "Rule 430A Information" means information with
respect to the Certificates and the offering of the Certificates permitted
to be omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulations under the Securities
Act. Any reference herein to the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date of the Registration
Statement or the issue date of such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue date
of any Preliminary Prospectus or the Prospectus, as the case may be, deemed
to be incorporated therein by reference.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement did or will, and, when the Prospectus is first filed
(if required) in accordance with Rule 424(b) and on the Closing Date, the
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Securities Act and the
rules and regulations of the Commission (the "Rules and Regulations"); on
the Effective Date, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; and, on the
Effective Date, the Prospectus, if not filed pursuant to Rule 424(b), did
not or will not, and on the date of any filing pursuant to Rule 424(b) and
on the Closing Date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Seller makes no representations or warranties
as to the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Seller by
any Underwriter specifically for use in connection with preparation of the
Registration Statement or the Prospectus (or any supplement thereto). As
of the Closing Date (as defined below), the Seller's representations and
warranties in the Pooling and Servicing Agreement will be true and correct.
(c) This Agreement has been duly authorized, executed and
delivered by the Seller and Chrysler Financial Company (the "Company").
(d) None of the Seller, the Servicer or anyone acting on its
behalf has taken any action that would require qualification of the Pooling
and Servicing Agreement under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), or require registration of the Seller or the
Trust under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), nor will the Seller, the Servicer or the Company act, nor
has any of them authorized or will any of them authorize any person to act,
in such manner with respect to any Certificate.
3. Purchase, Sale, and Delivery of Certificates. On the basis
of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Seller agrees to
cause the Trust to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Trust the respective
principal amount of the Certificates set forth opposite the name of such
Underwriter on Schedule I hereto, at a purchase price of [ ] of the
aggregate principal amount thereof. Delivery of and payment for the
Certificates shall be made at the office of [ ],
[ ], on [ ], 199[ ] (the "Closing Date"). Delivery
of one or more global certificates representing the Certificates shall be
made against payment of the purchase price in immediately available funds
drawn to the order of the Seller. The global certificates to be so
delivered shall be registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of
the Certificates will be represented by book entries on the records of DTC
and participating members thereof. Definitive Certificates representing
the Certificates will be available only under limited circumstances.
4. Offering by Underwriters. It is understood that, after the
Registration Statement becomes effective, the Underwriters propose to offer
the Certificates for sale to the public (which may include selected
dealers), as set forth in the Prospectus.
5. Covenants of the Seller. The Seller covenants and agrees
with the Underwriters that:
(a) The Seller will use its best efforts to cause the
Registration Statement, and any amendment thereto, if not effective at the
Execution Time, to become effective. If the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Seller will file
the Prospectus, properly completed, and any supplement thereto, with the
Commission pursuant to and in accordance with the applicable
subparagraph within the time period prescribed. The Seller will advise you
promptly of any such filing pursuant to Rule 424(b).
(b) The Seller will advise you promptly of any proposal to amend
or supplement the registration statement as filed, or the related
prospectus, and will not effect such amendment or supplement without your
consent, which consent will not unreasonably be withheld; the Seller will
also advise you promptly of any request by the Commission for any amendment
of or supplement to the Registration Statement or the Prospectus or for any
additional information; and the Seller will also advise you promptly of the
effectiveness of the Registration Statement, of any amendment or supplement
of the Registration Statement or the Prospectus and of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threat of any proceeding for
that purpose and the Seller will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible the
lifting of any issued stop order.
(c) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Securities Act, any
event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend or supplement the Prospectus to
comply with the Securities Act, the Seller promptly will prepare and file,
or cause to be prepared and filed, with the Commission an amendment or
supplement which will correct such statement or omission, or an amendment
or supplement which will effect such compliance. Any such filing shall not
operate as a waiver or limitation on any rights of the Underwriters
hereunder.
(d) As soon as practicable, but not later than sixteen months
after the original effective date of the Registration Statement, the Seller
will cause the Trust to make generally available to Series 199[_-_]
Certificateholders an earnings statement of the Trust covering a period of
at least twelve months beginning after the Effective Date of the
Registration Statement which will satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 under the Securities Act.
(e) The Seller will furnish to the Underwriters copies of the
Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as you request.
(f) The Seller will arrange for the qualification of the
Certificates for sale under the laws of such jurisdictions in the United
States as you may reasonably designate and will continue such
qualifications in effect so long as required for the distribution.
(g) For a period from the date of this Agreement until the
retirement of the Certificates, or until such time as the Underwriters
shall cease to maintain a secondary market in the Certificates, whichever
occurs first, the Seller will deliver to the Underwriters the annual
statement of compliance and the annual independent certified public
accountants' report furnished to the Trustee pursuant to the Pooling and
Servicing Agreement, as soon as such statements and reports are furnished
to the Trustee.
(h) So long as any of the Certificates are outstanding, the
Seller will furnish to the Underwriters (i) as soon as practicable after
the end of the fiscal year all documents required to be distributed to
Series 199[_-_] Certificateholders or filed with the Commission pursuant to
the Exchange Act, or any order of the Commission thereunder and (ii) from
time to time, any information concerning the Seller filed with any
government or regulatory authority which is otherwise publicly available,
as the Underwriters may reasonably request.
(i) On or before the Closing Date, the Seller shall cause the
computer records of the Seller, the Servicer and the Company relating to
the Receivables to be marked to show the Trustee's absolute ownership of
the Receivables, and from and after the Closing Date none of the Company,
the Seller or the Servicer shall take any action inconsistent with the
Trustee's ownership of such Receivables, other than as permitted by the
Pooling and Servicing Agreement.
(j) To the extent, if any, that the rating provided with respect
to the Certificates by the rating agency or agencies that initially rate
the Certificates is conditional upon the furnishing of documents or the
taking of any other actions by the Seller, the Seller shall furnish such
documents and take any such other actions.
(k) For the period beginning on the date of this Agreement and
ending seven days after the Closing Date, unless waived by the
Underwriters, none of the Seller, the Company or any trust originated,
directly or indirectly, by the Seller or the Company will offer to sell or
sell certificates substantially similar to the Certificates, which are
collateralized by, or evidencing an ownership interest in, receivables
generated pursuant to wholesale automobile loan revolving credit agreements
without the prior written consent of the Underwriters.
6. Payment of Expenses. The Seller will pay all expenses
incident to the performance of its obligations under this Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation of
this Agreement, (iii) the preparation, issuance and delivery of the
Certificates to the Underwriters, (iv) the fees and disbursements of the
Seller's counsel and accountants, (v) the qualification of the Certificates
under state securities laws in accordance with the provisions of
Section 5(f), including filing fees and the fees and disbursements of
counsel for you in connection therewith and in connection with the
preparation of any blue sky survey, (vi) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed
and of each amendment thereto, (vii) the printing and delivery to the
Underwriters of copies of any blue sky survey prepared in connection with
the Certificates, (viii) any fees charged by rating agencies for the rating
of the Certificates, (ix) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities Dealers,
Inc., and (x) the fees and expenses of Cravath, Swaine & Moore in its role
as special counsel to the Underwriters or the Seller, as the case may be,
incurred as a result of providing the opinions required by Sections 7(g)
and 7(h) hereof.
7. Conditions of the Obligations of the Under-writers. The
obligations of the Underwriters to purchase and pay for the Certificates
will be subject to the accuracy of the representations and warranties on
the part of the Seller herein, to the accuracy of the statements of
officers of the Seller made pursuant to the provisions hereof, to the
performance by the Seller of its obligations hereunder and to the following
additional conditions precedent:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Underwriters agree in writing to a later
time, the Registration Statement shall have become effective not later than
(i) 6:00 p.m. New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 12:00 noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 p.m. New York City time on such
date.
(b) The Prospectus and any supplements thereto shall have been
filed (if required) with the Commission in accordance with the Rules and
Regulations and Section 2 hereof, and prior to the Closing Date, no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or, to the knowledge of the Seller or the Underwriters, shall be
contemplated by the Commission or by any authority administering any state
securities or blue sky law.
(c) On or prior to the date of this Agreement and on or prior to
the Closing Date, you shall have received a letter or letters, dated as of
the date of this Agreement and as of the Closing Date, respectively, of
Deloitte & Touche, Certified Public Accountants, substantially in the form
of the drafts to which you have previously agreed and otherwise in form and
substance satisfactory to you and your counsel.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving
a prospective change, in or affecting particularly the business or
properties of the Trust, the Seller, the Servicer, the Company or Chrysler
Corporation which, in the judgment of the Underwriters, materially impairs
the investment quality of the Certificates or makes it impractical or
inadvisable to market the Certificates; (ii) any suspension or limitation
of trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or any suspension
of trading of any securities of Chrysler Corporation or the Company on any
exchange or in the over-the-counter market; (iii) any banking moratorium
declared by Federal or New York authorities; or (iv) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress, or any other substantial national or
international calamity or emergency if, in the judgment of the
Underwriters, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Certificates.
(e) You shall have received an opinion of Allan L. Ronquillo,
Vice President and General Counsel of the Company, the Seller and the
Servicer, addressed to you and the Trustee, dated the Closing Date and
satisfactory in form and substance to you and your counsel, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Michigan with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it,
and to enter into and perform its obligations under this Agreement and
the Receivables Sale Agreement.
(ii) The Servicer has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it,
and to enter into and perform its obligations under the Pooling and
Servicing Agreement, the Receivables Sale Agreement and the
Receivables Purchase Agreement, and had at all relevant times, and now
has, the power, authority and legal right to acquire, own, sell and
service the Receivables.
(iii) The Seller has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it,
and to enter into and perform its obligations under this Agreement,
the Receivables Purchase Agreement and the Pooling and Servicing
Agreement and had at all times, and now has, the power, authority and
legal right to acquire, own and sell the Receivables.
(iv) Each of the Company, the Seller and the Servicer is duly
qualified to do business and is in good standing, and has obtained all
necessary licenses and approvals in each jurisdiction in which failure
to qualify or to obtain such licenses or approvals would render any
Receivable unenforceable by the Seller or the Trustee on behalf of any
Certificateholder.
(v) The direction by the Seller to the Trustee to authenticate
the Certificates has been duly authorized by the Seller, the
Certificates have been duly executed and delivered by the Seller and,
when authenticated by the Trustee in accordance with the Pooling and
Servicing Agreement and delivered and paid for pursuant to this
Agreement, will be duly issued and entitled to the benefits and
security afforded by the Pooling and Servicing Agreement, subject as
to the enforcement of remedies (x) to applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws
affecting creditors' rights generally, (y) to general principles of
equity (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law), and (z) to the
further qualification that certain of the remedial provisions in the
Pooling and Servicing Agreement may be limited or rendered
unenforceable under the laws of the State of New York (but such laws
do not, in such counsel's opinion, make the remedies provided by the
Pooling and Servicing Agreement unsatisfactory for the realization of
the benefits provided thereby).
(vi) The Receivables Purchase Agreement and the Pooling and
Servicing Agreement have been duly authorized, executed and delivered
by the Seller, and are legal, valid and binding obligations of the
Seller enforceable against the Seller in accordance with their terms,
except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now or
hereafter in effect relating to creditors' rights, and (y) the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(vii) This Agreement has been duly authorized, executed and
delivered by the Seller and the Company.
(viii) The Receivables Sale Agreement has been duly authorized,
executed and delivered by the Company, and is the legal, valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms, except (x) the enforceability thereof may
be subject to bankruptcy, insolvency, reorganization, moratorium, or
other similar laws now or hereafter in effect relating to creditors'
rights, and (y) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding
therefor may be brought.
(ix) The Receivables Purchase Agreement, the Receivables Sale
Agreement and the Pooling and Servicing Agreement have been duly
authorized, executed and delivered by the Servicer, and are the legal,
valid and binding obligations of the Servicer enforceable in
accordance with their terms, except (x) the enforceability thereof may
be subject to bankruptcy, insolvency, reorganization, moratorium, or
other similar laws now or hereafter in effect relating to creditors'
rights, and (y) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding
therefor may be brought.
(x) Neither the transfer of the Receivables from the Company to
CCC nor from CCC to the Seller, nor the transfer of the Receivables
from the Seller to the Trustee acting on behalf of the Trust, nor the
assignment of the Collateral Security to the Servicer and to the
Seller, nor the assignment of the Collateral Security to the Trustee
acting on behalf of the Trust, nor the assignment of the Receivables
Purchase Agreement by the Seller to the Trustee on behalf of the
Trust, nor the execution and delivery of this Agreement and the
Receivables Sale Agreement by the Company, nor the execution and
delivery of the Receivables Purchase Agreement, the Receivables Sale
Agreement and the Pooling and Servicing Agreement by the Servicer, nor
the execution and delivery of this Agreement, the Receivables Purchase
Agreement, the Pooling and Servicing Agreement and the Certificates by
the Seller, nor the consummation of any transactions contemplated in
this Agreement, the Receivables Sale Agreement, the Receivables
Purchase Agreement or the Pooling and Servicing Agreement, nor the
fulfillment of the terms of this Agreement, the Receivables Sale
Agreement, the Receivables Purchase Agreement, the Pooling and
Servicing Agreement and the Certificates by the Company, the Servicer
or the Seller, as the case may be, will conflict with, or result in a
breach, violation or acceleration of, or constitute a default under,
any term or provision of the articles of incorporation or by-laws of
the Company, the Servicer or the Seller or of any indenture or other
agreement or instrument to which the Company, the Servicer or the
Seller is a party or by which any of them or their respective property
is bound, or result in a violation, or contravene the terms, of any
statute, order or regulation applicable to the Company, the Servicer
or the Seller of any court, regulatory body, administrative agency or
governmental body having jurisdiction over any of them.
(xi) There are no actions, proceedings or investigations pending
or, to the best of such counsel's knowledge after due inquiry,
threatened before any court, administrative agency, or other tribunal
(1) asserting the invalidity of this Agreement, the Pooling and
Servicing Agreement, the Receivables Sale Agreement or the Receivables
Purchase Agreement, (2) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement, the Pooling and
Servicing Agreement, the Receivables Sale Agreement or the Receivables
Purchase Agreement or the execution and delivery thereof, (3) that
might materially and adversely affect the performance by the Company
of its obligations under, or the validity or enforceability of, this
Agreement or the Receivables Sale Agreement, (4) that might materially
and adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, this Agreement, the
Receivables Purchase Agreement or the Pooling and Servicing Agreement
or (5) that might materially and adversely affect the performance by
the Servicer of its obligations under, or the validity or
enforceability of, the Receivables Purchase Agreement, the Receivables
Sale Agreement or the Pooling and Servicing Agreement.
(xii) To the best knowledge of such counsel and except as set
forth in the Prospectus, no default exists and no event has occurred
which, with notice, lapse of time or both, would constitute a default
in the due performance and observance of any term, covenant or
condition of any agreement to which the Company is a party or by which
it is bound, which default is or would be material for the financial
condition, earnings, prospects, business or properties of the Company
and its subsidiaries, taken as a whole.
(xiii) Nothing has come to such counsel's attention that would lead
such counsel to believe that the representations and warranties of
(x) the Servicer contained in the Receivables Purchase Agreement or
the Pooling and Servicing Agreement are other than as stated therein
or (y) the Seller contained in this Agreement, the Receivables
Purchase Agreement or the Pooling and Servicing Agreement are other
than as stated therein.
(xiv) The Seller is the sole owner of all right, title and
interest in, and has good and marketable title to, the Receivables and
the Collateral Security to be transferred by it to the Trust. The
assignment of the Receivables and the Collateral Security, all
documents and instruments relating thereto and all proceeds thereof to
the Trustee, pursuant to the Pooling and Servicing Agreement, vest in
the Trustee all interests which are purported to be conveyed thereby,
free and clear of any liens, security interests or encumbrances except
as specifically permitted pursuant to the Pooling and Servicing
Agreement.
(xv) Immediately prior to the transfer of the Receivables to the
Trustee, the Seller's interest in the Receivables, the Collateral
Security (including the security interests in the Vehicles securing
the Receivables) and the proceeds of each of the foregoing was
perfected upon the filing of the UCC-1 financing statement with the
Secretary of State of the State of Michigan and the Secretary of State
of the State of New York and constituted a perfected first priority
interest therein, subject to the rights of the Purchased Receivables
Owners in the Collateral Security (other than the Vehicles securing
the Receivables). If a court concludes that the transfer of the
Receivables from the Seller to the Trustee is a sale, the interest of
the Trustee in the Receivables, the Collateral Security (including the
security interests in the Vehicles securing the Receivables) and the
proceeds of each of the foregoing will be perfected upon the filing of
the UCC-1 financing statement, the form of which is attached to such
opinion with the Secretary of State of the State of Michigan and the
Secretary of State of the State of New York and will constitute a
first priority perfected interest therein, subject to the rights of
the Purchased Receivables Owners in the Collateral Security (other
than the Vehicles securing the Receivables). If a court concludes
that such transfer is not a sale, the Pooling and Servicing Agreement
constitutes a grant by the Seller to the Trustee of a valid security
interest in the Receivables, the Collateral Security (including the
security interests in the Vehicles securing the Receivables) and the
proceeds of each of the foregoing, which security interest is
perfected upon the filing of the UCC-1 financing statement the form of
which is attached to such opinion with the Secretary of State of the
State of Michigan and the Secretary of State of the State of New York
and will constitute a first priority perfected security interest
therein, subject to the rights of the Purchased Receivables Owners in
the Collateral Security (other than the Vehicles securing the
Receivables). No filing or other action, other than the filing of the
UCC-l financing statements with the Secretary of State of the State of
Michigan and the Secretary of State of the State of New York referred
to above, is necessary to perfect and maintain the interest of the
Trustee in the Receivables, the Collateral Security (including the
security interests in the Vehicles securing the Receivables) and the
proceeds of each of the foregoing against third parties.
(xvi) The Receivables are chattel paper as defined in the Uniform
Commercial Code.
(xvii) The Pooling and Servicing Agreement and the Receivables
Purchase Agreement conform in all material respects with the
description thereof contained in the Registration Statement and the
Prospectus and any supplement thereto.
(xviii) The statements in the Registration Statement and the
Prospectus under the heading "Special Considerations--Certain Legal
Aspects" and "Certain Legal Aspects of the Receivables", to the extent
they constitute matters of law or legal conclusions with respect
thereto, have been reviewed by such counsel and are correct in all
material respects.
(xix) The statements contained in the Prospectus and any
supplement thereto under the captions "The Certificates" and "Series
Provisions", insofar as such statements constitute a summary of the
Certificates and the Pooling and Servicing Agreement, constitute a
fair summary of such documents.
(xx) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated in this Agreement, the Receivables Purchase
Agreement, the Receivables Sale Agreement and the Pooling and
Servicing Agreement, except such filings with respect to the transfer
of the Receivables to the Servicer pursuant to the Receivables Sale
Agreement, the transfer of the Receivables to the Seller pursuant to
the Receivables Purchase Agreement, and the transfer of the
Receivables to the Trustee acting on behalf of the Trust pursuant to
the Pooling and Servicing Agreement, as have been made and such other
approvals as have been obtained.
(xxi) Such counsel is familiar with the Servicer's standard
operating procedures relating to the Servicer's acquisition of a
perfected first priority security interest in the vehicles financed by
the Servicer pursuant to wholesale automobile revolving credit
agreements in the ordinary course of the Servicer's business.
Assuming that the Servicer's standard procedures are followed with
respect to the perfection of security interests in the Vehicles (and
such counsel has no reason to believe that the Servicer has not or
will not continue to follow its standard procedures in connection with
the perfection of security interests in the Vehicles), the Servicer
has acquired or will acquire a perfected first priority security
interest in the Vehicles.
(xxii) All actions required to be taken and all filings required to
be made under the Securities Act and the Exchange Act prior to the
sale of the Certificates have been duly taken or made.
(xxiii) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act, and the Trust is not required
to be registered under the Investment Company Act.
(xxiv) The Seller is not, and will not as a result of the offer and
sale of the Certificates as contemplated in the Prospectus and this
Agreement become, an "investment company" as defined in the Investment
Company Act or a company "controlled by" an "investment company"
within the meaning of the Investment Company Act.
(xxv) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
which are required to be disclosed in the Registration Statement,
other than those disclosed therein.
(xxvi) To the best of such counsel's knowledge and information,
there are no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or included or
incorporated by reference as exhibits thereto, in order to make the
statements therein not misleading, the descriptions thereof or
references thereto are correct, and no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument so described, referred
to, filed or incorporated by reference.
(xxvii) The Registration Statement has become effective under the
Securities Act, any required filing of the Prospectus and any
supplements thereto pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b), and, to the
best of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, and the Registration Statement
and the Prospectus, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form in all
material respects with the requirements of the Securities Act and the
Rules and Regulations.
(xxviii) Such counsel has examined the Registration Statement and
the Prospectus, and nothing has come to such counsel's attention that
would lead such counsel to believe that the Registration Statement or
the Prospectus or any amendment or supplement thereto as of the
respective dates thereof (other than the financial statements and
other financial and statistical information contained therein, as to
which such counsel need not express any view) contains an untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not misleading.
(f) You shall have received an opinion of Allan L. Ronquillo,
Vice President and General Counsel of the Company, the Seller and the
Servicer, addressed to you and the Trustee, dated the Closing Date and
satisfactory in form and substance to you and your counsel, to the effect
that the statements in the Registration Statement and the Prospectus under
the heading "Certain Tax Matters--State and Local Tax Consequences"
accurately describe the material Michigan tax consequences to holders of
the Certificates.
(g) [ ], special counsel to the Seller,
shall have delivered an opinion, dated the Closing Date, with respect to
the characterization of the transfer of the Receivables.
(h) You shall have received an opinion of [
], addressed to you, dated the Closing Date, (i) in its
capacity as your special counsel, with respect to the validity of the
Certificates and such other related matters as you shall require and
(ii) in its capacity as Federal tax and ERISA counsel for the Seller and
the Trust, to the effect that the statements in the Registration Statement
and the Prospectus under the heading "Certain Tax Matters" (other than
"State and Local Tax Consequences") accurately describe the material
Federal income tax consequences to holders of the Certificates, and the
statements in the Registration Statement and the Prospectus under the
heading "ERISA Considerations", to the extent that they constitute
statements of matters of law or legal conclusions with respect thereto,
have been prepared or reviewed by such counsel and accurately describe the
material consequences to holders of the Certificates under ERISA.
(i) You shall have received an opinion addressed to you, the
Seller and the Servicer of [ ], counsel to the Trustee,
dated the Closing Date and satisfactory in form and substance to you and
your counsel, to the effect that:
(i) The Trustee is a banking corporation duly incorporated and
validly existing under the laws of the State of New York.
(ii) The Trustee has the full corporate trust power to accept the
office of trustee under the Pooling and Servicing Agreement and to
enter into and perform its obligations under the Pooling and Servicing
Agreement.
(iii) The execution and delivery of the Pooling and Servicing
Agreement and the performance by the Trustee of its obligations under
the Pooling and Servicing Agreement have been duly authorized by all
necessary corporate action of the Trustee.
(iv) The Pooling and Servicing Agreement constitutes a valid and
binding obligation of the Trustee enforceable against the Trustee in
accordance with its terms under the law of the State of New York and
the Federal law of the United States.
(v) The execution and delivery by the Trustee of the Pooling and
Servicing Agreement does not require any consent, approval or
authorization of, or any registration or filing with, any New York or
United States Federal governmental authority.
(vi) Each of the Certificates has been duly executed by the
Trustee as trustee and authenticating agent.
(j) You shall have received certificates dated the Closing Date
of any two of the Chairman of the Board, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the principal financial officer, or
the principal accounting officer of each of the Seller and the Servicer in
which such officers shall state that, to the best of their knowledge after
reasonable investigation, (i) the representations and warranties of the
Seller or the Servicer, as the case may be, contained in the Receivables
Purchase Agreement and the Pooling and Servicing Agreement, respectively,
are true and correct, that the Seller or the Servicer, as the case may be,
has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied under such Agreements at or prior to the
Closing Date, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission and (ii) since
December 31, 199[ ], except as may be disclosed in the Prospectus or, in
the case of Chrysler Corporation, as may be disclosed publicly by Chrysler
Corporation prior to the execution of this Agreement, no material adverse
change, or any development involving a prospective material adverse change,
in or affecting particularly the business or properties of the Trust, the
Seller, the Servicer, the Company or Chrysler Corporation has occurred.
(k) You shall have received evidence satisfactory to you that,
on or before the Closing Date, UCC-1 financing statements have been or are
being filed in the office of the Secretary of State of the States of
Michigan and New York reflecting the transfer of the interest of the
Servicer in the Receivables and the proceeds thereof to the Seller, and the
transfer of the interest of the Seller in the Receivables and the proceeds
thereof to the Trustee.
(l) The Certificates shall have been rated ["[ ]" by Standard
and Poor's Corporation, "[ ]" by Moody's Investors Service, Inc.,
"[ ]" by Duff & Phelps, Inc., and "[ ]" by Fitch Investors Service,
Inc.]
(m) No Early Amortization Event or Reinvestment Event or other
event or condition, which event or condition with notice, the passage of
time or both would result in an Early Amortization Event or Reinvestment
Event, shall have occurred or shall exist with respect to any outstanding
Series on the Closing Date.
The Seller will provide or cause to be provided to you such
conformed copies of such opinions, certificates, letters and documents as
you reasonably request.
8. Indemnification and Contribution. (a) The Seller and the
Company will, jointly and severally, indemnify and hold each Underwriter
harmless against any losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment,
exhibit or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each such
indemnified party for any legal or other expenses reasonably incurred by
such party in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that neither the Seller nor the Company will be liable in any such
case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in
or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Seller by any
Underwriter through you specifically for use therein.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Seller against any losses, claims, damages
or liabilities to which the Seller may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment, exhibit or
supplement thereto, or any related preliminary prospectus, or arise out of
or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Seller by such Underwriter
through you specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Seller in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under subsection (a) or
(b) above. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnifying party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Seller on the one hand and the Underwriters on the
other from the offering of the Certificates or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Seller
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Seller on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Seller bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Seller or by any Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection
(d), no Underwriter (except as may be provided in the agreement among
Underwriters relating to the offering of the Certificates) shall be
required to contribute any amount in excess of the underwriting discount or
commission applicable to the Certificates purchased by such Underwriter
hereunder. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Seller and the Company under this
Section 8 shall be in addition to any liability which the Seller or the
Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Securities Act; and the obligations of any Underwriter under
this Section shall be in addition to any liability which such Underwriter
may otherwise have and shall extend, upon the same terms and conditions, to
each director of the Seller, to each officer of the Seller who has signed
the Registration Statement and to each person, if any, who controls the
Seller within the meaning of the Securities Act.
9. Defaults by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Certificates agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions
which the amount of Certificates set forth opposite their names in
Schedule I hereto bears to the aggregate amount of Certificates set forth
opposite the names of all the remaining Underwriters) the Certificates
which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Certificates which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate principal amount of
Certificates set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation
to purchase any, of the Certificates, and if such nondefaulting
Underwriters do not purchase all the Certificates, this Agreement will
terminate without liability to any nondefaulting Underwriter, the Trust or
the Seller. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Underwriters shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Seller and any nondefaulting Underwriter for damages occasioned
by its default hereunder.
10. No Bankruptcy Petition. Each Underwriter covenants and
agrees that, prior to the date which is one year and one day after the
payment in full of all securities issued by the Seller or by a trust for
which the Seller was the depositor which securities were rated by any
nationally recognized statistical rating organization, it will not
institute against, or join any other Person in instituting against, the
Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under any Federal or state
bankruptcy or similar law.
11. Survival of Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements
of the Seller or its officers and the Company or its officers and of the
Underwriters set forth in or made pursuant to this Agreement or contained
in certificates of officers of the Seller submitted pursuant hereto shall
remain operative and in full force and effect, regardless of any
investigation or statement as to the results thereof, made by or on behalf
of any Underwriter or of the Seller or the Company or any of their
respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Certificates. If
for any reason the purchase of the Certificates by the Underwriters is not
consummated, the Seller shall remain responsible for the expenses to be
paid or reimbursed by the Seller pursuant to Section 6 and the respective
obligations of the Seller and the Underwriters pursuant to Section 8 shall
remain in effect. If for any reason the purchase of the Certificates by
the Underwriters is not consummated (other than because of a failure to
satisfy the conditions set forth in items (ii), (iii) and (iv) of
Section 7(d)), the Seller will reimburse the Underwriters severally, upon
demand, for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by any Underwriter in connection with the
offering of the Certificates. Nothing contained in this Section 11 shall
limit the recourse of the Seller against the Underwriters.
12. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed
and confirmed to the Representative at
[
], Attention: [ ]; and, if sent to the
Seller, will be mailed, delivered or telegraphed and confirmed to it at
U.S. Auto Receivables Company, 27777 Franklin Road, Southfield, Michigan
48034, Attention: Secretary.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8,
and no other person will have any rights or obligations hereunder.
14. Applicable Law. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
15. Severability of Provisions. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be
void or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof.
16. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the
matters and transactions contemplated hereby and supersedes all prior
agreements and understandings whatsoever relating to such matters and
transactions.
17. Amendment. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
18. Headings. The headings in this Agreement are for the
purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
19. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which
shall together constitute one instrument.
20. Representation. You will act for the several Underwriters in
connection with the transactions contemplated by this Agreement, and any
action under this Agreement taken by you will be binding upon all the
Underwriters.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement among the Seller and the
several Underwriters in accordance with its terms.
Very truly yours,
U.S. AUTO RECEIVABLES COMPANY,
By:
--------------------------------
Name:
Title:
CHRYSLER FINANCIAL CORPORATION,
By:
--------------------------------
Name:
Title:
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first written above.
[ ],
on behalf of itself and
as Representative of the several
Underwriters
By:
--------------------------------
Name:
Title:
EXHIBIT 4.4
==============================================================================
U.S. AUTO RECEIVABLES COMPANY
Seller
CHRYSLER CREDIT CORPORATION
Servicer
and
MANUFACTURERS AND TRADERS TRUST COMPANY
Trustee
----------------------------
SERIES [199_-_] SUPPLEMENT
Dated as of [ ], 199[ ]
to
POOLING AND SERVICING AGREEMENT
Dated as of May 31, 1991
(as assigned, amended and supplemented)
----------------------------
$[ ]
CARCO AUTO LOAN MASTER TRUST
SERIES [199_-_]
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Creation of the Series [199 - ] Certificates
SECTION 1.01. Designation . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
Definitions
SECTION 2.01. Definitions . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
Servicing Fee
SECTION 3.01. Servicing Compensation. . . . . . . . . . . . . . . 22
ARTICLE IV
Rights of Series [199 - ] Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections 23
SECTION 4.02. Monthly Interest. . . . . . . . . . . . . . . . . . 25
SECTION 4.03. Determination of Monthly Principal. . . . . . . . . 27
SECTION 4.04. Establishment of [Reserve Fund and] Funding
Accounts. . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.05. Deficiency Amount . . . . . . . . . . . . . . . . . 32
SECTION 4.06. Application of Investor Non-Principal Collections,
Investment Proceeds and Available Investor
Principal Collections . . . . . . . . . . . . . . 33
SECTION 4.07. Distribution to Series [199_-_] Certificateholders. 35
SECTION 4.08. Application of [Reserve Fund and] Available
Subordinated Amount . . . . . . . . . . . . . . . 36
SECTION 4.09. Investor Charge-Offs. . . . . . . . . . . . . . . . 38
SECTION 4.10. Excess Servicing. . . . . . . . . . . . . . . . . . 38
SECTION 4.11. Excess Principal Collections. . . . . . . . . . . . 39
[SECTION 4.12. Excess Funding Account. . . . . . . . . . . . . . . 40]
SECTION 4.13. Accumulation Period Length; Accumulation Period
Commencement Date . . . . . . . . . . . . . . . . 42
[SECTION 4.14. Enhancement . . . . . . . . . . . . . . . . . . . . 42]
ARTICLE V
Distributions and Reports to
Series [199 - ] Certificateholders
SECTION 5.01. Distributions . . . . . . . . . . . . . . . . . . . 42
SECTION 5.02. Reports and Statements to Series [199_-_]
Certificateholders. . . . . . . . . . . . . . . . 43
ARTICLE VI
Amortization Events
SECTION 6.01. Additional Amortization Events. . . . . . . . . . . 43
ARTICLE VII
Reinvestment Events
SECTION 7.01. Reinvestment Events . . . . . . . . . . . . . . . . 45
[ARTICLE VIII
Optional Repurchase
SECTION 8.01. Optional Repurchase . . . . . . . . . . . . . . . . 49]
ARTICLE IX
Final Distributions
SECTION 9.01. Sale of Certificateholders' Interest Pursuant to
Section 2.03 of the Agreement; Distributions
Pursuant to [Section 8.01 of this Series
Supplement or] Section 2.03 or 12.02(c) of the
Agreement . . . . . . . . . . . . . . . . . . . . 50
SECTION 9.02. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables Pursuant to
Section 9.02 of the Agreement . . . . . . . . . . 51
ARTICLE X
Other Series Provisions
SECTION 10.01. Certain Permitted Actions; Amendments to the
Agreement; Additional Covenants . . . . . . . . 52
[SECTION 10.02. Effect of Fully Reinvested Date; Conveyance of
Receivables . . . . . . . . . . . . . . . . . . . 53]
SECTION 10.03. Tax Treatment . . . . . . . . . . . . . . . . . . . 55
ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Ratification of Agreement . . . . . . . . . . . . . 56
SECTION 11.02. Counterparts. . . . . . . . . . . . . . . . . . . . 56
SECTION 11.03. Dealer Concentrations . . . . . . . . . . . . . . . 56
SECTION 11.04. Governing Law . . . . . . . . . . . . . . . . . . . 56
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Distribution Date Statement
SCHEDULES
Schedule 1 Identification of the Series [199_-_] Accounts
<PAGE>
SERIES [199[ ]_-_] SUPPLEMENT dated as of [ ],
199[ ] (the "Series Supplement"), among U.S. AUTO
RECEIVABLES COMPANY, a Delaware corporation, as Seller,
CHRYSLER CREDIT CORPORATION, a Delaware corporation, as
Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New
York banking corporation, as Trustee.
Pursuant to the Pooling and Servicing Agreement dated as of
May 31, 1991, as assigned by Chrysler Auto Receivables Company ("CARCO") to
the Seller on August 8, 1991 (as assigned, amended and supplemented, the
"Agreement"), among the Seller, the Servicer and the Trustee, CARCO has
created and assigned to the Seller the CARCO Auto Loan Master Trust (the
"Trust"). Section 6.03 of the Agreement provides that the Seller may from
time to time direct the Trustee to issue, on behalf of the Trust, one or
more new Series of Investor Certificates representing fractional undivided
interests in the Trust. The Principal Terms of any new Series are to be
set forth in a Supplement to the Agreement.
Pursuant to this Series Supplement, the Seller and the Trustee
shall create a new Series of Investor Certificates and specify the
Principal Terms thereof.
ARTICLE I
Creation of the Series [199 - ] Certificates
SECTION 1.01. Designation. (a) There is hereby created a
Series of Investor Certificates to be issued pursuant to the Agreement and
this Series Supplement to be known as the "[Floating Rate][ %] Auto Loan
Asset Backed Certificates, Series [199_-_]".
(b) In the event that any term or provision contained herein
shall conflict with or be inconsistent with any term or provision contained
in the Agreement, the terms and provisions of this Series Supplement shall
govern.
ARTICLE II
Definitions
SECTION 2.01. Definitions. (a) Whenever used in this Series
Supplement the following words and phrases shall have the following
meanings.
["Accrual Period" shall mean, with respect to any Distribution
Date, the period from and including the Distribution Date immediately
preceding such Distribution Date (or, in the case of the Initial
Distribution Date, the Closing Date) to but excluding such Distribution
Date.]
["Accumulation Period" shall mean, unless an Early Amortization
Event [(other than an Early Amortization Event which has resulted in an
Early Amortization Period which has ended as described in clause [ ] of
the definition thereof)], or a Reinvestment Event [(other than a
Reinvestment Event which has resulted in a Reinvestment Period which has
ended as described in clause [ ] of the definition thereof)] shall have
occurred prior thereto, the period commencing on the Accumulation Period
Commencement Date and ending upon the first to occur of (a) the
commencement of an Early Amortization Period, [(b) the commencement of a
Reinvestment Period] and (c) the payment in full to Series [199_-_]
Certificateholders of the outstanding principal amount of the Series [199_-_]
Certificates.]
["Accumulation Period Commencement Date" shall mean, [if the
Accumulation Period Length is one month, two months, three months, four
months or five months, the first day of the [ ] Collection Period,
the [ ] Collection Period, the [ ] Collection Period, the
Collection Period or the [ ] Collection Period, respectively;
provided, however, that the Accumulation Period Commencement Date shall be
[ ], if, prior to such date, any other outstanding Series shall
have entered into an early amortization period or a reinvestment person;
and provided further that, if the Accumulation Period Length shall have
been determined pursuant to Section 4.13 to be less than five months and,
thereafter, any outstanding Series shall enter into an early amortization
period or reinvestment period, the Accumulation Period Commencement Date
shall be the earlier of (a) the date that such outstanding Series shall
have entered into its early amortization period or reinvestment period and
(b) the Accumulation Period Commencement Date as previously determined][add
Citi alternative].
["Accumulation Period Length" shall mean a period which is [one,
two, three, four or five month(s) long and is calculated as the product,
rounded upwards to the nearest integer, of (a) five and (b) a fraction, the
numerator of which is the Invested Amount as of the [ ] Distribution
Date (after giving effect to all changes therein on such date) and the
denominator of which is the sum of such Invested Amount and the invested
amounts as of the [ ] Distribution Date (after giving effect to all
changes therein on such date) of all other outstanding Series whose
respective revolving periods are not scheduled to end before the last day
of the [ ] Collection Period][add Citi alternative].
[Additional Carry-Over Amount" shall have the meaning specified
in Section 4.02(b).]
"Additional Interest" shall have the meaning specified in
Section 4.02(a).
"Adjusted Invested Amount" shall mean, with respect to
Series [199_-_] for any Collection Period, an amount equal to the sum of
(a) the Initial Invested Amount of the Certificates on the Determination
Date occurring in such Collection Period, minus the excess, if any, of the
aggregate amount of Investor Charge-Offs for all Distribution Dates
preceding such date over the aggregate amount of any reimbursements of
Investor Charge-Offs for all Distribution Dates preceding such date and
(b) the applicable [Aggregate] Available Subordinated Amount, if any, on
the Determination Date occurring in such Collection Period (in each case,
after giving effect to the allocations, distributions, withdrawals and
deposits to be made on the Distribution Date following the Determination
Date during the Collection Period in which such date occurs).
["Adjustment Date" shall mean [ ], ].
["Aggregate Available Subordinated Amount" shall mean [the sum
of] the Available Subordinated Amount [, the Available Negative Carry
Subordinated Amount][and [others].]
"Allocable Defaulted Amount" shall mean, with respect to any
Collection Period, the product of (a) the Series [199_-_] Allocation
Percentage with respect to such Collection Period and (b) the Defaulted
Amount with respect to such Collection Period.
"Allocable Miscellaneous Payments" shall mean, with respect to
any Distribution Date, the product of (a) the Series [199_-_] Allocation
Percentage for the related Collection Period and (b) Miscellaneous Payments
with respect to the related Collection Period.
"Allocable Non-Principal Collections" shall mean, with respect to
any Deposit Date, the product of (a) the Series [199_-_] Allocation
Percentage for the related Collection Period and (b) the aggregate amount
of Collections of Non-Principal Receivables relating to such Deposit Date.
"Allocable Principal Collections" shall mean, with respect to any
Deposit Date, the product of (a) the Series [199_-_] Allocation Percentage
for the related Collection Period and (b) the aggregate amount of
Collections in respect of Principal Receivables relating to such Deposit
Date.
["Assets Receivables Rate" shall mean, with respect to any
[Interest Period][Accrual Period], an amount equal to the product of (a)
the quotient obtained by dividing (i) 360 by (ii) the actual number of days
elapsed in such [Interest Period][Accrual Period] and (b) a percentage,
expressed as a fraction, (i) the numerator of which is the sum of
(A) Investor Non-Principal Collections for the Collection Period
immediately preceding the last day of such Interest Period (which, for the
purposes of this definition only, shall be determined based on the interest
amounts billed to the Dealers which are due during such Collection Period)
less, unless the Monthly Servicing Fee has been waived by the Servicer, the
Certificateholders Monthly Servicing Fee with respect to such immediately
preceding Collection Period and (B) the Investment Proceeds to be applied
on the Distribution Date related to such [Interest Period][Accrual Period]
and (ii) the denominator of which is the sum of (A) the product of (I) the
Series [199_-_] Floating Allocation Percentage, (II) the Series [199_-_]
Series Allocation Percentage and (III) the average Pool Balance (after
giving effect to charge-offs) for such immediately preceding Collection
Period, [(B) the principal balance on deposit in the Excess Funding Account
on the first day of such [Interest Period][Accrual Period] (after giving
effect to all deposits to and withdrawals therefrom on such first day) and
[(C) the principal balance on deposit in the Principal Funding Account on
the first day of such [Interest Period][Accrual Period] (after giving
effect to all deposits to and withdrawals therefrom on such first day).]
"Available Investor Principal Collections" shall mean, with
respect to any Distribution Date, the sum of (a) an amount equal to
Investor Principal Collections for such Distribution Date, (b) Allocable
Miscellaneous Payments with respect to such Distribution Date,
(c) Series [199_-_] Excess Principal Collections on deposit in the
Collection Account for such Distribution Date [and (d) on the Termination
Date, any funds in the Reserve Fund after giving effect to Section 4.08].
"Available Negative Carry Subordinated Amount" shall mean [
].]
"Available Seller's Collections" shall mean, with respect to any
Deposit Date, the sum of (a) the Available Seller's Non-Principal
Collections for such Deposit Date and (b) the Available Seller's Principal
Collections for such Deposit Date; provided, however, that the Available
Seller's Collections shall be zero for any Collection Period with respect
to which the Available Subordinated Amount is zero on the Determination
Date immediately following the end of such Collection Period.
"Available Seller's Non-Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying (a) the excess of (i) the Seller's Percentage for the related
Collection Period over (ii) the Excess Seller's Percentage for such
Collection Period by (b) Allocable Non-Principal Collections for such
Deposit Date.
"Available Seller's Principal Collections" shall mean, with
respect to any Deposit Date, an amount equal to the result obtained by
multiplying (a) the excess of (i) the Seller's Percentage for the related
Collection Period over (ii) the Excess Seller's Percentage for such
Collection Period by (b) Allocable Principal Collections for such Deposit
Date.
"Available Subordinated Amount" for the first Determination Date
shall mean an amount equal to the Required Subordinated Amount. The
Available Subordinated Amount for any subsequent Determination Date shall
mean an amount equal to (a) the lesser of (i) the Available Subordinated
Amount for the preceding Determination Date, minus (A) the Required
Subordination Draw Amount with respect to the preceding Distribution Date
to the extent provided in Section 4.08, [minus (B) withdrawals from the
Reserve Fund pursuant to Section 4.08 on the preceding Distribution Date to
make distributions pursuant to Section [4.06(a)(iv)] (but excluding any
other withdrawals from the Reserve Fund)], plus (C) the portion of Excess
Servicing for such preceding Distribution Date distributed to the Seller
pursuant to Section 4.10(c), [plus (D) any amounts distributed as a Carry-
Over Amount or Additional Carry-over Amount pursuant to Section 4.07(c) on
the preceding Distribution Date] [and (ii) the product of the fractional
equivalent of the Subordinated Percentage and the Invested Amount on such
Determination Date, minus (b) in the case of clause (a)(i), the Incremental
Subordinated Amount for such preceding Determination Date,][plus (c) the
Incremental Subordinated Amount for the current Determination Date,] [plus
(d) the Subordinated Percentage of funds to be withdrawn from the Excess
Funding Account on the succeeding Distribution Date and paid to the Seller
or allocated to one or more Series]; provided, however, that the Available
Subordinated Amount may be increased on any Determination Date by the
Seller, in its sole discretion, by notice to the Trustee on or before such
Determination Date, so long as the cumulative amount of such increases does
not exceed the lesser of (x) $[ ] or (y) [ ]% of the Invested
Amount on such date; provided, however, that, once the [Accumulation
Period][Controlled Amortization Period] or any Early Amortization Period
[(other than an Early Amortization Period which has ended as described in
clause [ ] of the definition thereof)] shall have commenced, the Available
Subordinated Amount shall be calculated based on the Invested Amount as of
the close of business on the day preceding such [Accumulation
Period][Controlled Amortization Period] or Early Amortization Period [; and
provided further that, during any Reinvestment Period [(other than a
Reinvestment Period which has ended as described in clause [ ] of the
definitions thereof) shall have commenced, the Available Subordinated
Amount shall be calculated based on the Invested Amount as of the close of
business on the day preceding such Reinvestment Period [less [describe
permitted reductions, e.g., based on payment rates]].
["Calculation Agent" shall mean the Trustee or any other
Calculation Agent selected by the Seller which is reasonably acceptable to
the Trustee.]
["Carry-over Amount" shall mean, for any Distribution Date with
respect to which the related Certificate Rate is calculated on the basis of
the Asset Receivables Rate, the excess of (a) Monthly Interest for such
Distribution Date determined as if such Certificate Rate were calculated on
the basis of the Index formula set forth in clause (a) of the definition of
Certificate Rate over (b) the actual Monthly Interest for such Distribution
Date.]
"Certificate Rate" shall mean [ % per annum][, with respect to
any [Interest Period][Accrual Period], [the lesser of (a)] the Index for
such [Interest Period][Accrual Period][plus] [minus][times][ %] [and
(b) the Asset Receivables Rate for the immediately preceding [Interest
Period][Accrual Period]].
"Certificateholders Monthly Servicing Fee" shall have the meaning
specified in Section 3.01.
"Closing Date" shall mean [ ], 199[ ].
["Controlled Accumulation Amount" shall mean an amount equal to
the Invested Amount as of [the [ ] Distribution Date] [ ] (after
giving effect to any changes therein on such date), divided by the
Accumulation Period Length.]
["Controlled Amortization Amount" means an amount equal to the
Invested Amount as of the [ ] Distribution Date (after giving effect to
any changes therein on such date) divided by [ ].]
["Controlled Amortization Period" shall mean, unless an Early
Amortization Event [(other than an Early Amortization which has resulted in
an Early Amortization Period which has ended as described in clause [ ] of
the definition thereof] [or a Reinvestment Event [other than a Reinvestment
Event which has resulted in a Reinvestment Period which has ended as
described in clause [ ] of the definition thereof)] shall have occurred
prior thereto, the period commencing on the Principal Commencement Date and
ending on the first to occur at (a) the commencement of an Early
Amortization Period [,(b) the commencement of a Reinvestment Period] and
(c) the payment in full to Series [199_-_] Certificateholders of the
outstanding principal amount of the Series [199_-_] Certificates.]
["Controlled Distribution Amount" for a Distribution Date means
the sum of (a) [the excess, if any, of (i)] the Controlled Amortization
Amount for such Distribution Date [over (ii) the quotient obtained by
dividing the amount on deposit in the Excess Funding Account as of the [ ]
Distribution Date (after giving effect to any withdrawals from or deposits
to such account on such date) by [ ],] plus (b) any Controlled
Distribution Amount for a prior Distribution Date not previously
distributed to Series [199_-_] Certificateholders.]
[Controlled Deposit Amount" shall mean, with respect to any
Distribution Date, the excess, if any, of (a) the sum of (i) the product of
the Controlled Accumulation Amount and the number of Distribution Dates
from and including the first Distribution Date with respect to the
Accumulation Period through and including such Distribution Date (but not
in excess of the Accumulation Period Length) [and (ii) the amount on
deposit in the Excess Funding Account as of [the [ ] Distribution
Date] [ ] (after giving effect to any withdrawals from or deposits to
such account on such date (other than the transfer to the Principal Funding
Account of the amounts on deposit therein on such date))], over (b) the sum
of amounts on deposit in [the Excess Funding Account and the Principal
Funding Account, in each case before giving effect to any withdrawals from
or deposits to such accounts on such Distribution Date.]
"Deficiency Amount" shall have the meaning specified in
Section 4.05.
"Early Amortization Event" shall mean any Early Amortization
Event specified in Section 9.01 [ ] of the Agreement, together with any
additional Early Amortization Event specified in Section 6.01 of this
Series Supplement[; provided, however, that (i) for purposes of
Section 2.05(d)(vii), 2.07(b)(vi), 2.07(d)(viii), 3.01(d) and 6.03(b)(v) of
the Agreement, Early Amortization Event shall also include any Reinvestment
Event and (ii) for purposes of Section 2.01 of the Agreement, Early
Amortization Events specified in Sections 9.01(b),(c),(d) and (e) of the
Agreement shall also include Reinvestment Events specified in
Section 7.01[ ], respectively, of this Series Supplement].
"Early Amortization Period" shall mean an Early Amortization
Period with respect to Series [199_-_] [that occurs as a result of any
event specified in Section 9.01[ ] of the Agreement or any Early
Amortization Event specified in Section 6.01 of this Series Supplement] [;
provided, however, that for purposes of Section 4.04 of the Agreement,
Early Amortization Period shall also include, prior to the occurrence of
the Fully Reinvested Date and the making of all allocations, distributions,
withdrawals and deposits required to be made on such date [or at any time
thereafter following the recommencement of the Revolving Period], any
Reinvestment Period].
"Eligible Investments" shall mean (a) book-entry securities,
negotiable instruments or securities represented by instruments in bearer
or registered form having original or remaining maturities of 30 days or
less, but in no event occurring later than the Distribution Date next
succeeding the Trustee's acquisition thereof, which evidence:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(ii) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution
authorities; provided, however, that at the time of the Trust's
investment or contractual commitment to invest therein, the commercial
paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a person or
entity other than such depository institution or trust company)
thereof shall have a credit rating from each of the Rating Agencies in
the highest investment category granted thereby;
(iii) commercial paper having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating from
each of the Rating Agencies in the highest investment category granted
thereby;
(iv) [except during a Reinvestment Period,] investments in money
market funds having a rating from each of the Rating Agencies in the
highest investment category granted thereby or otherwise approved in
writing thereby;
(v) bankers' acceptances issued by any depository institution or
trust company referred to in clause (ii) above;
(vi) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii);
(vii) repurchase obligations with respect to any security or whole
loan, entered into with (i) a depository institution or trust company
(acting as principal) described in clause (ii) above (except that the
rating referred to in the proviso in such clause (ii) shall be A-1 or
higher in the case of Standard & Poor's) (such depository institution
or trust company being referred to in this definition as a "Financial
Institution"), (ii) a broker/dealer (acting as principal) registered
as a broker or dealer under Section 15 of the Securities Exchange Act
of 1934, as amended (a "Broker/Dealer") the unsecured short-term debt
obligations of which are rated P-1 by Moody's and at least A-1 by
Standard & Poor's at the time of entering into such repurchase
obligation (a "Rated Broker/Dealer"), (iii) an unrated Broker/Dealer
(an "Unrated Broker/Dealer"), acting as principal, that is a wholly
owned subsidiary of a non-bank holding company the unsecured short-
term debt obligations of which are rated P-1 by Moody's and at least
A-1 by Standard & Poor's at the time of entering into such repurchase
obligation (a "Rated Holding Company") or (iv) an unrated subsidiary
(a "Guaranteed Counterparty"), acting as principal, that is a wholly-
owned subsidiary of a direct or indirect parent Rated Holding Company,
which guarantees such subsidiary's obligations under such repurchase
agreement; provided that the following conditions are satisfied:
(A) the aggregate amount of funds invested in repurchase
obligations of a Financial Institution, a Rated Broker/Dealer, an
Unrated Broker/Dealer or Guaranteed Counterparty in respect of
which the Standard & Poor's unsecured short-term ratings are A-1
(in the case of an Unrated Broker/Dealer or Guaranteed
Counterparty, such rating being that of the related Rated Holding
Company) shall not exceed 20% of the sum of the then outstanding
principal balance of Series [199_-_] Certificates (there being no
limit on the amount of funds that may be invested in repurchase
obligations in respect of which such Standard & Poor's rating is
A-1+ (in the case of an Unrated Broker/Dealer or Guaranteed
Counterparty, such rating being that of the related Rated Holding
Company));
(B) in the case of any Series [199_-_] Account (other than
the Collection Account), the rating from Standard & Poor's in
respect of the unsecured short-term debt obligations of the
Financial Institution, Rated Broker/Dealer, Unrated Broker/Dealer
or Guaranteed Counterparty (in the case of an Unrated
Broker/Dealer or Guaranteed Counterparty, such rating being that
of the related Rated Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within 30 days of
the date on which the Trustee enters into such repurchase
obligation;
(D) the repurchase obligation shall not be subordinated to
any other obligation of the related Financial Institution, Rated
Broker/Dealer Unrated Broker/Dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase obligation is
held, in the appropriate form, by a custodial bank on behalf of
the Trustee;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
(i) the Trustee shall have received an opinion of
counsel (which may be in house counsel) to the effect that
the guarantee of the related Rated Holding Company is a
legal, valid and binding agreement of the Rated Holding
Company, enforceable in accordance with its terms, subject
as to enforceability to bankruptcy, insolvency,
reorganization and moratorium or other similar laws
affecting creditors' rights generally and to general
equitable principles;
(ii) the Trustee shall have received (x) an incumbency
certificate for the signer of such guarantee, certified by
an officer of such Rated Holding Company, and (y) a
resolution, certified by an officer of the Rated Holding
Company, of the board of directors (or applicable committee
thereof) of the Rated Holding Company authorizing the
execution, delivery and performance of such guarantee by the
Rated Holding Company;
(iii) the only conditions to the obligation of such Rated
Holding Company to pay on behalf of the Guaranteed
Counterparty shall be that the Guaranteed Counterparty shall
not have paid under such repurchase obligation when required
(it being understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is
necessary) and that the Trustee shall make a demand on the
Rated Holding Company to make the payment due under such
guarantee;
(iv) the guarantee of the Rated Holding Company shall be
irrevocable with respect to such repurchase obligation and
shall not be subordinate to other obligations of the Rated
Holding Company; and
(v) each of Standard & Poor's and Moody's has confirmed
in writing to the Trustee that it has reviewed the form of
the guarantee of the Rated Holding Company and has
determined that the Trust's investment in such repurchase
obligation, taking into account the issuance of such
guarantee, will not result in the downgrade or withdrawal of
the ratings assigned to the Series [199_-_] Certificates.
(H) the repurchase obligations shall require that the
repurchase obligation be overcollatera- lized and shall provide
that, upon any failure to maintain such overcollateralization,
the repurchase obligation shall become due and payable, and
unless the repurchase obligation is satisfied immediately, the
collateral subject to the repurchase agreement shall be
liquidated and the proceeds applied to satisfy the unsatisfied
portion of the repurchase obligation; and
(b) any other investment consisting of a financial asset that by
its terms converts to cash within a finite period of time, provided that
each Rating Agency shall have notified the Seller, the Servicer and the
Trustee that the Trust's investment therein will not result in a reduction
or withdrawal of the rating of any outstanding class or Series with respect
to which it is a Rating Agency.
"Excess Reserve Fund Required Amount" shall mean, for any
Distribution Date with respect to an Early Amortization Period [or any
Distribution Date with respect to a Reinvestment Period that occurs prior
to the Fully Reinvested Date], an amount equal to the greater of (a) [ ]%
of the initial principal balance of the Series [199_-_] Certificates and
(b) the excess of (i) the sum of (x) the Available Subordinated Amount on
the preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution
Date) and (y) an amount equal to (A) the excess of the Required
Participation Percentage over 100%, multiplied by (B) the outstanding
principal balance of the Series [199_-_] Certificates on such Distribution
Date (after giving effect to any changes therein on such Distribution Date)
over (ii) the excess of (x) the Series [199_-_] Allocation Percentage of
the Pool Balance on the last day of the immediately preceding Collection
Period over (y) the Invested Amount on such Distribution Date (after giving
effect to changes therein on such Distribution Date); provided that the
Excess Reserve Fund Required Amount shall not exceed such Available
Subordinated Amount.
"Excess Seller's Percentage" shall mean, with respect to any
Collection Period, a percentage (which percentage shall never be less than
0% nor more than 100%) equal to (a) 100% minus, when used with respect to
Non-Principal Receivables [(except during any Early Amortization Period)]
and Defaulted Receivables and Principal Receivables during the Revolving
Period, the sum of (i) the Floating Allocation Percentage with respect to
such Collection Period and (ii) the percentage equivalent of a fraction,
the numerator of which is the Available Subordinated Amount as of the
Determination Date occurring in such Collection Period (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on
the Distribution Date immediately following such Determination Date) and
the denominator of which is the product of (x) the Pool Balance as of the
last day of such immediately preceding Collection Period and (y) the
Series [199_-_] Allocation Percentage for the Collection Period in respect
of which the Excess Seller's Percentage is being calculated or (b) 100%
minus, when used with respect to [Non-Principal Receivables during any
Early Amortization Period and] Principal Receivables during the
[Accumulation Period] [Controlled Amortization Period] and any Early
Amortization Period [or Reinvestment Period], the sum of (i) the Fixed
Allocation Percentage with respect to such Collection Period and (ii) the
percentage equivalent of a fraction, the numerator of which is the
Available Subordinated Amount as of the Determination Date occurring in
such Collection Period (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution Date
immediately following such Determination Date) and the denominator of which
is the product of (x) the Pool Balance as of the last day of such
immediately preceding Collection Period and (y) the Series [199_-_]
Allocation Percentage for the Collection Period in respect of which the
Excess Seller's Percentage is being calculated.
"Excess Servicing" shall mean, with respect to any Distribution
Date, the amount, if any, specified pursuant to Section 4.06(a)[(viii)]
with respect to such Distribution Date.
"Expected Payment Date" shall mean the [ ]
Distribution Date.
"Fixed Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount
as of the last day of the Revolving Period and the denominator of which is
the product of (a) the Pool Balance as of the last day of the immediately
preceding Collection Period and (b) the Series [199_-_] Allocation
Percentage with respect to the Collection Period in respect of which the
Principal Allocation Percentage is being calculated; provided, however,
that, with respect to that portion of any Collection Period that falls
after the date on which any Early Amortization Event occurs [(other than an
Early Amortization Event which has resulted in an Early Amortization Period
which has ended as described in clause [ ] thereof] [or any Reinvestment
Event occurs [(other than a Reinvestment Period which has ended as
described in clause [ ] thereof)], the Fixed Allocation Percentage shall
be reset using the Pool Balance as of the close of business on [the earlier
of] the date on which such Early Amortization Event shall have occurred
[and the date on which such Reinvestment Event shall have occurred] and
Principal Collections shall be allocated for such portion of such
Collection Period using such reset Fixed Allocation Percentage.
"Floating Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount
as of the last day of the immediately preceding Collection Period (after
giving effect to the reinvestment to occur on the next succeeding
Distribution Date) and the denominator of which is the product of (a) the
Pool Balance as of such last day and (b) the Series [199_-_] Allocation
Percentage for the Collection Period in respect of which the Floating
Allocation Percentage is being calculated; provided, however, that, with
respect to the first Collection Period, the Floating Allocation Percentage
shall mean the percentage equivalent of a fraction, the numerator of which
is the Initial Invested Amount and the denominator of which is the product
of (x) the Pool Balance on the Series Cut-Off Date and (y) the Series
[199-_-] Allocation Percentage with respect to the Series Cut-Off Date.
["Incremental Subordinated Amount" shall mean, with respect to
any Determination Date, the result obtained by multiplying (a) a fraction,
the numerator of which is the sum of (i) (A) the Invested Amount on the
last day of the immediately preceding Collection Period or (B) with respect
to the first Determination Date, the Invested Amount on the Closing Date
and (ii) (A) the Available Subordinated Amount for such Determination Date
(calculated without adding the Incremental Subordinated Amount for such
Distribution Date as described in clause (c) of the definition thereof) or
(B) with respect to the first Determination Date, the product of the
Invested Amount on the Closing Date and the Subordinated Percentage and the
denominator of which is the Pool Balance on such last day by (b) the Trust
Incremental Subordinated Amount.]
["Index" shall mean [ ].]
"Initial Distribution Date" shall mean [ ] , 199[ ].
"Initial Invested Amount" shall mean the portion of initial
principal amount of the Series [199_-_] Certificates which is invested in
Principal Receivables on the Closing Date, which is $[ ][, plus
(a) the amount of any withdrawals from the Excess Funding Account in
connection with the purchase of an additional interest in Principal
Receivables of the Trust, minus (b) the amount of any additions to the
Excess Funding Account in connection with a reduction in the Principal
Receivables in the Trust].
"Initial Principal Amount" shall mean $[ ].
["Initial Reserve Fund Deposit Amount" shall mean $[ ].
["Initial Yield Supplement Account Deposit Amount" shall mean
$[ ]].
["Interest Funding Account" shall have the meaning specified in
Section 4.04[ ].]
["Interest Payment Date" shall mean [ ].]
["Interest Period" shall mean, with respect to any Distribution
Date, the period from and including the Distribution Date immediately
preceding such Distribution Date (or, in the case of the Initial
Distribution Date, the Closing Date) to but excluding such Distribution
Date. Interest will be calculated on the basis of the actual number of
days in each Interest Period divided by 360 days.]
"Interest Shortfall" shall have the meaning specified in
Section 4.02.
"Invested Amount" shall mean, when used with respect to any date,
an amount equal to (a) the Initial Invested Amount, minus (b) the amount,
without duplication, of principal payments [(except principal payments made
from the Excess Funding Account and any transfers from the Excess Funding
Account to the Principal Funding Account)] made to Series [199_-_]
Certificateholders or deposited to the Principal Funding Account prior to
such date, minus (c) the excess, if any, of the aggregate amount of
Investor Charge-Offs over Investor Charge-Offs reimbursed pursuant to
Section 4.08 prior to such date. In addition, for purposes of the
definitions of "Early Amortization Period" [and Reinvestment Period and
Section 12.01 of the Agreement], the Invested Amount shall be an amount
equal to the outstanding principal amount of the Certificates.
"Investment Proceeds" shall mean, with respect to any
Determination Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Series [199_-_]
Accounts, together with an amount equal to the Series [199_-_] Allocation
Percentage of the interest and other investment earnings on funds held in
the Collection Account credited to the Collection Account pursuant to
Section 4.02 of the Agreement.
"Investor Charge-Offs" shall have the meaning specified in
Section 4.09.
"Investor Default Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Allocable
Defaulted Amount for the related Collection Period and (b) the Floating
Allocation Percentage for the related Collection Period.
"Investor Non-Principal Collections" shall mean, with respect to
any Distribution Date, an amount equal to the product of (a) the Floating
Allocation Percentage for the related Collection Period and (b) Allocable
Non-Principal Collections deposited in the Collection Account for the
related Collection Period[; provided, however, that with respect to any
Distribution Date with respect to any Early Amortization Period, Investor
Non-Principal Collections shall mean an amount equal to the product of
(i) the Fixed Allocation Percentage for the related Collection Period and
(ii) Allocable Non-Principal Collections deposited in the Collection
Account for the related Collection Period].
"Investor Principal Collections" shall mean, with respect to any
Distribution Date, the sum of (a) the product of (i) the Floating
Allocation Percentage, with respect to the Revolving Period, or the
Principal Allocation Percentage, with respect to the [Accumulation Period]
[Controlled Amortization Period] or an Early Amortization Period [or a
Reinvestment Period] for the related Collection Period (or any partial
Collection Period which occurs as the first Collection Period during an
Early Amortization Period [or a Reinvestment Period]) and (ii) Allocable
Principal Collections deposited in the Collection Account for the related
Collection Period (or any partial Collection Period which occurs as the
first Collection Period during an Early Amortization Period [or a
Reinvestment Period]) and (b) the amount, if any, of Collections of Non-
Principal Receivables, Excess Servicing and Available Seller's Collections
to be distributed pursuant to Section [4.06(a)(iv), 4.08(b) or 4.10(a)] on
such Distribution Date.
["London Business Day" shall mean any business day on which
dealings in deposits in United States dollars are transacted in the London
interbank market.]
"Monthly Interest" shall have the meaning specified in
Section 4.02.
"Monthly Payment Rate" shall mean, for any Collection Period, the
percentage derived from dividing the Principal Collections for such
Collection Period by the average daily Pool Balance for such Collection
Period.
"Monthly Principal" shall have the meaning specified in
Section 4.03.
"Monthly Servicing Fee" shall have the meaning specified in
Section 3.01.
"Moody's" shall mean Moody's Investors Service, Inc.
"Pool Factor" shall mean, with respect to any Determination Date,
a number carried out to 11 decimals representing the ratio of the Invested
Amount as of such Determination Date (determined after taking into account
any increases or decreases in the Invested Amount which will occur on the
following Distribution Date) to the Initial Invested Amount.
"Principal Commencement Date" shall mean [
].
"Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date, the sum of (a) the Invested
Amount on such Distribution Date, (b) accrued and unpaid interest on the
unpaid balance of the Series [199_-_] Certificates (calculated on the basis
of the outstanding principal balance of the Series [199_-_] Certificates at
the Certificate Rate [as in effect during the applicable [Interest Periods]
[Accrual Periods])] through the day preceding such Distribution Date,
(c) the amount of Additional Interest, if any, for such Distribution Date
and any Additional Interest previously due but not [deposited to the
Interest Funding Account or] distributed to the Series [199_-_]
Certificateholders on a prior Distribution Date, [(d) any Carry-over Amount
for such Distribution Date and any Carry-over Amount previously due but not
distributed to the Series [199_-_] Certificateholders on a prior
Distribution Date and (e) any Additional Carry-Over Amount for such
Distribution Date and any Additional Carry-Over Amount previously due but
not distributed to the Series [199_-_] Certificateholders on a prior
Distribution Date].
["Reinvestment Event" shall have the meaning specified in
Section 7.01.]
["Reinvestment Period" shall mean the period beginning at the
close of business on the Business Day immediately preceding the day on
which a Reinvestment Event is deemed to have occurred, and in each case
ending upon the earliest to occur of (a) the payment in full to the Series
[199_-_] Certificateholders of the Investment Amount, (b) the Termination
Date, (c) the commencement of an Early Amortization Period, (d) if such
Reinvestment Period has resulted from the occurrence of a Reinvestment
Event described in Section 7.01[ ], the earlier of (i) end of the first
Collection Period during which a Reinvestment Event would no longer be
deemed to exist pursuant to Section 7.01[ ], so long as no other
Reinvestment Event shall have occurred, and (ii) the conveyance of
Receivables in Additional Accounts to the Trust following written
confirmation by each Rating Agency that such conveyance will not result in
the reduction or withdrawal of such Rating Agency's rating of the Series
[199_-_] Certificates, (a) receipt by the Trustee of written confirmation
by each Rating Agency that recommencement of the Revolving Period would not
result in such Rating Agency's rating of the Series [199_-_] Certificates
being reduced or withdrawn [and (f) describe other cures, if applicable].]
["Required Negative Carry Subordinated Amount" shall mean, as of
any date, [ ].]
"Required Participation Percentage" shall mean, with respect to
Series [199_-_], [ ]%; provided, however, that if the aggregate amount of
Principal Receivables due from any Dealer or group of affiliated Dealers at
the close of business on the last day of any Collection Period with respect
to which such determination is being made pursuant to Section 9.03 is
greater than [ ]% of the Pool Balance on such last day, the Required
Participation Percentage shall mean, as of such last day and with respect
to such Collection Period and the immediately following Collection Period
only, [ ]%; provided further, that the Seller may, upon 10 days' prior
notice to the Trustee, each Rating Agency and any Enhancement Provider,
reduce the Required Participation Percentage to a percentage which shall
not be less than 100%, provided that no Rating Agency shall have notified
the Seller or the Servicer that any such reduction will result in a
reduction or withdrawal of the rating of any outstanding Series or Class
with respect to which it is a Rating Agency.
"Required Subordinated Amount" shall mean, as of any date of
determination, [the sum of (a)] the product of (i) the Subordinated
Percentage and (ii) the Invested Amount on such date [and (b) the
Incremental Subordinated Amount].
"Required Subordination Draw Amount" shall have the meaning
specified in Section 4.05.
["Reserve Fund" shall have the meaning specified in
Section 4.04.]
["Reserve Fund Deposit Amount" shall mean, with respect to any
Distribution Date, the amount, if any, by which (a) the Reserve Fund
Required Amount for such Distribution Date exceeds (b) the amount of funds
in the Reserve Fund after giving effect to any withdrawals therefrom on
such Distribution Date.]
["Reserve Fund Required Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) [ ]% and
(b) the outstanding principal balance of the Series [199_-_] Certificates
on such Distribution Date (after giving effect to any changes therein on
such Distribution Date). [other]]
"Revolving Period" shall mean the period beginning at the close
of business on the Business Day immediately preceding the Series Cut-Off
Date and ending on the earlier of (a) the close of business on the day
immediately preceding the [Accumulation Period Commencement Date]
[Principal Commencement Date] (b) the close of business on the day an Early
Amortization Period commences; provided, however, that, if any Early
Amortization Period ends as described in paragraph [ ] of the definition
thereof, the Revolving Period will recommence as of the close of business
on the day such Early Amortization Period ends [, and (c) the close of
business on the day a Reinvestment Period commences; provided, however,
that if any Reinvestment Period ends as described in paragraph [ ] of the
definition thereof, the Revolving Period will recommence as of the close of
business on the day such Reinvestment Period ends].
"Seller's Collections" shall mean, with respect to any Collection
Period, the sum of (a) the Seller's Percentage of Allocable Non-Principal
Collections for the related Collection Period, plus (b) the Seller's
Percentage of Allocable Principal Collections for the related Collection
Period.
"Seller's Percentage" shall mean 100% minus (a) the Floating
Allocation Percentage, when used with respect to Non-Principal Receivables
[(except during any Early Amortization Period)] and Defaulted Receivables
and Principal Receivables during the Revolving Period, and (b) the Fixed
Allocation Percentage, when used with respect to Principal Receivables
during the [Accumulation Period] [Controlled Amortization Period] and an
Early Amortization Period [or Reinvestment Period] [and Non-Principal
Receivables during any Early Amortization Period].
"Series [199_-_]" shall mean the Series of Investor Certificates,
the terms of which are specified in this Series Supplement.
"Series [199_-_] Accounts" shall have the meaning specified in
Section [4.04(e)(i)].
"Series [199_-_] Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series [199_-_].
"Series [199_-_] Certificateholders" shall mean the Holders of
Series [199_-_] Certificates.
"Series [199_-_] Certificateholders' Interest" shall mean that
portion of the Certificateholders' Interest evidenced by the Series [199_-
_] Certificates.
"Series [199_-_] Certificates" shall mean any one of the
certificates executed by the Seller and authenticated by the Trustee,
substantially in the form of Exhibit A.
"Series [199_-_] Excess Principal Collections" shall mean that
portion of Excess Principal Collections allocated to Series [199_-_]
pursuant to Section 4.11.
"Series [199_-_] Principal Shortfall" shall have the meaning
specified in Section 4.11.
"Series Cut-off Date" shall mean [ ], 199[ ].
"Servicing Fee Rate" shall mean, with respect to Series [199_-_],
[ ]% or, for any Distribution Date in respect of which the Monthly
Servicing Fee has been waived, 0%.
"Special Payment Date" shall mean each distribution date with
respect to any Early Amortization Period (other than an Early Amortization
Period which has ended as described in clause [ ] of the definition
thereof).
"Standard & Poor's" shall mean Standard & Poor's Rating Group.
"Subordination Factor" shall mean [ ].
"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.
"Termination Date" shall mean the [ ] Distribution
Date.
"Termination Proceeds" shall mean any Termination Proceeds
arising out of a sale of Receivables (or interests therein) pursuant to
Section 12.02(c) of the Agreement with respect to Series [199_-_].
"Trust Available Subordinated Amount" means the sum of the
[Aggregate] Available Subordinated Amount and the sum of the aggregate
available subordinated amounts for all other outstanding Series.
["Yield Supplement Account" shall have the meaning specified in
Section 4.04.]
["Yield Supplement Account Deposit Amount" shall mean, with
respect to any Distribution Date, the amount, if any, by which the Yield
Supplement Account Required Amount exceeds the amount on deposit in the
Yield Supplement Account after giving effect to any deposits thereto and
withdrawals therefrom otherwise to be made on such Distribution Date.]
["Yield Supplement Account Required Amount" shall mean, with
respect to any Distribution Date, an amount equal to the product of
(a) [ ]% and (b) the outstanding principal balance of the Certificates on
such Distribution Date (after giving effect to any changes therein on such
Distribution Date) [other].
(b) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the term "Rating Agency" shall mean, whenever
used in this Series Supplement or the Agreement with respect to Series
[199_-_], Moody's and Standard & Poor's. As used in this Series Supplement
and in the Agreement with respect to Series [199_-_], "highest investment
category" shall mean (i) in the case of Standard & Poor's, A-l+ or AAA, as
applicable, and (ii) in the case of Moody's, P-1 or Aaa, as applicable.
Any notice required to be given to a Rating Agency pursuant to the
Agreement or this Series Supplement shall also be given to Fitch Investors
Service, Inc., and Duff & Phelps, Inc., although neither shall be deemed to
be a Rating Agency for any purposes of the Agreement or this Series
Supplement with respect to Series [199_-_].
(c) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement. The
definitions in Section 2.01 are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such terms.
(d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Series Supplement shall refer to this
Series Supplement as a whole and not to any particular provision of this
Series Supplement; references to any Article, Section or Exhibit are
references to Articles, Sections and Exhibits in or to this Series
Supplement unless otherwise specified; and the term "including" means
"including without limitation".]
ARTICLE III
Servicing Fee
SECTION 3.01. Servicing Compensation. The monthly servicing fee
(the "Monthly Servicing Fee") shall be payable to the Servicer, in arrears,
on each Distribution Date in respect of any Collection Period (or portion
thereof) occurring prior to the earlier of the first Distribution Date
following the Series [199_-_] Termination Date and the first Distribution
Date on which the Invested Amount is zero, in an amount equal to one-
twelfth of the product of (a) the Servicing Fee Rate, (b) the Pool Balance
as of the last day of the Collection Period second preceding such
Distribution Date and (c) the Series [199_-_] Allocation Percentage with
respect to the immediately preceding Collection Period. The share of the
Monthly Servicing Fee allocable to the Series [199_-_] Certificateholders
with respect to any Distribution Date (the "Certificateholders Monthly
Servicing Fee") shall be equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the Invested Amount as of the last day of the
Collection Period second preceding such Distribution Date. The remainder
of the Monthly Servicing Fee shall be paid by the Seller and in no event
shall the Trust, the Trustee or the Series [199_-_] Certificateholders be
liable for the share of the Monthly Servicing Fee to be paid by the Seller;
and the remainder of the Servicing Fee shall be paid by the Seller and the
Investor Certificateholders of other Series and the Series [199_-_]
Certificateholders shall in no event be liable for the share of the
Servicing Fee to be paid by the Seller or the Investor Certificateholders
of other Series. The Certificateholders Monthly Servicing Fee shall be
payable to the Servicer solely to the extent amounts are available for
distribution in accordance with the terms of this Series Supplement.
The Servicer will be permitted, in its sole discretion, to waive
the Monthly Servicing Fee for any Distribution Date by notice to the
Trustee on or before the related Determination Date; provided that the
Servicer believes that sufficient Collections of Non-Principal Receivables
will be available on any future Distribution Date to pay the
Certificateholders Monthly Servicing Fee relating to the waived Monthly
Servicing Fee. If the Servicer so waives the Monthly Servicing Fee for any
Distribution Date, the Monthly Servicing Fee and the Certificateholders
Monthly Servicing Fee for such Distribution Date shall be deemed to be zero
for all purposes of this Series Supplement and the Agreement; provided,
however, that such Certificateholders Monthly Servicing Fee shall be paid
on a future Distribution Date solely to the extent amounts are available
therefor pursuant to Section 4.10(b); provided further that, to the extent
any such waived Certificateholders Monthly Servicing Fee is so paid, the
related portion of the Monthly Servicing Fee to be paid by the Seller shall
be paid by the Seller to the Servicer.
ARTICLE IV
Rights of Series [199_-_] Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Allocations; Payments to Seller; Excess Principal
Collections and Unallocated Principal Collections. (a) Collections of
Non-Principal Receivables and Principal Receivables, Miscellaneous Payments
and Defaulted Amounts allocated to Series [199_-_] pursuant to Article IV
of the Agreement shall be allocated and distributed as set forth in this
Article.
(b) Subject to Sections 4.01(d) [and 4.01(e)] below, the
Servicer shall instruct the Trustee to withdraw from the Collection Account
and pay to the Seller on the dates set forth below the following amounts:
(i) on each Deposit Date:
(A) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Non-Principal
Collections deposited in the Collection Account for such Deposit
Date; and
(B) an amount equal to the Excess Seller's Percentage for
the related Collection Period of Allocable Principal Collections
deposited in the Collection Account for such Deposit Date, if the
Seller's Participation Amount (determined after giving effect to
any Principal Receivables transferred to the Trust on such
Deposit Date) exceeds the Trust Available Subordinated Amount for
the immediately preceding Determination Date (after giving effect
to the allocations, distributions, withdrawals and deposits to be
made on the Distribution Date immediately following such
Determination Date); and
(ii) on each Deposit Date with respect to the Revolving Period,
an amount equal to the Available Seller's Principal Collections for
such Deposit Date, if the Seller's Participation Amount (determined
after giving effect to any Principal Receivables transferred to the
Trust on such Deposit Date) exceeds the Trust Available Subordinated
Amount for the immediately preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to
be made on the Distribution Date immediately following such
Determination Date); provided, however, that Available Seller's
Principal Collections shall be paid to the Seller with respect to any
Collection Period only after an amount equal to [the sum of (A)] the
Deficiency Amount, if any, relating to the immediately preceding
Collection Period [and (B) the excess, if any, of the Reserve Fund
Required Amount over the amount in the Reserve Fund on the immediately
preceding Distribution Date (after giving effect to the allocations
of, distributions from, and deposits in, the Reserve Fund on such
Distribution Date),] has been deposited in the Collection Account from
such Available Seller's Principal Collections.
The withdrawals to be made from the Collection Account pursuant
to this Section 4.01(b) do not apply to deposits into the Collection
Account that do not represent Collections, including Miscellaneous
Payments, payment of the purchase price for the Certificateholders'
Interest pursuant to Section 2.03 of the Agreement[, payment of the
purchase price for the Series [199_-_] Certificateholders' Interest
pursuant to Section 8.01 of this Series Supplement] and proceeds from the
sale, disposition or liquidation of Receivables pursuant to Section 9.02 or
12.02 of the Agreement.
[(c) The Servicer shall instruct the Trustee to withdraw from
the Collection Account and deposit into the Reserve Fund on Deposit Dates
with respect to the Revolving Period Available Seller's Principal
Collections for such Deposit Date, up to the amount of the excess, if any,
determined pursuant to Section 4.01(b)(ii)(B).]
[(d) Notwithstanding the provisions of Section 4.01(b)(1),
amounts otherwise distributable to the Seller pursuant to Section 4.01(b),
up to the Available Negative Carry Subordinated Amount, shall be applied as
follows: on each Deposit Date with respect to the [Accumulation Period]
[Controlled Amortization Period], an Early Amortization Period [or a
Reinvestment Period], the Servicer shall instruct the Trustee to withdraw
such amounts from the collection Account and deposit the Negative Carry
Deposit Amount to the Negative Carry Reserve Fund and [describe other
applications, if applicable].]
[(e) Notwithstanding the provisions of Section 4.01(b)(i), on
each Deposit Date during any Collection Period on which any amount is on
deposit in [the Excess Funding Account or] Principal Funding Account, the
Servicer shall instruct the Trustee to withdraw from the Collection Account
and deposit in the Yield Supplement Account the amounts otherwise
distributable to the Seller pursuant to Section 4.01(b)(i) [and not applied
pursuant to Section 4.01(d)] until the amount on deposit in the Yield
Supplement Account is equal to the Yield Supplement Account Required
Amount.]
SECTION 4.02. Monthly Interest. [(a)] The amount of monthly
interest ("Monthly Interest") with respect to the Series [199_-_]
Certificates on any Distribution Date shall be [an amount equal to the
product of (i) the Certificate Rate, (ii) the outstanding principal balance
of the Series [199_-_] Certificates as of the close of business on the
preceding Distribution Date (after giving effect to all repayments of
principal made to Series [199_-_] Certificateholders on such preceding
Distribution Date, if any) and (iii) a fraction, the numerator of which is
the actual number of days elapsed in such Interest Period and the
denominator of which is [360] [other]]. [Accrual Period] [an amount equal
to one twelfth of the product of the outstanding principal balance of the
Series [199_-_] Certificates as of the close of business on the preceding
Distribution Date after giving effect to all repayments of principal made
to the Series [199_-_] Certificateholders on such preceding Distribution
Date, if any; provided, however, that with respect to the first such
Distribution Date, Monthly Interest shall be equal to $____. Monthly
Interest shall be calculated on the basis of a 360-day year of twelve 30-
day months].
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Interest Shortfall"), of
(x) the aggregate Monthly Interest for the [Interest Period] [Accrual
Record] applicable to such Distribution Date over (y) the amount which will
be available to be [deposited in the Interest Funding Account or]
distributed to Series [199_-_] Certificateholders on such Distribution Date
in respect thereof pursuant to this Series Supplement. If the Interest
Shortfall with respect to any Distribution Date is greater than zero, an
additional amount ("Additional Interest") equal to [the product of (i) the
Certificate Rate for the [Interest Period] commencing on the related
Distribution Date (or, for subsequent [Interest Periods] [Accrual Periods],
the Certificate Rate for such subsequent [Interest Period] [Accrual
Period]), (ii) such Interest Shortfall (or the portion thereof which has
not been [deposited in the Interest Funding Account or] paid to Series
[199_-_] Certificateholders) and (iii) a fraction, the numerator of which
is the amount of days elapsed in such [Interest Period] [Accrual Period]
(or in a subsequent [Interest Period] [Accrual Period]) and the denominator
of which is [ ] 360 [other]] [one-twelfth of the product of (i) the
Certificate Rate [plus [ ] and (ii) such Interest Shortfall (or the
portion thereof which has not been [deposited to the Interest Funding
Account or] paid to the Series [199_-_] Certificateholders], shall be
payable as provided herein with respect to the Series [199_-_] Certificates
on each Distribution Date following such Distribution Date to and including
the Distribution Date on which such Interest Shortfall is paid to Series
[199_-_] Certificateholders. Notwithstanding anything to the contrary
herein, Additional Interest shall be payable or distributed to Series
[199_-_] Certificateholders only to the extent permitted by applicable law.
[(b) On the Determination Date preceding each Distribution Date,
the Servicer shall determine the excess, if any (the "Carry-over
Shortfall"), of (x) the Carry-over Amount, if any, for such Distribution
Date over (y) the amount which will be available to be distributed to
Series [199_-_] Certificateholders in respect thereof on such Distribution
Date pursuant to this Series Supplement. If the Carry-over Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Additional Carry-over Amount") equal to the product of (i) the
Certificate Rate (calculated pursuant to clause (a) of the definition
thereof) for the Interest Period commencing on the related Distribution
Date (or, for subsequent Interest Periods, the Certificate Rate (calculated
pursuant to clause (a) of the definition thereof) for such subsequent
Interest Periods), (ii) such Carry-over Shortfall (or the portion thereof
which has not been paid to Series [199_-_] Certificateholders) and (iii) a
fraction, the numerator of which is the amount of days elapsed in such
Interest Period (or in a subsequent Interest Period) and the denominator of
which is 360, shall be payable as provided herein with respect to the
Series [199_-_] Certificates on each Distribution Date following such
Distribution Date to the Distribution Date on which such Carry-over
Shortfall is paid to Series [199_-_] Certificateholders. Notwithstanding
anything to the contrary herein, any Additional Carry-Over Amount shall be
payable or distributed to Series [199_-_] Certificateholders only to the
extent permitted by applicable law.]
SECTION 4.03. Determination of Monthly Principal. The amount of
monthly principal ("Monthly Principal") distributable with respect to the
Series [199_-_] Certificates on each Distribution Date with respect to an
Early Amortization Period [, a Reinvestment Period] and the [Accumulation
Period] [Controlled Amortization Period] shall be equal to the Available
Investor Principal Collections with respect to such Distribution Date;
provided, however, that, for each Distribution Date [with respect to the
Accumulation Period, Monthly Principal shall not exceed the Controlled
Deposit Amount [with respect to the Controlled Amortization Period, Monthly
Principal shall not exceed the Controlled Deposit Amount] with respect to
the Controlled Amortization Period, Monthly Principal shall not exceed the
Controlled Distribution Amount] for such Distribution Date; and provided
further that Monthly Principal shall not exceed the Invested Amount of the
Certificates.
SECTION 4.04. Establishment of [Reserve Fund and] Funding
Accounts. [(a) (i) The Servicer, for the benefit of the Series [199_-_]
Certificateholders, shall cause to be established and maintained in the
name of the Trustee, on behalf of the Trust, an Eligible Deposit Account
(the "Reserve Fund") which shall be identified as the "Reserve Fund for the
CARCO Auto Loan Master Trust, Series [199_-_]" and shall bear a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Series [199_-_] Certificateholders. On the Closing Date,
the Seller shall cause to be deposited in the Reserve Fund the Initial
Reserve Fund Deposit Amount.
(ii) At the direction of the Servicer, funds on deposit in the
Reserve Fund shall be invested by the Trustee in Eligible Investments
selected by the Servicer that will mature so that such funds will be
available at the close of business on or before the Business Day next
preceding the following Distribution Date. All Eligible Investments shall
be held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Reserve Fund received prior to such Distribution Date shall
be applied as set forth in Section 4.06(a) [or 4.06(b), as applicable,] of
this Series Supplement. Funds deposited in the Reserve Fund on a Business
Day (which immediately precedes a Distribution Date) upon the maturity of
any Eligible Investments are not required to be invested overnight.]
[(b) (i) The Servicer, for the benefit of the Series [199_-_]
Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account (the "Yield
Supplement Account"), which shall be identified as the "Yield Supplement
Account for the CARCO Auto Loan Master Trust Series [199_-_]" and shall
bear a designation clearly indicating that the funds deposited therein are
held for the benefit of the Series [199_-_] Certificateholders. On the
Closing Date, the Seller shall cause to be deposited into the Yield
Supplement Account the Initial Yield Supplement Account Deposit Amount.
(ii) At the direction of the Servicer, funds on deposit in the
Yield Supplement Account shall be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall
be held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Yield Supplement Account shall be applied as set forth in
Section 4.06(a) of this Series Supplement. Funds deposited in the Yield
Supplement Account on any Distribution Date shall be invested at the
direction of the Servicer in Eligible Investments that will mature so that
such funds will be available on or before the close of business on the
Business Day preceding the next following Distribution Date. Funds
deposited in the Yield Supplement Account on a Business Day (which
immediately precedes a Distribution Date) upon the maturity of any Eligible
Investments are not required to be invested overnight.
(iii) If on any Distribution Date there is a Carry-over Amount,
the Servicer shall cause the Trustee to apply the amounts on deposit in the
Yield Supplement Account up to the amount of such Carry-over Amount to
satisfy such Carry-over Amount.
(iv) If on any Distribution Date the amount on deposit in the
Yield Supplement Account (after giving effect to any withdrawals to be made
from the Yield Supplement Account on such Distribution Date) is greater
than the Yield Supplement Account Required Amount, the Servicer shall cause
the Trustee to pay to the Seller on such Distribution Date the excess of
such amount on deposit in the Yield Supplement Account over the Yield
Supplement Account Required Amount.]
[(c) (i) The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account (the
"Principal Funding Account"), which shall be identified as the "Principal
Funding Account for CARCO Auto Loan Master Trust, Series [199_-_]" and
shall bear a designation clearly indicating that the funds deposited
therein are held for the benefit of the Series [199_-_] Certificateholders.
(ii) At the direction of the Servicer, funds on deposit in the
Principal Funding Account shall be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall
be held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit therein shall be applied as set forth in Section 4.06(a) [or
4.06(b), as applicable] of this Series Supplement. Funds on deposit in the
Principal Funding Account shall be invested at the direction of the
Servicer in Eligible Investments that will mature so that such funds will
be available on or before the close of business on the Business Day next
preceding the Expected Payment Date. Funds deposited in the Principal
Funding Account on a Business Day (which immediately precedes the Expected
Payment Date) upon the maturity of any Eligible Investments are not
required to be invested overnight.]
(d) (i) The Servicer, for the benefit of the Series [199_-_]
Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account (the "Excess
Funding Account"), which shall be identified as the "Excess Funding Account
for CARCO Auto Loan Master Trust, Series [199_-_]" and shall bear a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Series [199_-_] Certificateholders. On the Closing
Date, the Seller shall cause to be deposited in the Excess Funding Account
an amount equal to the excess of the Initial Principal Amount of the Series
[199_-_] Certificates, if any, over the Initial Invested Amount on the
Closing Date, which excess is equal to [ ].
(ii) At the direction of the Servicer, funds on deposit in the
Excess Funding Account shall be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall
be held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Excess Funding Account shall be applied as set forth in
Section 4.06(a) of this Series Supplement.
Funds deposited in the Excess Funding Account on any Distribution Date
shall be invested at the direction of the Servicer in Eligible Investments
that will mature so that such funds will be available on or before the
close of business on the Business Day next preceding the following
Distribution Date. Funds deposited in the Excess Funding Account on a
Business Day (which immediately precedes a Distribution Date) upon the
maturity of any Eligible Investments are not required to be invested
overnight.]
(e) (i) The Servicer, for the benefit of the Series [199_-_]
Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account (the "Interest
Funding Account"), which shall be identified as the "Interest Funding
Account for the CARCO Auto Loan Master Trust Series [199_-_]" and shall
bear a designation clearly indicating that the funds deposited therein are
held for the benefit of the Series [199_-_] Certificateholders.
(ii) At the direction of the Servicer, funds on deposit in the
Interest Funding Account shall be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall
be held by the Trustee for the benefit of the Series [199_-_]
Certificateholders. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Interest Funding Account shall be applied as set forth in
Section 4.06(a) [or 4.06(b), as applicable,] of this Series Supplement.
Funds deposited in the Interest Funding Account on any Distribution Date
(which are not distributed to Certificateholders pursuant to Section 4.07
on such Distribution Date) shall be invested at the direction of the
Servicer in Eligible Investments that will mature so that such funds will
be available on or before the close of business on the Business Day
preceding the next following Distribution Date. Funds deposited in the
Interest Funding Account on a Business Day (which immediately precedes a
Distribution Date) upon the maturity of any Eligible Investments are not
required to be invested overnight.]
(f) (i) The Trustee shall possess all right, title and interest
in and to all funds on deposit from time to time in, and all Eligible
Investments credited to, [the Reserve Fund,] [the Yield Supplement
Account,] [the Principal Funding Account,] [the Excess Funding Account]
[and the Interest Funding Account] (collectively the "Series [199_-_]
Accounts") and in all proceeds thereof. The Series [199_-_] Accounts shall
be under the sole dominion and control of the Trustee for the benefit of
the Certificateholders. If, at any time, any of the Series [199_-_]
Accounts ceases to be an Eligible Deposit Account, the Trustee (or the
Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Series [199_-_] Account meeting the conditions
specified in paragraph [(a)(i), (b)(i), (c)(i), (d)(i) or (e)(i)] above, as
applicable, as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Series [199_-_] Account. Neither the
Seller, the Servicer nor any person or entity claiming by, through or under
the Seller, the Servicer or any such person or entity shall have any right,
title or interest in, or any right to withdraw any amount from, any Series
[199_-_] Account, except as expressly provided herein. Schedule 1, which
is hereby incorporated into and made part of this Series Supplement,
identifies each Series [199_-_] Account by setting forth the account number
of each such account, the account designation of each such account and the
name of the institution with which such account has been established. If a
substitute Series [199_-_] Account is established pursuant to this Section,
the Servicer shall provide to the Trustee an amended Schedule 1, setting
forth the relevant information for such substitute Series [199_-_] Account.
(ii) Pursuant to the authority granted to the Servicer in
Section 3.01(a) of the Agreement, the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and payments or to instruct
the Trustee to make withdrawals and payments from the Series [199_-_]
Accounts for the purposes of carrying out the Servicer's or Trustee's
duties hereunder.
[(g) Unless otherwise agreed to by the Rating Agencies, at no
time may greater than 10% of the outstanding principal balance of the
Series [199_-_] Certificates be invested in Eligible Investments (other
than obligations of the United States government) of any single entity or
its Affiliates.]
SECTION 4.05. Deficiency Amount. With respect to each
Distribution Date [that occurs on or prior to the Fully Reinvested Date [or
any Distribution Date thereafter during the Revolving Period], on the
related Determination Date, the Servicer shall determine the amount (the
"Deficiency Amount"), if any, by which (a) the sum of (i) Monthly Interest
for such Distribution Date, (ii) any Monthly Interest previously due but
not [deposited to the Interest Funding Account or] distributed to the
Series [199_-_] Certificateholders on a prior Distribution Date,
(iii) Additional Interest, if any, for such Distribution Date and any
Additional Interest previously due but not [deposited to the Interest
Funding Account or] distributed to the Series [199_-_] Certificateholders
on a prior Distribution Date, (iv) the Certificateholders Monthly Servicing
Fee for such Distribution Date, (v) the Investor Default Amount, if any,
for such Distribution Date and (vi) the Series [199_-_] Allocation
Percentage of the amount of any Adjustment Payment required to be deposited
in the Collection Account pursuant to Section 3.09(a) of the Agreement with
respect to the related Collection Period that has not been so deposited as
of such Determination Date, exceeds (b) the sum of [(i)] Investor Non-
Principal Collections for such Distribution Date plus any Investment
Proceeds with respect to such Distribution Date [and (ii) the amount of
funds in the Reserve Fund which are available pursuant to Section 4.08(a)
to cover any portion of the Deficiency Amount.] The lesser of the
Deficiency Amount and the Available Subordinated Amount shall be the
"Required Subordination Draw Amount". [Include other sources of funds and
applications of the Required Subordination Draw Amount, as appropriate.]
SECTION 4.06. Application of Investor Non-Principal Collections,
Investment Proceeds and Available Investor Principal Collections. The
Servicer shall cause the Trustee to apply, on each Distribution Date,
Investor Non-Principal Collections, Investment Proceeds and Available
Investor Principal Collections [other amounts] to make the following
distributions:
(a) On each Distribution Date [with respect to a Collection
Period that ends prior to the Fully Reinvested Date [and each Collection
Period thereafter during the Revolving Period], an amount equal to the sum
of Investor Non-Principal Collections and any Investment Proceeds with
respect to such Distribution Date [other amounts] will be distributed in
the following priority:
[(i) first, an amount equal to Monthly Interest for such
Distribution Date, plus the amount of any Monthly Interest previously
due but not [deposited to the Interest Funding Account or] distributed
to the Series [199_-_] Certificateholders on a prior Distribution
Date, plus the amount of any Additional Interest for such Distribution
Date and any Additional Interest previously due but not [deposited to
the Interest Funding Account or] distributed to the Series [199_-_]
Certificateholders on a prior Distribution Date shall be [deposited to
the Interest Funding Account] [distributed to the Series [199_-_]
Certificateholders];
(ii) second, an amount equal to the Certificateholders Monthly
Servicing Fee for such Distribution Date shall be distributed to the
Servicer (unless such amount has been netted against deposits to the
Collection Account or waived);
[(iii) third, an amount equal to the Reserve Fund Deposit Amount, if
any, for such Distribution Date shall be deposited in the Reserve
Fund;]
(iv) fourth, an amount equal to the Investor Default Amount for
such Distribution Date shall be treated as a portion of Investor
Principal Collections for such Distribution Date;
[(v) fifth, an amount equal to the Carry-over Amount (after
giving effect to any withdrawals from the Yield Supplement Account on
such Distribution Date), if any, for such Distribution Date, plus the
amount of any Carry-over Amount previously due but not previously
distributed to the Series [199_-_] Certificateholders on a prior
Distribution Date, plus the amount of any Additional Carry-over Amount
for such Distribution Date and any Additional Carry-over Amount
previously due but not previously distributed to the Series [199_-_]
Certificateholders on a prior Distribution Date shall be distributed
to the Series [199_-_] Certificateholders;]
[(vi) sixth, an amount equal to the Yield Supplement Account
Deposit Amount, if any, for such Distribution Date shall be deposited
in the Yield Supplement Account;] and
[(vii) seventh, describe other applications, if any]; and
(viii) eighth, the balance, if any, shall constitute Excess
Servicing and shall be allocated and distributed as set forth in
Section 4.10.]
[(b) On each Distribution Date with respect to a Collection
Period that ends after the Fully Reinvested Date [other than any such
Collection Period during the Revolving Period], any Investment Proceeds
[describe other funds] with respect to such Distribution Date will be
distributed in the following priority:
(i) first, (x) an amount equal to Monthly, Interest for such
Distribution Date, plus the amount of any Monthly Interest previously
due but not [deposited in the Interest Funding Account or] distributed
to the Series [199_-_] Certificateholders on a prior Distribution
Date, plus the amount of any Additional Interest for such Distribution
Date and any Additional Interest previously due but not [deposited in
the Interest Funding Account or] distributed to Series [199_-_]
Certificateholders on a prior Distribution Date shall be [deposited in
the Interest Funding Account] [distributed to Series [199_-_]
Certificatesholders;
[(ii) second, describe other applications; and]
(iii) third, the balance, if any, shall be distributed to the
Seller.]
(c) On each Distribution Date with respect to the Revolving
Period, an amount equal to Available Investor Principal Collections
deposited in the Collection Account for the related Collection Period shall
be [allocated first to make a deposit to the Excess Funding Account if the
sum of (i) the Invested Amount and (ii) the amount on deposit in the Excess
Funding Account (other than any Investment Proceeds) prior to the
allocation on such Distribution Date is less than the outstanding principal
balance of the Series [199_-_] Certificates and second] treated as Excess
Principal Collections and applied in accordance with Section 4.04 of the
Agreement.
(d) On each Distribution Date with respect to the [Accumulation
Period] [Controlled Amortization Period] or an Early Amortization Period
[or Reinvestment Period], an amount equal to Available Investor Principal
Collections will be distributed in the following priority:
(i) first, an amount equal to Monthly Principal for such
Distribution Date, shall be [deposited by the Servicer or the Trustee
into the Principal Funding Account, in the case of the Accumulation
Period or] [any Reinvestment Period, or] distributed to Series [199_-
_] Certificateholders, in the case of [the Controlled Amortization
Period or] and Early Amortization Period; and
(ii) second, for each Distribution Date with respect to the
[Accumulation Period] [Controlled Amortization Period] unless an Early
Amortization Event [or Reinvestment Event] [that has not been cured as
described herein] has occurred, after giving effect to the
transactions referred to in clause (i) above, an amount equal to the
balance, if any, of such Available Investor Principal Collections
shall be treated as Excess Principal Collections and applied in
accordance with Section 4.04 of the Agreement and Section 4.11 hereof.
SECTION 4.07. Distributions to Series [199_-_]
Certificateholders. (a) The Servicer shall cause the Trustee to make the
following distributions at the following times from the Collection Account,
[the Reserve Fund,] [the Principal Funding Account] [the Interest Funding
Account,] [other] and [the Excess Funding Account]:
(i) on each [Distribution Date] [Interest Payment Date and
Special Payment Date], all amounts on deposit in the Collection
Account, [the Reserve Fund,] [the Interest Funding Account,] [other]
that are payable to the Series [199_-_] Certificateholders with
respect to accrued interest will be distributed to the Series [199_-_]
Certificateholders;
[(ii) on each Distribution Date with respect to the Controlled
Amortization Period, all amounts on deposit in the Collection Account
[and the Excess to the Series [199_-_] Certificateholders with respect
to principal will be distributed to the Series [199_-_]
Certificateholders;] and
(iii) on each Special Payment Date and on the Expected Payment
Date, all amounts on deposit in the Principal Funding Account [and the
Excess Funding Account] [other], up to a maximum amount on any such
day equal to the excess of the outstanding principal balance of the
Series [199_-_] Certificates over the unreimbursed Investor Charge-
Offs, shall be distributed to the Series [199_-_] Certificateholders.
[(b) On each Distribution Date on which there is any Carry-over
Amount or Additional Carry-over Amount, the Servicer shall instruct the
Trustee to distribute to the Certificateholders the amounts payable with
respect thereto pursuant to Section 4.04(b)(iii) and Section 4.06(a).]
(c) The distributions to be made pursuant to this Section are
subject to the provisions of Sections 2.03, 9.02, 10.01 and 12.02 of the
Agreement and Sections 9.01 and 9.02 of this Series Supplement.
SECTION 4.08. Application of [Reserve Fund and] Available
Subordinated Amount. [(a) If the portion of Investor Non-Principal
Collections and Investment Proceeds allocated to Series [199_-_]
Certificateholders on any Distribution Date pursuant to Section 4.06(a) [or
4.06(b)] is not sufficient to make the entire distributions required on
such Distribution Date by Sections 4.06(a)[(i), (ii) and (iv)], [or
4.06(b)(i), respectively], the Servicer shall cause the Trustee to withdraw
funds from the Reserve Fund to the extent available therein, and apply such
funds to complete the distributions pursuant to Section 4.06[(a)(i), (ii)
and (iv)] [or 4.06(b)(i), as the case may be]; provided, however, that
during any Early Amortization Period (other than an Early Amortization
Period which has ended as described in clause [ ] of the definition
thereof) [or Reinvestment Period (other than a Reinvestment Period that has
ended as described in clause [ ] of the definition thereof) funds shall
not be withdrawn from the Reserve Fund to make distributions otherwise
required by Section 4.06(a)(iv) to the extent that, after giving effect to
such withdrawal, the amount on deposit in the Reserve Fund shall be less
than $1,000,000.]
(b) If there is a Required Subordination Draw Amount for such
Distribution Date, the Servicer shall apply or cause the Trustee to apply
the Available Seller's Collections on deposit in the Collection Account on
such Distribution Date, but only up to the amount of the Required
Subordination Draw Amount, to make the distributions required by Sections
4.06[(a)(i), (ii) and (iv)] [that have not been made through the
application of funds from the Reserve Fund in accordance with the preceding
paragraph]. Any such Available Seller's Collections remaining after the
application thereof pursuant to the preceding sentence shall be treated as
a portion of Investor Principal Collections for such Distribution Date, but
only up to the amount of unpaid Adjustment Payments allocated to Series
[199_-_] as described in Section 4.05(a)(vi). The amount of the Available
Seller's Collections applied in accordance with the two preceding sentences
shall reduce the Available Subordinated Amount in all other cases as
described in clause (A) of the definition thereof. If the Required
Subordination Draw Amount exceeds Available Seller's Collections for such
Distribution Date, the Available Subordinated Amount shall be further
reduced by the amount of such excess, but not by more than the sum of (x)
the Investor Default Amount and (y) the amount of unpaid Adjustment
Payments allocated to Series [199_-_] as described in Section 4.05 (a)(vi).
[(c) If, after giving effect to the allocations of,
distributions from, and deposits in, the Reserve Fund made pursuant to
Sections 4.01(c), 4.04, 4.06(a), 4.08(a) and 4.08(d), (i) the amount in the
Reserve Fund is greater than the Reserve Fund Required Amount (or, for any
Distribution Date with respect to an Early Amortization Period [or
Reinvestment Period], the Excess Reserve Fund Required Amount) for such
Distribution Date, the Servicer shall cause the Trustee to distribute such
excess amount to the Seller, subject to the proviso contained in paragraph
(e) or (ii) the amount in the Reserve Fund is less than such Reserve Fund
Required Amount, then the Trustee shall deposit any remaining Available
Seller's Collections on deposit in the Collection Account for such
Distribution Date after giving effect to Section 4.09(b) into the Reserve
Fund until the amount in the Reserve Fund is equal to such Reserve Fund
Required Amount. On the Termination Date, any funds in the Reserve Fund
will be treated as Available Investor Principal Collections. Upon payment
in full of the outstanding principal balance of the Series [199_-_]
Certificates, any funds remaining on deposit in the Reserve Fund shall be
paid to the Seller.]
[(d) If, for any Distribution Date with respect to an Early
Amortization Period [or a Reinvestment Period], after giving effect to the
allocations of, distributions from, and deposits in, the Reserve Fund made
pursuant to Sections 4.01(c), 4.04, 4.06(a) and 4.08(a), the amount in the
Reserve Fund is less than the Excess Reserve Fund Required Amount for such
Distribution Date, the Trustee shall deposit any remaining Available
Seller's Collections on deposit in the Collection Account for such
Distribution Date into the Reserve Fund until the amount in the Reserve
Fund is equal to such Excess Reserve Fund Required Amount.]
(e) The balance of Available Seller's Collections on any
Distribution Date, after giving effect to any distributions thereof
pursuant to Section [4.08(a), (b), (c) or (d),] shall be distributed to the
Seller on such Distribution Date[; provided that, in the case of any
remaining Available Seller's Principal Collections, if the Trust Available
Subordinated Amount for the immediately preceding Determination Date
exceeds the Seller's Participation Amount on such date (determined after
giving effect to any Principal Receivables transferred to the Trust on such
Distribution Date), Section 4.08(c) hereof shall not apply and the amount
of such excess shall be deposited into the Reserve Fund, with any remaining
Available Seller's Principal Collections paid to the Seller.]
SECTION 4.09. Investor Charge-Offs. If, on any Distribution
Date on which the Available Subordinated Amount on the preceding
Determination Date (after giving effect to the allocations, distributions,
withdrawals and deposits to be made on such Distribution Date) is zero and
the Deficiency Amount for such Distribution Date is greater than zero, the
Invested Amount shall be reduced by the amount of the excess of such
Deficiency Amount over any remaining Available Subordinated Amount on such
Determination Date, but not by more than the Investor Default Amount.
Investor Charge-Offs shall thereafter be reimbursed and the Invested Amount
increased (but not by an amount in excess of the aggregate unreimbursed
Investor Charge-Offs on any Distribution Date) by the sum of (a) Allocable
Miscellaneous Payments with respect to such Distribution Date and (b) the
amount of Excess Servicing allocated and available for that purpose
pursuant to Section 4.10(a).
SECTION 4.10. Excess Servicing. The Servicer shall cause the
Trustee to apply, on each Distribution Date [with respect to Collection
Period that ends prior to the Fully Reinvested Date] [or any such
Collection Period thereafter during the Revolving Period], Excess Servicing
with respect to the Collection Period immediately preceding such
Distribution Date, to make the following distributions in the following
priority:
(a) an amount equal to the aggregate amount of Investor Charge-
Offs which have not been previously reimbursed as provided in
Section 4.09 (after giving effect to the allocation on such
Distribution Date of any amount for that purpose pursuant to
Section 4.09) shall be treated as a portion of Available Investor
Principal Collections with respect to such Distribution Date;
(b) an amount equal to the aggregate outstanding amounts of the
Certificateholders Monthly Servicing Fee which have been previously
waived pursuant to Section 3.01 shall be distributed to the Servicer;
and
[(c) describe other applications;] and
(d) the balance, if any, shall be distributed to the Seller.
SECTION 4.11. Excess Principal Collections.
(a) That portion of Excess Principal Collections for any Distribution Date
equal to the amount of Series [19_-_] Excess Principal Collections for such
Distribution Date will be allocated to Series [199_-_] and will be
distributed as set forth in this Series Supplement.
(b) Series [199_-_] Excess Principal Collections, with respect
to any Distribution Date, shall mean an amount equal to the Series [199_-_]
Principal Shortfall for such Distribution Date; provided, however, that, if
the aggregate amount of Excess Principal Collections for all Series for
such Distribution Date is less than the aggregate amount of Principal
Shortfalls for all Series for such Distribution Date, then Series [199_-_]
Excess Principal Collections for such Distribution Date shall equal the
product of (x) Excess Principal Collections for all Series for such
Distribution Date and [(y) a fraction, the numerator of which is the Series
[199_-_] Principal Shortfall for such Distribution Date and the denominator
of which is the aggregate amount of Principal Shortfalls for all Series for
such Distribution Date] [describe other non-pro rata formula, if
applicable]. The Series [199_-_] Principal Shortfall, with respect to any
Distribution Date, shall equal the excess of (i) (x) [for any Distribution
Date with respect to the Accumulation Period, the Controlled Deposit Amount
[other] [for any Distribution Date with respect to the Controlled
Amortization Period, the Controlled Distribution Amount] [other], or
(y) for any Distribution Date with respect to an Early Amortization Period
[or Reinvestment Period], the [Invested Amount] [other], over
(ii) Available Investor Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Excess Principal
Collections).
[SECTION 4.12. Excess Funding Account. (a) Any funds on
deposit in the Excess Funding Account on [the earlier of] [the [ ]
Distribution Date] [the Principal Commencement Date] will be deposited in
the Principal Funding Account on such date. In addition, on each
Distribution Date with respect to the Controlled Amortization Period an
amount equal to the quotient obtained by dividing the amount on deposit in
the Excess Funding Account as of the [ ] Distribution Date (after giving
effect to any withdrawals from or deposits to such account on such date) by
[ ] will be distributed to Series [199_-_] certificateholders on
such date in respect of principal of the Series [199_-_] Certificates.] In
addition, no funds will be deposited in the Excess Funding Account during
any Early Amortization Period [or Reinvestment Period] or with respect to
any Collection Period following the [ Collection Period] [the
Accumulation Period Commencement Date].
(b) On each Determination Date during the Revolving Period, the
Seller shall determine whether the sum of the Invested Amount and the
amount on deposit in the Excess Funding Account (other than any Investment
Proceeds) is greater than the outstanding principal balance of the Series
[199_-_] Certificates. If on any such Determination Date such sum is
greater than the outstanding principal balance of the Series [199_-_]
Certificates and thus there are sufficient Principal Receivables in the
Trust to permit an increase in the Invested Amount without causing an Early
Amortization Event to occur with respect to any outstanding Series, the
Seller shall notify the Trustee of the amount of the increase in the
Invested Amount. Subject to the provisions set forth below in this
Section 4.12(b) and to Sections 4.12(c) and (d) below, upon receipt of such
notice the Invested Amount shall be increased by the amount specified, and
the Servicer shall instruct the Trustee to withdraw from the Excess Funding
Account and pay to the Seller or allocate to one or more other Series, on
the immediately succeeding Distribution Date, an amount equal to the amount
of such increase in the Invested Amount. Such payment shall be in payment
or partial payment pursuant to the Receivables Purchase Agreement for
additional Principal Receivables transferred to the Trust or allocated to
Series [199_-_]. To the extent that the Invested Amount is increased by
any payment to the Seller or any allocation to one or more other Series,
the Seller's Interest or such other Series' invested amount, as applicable,
shall be reduced by the amount of such payment. In addition, any increase
in the Invested Amount is subject to the condition that after giving effect
to such increase (i) the Pool Balance equals or exceeds (ii) the sum of (A)
the Required Participation Amount, (B) the sum of the Required Subordinated
Amount and the sum of the required subordinated amounts for all other
Series (or, if such other series shall have no required subordinated
amount, the available subordinated amount with respect to such Series) and
(C) the sum of any subordinated amounts supporting any Enhancement for all
other Series. In connection with the foregoing, the Seller shall endeavor
(taking into account any seasonality experienced in the Accounts in the
Trust) to minimize the amounts on deposit, from time to time, in the Excess
Funding Account.
(c) In the event that other Series issued by the Trust provide
for excess funding accounts or other arrangements similar to the Excess
Funding Account involving fluctuating levels of investments in Principal
Receivables, (i) the allocation of additional Principal Receivables to
increase the Invested Amount and the invested amounts of such other Series
(and the related withdrawals from the Excess Funding Account and the other
excess funding or similar accounts) will be based on the proportion that
the amount on deposit in the Excess Funding Account bears to amounts on
deposit in the excess funding accounts of all Series providing for excess
funding accounts or such similar arrangements or to amounts otherwise
similarly available and (ii) the deposit of amounts into the Excess Funding
Account and the excess funding accounts of such other Series will be pro
rata based on the proportion that the Adjusted Invested Amount bears to the
adjusted invested amounts of all Series providing for excess funding
accounts or such similar arrangements.
(d) In the event that any other Series is in an amortization,
early amortization or accumulation period the amounts of any withdrawals
from the Excess Funding Account shall be applied first to satisfy in full
any then applicable funding or payment requirements of such Series and
second to make a payment to the Seller. In the event that more than one
other Series is in an amortization, early amortization or accumulation
period, the amounts of any withdrawals from the Excess Funding Account
shall be allocated (and, if necessary, reallocated) among such Series as
specified in the related Series Supplement to meet the funding or payment
requirements of each such Series first to satisfy in full all then
applicable funding or payment requirements of each such Series and second
to make a payment to the Seller.]
SECTION 4.13 Accumulation Period Length; Accumulation Period
Commencement Date. [On the [ ] Distribution Date the Servicer shall
determine the Accumulation Period Length and the Accumulation Period
Commencement Date and, promptly following such determination, the Servicer
shall notify the Trustee in writing of such determination. In connection
therewith, the Seller hereby agrees not to cause the Trust to issue any new
Series during the period from the date hereof until the date that the
Series [199_-_] Certificates shall have been paid in full, if such issuance
would have an adverse effect on the results obtained by application of the
formula used to compute the Accumulation Period Length. [Add Citi
alternative].
[SECTION 4.14. Enhancement. [To be provided.]
ARTICLE V
Distributions and Reports
to Series [199_-_] Certificateholders
SECTION 5.01. Distributions. (a) On each Distribution Date,
the Trustee shall distribute to each Series [199_-_] Certificateholder of
record on the preceding Record Date (other than as provided in
Section 12.02 of the Agreement respecting a final distribution) such
Certificateholder's pro rata share (based on the aggregate fractional
undivided interests represented by the Series [199_-_] Certificates held by
such Certificateholder) of the amounts on deposit in the Series [199_-_]
Accounts as is payable to the Series [199_-_] Certificateholders on such
Distribution Date pursuant to Section 4.07.
(b) Except as provided in Section 12.02 of the Agreement with
respect to a final distribution, distributions to Series [199_-_]
Certificateholders hereunder shall be made by check mailed to each Series
[199_-_] Certificateholder at such Certificateholder's address appearing in
the Certificate Register without presentation or surrender of any Series
[199_-_] Certificate or the making of any notation thereon; provided,
however, that, with respect to Series [199_-_] Certificates registered in
the name of a Depository, such distributions shall be made to such
Depository in immediately available funds.
SECTION 5.02. Reports and Statements to Series [199_-_]
Certificateholders. (a) At least two Business Days prior to each
Distribution Date, the Servicer will provide to the Trustee, and on each
Distribution Date, the Trustee shall forward to each Series [199_-_]
Certificateholder, a statement substantially in the form of Exhibit B
prepared by the Servicer setting forth certain information relating to the
Trust and the Series [199_-_] Certificates.
(b) A copy of each statement provided pursuant to paragraph (a)
will be made available for inspection at the Corporate Trust Office.
(c) On or before January 31 of each calendar year, beginning
with calendar year 199[], the Trustee shall furnish or cause to be
furnished to each Person who at any time during the preceding calendar year
was a Series [199_-_] Certificateholder (or Certificate Owner), a statement
prepared by the Servicer containing the information which is required to be
contained in the statement to Series [199_-_] Certificateholders as set
forth in paragraph (a) above, aggregated for such calendar year or the
applicable portion thereof during which such Person (or any related
Certificate Owner) was a Series [199_-_] Certificateholder (or Certificate
Owner), together with other information as is required to be provided by an
issuer of indebtedness under the Internal Revenue Code and such other
customary information as is necessary to enable the Series [199_-_]
Certificateholders (or Certificate Owners) to prepare their tax returns.
Such obligation of the Trustee shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by
the Trustee pursuant to any requirements of the Internal Revenue Code as
from time to time in effect.
ARTICLE VI
Amortization Events
SECTION 6.01. Additional Amortization Events. The occurrence of
any of the following events shall, immediately upon the occurrence thereof
without notice or other action on the part of the Trustee or the Series
[199_-_] Certificateholders, be deemed to be an Early Amortization Event
solely with respect to Series [199_-_]:
[(a) the Trust shall file a petition commencing a voluntary case
under any chapter of the Federal bankruptcy laws; or the Trust shall
file a petition or answer or consent seeking reorganization,
arrangement, adjustment, or composition under any other similar
applicable Federal law, or shall consent to the filing of any such
petition, answer, or consent; or the Trust shall appoint, or consent
to the appointment of, a custodian, receiver, liquidator, trustee,
assignee, sequestrator or other similar official in bankruptcy or
insolvency of it or of any substantial part of its property; or the
Trust shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they
become due;
(b) any order for relief against the Trust shall have been
entered by a court having jurisdiction in the premises under any
chapter of the Federal bankruptcy laws, and such order shall have
continued undischarged or unstayed for a period of 60 days; or a
decree or order by a court having jurisdiction in the premises shall
have been entered approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of the Trust
under any other similar applicable Federal law, and such decree or
order shall have continued undischarged or unstayed for a period of
120 days; or a decree or order of a court having jurisdiction in the
premises for the appointment of a custodian, receiver, liquidator,
trustee, assignee, sequestrator, or other similar official in
bankruptcy or insolvency of the Trust or of any substantial part of
its property, or for the winding up or liquidation of its affairs,
shall have been entered, and such decree or order shall have remained
in force undischarged or unstayed for a period of 120 days;
(c) the outstanding principal amount of the Series [199_-_]
Certificates is not repaid by the Expected Payment Date.
(d) on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods is less than [ ]%;
(e) on any Determination Date, the Available Subordinated Amount
for the next Distribution Date will be less than the Required
Subordinated Amount on such Determination Date, after giving effect to
the distributions to be made on the next Distribution Date;
(f) any Service Default with respect to Series
[199_-_] occurs;
(g) on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal
Receivables relating to Used Vehicles exceeds [ ]% of the Pool
Balance on such last day;
(h) on any Determination Date, the quotient obtained by dividing
(i) the sum of (x) the amount on deposit in the Yield Supplement
Account on the next Distribution Date, after giving effect to the
distributions to be made on such Distribution Date, and (y) the amount
on deposit in the Yield Supplement Account on the immediately
preceding Distribution Date, after giving effect to the distributions
made on such Distribution Date, by (ii) the sum of (A) the outstanding
principal balance of the Series [199_-_] Certificates on the next
Distribution Date, after giving effect to all distributions and
payments to be made on such Distribution Date and (B) the outstanding
principal balance of the Series [199_-_] Certificates on the
immediately preceding Distribution Date, after giving effect to all
distributions and payments made on such Distribution Date, is less
than [ ];
(i) any Carry-over Amount or Additional Carry-over Amount is
outstanding on six consecutive Distribution Dates;
(j) the outstanding principal amount of the Series 199_-_
Certificates is not repaid by the Expected Payment Date; and
(k) [other].
ARTICLE VII
Reinvestment Events
SECTION 7.01. Reinvestment Events. If any one of the following
events shall occur:
(a) a failure by the Seller to convey Receivables in Additional
Accounts to the Trust within five Business Days after the day on which it
is required to convey such Receivables pursuant to the Agreement;
(b) the Servicer (or CCC, if it is not the Servicer) shall file a
petition commencing a voluntary case under any chapter of the Federal
bankruptcy laws; or the Servicer (or CCC, as aforesaid) shall file a
petition or answer or consent seeking reorganization, arrangement,
adjustment, or composition under any other similar applicable Federal law,
or shall consent to the filing of any such petition, answer, or consent; or
the Servicer (or CCC, as aforesaid) shall appoint, or consent to the
appointment of, a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other similar official in bankruptcy or insolvency of it or
of any substantial part of its property; or the Servicer (or CCC, as
aforesaid) shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become
due;
(c) any order for relief against the Servicer (or CCC, if it is
not the Servicer) shall have been entered by a court having jurisdiction in
the premises under any chapter of the Federal bankruptcy laws, and such
order shall have continued undischarged or unstayed for a period of
60 days; or a decree or order by a court having jurisdiction in the
premises shall have been entered approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of the
Servicer (or CCC, as aforesaid) under any other similar applicable Federal
law, and such decree or order shall have continued undischarged or unstayed
for a period of 120 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a custodian, receiver,
liquidator, trustee, assignee, sequestrator, or other similar official in
bankruptcy or insolvency of the Servicer (or CCC, as aforesaid) or of any
substantial part of its property, or for the winding up or liquidation of
its affairs, shall have been entered, and such decree or order shall have
remained in force undischarged or unstayed for a period of 120 days;
(d) CFC or Chrysler shall file a petition commencing a voluntary
case under any chapter of the Federal bankruptcy laws; or CFC or Chrysler
shall file a petition or answer or consent seeking reorganization,
arrangement, adjustment, or composition under any other similar applicable
Federal law, or shall consent to the filing of any such petition, answer,
or consent; or CFC or Chrysler shall appoint, or consent to the appointment
of, a custodian, receiver, liquidator, trustee, assignee, sequestrator or
other similar official in bankruptcy or insolvency of it or of any
substantial part of its property; or CFC or Chrysler shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due;
(e) any order for relief against CFC or Chrysler shall have been
entered by a court having jurisdiction in the premises under any chapter of
the Federal bankruptcy laws, and such order shall have continued
undischarged or unstayed for a period of 60 days; or a decree or order by a
court having jurisdiction in the premises shall have been entered approving
as properly filed a petition seeking reorganization, arrangement,
adjustment, or composition of CFC or Chrysler under any other similar
applicable Federal law, and such decree or order shall have continued
undischarged or unstayed for a period of 120 days; or a decree or order of
a court having jurisdiction in the premises for the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator, or other
similar official in bankruptcy or insolvency of CFC or Chrysler or of any
substantial part of its property, or for the winding up or liquidation of
its affairs, shall have been entered, and such decree or order shall have
remained in force undischarged or unstayed for a period of 120 days;
(f) failure on the part of the Seller, the Servicer or CCC, as
applicable, (i) to make any payment or deposit (including any Transfer
Deposit Amount or Adjustment Payment) required by the terms of the
Agreement or the Receivables Purchase Agreement on or before the date
occurring two Business Days after the date such payment or deposit is
required to be made therein, or (ii) with respect to any Series, to deliver
a Distribution Date Statement within five Business Days of the day such
item is due to be delivered under the Agreement, or (iii) duly to observe
or perform in any material respect the covenant of the Seller set forth in
Section 2.06(a) of the Agreement or (iv) duly to observe or perform in any
material respect any other covenants or agreements of the Seller or the
Servicer, as the case may be, set forth in the Agreement or the Receivables
Purchase Agreement, which failure in the case of this clause (iv) continues
unremedied for a period of 45 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Seller by the Trustee or any Enhancement Provider;
(g) any representation or warranty made by CCC in the Receivables
Purchase Agreement or the Seller in the Agreement or any information
contained in a computer file or microfiche or written list required to be
delivered by the Seller pursuant to Section 2.01, 2.05, 2.07 or 2.08 of the
Agreement, (i) shall prove to have been incorrect in any material respect
when made or when delivered, and shall continue to be incorrect in any
material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Seller by the Trustee and (ii) as a result of such
incorrectness the interests of the Holders of the Investor Certificates are
materially and adversely affected; provided, however, that a Reinvestment
Event shall not be deemed to have occurred under this paragraph if the
Seller has repurchased the related Receivable or all such Receivables, if
applicable, during such period in accordance with the provisions of the
Agreement;
(h) on any Determination Date, the average of the Monthly Payment
Rates for the two preceding Collection Periods is less than 20%;
(i) on any Determination Date, the Available Subordinated Amount
for the next Distribution Date will be less than the Required Subordinated
Amount on such Determination Date, after giving effect to the distributions
to be made on the next Distribution Date;
(j) any Service Default with respect to Series [199_-_] occurs;
(k) on any Determination Date, as of the last day of the
preceding Collection Period, the aggregate amount of Principal Receivables
relating to Used Vehicles exceeds [ ]% of the Pool Balance on such last
day;
(l) on any Determination Date, the quotient obtained by dividing
(i) the sum of (x) the amount on deposit in the Yield Supplement Account on
the next Distribution Date, after giving effect to the distributions to be
made on such Distribution Date, and (y) the amount on deposit in the Yield
Supplement Account on the immediately preceding Distribution Date, after
giving effect to the distributions made on such Distribution Date, by
(ii) the sum of (A) the outstanding principal balance of the
Series [199_-_] Certificates on the next Distribution Date, after giving
effect to all distributions and payments to be made on such Distribution
Date, and (B) the outstanding principal balance of the Series [199_-_]
Certificates on the immediately preceding Distribution Date, after giving
effect to all distributions and payments made on such Distribution Date, is
less than [ ]%;
(m) interest at the Certificate Rate is not paid on the
Series [199_-_] Certificates on any [Distribution Date] [Interest Payment
Date];
(n) the delivery by the Seller to the Trustee of a notice,
stating that the Seller will no longer continue to sell Receivables to the
Trust on [ ] or any yearly anniversary thereof; provided that the Seller
shall have delivered to the Trustee an Opinion of Counsel to the effect
that, following the suspension of the sale of Receivables, the Trust shall
not become an "investment company" within the meaning of the Investment
Company Act;
(o) any Carry-over Amount or Additional Carry-over Amount is
outstanding on six consecutive Distribution Dates; or
(p) [other];
then, subject to applicable law, and after the applicable grace period, if
any, a reinvestment event (a "Reinvestment Event") shall occur without any
notice or other action on the part of the Trustee, any Agent, the
Series [199_-_] Certificateholders or any other Beneficiary, immediately
upon the occurrence of such event.] 1/ <F1>
<F1>
1/ Delete or modify as appropriate.
[ARTICLE VIII
Optional Repurchase
SECTION 8.01. Optional Repurchase. (a) On any Distribution
Date occurring after the date on which the Invested Amount is reduced to $[
] or less, the Seller shall have the option, subject to the condition
set forth in paragraph (c) to purchase the entire Series [199_-_]
Certificateholders' Interest, at a purchase price equal to the Reassignment
Amount for such Distribution Date.
(b) The Seller shall give the Servicer and the Trustee at least
10 days' prior written notice of the Distribution Date on which the Seller
intends to exercise such purchase option. Not later than 12:00 noon, New
York City time, on such Distribution Date the Seller shall deposit the
Reassignment Amount into the Collection Account in immediately available
funds. Such purchase option is subject to payment in full of the
Reassignment Amount. The Reassignment Amount shall be distributed as set
forth in Section 9.01(b).
(c) If at the time the Seller exercises its purchase option
hereunder the Seller's long-term unsecured debt has a rating lower than Baa
by Moody's, the Seller shall deliver to the Trustee on such Distribution
Date an Opinion of Counsel (which must be an independent outside counsel)
to the effect that, in reliance on certain certificates to the effect that
the Series [199_-_] Certificateholders' Interest purchased by the Seller
constitutes fair value for the consideration paid therefor and as to the
solvency of the Seller, the purchase of the Series [199_-_]
Certificateholders' Interest would not be considered a fraudulent
conveyance under applicable law.]
ARTICLE IX
Final Distributions
SECTION 9.01. Sale of Certificateholders' Interest Pursuant to
Section 2.03 of the Agreement; Distributions Pursuant to [Section 8.01 of
this Series Supplement or] Section 2.03 or 12.02(c) of the Agreement.
(a) The amount to be paid by the Seller to the Collection Account with
respect to Series [199_-_] in connection with a purchase of the
Certificateholders' Interest pursuant to Section 2.03 of the Agreement
shall equal the Reassignment Amount for the Distribution Date on which such
repurchase occurs.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section [8.01 or] 9.01 of this Series
Supplement or Section 2.03 of the Agreement or any Termination Proceeds
deposited into the Collection Account pursuant to Section 12.02(c) of the
Agreement, the Trustee shall, not later than 12:00 noon, New York City
time, on the Distribution Date on which such amounts are deposited (or, if
such date is not a Distribution Date, on the immediately following
Distribution Date) (in the priority set forth below): (i) first,
(x) deposit the Invested Amount on such date [into the Principal Funding
Account] and (y) deposit the amount of accrued and unpaid interest on the
unpaid balance of the Series [199_-_] Certificates, plus the amount of
Additional Interest, if any, for such Distribution Date and any Additional
Interest, Carry-over Amount, Additional Carry-over Amount or Asset
Composition Premium previously due but not paid to Series [199_-_]
Certificateholders on any prior Distribution Date, up to the Reassignment
Amount for Series [199_-_] and (ii) second, pay the remainder of any
Termination Proceeds to the Seller. [Describe other applications, if any.]
(c) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited [in the Principal
Funding Account] pursuant to Section [8.01 or] 9.01 and all other amounts
on deposit therein shall be distributed in full to the Series [199_-_]
Certificateholders on such date and any distribution made pursuant to
paragraph (b) above shall be deemed to be a final distribution pursuant to
Section 12.02 of the Agreement with respect to Series [199_-_].
SECTION 9.02. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables Pursuant to Section 9.02 of the Agreement.
(a) Not later than 12:00 noon, New York City time, on the Distribution
Date following the date on which the Insolvency Proceeds are deposited into
the Collection Account pursuant to Section 9.02(b) of the Agreement, the
Trustee shall first (in each case, after giving effect to any deposits and
distributions otherwise to be made on such Distribution Date) deduct an
amount equal to the Invested Amount on such Distribution Date from the
portion of the Insolvency Proceeds allocated to Allocable Principal
Collections and deposit such amount in [the Principal Funding Account];
provided that the amount of such deposit shall not exceed the product of
(x) the portion of the Insolvency Proceeds allocated to Allocable Principal
Collections and (y) 100% minus the Excess Seller's Percentage with respect
to the related Collection Period. The remainder of the portion of the
Insolvency Proceeds allocated to Allocable Principal Collections shall be
allocated to the Seller's Interest and shall be released to the Seller on
such Distribution Date. [Describe other applications, if any.]
(b) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Trustee shall first (in each case, after giving
effect to any deposits and distributions otherwise to be made on such
Distribution Date) deduct an amount equal to the sum of (i) Monthly
Interest for such Distribution Date, (ii) any Monthly Interest previously
due but not [deposited to the Interest Funding Account or] distributed on a
prior Distribution Date, (iii) the amount of Additional Interest, if any,
for such Distribution Date and any Additional Interest previously due but
not [deposited to the Interest Funding Account or] distributed on a prior
Distribution Date, [(iv) any Carry-over Amount for such Distribution Date
and any Carry-over Amount previously due but not distributed to the Series
[199_-_] Certificateholders on a prior Distribution Date and (v) the amount
of any Additional Carry-over Amount for such Distribution Date and any
Additional Carry-over Amount previously due but not distributed to the
Series [199_-_] Certificateholders on a prior Distribution Date,] from the
portion of the Insolvency Proceeds allocated to Allocable Non-Principal
Collections and deposit such amount in the Collection Account with such
funds designated by the Trustee as being held for the benefit of the Series
[199_-_] Certificateholders; provided that the amount of such distribution
shall not exceed (x) the product of (A) the portion of the Insolvency
Proceeds allocated to Allocable Non-Principal Collections and (B) 100%
minus the Excess Seller's Percentage. The remainder of the portion of the
Insolvency Proceeds allocated to Allocable Non-Principal Collections shall
be allocated to the Seller's Interest and shall be released to the Seller
on such Distribution Date. [Describe other applications, if any.]
(c) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited in the Principal
Funding Account and the Collection Account pursuant to this Section and all
other amounts on deposit therein shall be distributed in full to the Series
[199_-_] Certificateholders on the Distribution Date on which funds are
deposited pursuant to this Section (or, if not so deposited on a
Distribution Date, on the immediately following Distribution Date) and any
distribution made pursuant to this Section shall be deemed to be a final
distribution pursuant to Section 12.02 of the Agreement with respect to
Series [199_-_].
ARTICLE X
Other Series Provisions
SECTION 10.01. Certain Permitted Actions; Amendments to the
Agreement; Additional Covenants. (a) Notwithstanding anything to the
contrary in the Agreement, funds on deposit in the Collection Account may
be invested in any Eligible Investments (as that term is defined in this
Series Supplement).
(b) Notwithstanding anything to the contrary in the Agreement,
including Section 2.07(c) thereof, the Seller shall not be required to make
any deposit to the Collection Account in respect of the Repurchased
Receivables Price of any receivables repurchased by the Seller from the
Trust pursuant to such Section.
(c) Notwithstanding anything to the contrary in the Agreement,
including Section 4.03(b) thereof, but subject to the other limitations set
forth therein, CCC need not deposit collections with respect to any
Collection Period in the Collection Account until [ ], a.m., New York
City time, on the related Distribution Date.
(d) Each Holder of a Series [199_-_] Certificate, by such
Holder's acceptance thereof, will be deemed to have consented to an
amendment to the Agreement that incorporates the provisions of
Sections 10.01(a), 10.01(b) and 10.01(c), it being understood that no such
amendment shall be effective unless and until each Series of Investor
Certificates issued prior to [ ], 199[ ], shall no longer be
outstanding or shall have consented to such amendment in accordance with
the Agreement.
(e) Except for the conveyance hereunder to the Trustee, the
Seller will not sell, pledge, assign or transfer to any other Person any
rights it might have to funds on deposit in [the Reserve Fund,] [the
Principal Funding Account,] [the Excess Funding Account,] [the Yield
Supplement Account,] [other,] or Investment Proceeds with respect thereto.
[SECTION 10.02. Effect of Fully Reinvested Date; Conveyance of
Receivables. (a) Notwithstanding anything to the contrary in the
Agreement, upon the occurrence of the Fully Reinvested Date, after giving
effect to all allocations, distributions, withdrawals and deposits to be
made on such date, the following provisions of the Agreement shall no
longer apply to the Seller or the Servicer, as applicable, the Series
[199_-_] Certificates or the Series [199_-_] Certificateholders[, unless,
in each case, the Revolving Period shall have recommenced]:
(i) Section 2.01 (except to the extent it relates to amounts
received with respect to the Receivables and the Collateral Security
and proceeds (including "proceeds" as defined in Section 9-306 of the
UCC as in effect in the State of Michigan and Recoveries) thereof on
deposit in the Series [199_-_] Accounts on the Fully Reinvested Date,
after giving effect to all such allocations, distributions,
withdrawals and deposits);
(ii) Section 2.03(i) and Section 2.03(j) (except to the extent
it relates to amounts received with respect to the Receivables and the
Collateral Security and proceeds (including "proceeds" as defined in
Section 9-306 of the UCC as in effect in the State of Michigan and
Recoveries) thereof on deposit in the Series [199_-_] Accounts on the
Fully Reinvested Date, after giving effect to all such allocations,
distributions, withdrawals and deposits) and all obligations and
remedies in Section 2.03 relating to a breach of the representations
contained in those Sections other than to the extent provided above);
(iii) Section 2.04;
(iv) Section 2.05; provided, that the Seller may from time to
time at its sole discretion, voluntarily designate additional Accounts
(including Partial Accounts) to be included as Accounts and transfer
to the Trust the Receivables (and the related Collateral Security) of
such Additional Accounts;
(v) Sections 2.06(a),(b),(c) and (d);
(vi) Section 2.07; provided, that the Seller may from time to
time at its sole discretion remove Accounts from the Trust;
(vii) Section 2.08;
(viii) Section 2.09;
(ix) the first sentence of Section 3.01(a), Section 3.01(b) and
Section 3.01(d);
(x) Section 3.03(a)(vii), Section 3.03 (viii), Section 3.03
(ix), Section 3.03(x) and Section 3.03(xi) and all obligations and
remedies contained in Sections 3.03(a) and 3.03(b) relating to a
breach of the representations contained in those Sections;
(xi) Section 3.06;
(xii) Section 3.07;
(xiii) Section 3.09;
(xiv) Section 4.03;
(xv) Section 4.04;
(xvi) Section 6.03(b) (except for the first, second and last
sentences thereof) and the last two sentences of Section 6.03(c) and
the conditions set forth in Section 6.03(c) to the exchange of CARCO
Certificate;
(xvii) Section 8.06;
(xviii) Section 8.08;
(xix) Section 11.01(e); and
[(xx) [Sections 13.02(a),(b) and (c) and] clauses (ii) and (iii)
of Section 13.02(d).
(b) Upon the later to occur of (i) the Fully Reinvested Date and
the making of all allocations, distributions, withdrawals and deposits to
be made on such date and (ii) the date on which each other Series is either
no longer outstanding or the fully reinvested date has occurred with
respect thereto, the Trustee shall sell, assign and convey to the Seller or
its designee, without recourse, representation or warranty, all right,
title and interest of the Trust in the Receivables, whether then existing
or thereafter created, all Collateral Security with respect thereto, all
monies due or to become due and all amounts received with respect thereto
and all proceeds thereof except for amounts on deposit in the Collection
Account that are allocable to Investor Certificates and amounts on deposit
in any Series Account. The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as
shall be reasonably requested by the Seller to vest in the Seller or its
designee all right, title and interest which the Trust had in all such
property.]
[SECTION 10.03. Tax Treatment. The Seller has entered into the
Agreement and this Series Supplement and the Series [199_-_] Certificates
have been issued with the intention that the Series [199_-_] Certificates
will quality under applicable tax law as indebtedness of the Seller secured
by the Trust assets attributable to the Series [199_-_] Certificates. The
Seller, each Beneficiary and each Series [199_-_] Certificateholder and
Certificate Owner, by the acceptance of its Series [199_-_] Certificate or
Book-Entry Certificate, as applicable, agrees to treat the Series [199_-_]
Certificates as indebtedness of the Seller secured by the Trust assets
attributable to the Series [199_-_] Certificates, for Federal income taxes,
state and local income and franchise taxes, Michigan Single Business tax
and any other taxes imposed on or measured by income in whole or in part.
ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Ratification of Agreement. As supplemented by
this Series Supplement, the Agreement is in all respects ratified and
confirmed and the Agreement as so supplemented by this Series Supplement
shall be read, taken and construed as one and the same instrument.
SECTION 11.02. Counterparts. This Series Supplement may be
executed in two or more counterparts (and by different parties on separate
counterparts) each of which shall be an original, but all of which together
shall constitute one and the same instrument.
[SECTION 11.03 Dealer Concentrations. So long as this Series
[199_-_] shall be outstanding, on the last day of each Collection Period,
the Servicer shall determine if the aggregate amount of Principal
Receivables due from any Dealer or group of affiliated Dealers on such date
is greater than [ ]% of the Pool Balance on such date. The Servicer
shall promptly provide the Trustee a report setting forth the basis for
such determination. The Trustee upon request from any Rating Agency will
make such report available to such Rating Agency.]
SECTION 11.04. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective
officers as of the day and year first above written.
U.S. AUTO RECEIVABLES COMPANY,
Seller,
by
--------------------------------
CHRYSLER CREDIT CORPORATION,
Servicer,
by
--------------------------------
MANUFACTURERS AND TRADERS
TRUST COMPANY, Trustee,
by
--------------------------------
<PAGE>
EXHIBIT A
FORM OF FACE OF CERTIFICATE
Initial
REGISTERED Invested Amount: 1/<F1>
$
-------------------
Certificate No. R-[ ]
CUSIP NO.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer
or its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]
CARCO AUTO LOAN MASTER TRUST
[FLOATING RATE] [ %] AUTO LOAN
ASSET BACKED CERTIFICATES, SERIES [199_-_]
evidencing a fractional undivided interest in certain
assets of the
CARCO AUTO LOAN MASTER TRUST
the corpus of which consists primarily of wholesale (i.e., dealer
floorplan) receivables (the "Receivables") generated from time to time in
the ordinary course of business in a portfolio of revolving financing
arrangements (the "Accounts") of Chrysler Credit Corporation meeting
certain eligibility criteria. This certificate (a "Certificate") does not
represent an interest in, or obligation of, U.S. Auto Receivables Company
(the "Seller" or "USA"), Chrysler Credit Corporation or any affiliate
thereof.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate shall
not be entitled to any benefit under the Pooling and Servicing Agreement
referred to on the reverse side hereof or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Seller has caused this Certificate to be
duly executed.
U.S. AUTO RECEIVABLES COMPANY,
by
---------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates described in the within-mentioned Pooling
and Servicing Agreement.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee,
by
---------------------------------
Authorized Officer
<F1>
1/ Denominations of $[1,000] [other] and integral multiples of $[1,000]
[other] in excess thereof.
<PAGE>
FORM OF THE REVERSE OF CERTIFICATE
This certifies that Cede & Co. (the "Series [199_-_]
Certificateholder"), is the registered owner of a fractional undivided
interest in certain assets of the CARCO AUTO LOAN MASTER TRUST (the
"Trust") created pursuant to a Pooling and Servicing Agreement dated as of
May 31, 1991, as assigned by Chrysler Auto Receivables Company to U.S. Auto
Receivables Company (the "Seller") on August 8, 1991 (as assigned and as
amended and supplemented from time to time, the "P&S"), as supplemented by
the Series [199_-_] Supplement dated as of [ ], 199[ ], (the
"Series Supplement"), among the Seller, Chrysler Credit Corporation, as
servicer, and Manufacturers and Traders Trust Company, as trustee (the
"Trustee") that are allocated to the Series [199_-_] Certificateholders'
Interest pursuant to the P&S and the Series Supplement. The P&S and the
Series Supplement are hereinafter collectively referred to as the Pooling
and Servicing Agreement. The corpus of the Trust will include (a) all of
the Seller's right, title and interest in, to and under the Receivables in
each Account and all Collateral Security with respect thereto owned by the
Seller at the close of business on the Cut-Off Date, in the case of the
Initial Accounts, and on the applicable Additional Cut-Off Date, in the
case of Additional Accounts, and all monies due or to become due and all
amounts received with respect thereto and all proceeds (including
"proceeds" as defined in Section 9-306 of the UCC as in effect in the State
of Michigan and Recoveries) thereof, (b) all of the Seller's rights,
remedies, powers and privileges with respect to such Receivables under the
Receivables Purchase Agreement, (c) all of the Seller's right, title and
interest in, to and under the Receivables in each Account (other than any
newly created Receivables in any Designated Account) and all Collateral
Security with respect thereto owned by the Seller at the close of on each
Transfer Date and not theretofore conveyed to the Trust, all monies due or
to become due and all amounts received with respect thereto and all
proceeds (including "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of Michigan and Recoveries) thereof, (d) all monies on
deposit in, and Eligible Investments credited to, the Collection Account or
any Series Account, (e) any Enhancements and (f) all other assets and
interests constituting the Trust. In addition to the Certificates, the
Seller's Certificate will be issued pursuant to the Pooling and Servicing
Agreement which will represent the Seller's Interest in the Trust. The
Seller's Certificate will represent the interest in the Trust Assets not
represented by the Investor Certificates.
The Receivables consist of advances made directly or indirectly
by Chrysler Credit Corporation to domestic automobile dealers franchised by
Chrysler Corporation any or other automobile manufacturers.
Subject to the terms and conditions of the Agreement, the Seller
may from time to time direct the Trustee, on behalf of the Trust, to issue
one or more new Series of Investor Certificates, which will represent
fractional undivided interests in certain of the Trust Assets.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement to which,
as amended and supplemented from time to time, the Series [199_-_]
Certificateholder by virtue of the acceptance hereof assents and is bound.
Although a summary of certain provisions of the Pooling and Servicing
Agreement is set forth below, this Certificate does not purport to
summarize the Pooling and Servicing Agreement and reference is made to the
Pooling and Servicing Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A copy of
the Pooling and Servicing Agreement (without schedules and exhibits) may be
requested from the Trustee by writing to the Trustee at One M&T Plaza,
Buffalo, New York 14203, Attention: Corporate Trust Department. To the
extent not defined herein, the capitalized terms used herein have the
meanings ascribed to them in the Pooling and Servicing Agreement.
The Seller has entered into the Pooling and Servicing Agreement
and the Series [199_-_] Certificates have been (or will be) issued with the
intention that the Series [199_-_] Certificates will qualify under
applicable tax law as indebtedness of the Seller secured by the Trust
assets attributable to the Certificates. The Seller, each Beneficiary and
each Certificateholder and Certificate Owner, by the acceptance of its
Certificate or Book-Entry Certificate, as applicable, agrees to treat the
Series [199_-_] Certificates as indebtedness of the Seller secured by the
Trust assets attributable to the Certificates for Federal income taxes,
state and local income, single business and franchise taxes and any other
taxes imposed on or measured by income.
On each Distribution Date, the Trustee shall distribute to each
Series [199_-_] Certificateholder of record at the close of business on the
day preceding such Distribution Date (each a "Record Date") such
Certificateholder's pro rata share (based on the aggregate fractional
undivided interest represented by the Series [199_-_] Certificates held by
such Certificateholder, except as otherwise provided in the Pooling and
Servicing Agreement) of such amounts on deposit in the Collection Account
and any Series Account as are payable in respect of the Series [199_-_]
Certificates pursuant to the Pooling and Servicing Agreement.
Distributions with respect to this Certificate will be made by the Trustee
by check mailed to the address of the Certificateholder of record appearing
in the Certificate Register without the presentation or surrender of this
Certificate or the making of any notation thereon (except for the final
distribution in respect of this Certificate) except that with respect to
Series [199_-_] Certificates registered in the name of a Depository,
including Cede & Co., the nominee for The Depository Trust Company,
distributions will be made in immediately available funds. Final payment
of this Certificate will be made only upon presentation and surrender of
this Certificate at the office or agency specified in the notice of final
distribution delivered by the Trustee to the Certificateholder in
accordance with the Pooling and Servicing Agreement.
[On the Distribution Date occurring after the Invested Amount is
reduced to $[ ] or less, the Seller has the option, subject to the
condition set forth in Section 8.01(c) of the Series Supplement, to
purchase the entire Series [199_-_] Certificateholders' Interest in the
Trust. The purchase price will be equal to the Reassignment Amount (as
defined in the Series Supplement).]
This Certificate does not represent an obligation of, or an
interest in, Chrysler Corporation, the Seller, the Servicer, or any
affiliate of any of them and is not insured or guaranteed by any
governmental agency or instrumentality. This Certificate is limited in
right of payment to certain Collections with respect to the Receivables
(and certain other amounts), all as more specifically set forth herein and
in the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement may be amended from time to
time (including in connection with the issuance of a Supplemental
Certificate) by the Servicer, the Seller and the Trustee, without the
consent of any of the Series [199_-_] Certificateholders, so long as any
such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of the Certificateholders of
any outstanding Series. The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's rights, duties or
immunities under the Pooling and Servicing Agreement or otherwise.
Notwithstanding anything contained therein to the contrary, the Trustee,
with the consent of any Enhancement Providers, may at any time and from
time to time amend, modify or supplement the form of Distribution Date
Statement.
The Pooling and Servicing Agreement may also be amended from time
to time (including in connection with the issuance of a Supplemental
Certificate) by the Servicer, the Seller and the Trustee with the consent
of the Holders of Investor Certificates evidencing not less than 66-2/3% of
the aggregate unpaid principal amount of the certificates of the Investor
Certificates of all adversely affected Series, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or of modifying in any
manner the rights of the Investor Certificateholders; provided, however,
that no such amendment to the Pooling and Servicing Agreement shall
(i) reduce in any manner the amount of or delay the timing of distributions
to be made to Investor Certificateholders or deposits of amounts to be so
distributed without the consent of such each affected Investor
Certificateholder; (ii) change the definition or the manner of calculating
any certificateholders' interest without the consent of each affected
Investor Certificateholder; (iii) reduce the amount available under any
Enhancement without the consent of each affected Investor
Certificateholder; (iv) adversely affect the rating of any Series or class
by each Rating Agency without the consent of the holders of certificates of
such Series or class evidencing not less than 66-2/3% of the aggregate
unpaid principal amount of the Investor Certificates of such Series or
Class or (v) reduce the aforesaid percentage required to consent to any
such amendment without the consent of all Investor Certificateholders. The
Pooling and Servicing Agreement may not be amended in any manner which
adversely affects the interests of any Enhancement Provider without its
prior consent.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register of the Trustee upon surrender of
this Certificate for registration of transfer at the office or agency
maintained by the Trustee in New York, New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by
the Holder hereof or such Holder's attorney duly authorized, and thereupon
one or more new Series [199_-_] Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest will be issued
to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Series [199_-_] Certificates are
exchangeable for new Series [199_-_] Certificates evidencing like aggregate
fractional undivided interests as requested by the Certificateholder
surrendering such Certificates. No service charge may be imposed for any
such exchange but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection therewith.
The Servicer, the Trustee, the Transfer Agent and Registrar and
any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither
the Servicer nor the Trustee, the Transfer Agent and Registrar, nor any
agent of any of them, shall be affected by notice to the contrary except in
certain circumstances described in the Pooling and Servicing Agreement.
EXHIBIT 4.5
FORM OF REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of [ ], 199[ ] the
"Remarketing Agreement"), by and among Chrysler Financial Corporation
("CFC"), U.S. Auto Receivables Company ("USA"), Manufacturers and Traders
Trust Company, as Trustee under the below-mentioned Pooling and Servicing
Agreement (in its capacity as trustee, the "Trustee", and in its capacity
as remarketing coordinator, the "Remarketing Coordinator") and
[ ], in its capacity as underwriter, and in its
capacity as remarketing broker-dealer, the "Remarketing Broker-Dealer").
WHEREAS USA expects to cause the CARCO Auto Loan Master Trust
(the "Trust") to issue $[ ] principal amount of Floating Rate
Auto Loan Asset Backed Certificates, Series 199[ - ], consisting of
$[ ] principal amount of [Class A-1] [Money Market Extendible
Certificates], Series 199[ - ] (the "Certificates" and any holder of such
Certificates, a "Certificateholder"), and $[ ] principal amount
of [Class A-2] [Medium Term Certificates, Series 199[ - ] (the "Class A-2
Certificates")], pursuant to and with the rights assigned to them in the
Pooling and Servicing Agreement dated as of May 31, 1991, as assigned by
Chrysler Auto Receivables Company ("CARCO") to USA on August 8, 1991 (as
assigned and as supplemented and amended from time to time, the "P&S"),
among CARCO, USA, as Seller, Chrysler Credit Corporation ("CCC"), as
Servicer, and the Trustee and the series 199[ - ] Supplement to the P&S
dated as of [ ], 199[ ] (the "Supplement") among the Seller,
the Servicer and the Trustee (the P&S and the Supplement collectively
referred to as the "Pooling and Servicing Agreement");
WHEREAS the Certificates will initially be sold to and purchased
by the Underwriter pursuant to the terms and conditions of an Underwriting
Agreement (the "Underwriting Agreement"), dated [ ], 199[ ],
among USA, Chrysler Financial Corporation ("CFC") and the Underwriter;
WHEREAS USA has requested that [ ] act as the
Remarketing Broker-Dealer under this Agreement to remarket Certificates
which are the subject of an Election Notice in a Remarketing on behalf of
the Certificateholders from time to time who wish to sell the related
Certificates in a Remarketing, all in accordance with the terms of this
Agreement, including the Remarketing Procedures described in Annex A hereto
and in accordance with the Pooling and Servicing Agreement;
WHEREAS USA has requested the Remarketing Coordinator to manage
each Remarketing in accordance with the terms of this Agreement, including
the Remarketing Procedures described in Annex A hereto, and the Pooling and
Servicing Agreement; and
WHEREAS the Remarketing Broker-Dealer and the Remarketing
Coordinator are willing to assume such duties on the terms and conditions
expressly set forth herein;
NOW, THEREFORE, for and in consideration of the covenants herein
made, and subject to the terms and conditions herein set forth, the parties
hereto agree as follows:
Section 1. Definitions. Capitalized terms used and not defined
in this Agreement, including Annex A hereto, shall have the meanings
assigned to them in the Pooling and Servicing Agreement.
Section 2. Appointment and Obligations of the Remarketing
Broker-Dealer and the Remarketing Coordinator. (a) USA hereby requests
that [ ] act, and [ ] hereby agrees to act, as
Remarketing Broker-Dealer for the purpose of remarketing Certificates from
time to time on behalf of the Certificateholders and performing such other
duties as are assigned to the Remarketing Broker-Dealer herein and in the
Pooling and Servicing Agreement, all in accordance with and pursuant to the
procedures set forth herein and in the Pooling and Servicing Agreement.
(b) The Remarketing Broker-Dealer may, in its sole discretion,
but shall not be obligated to, remarket Certificates which are the subject
of an Election Notice in a Remarketing and the Remarketing Broker-Dealer
agrees to carry out such other duties as are assigned to it herein, all in
accordance with the provisions of this Agreement.
(c) USA hereby requests that the Trustee act, and the Trustee
hereby agrees to act, as the Remarketing Coordinator to perform the duties
and obligations assigned to it herein and in the Pooling and Servicing
Agreement in accordance with and pursuant to the procedures set forth
herein and therein.
Section 3. Annual Adjustment; Certain Expenses. On the Business
Day following the Distribution Date in [ ] of each of 199[ ],
199[ ] and 199[ ] (each, an "Annual Adjustment Date"), the Remarketing
Broker-Dealer shall deliver an amount equal to the Annual Adjustment to USA
by wire transfer of immediately available funds to such account or accounts
as the Seller may specify from time to time. "Annual Adjustment" means,
with respect to any Annual Adjustment Date, an amount equal to the product
of (x) the aggregate initial principal amount of Certificates as to which
the [Class A-1 Revolving Period] ended during any of the twelve Interest
Periods immediately preceding such Annual Adjustment Date, as the result of
a Purchase Option with respect to such Certificate not being exercised, and
(y) the Rebate Percentage applicable on such Annual Adjustment Date. The
Rebate Percentage for each of the three Annual Adjustment Dates shall
be: .[ ]%, .[ ]% and .[ ]%, respectively. The foregoing
calculations shall be made by the Remarketing Broker-Dealer and shall be
conclusive absent manifest error. Notwithstanding the foregoing, the
Remarketing Broker-Dealer shall not have any obligation to pay the Annual
Adjustment with respect to Certificates (i) as to which the [Class A-1
Revolving Period] ended as a result of the occurrence of an Early
Amortization Event or (ii) for which the first distribution of [Special
Class A-1 Monthly Principal] is due on the [ ] 199[ ]
Distribution Date.
Section 4. Dealing in the Certificates; Redemption of the
Remarketing Broker-Dealer's Certificates. (a) The Remarketing Broker-
Dealer, when acting as Remarketing Broker-Dealer or in its individual or
any other capacity, may, to the extent permitted by law, buy, sell, own,
hold and deal in any of the Certificates, either as principal or as agent.
The Remarketing Broker-Dealer is not obligated to purchase any Certificates
that would otherwise remain unsold in a Remarketing. The Remarketing
Broker-Dealer may sell Certificates which it owns during a Remarketing
Period without giving preference to Certificates as to which an Election
Notice has been delivered.
(b) The Remarketing Broker-Dealer may exercise any vote or join
in any action which any Holder or Owner of Certificates may be entitled to
exercise or take pursuant to the terms and conditions contained herein and
in the Pooling and Servicing Agreement with like effect as if it did not
act in any capacity hereunder. The Remarketing Broker-Dealer, in its
individual capacity, either as principal or agent, may also engage in or
have an interest in any financial or other transaction with USA, CARCO, the
Remarketing Coordinator or the Trustee or any of their respective
Affiliates and may act as depository, trustee or agent for any committee or
body of Owners of the Certificates or any obligations of USA, CARCO, the
Remarketing Coordinator or the Trustee or any of their respective
Affiliates as freely as if it did not act in any capacity hereunder.
Section 5. Information. (a) If the Remarketing Broker-Dealer
determines that it is necessary (as evidenced by an opinion of counsel, who
may be an employee of the Remarketing Broker-Dealer) to use a disclosure
document in connection with the Remarketing of Certificates, the
Remarketing Broker-Dealer will notify USA, and USA will promptly provide to
the Remarketing Broker-Dealer the Prospectus distributed in connection with
the initial sale of the Certificates (as amended or supplemented by USA)
satisfactory to the Remarketing Broker-Dealer and its counsel in respect of
the Certificates (such Prospectus, as amended or supplemented, being
referred to herein as the "Disclosure Documents"). USA will supply the
Remarketing Broker-Dealer with such number of copies of the Disclosure
Documents as the Remarketing Broker-Dealer reasonably requests from time to
time. USA will supplement and amend the Disclosure Documents so that at
all times they will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements in the
Disclosure Documents, in the light of the circumstances under which they
were made, not misleading. The Remarketing Broker-Dealer agrees to provide
USA with such information relating to it as may be necessary for USA to
fulfill its obligations under this Section 5(a). USA acknowledges that
such information relating to the Remarketing Broker-Dealer consists only of
the following information (x) contained in the Prospectus relating to the
Certificates: (i) the last paragraph of the cover page, (ii) the legend at
the top of page 2, (iii) the second sentence under "Special Considerations-
- -Limited Liquidity", and (y) the statements in the related prospectus
Supplement under the heading "Underwriting".
(b) In addition, USA agrees to furnish to the Remarketing
Broker-Dealer: (i) all notices and other communications required to be
delivered by USA or an Affiliate thereof to any party under the Pooling and
Servicing Agreement and each report or other document mailed or made
available to Holders or Owners of Certificates (including all "Annual
Servicer's Certificates" delivered pursuant to Section 3.05 of the P&S),
(ii) notice of the purchase of Certificates, either in a Remarketing or
otherwise, by USA or an Affiliate thereof, (iii) notice of the occurrence
of (A) the downgrading or withdrawal of the rating of the Certificates [or
the Class A-2 Certificates] by a nationally recognized statistical rating
agency, (B) the giving of notice of an election to exercise USA's option to
repurchase all the Certificates [and the Class A-2 Certificates] and (C)
the amendment of the Pooling and Servicing Agreement, (iv) upon request,
complete and correct copies of publicly available portions of all quarterly
and annual financial reports of CFC and the Trust, (v) upon request, the
annual audited consolidated balance sheets of CFC, (vi) upon request, all
notices, reports or other communications received by USA from the Trustee,
the Clearing Agency or any other Person pursuant to or in connection with
the Pooling and Servicing Agreement and (vii) such other information as the
Remarketing Broker-Dealer reasonably requests from time to time, in such
form as the Remarketing Broker-Dealer reasonably requests, relating to the
Certificates or the financial condition of USA or any Affiliate of USA to
the extent such information is deemed by the Remarketing Broker-Dealer to
be necessary or appropriate to the performance by the Remarketing Broker-
Dealer of its services hereunder and to the extent such information is
available to USA. USA shall promptly provide the Remarketing Broker-Dealer
with as many copies of the foregoing materials and information as the
Remarketing Broker-Dealer reasonably requests from time to time.
(c) If, at any time during the term of this Agreement, any event
or condition relating to or affecting USA or any Affiliate of USA or the
Certificates shall occur which might affect the accuracy or completeness of
any statement of a material fact contained in any of the materials and
information referred to in paragraph (a) or (b) above or any document
incorporated therein by reference or any other materials or information
made publicly available by USA, USA shall promptly notify the Remarketing
Broker-Dealer in writing of the circumstances and details of such event or
condition.
(d) None of the information contained in any of the reports or
other documents mailed or made available to Holders or Owners of
Certificates (including all "Annual Servicer's Certificates" delivered
pursuant to Section 3.05 of the P&S) or filed by or on behalf of USA or any
Affiliate of USA with the Securities and Exchange Commission (including any
documents incorporated therein by reference) or any documents referred to
in Section 5(a) or 5(b) hereof (collectively, the "Remarketing Materials")
shall contain an untrue or misleading statement of material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
Section 6. Conditions to the Remarketing BrokerDealer's
Obligations. The obligations of the Remarketing Broker-Dealer under this
Agreement have been undertaken in reliance on (i) the due performance in
all material respects by USA of its obligations and agreements as set forth
in this Agreement, the Underwriting Agreement and the Pooling and Servicing
Agreement, (ii) the accuracy in all material respects as of the dates
specified therein of the representations and warranties contained in the
Underwriting Agreement and the Pooling and Servicing Agreement and
(iii) the further condition that none of the following events shall have
occurred:
(a) the rating of the Certificates [or the Class A-2
Certificates] shall have been downgraded or withdrawn by a nationally
recognized statistical rating agency;
(b) USA shall have elected to exercise its repurchase option with
respect to the Certificates [and the Class A-2 Certificates];
(c) without the prior written consent of the Remarketing Broker-
Dealer (which consent shall not be unreasonably withheld), the Pooling
and Servicing Agreement shall have been amended in any manner that in
the opinion of the Remarketing Broker-Dealer materially changes the
rights of Certificateholders under the Pooling and Servicing
Agreement, the remarketability of the Certificates or the Remarketing
Procedures described in Annex A hereto;
(d) there is a material misstatement or omission in any of the
Remarketing Materials or in any Disclosure Document that in the
opinion of the Remarketing Broker-Dealer (x) is not corrected within a
reasonable period of time and (y) materially changes the rights of
Certificateholders under the Pooling and Servicing Agreement or the
remarketability of the Certificates;
(e) an Early Amortization Event shall have occurred; or
(f) if at any time the Remarketing Broker-Dealer shall determine
for any reason that it is not advisable to remarket the Certificates
by reason of (A) a pending or proposed change in tax laws applicable
to the Certificates (which determination shall be evidenced by an
opinion of counsel), (B) a pending or proposed change in laws
resulting in the Certificates no longer being qualified as "Eligible
Securities" as defined in Rule 2a-7 promulgated under the Investment
Company Act of 1940 (which determination shall be evidenced by an
opinion of counsel), (C) a material adverse change in the financial
condition of USA, CCC or Chrysler Corporation, (D) a banking
moratorium under the laws of the State of New York or the United
States of America, (E) the suspension or termination of trading in
securities generally on the New York Stock Exchange or the
establishment of minimum prices on such Exchange or (F) domestic or
international hostilities; or
(g) CFC, USA or any affiliate thereof shall issue a Series of
certificates, backed by wholesale receivables, (A) having a revolving
period subject to automatic extension absent an election to terminate
such revolving period, and otherwise having the same terms and legal
final maturity of [ , ] or less, as the Certificates,
and (B) the interest rate of which is a percentage over the Commercial
Paper Rate or a comparable 30-day index and such percentage exceeds
[the Class A-1 Spread].
In the event of the failure of any of such conditions, the Remarketing
Broker-Dealer may immediately terminate its duties under this Agreement;
provided that, with respect to the failure of any such conditions specified
in clauses (f)(D), (f)(E) or (f)(F) above, the Remarketing Broker-Dealer
may immediately suspend its duties under this Agreement until the earlier
to occur of (x) the 180th day following the first occurrence of such
failure or (y) such time as such moratorium, suspension or termination or
hostilities, as the case may be, has ceased. If, on or after the 180th day
following the occurrence of such failure specified in clauses (f)(D),
(f)(E) or (f)(F) above, in the opinion of the Remarketing Broker-Dealer,
the occurrence of such event has materially changed the nature of the
Certificates or the remarketability thereof, the Remarketing Broker-Dealer
may then immediately terminate its duties hereunder.
Section 7. Indemnification. (a) USA and CFC jointly and
severally agree to indemnify and hold harmless the Remarketing Broker-
Dealer and each person who controls the Remarketing Broker-Dealer within
the meaning of the Securities Act of 1933, as amended, and the rules
promulgated thereunder (the "Act") against any and all losses, claims,
damages or liabilities, arising under the Act, the Securities Exchange Act
of 1934, as amended, and the rules promulgated thereunder or other Federal
or state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Remarketing Materials,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agree to reimburse each such
indemnified party, as incurred, for any legal or other expenses incurred by
it in connection with investigating or defending any such loss, claim,
damage, liability or action. In addition, in the event that the
Remarketing Broker-Dealer becomes involved in any action, proceeding or
investigation brought by or against any Person in connection with
performing the services which USA has requested the Remarketing Broker-
Dealer to perform under this Agreement, USA and CFC will reimburse the
Remarketing Broker-Dealer for any loss, claim, damage or expense (including
the cost of any investigation and preparation and legal fees and expenses
in connection therewith, as such losses, claims, damages or expenses are
incurred (except to the extent that any such loss, claim, damage or expense
results from the gross negligence, bad faith or willful misconduct of the
Remarketing Broker-Dealer in performing the services which USA has
requested the Remarketing Broker-Dealer to perform under this Agreement)).
If for any reason the foregoing indemnification is unavailable to the
Remarketing Broker-Dealer or is insufficient to hold the Remarketing
Broker-Dealer harmless, USA and CFC shall contribute to the amount paid or
payable by the Remarketing Broker-Dealer as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by USA on the one hand and the
Remarketing Broker-Dealer on the other hand in connection with the subject
matter hereof but also the relative fault of USA and the Remarketing
Broker-Dealer as well as any relevant equitable considerations. The
reimbursement, indemnity and contribution obligations of USA and CFC under
this Section 7 shall be in addition to any liability which USA and CFC may
otherwise have, shall extend upon the same terms and conditions to any of
the Affiliates, officers, directors, employees and controlling persons (if
any) of the Remarketing Broker-Dealer and any such Affiliate or Person and
shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of USA, CFC, the Remarketing Broker-
Dealer, any such Affiliate and any such Person. The foregoing provisions
shall survive the period of the Remarketing Broker-Dealer's services under
this Agreement or any termination thereof and shall also survive the
termination or cancellation of this Agreement and the Remarketing of any
Certificates hereunder.
(b) The Remarketing Broker-Dealer shall not incur any liability
to USA, CFC or any other Person for its actions as Remarketing Broker-
Dealer pursuant to the terms hereof without gross negligence or in the
absence of willful misconduct. The Remarketing Broker-Dealer shall not be
liable to USA, CFC or any other Person on account of the failure of any
Person to whom the Remarketing Broker-Dealer has sold any Certificates to
pay for such Certificates or to deliver any document in respect of such
sale unless such failure was directly caused by the willful misconduct of
the Remarketing Broker-Dealer. The Remarketing Broker-Dealer shall have no
obligation whatsoever to remarket any Certificates.
Section 8. Termination of Remarketing Agreement. This Agreement
shall terminate as to the Remarketing Broker-Dealer upon the resignation of
the Remarketing Broker-Dealer pursuant to Section 6 hereof. The provisions
of Section 7 hereof shall continue in effect as to actions prior to the
date of termination of this Agreement, and each party shall pay to the
others any amounts owing at the time of termination of this Agreement.
Section 9. Remarketing Broker-Dealer's Performance; Duty of
Care. (a) The duties of the Remarketing Broker-Dealer shall be
determined solely by the express provisions of this Remarketing Agreement.
No implied covenants or obligations of or against the Remarketing Broker-
Dealer shall be read into this Remarketing Agreement or the Pooling and
Servicing Agreement.
(b) In the absence of bad faith on the part of the Remarketing
Broker-Dealer, the Remarketing Broker-Dealer may conclusively rely upon any
document furnished to it which purports to conform to the requirements of
this Remarketing Agreement or the Pooling and Servicing Agreement, as to
the truth of the statements expressed in any of such documents. The
Remarketing Broker-Dealer shall be fully protected for any action taken,
suffered or omitted under the provisions of this Agreement or otherwise
upon the faith of any document or communication reasonably believed by it
to have been signed, presented or made by the proper party or parties. The
Remarketing Broker-Dealer may consult with counsel selected by it and the
opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted under the
provisions of this Agreement or otherwise, in accordance with such opinion
and in reliance thereon.
(c) [ ] shall incur no liability to USA, CFC or any
Certificate Owner or Holder of Certificates in its individual capacity or
as Remarketing Broker-Dealer for any action or failure to act, on its part,
in connection with a Remarketing or otherwise, except as a result of gross
negligence or willful misconduct on its part.
(d) The Remarketing Broker-Dealer shall perform its services
hereunder as an independent contractor with respect to USA, and nothing
contained herein shall be deemed to create any partnership, joint venture,
or relationship of principal and agent between or among the parties hereto
or any of their Affiliates.
Section 10. Governing Law. This Remarketing Agreement shall be
governed by and construed in accordance with the laws of the State of New
York.
Section 11. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof, this Agreement shall remain in full
force and effect from the date hereof until the first day thereafter on
which no Certificate is in a [Class A-1 Revolving Period]. Regardless of
any termination of this Agreement pursuant to any of the provisions hereof,
the obligations of USA pursuant to Section 5, and USA and CFC pursuant to
Section 7, shall remain operative and in full force and effect until fully
satisfied.
Section 12. Successors and Assigns. The rights and obligations
of USA or CFC hereunder may not be assigned or delegated to any other
Person without the prior written consent of the Remarketing Broker-Dealer;
provided that such consent shall not be required in the case of any
assignment to an Affiliate of USA or CFC. The rights and obligations of
the Remarketing Broker-Dealer hereunder may not be assigned or delegated to
any other Person without the prior written consent of USA. This Agreement
shall inure to the benefit of and be binding upon USA, CFC, the Remarketing
Coordinator and the Remarketing Broker-Dealer and their respective
successors and assigns. Any successor to the Remarketing Broker-Dealer,
and any director or officer, or any Person controlling the Remarketing
Broker-Dealer, as the case may be, shall be entitled to the benefits of the
agreements contained herein. The terms "successors" and "assigns" shall
not include any purchaser of any Certificates merely because of such
purchase.
Section 13. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is
agreed that such section headings are not a part of this Agreement and will
not be used in the interpretation of any provision of this Agreement.
Section 14. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provision of any constitution, statute, rule
or public policy or for any other reason, such circumstances shall not have
the effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or of
rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatsoever.
Section 15. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded as an original and
all of which shall constitute one and the same document.
Section 16. Remarketing Broker-Dealer Not Acting as Underwriter.
It is understood and agreed by all parties hereto that the Remarketing
Broker-Dealer's only duties hereunder are as set forth in Section 2 of this
Agreement. When engaged in the Remarketing of any Certificates which are
the subject of an Election Notice, the Remarketing Broker-Dealer shall act
only as agent for and on behalf of each Certificate Owner of the related
Certificates. The Remarketing Broker-Dealer shall not act as underwriter
for any Certificates which are the subject of an Election Notice. Except
in connection with the exercise of a Purchase Option by the Remarketing
Broker-Dealer, the Remarketing Broker-Dealer shall in no way be obligated
to advance its own funds to purchase any Certificates or to otherwise
expend or risk its own funds or incur or become exposed to any financial
liability in the performance of its services hereunder.
Section 17. Amendments. (a) This Agreement may be amended by
any instrument in writing signed by all of the parties hereto so long as
this Agreement as amended is not inconsistent with the Pooling and
Servicing Agreement in effect as of the date of any such amendment.
(b) In the event that (x) the Certificates are issued as
Definitive Certificates (y) the Depository Trust Company ceases to be the
Depository, the parties hereto will negotiate in good faith to agree upon
any necessary or appropriate modifications to the
Remarketing Procedures set forth in Annex A hereto and the Remarketing
Coordinator will notify Certificateholders (or cause Certificateholders to
be notified) of any such modifications which materially affect the
procedures to be followed in the event a Certificateholder seeks to elect
not to extend the [Class A-1 Revolving Period] with respect to its
Certificates.
Section 18. No Petition. The Remarketing Coordinator and the
Remarketing Broker-Dealer, by entering into this Agreement, hereby covenant
and agree that they will not at any time institute against USA any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under any United States federal or state
bankruptcy or similar law.
Section 19. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or
pursuant hereto shall be made in writing and shall be deemed to have been
validly given or made when delivered or mailed, registered or certified
mail, return receipt requested and postage prepaid, addressed as follows:
if to USA, to 27777 Franklin Road, Southfield, Michigan 48034, Attention:
Secretary; if to the Remarketing Coordinator, to Manufacturers and Traders
Trust Company, One M&T Plaza, Buffalo, NY 14203-2399, Attention:
[ ]; and if to the Remarketing Broker-Dealer, to
[ ] Attention:
[ ]; or to such other address as any of the above shall specify
to the others in writing.
<PAGE>
IN WITNESS WHEREOF, each of CFC, USA, the Remarketing Broker-
Dealer, the Trustee, and the Remarketing Coordinator has caused this
Agreement to be executed in its name and on its behalf by one of its duly
authorized officers as of the date first above written.
CHRYSLER FINANCIAL CORPORATION,
by
---------------------------------
Name:
Title:
U.S. AUTO RECEIVABLES COMPANY,
by
---------------------------------
Name:
Title:
[ ],
as Remarketing Broker-Dealer
by
---------------------------------
Name:
Title:
MANUFACTURERS AND TRADERS TRUST COMPANY, as
Trustee and Remarketing Coordinator
by
---------------------------------
Name:
Title:
Exhibit 5.1
September 28, 1994
Chrysler Financial Corporation Chrysler Credit Corporation
27777 Franklin Road 27777 Franklin Road
Southfield, Michigan 48034 Southfield, Michigan 48034
U.S. Auto Receivables Company
27777 Franklin Road
Southfield, Michigan 48034
Gentlemen:
Re: Registration Statement No. 33-55397 on Form S-3 to
Register Auto Loan Asset-Backed Certificates to be
Issued by CARCO Auto Loan Master Trust (the
"Registration Statement")
I am Vice President and General Counsel of U.S. Auto Receivables
Company, a Delaware corporation, as seller (the "Seller"), Chrysler
Financial Corporation, a Michigan corporation ("CFC"), Chrysler Credit
Corporation, a Delaware corporation, as servicer (the "Servicer") and
Chrysler Auto Receivables Company, a Delaware corporation, in connection
with (a) the transfer and assignment of certain loans of automotive dealers
(the "Receivables") by the Seller to Manufacturers and Traders Trust
Company, as trustee (the "Trustee") for the CARCO Auto Loan Master Trust
(the "Trust"), formed pursuant to the Pooling and Servicing Agreement dated
as of May 31, 1991 (as amended and supplemented, the "Pooling and Servicing
Agreement") among the Seller, the Servicer and the Trustee, in exchange for
Auto Loan Asset Backed Certificates (the "Certificates") evidencing a
fractional undivided interest in the Trust. As described in the
Registration Statement, the Certificates will be issued from time to time
by the Trust in series. With respect to each series, the Certificates will
be issued pursuant to a supplement to the Pooling and Servicing Agreement
and the Certificates will be sold from time to time pursuant to certain
underwriting agreements (the "Underwriting Agreements") between the Seller
and various underwriters named therein.
I am admitted to the State Bar of Michigan and I express no opinion as
to the laws of any other jurisdiction except the laws of the United States
of America to the extent specifically referred to herein.
I have examined and relied upon the Registration Statement and, in
each case as filed with the Registration Statement, the form of the Pooling
and Servicing Agreement and supplements thereto, including the forms of
Certificates and the Underwriting Agreement previously filed or filed
herewith, as the case may be, as exhibits to the Registration Statement.
In addition, I have examined and considered executed originals or
counterparts, or certified or other copies identified to my satisfaction as
being true copies of such certificates, instruments, documents and other
corporate records of the Seller and matters of fact and law as I deem
necessary for the purposes of the opinion expressed below. Capitalized
terms not otherwise defined herein have the meanings given to them in the
Registration Statement.
In my examination I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of
such documents. As to any facts material to the opinions expressed herein
which were not independently established or verified, I have relied upon
statements and representations of officers and other representatives of the
Seller and others.
Based on and subject to the foregoing, I am of the opinion that, with
respect to the Certificates of any series, when (i) the Registration
Statement becomes effective pursuant to the provisions of the Securities
Act of 1933, as amended, (ii) the amount, price, interest rate and other
principal terms of such Certificates have been duly approved by the Board
of Directors of the Seller, (iii) the various agreements relating to such
series have each been duly completed, executed and delivered by the parties
thereto substantially in the form filed as an exhibit to the Registration
Statement reflecting the terms established as described above, and (iv)
such Certificates have been duly executed and issued by the Trust and
authenticated by the Trustee and sold by the Seller, all in accordance with
the terms and conditions of the related agreements and in the manner
described in the Registration Statement, such Certificates will have been
duly authorized by all necessary action of the Trust and will have been
legally issued, fully paid and nonassessable.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Matters" in the Prospectus included in the Registration Statement.
Very truly yours,
/s/ Allan L. Ronquillo
----------------------
Allan L. Ronquillo
Vice President and
General Counsel
/mr
a:\chryusa1.opn
Exhibit 8.1
[Letterhead of]
CRAVATH, SWAINE & MOORE
October 5, 1994
CARCO Auto Loan Master Trust
Registration Statement on Form S-3
Relating To $3,000,000,000 of
Auto Loan Asset Backed Certificates
Dear Sirs:
We have acted as special Federal tax counsel for CARCO Auto Loan
Master Trust (the "Trust"), in connection with the above-captioned
Registration Statement (such registration statement, together with the
exhibits and any amendments thereto, the "Registration Statement"), filed
by the Trust with the Securities and Exchange Commission in connection with
the registration by the Trust of trust certificates (the "Certificates").
As described in the Registration Statement, the Certificates will be issued
from time to time in series by the Trust, which was created pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
among U.S. Auto Receivables Company, Chrysler Credit Corporation and
Manufacturers and Traders Trust Company, as trustee. Capitalized terms not
otherwise defined herein are used as defined in the Registration Statement.
In that connection, we are generally familiar with the
proceedings required to be taken in connection with the proposed
authorization, issuance and sale of any series of Certificates and we have
examined copies of such documents, corporate records and other instruments
as we have deemed necessary or appropriate for the purposes of this
opinion, including the Registration Statement, the Pooling and Servicing
Agreement and the form of pooling and servicing agreement supplement (the
"Supplement") filed as exhibits to the Registration Statement (including
the form of each class of Certificates included as an exhibit).
Based on the foregoing and assuming that the Supplement with
respect to each series of Certificates is executed and delivered in
substantially the form we have examined and the transactions contemplated
to occur under the Registration Statement, the Pooling and Servicing
Agreement and the Supplement in fact occur in accordance with the terms
thereof, we hereby confirm that the statements set forth in the Prospectus
forming part of the Registration Statement under the captions "Prospectus
Summary--Tax Matters" (to the extent they relate to Federal income tax
consequences), "--ERISA Considerations", "Certain Tax Matters--Federal
Income Tax Consequences" and "ERISA Considerations" accurately reflect our
opinion with respect to a transaction to which those provisions by their
terms apply.
We know that we are referred to under the headings "Certain
Federal Income Tax Consequences" and "Legal Opinions" in the Prospectus
Supplement forming part of the Registration Statement and we hereby consent
to the use of our name therein and to the use of this opinion for filing
with the Registration Statement as Exhibit 8 thereto.
Very truly yours,
/s/ Cravath, Swaine & Moore
U.S. Auto Receivables Company
27777 Franklin Road
Southfield, Michigan 48034
32NS
O
Exhibit 8.2
September 28, 1994
Chrysler Financial Corporation Chrysler Credit Corporation
27777 Franklin Road 27777 Franklin Road
Southfield, Michigan 48034 Southfield, Michigan 48034
U.S. Auto Receivables Company
27777 Franklin Road
Southfield, Michigan 48034
Gentlemen:
Re: Registration Statement No. 33-55397 on Form S-3 to
Register Auto Loan Asset-Backed Certificates to be
Issued by CARCO Auto Loan Master Trust (the
"Registration Statement")
I am Vice President and General Counsel of U.S. Auto Receivables
Company, a Delaware corporation, as seller (the "Seller"), Chrysler
Financial Corporation, a Michigan corporation ("CFC"), Chrysler Credit
Corporation, a Delaware corporation, as servicer (the "Servicer") and
Chrysler Auto Receivables Company, a Delaware corporation, in connection
with (a) the transfer and assignment of certain loans of automotive dealers
(the "Receivables") by the Seller to Manufacturers and Traders Trust
Company, as trustee (the "Trustee") for the CARCO Auto Loan Master Trust
(the "Trust"), formed pursuant to the Pooling and Servicing Agreement dated
as of May 31, 1991 (as amended and supplemented, the "Pooling and Servicing
Agreement") among the Seller, the Servicer and the Trustee, in exchange for
Auto Loan Asset Backed Certificates (the "Certificates") evidencing a
fractional undivided interest in the Trust. As described in the
Registration Statement, the Certificates will be issued from time to time
by the Trust in series. With respect to each series, the Certificates will
be issued pursuant to a supplement to the Pooling and Servicing Agreement
and the Certificates will be sold from time to time pursuant to certain
underwriting agreements between the Seller and various underwriters named
therein.
I am admitted to the State Bar of Michigan and I express no opinion as
to the laws of any other jurisdiction except to the extent specifically
referred to herein.
I hereby confirm that the statements set forth in the Prospectus
forming a part of the Registration Statement under the caption "Certain Tax
Matters -- State and Local Tax Consequences" accurately describe the
material Michigan tax consequences to holders of the Certificates.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me in the Prospectus
included in the Registration Statement.
Very truly yours,
/s/ Allan L. Ronquillo
----------------------
Allan L. Ronquillo
Vice President and
General Counsel
/mr
a:usatx1.opn
Exhibit 23.3
[Letterhead of Deloitte & Touche LLP]
Deloitte &
Touche LLP
- ------------ -----------------------------------------
Suite 900 Telephone (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 1 to
Registration Statement No. 33-55397 on Form S-3, of the report of Deloitte &
Touche dated January 18, 1994 appearing in the Annual Report on Form 10-K of
CARCO Auto Loan Master Trust for the year ended December 31, 1993, and to
the reference to Deloitte & Touche LLP under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
September 28, 1994
- ---------------
Deloitte Touche
Tohmatsu
International
- ---------------
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
directors of U.S. Auto Receivables Company hereby severally
constitutes and appoints ROBERT A. LINK, BYRON C. BABBISH and
STEVEN C. POLING, or any one or more of them, to be his agents,
proxies and attorneys-in-fact, to sign and execute in his name,
place and stead and on his behalf as a director of U.S. Auto
Receivables Company, and to file with the Securities and Exchange
Commission, the Registration Statement of CARCO Auto Loan Master
Trust on Form S-3, registering under the Securities Act of 1933,
as amended, auto loan asset backed securities in an aggregate
principal amount of $700,000,000 and any and all further
amendments (including any pre- and post-effective amendments) to
such Registration Statement, and to file all exhibits thereto and
other documents in connection therewith, granting unto said
attorneys-in-fact and agents and each of them, full power and
authority to do and perform each and every act and thing required
to be done that may be necessary or desirable, hereby approving,
ratifying and confirming all that the aforesaid agents, proxies
and attorneys-in-fact do, or that any one of them does or causes
to be done, on his behalf pursuant to this Power of Attorney.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands as of this 8th day of September, 1994.
/s/ D. M. Cantwell /s/ E. F. Langs
D. M. Cantwell E. F. Langs
/s/ T. P. Dykstra /s/ L. A. Neeb
T. P. Dykstra L. A. Neeb
/s/ Jeremiah E. Farrell /s/ J. A. Sellgren
Jeremiah E. Farrell J. A. Sellgren
/s/ John P. Tierney
John P. Tierney
