<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 13, 1999
REGISTRATION NO. 333-74069
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
YAMAHA MOTOR MASTER TRUST
(ISSUER WITH RESPECT TO CERTIFICATES)
------------------------
YAMAHA MOTOR RECEIVABLES CORPORATION
(ORIGINATOR OF THE TRUST DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 9999 33-0592719
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NO.) IDENTIFICATION NO.)
</TABLE>
------------------------
6555 KATELLA AVENUE
SUITE A
CYPRESS, CA 90630
(714) 761-7500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
RUSSELL D. JURA, ESQ.
GENERAL COUNSEL
6555 KATELLA AVENUE
CYPRESS, CA 90630
(714) 761-7300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies To:
<TABLE>
<S> <C>
MELANIE GNAZZO, ESQ. KENNETH A. WRIGHT, ESQ.
GIANCARLO & GNAZZO, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
A PROFESSIONAL CORPORATION 919 THIRD AVENUE
625 MARKET STREET, 11TH FLOOR NEW YORK, NEW YORK 10022
SAN FRANCISCO, CALIFORNIA 94105
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
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, check the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Floating Rate Series 1999-1 Asset-Backed
Certificates.......................................... $ 214,035,000 100% $214,035,000 $59,501.73(1)
</TABLE>
(1) Of this amount, $278.00 has been previously paid.
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion
Preliminary Prospectus Dated May 13, 1999
$214,035,000
YAMAHA MOTOR MASTER TRUST
FLOATING RATE SERIES 1999-1, CLASS A ASSET-BACKED CERTIFICATES
FLOATING RATE SERIES 1999-1, CLASS B ASSET-BACKED CERTIFICATES
YAMAHA MOTOR RECEIVABLES CORPORATION, Transferor
YAMAHA MOTOR CORPORATION, U.S.A., Servicer
<TABLE>
<CAPTION>
Class A Certificates Class B Certificates
-------------------- --------------------
<S> <C> <C>
THE TRUST IS OFFERING:
Principal Amount $ 200,000,000 $ 14,035,000
Price $ ( %) $ ( %)
Underwriter's Commissions $ ( %) $ ( %)
Proceeds to the Issuer $ ( %) $ ( %)
Interest Rate (subject to cap) one-month LIBOR + one-month LIBOR +
% p.a. % p.a.
Interest Distribution Dates monthly on the 15th monthly on the 15th
or the first or the first
business business
day after the 15th day after the 15th
First Interest Distribution July 15, 1999 July 15, 1999
Date
Expected Final Payment Date June 2004 July 2004
distribution date distribution date
o The trust is also issuing $19,883,041 principal amount of Class C
Certificates. The Class C Certificates are not being offered by this
prospectus.
</TABLE>
CREDIT ENHANCEMENT:
Credit enhancement for the Class A Certificates is provided by:
o subordination of the Class B Certificates;
o subordination of the Class C Certificates; and
o subordination of the transferor interest in the trust up to the
available subordination amount.
Credit enhancement for the Class B Certificates is provided by:
o subordination of the Class C Certificates; and
o subordination of the transferor interest in the trust up to the
available subordination amount.
THESE SECURITIES ARE INTERESTS IN YAMAHA MOTOR MASTER TRUST, AND ARE BACKED ONLY
BY THE ASSETS OF THE TRUST. NEITHER THESE SECURITIES NOR THE ASSETS OF THE TRUST
ARE OBLIGATIONS OF YAMAHA MOTOR RECEIVABLES CORPORATION, YAMAHA MOTOR
CORPORATION, U.S.A. OR ANY OF THEIR AFFILIATES OR INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR ANY OTHER ENTITY.
THESE SECURITIES ARE HIGHLY STRUCTURED. BEFORE YOU PURCHASE THESE SECURITIES, BE
SURE YOU UNDERSTAND THE STRUCTURE AND THE RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 11 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The trust is offering these securities subject to availability.
<PAGE>
CHASE SECURITIES INC.
The date of this prospectus is May , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
WHERE TO FIND INFORMATION IN THIS PROSPECTUS......... 4
SUMMARY OF TERMS..................................... 5
STRUCTURAL SUMMARY................................... 6
SELECTED TRUST PORTFOLIO SUMMARY DATA................ 9
RISK FACTORS......................................... 11
THE TRANSFEROR AND RELATED PARTIES................... 17
Yamaha Motor Receivables Corporation.......... 17
Yamaha Motor Corporation, U.S.A............... 17
Deutsche Financial Services Corporation....... 17
Insolvency-Related Matters.................... 17
The Trust..................................... 18
The Transferor's Other Activities............. 19
USE OF PROCEEDS...................................... 19
THE DEALER FLOORPLAN FINANCING BUSINESS.............. 19
Credit Underwriting Process................... 20
Creation of Receivables....................... 21
Payment Terms................................. 22
Billing and Collection Procedures............. 22
Interest Rates................................ 22
Relationship between Deutsche Financial and
Yamaha................................ 23
Dealer Monitoring............................. 23
"Red Flag" and Deutsche Financial's Write-Off
Policy................................ 23
THE ACCOUNTS......................................... 24
Loss Experience............................... 25
Aging Experience.............................. 25
Geographic Distribution....................... 26
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS........ 27
DESCRIPTION OF THE OFFERED CERTIFICATES.............. 29
Interests in the Trust........................ 29
Interest Payments............................. 30
Principal Payments............................ 31
Registration of the Offered Certificates in
the Name of Cede as Nominee of DTC.... 32
Book-Entry Registration of the Offered
Certificates.......................... 32
DTC's Year 2000 Efforts....................... 36
<CAPTION>
PAGE
-----
<S> <C>
Issuance of Definitive Certificates Upon the
Occurrence of Certain Circumstances... 36
Rating of the Offered Certificates............ 37
Conveyance of Receivables..................... 37
Additional Series of Certificates............. 38
Covenants, Representations and Warranties..... 40
Addition of Accounts.......................... 43
Removal of Accounts........................... 44
Collection Account............................ 45
Principal Funding Account..................... 46
Special Funding Account....................... 46
Servicer Cash Collateral Account.............. 46
Allocation Percentages........................ 48
Allocation of Collections; Deposits in
Collection Account.................... 49
Yield Factor; Yield Collections............... 50
Principal Collections for All Series.......... 51
Application of Collections.................... 51
Subordination of Transferor Interest in
Certain Circumstances................. 52
Distributions from the Collection Account..... 53
Distributions to Certificateholders........... 56
Defaulted Receivables; Recoveries, Adjustment
Payments.............................. 57
Investor Charge-Offs.......................... 57
Final Payment of Principal; Termination of
Trust................................. 58
Early Amortization Events..................... 58
Indemnification............................... 61
Collection and Other Servicing Procedures..... 61
Servicer Covenants............................ 62
Servicing Compensation and Payment of
Expenses.............................. 62
Certain Matters Regarding the Servicer........ 63
Servicer Default.............................. 64
Reports to Certificateholders................. 65
Evidence as to Compliance..................... 66
Amendments.................................... 66
List of Certificateholders.................... 67
The Trustee................................... 67
DESCRIPTION OF THE RECEIVABLES SALE AGREEMENT........ 68
DESCRIPTION OF THE RECEIVABLES PURCHASE AGREEMENT.... 68
Sale of Receivables........................... 68
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Representations and Warranties................ 69
Certain Covenants............................. 70
Termination................................... 70
CERTAIN TRANSFER, SECURITY INTEREST AND BANKRUPTCY
CONSIDERATIONS................................ 70
Transfer of Receivables....................... 70
Certain Matters Relating to Bankruptcy........ 71
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS............ 72
Characterization of the Offered Certificates
as Indebtedness....................... 72
Future Legislation............................ 73
Taxation of Interest Income................... 73
Sales of Offered Certificates................. 74
Tax Characterization of the Trust............. 74
Possible Classification of the Transaction as
a Partnership......................... 74
Federal Income Tax Consequences to Foreign
Investors............................. 75
<CAPTION>
PAGE
-----
<S> <C>
Backup Withholding............................ 76
New Withholding Regulations................... 76
State, Local and Foreign Taxation............. 76
ERISA CONSIDERATIONS................................. 77
The Class A Certificates...................... 77
The Class B Certificates...................... 78
UNDERWRITING......................................... 79
LEGAL MATTERS........................................ 80
REPORTS TO CERTIFICATEHOLDERS........................ 81
WHERE YOU CAN FIND MORE INFORMATION.................. 81
INDEX OF DEFINED TERMS............................... 82
ANNEX A.............................................. A-1
</TABLE>
3
<PAGE>
WHERE TO FIND INFORMATION IN THIS PROSPECTUS
This prospectus provides the specific terms of the Class A and Class B
Certificates as well as general information about Yamaha Motor Master Trust,
including terms and conditions that are generally applicable to the securities
issued by the trust. You should rely only on the information about the
certificates provided in this prospectus. We have not authorized anyone to
provide you with different information.
This prospectus begins with several introductory sections describing your series
and the trust in abbreviated form:
o Summary of Terms provides important amounts, dates and other terms of your
series;
o Structural Summary gives a brief introduction of the key structural features
of your series and directions for locating further information;
o Selected Trust Portfolio Summary Data provides financial information about the
assets of the trust; and
o Risk Factors describes risks that apply to your certificates.
As you read through these sections, cross-references will direct you to more
detailed sections where you can find additional information. You can also
directly reference key topics by looking at the table of contents. You can find
a listing of the pages where capitalized terms used in this prospectus are
defined beginning on page 82 in this prospectus.
TO UNDERSTAND THE STRUCTURE OF THESE SECURITIES, YOU MUST READ CAREFULLY
THIS PROSPECTUS IN ITS ENTIRETY.
4
<PAGE>
SUMMARY OF TERMS
This summary contains a brief description of the certificates. You will
find a detailed description of the terms of the offering of the Class A and
Class B Certificates following this summary.
<TABLE>
<S> <C>
The Trust: Yamaha Motor Master Trust
Transferor of the Yamaha Motor Receivables Corporation
Receivables:
Transferor's Address: 6555 Katella Avenue, Suite A, Cypress, CA 90630
Transferor's Telephone (714) 761-7500
Number:
Servicer of the Yamaha Motor Corporation, U.S.A.
Receivables:
Trustee: The Fuji Bank and Trust Company
Clearance and Settlement: The Depository Trust Company, Cedel Bank, societe
anonyme and the Euroclear System
Assets of the Trust: The assets of the trust include:
o wholesale receivables generated from revolving
financing arrangements and other inventory financing
arrangements with dealers in products manufactured
by Yamaha Motor Company, Ltd., Yamaha Motor
Manufacturing Corporation of America and Tennessee
Watercraft, Inc.;
o collections on the receivables;
o funds in the accounts of the trust;
o any enhancements issued which benefit
certificateholders of another series; and
o security interests in the inventory of the dealers
financed by the receivables
</TABLE>
The Terms of the Series:
<TABLE>
<S> <C> <C> <C>
CLASS A CERTIFICATES CLASS B CERTIFICATES CLASS C CERTIFICATES
(not offered by this
prospectus)
Principal Amount: $200,000,000 $14,035,000 $19,883,041
Interest Rate (subject to one-month LIBOR one-month LIBOR one-month LIBOR
cap): plus % p.a. plus % p.a. plus % p.a.
Percent of Series: 85.5% 6.0% 8.5%
Interest Accrual Method: actual/360 actual/360 actual/360
Interest Distribution monthly (15th) monthly (15th) monthly (15th)
Dates:
First Interest July 15, 1999 July 15, 1999 July 15, 1999
Distribution Date:
Commencement of December 1, 2003 June 1, 2004 none
Accumulation Period:
Expected Final Payment June 2004 July 2004 July 2004
Date: distribution date distribution date distribution date
Anticipated Ratings Aaa/AAA A3/A not rated
(Moody's/S&P):*
Credit Enhancement: subordination of Class B subordination of Class C limited subordination of
and Class C Certificates Certificates and limited transferor interest
and limited subordination subordination of
of transferor interest transferor interest
CUSIP Number: 98462PAC3 98462PAD1 none
ISIN: US98462PAC32 US98462PAD15 none
Common Code: 9744991 9745025 none
</TABLE>
- ------------
* It is a condition to the offering of each of the Class A and the Class B
Certificates that at least one of these ratings be obtained. However, a rating
agency in its discretion may lower or withdraw its rating in the future.
5
<PAGE>
STRUCTURAL SUMMARY
This summary briefly describes some of the major structural components of the
certificates. To fully understand the terms of the offering, you will need to
read this prospectus in its entirety.
THE CERTIFICATES
Your certificates represent the right to a portion of collections on the
underlying trust assets. Your certificates will also be allocated a portion of
net losses on the receivables, if there are any. Any collections allocated to
your series will be used to make interest and principal payments, to pay a
portion of Yamaha Motor Corporation, U.S.A.'s fees as servicer and to cover net
losses allocated to your series. Any collections allocated to your series in
excess of the amount owed to you or Yamaha as servicer will be shared with other
series of certificates issued by the trust or returned to the transferor. In no
case will you receive more than the principal and interest owed to you under the
terms described in this prospectus.
For further information on allocations and payments, see "Description of the
Offered Certificates--Allocation Percentages" and "--Application of
Collections." For a more detailed discussion of your certificates, see
"Description of the Offered Certificates." For a discussion of losses, see
"Description of the Offered Certificates--Defaulted Receivables; Recoveries,
Adjustment Payments" and "--Investor Charge-Offs." See "Risk Factors" for more
detailed discussions of the risks of investing in the certificates.
THE RECEIVABLES
The receivables supporting your certificates consist of rights to payment
arising out of wholesale floorplan financing arrangements and other inventory
financing arrangements between Deutsche Financial Services Corporation and
Yamaha dealers. The dealers use these financing arrangements to purchase
products manufactured by Yamaha Motor Manufacturing Corporation of America,
Yamaha Motor Company, Ltd. and Tennessee Watercraft, Inc. Generally, Deutsche
Financial advances the wholesale purchase price of a new product to the dealer.
The dealer generally must repay this amount when it sells the financed product.
Yamaha also offers special sales programs to its dealers several times a year.
For further information about the receivables supporting your certificates, see
"The Accounts," "The Dealer Floorplan Financing Business--Creation of
Receivables" and "--Payment Terms."
As new receivables arise, Deutsche Financial sells them to Yamaha. In turn,
Yamaha sells the receivables to the transferor, and the transferor transfers
them to the trust. The amount of receivables in the trust will fluctuate over
time.
For a detailed description of this process, see "The Dealer Floorplan Financing
Business--Creation of Receivables," "Description of the Receivables Sale
Agreement" and "Description of the Receivables Purchase Agreement."
CREDIT ENHANCEMENT
Your certificates feature credit enhancement by means of the subordination of
other interests. This subordination is intended to protect you from net losses
and shortfalls in cash flow. Credit enhancement is provided to the Class A
Certificates by the following:
o subordination of the Class B Certificates;
o subordination of the Class C Certificates; and
o subordination of the transferor interest in the trust up to the
available subordination amount.
Credit enhancement is provided to the Class B Certificates by the following:
o subordination of the Class C Certificates; and
o subordination of the transferor interest in the trust up to the
available subordination amount.
The effect of subordination is that the more subordinated interests will absorb
any net losses allocated to your series, and make up any shortfalls in cash
flow, before the more senior interests are affected. If the cash flow and the
subordination do not cover all net losses allocated to your series, your
payments of interest and principal will be reduced and you may suffer a loss of
principal.
For a more detailed description of the subordination provisions of your series,
see "Description of the Offered Certificates--Allocation Percentages" and
6
<PAGE>
"--Subordination of Transferor Interest in Certain Circumstances."
YAMAHA MOTOR MASTER TRUST
Your series consists of the Class A Certificates, the Class B Certificates and
the Class C Certificates (which are not being offered by this prospectus). Your
series is one of three outstanding series issued by the trust. The trust is
maintained by the trustee for the benefit of:
o certificateholders of your series;
o certificateholders of other series issued by the trust; and
o the transferor.
Each series has a claim to a percentage of the trust's assets, regardless of the
total amount of receivables in the trust at any time. The transferor holds the
remaining claim to the trust's assets, which fluctuates with the total amount of
receivables in the trust. The transferor, as the holder of that remainder, can
cause the trust to issue additional series in the future. In addition, the
transferor may purchase your certificates at any time when the outstanding
amount of the Series 1999-1 certificateholders' interest in the trust is less
than 10% of the original amount of that interest.
For further information about the issuance of new series, see "Description of
the Offered Certificates--Additional Series of Certificates." For details about
the transferor's purchase option, see "Description of the Offered
Certificates--Final Payment of Principal; Termination of Trust."
IMPUTED INTEREST
The receivables do not bear interest for a specified period of time after their
creation. If a dealer sells a product during that period, the dealer will not be
required to pay interest on the receivable. During that period, the trust
imputes interest for the receivables by treating a portion of the collections on
the receivables as "yield" to the trust. The amount of collections which will be
treated as yield during each collection period will initially be 1.5% of the
total amount of receivables in the trust, increasing to 1.75% during the
accumulation periods. In addition, the amount of collections for this series
which will be treated as yield will increase to 2% during any collection period
when one-month LIBOR exceeds 15%. If one-month LIBOR subsequently decreases to
15% or below, the amount of collections which will be treated as yield will
decrease to 1.5% or 1.75%, as applicable.
INTEREST PAYMENTS
On each distribution date, the trust will pay interest on your certificates in
proportion to the principal balance of the certificates.
For more information on interest payments, see "Description of the Offered
Certificates--Interest Payments."
PRINCIPAL PAYMENTS
The trust expects to repay all principal on the Class A Certificates in one
payment on the June 2004 distribution date. In order to collect the funds to pay
the Class A Certificates on time, the trust will accumulate a portion of
principal collections allocable to your series in a principal funding account
during a controlled accumulation period. The controlled accumulation period will
be six months long, commencing on December 1, 2003 and ending on May 31, 2004.
The Class A Certificates will then be paid in full on the expected final payment
date for the Class A Certificates.
The trust also expects to repay all principal on the Class B Certificates in one
payment on the July 2004 distribution date. In order to collect the funds to pay
the Class B Certificates on time, after all funds have been collected to pay the
Class A Certificates, the trust will accumulate all principal collections
allocable to your series in a principal funding account during a rapid
accumulation period. The rapid accumulation period will be one month long,
commencing on June 1, 2004 and ending on June 30, 2004. The Class B Certificates
will then be paid in full on the expected final payment date for the Class B
Certificates.
For more information on principal payments, the controlled accumulation period
and the rapid accumulation period, see "Maturity and Principal Payment
Considerations," "Description of the Offered Certificates--Principal Payments,"
"--Principal Funding Account" and "--Principal Collections for All Series."
Possible Later Payments of Principal. If the trust does not fully repay your
certificates on the applicable expected final payment date, the certificates
will begin to amortize by means of monthly payments of all principal collections
allocated to your series until full repayment occurs. After the trust fully
repays the Class A Certificates, the trust will use principal collections
allocated to your series to repay the Class B Certificates.
7
<PAGE>
Possible Earlier Payments of Principal. The trust may repay your certificates
earlier than the applicable expected final payment date if an early amortization
event occurs. In that case, the trust will commence a monthly amortization of
the certificates. After this amortization begins, the Class A Certificates will
receive monthly payments of principal until full repayment occurs. After the
Class A Certificates are paid in full, the Class B Certificates will receive
monthly payments of principal until full repayment occurs. In that event, your
certificates will receive principal payments earlier than the applicable
expected final payment date.
For more information on early payments of principal and early amortization
events, see "Maturity and Principal Payment Considerations" and "Description of
the Offered Certificates--Early Amortization Events."
Prior to the commencement of an accumulation or early amortization period for
your series, the trust will pay principal collections to the transferor or share
them with other series that are amortizing or in an accumulation period.
The trust will make final payments of principal and interest no later than the
December 2006 distribution date, which is the final series termination date.
TAX STATUS
Giancarlo & Gnazzo, A Professional Corporation, special tax counsel to the trust
and the transferor, is of the opinion that for U.S. federal income tax purposes:
o the Class A Certificates and the Class B Certificates will be
characterized as debt; and
o the trust will not be an association or a publicly traded
partnership taxable as a corporation.
If you purchase the certificates, you agree to treat them as debt for tax
purposes.
For further information regarding the application of U.S. federal income tax
laws, see "Certain Federal Income Tax Considerations."
ERISA CONSIDERATIONS
The Class A Certificates are generally eligible for purchase by persons
investing assets of employee benefit plans that are subject to the Employee
Retirement Income Security Act of 1974. Since the Class B Certificates will be
subordinated to the Class A Certificates, employee benefit plans generally may
not purchase the Class B Certificates. Insurance company general accounts,
however, may purchase the Class B Certificates in some cases. The administrators
of employee benefit plans should review the matters discussed under "ERISA
Considerations" and also should consult with their legal advisors before
purchasing the certificates.
8
<PAGE>
SELECTED TRUST PORTFOLIO SUMMARY DATA
Geographic Distribution of Receivables in U.S. Wholesale Portfolio
as of March 31, 1999
[PIE GRAPH]
The chart above shows the geographic distribution of the receivables in the
U.S. wholesale portfolio among the 50 states and the District of Columbia. Other
than the states specifically shown in the chart, no state accounts for more than
3% of the receivables in the U.S. wholesale portfolio.
Age Distribution of Receivables in U.S. Wholesale.
Portfolio as of March 31, 1999
(days)
[BAR GRAPH]
The chart above shows the percentages of the receivables in the U.S.
wholesale portfolio within the age brackets shown.
9
<PAGE>
Payment Rate Data
[LINE GRAPH]
The chart above shows the payment rate for the U.S. wholesale portfolio for
each month from April 1997 to March 1999. The "payment rate" for any month is
the aggregate amount collected on the receivables during the month, expressed as
a percentage of total outstanding receivables for that period.
10
<PAGE>
RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the certificates.
<TABLE>
<S> <C>
ABSENCE OF SECONDARY
MARKET FOR CERTIFICATES
COULD LIMIT YOUR ABILITY
TO RESELL You may be unable to resell your certificates due to
the absence of a secondary market for the
certificates. The underwriter for the certificates
may assist in resales of the certificates but it is
not required to do so. A secondary market for the
certificates may not develop. If a secondary market
for the certificates does develop, it may not
continue or it may not be sufficiently liquid to
allow you to resell your certificates.
LIMITED ASSETS OF THE
TRUST COULD RESULT IN
LOSSES ON THE
CERTIFICATES You may suffer a loss on your certificates if the
assets of the trust are insufficient to pay the
principal amount of the certificates in full. The
only source of funds for payments on the certificates
will be the assets of the trust. The assets of the
trust are limited to the receivables and the funds on
deposit in the trust's bank accounts. Neither Yamaha,
the transferor, the trustee nor anyone else will
insure or guarantee the certificates. Consequently,
you must rely for payment of the Class A Certificates
solely upon collections on the receivables, funds on
deposit in the trust's bank accounts, the
subordination of the Class B Certificates, the
subordination of the Class C Certificates and the
subordination of the transferor interest up to the
available subordination amount. Similarly, you must
rely for payment of the Class B Certificates solely
upon collections on the receivables, funds on deposit
in the trust's bank accounts, the subordination of
the Class C Certificates and the subordination of
the transferor interest up to the available
subordination amount. In addition, the certificates
have a claim only to a percentage of the trust's
assets, regardless of the total amount of receivables
in the trust at any time. If the trust does not pay
the certificates in full on time, you may not look to
any assets of Yamaha, the transferor, the trustee or
anyone else to satisfy your claim.
PRIORITY OF SOME LIENS
OVER THE CERTIFICATES
COULD RESULT IN LOSSES ON
THE CERTIFICATES You may suffer a loss on your certificates if some
liens on Yamaha's or the transferor's property have
priority over the certificates. Deutsche Financial
accounts for the transfer of the receivables to
Yamaha as a sale, and Yamaha accounts for the
transfer to the transferor of the receivables
purchased from Deutsche Financial as a sale.
Similarly, the transferor accounts for the transfer
to the trust of the receivables purchased from Yamaha
as a sale. However, a court could conclude that
Deutsche Financial, Yamaha or the transferor still
owns the receivables and that the trust holds only a
security interest. Deutsche Financial, Yamaha and the
transferor have taken steps to give the trustee a
first priority perfected security interest in the
receivables in the event a court concludes Deutsche
Financial, Yamaha or the transferor still owns the
receivables. If a court concludes that the transfer
to the trust is only a grant of a security interest
in the receivables and not a sale, some liens on
Yamaha's or the transferor's property arising before
new receivables come into existence may get paid
before the trust's interest in those receivables.
Those liens include a tax or government lien or other
liens permitted under the law without the consent of
Yamaha or the transferor.
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For More Information About This Risk, See "Certain
Transfer, Security Interest and Bankruptcy
Considerations--Transfer of Receivables."
In addition, the agreements between Deutsche
Financial and the dealers to provide credit generally
grant a lien to Deutsche Financial in all of the
property of the dealers. If Deutsche Financial has
not taken all legal steps to perfect its lien in a
particular product, other creditors of the dealer who
perfected their liens prior to Deutsche Financial may
have a lien superior to Deutsche Financial's lien. In
addition, since Deutsche Financial also provides
financing to dealers for products not made by
Yamaha's affiliates, Deutsche Financial may have made
loans to dealers that are secured by liens in all of
the property of the dealers. Historically, Deutsche
Financial's practice has been not to pursue remedies
against any Yamaha-brand product to repay any
receivable owed to Deutsche Financial (other than a
Yamaha-related receivable). However, Deutsche
Financial is under no obligation to continue this
practice in the future. Therefore, if a dealer
becomes bankrupt, another creditor of the dealer
could try to claim that the creditor has a superior
lien in the product. This could prevent the trust
from realizing the full benefit of its lien in a
product. In addition, when a dealer sells a product,
Deutsche Financial's and the trust's liens in the
product will end. Therefore, although the dealer must
pay the amount owed on the receivable when it sells
the product, and the trust has a lien in the
receivable, the product will no longer secure the
receivable.
If the short-term debt ratings of Yamaha and Deutsche
Financial are at least "A-1" or "P-1" while Yamaha is
the servicer and Deutsche Financial is the
subservicer, Yamaha and Deutsche Financial will, with
some limitations, be allowed to use the cash
collections for their own benefit before each
distribution date. Consequently, the trust could lose
its lien in the cash collections in some
circumstances such as the bankruptcy of Yamaha or
Deutsche Financial. However, if Yamaha or Deutsche
Financial fails to meet this condition, Yamaha and
Deutsche Financial will be required to deposit all
cash collections in the collection account within two
business days of receipt.
For a more detailed description of this process, see
"Description of the Offered Certificates--Allocation
of Collections; Deposits in Collection Account."
BANKRUPTCY OF YAMAHA OR
DEUTSCHE FINANCIAL COULD
RESULT IN LOSSES OR
DELAYS IN PAYMENTS ON THE
CERTIFICATES If Yamaha or Deutsche Financial enters a bankruptcy
proceeding, you could experience losses or delays in
the payments on your certificates. Deutsche Financial
sells the receivables to Yamaha, Yamaha sells the
receivables to the transferor, and the transferor
transfers the receivables to the trust. Deutsche
Financial, Yamaha and the transferor treat these
transactions as absolute transfers. However, if
Deutsche Financial enters a bankruptcy proceeding,
the court has the power to conclude that the sale of
the receivables by Deutsche Financial to Yamaha was
not a "true sale" and that Deutsche Financial still
owns the receivables. Similarly, if Yamaha enters a
bankruptcy proceeding, the court has the power to
conclude that the sale of the receivables by Yamaha
to the transferor was not a "true sale" and that
Yamaha still owns the receivables. The court also has
the power to conclude that Yamaha and the transferor
should be consolidated for bankruptcy
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purposes. If the court were to reach any of these
conclusions, you could experience losses or delays in
payments on your certificates because:
o the trustee would not be able to exercise remedies
against Yamaha or Deutsche Financial on your behalf
without permission from the court;
o the court might require the trustee to accept
property in exchange for the receivables that is of
less value than the receivables;
o the transferor would no longer transfer new
receivables to the trust, and the trustee would be
required to sell the existing receivables and
allocate the proceeds to each series;
o the court might prevent the trustee or the
certificateholders from taking some actions such as
selling the receivables or appointing a successor
servicer;
o the court might sell the receivables and pay off
the certificates before their maturity;
o tax or government liens on Yamaha's or Deutsche
Financial's property that arose before the transfer
of the receivables to the trust would be paid from
the collections on the receivables before the
collections were used to make payments on your
certificates; and
o the trustee might not have a perfected security
interest in the products securing the receivables
or cash collections held by Yamaha or Deutsche
Financial at the time a bankruptcy proceeding
begins.
The transferor has taken steps in structuring the
trust to minimize the risk that a court would
conclude that the sale of the receivables to Yamaha
and the transferor was not a true sale or that Yamaha
and the transferor should be consolidated for
bankruptcy purposes.
See "The Transferor and Related
Parties--Insolvency-Related Matters" and "Certain
Transfer, Security Interest and Bankruptcy
Considerations--Transfer of Receivables" for a more
detailed description of these risks.
In a case decided by the U.S. Court of Appeals for
the Tenth Circuit in 1993, the court concluded that
accounts transferred by a seller to a buyer should be
included in the bankruptcy estate of the seller even
if the transfer was a true sale. Our counsel has
advised us that the facts of that case are
distinguishable and that the reasoning of that court
appears to be inconsistent with established precedent
and the Uniform Commercial Code. However, if Yamaha
or Deutsche Financial enters a bankruptcy proceeding
and the court in the bankruptcy proceeding applies
the reasoning of the court in that case, you could
experience losses or delays in the payments on your
certificates.
For more information about that case, see "The
Transferor and Related Parties--Insolvency-Related
Matters."
SLOWER GENERATION OF
RECEIVABLES BY DEALERS
COULD REDUCE COLLECTIONS The dealers generally must pay the receivables
following the sale of the related product. The timing
of these sales is uncertain. We cannot assure the
creation of additional receivables or that any
particular pattern of dealer repayments will occur. A
significant decline in the amount of new receivables
generated could result in reduced collections
available to the trust as a whole. Those collections
may not be sufficient to pay your certificates in
full on the expected final payment date. If your
certificates are not paid by that time, the average
term of the certificates will increase. You may not
be able to reinvest the delayed principal payments at
a rate of return equal to or greater than the rate of
return that would have been available on the expected
final payment date.
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EARLY AMORTIZATION EVENTS
COULD RESULT IN LOSSES OR
ACCELERATION OF PAYMENTS
ON THE CERTIFICATES If an early amortization event occurs under the
pooling and servicing agreement, it may shorten the
average term and date of final payment of the
certificates. You may not be able to reinvest the
principal repaid to you earlier than expected at a
rate of return that is equal to or greater than the
rate of return on your certificates. You also may not
be paid the principal amount of your certificates in
full if the assets of the trust are insufficient to
pay the principal amount of all certificates in full.
For more details about the risks associated with
early amortization events, see "The Dealer Floorplan
Financing Business," "Maturity and Principal Payment
Considerations" and "Description of the Offered
Certificates--Early Amortization Events."
INCREASE IN LIBOR COULD
RESULT IN CAPPED INTEREST
PAYMENTS ON THE
CERTIFICATES An increase in LIBOR could result in a cap on
interest payments on the certificates at a maximum
rate. The certificates generally bear interest at a
floating rate which is based on LIBOR. It is possible
that LIBOR plus the margin used to compute the
interest rate on your certificates will increase
above an applicable maximum rate. If that occurs, the
certificates will bear interest only at a maximum
rate.
ECONOMIC AND SOCIAL
FACTORS COULD LEAD TO
SLOWER SALES OF PRODUCTS
BY DEALERS Payment of the receivables depends upon the sale of
the related products by the dealers. The level of
product sales may change because of a variety of
economic and social factors. Economic factors include
interest rates, unemployment levels, the rate of
inflation and consumer perception of general economic
conditions. The use of incentive programs (e.g.,
manufacturers' rebate programs) may also affect
retail sales. Social factors include consumer
perception of Yamaha-brand products in the
marketplace and consumer demand for motorized
recreational products. However, we cannot determine
or predict whether or to what extent economic or
social factors will affect the level of product
sales.
THE TRUST IS COMPLETELY
DEPENDENT ON YAMAHA AND
DEUTSCHE FINANCIAL The trust is completely dependent upon Yamaha and
Deutsche Financial for the generation of new
receivables. The ability of Yamaha and Deutsche
Financial to generate receivables is, in turn,
dependent on the sales of Yamaha-brand products. We
cannot assure that Yamaha will continue to generate
receivables at the same rate as in past years. In
addition, if Deutsche Financial ceased acting as
subservicer, delays in processing payments and
related information on the receivables could occur
and result in delays in payments to the
certificateholders.
Yamaha and the transferor are generally not obligated
to make any payments regarding the certificates or
the receivables. However, if Yamaha breaches any of
its representations and warranties regarding any
receivables which materially and adversely affects
the interests of the certificateholders, Yamaha will
repurchase those receivables from the transferor, and
the transferor will repurchase those receivables from
the trust. Yamaha will also
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be required to purchase receivables from the trust if
it breaches its servicing obligations regarding those
receivables.
For more information about these obligations, see
"Description of the Offered Certificates--Covenants,
Representations and Warranties" and "--Servicer
Covenants."
In addition, Deutsche Financial and Yamaha have the
ability in some cases to change the terms of the
receivables and the accounts. These terms may include
the applicable interest rate, payment terms and the
amount of the dealer's credit line, as well as
underwriting procedures.
RISKS INHERENT IN THE
DEALER FLOORPLAN
FINANCING BUSINESS COULD
LEAD TO LOSSES ON THE
RECEIVABLES Yamaha has sometimes provided financial assistance to
its dealers (unrelated to the receivables), but it is
under no obligation to do so. In addition, Yamaha
generally makes optional repurchases of unsold
products from dealers who are no longer authorized
Yamaha dealers. If Yamaha is unable or decides not to
provide this financial assistance or make these
optional repurchases, losses on the receivables would
likely increase. In addition, the products sold by
the dealers are manufactured by either Yamaha Motor
Manufacturing Corporation of America, Yamaha Motor
Company, Ltd. or Tennessee Watercraft, Inc. These
products are then distributed by Yamaha. If Yamaha,
Yamaha Motor Manufacturing Corporation of America,
Yamaha Motor Company, Ltd. or Tennessee Watercraft,
Inc. were temporarily or permanently to cease
operation of those businesses, the dealers' rate of
product sales would decrease. This would lead to a
decrease in the payment rates on the receivables.
For more information about these risks, see "The
Dealer Floorplan Financing Business."
INDIVIDUAL
CERTIFICATEHOLDERS WILL
HAVE LIMITED CONTROL OF
TRUST ACTIONS Certificateholders of any series may need the consent
or approval of the holders of a specified percentage
of the unpaid investor interests of all outstanding
series to take some actions. These actions include:
o amending the pooling and servicing agreement in
some cases;
o directing a reassignment of the receivables
portfolio; and
o directing the trustee not to sell or liquidate the
receivables if the transferor becomes insolvent.
The interests of the certificateholders of any series
may not coincide with yours, making it more difficult
for you or any other particular certificateholder to
achieve the desired results from any vote.
ISSUANCE OF ADDITIONAL
SERIES BY THE TRUST COULD
AFFECT THE TIMING OF THE
PAYMENTS ON THE
CERTIFICATES Yamaha Motor Master Trust, as a master trust, may
issue additional series of certificates from time to
time. The trust may issue series with terms that are
different from your series without the prior review
or consent of any certificateholders. It is a
condition to the issuance of each new series that
each rating agency that has rated an outstanding
series of the trust confirm that the issuance of the
new series will not result in a reduction or
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withdrawal of its rating of any class of any
outstanding series. Even so, the terms of a new
series could affect the timing and amounts of
payments on any other outstanding series. In
addition, some remedies require the consent of a
majority of the certificateholders of all outstanding
series. The interests of the holders of any new
series of certificates could be different from your
interests.
For more details about the issuance of new series,
see "Description of the Offered
Certificates--Additional Series of Certificates."
CLASS B CERTIFICATES BEAR
ADDITIONAL CREDIT RISK The Class B Certificates bear more credit risk than
the Class A Certificates. Because the Class B
Certificates are subordinated to the Class A
Certificates, principal payments on the Class B
Certificates will not begin until the Class A
Certificates are repaid. Additionally, if yield
collections allocated to your series are insufficient
to cover amounts due on the Class A Certificates, the
invested amount for the Class B Certificates might be
reduced. This would reduce the amount of yield
collections available to the Class B Certificates in
future periods and could cause a possible delay or
reduction in principal and interest payments on the
Class B Certificates. Additionally, if the trustee
had to sell receivables, the net proceeds of that
sale available to pay principal would be paid first
to the Class A Certificates before any remaining
proceeds were paid to the Class B Certificates.
For more information about these credit risks, see
"Maturity and Principal Payment Considerations" and
"Description of the Offered Certificates--Investor
Charge Offs."
POTENTIAL COMPUTER
PROGRAM PROBLEMS
BEGINNING IN THE YEAR
2000 COULD RESULT IN
DELAYS IN PAYMENTS ON THE
CERTIFICATES The payment of principal and interest on the
certificates could be delayed if Yamaha, in its
capacity as the servicer, Deutsche Financial, in its
capacity as the subservicer, or the trustee
experience problems in their computer programs
relating to the year 2000. Many existing computer
programs use only two digits to identify a year.
These programs could fail or produce erroneous
results during the transition from the year 1999 to
the year 2000 and afterwards. Yamaha and Deutsche
Financial have evaluated the impact of preparing
their systems for the year 2000. They have identified
areas of potential impact and are implementing
conversion efforts. They believe their
mission-critical applications, including their
systems for operations, collections on the
receivables and servicing the receivables, are
already year 2000 compliant, subject to further
testing.
If Yamaha, in its capacity as the servicer, does not
have a computer system that is year 2000 compliant by
the year 2000, Yamaha's ability to service the
receivables may be materially and adversely affected.
If Deutsche Financial, in its capacity as the
subservicer, does not have a computer system that is
year 2000 compliant by the year 2000, Deutsche
Financial's ability to service the receivables may be
materially and adversely affected. If the trustee
does not have a computer system that is year 2000
compliant by the year 2000, the trustee's ability to
make distributions on the certificates may be
materially and adversely affected.
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THE TRANSFEROR AND RELATED PARTIES
YAMAHA MOTOR RECEIVABLES CORPORATION
Yamaha Motor Receivables Corporation (the "TRANSFEROR"), a wholly-owned
subsidiary of Yamaha, was incorporated in the State of Delaware on December 2,
1993. The Transferor was organized for limited purposes, which include
purchasing receivables from Yamaha and transferring such receivables to third
parties and any activities incidental to and necessary or convenient for the
accomplishment of such purposes. The principal executive offices of the
Transferor are located at 6555 Katella Avenue, Suite A, Cypress, California
90630. The telephone number of such offices is (714) 761-7500.
YAMAHA MOTOR CORPORATION, U.S.A.
Yamaha Motor Corporation, U.S.A. ("YAMAHA" or, together with, as
applicable, a successor servicer, the "SERVICER") was incorporated in the State
of California on October 21, 1976, and its primary business is the distribution
in the United States of Yamaha-brand motorized products (except golf carts) to
retail dealers of such products and to manufacturers of vessels into which
motorized products are incorporated (collectively, "DEALERS"). Yamaha's major
product lines include, but are not limited to, motorcycles, all-terrain
vehicles, snowmobiles, water vehicles and outboard motors. Only outboard motors
and selected marine engine components are sold to manufacturers of marine
vessels. Yamaha also sells parts and accessories for such product lines to the
Dealers. The principal executive offices of Yamaha are located at 6555 Katella
Avenue, Cypress, California 90630. The telephone number of such offices is
(714) 761-7300.
DEUTSCHE FINANCIAL SERVICES CORPORATION
Deutsche Financial Services Corporation ("DEUTSCHE FINANCIAL"), a Nevada
corporation formerly known as ITT Commercial Finance Corp., is a subsidiary of
Deutsche Business Services Corporation, a Missouri corporation, which is a
direct subsidiary of Deutsche Bank North America Holding Company ("DBNA"), a
Delaware corporation and the North American subsidiary of Deutsche Bank AG.
Deutsche Bank AG, headquartered in Frankfurt, Germany, is one of the world's
largest banks, with assets in excess of $689.8 billion as of December 31, 1998.
DBNA, formed in 1992 to coordinate and manage all of Deutsche Bank AG's
activities in North America, had total assets and shareholder equity of
approximately $164.9 billion and $5.1 billion, respectively, as of December 31,
1998.
Prior to May 2, 1995, all of the servicing activities of Deutsche Financial
in connection with the Receivables were conducted by Deutsche Financial under
the name ITT Commercial Finance Corp. ("ITT"). On May 2, 1995, Deutsche Bank AG
completed the purchase from ITT Corporation of all of the outstanding common
stock of ITT and, in connection with such purchase, ITT's name was changed to
Deutsche Financial Services Corporation. None of the obligations of ITT under
its various agreements pertaining to the Receivables were changed or modified as
a result of its purchase and name change to Deutsche Financial Services
Corporation.
Deutsche Financial provides commercial financing for over 18,000
manufacturers, distributors and dealers throughout the United States, Canada,
Puerto Rico and the United Kingdom, and its annual finance volume exceeds
$35.7 billion. Deutsche Financial's principal office is at 655 Maryville Centre
Drive, St. Louis, Missouri 63141.
INSOLVENCY-RELATED MATTERS
Under the Receivables Sale Agreement (the "RECEIVABLES SALE AGREEMENT"),
Deutsche Financial, as seller, and Yamaha, as purchaser, treat and will continue
to treat the sale of the Receivables in the Accounts in existence and owned by
Deutsche Financial on or after January 31, 1994 and the related Product Security
from Deutsche Financial to Yamaha as an absolute transfer of such Receivables to
Yamaha. Under a Receivables Purchase Agreement (the "RECEIVABLES PURCHASE
AGREEMENT"), Yamaha, as seller, and the Transferor, as purchaser, treat and will
continue to treat the sale of the Receivables and the related Product Security
from Yamaha to the Transferor as an absolute transfer of such Receivables and
the related Product Security to the Transferor. In the event of an insolvency of
either Deutsche Financial or Yamaha, such entity would be subject to Title 11 of
the United States Code (the "BANKRUPTCY CODE"). As an absolute transfer to
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Yamaha, the Receivables and the related Product Security sold by Deutsche
Financial to Yamaha on and after March 24, 1994 would not be part of the
bankruptcy estate of Deutsche Financial, and such Receivables and related
Product Security would not be available to creditors of Deutsche Financial. In
addition, as an absolute transfer to the Transferor, such Receivables and
related Product Security would not be part of the bankruptcy estate of Yamaha,
and such Receivables and Product Security would not be available to creditors of
Yamaha. However, in the event of the insolvency of Yamaha or Deutsche Financial,
it is possible that the bankruptcy trustee or a creditor of such insolvent
entity, or such entity as debtor in possession, may argue that the transactions
between Deutsche Financial and Yamaha or between Yamaha and the Transferor, as
the case may be, are pledges of the Receivables rather than absolute transfers.
Such a position, if accepted by a court, could prevent timely payments due to
Certificateholders.
The Transferor has received, and will receive on the Closing Date, opinions
of counsel, with respect to the Transferor and Yamaha, concluding on the basis
of a reasoned analysis of analogous case law (although there is no precedent
based on directly similar facts) that subject to certain facts, assumptions and
qualifications specified therein (including matters set forth under "Certain
Transfer, Security Interest and Bankruptcy Considerations--Transfer of
Receivables"), in the event that Yamaha were to be a debtor in a case under the
Bankruptcy Code, a bankruptcy court that properly analyzed and applied the law
and facts in a properly presented and argued case would not disregard the
separate corporate existence of the Transferor and consolidate the assets and
liabilities of the Transferor with those of Yamaha. However, if a court
concluded otherwise, or a filing were made under any bankruptcy or insolvency
law by or against the Transferor, or if an attempt were made to litigate any of
the foregoing issues, delays in distributions on the Offered Certificates (and
possible reductions of such distributions) could occur.
In Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th Cir. 1993),
cert. denied, 114 S. Ct. 554 (1993), the United States Court of Appeals for the
Tenth Circuit suggested that, even where a transfer of accounts from a seller to
a buyer constitutes a "true sale," the accounts would nevertheless constitute
property of the seller's bankruptcy estate in a bankruptcy of the seller. If
Yamaha or Deutsche Financial were to become subject to a bankruptcy proceeding
and a court were to follow the Octagon court's reasoning, the holders of record
of the Class A Certificates (the "CLASS A CERTIFICATEHOLDERS") and the holders
of record of the Class B Certificates (the "CLASS B CERTIFICATEHOLDERS") might
experience delays in payment or possibly losses on their investment in the
Class A Certificates and the Class B Certificates, respectively. As part of the
opinion of counsel described above, counsel has advised Yamaha and the
Transferor that the facts of the Octagon case are distinguishable from those in
the sale transactions between, on the one hand, Deutsche Financial and Yamaha
and, on the other hand, Yamaha and the Transferor, respectively, and that the
reasoning of the Octagon case appears to be inconsistent with established
precedent. In addition, the Permanent Editorial Board of the UCC has issued an
official commentary (PEB Commentary No. 14) which characterizes the Octagon
court's interpretation of Article 9 of the UCC as erroneous. Such commentary
states that nothing in Article 9 of the UCC is intended to prevent the transfer
of ownership of accounts or chattel paper. Moreover, because Deutsche Financial,
Yamaha, the Transferor and the transactions governed by the Receivables Sale
Agreement and the Receivables Purchase Agreement do not have any particular link
to the Tenth Circuit, it is unlikely that Deutsche Financial or Yamaha would be
subject to a bankruptcy proceeding in the Tenth Circuit. Accordingly, the
Octagon case should not be binding precedent on a court in a Deutsche Financial
or Yamaha bankruptcy proceeding. Application of Federal and state bankruptcy and
debtor relief laws would adversely affect the interests of (a) the Class A
Certificateholders in the Receivables if such laws result in any Receivables
being charged-off as uncollectible when the Class B Invested Amount and the
Class C Invested Amount are zero and (b) the Class B Certificateholders in the
Receivables if such laws result in any Receivables being charged-off as
uncollectible when the Class C Invested Amount is zero. See "Description of the
Offered Certificates--Defaulted Receivables; Recoveries, Adjustment Payments."
THE TRUST
Yamaha Motor Master Trust (the "TRUST") was formed for this and like
transactions pursuant to a Master Pooling and Servicing Agreement, originally
dated as of March 1, 1994 and amended and restated as of May 1, 1999, among the
Transferor, Yamaha, as Servicer, and The Fuji Bank and Trust Company, as trustee
(the "TRUSTEE") (as amended, supplemented or otherwise modified from time to
time, the "POOLING AND SERVICING AGREEMENT"), and prior to formation had no
assets or obligations. The assets of the Trust
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include wholesale receivables (the "RECEIVABLES") generated from time to time in
a portfolio of revolving financing arrangements and other inventory financing
arrangements (the "ACCOUNTS") with dealers in motorized products manufactured by
Yamaha Motor Company, Ltd., Yamaha Motor Manufacturing Corporation of America
and Tennessee Watercraft, Inc. to finance their inventory and Collections on the
Receivables. The Trust has not and will not engage in any business activity
other than to acquire and hold the Receivables and the other assets of the Trust
and proceeds therefrom, issue the Certificates and the Exchangeable Transferor
Certificate, issue additional series of certificates (each, a "SERIES") at the
direction of the Transferor and make payments thereon and engage in related
activities. As a consequence, the Trust is not expected to have any need for, or
source of, additional capital resources other than the assets of the Trust.
THE TRANSFEROR'S OTHER ACTIVITIES
Yamaha and the Transferor are also parties to a 1995 transaction (the "GOLF
CART TRANSACTION") that is separate and distinct from the transactions described
herein. Pursuant to the Golf Cart Transaction, the Transferor periodically
purchases from Yamaha wholesale receivables and related security generated in a
portfolio of revolving financing agreements with dealers of products comprised
of motorized golf carts, motorized utility vehicles and selected golf course
accessory devices manufactured by Yamaha Motor Manufacturing Corporation of
America. The Transferor then sells such receivables and related security to a
business trust formed pursuant to a trust agreement under the laws of the State
of Delaware. As part of the Golf Cart Transaction, that trust has issued
commercial paper notes and certificates of beneficial interest backed by the
dealer receivables attributable to sales of golf carts, motorized utility
vehicles and golf course accessory devices. The receivables related to the Golf
Cart Transaction are specifically excluded from the Trust, and the Receivables
are specifically excluded from the Golf Cart Transaction. Under certain
circumstances, the Transferor's certificate of incorporation authorizes the
Transferor to engage in additional securitization transactions as well; however,
any such transaction must be reviewed by the Rating Agency prior to its
effectiveness. The documents underlying the Golf Cart Transaction provide that
any creditor of the Transferor under such documents may not attach the
Transferor Interest in the Trust or any other assets of the Transferor that are
related to the transactions described herein or the Trust.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Certificates will be paid to
the Transferor. The Transferor will use such proceeds to purchase additional
Receivables from Yamaha. Yamaha will use such proceeds for general corporate
purposes. Additionally, approximately $125 million of the net proceeds will be
used by the Transferor to repay a portion of the Series 1998-1 Asset-Backed
Certificates which are held by an asset-backed commercial paper vehicle for
which The Chase Manhattan Bank, an affiliate of the Underwriter, provides a
liquidity facility and certain administrative services.
THE DEALER FLOORPLAN FINANCING BUSINESS
The Receivables transferred or to be transferred by the Transferor to the
Trust represent the extensions of credit made by Deutsche Financial to Dealers
to purchase Products (collectively, the "U.S. WHOLESALE PORTFOLIO"). The
Receivables are secured by a security interest in certain inventory of the
Dealers, including motorcycles, snowmobiles, all terrain vehicles, outboard
motors, water vehicles, parts and accessories related to the foregoing and
certain other motorized equipment manufactured by Yamaha Motor Company, Ltd.,
Yamaha Motor Manufacturing Corporation of America and Tennessee Watercraft, Inc.
and distributed in the United States by Yamaha (collectively, the "PRODUCTS" and
such security interest in such Products, the "PRODUCT SECURITY").
Deutsche Financial is the primary source of inventory financing for the
Dealers to purchase Products. In fiscal years 1996, 1997 and 1998, Deutsche
Financial provided financing for $523.3 million, $557.3 million and
$524.9 million of new unit sales to Dealers, respectively. Deutsche Financial
arranged wholesale financing for approximately $533.4 million of units as of
March 31, 1999, up approximately 1.613% from the previous fiscal year. Deutsche
Financial services the U.S. Wholesale Portfolio through its national
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headquarters in St. Louis, Missouri, its Yamaha program headquarters in Newport
Beach, California and five other branch offices located in the United States.
The Products are categorized by Deutsche Financial as new or used products.
"NEW PRODUCTS" means those units which have not been previously sold to a retail
consumer, and "USED PRODUCTS" means Products which have been previously sold to
a retail consumer. The categorization of New Products and Used Products may
change in the future based upon Deutsche Financial's practices and policies;
however, receivables generated by Used Products are not eligible as Receivables
for transfer by the Transferor to the Trust.
CREDIT UNDERWRITING PROCESS
Deutsche Financial extends credit to Dealers pursuant to lines of credit
which are established by Deutsche Financial for Dealers to finance purchases of
New Products and Used Products. Deutsche Financial may also extend credit to a
Dealer for other types of Yamaha products and for non-Yamaha motor vehicles and
products; however, such extensions of credit are not eligible as Receivables for
sale by Deutsche Financial to Yamaha, by Yamaha to the Transferor, or by the
Transferor to the Trust. All Dealers of Products (except manufacturers of marine
vessels) that have a New Product credit line in place may also be eligible for a
Used Product credit line.
A new Dealer requesting the establishment of a New Product credit line must
submit an application for financing to a Deutsche Financial branch office. After
receipt of such request, the Deutsche Financial branch office investigates the
prospective Dealer by reviewing such Dealer's credit reports and bank references
and by evaluating the dealer's start-up financing resources and credit
requirements. When an existing Dealer requests the establishment of a wholesale
additional Product credit line, the Deutsche Financial branch office reviews the
Dealer's credit reports (including the experience of the Dealer's present
financing source) and bank references. Deutsche Financial also investigates the
particular Dealer's present state of operations and management. Based on the
foregoing review, the Deutsche Financial branch office prepares a written
recommendation either approving or disapproving the Dealer's request and,
depending on the amount of the requested credit line, transmits such
recommendation with the requisite documentation to the Yamaha program office.
The Deutsche Financial regional vice president can, in some cases, approve new
wholesale financing requests for amounts up to $1,000,000; for greater amounts,
all such documentation will be forwarded to the Deutsche Financial area or home
office for approval. Deutsche Financial's ultimate decision whether to extend
credit to a new or existing Dealer is based upon its reasonable judgment. If a
Dealer has been denied credit by Deutsche Financial, Yamaha may, in its
discretion, make other arrangements.
Upon approval by both Deutsche Financial and Yamaha, Dealers execute a
series of financing agreements with Deutsche Financial and dealership agreements
with Yamaha. Such agreements provide for a purchase money security interest in
favor of Deutsche Financial in the Products and the receivables related thereto
and a security interest in all other then-owned or thereafter acquired personal
property of such Dealer. In addition, in certain cases, Deutsche Financial
obtains additional credit enhancement (such as a stand-by letter of credit or a
guarantee) or other collateral. In certain cases, the financing agreements
executed between a particular Dealer and Deutsche Financial may relate to
products floorplanned by such Dealer that are not Yamaha-distributed products.
See "Risk Factors--Priority of some liens over the certificates could result in
losses on the certificates." Such agreements are generally for an unspecified
period of time and create discretionary lines of credit, which Deutsche
Financial may terminate at any time in its sole discretion, subject, however, to
prevailing standards of commercial reasonableness and good faith, which may
require commercially reasonable notice and other accommodations by Deutsche
Financial. Absent default by a particular Dealer, the outstanding Receivables
owed by such Dealer cannot be accelerated, even if the line of credit provided
by Deutsche Financial is terminated, although Deutsche Financial may request
that the Dealer begin to make principal payments earlier than such payments
would otherwise be due. After the effective date of termination, Deutsche
Financial is under no obligation to continue to provide additional financing,
but the then current outstanding balance will be repayable in accordance with
the Pay-as-Sold or Scheduled Payment Plan terms of such Dealer's particular
arrangement with Deutsche Financial, as described below in "--Payment Terms."
The size of a credit line offered to a Dealer is based upon the Dealer's
sales rate or expected sales rate. The amount of a Dealer's credit line for New
Products is reviewed periodically for adjustment. The amount
20
<PAGE>
advanced by Deutsche Financial for New Products is equal to the amount invoiced
with respect to New Products. As more fully described below, the credit lines
are guidelines, not limits, which Dealers are permitted to exceed for
appropriate business reasons. See "--Dealer Monitoring."
CREATION OF RECEIVABLES
Deutsche Financial finances 100% of the wholesale invoice price of New
Products, together with destination charges and a "holdback" on most Products
(generally in the amount of approximately 3% of the suggested retail price).
Although holdback arrangements vary from year to year, there are currently two
such arrangements. The first type of holdback arrangement requires Yamaha to pay
an amount (determined at the time of invoicing) directly to the Dealer when the
related Product is sold. Under the second type, Yamaha pays an amount
(determined at the time of invoicing) to the Dealer on a date certain in the
future if the related Product has been sold by such date. If such date passes
without the sale of the Product by the Dealer, the related Receivable will be
adjusted downward as a purchase price adjustment, which will reduce the value of
the Receivable to the Trust. The latter type of holdback arrangement is designed
to provide an incentive to the Dealer to take early or off-season delivery of
seasonal Products.
Once a Dealer has commenced the floorplanning of Products through Deutsche
Financial, Deutsche Financial will generally finance all purchases of Products
by such Dealer from Yamaha. Deutsche Financial may limit or cancel this
arrangement if, in Deutsche Financial's opinion, a particular Dealer's inventory
is seriously overstocked or if a Dealer is experiencing financial difficulties.
In these circumstances, the Deutsche Financial branch office will approve
additional financing on a Product-by-Product basis.
Receivables are originated concurrently with the shipment of New Products
to the Dealer and are generally considered full-recourse obligations of such
Dealer. Advances made by Deutsche Financial for a Dealer's purchase of Products
from Yamaha are most commonly arranged by the Dealer placing a purchase order
with Yamaha for a shipment of Products, and by Yamaha checking the computer
records that it shares with Deutsche Financial to confirm that the Dealer is
within its credit limit guideline and that no hold has been placed on such
Dealer's credit line (any such hold, a "CREDIT HOLD"). If the Dealer is not
subject to a Credit Hold and if, after giving effect to the requested advance,
the Dealer will be within its credit limit guideline, Yamaha will ship the
requested Product and submit its invoice for the purchase order directly to
Deutsche Financial for payment. If, on the other hand, such advance would cause
the Dealer to exceed its credit line, Yamaha will contact Deutsche Financial
prior to shipping the Product. As described in "--Credit Underwriting Process"
and "--Dealer Monitoring," the credit line is a guideline rather than a limit,
and Deutsche Financial may increase the credit line after such a request by
Yamaha and after ascertaining that the particular Dealer is otherwise in
compliance with Deutsche Financial's financing program. If such conditions are
satisfied, Deutsche Financial will generally approve the request for a credit
increase, and Yamaha will ship the Product to the Dealer.
A Credit Hold may be placed on a Dealer for a variety of reasons, many of
which are easily resolved or temporary, but some of which are serious and
permanent. A Credit Hold may indicate that a payment due and promised by a
Dealer to Deutsche Financial has not been made in the time allowed, that a check
from a Dealer has been returned to Deutsche Financial for insufficient funds or
that the Dealer has not provided Deutsche Financial with its financial reports
in a timely manner. A Credit Hold is also placed on a Dealer if Deutsche
Financial determines that the Dealer's financial condition is deteriorating or
that the Dealer is insolvent. Deutsche Financial updates the computer system
that it shares with Yamaha daily to reflect any changes in the Credit Hold
status of Dealers. If and when a Dealer is removed from Credit Hold, Yamaha will
ship the requested Products to the Dealer. In contrast to the procedure
described above for increasing a Dealer's credit line, Yamaha does not request
Deutsche Financial to override any Credit Hold notation, and Yamaha does not
ship Products or create Receivables with respect to any Dealer that is on Credit
Hold.
For purposes of including a Receivable in the Trust, Yamaha considers a
Receivable to have been created as of the date of invoicing. Normally, interest
or finance charges begin to accrue on such Receivable as of the date specified
by Yamaha in the Sales Program for the related Product, which may be later than
the date of invoicing.
21
<PAGE>
PAYMENT TERMS
If a Product is sold by Yamaha to a Dealer with a specific payment due
date, Deutsche Financial generally is entitled to receive from the particular
Dealer payment in full for the financed amount on such due date. If a Product is
floorplanned, Deutsche Financial is generally entitled to receive payment in
full for the financed amount on the date of sale of the Product. Interest
charges, if any, are billed monthly by Deutsche Financial and are due from the
Dealer upon receipt from the Dealer of the monthly bill. Deutsche Financial
submits payments received by it from Dealers to Yamaha within two Business Days
following receipt.
Deutsche Financial provides two basic payment terms to Dealers of Products:
Pay-as-Sold financing programs or Scheduled Payment Plans. As of March 31, 1999,
Deutsche Financial provides approximately 99.68% of its financing to Dealers
through its Pay-as-Sold programs. Under a "PAY-AS-SOLD" program, the Dealer is
obligated to pay interest or finance charges monthly, but principal repayment
with respect to any particular Product financed by Deutsche Financial is due and
payable only upon the sale of such Product by the Dealer. On occasion, Deutsche
Financial may request that particular Dealers begin repaying principal in
installments if the Product has not been sold within a specified period of time.
These payments are referred to by Deutsche Financial as "curtailments." Even if
a Product is subject to curtailment payments, the remaining outstanding balance
with respect to such Product will be fully payable if such Product is sold.
"SCHEDULED PAYMENT PLANS," in contrast, require that principal be repaid in
accordance with a particular schedule. Depending upon the Product line and the
particular inventory turns of the individual Dealer, the majority of these
payment terms are generally no longer than 180 days. Under a Scheduled Payment
Plan, the Dealer is only obligated to make payments in accordance with an
agreed-upon schedule, regardless of when the Product is actually sold. Under a
Scheduled Payment Plan, Deutsche Financial will remit any payments made by
Dealers to Yamaha over time immediately upon receipt.
Yamaha's marketing programs to Dealers with respect to the various Products
vary throughout the year and by Product (the "SALES PROGRAMS"). The Sales
Programs offer specific payment terms to the Dealers, which may include (in
addition to specifying whether the Product is eligible for a Pay-as-Sold program
or a Scheduled Payment Plan):
(1) a discount from the wholesale purchase price for payment within a
certain number of days;
(2) a period of interest-free financing;
(3) a dealer "holdback";
(4) interest at a margin over the prime rate for a period, payable
monthly; and
(5) interest at a higher margin after a period of time, payable
monthly.
BILLING AND COLLECTION PROCEDURES
A statement setting forth billing and related account information is
prepared by Deutsche Financial and distributed on the third calendar day of each
month to each Dealer. Interest and other non-principal charges are billed in
arrears and are required to be paid by Dealers to Deutsche Financial by the end
of the calendar month in which they are billed. Principal is payable by Dealers
to Deutsche Financial in accordance with the terms of the specific Sales Program
relating to a particular Product. Under existing arrangements, Deutsche
Financial remits such Collections to Yamaha in the form of a wire drawn on
Deutsche Financial and payable not later than two Business Days from receipt by
Deutsche Financial from Dealers. See "Description of the Offered
Certificates--Collection and Other Servicing Procedures."
INTEREST RATES
Deutsche Financial charges Dealers interest at a rate determined by the
terms of the specific Sales Program under which a Product was sold. Generally,
such interest rates are calculated monthly according to a formula that adds a
fixed amount to the prime rate, as such prime rate is reported from time to time
by certain financial institutions selected by Deutsche Financial. The spread
above the prime rate depends on the Sales Program under which a Product is sold
and may also depend on the length of time the Dealer has held
22
<PAGE>
the Product. Interest accrues at the rate so calculated on the outstanding
principal balance owed by the Dealer under the related Sales Program.
RELATIONSHIP BETWEEN DEUTSCHE FINANCIAL AND YAMAHA
Yamaha determines whether a particular Dealer shall become, or shall
continue to be, an authorized Dealer of Products. Yamaha, in its sole
discretion, determines the financing terms to be offered under every Sales
Program.
At times, Yamaha may provide financial assistance to Dealers (unrelated to
the Receivables), although it is under no obligation to do so. In addition, in
certain circumstances, Yamaha makes optional repurchases of unsold Products from
Dealers who are no longer authorized Yamaha Dealers. Yamaha may terminate any
such optional programs in whole or in part at any time. If Yamaha is unable or
elects not to provide such financial assistance or make such optional
repurchases, the loss experience of Deutsche Financial in respect of the U.S.
Wholesale Portfolio will likely be adversely affected. In addition, because
substantially all of the Products sold in the retail market by the Dealers are
distributed by Yamaha, if Yamaha were temporarily or permanently to cease
operation of such business, the rate of sales of Yamaha-brand Products would
decrease, adversely affecting payment rates and the loss experience of the U.S.
Wholesale Portfolio.
Yamaha also has certain mandatory obligations under an agreement between
Deutsche Financial and Yamaha whereby Yamaha repurchases unsold Products that
are recovered by Deutsche Financial through repossession or otherwise. Yamaha
credits Deutsche Financial the fair market value for these Products. Yamaha
also, by contract or state statute, has certain direct repurchase obligations
for some Products if a Dealer terminates its business. Such Dealer repurchase
obligations generally apply only to new, unused, undamaged Products, and are
usually at the wholesale price of the Product.
DEALER MONITORING
The level of each Dealer's wholesale credit line is monitored on a periodic
basis. Because the wholesale credit lines are not limits, Dealers are permitted
to exceed such credit lines for certain business reasons. For example, prior to
a seasonal peak, a Dealer may purchase more Products than its existing credit
lines would otherwise indicate. Because of slow inventory turnover, a Dealer's
credit lines may be reduced until a sufficient portion of its Product inventory
is liquidated. Exception reports of Dealers that have exceeded their credit
lines by a certain percentage are reviewed on a weekly basis. Deutsche Financial
may at any time evaluate a Dealer's financial position and may place the Dealer
on Credit Hold. See "--Creation of Receivables" and "--'Red Flag' and Deutsche
Financial's Write-Off Policy."
On site audits of Dealer Product inventories are conducted on a regular
basis (normally, twelve times a year) by Deutsche Financial employees. The
timing of each visit and Deutsche Financial personnel conducting such inspection
varies, and no advance notice is given to the audited Dealer. Auditors conduct a
physical inventory of the Products on the Dealer's premises. Through the audit
process, Deutsche Financial reconciles each Dealer's physical inventory with its
records of financed Products. Audits are intended to identify instances where a
Dealer sells Products without immediately repaying the related advances.
"RED FLAG" AND DEUTSCHE FINANCIAL'S WRITE-OFF POLICY
Deutsche Financial prepares a monthly report called a "red flag report"
detailing the status of certain Dealers and the related Accounts and inventory.
This monthly red flag report generally includes information regarding whether
the Dealer has voluntarily surrendered its inventory to Deutsche Financial or
whether a liquidation of the Dealer's inventory is in progress. If a liquidation
has occurred, the red flag report indicates whether such liquidation was orderly
and voluntary, resulting in normal sales to retail customers by the Dealer
(which are monitored by Deutsche Financial), or whether such liquidation was
forced, resulting in repossession of the inventory by Deutsche Financial. Should
litigation occur against such Dealer, the red flag report describes its progress
and outcome.
Once liquidation has commenced, Deutsche Financial will write off any
amounts attributable to unpaid Receivables with respect to inventory previously
sold by the related Dealer and identified at such time as uncollectible. Yamaha
and Deutsche Financial share equally the amounts written off up to an aggregate
annual amount equal to $3,000,000 (i.e., $1,500,000 per entity) in respect of
all receivables (other than those
23
<PAGE>
pertaining to Products consisting of parts and accessories) originated by
Deutsche Financial to finance the purchase of Yamaha products by Dealers,
without regard for whether such receivables are Receivables in the Trust. The
Trust absorbs any losses related to defaulted Receivables in the Trust to the
extent that such losses are not covered by this loss sharing arrangement and net
of recoveries attributable to the defaulted Receivables. Deutsche Financial also
liquidates any other collateral securing the Dealer's obligations, some of which
are repurchased at fair market value by Yamaha if it consists of unsold
Products. Shortfalls on any such repurchases are generally not eligible for
reimbursement under the loss sharing arrangement described above.
THE ACCOUNTS
The Receivables arise in the Accounts. The Accounts constitute all of the
wholesale accounts in the U.S. Wholesale Portfolio on January 31, 1994, and
subject to the limitations described in "Description of the Offered
Certificates--Addition of Accounts," all dealer wholesale accounts opened by
Yamaha thereafter. See "Description of the Offered Certificates--Covenants,
Representations and Warranties."
Pursuant to the Receivables Purchase Agreement, Yamaha has conveyed and
will continue to convey to the Transferor, and pursuant to the Pooling and
Servicing Agreement, the Transferor has conveyed and will continue to convey to
the Trust, the Receivables existing as of January 31, 1994 and thereafter
created in all Accounts. New Accounts must meet the eligibility criteria set
forth in "Description of the Offered Certificates--Addition of Accounts" as of
the first date Receivables created in such Accounts are conveyed to the Trust.
In addition, with respect to any Account created after January 31, 1994 and any
Receivable generated thereunder, Yamaha will represent and warrant to the
Transferor, and the Transferor will represent and warrant to the Trust, that
such Receivables meet the eligibility requirements set forth in the Pooling and
Servicing Agreement. See "Description of the Offered Certificates--Conveyance of
Receivables." Under certain circumstances specified in the Pooling and Servicing
Agreement, the Transferor has the right to remove Accounts (collectively,
"REMOVED ACCOUNTS"), and the Receivables arising therein, from the Trust. See
"Description of the Offered Certificates--Removal of Accounts." Throughout the
term of the Trust, the Accounts from which the Receivables arise will be the
Accounts identified by the Transferor on January 31, 1994 plus, subject to the
limitations described in "Description of the Offered Certificates--Addition of
Accounts" and "--Removal of Accounts," any Accounts created thereafter minus any
Accounts removed from the Trust.
As of March 31, 1999, no Receivable generated by a single Dealer
constituted more than 1.0% of the aggregate amount of Eligible Receivables
included in the Trust (the "POOL BALANCE"). As of March 31, 1999, with respect
to the Accounts in the Trust:
o there were approximately 2,273 Accounts and the aggregate Receivables
balance was approximately $533.4 million;
o the average credit line per Account was approximately $407,825 and the
average balance of Receivables per Account was $234,677;
o the aggregate total Receivables balance as a percentage of the aggregate
total credit line was approximately 57.54%; and
o the weighted average rate charged to Dealers was 2.64%.
Receivables originated under the Accounts consist of amounts owed by
Dealers for the wholesale price of Products and, if the Dealer has not paid such
price within a specified period of time, interest and service charges or fees
related to such price. Collections on the Receivables, whether consisting of the
wholesale price or interest, fees or service charges relating to such amount,
are discounted in order to provide imputed yield to the Trust. Pursuant to the
Pooling and Servicing Agreement, a portion of the Collections on the Receivables
in the Accounts received in any calendar month (each, a "COLLECTION PERIOD"),
which is equal to the product of the Yield Factor and the Pool Balance, are
treated as Yield Collections, and the remainder of such Collections are treated
as Principal Collections.
With respect to the tabular data provided below concerning the loss
experience, age distribution, geographic distribution and distribution by
Product line of the U.S. Wholesale Portfolio, Yamaha and the
24
<PAGE>
Transferor believe there are no discernible trends in the historical performance
of the Receivables that are material.
LOSS EXPERIENCE
The following table sets forth Yamaha's average principal receivables
balance and loss experience for each of the periods shown with respect to the
U.S. Wholesale Portfolio. This table is for illustrative purposes only, and
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 the financial assistance provided by Yamaha in certain
limited instances to the Dealers as described above under "The Dealer Floorplan
Financing Business--Relationship between Yamaha and Deutsche Financial" and
reflects Yamaha's prior practice of repurchasing Products at the full invoiced
amount (provided such repurchase was made with respect to a Dealer which had
ceased business or from Deutsche Financial). No Accounts from which Receivables
arise in the Trust include Accounts with any Dealer which is an affiliate of the
Trust, the Transferor or the Servicer. If Yamaha is not able to, or elects not
to, provide such assistance or repurchase in the future, the loss experience in
respect of the U.S. Wholesale Portfolio will likely be adversely affected. See
"Risk Factors--Risks inherent in the dealer floorplan financing business could
lead to losses on the receivables."
LOSS EXPERIENCE FOR THE U.S. WHOLESALE PORTFOLIO(1)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31,
------------------------------------
1999 1998 1997
------------ -------- --------
<S> <C> <C> <C>
Average Receivables Balance(2)............................................ $473,708 $503,566 $514,564
Charge-off Net of Recoveries.............................................. $ 134 $ 489 $ 630
Charge-off Net of Recoveries/Average Receivables Balance(3)............... 0.028% 0.097% 0.122%
</TABLE>
- ------------------
(1) Dollars in thousands.
(2) Average receivables balance is the average of the monthly ending balances
for the fiscal years ended March 31.
AGING EXPERIENCE
The following table provides the age distribution of Product inventory for
all Dealers in the U.S. Wholesale Portfolio. The actual experience of the U.S.
Wholesale Portfolio may differ from historical experience.
AGE DISTRIBUTION FOR THE U.S. WHOLESALE PORTFOLIO(1)
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
PERCENTAGE OF
RECEIVABLES RECEIVABLES
OUTSTANDING(2) OUTSTANDING
-------------- --------------
<S> <C> <C>
1-90............................................................................. $298,579 55.97%
91-180............................................................................ $120,459 22.58%
181-270............................................................................ $ 42,521 7.97%
271-365............................................................................ $ 15,864 2.97%
366+............................................................................... $ 55,998 10.50%
-------- ------
TOTAL......................................................................... $533,421 100.00%(3)
-------- ------
-------- ------
</TABLE>
- ------------------
(1) Ages in days.
(2) Dollars in thousands.
(3) Percentages may not add to 100% due to rounding.
25
<PAGE>
GEOGRAPHIC DISTRIBUTION
The following table provides the geographic distribution for all Dealers on
the basis of Receivables outstanding and the number of Accounts.
GEOGRAPHIC DISTRIBUTION OF THE U.S. WHOLESALE PORTFOLIO
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
RECEIVABLES RECEIVABLES TOTAL NUMBER TOTAL NUMBER OF
OUTSTANDING(1) OUTSTANDING OFACCOUNTS(2) ACCOUNTS(2)
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
California...................................... $ 43,833 8.22% 146 6.42%
Florida......................................... 41,253 7.73% 162 7.13%
Texas........................................... 31,185 5.85% 128 5.63%
Michigan........................................ 26,179 4.91% 99 4.36%
New York........................................ 24,960 4.68% 117 5.15%
Pennsylvania.................................... 20,823 3.90% 91 4.00%
Ohio............................................ 17,747 3.33% 65 2.86%
North Carolina.................................. 17,406 3.26% 78 3.43%
Illinois........................................ 17,043 3.20% 74 3.26%
Minnesota....................................... 16,256 3.05% 77 3.39%
Other(3)........................................ 276,736 51.88% 1,236 54.38%
-------- ------ ------ -------
TOTAL...................................... $533,421 100.00%(4) 2,273 100.00%(4)
-------- ------ ------ -------
-------- ------ ------ -------
</TABLE>
- ------------------
(1) Dollars in thousands.
(2) For purposes of this table, each Account corresponds to one Dealer.
(3) The geographic distribution of Accounts in the Trust with respect to any
state other than as set forth above does not exceed 3%.
(4) Percentages may not add to 100% due to rounding.
RECEIVABLES OUTSTANDING BY PRODUCT GROUP FOR THE U.S. WHOLESALE PORTFOLIO
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
PERCENTAGE OF
RECEIVABLES TOTAL RECEIVABLES
OUTSTANDING(1) OUTSTANDING
-------------- -----------------
<S> <C> <C>
Motorcycles/Scooters............................................................ $199,890 37.47%
Water Vehicles.................................................................. 120,692 22.63%
All-Terrain Vehicles............................................................ 121,565 22.79%
Outboards....................................................................... 68,428 12.83%
Snowmobiles..................................................................... 15,130 2.83%
Other(2)........................................................................ 7,716 1.45%
-------- -------
TOTAL...................................................................... $533,421 100.00%
-------- -------
-------- -------
</TABLE>
- ------------------
(1) Dollars in thousands.
(2) Includes snowblowers, generators, lawn tractors, go carts and parts for all
Products.
26
<PAGE>
MATURITY AND PRINCIPAL PAYMENT CONSIDERATIONS
The Pooling and Servicing Agreement provides that the Class A Invested
Amount is payable on June 15, 2004 (or if such day is not a day other than a
Saturday, Sunday or a day on which banking institutions in New York, New York
are authorized or obligated by law to be closed (such day, a "BUSINESS DAY"), on
the next succeeding Business Day) (the "CLASS A EXPECTED FINAL PAYMENT DATE"),
or earlier upon the occurrence of an Early Amortization Event, to the extent
funds are available therefor from the Fixed Allocation Percentage of Principal
Collections, the Transferor Percentage of Principal Collections allocable to the
Certificates, any Excess Principal Collections allocated to the Certificates and
amounts on deposit in the Principal Funding Account. The Pooling and Servicing
Agreement also provides that the Class B Invested Amount is payable on July 15,
2004 (or if such day is not a Business Day, on the next succeeding Business Day)
(the "CLASS B EXPECTED FINAL PAYMENT DATE" and, together with the Class A
Expected Final Payment Date, the "EXPECTED FINAL PAYMENT DATES"), or earlier
upon the occurrence of an Early Amortization Event, to the extent funds are
available therefor from the Fixed Allocation Percentage of Principal
Collections, the Transferor Percentage of Principal Collections allocable to the
Certificates, any Excess Principal Collections allocated to the Certificates and
amounts on deposit in the Principal Funding Account (in either case, only after
the Class A Invested Amount has been paid in full). The Class B
Certificateholders will not receive any payments of principal until the Class A
Invested Amount has been paid in full, and the Class C Certificateholders will
not receive any payments of principal until the Class A Invested Amount and the
Class B Invested Amount have been paid in full.
Although it is anticipated that Principal Collections from such sources
will be deposited in the Principal Funding Account in an amount sufficient to
pay the Class A Invested Amount on the Class A Expected Final Payment Date and
the Class B Invested Amount on the Class B Expected Final Payment Date, no
assurance can be given in that regard. Full payment of each Class of Offered
Certificates by the applicable Expected Final Payment Date depends on, among
other things, generation of new Receivables and repayment by Dealers of the
Receivables and may not occur if Dealer sales or payments are insufficient
therefor. Because the Receivables generally are paid upon retail sale of the
underlying Product, the timing of such payments is uncertain. In addition, there
is no assurance that Yamaha Products will continue to sell at current rates or
that any particular pattern of Dealer sales or payments will occur. See
"Description of the Offered Certificates--Allocation of Collections; Deposits in
Collection Account," "--Principal Collections for all Series" and "The Dealer
Floorplan Financing Business."
Funds on deposit in the Principal Funding Account will be distributed to
the Class A Certificateholders on the Class A Expected Final Payment Date. If
such amounts are insufficient to pay the Class A Invested Amount on the Class A
Expected Final Payment Date, an Early Amortization Event will occur and
thereafter the Class A Certificateholders will receive distributions of Class A
Monthly Principal and Class A Monthly Interest on each Distribution Date until
the Class A Invested Amount has been paid in full. Provided that the Class A
Invested Amount is paid in full on the Class A Expected Final Payment Date and
the Early Amortization Period has not commenced, funds on deposit in the
Principal Funding Account will be distributed to the Class B Certificateholders
on the Class B Expected Final Payment Date. If such amounts are insufficient to
pay the Class B Invested Amount on the Class B Expected Final Payment Date, an
Early Amortization Event will occur and thereafter the Class B
Certificateholders will receive distributions of Class B Monthly Principal and
Class B Monthly Interest on each Distribution Date until the Class B Invested
Amount has been paid in full.
The amount of new Receivables generated in any month and monthly payment
rates on the Receivables may vary because of seasonal variations in Product
sales and inventory levels, retail incentive programs provided by Yamaha,
competition from other manufacturers and various economic factors affecting
Product 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 during the
period and the denominator of which is the average aggregate principal balance
for such period. There can be no assurance that the rate of Collections will be
similar to the historical experience set forth below, and there are no
discernible trends with respect to
27
<PAGE>
such experience that are material. Although the Accounts constitute the entire
U.S. Wholesale Portfolio as of March 31, 1999, actual monthly payment rates with
respect to the Accounts may be different in the future.
MONTHLY PAYMENT RATES FOR THE U.S. WHOLESALE PORTFOLIO(1)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH
31,
--------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Highest Monthly
Payment Rate........ 29.43% 25.51% 23.72%
Lowest Monthly Payment
Rate................ 18.25% 13.46% 11.35%
Twelve Month
Average............. 23.93% 19.17% 18.07%
</TABLE>
- ------------------
(1) Monthly payment rate is calculated as monthly collections divided by the
average aggregate principal balance for such period.
Prior to the payment (or deposit in the Principal Funding Account) of the
Class A Invested Amount in full, deposits will be made to the Principal Funding
Account on each Distribution Date with respect to the period commencing on the
first day of the December 2003 Collection Period and continuing until the
earlier of the commencement of an Early Amortization Period and the last day of
the May 2004 Collection Period (the "CONTROLLED ACCUMULATION PERIOD"), in an
amount equal to the lesser of (a) Class A Monthly Principal and (b) the sum of
the Controlled Accumulation Amount for the Collection Period immediately
preceding such Distribution Date plus any unpaid Accumulation Shortfall related
to any prior Collection Period (the "CONTROLLED DEPOSIT AMOUNT"). In addition,
Excess Principal Collections allocable to the Certificates will be deposited in
the Principal Funding Account during the Controlled Accumulation Period in an
amount not to exceed the Controlled Deposit Amount when aggregated with the
amounts in the preceding sentence. "CONTROLLED ACCUMULATION AMOUNT" means, with
respect to the Class A Certificates, one-sixth of the Class A Invested Amount as
of the Controlled Accumulation Date. "ACCUMULATION SHORTFALL" means, for the
Collection Period immediately preceding the related Distribution Date, the
amount by which the Controlled Deposit Amount exceeds the amount deposited in
the Principal Funding Account on such Distribution Date.
If the amount on deposit in the Principal Funding Account equals the
Controlled Deposit Amount for the related Distribution Date, the balance of
funds remaining on deposit in the Collection Account and otherwise allocable to
Series 1999-1 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 investor certificateholders of any such Series or (b) if no
such Series is then amortizing or accumulating principal, paid to the Transferor
to maintain the Certificateholders' Interest or held as Undistributed Principal
Collections.
Following the payment (or deposit in the Principal Funding Account) of the
Class A Invested Amount in full but prior to the payment (or deposit in the
Principal Funding Account) of the Class B Invested Amount in full, deposits will
be made to the Principal Funding Account on the Distribution Date with respect
to the period commencing on the first day of the June 2004 Collection Period and
continuing until the earlier of the commencement of an Early Amortization Period
and the last day of the June 2004 Collection Period (the "RAPID ACCUMULATION
PERIOD" and, together with the Controlled Accumulation Period, the "ACCUMULATION
PERIODS") in an amount equal to Class B Monthly Principal. In addition, Excess
Principal Collections allocable to the Certificates will be deposited in the
Principal Funding Account during the Rapid Accumulation Period in an amount not
to exceed the Class B Invested Amount when aggregated with the amounts in the
preceding sentence.
Assuming that (a) the monthly payment rate for the Receivables during each
calendar month during the Accumulation Periods is not less than the lowest
monthly payment rate for the respective calendar month during the fiscal years
1996, 1997 and 1998, (b) the Pool Balance remains constant at the amount
outstanding as of March 31, 1999 and (c) an Early Amortization Event does not
occur during either Accumulation Period, and no other Series is in an
accumulation period or early amortization period, the Transferor expects that,
on the applicable Expected Final Payment Dates, there will be sufficient funds
on deposit in the Principal Funding Account to pay the Class A Invested Amount
and the Class B Invested Amount in full. The actual
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rate of accumulation and payment of principal will depend, among other factors,
on the rate of repayment, the timing of the receipt of such repayments, the
turnover rate of the Receivables and the rate of default by Dealers.
In the event of the occurrence of an Early Amortization Event, the Early
Amortization Period will begin on the day on which such Early Amortization Event
occurs or is deemed to have occurred. In the event of a sale, disposition or
other liquidation of the Receivables following an insolvency event as described
under "Description of the Offered Certificates--Early Amortization Events," the
Class A Monthly Principal and Class B Monthly Principal, as applicable, payable
to Certificateholders on the following Distribution Date will be equal to the
Class A Invested Amount and the Class B Invested Amount, respectively. Although
the Transferor believes that the likelihood of an Early Amortization Event
occurring is remote, there can be no assurance that an Early Amortization Event
will not occur. See "Description of the Offered Certificates--Early Amortization
Events."
Any delay in full payment of the aggregate principal amount of any Class of
Offered Certificates beyond the applicable Expected Final Payment Date would
extend the average life and date of final payment of the Offered Certificates,
in which case the holders of each Class of Offered Certificates will bear the
risk of not being able to reinvest payments at such time at yields at least
equal to the yields which would have been available to the holders of each Class
of Offered Certificates on the applicable Expected Final Payment Date. In
addition, a significant decline in the amount of Receivables generated could
cause an Early Amortization Event, the occurrence of which may shorten the
average life and date of final payment of the Offered Certificates, and the
holders of each Class of Offered Certificates would bear the risk of not being
able to reinvest payments on the Offered Certificates when received at yields at
least equal to the yield on the Offered Certificates.
In addition, since the Trust, as a master trust, may issue additional
Series from time to time, there can be no assurance that the issuance of
additional Series or the Principal Terms of any additional Series might not have
an impact on the timing and amount of payments received by Certificateholders.
DESCRIPTION OF THE OFFERED CERTIFICATES
The Floating Rate Series 1999-1, Class A Asset-Backed Certificates (the
"CLASS A CERTIFICATES") and the Floating Rate Series 1999-1, Class B
Asset-Backed Certificates (the "CLASS B CERTIFICATES" and, together with the
Class A Certificates, the "OFFERED CERTIFICATES") will be issued pursuant to the
Pooling and Servicing Agreement and the Series 1999-1 Supplement entered into
between the Transferor, as the transferor of the Receivables, Yamaha, as
Servicer and The Fuji Bank and Trust Company, as Trustee for the
Certificateholders, substantially in the forms filed as exhibits to the
Registration Statement of which this Prospectus is a part. Pursuant to the
Pooling and Servicing Agreement, the Transferor may execute further Supplements
thereto between the Transferor and the Trustee in order to issue additional
Series. See "--Additional Series of Certificates." The Trustee will provide a
copy of the Pooling and Servicing Agreement (without exhibits or schedules),
including any Supplements, to holders of any Class of Offered Certificates
without charge upon written request at the address of the Trustee referenced in
"--The Trustee." The following summary describes certain terms of the Pooling
and Servicing Agreement.
INTERESTS IN THE TRUST
The Offered Certificates will represent undivided interests in the Trust,
including the right to receive the Floating Allocation Percentage and the Fixed
Allocation Percentage of all Collections received with respect to the
Receivables in the Trust up to (but not in excess of) amounts required to make
payments of interest at the Class A Certificate Rate or the Class B Certificate
Rate, as the case may be, and the Class A Invested Amount on the Class A
Expected Final Payment Date or the Class B Invested Amount on the Class B
Expected Final Payment Date, as applicable, or earlier or later in certain
circumstances. The property of the Trust consists of the Receivables generated
on and after January 31, 1994 under the Accounts, all funds to be collected from
Dealers in respect of Receivables (including Recoveries), all of the
Transferor's right, title and interest in, to and under the Receivables Purchase
Agreement, the related Product Security, all moneys on
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<PAGE>
deposit in the Collection Account, the Principal Funding Account, the Special
Funding Account and any other accounts established for the benefit of any other
Series (which other accounts will not be available to Certificateholders), and
payments made in respect of Enhancements issued with respect to any other Series
(the drawing on or payment of such Enhancement not being available to
Certificateholders). The term "ENHANCEMENT," as defined in the Pooling and
Servicing Agreement, includes any letter of credit, guaranteed rate agreement,
maturity guaranty facility, cash collateral account or guaranty, tax protection
agreement, interest rate swap or other contract or agreement for the benefit of
any Series issued by the Trust. The Trust does not include the Receivables
arising from any Removed Accounts. As of the Closing Date, the Class A Invested
Amount will be $200,000,000 (the "CLASS A INITIAL INVESTED AMOUNT"), the
Class B Invested Amount will be $14,035,000 (the "CLASS B INITIAL INVESTED
AMOUNT") and the Class C Invested Amount will be $19,883,041 (the "CLASS C
INITIAL INVESTED AMOUNT").
The Transferor or a designated affiliate will own the interest in the Trust
(the "TRANSFEROR INTEREST") not represented by the Certificates or any other
Series of certificates issued or to be issued. The Transferor Interest will be
evidenced by a certificate (the "EXCHANGEABLE TRANSFEROR CERTIFICATE")
representing an undivided interest in the Trust, including the right to the
Transferor Percentage, which may vary from month to month, of all Collections on
the Receivables in the Trust, subject to allocation to the Certificates and any
other Series of certificates then in its accumulation or early amortization
period and further subject to allocation to the Certificates and other Series of
certificates (if so provided in the applicable Supplement) upon the occurrence
of a Transferor Subordination Event.
INTEREST PAYMENTS
Interest will accrue on the unpaid principal amount of each Class of
Offered Certificates at a per annum rate equal to the applicable Certificate
Rate and, except as otherwise provided herein, will be distributed to the
Class A Certificateholders and the Class B Certificateholders monthly on the
15th day of each month (or, if any such day is not a Business Day, on the next
succeeding Business Day) and on the applicable Expected Final Payment Date (each
a "DISTRIBUTION DATE"), commencing July 15, 1999. Interest for any Distribution
Date will include interest at the applicable Certificate Rate from and including
the preceding Distribution Date or, in the case of the first Distribution Date,
from and including June 1, 1999 (the "CLOSING DATE"), to but excluding such
Distribution Date (each an "INTEREST ACCRUAL PERIOD"). Interest will be
calculated on the basis of the actual number of days in the related Interest
Accrual Period and a 360-day year.
Interest on the unpaid principal amount of the Class A Certificates will
accrue for each Interest Accrual Period at a rate per annum equal to the lesser
of (1) one-month LIBOR determined as of the second London Banking Day prior to
such Interest Accrual Period (or, in the case of the first Distribution Date,
based on the average of one-month and two-month LIBOR determined as of May 27,
1999 for the period from June 1, 1999 up to but excluding July 15, 1999) plus
% per annum or (2) the Maximum Rate (the "CLASS A CERTIFICATE RATE").
Interest on the unpaid principal amount of the Class B Certificates will accrue
for each Interest Accrual Period at a rate per annum equal to the lesser of
(1) one-month LIBOR determined as of the second London Banking Day prior to such
Interest Accrual Period (or, in the case of the first Distribution Date, based
on the average of one-month and two-month LIBOR determined as of May 27, 1999
for the period from June 1, 1999 up to but excluding July 15, 1999) plus %
per annum or (2) the Maximum Rate (the "CLASS B CERTIFICATE RATE"). Interest on
the unpaid principal amount of the Class C Certificates will accrue for each
Interest Accrual Period at a rate per annum equal to the lesser of
(1) one-month LIBOR determined as of the second London Banking Day prior to such
Interest Accrual Period (or, in the case of the first Distribution Date, based
on the average of one-month and two-month LIBOR determined as of May 27, 1999
for the period from June 1, 1999 up to but excluding July 15, 1999) plus %
per annum or (2) the Maximum Rate (the "CLASS C CERTIFICATE RATE" and, together
with the Class A Certificate Rate and the Class B Certificate Rate, the
"CERTIFICATE RATES"). The "MAXIMUM RATE" for a Distribution Date is (1) the
product of (a) the Yield Factor for such Distribution Date and (b) twelve minus
(2) the Servicing Fee Percentage.
On the second London Banking Day preceding the first day of an Interest
Accrual Period (a "LIBOR DETERMINATION DATE"), until the Final Series
Termination Date, the Trustee will determine the rate for deposits in United
States dollars having a one-month maturity, commencing on the first day of such
Interest
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Accrual Period, which appears on Telerate Page 3750 as of 11:00 a.m., London
time, on such LIBOR Determination Date. If such rate does not appear on Telerate
Page 3750, the rate for such LIBOR Determination Date will be determined on the
basis of rates at which deposits in United States dollars having a one-month
maturity are offered by the Reference Banks at approximately 11:00 a.m., London
time, on that day to prime banks in the London interbank market. The Trustee
will request the principal London office in each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for such LIBOR Determination Date will be the arithmetic mean of the
quotations (rounded upward to the nearest 0.015625%). If fewer than two
quotations are provided as requested, the rate for such LIBOR Determination Date
will be the arithmetic mean (rounded upward to the nearest 0.015625%) of the
rates quoted by major banks in The City of New York, selected by the Servicer,
at approximately 11:00 a.m., New York time, on such date for loans in United
States dollars having a one-month maturity to leading European banks; provided,
however, that if the Trustee is unable to determine a rate in accordance with
one of the procedures described above, LIBOR shall be LIBOR as determined on the
most recent LIBOR Determination Date. The Class A Certificate Rate and the
Class B Certificate Rate applicable to the then current and preceding Interest
Accrual Period may be obtained be telephoning the Trustee at (212) 898-2516. For
purposes of calculating LIBOR, "LONDON BANKING DAY" means any business day on
which dealings in deposits in United States dollars are transacted in the London
interbank market, "TELERATE PAGE 3750" means the display page currently so
designated on the Dow Jones Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices) and "REFERENCE BANKS" means three major banks in the London interbank
market selected by the Servicer.
On each Distribution Date, Class A Monthly Interest and Class B Monthly
Interest will be paid to the Class A Certificateholders and the Class B
Certificateholders, respectively, of record on the last Business Day of the
immediately preceding month (the "RECORD DATE").
PRINCIPAL PAYMENTS
No principal payments will be made to the Class A Certificateholders until
the earlier of the Class A Expected Final Payment Date or upon the occurrence of
an Early Amortization Event as described herein. See "--Early Amortization
Events." No principal payments will be made to the Class B Certificateholders
until the final principal payment has been made to the Class A
Certificateholders. No principal payments will be made to the holders of record
of Class C Certificates (the "CLASS C CERTIFICATEHOLDERS" and, together with the
Class A Certificateholders and the Class B Certificateholders, the
"CERTIFICATEHOLDERS") until the final principal payment has been made to the
holders of each Class of Offered Certificates. With respect to the period
beginning on June 1, 1999 and ending on the earlier of (1) on the day prior to
the day on which the Controlled Accumulation Period commences or (2) on the day
prior to the day on which the Early Amortization Period commences (the
"REVOLVING PERIOD"), Principal Collections allocable to the Certificateholders'
Interest 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 investor certificateholders of any such Series or (b) if no
such Series is then amortizing or accumulating principal, paid to the Transferor
to maintain the Certificateholders' Interest or held as Undistributed Principal
Collections.
Unless and until an Early Amortization Event shall have occurred, on each
Distribution Date occurring during the Controlled Accumulation Period on or
prior to the Class A Expected Final Payment Date, all Principal Collections
allocable to the undivided interests of the Class A Certificateholders, the
Class B Certificateholders and the Class C Certificateholders in the Trust (the
"CERTIFICATEHOLDERS' INTEREST") and the Transferor Interest and certain other
amounts comprising Class A Monthly Principal and Excess Principal Collections
allocated to the Certificates will no longer be paid for the benefit of other
Series or to the Transferor as described above but instead will be deposited in
the Principal Funding Account in an amount not to exceed the Controlled Deposit
Amount. Unless and until an Early Amortization Event shall have occurred, on
each Distribution Date occurring during the Rapid Accumulation Period on or
prior to the Class B Expected Final Payment Date, all Principal Collections
allocable to the Certificateholder's Interest and the Transferor Interest and
certain other amounts comprising Class B Monthly Principal and Excess Principal
Collections allocated to the Certificates will no longer be paid for the benefit
of other Series or to the Transferor as described above but instead will be
deposited in the Principal Funding Account. The funds
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deposited in the Principal Funding Account will be used to pay the Class A
Invested Amount on the Class A Expected Final Payment Date and the Class B
Invested Amount on the Class B Expected Final Payment Date. Amounts on deposit
in the Principal Funding Account shall be invested at the direction of the
Servicer. Earnings, net of losses and investment expenses, will be withdrawn
from the Principal Funding Account and deposited in the Collection Account. See
"--Principal Funding Account." Although the Principal Funding Account will be an
Eligible Deposit Account and amounts therein will be invested in Eligible
Investments, the holders of each Class of Offered Certificates will bear the
risk of loss of any amounts of principal on deposit therein. Prior to the
Class A Expected Final Payment Date, the amount on deposit in the Principal
Funding Account subject to such risk could reach a maximum of $200,000,000,
which is the Class A Initial Invested Amount. During the period commencing on
the Class A Expected Final Payment Date until the Class B Expected Final Payment
Date, the amount on deposit in the Principal Funding Account subject to such
risk could reach a maximum of $14,035,000, which is the Class B Initial Invested
Amount. Even if the funds on deposit in the Principal Funding Account at such
applicable time are insufficient to pay the Class A Invested Amount or the
Class B Invested Amount, as the case may be, in full, all such funds will be
distributed to the holders of such Class of Offered Certificates on the
applicable Expected Final Payment Date and the Early Amortization Period will
commence. On each Distribution Date thereafter the holders of such Class of
Offered Certificates will receive, as applicable, distributions of Class A
Monthly Principal and Class A Monthly Interest until the Class A Invested Amount
has been paid in full or distributions of Class B Monthly Principal and Class B
Monthly Interest until the Class B Invested Amount has been paid in full.
Interest payments on the Offered Certificates will be made on each
Distribution Date and interest and principal payments on the Offered
Certificates will be made on the applicable Expected Final Payment Date (or, if
an Early Amortization Event occurs, on each Distribution Date thereafter) to the
holders in whose names the Offered Certificates were registered (expected to be
Cede, as nominee of DTC) at the close of business on the related Record Date.
The final payment on the Offered Certificates will be made only upon
presentation and surrender of the Offered Certificates. Distributions will be
made to DTC in immediately available funds.
REGISTRATION OF THE OFFERED CERTIFICATES IN THE NAME OF CEDE AS NOMINEE OF DTC
The interests of holders of beneficial interests in the Offered
Certificates ("CERTIFICATE OWNERS") will be offered for purchase in minimum
denominations of $1,000 (representing 1/200,000th of the undivided interest of
the Class A Certificateholders in the Trust and 1/14,035th of the undivided
interest of the Class B Certificateholders in the Trust) and integral multiples
thereof and will be represented initially by one or more physical certificates
registered in the name of Cede & Co. ("CEDE") as nominee of The Depository Trust
Company ("DTC"). No Certificate Owner will be entitled to receive a definitive
certificate representing such person's beneficial ownership interest in the
Offered Certificates except in the event that Definitive Certificates are issued
under the limited circumstances described herein. Unless and until Definitive
Certificates are issued, all references to actions by holders of any Class of
Offered Certificates shall refer to actions taken by DTC upon instructions from
its participating organizations ("DIRECT PARTICIPANTS") and all references to
distributions, notices, reports and statements to holders of any Class of
Offered Certificates shall refer to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of the Offered Certificates,
for payment or distribution to Certificate Owners in accordance with DTC's
procedures with respect thereto. See "--Book-Entry Registration of the Offered
Certificates" and "--Issuance of Definitive Certificates Upon the Occurrence of
Certain Circumstances."
BOOK-ENTRY REGISTRATION OF THE OFFERED CERTIFICATES
Certificate Owners may hold their Offered Certificates through DTC (in the
United States) or Cedel Bank, societe anonyme ("CEDEL") or Euroclear (in Europe)
if they are participants of such systems, or indirectly through organizations
that are participants in such systems.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a banking organization within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the Uniform Commercial Code (the "UCC") as in effect in
the State of New York and a "clearing agency" registered pursuant to
Section 17A of the Exchange Act.
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DTC was created to hold securities for its Direct Participants and to facilitate
the clearance and settlement of securities transactions between Direct
Participants through electronic book-entries, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include
securities brokers and dealers (including the Underwriter), banks, trust
companies and clearing corporations, and certain other organizations. Indirect
access to the DTC system is also available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("INDIRECT
PARTICIPANTS" and, together with Direct Participants, "DTC PARTICIPANTS"). The
rules applicable to DTC and DTC Participants are on file with the Commission.
To facilitate subsequent transfers, all Offered Certificates deposited with
DTC will be registered in the name of DTC's nominee, Cede. The deposit of
Offered Certificates with DTC and their registration in the name of Cede will
effect no change in beneficial ownership. DTC has no knowledge of the actual
Certificate Owners; DTC's records reflect only the identity of the Direct
Participants to whose accounts the Offered Certificates are credited, which may
or may not be the Certificate Owners. The DTC Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Certificate Owners will receive all distributions of principal of, and
interest on, the Offered Certificates from the Trustee, as paying agent, or its
successor in such capacity (the "PAYING AGENT"), through Direct Participants or
Indirect Participants. Under a book-entry format, Certificate Owners may
experience some delay in their receipt of payments, since such payments will be
forwarded by the Paying Agent to Cede, as nominee of DTC. DTC will forward such
payments to its Direct Participants which thereafter will forward them to
Indirect Participants or Certificate Owners. Certificate Owners will not be
recognized by the Trustee as Certificateholders, as such term is used in the
Pooling and Servicing Agreement or any Supplement. Certificate Owners will be
permitted to exercise the rights of holders of any Class of Offered Certificates
only indirectly through DTC and its Direct Participants and Indirect
Participants.
Because DTC can act only on behalf of Direct Participants, who in turn act
on behalf of Indirect Participants, and on behalf of certain banks, trust
companies and other persons approved by it, the ability of a Certificate Owner
to pledge the Offered Certificates to persons or entities that do not
participate in the DTC system, or to otherwise act with respect to such Offered
Certificates, may be limited due to the absence of physical certificates for
such Offered Certificates.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Certificate Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payments by DTC Participants to Certificate
Owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the responsibility of such DTC
Participant and not of DTC, the Trustee, the Transferor or the Servicer, subject
to any statutory or regulatory requirements as may be in effect from time to
time. Payment of principal and interest to DTC is the responsibility of the
Paying Agent, disbursement of such payments to Direct Participants shall be the
responsibility of DTC and disbursement of such payments to Certificate Owners
shall be the responsibility of Direct Participants and Indirect Participants.
Purchases of Offered Certificates under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Offered
Certificates on DTC's records. The ownership interest of each actual Certificate
Owner is in turn to be recorded on the Direct Participants' and Indirect
Participants' records. Certificate Owners will not receive written confirmation
from DTC of their purchase, but Certificate Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct Participant or Indirect
Participant through which the Certificate Owner entered into the transaction.
Transfers of ownership interests in the Offered Certificates are to be
accomplished by entries made on the books of DTC Participants acting on behalf
of Certificate Owners. Certificate Owners will not receive physical certificates
representing their ownership interest in the Offered Certificates, except in the
event that use of the book-entry system for the Offered Certificates is
discontinued.
Neither DTC nor Cede will consent or vote with respect to the Offered
Certificates. DTC has advised the Transferor that it will take any action
permitted to be taken by a holder of any Class of Offered
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Certificates under the Pooling and Servicing Agreement or any Supplement only at
the direction of one or more Direct Participants to whose accounts with DTC the
Offered Certificates are credited. Additionally, DTC has advised the Transferor
that to the extent that the Pooling and Servicing Agreement or any Supplement
requires that any action may be taken only by Certificateholders of each Class
of Offered Certificates representing a specified percentage of the Class A
Invested Amount or the Class B Invested Amount, respectively, DTC will take such
action only at the direction of and on behalf of Direct Participants whose
holdings include undivided interests that satisfy such specified percentage.
Under its usual procedures, DTC will mail an "OMNIBUS PROXY" to the Trustee as
soon as possible after any applicable record date with respect to a consent or
vote. The Omnibus Proxy will assign Cede's consenting or voting rights to those
Direct Participants to whose accounts the Offered Certificates will be credited
on that record date (identified on a listing attached to the Omnibus Proxy).
DTC may discontinue providing its services as securities depository with
respect to the Offered Certificates at any time by giving reasonable notice to
the Trustee. Under such circumstances, in the event that a successor securities
depository is not obtained, Definitive Certificates are required to be printed
and delivered. The Transferor may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor securities depository). In that
event, Definitive Certificates will be delivered to holders of each Class of
Offered Certificates. See "--Issuance of Definitive Certificates Upon the
Occurrence of Certain Circumstances."
Cedel and Euroclear will hold omnibus positions on behalf of the Cedel
Participants and the Euroclear Participants, respectively, through customers'
securities accounts in Cedel's and Euroclear's names on the books of their
respective depositaries (each, a "DEPOSITARY" and collectively, the
"DEPOSITARIES") which in turn will hold such positions in customers' securities
accounts in the Depositaries' names on the books of DTC.
Transfers between Direct Participants will occur in accordance with DTC
rules. Transfers between Cedel Participants and Euroclear Participants will
occur in accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC in the United States, on the one hand, and directly or indirectly
through Cedel Participants or Euroclear Participants, on the other, will be
effected through DTC in accordance with DTC rules through Cedel or Euroclear
through its Depositary; however, such cross-market transactions will require
delivery of instructions to Cedel or Euroclear by the counterparty in such
system in accordance with its rules and procedures and within its established
deadlines (European time). Cedel or Euroclear will, if the transaction meets its
settlement requirements, deliver instructions to its Depositary to take action
to effect final settlement on its behalf by delivering or receiving securities
through DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedel Participants
and Euroclear Participants may not deliver instructions directly to the
Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing day, dated the business
day following the DTC settlement date, and such credits or any transactions in
such securities settled during such processing day will be reported to the
relevant Cedel Participant or Euroclear 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 through DTC.
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for its participating organizations ("CEDEL
PARTICIPANTS") and facilitates the clearance and settlement of securities
transactions between Cedel Participants through electronic book-entry changes in
accounts of Cedel Participants, thereby eliminating the need for physical
movement of certificates. Transactions may be settled in Cedel in any of 36
currencies, including United States dollars. Cedel provides to its Cedel
Participants, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Cedel interfaces with domestic markets in several
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countries. As a professional depository, Cedel is subject to regulation by the
Luxembourg Monetary Institute. Cedel Participants are recognized financial
institutions around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations and may include the Underwriter. Indirect access to Cedel is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Cedel Participant,
either directly or indirectly.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ("EUROCLEAR PARTICIPANTS") and to clear and
settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of securities certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions may now be settled
in any of 34 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 Clearance System, S.C., a Belgian cooperative corporation (the
"COOPERATIVE"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for the Euroclear System on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the
Underwriter. Indirect access to the Euroclear System is also available to other
firms that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "TERMS AND CONDITIONS"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal 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 securities
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.
Payments on Offered 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 Depositary. Such payments will be subject to tax reporting in
accordance with relevant United States tax laws and regulations. See "Certain
Federal Income Tax Considerations" and Annex A. Cedel or the Euroclear Operator,
as the case may be, will take any other action permitted to be taken by holders
of any Class of Offered Certificates under the related agreement on behalf of a
Cedel Participant or Euroclear Participant only in accordance with its relevant
rules and procedures and subject to its Depositary's ability to effect such
actions on its behalf through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of Offered 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.
The information in this section concerning DTC, Cedel and Euroclear and
their respective book-entry systems has been obtained from sources that the
Transferor believes to be reliable, but the Transferor takes no responsibility
for the accuracy thereof.
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DTC'S YEAR 2000 EFFORTS
DTC's management is aware that some computer applications, systems and the
like for processing data ("SYSTEMS") that are dependent upon calendar dates,
including dates before, on and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed the DTC Participants and other members of the
financial community (the "INDUSTRY") that it has developed and is implementing a
program so that its Systems, as the same relate to the timely payment of
distributions (including principal and interest payments) to securityholders,
book-entry deliveries and settlement of trades within DTC, continue to function
appropriately. This program includes a technical assessment and a remediation
plan, each of which is complete. Additionally, DTC's plan includes a testing
phase, which is expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third party vendors from whom DTC licenses software and hardware, and
third party vendors on whom DTC relies for information and the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has informed the Industry that it is contacting (and will
continue to contact) third party vendors from whom DTC acquires services to:
(a) impress upon them the importance of such services being Year 2000 compliant
and (b) determine the extent of their efforts for Year 2000 remediation (and, as
appropriate, testing) of their services. In addition, DTC is in the process of
developing such contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.
ISSUANCE OF DEFINITIVE CERTIFICATES UPON THE OCCURRENCE OF CERTAIN CIRCUMSTANCES
Each Class of the Offered Certificates will be issued in fully registered,
certificated form (the "DEFINITIVE CERTIFICATES") in denominations of $1,000 and
integral multiples thereof to the related Certificate Owners or their nominees,
rather than to DTC or its nominee or a successor clearing agency, only if:
(1) the Transferor advises the Trustee in writing that DTC (or such
successor clearing agency) is no longer willing or able to discharge
properly its responsibilities as depository with respect to the Offered
Certificates, and neither the Trustee nor the Transferor is able to locate
a qualified successor;
(2) the Transferor, at its option, advises the Trustee in writing that
it elects to terminate the registration of the Offered Certificates on the
book-entry system through DTC (or such successor clearing agency); or
(3) after the occurrence of a Servicer Default, Certificate Owners
representing in the aggregate more than 50% of the Invested Amount advise
the Trustee and DTC (or such successor clearing agency) in writing that the
continuation of a book-entry system through DTC (or such successor clearing
agency) is no longer in the best interest of the Certificate Owners.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee shall notify all Certificate Owners, through DTC, of the
availability through DTC of Definitive Certificates. Upon surrender by DTC of
the definitive certificates representing the Offered Certificates and receipt by
the Trustee of instructions for re-registration, the Trustee will reissue the
Offered Certificates as Definitive Certificates, and thereafter the Trustee will
recognize the holders of such Definitive Certificates as holders under the
Pooling and Servicing Agreement (collectively, "HOLDERS").
Distributions of principal of, and interest on, the Definitive Certificates
will be made by the Paying Agent directly to Holders in accordance with the
procedures set forth herein and in the Pooling and Servicing Agreement. Interest
payments on each Distribution Date and interest and principal payments on the
applicable Expected Final Payment Date or otherwise will be made to Holders in
whose names the Definitive Certificates were registered at the close of business
on the preceding Record Date. Such payments will be made by check mailed to the
address of such Holder as it appears on the certificate register. The final
payment on any Definitive Certificate, however, will be made only upon
presentation and surrender of such
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Definitive Certificate at the office or agency specified in the notice of final
distribution mailed to Certificateholders of each affected Class of Offered
Certificates. The Trustee will provide such notice to registered
Certificateholders of each affected Class of Offered Certificates not later than
the fifth day of the month of such final distribution.
Definitive Certificates will be transferable and exchangeable at the
offices of the Transfer Agent and Registrar, which shall initially be the
Trustee. No service charge will be imposed for any registration of transfer or
exchange, but the Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith.
RATING OF THE OFFERED CERTIFICATES
It is a condition to the issuance of the Class A Certificates that they be
rated in the highest rating category by at least one nationally recognized
statistical rating organization (the rating agency or rating agencies selected
by the Transferor to rate the certificates of a Series is herein referred to as
the "RATING AGENCY"). The rating of the Class A Certificates is based primarily
on the credit quality of the Receivables, the level of subordination of the
Class B Certificates and the Class C Certificates and the limited subordination
of the Transferor Interest up to the Available Subordinated Amount. It is a
condition to the issuance of the Class B Certificates that they be rated in the
"A" category for long-term debt obligations or the equivalent by the Rating
Agency, as applicable. The rating of the Class B Certificates is based primarily
on the credit quality of the Receivables, the level of subordination of the
Class C Certificates and the limited subordination of the Transferor Interest up
to the Available Subordinated Amount. There is no assurance that such ratings
will remain for any given period of time or that such ratings will not be
lowered or withdrawn entirely by the Rating Agency, if in its judgment
circumstances in the future so warrant. The ratings are not a recommendation to
purchase, hold or sell the Offered Certificates, inasmuch as such ratings do not
comment as to market price or suitability for a particular investor. The rating
of each Class of Offered Certificates addresses the likelihood of the ultimate
payment of principal and interest on such Class of Offered Certificates.
However, the Rating Agency does not evaluate, and the ratings of the Offered
Certificates do not address, the likelihood that the outstanding principal
amount of each Class of Offered Certificates will be paid by the applicable
Expected Final Payment Date.
CONVEYANCE OF RECEIVABLES
On March 24, 1994, the Transferor transferred and assigned to the Trust all
of its right, title and interest in, to and under Receivables outstanding as of
January 31, 1994 in the Accounts, all of the Receivables thereafter created
under the Accounts then in existence or subsequently created and the proceeds
and related Product Security of all of the foregoing. Prior to such transfer and
assignment, pursuant to the Receivables Sale Agreement, Deutsche Financial sold
to Yamaha all its right, title and interest in, to and under all Receivables
owned by it and existing as of January 31, 1994 under the Accounts, together
with all Receivables thereafter created under the Accounts (including subsequent
Accounts) and any related proceeds and Product Security, and, pursuant to the
Receivables Purchase Agreement, Yamaha sold to the Transferor all its right,
title and interest in, to and under the Receivables existing as of January 31,
1994 under the Accounts, together with all Receivables thereafter created under
the Accounts (including subsequent Accounts) and any related proceeds and
Product Security, from time to time thereafter. On the Closing Date, the Trustee
will authenticate each Class of Offered Certificates and the Series 1999-1,
Class C Asset-Backed Certificates (the "CLASS C CERTIFICATES," and together with
the Offered Certificates, the "CERTIFICATES" or "SERIES 1999-1" and each such
class of Certificates, a "CLASS") and deliver such Offered Certificates to the
Transferor which will, in turn, deliver them to or upon the order of Chase
Securities Inc. (the "UNDERWRITER") against payment of the net proceeds of the
sale of the Offered Certificates. The Trustee will also deliver the Class C
Certificates to the Transferor.
In connection with the sale of the Receivables and related Product Security
owned by Deutsche Financial and existing on or after January 31, 1994 to Yamaha
pursuant to the Receivables Sale Agreement, and the sale of the Receivables and
related Product Security by Yamaha to the Transferor pursuant to the Receivables
Purchase Agreement, and the transfer of the Receivables by the Transferor to the
Trust pursuant to the Pooling and Servicing Agreement, Yamaha has caused and
will continue to cause Deutsche Financial
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to indicate in its records, including any computer files, that such Receivables
have been sold by Deutsche Financial to Yamaha and then resold by Yamaha to the
Transferor and then transferred to the Trust, and the Transferor has indicated
and will continue to indicate in its records, including any computer files, that
the Receivables have been transferred from the Transferor to the Trust. In
addition, the Transferor provides and will continue to provide to the Trustee
upon request a computer file or a microfiche list containing a true and complete
list showing for each Account (a) its account number and (b) the amount of
Receivables in such Account. Deutsche Financial, acting on behalf of Yamaha as
initial subservicer, will retain and will not deliver to the Trustee any other
records or agreements relating to the Accounts or the Receivables. Except as set
forth above, the records and agreements relating to the Accounts and the
Receivables are not and will not be segregated from those relating to other
dealer accounts and receivables, and neither the computer files nor the physical
documentation relating to the Accounts or Receivables have been or will be
stamped or marked to reflect the transfer of Receivables to the Trust. The
Trustee will have reasonable access to such records and agreements as required
by applicable law or to enforce the rights of the Certificateholders. Deutsche
Financial and Yamaha have filed one or more UCC-1 financing statements in
accordance with the UCC to perfect Yamaha's and the Transferor's interest in the
Receivables, as applicable. The Transferor, in turn, has filed one or more UCC-1
financing statements in accordance with California state law to perfect the
Trust's interest in the Receivables. See "Risk Factors" and "Certain Transfer,
Security Interest and Bankruptcy Considerations--Transfer of Receivables."
ADDITIONAL SERIES OF CERTIFICATES
The Pooling and Servicing Agreement provides for the Trustee to issue two
types of certificates: (a) one or more Series of investor certificates which are
generally transferable and have the characteristics described below and (b) the
Exchangeable Transferor Certificate, a certificate which evidences the
Transferor Interest, which is held by the Transferor or a designated affiliate
and is generally not transferable. The Pooling and Servicing Agreement also
provides that, pursuant to any one or more supplements to the Pooling and
Servicing Agreement (each, a "SUPPLEMENT"), the Transferor may by written
request to the Trustee, and fulfillment of the conditions set forth in the
Pooling and Servicing Agreement, cause the Trustee to issue one or more new
Series of certificates. Under the Pooling and Servicing Agreement, the
Transferor may define, with respect to any newly issued Series:
(1) its name or designation;
(2) its initial principal amount (or method for calculating such
amount);
(3) its certificate rate (or formula for the determination thereof);
(4) the interest payment date or dates and the date or dates from
which interest shall accrue;
(5) the method for allocating collections to certificateholders;
(6) the names of any accounts to be used by such Series and the terms
governing the operation
of any such accounts;
(7) the percentage used to calculate monthly servicing fees;
(8) the Minimum Transferor Percentage;
(9) the minimum amount of Trust Principal Component required to be
maintained;
(10) the issuer and terms of any Enhancement with respect thereto;
(11) the base rate for such Series, if applicable;
(12) the terms on which the certificates of such Series may be
repurchased at the Transferor's
option or remarketed to other investors;
(13) the series termination date;
(14) any deposit into any account maintained for the benefit of
certificateholders;
(15) the number of classes of such Series, and if more than one class,
the rights and priorities of each such class;
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(16) the extent to which the certificates of such Series will be
issuable in temporary or permanent global form (and, in such case, the
depository for such global certificate or certificates, the terms and
conditions, if any, upon which such global certificate may be exchanged, in
whole or in part, for definitive certificates, and the manner in which any
interest payable on a temporary or global certificate will be paid);
(17) the priority of any Series with respect to any other Series; and
(18) any other relevant terms (all such terms, the "PRINCIPAL TERMS"
of such Series).
None of the Transferor, the Servicer, the Trustee and the Trust is required or
intends to obtain the consent of any Certificateholder to issue any additional
Series. However, as a condition to the issuance of a new Series, the Transferor
will deliver to the Trustee written confirmation that such proposed issuance
will not result in the applicable Rating Agency reducing or withdrawing its
rating of any outstanding Series, including each Class of Offered Certificates.
The Transferor 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 of 1933, as amended (the "SECURITIES ACT") or exempt from
registration thereunder directly, through the Underwriter or one or more other
underwriters or placement agents, in fixed-price offerings or in negotiated
transactions or otherwise. Any such Series may be issued in fully registered or
book-entry form in minimum denominations determined by the Transferor. The Trust
has previously issued:
o the 6.25% Series 1994-1, Class A Asset-Backed Certificates (which
have been repaid);
o the 6.45% Series 1994-1, Class B Asset-Backed Certificates (which
have been repaid);
o the 6.20% Series 1995-1, Class A Asset-Backed Certificates;
o the 6.45% Series 1995-1, Class B Asset-Backed Certificates;
o the Variable Funding Series 1998-1, Class A Asset-Backed
Certificates; and
o the Variable Funding Series 1998-1, Class B Asset-Backed
Certificates.
The Certificates are the fourth Series to be issued by the Trust. The Transferor
may offer, from time to time, additional Series.
The Pooling and Servicing Agreement provides that the Transferor may cause
new Series to be issued and define Principal Terms such that each Series has a
period during which amortization of the principal amount thereof is intended to
occur which may have a different length and begin on a different date than such
period for any other Series. Further, one or more Series may be in their
revolving periods while other Series are not. Thus, certain Series may not be
amortizing, while other Series are amortizing. Each Series may have the benefits
of a form of Enhancement issued by issuers different from the issuers of the
form of Enhancement with respect to any other Series. Under the Pooling and
Servicing Agreement, the Trustee shall hold any such Enhancement only on behalf
of the Series with respect to which it relates. Likewise, with respect to each
such Enhancement, the Transferor may deliver a different form of Enhancement
agreement. The Pooling and Servicing Agreement also provides that the Transferor
may specify different certificate rates and monthly servicing fees with respect
to each Series. Yield Collections not used to pay interest on the certificates,
the monthly servicing fee, the investor default amount or investor charge-offs
with respect to any Series may be allocated pursuant to the terms of an
Enhancement agreement for such Series, if applicable. The Transferor also has
the option under the Pooling and Servicing Agreement to vary between Series the
terms upon which a Series may be repurchased at the Transferor's option or
remarketed to other investors. Additionally, certain Series may be subordinated
to other Series, or classes within a Series may have different priorities. Under
the terms of Series 1999-1, no current or future Series of certificates may be
senior to this Series of Certificates. The Class B Certificates will be
subordinate to the Class A Certificates, and the Class C Certificates will be
subordinate to the Offered Certificates, but no Class of Certificates will be
subordinate to any other Series of certificates. There is no limit to the number
of new Series that the Transferor may cause the Trust to issue under the Pooling
and Servicing Agreement. The Trust will terminate only as provided in the
Pooling and Servicing Agreement.
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New Series may only be issued upon the satisfaction of certain conditions
provided in the Pooling and Servicing Agreement. The Transferor may cause such a
new issuance by notifying the Trustee, at least three Business Days in advance
of the date upon which the issuance is to occur. The notice must state the
designation of any Series to be issued on the date of the issuance and, with
respect to each such Series: (a) its initial invested amount (or method for
calculating such amount) and (b) its certificate rate (or the method for
allocating interest payments or other cash flow to such Series). On the date of
the issuance, the Trustee will issue any such Series only upon delivery to it of
the following:
(1) a Supplement in form satisfactory to the Trustee signed by the
Transferor and specifying the Principal Terms of such Series;
(2) the form of Enhancement and the Enhancement agreement, if any,
with respect thereto executed by the Transferor and the provider of the
form of Enhancement;
(3) an opinion of counsel to the effect that certificates of such
Series will be characterized either as indebtedness or an interest in a
partnership under existing law for Federal income tax purposes and that the
issuance of such Series will not have a material adverse impact on the
Federal income tax characterization of any outstanding Series;
(4) written confirmation from each applicable Rating Agency that the
issuance of such Series will not result in such Rating Agency reducing or
withdrawing its rating on any outstanding Series; and
(5) a copy of a certified report of the Servicer setting forth certain
factual matters.
Upon satisfaction of such conditions, the Trustee will issue the new Series.
COVENANTS, REPRESENTATIONS AND WARRANTIES
Under the Pooling and Servicing Agreement, the Transferor represents and
warrants as of the date of any Supplement and the date of the initial issuance
of any related certificates that, among other things, (1) it has the power and
authority to carry out its obligations with respect to the transactions
contemplated by the Pooling and Servicing Agreement and related agreements and
cause the issuance of the certificates and (2) the Pooling and Servicing
Agreement constitutes a valid conveyance, transfer and assignment to the Trust
of all right, title and interest of the Transferor in, to and under the
Receivables and the related Product Security and the proceeds thereof.
If any of the representations and warranties described in the preceding
paragraph is not true and, as a result, there is a material adverse effect on
the interests of the investor certificateholders, then either the Trustee or
holders of investor certificates evidencing not less than a majority of the
aggregate unpaid principal amount of all outstanding investor certificates may
direct the Transferor to purchase the certificateholders' interest in such
Receivables on a Distribution Date within thirty (30) days of such notice (or
such longer period as may be allowed). However, no such purchase is required if,
by the end of such period, such representations and warranties are satisfied in
all material respects and any material adverse effect on the certificateholders'
interests has been cured.
To effect such a purchase, the Transferor must deposit into the Collection
Account, in immediately available funds on the Business Day preceding the
applicable Distribution Date, an amount equal to the sum of the amounts
specified in the Supplement related to each outstanding Series, which must then
be distributed to the investor certificateholders on such Distribution Date.
Unless the Transferor is required to repurchase all of the Receivables as
described herein, the obligation of the Transferor to purchase the
certificateholders' interest as set forth above is the sole remedy available to
the investor certificateholders (or the Trustee on their behalf) in the event of
a breach of the representations and warranties described above.
Additionally, with respect to the Receivables, the Transferor represents
and warrants under the Pooling and Servicing Agreement that, among other things:
(1) each Receivable and all related Product Security existing on or
after March 24, 1994 has been or will have been conveyed to the Trust free
and clear of any security interest or lien (except for those liens not of
equal or higher priority than the lien of the Trust);
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(2) on the applicable transfer date, each Receivable conveyed to the
Trust is an Eligible Receivable or, if such Receivable is not an Eligible
Receivable, such Receivable is conveyed to the Trust in accordance with the
terms of the Pooling and Servicing Agreement;
(3) all applicable consents, licenses, approvals and authorizations
have been obtained with respect to the conveyance of the Receivables;
(4) each of the Pooling and Servicing Agreement, any Supplement and
the Receivables Purchase Agreement constitutes a legal, valid and binding
obligation of the Transferor, enforceable against the Transferor in
accordance with its terms;
(5) the Pooling and Servicing Agreement constitutes either a valid
transfer and assignment, or the grant of a security interest, to the Trust
in all of the right, title and interest of the Transferor in, to and under
the Receivables, all related Product Security and all proceeds of the
foregoing; and
(6) certain specified information provided to the Trustee with respect
to the Receivables, the Accounts and the Dealers is true and correct in all
material respects.
If any of the representations and warranties described in the preceding
paragraph is not true and correct, and such breach has a material adverse effect
on the certificateholders' interest in any Receivable or Account, then, within
thirty (30) days (or such longer period not to exceed sixty (60) days) of the
earlier to occur of (A) the discovery of such event by the Transferor or the
Servicer and (B) receipt by the Transferor or the Servicer of written notice of
any such event given by the Trustee, Deutsche Financial or any Enhancement
provider, the Transferor must accept the reassignment of the affected
Receivables (or, in the case of an untrue representation or warranty with
respect to an Account, all Receivables in such Account). However, no such
reassignment is required if, by the end of such period, the breached
representation or warranty is true and correct in all material respects and any
material adverse effect caused by such breach has been cured.
The Transferor accepts the reassignment of any Receivables described above
(each, an "INELIGIBLE RECEIVABLE") by directing the Servicer to deduct the
aggregate principal amount of such Receivables from the Pool Balance (if the
amount is otherwise included in the Pool Balance) on or prior to the end of the
Collection Period in which the reassignment obligation arises. If, following
such deduction, the Transferor Amount is less than the product of (A) 10% (the
"MINIMUM TRANSFEROR PERCENTAGE") and (B) the product of (1) the Pool Balance and
(2) the result of one minus the Yield Factor (the "TRUST PRINCIPAL COMPONENT")
on the immediately preceding Determination Date, then the Transferor must
deposit into the Collection Account in immediately available funds the amount of
such shortfall (the "TRANSFER DEPOSIT AMOUNT"). If the Transfer Deposit Amount
is not so deposited, then the principal amount of such Receivables may only be
deducted from the Pool Balance if the Transferor Amount is not reduced below the
Minimum Transferor Percentage of the Trust Principal Component, and the
Receivables, the aggregate principal amounts of which have not been so deducted,
will not be reassigned to the Transferor but will remain part of the Trust. Upon
reassignment of any such Receivable (but only if the Transfer Deposit Amount, if
any, is paid), the Trust will automatically be deemed to transfer to the
Transferor, without recourse, representation or warranty, all of the right,
title and interest of the Trust in, to and under such Receivable, all related
Product Security and all proceeds of the foregoing. Unless the Transferor is
required to repurchase all of the Receivables as described herein, the
obligation of the Transferor to accept the reassignment of any such Receivable
and to pay any related Transfer Deposit Amount is the sole remedy available to
the investor certificateholders (or the Trustee on their behalf) respecting the
event giving rise to such obligation.
Under the Pooling and Servicing Agreement, if (A) a breach of any of the
Transferor's representations or warranties described above occurs or (B) a
material amount of Receivables are not Eligible Receivables, and in either case
such event has a material adverse effect on the investor certificateholders,
then either the Trustee or the holders of investor certificates evidencing
undivided interests aggregating more than 50% of the aggregate invested amount
of all outstanding Series may direct the Transferor to accept reassignment of
all Receivables on a Distribution Date within sixty (60) days (or such longer
period not to exceed an additional sixty (60) days). However, no such
reassignment is required if, on the Business Day prior to such Distribution
Date, the applicable representations and warranties are then true and correct in
all material
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respects or there is no longer a material amount of Receivables which are not
Eligible Receivables, as applicable.
To effect such a reassignment, the Transferor must deposit into the
Collection Amount on the Business Day prior to the applicable Distribution Date
an amount equal to the reassignment deposit amount for such Receivables for
distribution to the investor certificateholders. The deposit amount for such
reassignment is equal to the aggregate invested amount of all outstanding Series
on the Record Date related to the applicable Distribution Date on which such
deposit is made (less the aggregate principal amount on deposit in any principal
funding account) plus an amount equal to all accrued but unpaid interest on the
certificates of all Series at the applicable certificate rates through the end
of the interest accrual periods for such Series. Any payment of the reassignment
deposit amount and all other amounts in the Collection Account in respect of the
preceding Collection Period is considered a prepayment in full of all such
Receivables. On the Distribution Date with respect to which such amount has been
deposited into the Collection Account, the Receivables, any related Product
Security and all proceed of the foregoing will be released to the Transferor
without recourse, representation or warranty. If the Trustee or the investor
certificateholders direct the Transferor to accept the reassignment of all
Receivables, the obligation of the Transferor to accept such reassignment is the
sole remedy respecting the breach of the representations and warranties
described above or the existence of a material amount of Receivables which are
not Eligible Receivables.
Pursuant to the Receivables Purchase Agreement, Yamaha makes
representations and warranties with respect to the Receivables sold by it to the
Transferor pursuant to the Receivables Purchase Agreement substantially similar
to those described above with respect to the Transferor. As a result, in the
event that the Transferor breaches a representation and warranty described above
with respect to a Receivable sold to the Transferor by Yamaha, Yamaha will be
required to repurchase from the Transferor the Receivables retransferred to the
Transferor for an amount of cash equal to the amount the Transferor is required
to deposit under the Pooling and Servicing Agreement in connection with such
retransfer.
An "ELIGIBLE RECEIVABLE," as defined in the Pooling and Servicing
Agreement, refers to each Receivable:
(1) which has arisen under an eligible Account and is payable in
United States dollars;
(2) which was created in compliance with all applicable requirements
of law and pursuant to a dealer agreement which complies with all
applicable requirements of law;
(3) with respect to which all consents, licenses, approvals or
authorizations of, or registrations with, any governmental authority
required to be obtained or given by Yamaha or the Transferor in connection
with the creation or transfer of such Receivable or the execution, delivery
and performance by Deutsche Financial of the related dealer agreement have
been duly obtained or given and are in full force and effect;
(4) which was originated or acquired by Yamaha in the ordinary course
of business;
(5) which has been the subject of a valid transfer and assignment from
the Transferor to the Trust of all of the Transferor's right, title and
interest therein (and in the proceeds thereof);
(6) which will at all times be the legal, valid, binding and
assignable payment obligation of the Dealer thereof enforceable against
such Dealer in accordance with its terms, subject to certain bankruptcy and
equity related exceptions;
(7) which constitutes either an "account," "chattel paper" or a
"general intangible" under and as defined in Article 9 of the UCC as then
in effect in the State of California;
(8) which represents the obligation of a Dealer to repay an extension
of credit made to such Dealer by Deutsche Financial to finance such
Dealer's acquisition of Products from Yamaha;
(9) which at the time of creation and, except at the closing date for
the initial Series, in the case of Receivables in respect of which the
related financed Product has been sold by the Dealer, at the time of
transfer to the Trust is secured by a perfected security or ownership
interest in the Product relating thereto;
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(10) as to which at all times following the transfer of such
Receivable by the Transferor 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 (except for liens of lesser priority than
the lien of the Trust), other than liens permitted by the Pooling and
Servicing Agreement;
(11) which was owned by Yamaha at the time of its sale by Yamaha to
the Transferor;
(12) which, at the time of its transfer to the Trust, is not subject
to any right of rescission, setoff, counterclaim or other defense
(including the defense of usury) of the Dealer;
(13) as to which Yamaha, Deutsche Financial and the Transferor have
satisfied all obligations to be fulfilled at the time of its transfer to
the Trust;
(14) as to which Yamaha, Deutsche Financial and the Transferor have
done nothing, at the time of its transfer to the Trust, to impair the
rights of the Trust or certificateholders therein; and
(15) which, effective as of the last day of any Collection Period
commencing after the Series 1995-1 Asset-Backed Certificates and the
Series 1998-1 Asset-Backed Certificates have been retired, when aggregated
with the balance of all other Receivables due from such Dealer, does not
exceed 1% of the Pool Balance.
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 the Transferor's representations and warranties 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 or the performance by the Servicer of its obligations under the
Pooling and Servicing Agreement or for any other purpose. The Servicer, however,
is required to deliver to the Trustee on or before May 31 of each year an
opinion of counsel with respect to the validity of the security interest of the
Trust in, to and under the Receivables and certain other components of the
Trust.
ADDITION OF ACCOUNTS
Receivables created in all Accounts established with Dealers which have
purchased existing dealerships ("DEALER REPLACEMENT ACCOUNTS") shall be added
automatically to the Trust. Subject to the limitations described herein and in
"--Subordination of Transferor Interest in Certain Circumstances," the
Transferor shall, on an ongoing basis, automatically add Receivables created in
new Accounts which do not constitute Dealer Replacement Accounts ("NEW
ACCOUNTS") to the Trust subject to the following conditions:
(1) if either (a) on an annual basis, the percentage derived by
dividing the number of New Accounts added to the Trust during any fiscal
year of the Transferor by the number of Accounts in the Trust at the
beginning of such year exceeds 8% or (b) on a quarterly basis, the
percentage derived by dividing the number of New Accounts added to the
Trust during such calendar quarter by the number of Accounts in the Trust
at the beginning of such calendar quarter exceeds 5%, then the Transferor
may continue to add Receivables created in New Accounts to the Trust only
if (x) the Available Subordinated Amount is adjusted each Collection Period
thereafter by the aggregate amount of Receivables in those New Accounts
included in the Trust which New Accounts resulted in such percentage to
exceed the specified percentages therein or (y) the Transferor obtains a
letter from each of the Rating Agencies that such action will not result in
a downgrade or withdrawal of the then current ratings assigned by each of
them to each Series;
(2) if the annualized rate (averaged for a period of three consecutive
Collection Periods) of (a) Defaulted Receivables minus recoveries plus the
repossession value of all Products repossessed during such period to
(b) the beginning Pool Balance for the related Collection Period exceeds
7.5%, then the Transferor may continue to add Receivables created in any
New Accounts and Dealer Replacement Accounts to the Trust only if (x) the
Available Subordinated Amount is increased by the aggregate amount of
Receivables in New Accounts and Dealer Replacement Accounts or (y) the
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Transferor obtains a letter from each of the Rating Agencies that such
action will not result in a downgrade or withdrawal of the then current
ratings assigned by each of them to each Series; and
(3) if either (a) on an annual basis, the percentage derived by
dividing the number of New Accounts and Dealer Replacement Accounts added
to the Trust during any fiscal year of the Transferor by the number of
Accounts in the Trust at the beginning of such year exceeds 15% or (b) on a
quarterly basis, the percentage derived by dividing the number of New
Accounts and Dealer Replacement Accounts added to the Trust during such
calendar quarter by the number of Accounts in the Trust at the beginning of
such calendar quarter exceeds 10%, then the Transferor may continue to add
any Accounts to the Trust only if (x) the Available Subordinated Amount is
increased by the aggregate amount of Receivables in New Accounts and Dealer
Replacement Accounts or (y) the Transferor obtains a letter from each of
the Rating Agencies that such action will not result in a downgrade or
withdrawal of the then current ratings assigned by each of them to each
Series;
REMOVAL OF ACCOUNTS
Subject to the conditions set forth in the next succeeding sentence, on the
second Business Day preceding each Distribution Date (each, a "DETERMINATION
DATE") with respect to which the sum of the Trust Principal Component, the
Special Funding Account and the Principal Funding Account minus the sum of the
invested amounts (or adjusted invested amounts) for all Series and the Available
Subordinated Amount as of such date of determination (the "TRANSFEROR AMOUNT")
as a percentage of the Trust Principal Component exceeds 10% at the end of the
related Collection Period, the Transferor has the right to designate Removed
Accounts and accept the reassignment of all the Receivables in the Removed
Accounts, without notice to the certificateholders. The Transferor may, at its
sole discretion, accept such reassignment in an aggregate amount equal to an
amount not greater than the excess of the Transferor Amount over 10% of the
Trust Principal Component as of the end of the related Collection Period. The
Transferor is permitted to designate and require reassignment to it of the
Receivables from Removed Accounts only upon satisfaction of the following
conditions:
(1) the Transferor shall have delivered to the Trustee for execution a
written instrument of reassignment and a computer file or microfiche list
containing a true and complete list of all Removed Accounts identified by
account number and aggregate amount of Receivables;
(2) the Transferor shall represent and warrant that no selection
procedure believed by the Transferor to be materially adverse to the
interests of the certificateholders or any provider of Enhancements was
utilized in selecting the Removed Accounts;
(3) the removal of any Receivables of any Removed Accounts shall not,
after giving effect thereto in the reasonable belief of the Transferor,
cause an Early Amortization Event to occur and would not cause the
Transferor Amount as a percentage of the Trust Principal Component to be
less than the Minimum Transferor Percentage on the date of removal;
(4) the Transferor shall have delivered prior written notice of the
removal to each Rating Agency which has been selected by the Transferor to
rate any outstanding Series and, prior to the date on which such
Receivables are to be removed, shall have received notice from each Rating
Agency that such removal will not cause the reduction or withdrawal of its
rating of any Series of investor certificates;
(5) the Transferor shall have delivered to the Trustee and each
applicable Rating Agency an officer's certificate confirming the items set
forth in clauses (1) through (4) above; and
(6) the Transferor shall have delivered to the Trustee and the Rating
Agencies a favorable opinion of counsel that such removal will not
adversely affect the first priority security interest of the Trust in the
Receivables.
In addition, the Pooling and Servicing Agreement provides that no Receivables
arising in Accounts created after the date of any such removal may be conveyed
by the Transferor to the Trust without the written confirmation of each Rating
Agency and without delivery to the Trustee of a favorable opinion of counsel
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regarding the continuing perfection and priority of the security interest in the
Receivables in existing Accounts and in the Receivables in Accounts created on
or after the effective date of such reassignment.
COLLECTION ACCOUNT
The Trustee has caused to be established and maintained, in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account (the "COLLECTION
ACCOUNT") for the benefit of the Certificateholders and the holders of
certificates of any other Series. An "ELIGIBLE DEPOSIT ACCOUNT" shall mean
either a segregated account with an Eligible Institution or 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,
including the District of Columbia (or any domestic branch of a foreign bank),
and acting as a trustee for funds deposited in such account, for so long as any
of the securities of such depository institution or its parent shall have a
credit rating from each Rating Agency in one of its generic rating categories
which signifies investment grade. An "ELIGIBLE INSTITUTION" means a depository
institution, which may include the Trustee, organized under the laws of the
United States or any one of the states thereof, which at all times (1) has
itself, or has a parent which has, either (A) a long-term unsecured debt rating
of "A2" or better by Moody's or (B) a certificate of deposit rating of "P-1" by
Moody's, (2) has itself, or has a parent which has, either (A) a long-term
unsecured debt rating of "AAA" by Standard & Poor's or (B) a certificate of
deposit rating of "A-1+" by Standard & Poor's and (3) is a member of the FDIC.
Funds in the Collection Account may be invested, at the direction of the
Servicer, in:
(1) direct obligations of the United States of America and obligations
fully guaranteed as to the timely payment of principal and interest by the
full faith and credit of the United States of America;
(2) demand deposits, time deposits or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or
trust companies incorporated under the laws of the United States of America
or any state thereof (or domestic branches of foreign banks) and subject to
the supervision and examination by federal or state banking authorities or
depository institution authorities and having short-term debt ratings in
the highest investment category from each Rating Agency;
(3) commercial paper or other short-term obligations having, at the
time of the Trust's investment, a rating in the highest investment category
from each Rating Agency;
(4) demand deposits, time deposits and certificates of deposit which
are fully insured by the Federal Deposit Insurance Corporation, with an
entity the commercial paper of which has a credit rating from each Rating
Agency in its highest investment category;
(5) notes or bankers' acceptances (having original maturities of no
more than 365 days) issued by any depository institution or trust company
referred to in (2) above;
(6) investments in money market funds rated in the highest investment
category by each Rating Agency or otherwise approved in writing by each
Rating Agency;
(7) time deposits, other than as referred to in clause (4) above, with
an entity the commercial paper of which has a credit rating from each
Rating Agency in its highest investment category; and
(8) any other investments as may be approved in writing by each Rating
Agency prior to the Trust's investment therein (collectively, the "ELIGIBLE
INVESTMENTS").
Generally, any such investment must be held to maturity. Any earnings (net of
losses and investment expenses) on funds in the Collection Account shall be paid
monthly to the Transferor unless an Early Amortization Event occurs, in which
event such funds will remain on deposit in the Collection Account. The Servicer
will have the revocable power to withdraw funds from the Collection Account and
to instruct the Trustee to make withdrawals and payments from the Collection
Account for the purpose of carrying out the Servicer's or the Trustee's duties
under the Pooling and Servicing Agreement. So long as no Servicer Default has
occurred and the Servicer (or Deutsche Financial, for so long as Deutsche
Financial is acting as subservicer) maintains certain short-term credit ratings,
or obtains a guaranty from an entity with such short term credit ratings or
written confirmation of the ratings on each Class of Offered Certificates from
each Rating Agency, the Servicer need not deposit funds into the Collection
Account until the Business Day
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preceding the following Distribution Date and may use such funds for its own
purposes during such period. See "--Allocation of Collections; Deposits in
Collection Account."
PRINCIPAL FUNDING ACCOUNT
The Trustee has caused to be established and maintained, for the benefit of
the Certificateholders, an Eligible Deposit Account in the name of the Trustee
on behalf of the Certificateholders of each Class of Offered Certificates (the
"PRINCIPAL FUNDING ACCOUNT"). During the Controlled Accumulation Period,
Class A Monthly Principal plus Excess Principal Collections, if any, from other
Series allocable to the Certificates plus the Transferor Percentage of Principal
Collections allocable to the Certificates will be deposited in the Principal
Funding Account on each Distribution Date in an amount not to exceed the
Controlled Deposit Amount, and during the Rapid Accumulation Period, Class B
Monthly Principal plus Excess Principal Collections, if any, from other Series
allocable to the Certificates plus the Transferor Percentage of Principal
Collections allocable to the Certificates will be deposited in the Principal
Funding Account on each Distribution Date, all as provided below under
"--Distributions from the Collection Account" and "--Distributions to
Certificateholders"; provided that, if an Early Amortization Event occurs during
either of the Accumulation Periods, the amounts on deposit in the Principal
Funding Account shall be paid on the next succeeding Distribution Date first to
the Class A Certificateholders up to the outstanding principal amount and then,
to the extent of any remaining funds, to the Class B Certificateholders. All
amounts deposited into the Principal Funding Account prior to the Expected Final
Payment Dates will be invested by the Trustee at the direction of the Servicer
in certain eligible investments (which are substantially similar to the Eligible
Investments described above). On each Distribution Date, all investment income
earned (net of losses and investment expenses) on amounts in the Principal
Funding Account since the preceding Distribution Date will be withdrawn from the
Principal Funding Account and deposited into the Collection Account.
SPECIAL FUNDING ACCOUNT
If, on any date, the Transferor Amount, as a percentage of the Trust
Principal Component, is less than or equal to the Minimum Transferor Percentage,
or the amount of the Trust Principal Component is less than the Initial Invested
Amount plus any amounts established with respect to other outstanding Series
(the "MINIMUM TRUST PRINCIPAL COMPONENT"), the Servicer shall not distribute to
the Transferor any Principal Collections in the Collection Account that
otherwise would be distributed to the Transferor, but shall, on the next
succeeding Distribution Date, deposit such funds into an Eligible Deposit
Account established and maintained by the Servicer for the benefit of the
certificateholders of all Series, in the name of the Trustee, on behalf of the
Trust, and bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the certificateholders of all Series (the
"SPECIAL FUNDING ACCOUNT"). Funds on deposit in the Special Funding Account will
be withdrawn and paid to the Transferor on any Distribution Date to the extent
that, after giving effect to such payment, the Transferor Amount, as a
percentage of the Trust Principal Component, exceeds the Minimum Transferor
Percentage; provided, however, that if an accumulation period or early
amortization period commences with respect to any Series, any funds on deposit
in the Special Funding Account will be released from the Special Funding
Account, deposited in the Collection Account and treated as Principal
Collections to the extent needed to cover principal payments due to or for the
benefit of such Series.
Funds on deposit in the Special Funding Account will be invested by the
Trustee, at the direction of the Servicer, in Eligible Investments. Any earnings
(net of losses and investment expenses) earned on amounts on deposit in the
Special Funding Account during the Revolving Period or the Accumulation Periods
will be withdrawn from the Special Funding Account and paid to the Transferor,
and during an Early Amortization Period, shall be treated as Yield Collections
of Receivables with respect to the related Collection Period.
SERVICER CASH COLLATERAL ACCOUNT
On or before the Closing Date, the Servicer shall establish and maintain an
Eligible Deposit Account for the benefit of the Certificateholders, in the name
of the Trustee, bearing a designation clearly indicating that the funds on
deposit therein are held for the benefit of the Certificateholders (the
"SERVICER CASH COLLATERAL
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ACCOUNT"). On the Closing Date, the Servicer shall deposit an amount equal to
$2,675,437.50 (the "INITIAL SERVICER CASH COLLATERAL DEPOSIT") into the Servicer
Cash Collateral Account. The Trustee shall possess all right, title and interest
in and to all funds on deposit in the Servicer Cash Collateral Account and in
all proceeds thereof.
If, on any Determination Date, one-month LIBOR (as calculated by the
Trustee on the preceding LIBOR Determination Date) exceeds 15% per annum, then,
in such event, the Servicer will be required to remit all Collections to the
Collection Account on a daily basis. After such time, the Servicer Cash
Collateral Account will be terminated and the Trustee will release all funds on
deposit in such account to the Servicer, net of any amount not already in the
Collection Account required to pay all accrued and unpaid interest on the
Certificates, which amount will be deposited by the Trustee into the Collection
Account.
In the event that one-month LIBOR (as calculated by the Trustee) is equal
to or less than 15% per annum on any Determination Date after the Servicer Cash
Collateral Account has been terminated, the Servicer may, but need not,
reestablish and maintain the Servicer Cash Collateral Account. If the Servicer
so elects, the Servicer must deposit an amount equal to the Initial Servicer
Cash Collateral Deposit into the Servicer Cash Collateral Account. Once such
deposit has been made, the Servicer will no longer be required to deposit
Collections into the Collection Account on a daily basis and the Servicer may,
but need not, deposit such Collections on a less frequent basis as provided in
"--Allocations of Collections; Deposits in Collection Account."
If for any reason the Servicer fails to deposit to the Collection Account
Yield Collections it has received for any Collection Period by the Business Day
immediately preceding the related Distribution Date (the "TRANSFER DATE"), the
Trustee shall, on the related Distribution Date, withdraw from the Servicer Cash
Collateral Account an amount equal to the shortfall required for payment of the
Class A Monthly Interest and/or the Class B Monthly Interest, as applicable, for
such Collection Period and shall deposit such amount to the Collection Account.
The Servicer shall be required to remit such amount to the Collection Account
immediately upon notice from the Trustee that the Trustee has made a withdrawal
and if no such remittance has been made, by the fifth Business Day after the
Distribution Date for such Collection Period, an Early Amortization Event shall
occur on such fifth Business Day. If the Servicer does remit such amount to the
Collection Account by the fifth Business Day after the Distribution Date for
such Collection Period, the Trustee shall withdraw such amount from the
Collection Account and deposit it into the Servicer Cash Collateral Account.
On each Distribution Date, all funds on deposit in the Servicer Cash
Collateral Account shall be invested in Eligible Investments with maturities not
exceeding the succeeding Transfer Date, and all earnings (net of losses and
investment expenses) on such Eligible Investments shall be paid to the Servicer
on the next succeeding Distribution Date (provided that if the Servicer is
obligated to remit funds to the Servicer Cash Collateral Account pursuant to the
foregoing sentence, such earnings shall be retained in the Servicer Cash
Collateral Account). Upon the termination of the Trust, the funds on deposit in
the Servicer Cash Collateral Account shall be remitted to the Servicer. The
Servicer Cash Collateral Account may be terminated at the direction of the
Servicer at any time after any of the following occurs:
(1) the Servicer elects to remit Collections to the Collection Account
on a daily basis;
(2) the ratings assigned by each of Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc. ("STANDARD &
POOR'S") and Moody's Investors Service, Inc. ("MOODY'S") to the short-term
debt obligations of Yamaha shall be no lower than "A-1" and "P-1",
respectively;
(3) the ratings assigned by each of Standard & Poor's and Moody's to
the short-term debt obligations of Deutsche Financial shall be no lower
than "A-1" and "P-1" and Yamaha and Deutsche Financial shall have agreed in
a document satisfactory to the Rating Agencies that Deutsche Financial
shall remit Collections directly to the Collection Account rather than to
Yamaha;
(4) the Servicer provides a letter of credit, surety bond or other
similar instrument meeting the requirements of the Rating Agencies; or
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(5) the Servicer obtains written confirmation from each of the Rating
Agencies that other arrangements satisfactory to such Rating Agencies have
been put into place.
Upon such termination, any funds remaining in the Servicer Cash Collateral
Account will be remitted to the Servicer.
ALLOCATION PERCENTAGES
Pursuant to the Pooling and Servicing Agreement, during each Collection
Period the Servicer will allocate among the Certificateholders' Interest, any
other Series of certificates issued by the Trust and the Transferor Interest all
Yield Collections, all Principal Collections and the amount of all Defaulted
Receivables. Yield Collections and the Investor Default Amount of Defaulted
Receivables will be allocated at all times, and Principal Collections will be
allocated during the Revolving Period, to the Certificateholders based on the
percentage equivalent of the ratio of the sum of the Class A Adjusted Invested
Amount, the Class B Adjusted Invested Amount and the Class C Invested Amount on
the last day of the immediately preceding Collection Period to the Trust
Principal Component plus amounts on deposit in the Special Funding Account on
the last day of the immediately preceding Collection Period (the "FLOATING
ALLOCATION PERCENTAGE"). During the initial Collection Period, the Floating
Allocation Percentage will equal the percentage equivalent of the ratio which
the amount of the sum of the Class A Initial Invested Amount, the Class B
Initial Invested Amount and the Class C Initial Invested Amount bears to the
Trust Principal Component on April 30, 1999. To maintain the Certificateholders'
Interest during the Revolving Period, subject to certain limitations, the
Floating Allocation Percentage of all Principal Collections will be reinvested
in new Receivables conveyed to the Trust or treated as Excess Principal
Collections and applied as described below in "--Principal Collections for all
Series." The Transferor Percentage of such Collections will be paid to the
Transferor unless required to be allocated in respect of the Available
Subordinated Amount. During the Accumulation Periods and during any Early
Amortization Period, Principal Collections will be allocated to the
Certificateholders based on the percentage equivalent of the ratio which the
Invested Amount as of the last day of the Revolving Period bears to the greater
of (a) the Trust Principal Component on the last day of the prior Collection
Period and (b) the sum of the numerators used to calculate the invested
percentage with respect to Principal Collections for all Series of certificates
outstanding for the current Distribution Date (the "FIXED ALLOCATION
PERCENTAGE"). During the Accumulation Periods and any Early Amortization Period,
the Transferor Percentage of Principal Collections (after giving effect to any
allocation required upon the occurrence of a Transferor Subordination Event) and
any Excess Principal Collections available from other Series will be allocated
pro rata to the Certificates and the investor certificates of any other Series
in its amortization period or accumulation period, if any, as provided in the
applicable Supplement with any excess remaining after such application paid to
the Transferor.
"CLASS A INVESTED AMOUNT" for any date means an amount equal to (1) the
initial principal balance of the Class A Certificates, minus (2) the amount of
principal payments made to Class A Certificateholders prior to such date, minus
(3) the aggregate amount of Class A Investor Charge-Offs for the current and all
prior Distribution Dates, and plus (4) the aggregate amount of Yield Collections
and the aggregate amount of Principal Collections applied in respect of the
Available Subordinated Amount applied on all prior Distribution Dates and to be
applied on the current Distribution Date for the purpose of reimbursing amounts
deducted pursuant to the foregoing clause (3).
"CLASS A ADJUSTED INVESTED AMOUNT" for any date during the Controlled
Accumulation Period means an amount equal to the Class A Invested Amount minus
the aggregate principal amount on deposit in the Principal Funding Account and
for any other date, means the Class A Invested Amount.
"CLASS B INVESTED AMOUNT" for any date means an amount equal to (1) the
initial principal balance of the Class B Certificates, minus (2) the amount of
principal payments made to Class B Certificateholders prior to such date, minus
(3) the aggregate amount of Class B Investor Charge-Offs for the current and all
prior Distribution Dates, and plus (4) the aggregate amount of Yield Collections
and the aggregate amount of Principal Collections applied in respect of the
Available Subordinated Amount applied on all prior Distribution Dates and to be
applied on the current Distribution Date for the purpose of reimbursing amounts
deducted pursuant to the foregoing clause (3).
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"CLASS B ADJUSTED INVESTED AMOUNT" for any date during the Rapid
Accumulation Period means an amount equal to the Class B Invested Amount minus
the aggregate principal amount on deposit in the Principal Funding Account and
for any other date, means the Class B Invested Amount.
"CLASS C INVESTED AMOUNT" for any date means an amount equal to (1) the
initial principal balance of the Class C Certificates, minus (2) the amount of
principal payments made to Class C Certificateholders prior to such date, minus
(3) the aggregate amount of Class C Investor Charge-Offs for the current and all
prior Distribution Dates, and plus (4) the aggregate amount of Yield Collections
and the aggregate amount of Principal Collections applied in respect of the
Available Subordinated Amount applied on all prior Distribution Dates and to be
applied on the current Distribution Date for the purpose of reimbursing amounts
deducted pursuant to the foregoing clause (3).
"INVESTED AMOUNT" means the sum of the Class A Invested Amount, the
Class B Invested Amount and the Class C Invested Amount.
"TRANSFEROR PERCENTAGE" generally means (1) when used with respect to Yield
Collections and the amount of Defaulted Receivables, 100% minus the sum of the
applicable Floating Allocation Percentages with respect to all Series of
certificates then issued and outstanding and (2) when used with respect to
Principal Collections during any Early Amortization Period, 100% minus the sum
of the Fixed Allocation Percentages with respect to all Series of certificates
then issued and outstanding.
As a result of the Floating Allocation Percentage, Yield Collections and
the portion of Defaulted Receivables allocated to the Certificateholders'
Interest will change each Collection Period based on the relationship of the sum
of the Class A Adjusted Invested Amount, the Class B Adjusted Invested Amount
and the Class C Invested Amount to the Trust Principal Component on the last day
of the immediately preceding Collection Period. As a result of the Fixed
Allocation Percentage, the percentage of Principal Collections allocable to the
Certificateholders' Interest during the Accumulation Periods or during any Early
Amortization Period will exceed the percentage of Principal Collections which
would have been allocable using the Floating Allocation Percentage.
ALLOCATION OF COLLECTIONS; DEPOSITS IN COLLECTION ACCOUNT
By the second Business Day following the date of processing of a payment on
a Receivable, the Servicer deposits and will continue to deposit Collections on
such Receivables and payments made by the Transferor in respect of Ineligible
Receivables allocable to the Certificateholders' Interest into the Collection
Account, except as described below. So long as a Servicer Default has not
occurred and the Servicer (a) maintains a short-term credit rating of at least
"A-1" and "P-1" by the applicable Rating Agency, (b) obtains a guarantee
pursuant to the Pooling and Servicing Agreement with respect to its deposit and
payment obligations thereunder so long as the guarantor maintains a short-term
credit rating of at least "A-1" and "P-1" by the applicable Rating Agency,
(c) have appointed Deutsche Financial as subservicer pursuant to the Servicing
Agreement and Deutsche Financial shall maintain a short-term credit rating
(which may be an implied rating) of "P-1" by Moody's and of "A-1" by Standard &
Poor's and Yamaha and Deutsche Financial shall have agreed pursuant to a
document satisfactory to the Rating Agencies that Deutsche Financial shall remit
collections directly to the Collection Account rather than to Yamaha or
(d) obtains a written notification from each Rating Agency to the effect that
such Rating Agency does not intend to downgrade or withdraw its then current
rating of any outstanding Series of certificates despite its inability to
satisfy the rating requirement specified in clause (a), and for the two Business
Day period following any reduction of either such rating or failure to satisfy
the conditions of either clause (b) or (c), the Servicer need not deposit
Collections or payments made by the Transferor in respect of Ineligible
Receivables allocable to the Certificateholders' Interest into the Collection
Account on the second Business Day after processing but may use for its own
benefit all such Collections and payments until the Transfer Date, at which time
the Servicer must deposit such amounts (net of the Monthly Servicing Fee) into
the Collection Account. Until such Collections and payments are deposited in the
Collection Account, such amounts will not be segregated from the assets of the
Servicer, and the proceeds of any short term investment of such proceeds will
accrue to the Servicer. While the Servicer holds Collections and payments made
by the Transferor in respect of Ineligible Receivables and is permitted to use
such Collections and payments for its own benefit, the Certificateholders are
subject to risk of loss, including risk resulting from the bankruptcy or
insolvency of
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the Servicer. The Servicer pays no fee to the Trust or the Certificateholders
for use of Collections and payments made by the Transferor in respect of
Ineligible Receivables. See "Risk Factors--Priority of some liens over the
certificates could result in losses on the certificates."
For each Collection Period, all Collections received will be treated as
Yield Collections until the amount of such Collections equals an amount equal to
the product of the Yield Factor and the Pool Balance as of the beginning of such
Collection Period. If the Servicer is required to deposit Collections on the
Receivables for the related Collection Period allocable to the Certificates into
the Collection Account within two Business Days following the date of
processing:
(1) the Floating Allocation Percentage of Yield Collections received
each day will be deposited by the Servicer into the Collection Account
within two Business Days following the date of processing;
(2) during the Revolving Period, the Floating Allocation Percentage of
Principal Collections received each day will first be deposited into the
Collection Account as Excess Principal Collections to the extent required
to be distributed to other Series on the next succeeding Distribution Date
and any excess will be remitted by the Servicer to the Transferor within
two Business Days following the date of processing, unless such Principal
Collections would reduce the Transferor Amount as a percentage of the Trust
Principal Component below 10% (after giving effect to any new Receivables
transferred to the Trust), in which case such amount will be retained in
the Collection Account as Undistributed Principal Collections and any such
Undistributed Principal Collections remaining on the next succeeding
Distribution Date will be deposited in the Special Funding Account as
Undistributed Principal Collections, and the Floating Allocation Percentage
of Yield Collections received each day will be deposited by the Servicer
into the Collection Account within two Business Days following the date of
processing;
(3) during the Accumulation Periods, the Fixed Allocation Percentage
of Principal Collections received each day allocable to Certificateholders
(up to the Controlled Deposit Amount, in the case of the Controlled
Accumulation Period), the Transferor Percentage of Principal Collections
allocable to the Certificates, if any, and the Excess Principal Collections
allocable to the Certificates, will be deposited by the Servicer into the
Principal Funding Account for the benefit of the holders of each Class of
Offered Certificates within two Business Days following the date of
processing; thereafter, the Fixed Allocation Percentage of Principal
Collections received each day will first be deposited into the Collection
Account as Excess Principal Collections to the extent required to be
distributed to other Series on the next succeeding Distribution Date, and
any excess will be remitted by the Servicer to the Transferor within two
Business Days following the date of processing, unless such distribution of
Principal Collections would reduce the Transferor Amount as a percentage of
the Trust Principal Component below 10% (after giving effect to any new
Receivables transferred to the Trust), in which case such amount will be
retained in the Collection Account as Undistributed Principal Collections,
to the extent necessary to increase the Transferor Amount as a percentage
of the Trust Principal Component to 10%, and any such Undistributed
Principal Collections remaining in the Collection Account on the next
succeeding Distribution Date will be deposited into the Special Funding
Account; and
(4) after the applicable Expected Final Payment Date and during an
Early Amortization Period, all Principal Collections received each day
allocable to the Certificateholders' Interest, the Transferor Percentage of
Principal Collections allocable to the Certificates, if any, and the Excess
Principal Collections allocable to the Certificates, will be deposited by
the Servicer into the Collection Account within two Business Days following
the date of processing until such deposits equal the amount of principal
required to be paid to Certificateholders.
YIELD FACTOR; YIELD COLLECTIONS
Most Receivables originated under the Accounts are not subject to a monthly
finance charge for a certain period of time after their creation. As a result,
in order to provide yield to the Trust on such Receivables, pursuant to the
Pooling and Servicing Agreement a portion of Collections received in any period
equal to the product of the Pool Balance and the Yield Factor will be treated as
"YIELD COLLECTIONS" and the
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remainder will be treated as "PRINCIPAL COLLECTIONS" (Principal Collections and
Yield Collections are collectively sometimes referred to herein as
"COLLECTIONS"). The "YIELD FACTOR" will initially be equal to 1.5% and will
increase to 1.75% during the Accumulation Periods. In addition, the Yield Factor
will increase to 2% solely with respect to Series 1999-1 during any Collection
Period for which one-month LIBOR (as calculated by the Trustee on the preceding
LIBOR Determination Date) exceeds 15% per annum. During such period, the amount
of Collections treated as Yield Collections allocable to the Certificates will
be increased accordingly and the amount of such increase will not be treated as
Principal Collections allocable to the Certificates. After such time, if
one-month LIBOR (as calculated by the Trustee on any subsequent LIBOR
Determination Date) decreases to a rate equal to or less than 15% per annum, the
Yield Factor will be reduced from 2% to 1.5% or 1.75%, as applicable. Recoveries
will be utilized as an offset to Defaulted Receivables and will only be
considered Collections to the extent they exceed Defaulted Receivables in any
Collection Period.
PRINCIPAL COLLECTIONS FOR ALL SERIES
The Fixed Allocation Percentage of Principal Collections for any Collection
Period will first be used to cover, with respect to the Accumulation Periods,
required deposits to the Principal Funding Account or, with respect to any Early
Amortization Period, payments to the Certificateholders. The Servicer will
determine the amount of Principal Collections for any Collection Period
allocated to the Certificates remaining after covering required deposits to the
Principal Funding Account, if any, and required payments to the
Certificateholders and any similar amount remaining for any other Series
("EXCESS PRINCIPAL COLLECTIONS"). During the Revolving Period, all Principal
Collections allocable to the Certificates will be treated as Excess Principal
Collections. The Servicer will allocate the Excess Principal Collections to
cover any scheduled or permitted principal distributions to certificateholders
and deposits to principal funding accounts for any other Series which have not
been covered out of the Principal Collections allocable to such other Series and
certain other amounts for such Series ("PRINCIPAL SHORTFALLS"). Excess Principal
Collections will not be used to cover investor charge-offs for any Series. If
Principal Shortfalls exceed Excess Principal Collections for any Collection
Period, Excess Principal Collections will be allocated pro rata among the
applicable Series based on the relative amounts of Principal Shortfalls. To the
extent that Excess Principal Collections exceed Principal Shortfalls, the
balance will, subject to certain limitations, be paid to the Transferor.
The Transferor Percentage of Principal Collections, after giving effect to
any required application in respect of the Available Subordination Amount as
described in "--Subordination of the Transferor Interest in Certain
Circumstances," shall be allocated pro rata to the Certificates if an
Accumulation Period or Early Amortization Period has occurred and to any other
Series then in an accumulation period or early amortization period if required,
and then any remaining amount shall be paid to the Transferor.
APPLICATION OF COLLECTIONS
Any Principal Collections not distributed to the Transferor from the
Collection Account because such Principal Collections would reduce the
Transferor Amount as a percentage of the Trust Principal Component below 10%
(after giving effect to any new Receivables transferred to the Trust for the
related Collection Period, "UNDISTRIBUTED PRINCIPAL COLLECTIONS") will, on the
next succeeding Distribution Date, be deposited into the Special Funding Account
until distributable to the Transferor or, if an Accumulation Period or an Early
Amortization Period has commenced, on each Distribution Date all such
Undistributed Principal Collections (or a pro rata portion thereof if an
accumulation period or an early amortization period has commenced with respect
to any other Series) will be treated as part of Class A Monthly Principal or
Class B Monthly Principal, as applicable. Any proceeds from any repurchase of
the Certificates occurring in connection with a Service Transfer and the
proceeds of any sale, disposition or liquidation of Receivables following the
occurrence of an Early Amortization Event as a result of the bankruptcy or
insolvency of Deutsche Financial, Yamaha or the Transferor will also be
deposited into the Collection Account immediately upon receipt and will be
allocated as Principal Collections or Yield Collections, as applicable.
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SUBORDINATION OF TRANSFEROR INTEREST IN CERTAIN CIRCUMSTANCES
A "TRANSFEROR SUBORDINATION EVENT" with respect to the Offered Certificates
shall mean the occurrence of any of the following events at any time:
(1) the average payment rate determined by dividing the aggregate
amount of Collections for each Collection Period by the beginning Pool
Balance for each such Collection Period, averaged for any three consecutive
Collection Periods, is less than (x) with respect to the Collection Periods
included in the period from each November through the next succeeding
April, 10% and (y) with respect to the Collection Periods included in the
period from each May through the next succeeding October, 13%;
(2) as of the last day of any Collection Period, the aggregate balance
of Receivables with respect to Products constituting all-terrain vehicles,
calculated as a percentage of the Pool Balance, exceeds 36%;
(3) as of the last day of any Collection Period, the aggregate balance
of Receivables with respect to all Products other than
motorcycles/scooters, water vehicles, all-terrain vehicles, outboards and
snowmobiles, calculated as a percentage of the Pool Balance, exceeds 10%;
(4) the sum of (x) the aggregate amount of all dealer "holdbacks" with
respect to Products for which there has been no retail sale by the Dealer,
plus (y) the aggregate amount of all discounts available to Dealers
pursuant to Sales Programs on Products owed by Yamaha to the Dealers,
exceeds 5% of the Pool Balance;
(5) either (x) on an annual basis, the percentage derived by dividing
the number of New Accounts added to the Trust during any fiscal year of the
Transferor by the number of Accounts in the Trust at the beginning of such
year exceeds 8% or (y) on a quarterly basis, the percentage derived by
dividing the number of New Accounts added to the Trust during such calendar
quarter by the number of Accounts in the Trust at the beginning of such
calendar quarter exceeds 5%;
(6) the annualized rate (averaged for a period of three consecutive
Collection Periods) of (x) Defaulted Receivables minus recoveries plus the
repossession value of all Products repossessed during each such Collection
Period to (y) the beginning Pool Balance for the related Collection Period
exceeds 7.5%;
(7) either (x) on an annual basis, the percentage derived by dividing
the number of New Accounts and Dealer Replacement Accounts added to the
Trust during any fiscal year of the Transferor by the number of Accounts in
the Trust at the beginning of such year exceeds 15% or (y) on a quarterly
basis, the percentage derived by dividing the number of New Accounts and
Dealer Replacement Accounts added to the Trust during such calendar quarter
by the number of Accounts in the Trust at the beginning of such calendar
quarter exceeds 5%; or
(8) as of the last day of any Collection Period prior to the repayment
in full of the Series 1995-1 Asset-Backed Certificates and the Series
1998-1 Asset-Backed Certificates, the aggregate balance of Receivables due
from a single Dealer, as a percentage of the Pool Balance, exceeds 1%.
In the event that, on any Determination Date, a Transferor Subordination
Event shall have occurred and be continuing, then the Transferor's right to the
Transferor Percentage of Principal Collections received during the related
Collection Period shall be subordinated to the extent of the applicable
Available Subordinated Amount. The amount of the Transferor Percentage of
Principal Collections equal to the Available Subordinated Amount allocable to
the Certificates and the certificates of any other Series shall be included in
Available Yield Funds and applied as such, and the remaining amount of the
Transferor Percentage of Principal Collections shall then be applied pro rata to
the investor certificates of all Series then in their amortization periods or
accumulation periods, if any, with any excess remaining after such applications
paid to the Transferor.
In the event that on any subsequent Determination Date such Transferor
Subordination Event shall no longer be continuing, provided that no Early
Amortization Event shall have occurred, the right of the Transferor to receive
the Transferor Percentage of Principal Collections during the related Collection
Period shall no longer be subordinated, and the Available Subordinated Amount
shall be deemed to be zero again; provided that the Transferor's right to
receive the Transferor Percentage of Principal Collections shall remain
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subject to reallocation to the Certificates if any Accumulation Period or any
Early Amortization Period has commenced and reallocation to the certificates of
any other Series then in an accumulation or amortization period.
In the case of a Transferor Subordination Event described in clause
(1) above, the "AVAILABLE SUBORDINATED AMOUNT" will be equal to 1% of the sum of
the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount as
of the last day of such Collection Period. In the case of a Transferor
Subordination Event described in clause (2), (3) or (8) above, the Available
Subordinated Amount will be equal to the dollar amount by which the aggregate
balance of such Receivables exceeds the specified percentage therein. In the
case of a Transferor Subordination Event described in clause (4) above, the
Available Subordinated Amount will be equal to the dollar amount by which such
sum exceeds the specified percentage therein. In the case of a Transferor
Subordination Event described in clause (5) above, the Available Subordinated
Amount will be adjusted each Collection Period thereafter by the aggregate
amount of Receivables in those New Accounts included in the Trust which caused
such percentage to exceed the specified percentages therein, or alternatively,
will not be so adjusted in the event the Transferor provides to the Trustee a
letter from each of the Rating Agencies then providing a rating for the Offered
Certificates at the Transferor's request that such event will not result in a
downgrade or withdrawal of the then current ratings assigned by each of them to
each Class of Offered Certificates. In the case of a Transferor Subordination
Event described in clause (6) or (7) above, the Available Subordinated Amount
will be increased by the aggregate amount of Receivables in New Accounts and
Dealer Replacement Accounts, or alternatively, will not be so adjusted in the
event the Transferor provides to the Trustee a letter from each of the Rating
Agencies then providing a rating for the Offered Certificates at the
Transferor's request that such event will not result in a downgrade or
withdrawal of the then current ratings assigned by each of them to each Class of
Offered Certificates. Should any increase in the Available Subordinated Amount
resulting from the occurrence of a Transferor Subordination Event described in
clauses (2) through (8) above cause the Transferor Amount as a percentage of the
Trust Principal Component to be less than 10%, then the Transferor shall deposit
funds in an amount equal to such deficiency into the Collection Account. Any
such deposit by the Transferor shall be allocated in respect of Yield
Collections and Principal Collections as provided in the Pooling and Servicing
Agreement. Unless otherwise indicated, the Available Subordinated Amount at any
time shall be the sum of all Available Subordinated Amounts described above at
such time.
The Available Subordinated Amount shall be reduced on any Distribution Date
by the amount of the Transferor Percentage of Principal Collections which are
applied as Available Yield Funds and shall be reinstated (up to the required
Available Subordinated Amount) by the amount of the Available Yield Funds
distributed to the Transferor as provided in clause (a)(9) under
"--Distributions from the Collection Account."
DISTRIBUTIONS FROM THE COLLECTION ACCOUNT
The Servicer shall apply or shall cause the Trustee to apply the funds on
deposit in the Collection Account with respect to each Distribution Date to make
the following distributions for such Distribution Date:
(a) An amount equal to the Floating Allocation Percentage of Yield
Collections, plus an amount equal to the Transferor Percentage of Principal
Collections allocable to the Certificates equal to the Available
Subordinated Amount, plus any net investment income with respect to the
Principal Funding Account, plus the Floating Allocation Percentage of net
investment income on the Collection Account, plus the Floating Allocation
Percentage of net investment income on the Special Funding Account (the
"AVAILABLE YIELD FUNDS") deposited in the Collection Account for the
Collection Period immediately preceding such Distribution Date will be
allocated in the following priority:
(1) 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 paid to Class A Certificateholders on a prior
Distribution Date, plus any additional interest at the Class A
Certificate Rate with respect to interest amounts that were due but
not paid on a prior Distribution Date, will be paid to the Class A
Certificateholders;
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(2) 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 paid to Class B Certificateholders on a prior
Distribution Date, plus any additional interest at the Class B
Certificate Rate with respect to interest amounts that were due but
not paid on a prior Distribution Date, will be paid to Class B
Certificateholders;
(3) an amount equal to Class C Monthly Interest for such
Distribution Date, plus the amount of any Class C Monthly Interest
previously due but not paid to Class C Certificateholders on a prior
Distribution Date, plus any additional interest at the Class C
Certificate Rate with respect to interest amounts that were due but
not paid on a prior Distribution Date, will be paid to Class C
Certificateholders;
(4) an amount equal to the Monthly Servicing Fee for such
Distribution Date plus any Monthly Servicing Fee that was due but not
paid on a prior Distribution Date will be distributed to the Servicer
(unless such amount has been previously netted against deposits to
the Collection Account);
(5) an amount equal to the aggregate Investor Default Amount for
such Distribution Date will be treated as Excess Principal
Collections during the Revolving Period and will be allocated first
to the Class A Certificateholders to the extent included in Class A
Monthly Principal and then to the Class B Certificateholders to the
extent included in Class B Monthly Principal during any Accumulation
Period or any Early Amortization Period or, if applicable, will be
set aside and retained in the Collection Account and be applied as
part of Class C Monthly Principal;
(6) an amount equal to unreimbursed Class A Investor
Charge-Offs, if any, will be allocated to the Class A
Certificateholders to the extent included in Class A Monthly
Principal during any Accumulation Period or any Early Amortization
Period;
(7) an amount equal to unreimbursed Class B Investor
Charge-Offs, if any, will be treated as Excess Principal Collections
during the Revolving Period and will be allocated to the Class B
Certificateholders to the extent included in Class B Monthly
Principal during any Accumulation Period or any Early Amortization
Period;
(8) an amount equal to unreimbursed Class C Investor
Charge-Offs, if any, will be treated as Excess Principal Collections
during the Revolving Period and will be distributed first to the
Class A Certificateholders to the extent included in Class A Monthly
Principal, then to the Class B Certificateholders to the extent
included in Class B Monthly Principal and then to the Class C
Certificateholders to the extent included in Class C Monthly
Principal during any Accumulation Period or Early Amortization
Period; and
(9) during the Revolving Period any Yield Collections allocated
to the Certificateholders' Interest remaining after making the above
described distributions will be distributed to the Transferor.
(b) For each Distribution Date with respect to the applicable
Accumulation Period or any Early Amortization Period, the remaining funds
on deposit in the Collection Account with respect to such Distribution Date
including any Available Yield Funds remaining after the application
described in clause (a)(1) through (9) above, the Fixed Allocation
Percentage of Principal Collections, Excess Principal Collections if any,
from other Series allocable to the Certificates and the Transferor
Percentage of Principal Collections allocable to this Series, if any,
excluding such Principal Collections allocable in respect of the Available
Subordinated Amount (the "AVAILABLE PRINCIPAL FUNDS") will be allocated in
the following priority:
(1) on the Class A Expected Final Payment Date or on any
Distribution Date during the Controlled Accumulation Period, an
amount up to the Controlled Deposit Amount will be deposited in the
Principal Funding Account, and on any Distribution Date during an
Early Amortization Period, an amount up to Class A Monthly Principal
plus any other remaining Available Principal Funds will be
distributed to the holders of the Class A Certificates;
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(2) on the Class B Expected Final Payment Date or on the
Distribution Date during the Rapid Accumulation Period, an amount up
to Class B Monthly Principal plus any other remaining Available
Principal Funds will be deposited in the Principal Funding Account,
and on any Distribution Date during an Early Amortization Period, an
amount up to Class B Monthly Principal plus any remaining Available
Principal Funds will be distributed to the holders of the Class B
Certificates;
(3) an amount up to Class C Monthly Principal for such
Distribution Date on and after the Offered Certificates have been
paid in full, plus any other remaining Available Principal Funds,
will be distributed to the holders of the Class C Certificates; and
(4) an amount equal to the balance of any remaining Available
Principal Funds on deposit in the Collection Account will be treated
as Excess Principal Collections and distributed to other Series or to
the Transferor as provided in the Pooling and Servicing Agreement.
"CLASS A MONTHLY INTEREST" with respect to any Distribution Date will equal
one-twelfth of the product of (a) the Class A Certificate Rate and (b) the
Class A Invested Amount; provided, however, with respect to the first
Distribution Date, Class A Monthly Interest will be equal to $ .
"CLASS B MONTHLY INTEREST" with respect to any Distribution Date will equal
one-twelfth of the product of (a) the Class B Certificate Rate and (b) the
Class B Invested Amount; provided, however, with respect to the first
Distribution Date, Class B Monthly Interest will be equal to $ .
"CLASS C MONTHLY INTEREST" with respect to any Distribution Date will equal
one-twelfth of the product of (a) the Class C Certificate Rate and (b) the
Class C Invested Amount; provided, however, with respect to the first
Distribution Date, Class C Monthly Interest will be equal to $ .
"CLASS A MONTHLY PRINCIPAL" with respect to the Class A Expected Final
Payment Date or any Distribution Date during the Controlled Accumulation Period
or any Early Amortization Period will equal the sum of (a) an amount equal to
the Fixed Allocation Percentage of all Principal Collections received during the
Collection Period immediately preceding such Class A Expected Final Payment Date
or, in the case of a Distribution Date during the Controlled Accumulation Period
or the first Distribution Date during any Early Amortization Period, all
Principal Collections received during the preceding Collection Period or the
period from the day an Early Amortization Event occurred, respectively, to the
end of such Collection Period, (b) the amount, if any, equal to the product of
(x) a fraction, the numerator of which is equal to the Invested Amount and the
denominator of which is equal to the sum of the invested amount of all Series
then accumulating or amortizing principal (less any amounts on deposit in any
principal funding accounts) and (y) Undistributed Principal Collections on
deposit in the Special Funding Account on such Expected Final Payment Date
("SERIES UNDISTRIBUTED PRINCIPAL COLLECTIONS") and (c) the Investor Default
Amount with respect to any Distribution Date during the Controlled Accumulation
Period or any Early Amortization Period or on the Class A Expected Final Payment
Date and any reimbursements of unreimbursed Class A Investor Charge-Offs;
provided, however, that with respect to any Distribution Date, Class A Monthly
Principal will not exceed the Class A Adjusted Invested Amount.
"CLASS B MONTHLY PRINCIPAL" with respect to each Distribution Date
beginning with the Distribution Date on which the Class A Certificates are paid
in full will equal the sum of (a) an amount equal to the Fixed Allocation
Percentage of all Principal Collections received during the Collection Period
immediately preceding such Distribution Date, (b) the amount, if any, of Series
Undistributed Principal Collections for such Distribution Date, (c) the Investor
Default Amount with respect to such Distribution Date and any reimbursements of
unreimbursed Class B Investor Charge-Offs, and if during an Early Amortization
Period, minus (d) Class A Monthly Principal, if any, with respect to such
Distribution Date; provided, however, that with respect to any Distribution
Date, Class B Monthly Principal will not exceed the Class B Invested Amount.
"CLASS C MONTHLY PRINCIPAL" with respect to each Distribution Date
beginning with the Distribution Date on which each Class of Offered Certificates
is paid in full will equal the sum of (a) an amount equal to the Fixed
Allocation Percentage of all Principal Collections received during the
Collection Period immediately preceding such Distribution Date, (b) the amount,
if any, of Series Undistributed Principal
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Collections for such Distribution Date, (c) the Investor Default Amount with
respect to such Distribution Date and any reimbursements of unreimbursed
Class C Investor Charge-Offs, and if during an Early Amortization Period, minus
(d) Class A Monthly Principal and Class B Monthly Principal, if any, with
respect to such Distribution Date; provided, however, that with respect to any
Distribution Date, Class C Monthly Principal will not exceed the Class C
Invested Amount.
DISTRIBUTIONS TO CERTIFICATEHOLDERS
Payments to Certificateholders of each Class of Offered Certificates will
be made with respect to interest from the Collection Account and, with respect
to principal, from the Principal Funding Account and, if principal is not fully
paid on the applicable Expected Final Payment Date and during any Early
Amortization Period, from the Collection Account. In addition, the proceeds of
any optional repurchase of the Offered Certificates by the Transferor will be
deposited in the Collection Account on the Distribution Date on which such
purchase occurs.
The Servicer shall instruct the Trustee or the Paying Agent to:
(a) on each Distribution Date, including the Class A Expected Final
Payment Date, distribute the amount described in clause (a)(1) under
"Description of the Offered Certificates--Distributions from the Collection
Account" to the Class A Certificateholders;
(b) on each Distribution Date, including the Class B Expected Final
Payment Date, distribute the amount described in clause (a)(2) under
"Description of the Offered Certificates--Distributions from the Collection
Account" to the Class B Certificateholders;
(c) on the Class A Expected Final Payment Date, distribute all amounts
on deposit in the Principal Funding Account to the Class A
Certificateholders up to a maximum amount on any such date equal to the
unpaid Class A Invested Amount on such date;
(d) on the Class B Expected Final Payment Date, distribute all amounts
on deposit in the Principal Funding Account to the Class B
Certificateholders up to a maximum amount on any such date equal to the
unpaid Class B Invested Amount on such date;
(e) if the Class A Invested Amount is not paid in full on the Class A
Expected Final Payment Date, on each Distribution Date thereafter until the
Class A Certificateholders have been paid in full, distribute the amount
described in clause (b)(1) under "Description of the Offered
Certificates--Distributions from the Collection Account" to the Class A
Certificateholders; and
(f) if the Class B Invested Amount is not paid in full on the Class B
Expected Final Payment Date, on each Distribution Date thereafter until the
Class B Certificateholders have been paid in full, distribute the amount
described in clause (b)(2) under "Description of the Offered
Certificates--Distributions from the Collection Account" to the Class B
Certificateholders.
The Paying Agent shall have the revocable power to withdraw funds from the
Collection Account and the Principal Funding Account for the purpose of making
distributions to the holders of any Class of Offered Certificates.
On each Distribution Date during the Revolving Period, the Servicer will
pay to the Transferor any investment earnings (net of losses and investment
expenses) with respect to the Collection Account. On any Distribution Date
during any Accumulation Period or Early Amortization Period, such investment
earnings (net of losses and investment expenses) will be considered Yield
Collections under the Pooling and Servicing Agreement.
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DEFAULTED RECEIVABLES; RECOVERIES, ADJUSTMENT PAYMENTS
"DEFAULTED RECEIVABLES" for any Collection Period are Receivables which
were written off by Deutsche Financial as uncollectible in such Collection
Period. The aggregate amount of Defaulted Receivables for any Collection Period
will be an amount (not less than zero) equal to the product of (1) one minus the
Yield Factor and (2) the aggregate amount of the Receivables that were written
off by Deutsche Financial in such Collection Period. A portion of all Defaulted
Receivables (the "INVESTOR DEFAULT AMOUNT") will be allocated to the
Certificateholders' Interest for each Collection Period in an amount equal to
the product of (a) the Floating Allocation Percentage applicable during the
immediately preceding Collection Period and (b) the amount of Defaulted
Receivables for such Collection Period less the amount of Recoveries received by
the Servicer in such Collection Period and less the full amount of any Defaulted
Receivables as to which the Transferor or Servicer became obligated to accept
reassignment for such Collection Period, unless certain events of bankruptcy,
insolvency or receivership have occurred with respect to the Transferor, the
Servicer or Deutsche Financial.
If the Servicer makes a downward adjustment of the amount of any Receivable
because of a rebate, refund, billing error or certain other noncash items, or if
the Servicer or Deutsche Financial otherwise adjusts downward the amount of any
Receivable without receiving collections therefor or charging off such amount as
uncollectible, or any Receivable is discovered as having been created through a
fraudulent or counterfeit action or the balance of any Receivable is reduced by
any "holdback" amount due and owing to such Dealer by Yamaha, the Pool Balance
will be reduced by the amount of such adjustment. To the extent that such
reduction in the Trust Principal Component would cause the Transferor Amount as
a percentage of the Trust Principal Component to be less than 10%, the
Transferor shall deposit an amount into the Collection Account sufficient to
cause the Transferor Amount as a percentage of the Trust Principal Component to
be at least equal to 10% (such deposit, an "ADJUSTMENT PAYMENT"). Any such
deposit shall be deemed to be a Collection.
INVESTOR CHARGE-OFFS
If on any Distribution Date, the Investor Default Amount, if any, for such
Distribution Date exceeds the amount of Yield Collections which are allocated
and available to fund such amount as described under "--Subordination of the
Transferor Interest in Certain Circumstances" andclause (a)(5) of
"--Distributions from the Collection Account," then the Class C Invested Amount
shall be reduced by the aggregate amount of such excess, but not more than the
Investor Default Amount for such Distribution Date (a "CLASS C INVESTOR
CHARGE-OFF"). The Class C Invested Amount will thereafter be increased (but not
in excess of the unpaid principal balance of the Class C Certificates) on any
Distribution Date by the amount of Yield Collections allocated and available for
that purpose as described under clause (a)(8) of "--Distributions from the
Collection Account."
In the event that any such reduction of the Class C Invested Amount would
cause the Class C Invested Amount to be a negative number, the Class C Invested
Amount will be reduced to zero, and the Class B Invested Amount will be reduced
by the amount by which the Class C Invested Amount would have been reduced below
zero, but not more than the Investor Default Amount for such Distribution Date
(a "CLASS B INVESTOR CHARGE-OFF"), which will have the effect of slowing or
reducing the return of principal to the Class B Certificateholders. If the
Class B Invested Amount has been reduced by the amount of any Class B Investor
Charge-Offs, it will be increased on any Distribution Date (but not by an amount
in excess of the aggregate Class B Investor Charge-Offs) by the amount of Yield
Collections allocated and available for such purpose as described under clause
(a)(7) of "--Distributions from the Collection Account."
In the event that any such reduction of the Class B Invested Amount 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 more than the Investor Default Amount for such Distribution Date
(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 the amount of any Class A Investor
Charge-Offs, it will be increased on any Distribution Date (but not by an amount
in excess of the
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aggregate Class A Investor Charge-Offs) by the amount of Yield Collections
allocated and available for such purpose as described under clause (a)(6) of
"--Distributions from the Collection Account."
FINAL PAYMENT OF PRINCIPAL; TERMINATION OF TRUST
The Certificates will be subject to optional repurchase, in whole but not
in part, by the Transferor on any Distribution Date on or after which the
Invested Amount is reduced to an amount less than or equal to $23,391,804.10
(10% of the sum of the Class A Initial Invested Amount, the Class B Initial
Invested Amount and the Class C Initial Invested Amount), unless certain events
of bankruptcy, insolvency or receivership have occurred with respect to the
Transferor. The repurchase price will be equal to the sum of the Class A
Invested Amount plus accrued and unpaid interest on the Class A Certificates,
the Class B Invested Amount plus accrued and unpaid interest on the Class B
Certificates and the Class C Invested Amount plus accrued and unpaid interest on
the Class C Certificates through the day preceding the Distribution Date with
respect to which the repurchase occurs.
Subject to prior termination as provided above, the Pooling and Servicing
Agreement provides that the final distribution of principal and interest on the
Offered Certificates will be made no later than the December 2006 Distribution
Date (the "FINAL SERIES TERMINATION DATE"). In the event that the Invested
Amount of the Certificates is greater than zero on the Final 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 Certificateholders pro
rata as final payment of the Certificates, an amount of Receivables up to 110%
of the Invested Amount of the Certificates at the close of business on such
date, but not more than the total amount of Receivables allocable to the
Certificates. The proceeds of any such sale will be treated as collections on
the Receivables and applied as provided above in "--Application of Collections."
Such proceeds will be allocated first to pay amounts due to the Class A
Certificateholders and then to pay amounts due to the Class B
Certificateholders.
Unless the Transferor instructs the Trustee otherwise, the Trust will only
terminate on the earlier to occur of: (a) the day following the day on which the
aggregate invested amounts of all Series is zero or (b) March 1, 2094 (the
"FINAL TERMINATION DATE"). Upon the termination of the Trust and the surrender
of the Exchangeable Transferor Certificate, the Trustee shall convey to the
Transferor all right, title and interest of the Trust in and to the Receivables
and other funds of the Trust (other than amounts in the accounts maintained by
the Trust for the final payment of principal and interest to
Certificateholders).
EARLY AMORTIZATION EVENTS
The Revolving Period will continue through the end of the November 2003
Collection Period unless an Early Amortization Event occurs. An "EARLY
AMORTIZATION PERIOD" will commence (a) on the day on which an Early Amortization
Event occurs or is deemed to occur, (b) on the Class A Expected Final Payment
Date if the Class A Invested Amount is not paid in full on such date or (c) on
the Class B Expected Final Payment Date if the Class B Invested Amount is not
paid in full on such date. An "EARLY AMORTIZATION EVENT" with respect to the
Certificates refers to any of the following events:
(1) failure on the part of (a) the Transferor or Yamaha to make any
payment or deposit on the date required under the Pooling and Servicing
Agreement or the Receivables Purchase Agreement, as applicable (or within
the applicable grace period which will not exceed five Business Days),
(b) the Transferor to duly observe or perform in any material respect the
covenant of the Transferor not to sell, pledge, assign or transfer to any
person, or grant any prohibited lien on, any Receivable or (c) the
Transferor to duly observe or perform in any material respect any other
covenants or agreements of the Transferor in the Pooling and Servicing
Agreement or, to the extent assigned to the Trust, in the Receivables
Purchase Agreement, which in the case of subclause (c) hereof, continues
unremedied for a period of 60 days after written notice to the Transferor
or Yamaha, as applicable, and continues to affect materially and adversely
the interests of the Certificateholders for such period (or, with respect
to a failure arising out of the creation of certain liens upon the
Receivables or the failure by the Transferor or the Servicer to comply with
certain covenants specified in the Pooling and Servicing Agreement,
immediately); provided, however, that an Early Amortization Event described
in clause (b) or (c) shall not be deemed to occur if the Transferor has
accepted the transfer of the related Receivable during such
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period (or such longer period as the Trustee may specify not to exceed an
additional 60 days) in accordance with the provisions of the Pooling and
Servicing Agreement;
(2) any representation or warranty made by the Transferor in the
Pooling and Servicing Agreement or any representation or warranty made by
Yamaha in the Receivables Purchase Agreement or any information required to
be given by the Transferor or the Servicer 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 of which the interests of the
Certificateholders are materially and adversely affected and which
continues to materially and adversely affect the interests of the
Certificateholders for such period; provided, however, that an Early
Amortization Event described in this clause (2) shall not be deemed to
occur if the Transferor has accepted the transfer of the related Receivable
or all such Receivables, if applicable, during such period (or such longer
period as the Trustee may specify not to exceed an additional 60 days) in
accordance with the provisions of the Pooling and Servicing Agreement;
(3) certain events of bankruptcy or insolvency relating to the
Transferor, Yamaha or Deutsche Financial;
(4) there will have been three consecutive Distribution Dates on which
the Class C Invested Amount is less than the Initial Class C Invested
Amount;
(5) the Trust becomes an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(6) any Servicer Default occurs which would have a material adverse
effect on the Certificateholders;
(7) on any Determination Date, the Class C Invested Amount is less
than 8.25% of the Initial Invested Amount;
(8) Undistributed Principal Collections remain in the Special Funding
Account for twelve consecutive Collection Periods;
(9) on any Determination Date, the Transferor Amount, as of the last
day of the prior Collection Period, was less than 10% of the Trust
Principal Component as of the last day of the prior Collection Period, and
such condition shall have continued unremedied for ten consecutive days or
more;
(10) the average payment rate determined by dividing the aggregate
amount of Collections for each Collection Period by the beginning Pool
Balance for each such period, averaged for any three consecutive Collection
Periods, shall be less than (a) with respect to the Collection Periods
included in the period from each November through the next succeeding
April, 10% and (b) with respect to the Collection Periods included in the
period from each May through the next succeeding October, 13%; provided
that this clause (10) may be amended with the consent of the Transferor and
the Rating Agencies;
(11) the annualized rate (averaged for a period of any three
consecutive Collection Periods) of (a) Defaulted Receivables minus
recoveries plus the repossession value of all Products repossessed during
each such Collection Period to (b) the beginning Pool Balance for such
Collection Period exceeds 10%; provided that this clause (11) shall not
constitute an Early Amortization Event if, upon the occurrence of such
event, the Available Subordinated Amount is increased by an amount equal to
1% of the sum of the Class A Adjusted Invested Amount and the Class B
Adjusted Invested Amount (to the extent such increase does not result in
the Transferor Amount as a percentage of the Trust Principal Component, to
fall below the Minimum Transferor Percentage), in which case an Early
Amortization Event under this clause (11) shall not occur until such time
as such annualized rate equals or exceeds 11%; provided, further, that this
clause (11) may be amended with the consent of the Transferor and the
Rating Agencies;
(12) on any Determination Date, the Transferor Amount, as of the last
day of the prior Collection Period, shall be less than 12% of the Trust
Principal Component and the annualized rate (averaged for a period of any
two consecutive Collection Periods) determined by dividing (a) the amount
of interest,
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fees and service charges owed by Dealers in respect of Receivables
collected in the related Collection Period by (b) the Pool Balance at the
beginning of the related Collection Period shall be less than 6%; or
(13) the Trustee makes a withdrawal from the Servicer Cash Collateral
Account and the Servicer fails to remit Collections to the Collection
Account in the amount of such withdrawal by the fifth Business Day after
the Distribution Date for such Collection Period.
In the case of any event described in clause (1), (2) or (6), an Early
Amortization Event will be deemed to have occurred with respect to any Series
only if, after any applicable grace period described in such clauses, either the
Trustee or certificateholders of such Series evidencing undivided interests
aggregating more than 50% of the invested amount of such Series, by written
notice to the Transferor and the Servicer (and to the Trustee, if given by such
certificateholders) declare that an Early Amortization Event has occurred as of
the date of such notice. In the case of any event described in clause (3), (5),
(8) or (9) an Early Amortization Event with respect to all Series, and in the
case of any event described in clause (4), (7), (10), (11), (12) or (13) an
Early Amortization Event with respect to only the Certificates, will be deemed
to have occurred without any notice or other action on the part of the Trustee
or the Certificateholders or all certificateholders, as appropriate, immediately
upon the occurrence of such event. The Early Amortization Period will commence
on the day on which an Early Amortization Event occurs or is deemed to occur.
Monthly distributions of principal to the Certificateholders will begin (if they
have not already) on the first Distribution Date following the Collection Period
in which an Early Amortization Event occurs or is deemed to have occurred. Thus,
Certificateholders may begin receiving distributions of principal earlier than
they otherwise would have, which may shorten the final maturity of the
Certificates. If the only Early Amortization Event to occur is either the
insolvency of the Transferor or the appointment of a receiver or bankruptcy
trustee for the Transferor, the receiver or bankruptcy trustee for the
Transferor may have the power to delay or prevent commencement of the Early
Amortization Period.
In addition to the consequences of an Early Amortization Event discussed
above, if Yamaha, the Transferor or Deutsche Financial voluntarily files a
bankruptcy petition or goes into liquidation or any person is appointed a
receiver or bankruptcy trustee of Yamaha or the Transferor or Deutsche
Financial, on the day of such appointment Yamaha will immediately cease to sell
Receivables to the Transferor under the Receivables Purchase Agreement and
promptly give notice to the Trustee of such appointment or if the Transferor
voluntarily files for bankruptcy or a receiver or bankruptcy trustee is
appointed for the Transferor, on the day of such appointment the Transferor will
immediately cease to transfer Receivables to the Trust and the Transferor will
promptly give notice to the Trustee of such appointment. Within 15 days of the
receipt of such notice, the Trustee will (1) publish a notice of the liquidation
or the appointment requesting instructions from the investor certificateholders
whether to sell, dispose of or otherwise liquidate the Receivables in a
commercially reasonable manner and (2) send written notice to the investor
certificateholders describing the relevant provisions of the Pooling and
Servicing Agreement and requesting such certificateholders to elect whether the
Trustee should instruct the Servicer to sell, dispose of or otherwise liquidate
the Receivables. Unless otherwise instructed within a specified period by the
certificateholders representing undivided interests aggregating more than 50% of
the aggregate principal amount of each class of each Series, the Trustee will
sell, dispose of or otherwise liquidate the portion of the Receivables allocated
to the Certificates and the Receivables allocable to other Series that did not
vote to continue the Trust in accordance with the Pooling and Servicing
Agreement in a commercially reasonable manner and on commercially reasonable
terms. The proceeds from the sale, disposition or liquidation of the Receivables
will be treated as collections allocable to certificateholders and such proceeds
will be distributed to Certificateholders and the certificateholders of other
Series. If the portion of such proceeds allocable to the Certificateholders'
Interest and the proceeds of any Collections in the Collection Account are not
sufficient to pay in full the remaining amount due on the Offered Certificates,
the Certificateholders of such Class of Offered Certificates will suffer a
corresponding loss. If the Trustee is instructed not to sell a portion of the
Receivables allocable to the Certificateholders, as described above, then the
Trust shall continue with respect to the Certificates pursuant to the terms of
the Pooling and Servicing Agreement and the applicable Supplement. See "Certain
Transfer, Security Interest and Bankruptcy Considerations--Certain Matters
Relating to Bankruptcy."
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INDEMNIFICATION
The Pooling and Servicing Agreement provides that the Servicer will
indemnify the Trust, for the benefit of certificateholders, and the Trustee,
including its officers, directors and employees, from and against any loss,
liability, expense, damage or injury arising out of or relating to the
administration of the Pooling and Servicing Agreement or any Supplement and the
performance of the Trustee's duties thereunder; provided, however, that the
Servicer shall not indemnify the Trust or the certificateholders for any
liabilities, costs or expenses incurred by the Trustee through its own
negligence or willful misconduct or with respect to U.S. Federal, state or local
income or franchise taxes required to be paid by the Trust or the
certificateholders. However, in the Pooling and Servicing Agreement, the
Servicer has agreed to indemnify The Fuji Bank and Trust Company in its
individual capacity for any such tax liabilities, costs or expenses arising in
connection with the performance of its obligations under the Pooling and
Servicing Agreement.
Under the Pooling and Servicing Agreement, the Transferor will indemnify an
injured party for the entire amount of any losses, claims, damages or
liabilities (other than those incurred by a certificateholder in the capacity of
an investor in the investor certificates) arising out of or based on the Pooling
and Servicing Agreement or the actions of the Servicer taken pursuant to the
Pooling and Servicing Agreement as though the Pooling and Servicing Agreement
created a partnership under the Uniform Partnership Act. The Transferor will
also indemnify each certificateholder for any such losses, claims, damages or
liabilities (other than those incurred by a certificateholder in the capacity of
an investor in the certificates) except to the extent that they arise from any
action by any certificateholder. In the event of a Service Transfer, the
successor Servicer will indemnify the Transferor for any losses, claims, damages
and liabilities of the Transferor as described in this paragraph arising from
the actions or omissions of such successor Servicer.
The Pooling and Servicing Agreement provides that none of the Transferor,
the Servicer or any of their directors, officers, employees or agents will be
under any other liability to the Trust, the Trustee, the certificateholders, any
Enhancement provider or any other person for any action taken, or for refraining
from taking any action, in good faith pursuant to the Pooling and Servicing
Agreement. However, none of the Transferor, the Servicer, Yamaha or 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
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, whether
acting itself, through Deutsche Financial or through another subservicer, is
responsible for servicing, collecting, enforcing and administering the
Receivables in accordance with the policies and procedures and the degree of
skill and care applied or exercised with respect to dealer receivables owned or
serviced by the Servicer, Deutsche Financial or any other subservicer.
Servicing activities performed by the Servicer with respect to the Accounts
include collecting and recording payments, communicating with Dealers,
investigating payment delinquencies, providing billing records to Dealers and
maintaining internal records. 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.
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SERVICER COVENANTS
In the Pooling and Servicing Agreement, the Servicer makes various
representations, warranties and covenants for the benefit of the
Certificateholders and the Trustee including that, as to each Receivable and
related Account:
(1) it will duly fulfill all obligations on its part to be fulfilled
under or in connection with the Receivable or Account, and will maintain in
effect all qualifications required in order to service the Receivable or
Account and will comply with all requirements of law in connection with
servicing the Receivables and the Accounts the failure to comply with which
would have a material adverse effect on Certificateholders;
(2) it will not permit any rescission or cancellation of the
Receivable, except as ordered by a court of competent jurisdiction or
except in accordance with the Servicer's usual and customary servicing
practices; and
(3) it will do nothing to impair the rights of the Certificateholders
in the Receivables and will not reschedule, revise or defer payments due on
the Receivables, except in accordance with the applicable floorplan
financing policies and procedures.
In the event any of the covenants described above is not true and correct
in any material respect as of the date specified therein with respect to any
Receivable or Account, and such breach has a material adverse effect on the
certificateholders' interest in such Receivable, then the Servicer will purchase
such Receivable or, in the case of an untrue representation with respect to an
Account, all Receivables in such Account; provided, however, that no such
purchase is required with respect to such Receivable if, by the end of the
applicable grace period, the breached representation or warranty is true and
correct in all material respects and any material adverse effect caused thereby
has been cured. The Servicer will effect such purchase by depositing into the
Collection Account the principal amount of such Receivables. The amount of such
deposit shall be deemed a payment in respect of the related Receivable and will
be treated under the Pooling and Servicing Agreement in the same manner as are
payments received by the Servicer from Dealers under the Accounts. Any amounts
so paid by the Servicer shall be allocated in respect of Yield Collections and
Principal Collections as provided in the Pooling and Servicing Agreement. This
reassignment or transfer and assignment to 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 reassigned
Receivables shall be automatically assigned to the Servicer.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer's compensation for its servicing activities is a monthly
servicing fee (the "SERVICING FEE") in an amount, on any Distribution Date,
equal to the sum of, with respect to all Series, one-twelfth of the sum for each
Series of the product of (a) the applicable servicing fee percentages with
respect to each Series and (b) the sum of an allocable portion of the amount of
the Transferor Interest and the aggregate invested amount with respect to each
Series with respect to the related Collection Period.
The Servicing Fee will be allocated among the Transferor Interest, the
Certificateholders and certificateholders of all of the other Series. The
portion of the Servicing Fee allocable to the Certificateholders' Interest on
each Distribution Date (the "MONTHLY SERVICING FEE") generally will be equal to
one-twelfth of the product of 2% per annum (the "SERVICING FEE PERCENTAGE") and
the amount of the Class A Invested Amount, the Class B Invested Amount and the
Class C Invested Amount and the allocable portion of the amount of the
Transferor Interest, on the last day of the second preceding Collection Period
or, in the case of the first Distribution Date, one-twelfth of the product of
the Servicing Fee Percentage and the initial principal amount of the
Certificates. The portion of the Servicing Fee allocable to the Transferor
Interest is paid directly by the holder of the Exchangeable Transferor
Certificate from Yield Collections allocated to the Transferor Interest and
neither the Trust nor the Certificateholders have any obligations to pay such
portion of the Servicing Fee. The Monthly Servicing Fee will be paid with
respect to each Collection Period from the Collection Account (unless such
amount has been netted against deposits to the Collection Account) as described
under "--Distributions from the Collection Account" above. The Servicer pays
from its servicing compensation certain expenses incurred in connection with
servicing the Accounts and
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the Receivables including, without limitation, expenses related to enforcement
of the Receivables, 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 (a) upon determination that such duties
are impermissible under applicable law, regulation or order or (b) upon the
satisfaction of the following conditions:
(1) the assumption of the duties and obligations of the Servicer under
the Pooling and Servicing Agreement by a proposed successor Servicer;
(2) the written confirmation by the applicable Rating Agency that the
rating of any Series of certificates then outstanding will not, solely as a
result of such transfer, be reduced or withdrawn;
(3) the delivery to the Trustee of an opinion of counsel to the effect
that such transfer will not materially adversely affect the treatment of
any Series of certificates then outstanding after such transfer as debt for
Federal income tax purposes and that such transfer will not have any
material adverse impact on the Federal income taxation of the Trust or any
certificateholder or any certificate owner; and
(4) the proposed successor Servicer has a net worth of not less than
$50,000,000 and its regular business includes the servicing of wholesale
dealer accounts.
No such resignation described in clause (a) above 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.
Yamaha, as Servicer, is permitted under the Pooling and Servicing Agreement
to delegate certain of its servicing obligations to a designated subservicer if
such subservicer agrees to conduct such duties in accordance with the applicable
floorplan financing policies and procedures. Pursuant to the Servicing
Agreement, dated as of March 1, 1994, as amended as of May 1, 1999, between
Yamaha and Deutsche Financial, and related agreements (as amended, supplemented
or otherwise modified and in effect, the "SERVICING AGREEMENT"), Deutsche
Financial has agreed to act as the initial subservicer of the Receivables on
behalf of Yamaha. Notwithstanding any such delegation, Yamaha, as Servicer, will
continue to be liable for all of its obligations as Servicer under the Pooling
and Servicing Agreement.
In the event that Yamaha terminates Deutsche Financial as subservicer under
the Servicing Agreement, Yamaha will promptly appoint a successor subservicer
that has a short-term credit rating (which may be an implied rating) of at least
"P-1" by Moody's and of "A-1" by Standard & Poor's. Yamaha will provide notice
of any such appointment to the applicable Rating Agencies. If Yamaha has not
appointed a successor subservicer (which has accepted such appointment) at the
time that Deutsche Financial ceases to act as subservicer, Yamaha will serve as
the successor subservicer. If Yamaha is legally unable to serve as the
subservicer, Yamaha will petition a court to appoint an established financial
institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of wholesale dealer receivables as the successor
subservicer.
Any person into which, in accordance with the Pooling and Servicing
Agreement, any of the Transferor or the Servicer may be merged or consolidated
or any person resulting from any merger or consolidation to which any of the
Transferor or the Servicer is a party, or any person succeeding to the business
of any of the Transferor or the Servicer, will be the successor to the
Transferor or the Servicer, as the case may be, under the Pooling and Servicing
Agreement.
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SERVICER DEFAULT
In the event of any unremedied Servicer Default, either the Trustee or
certificateholders evidencing undivided interests aggregating more than 50% of
the aggregate principal amount of all Series, by written notice to the Servicer
(and to the Trustee, if given by the certificateholders), may terminate all of
the rights and obligations of the Servicer, in its capacity as servicer under
the Pooling and Servicing Agreement and in and to the Receivables and the
proceeds thereof, and the Trustee shall thereafter appoint a new Servicer (a
"SERVICE TRANSFER"). The rights and interests of the Transferor under the
Pooling and Servicing Agreement in the Transferor Interest will not be affected
by any Service Transfer. The Transferor shall have the right to nominate to the
Trustee the name of a potential successor Servicer. The Trustee shall as
promptly as possible appoint the entity nominated by the Transferor if such
entity meets certain eligibility criteria set forth in the Pooling and Servicing
Agreement. If the Transferor does not nominate an entity to be successor
Servicer within such 60-day period, 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 authority, power and obligations of the Servicer under the
Pooling and Servicing Agreement will pass to, and be vested in, the Trustee.
Prior to any Service Transfer, the Trustee will seek to obtain bids from
potential Servicers meeting certain eligibility requirements set forth in the
Pooling and Servicing Agreement to serve as a successor Servicer for servicing
compensation not in excess of the Servicing Fee. If the Trustee is unable to
obtain any bids from eligible servicers and the Servicer delivers an officer's
certificate to the effect that it cannot in good faith cure the related Servicer
Default, then the Trustee will offer the Transferor the right to accept the
retransfer of all of the Receivables. The deposit amount of such a retransfer
for this Series of Certificates shall be equal to the sum of the Class A
Invested Amount, the Class B Invested Amount and the Class C Invested Amount
plus accrued and unpaid interest on the Certificates (together with interest on
interest amounts that were due and not paid on a prior Distribution Date) at the
respective Certificate Rates through the day preceding such Distribution Date.
A "SERVICER DEFAULT" refers to any of the following events:
(1) failure by the Servicer to make any payment, transfer or deposit,
or to give instructions or notice to the Trustee to make such payment,
transfer or deposit, on the date the Servicer is required to do so under
the Pooling and Servicing Agreement or any Supplement; provided, however,
that any such failure caused by a nonwillful act of the Servicer shall not
constitute a Servicer Default if the Servicer promptly remedies such
failure within five Business Days after receiving notice thereof;
(2) failure on the part of the Servicer to duly observe or perform any
other covenants or agreements of the Servicer in the Pooling and Servicing
Agreement or any Supplement which has a material adverse effect on the
certificateholders, which continues unremedied for a period of 60 days
after written notice and which continues to materially adversely affect the
rights of the certificateholders of any Series then outstanding for such
period, or the Servicer assigns 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 any Supplement or in any
certificate delivered pursuant to the Pooling and Servicing Agreement or
any Supplement proves to have been incorrect when made, which has a
material adverse effect on the rights of the certificateholders, and which
material adverse effect continues to affect the certificateholders for a
period of 60 days after written notice; or
(4) the occurrence of certain events of bankruptcy or insolvency
relating to the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (1) above for a period of 10 Business Days after the
applicable grace period or a delay in or failure of performance referred to
under clauses (2) or (3) for a period of 60 Business Days after the applicable
grace period shall not constitute a Servicer Default, if such delay or failure
could not have been prevented by the exercise of reasonable diligence by the
Servicer and 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 or
any Supplement and the Servicer shall provide the Trustee, the provider of any
form
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of Enhancement, if any, applicable to any other Series, the Transferor 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 will
immediately notify the Trustee in writing of any Servicer Default.
REPORTS TO CERTIFICATEHOLDERS
Prior to each Distribution Date, the Servicer will forward to the Trustee a
statement (the "MONTHLY SERVICER REPORT") prepared by the Servicer setting forth
certain information with respect to the Trust and the Certificates, including,
but not limited to:
(a) the aggregate amount of Collections, the aggregate amount of Yield
Collections and the aggregate amount of Principal Collections processed
during the immediately preceding Collection Period;
(b) the Floating Allocation Percentage for such Collection Period and,
during any Accumulation Period and any Early Amortization Period, the Fixed
Allocation Percentage;
(c) the Investor Default Amount for such Distribution Date;
(d) the amount of Class A Investor Charge-Offs, Class B Investor
Charge-Offs and Class C Investor Charge-Offs and the amount of
reimbursements thereof for such Distribution Date;
(e) the amount of the Monthly Servicing Fee for such Distribution
Date;
(f) the aggregate amount of Receivables in the Trust at the close of
business on the last day of the Collection Period preceding such
Distribution Date;
(g) the Class A Invested Amount, the Class B Invested Amount and the
Class C Invested Amount at the close of business on the last day of the
Collection Period immediately preceding such Distribution Date; and
(h) whether an Early Amortization Event shall have occurred.
The Trustee will make such statement available to the holders of any Class of
Offered Certificates and Certificate Owners upon request at the offices of the
Trustee referenced in "--The Trustee."
On each Distribution Date (including the applicable Expected Final Payment
Date), the Paying Agent, on behalf of the Trustee, will forward to each holder
of any Class of Offered Certificates of record a statement (the "PAYMENT DATE
STATEMENT") prepared by the Servicer setting forth the information with respect
to the Certificates set forth in the Monthly Servicer Report supplied to the
Trustee as described in the preceding paragraph since the immediately preceding
Distribution Date, and the following additional information (which, in the case
of (1) through (7) below, will be stated on the basis of an original principal
amount of $1,000 per Offered Certificate, as applicable):
(1) the total amount distributed;
(2) the amount of such distribution allocable to principal on the
Class A Certificates;
(3) the amount of such distribution allocable to principal on the
Class B Certificates;
(4) the amount of such distribution allocable to principal on the
Class C Certificates;
(5) the amount of such distribution allocable to interest on the
Class A Certificates;
(6) the amount of such distribution allocable to interest on the
Class B Certificates;
(7) the amount of such distribution allocable to interest on the
Class C Certificates;
(8) the amount, if any, by which the principal balance of the Class A
Certificates exceeds the Class A Invested Amount as of the Record Date with
respect to such Distribution Date;
(9) the amount, if any, by which the principal balance of the Class B
Certificates exceeds the Class B Invested Amount as of the Record Date with
respect to such Distribution Date;
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(10) the amount, if any, by which the principal balance of the
Class C Certificates exceeds the Class C Invested Amount as of the Record
Date with respect to such Distribution Date;
(11) the "series factor" as of the end of the related Collection
Period (consisting of an eight-digit decimal expressing the Class A
Invested Amount as of such date (determined after taking into account any
increase or decrease in the Invested Amount which will occur on the
following Distribution Date) as a proportion of the Class A Initial
Invested Amount);
(12) the "series factor" as of the end of the related Collection
Period (consisting of an eight-digit decimal expressing the Class B
Invested Amount as of such date (determined after taking into account any
increase or decrease in the Invested Amount which will occur on the
following Distribution Date) as a proportion of the Class B Initial
Invested Amount); and
(13) the "series factor" as of the end of the related Collection
Period (consisting of an eight-digit decimal expressing the Class C
Invested Amount as of such date (determined after taking into account any
increase or decrease in the Invested Amount which will occur on the
following Distribution Date) as a proportion of the Class C Initial
Invested Amount).
On or before January 31 of each calendar year, beginning with January 31,
2000, the Paying Agent, on behalf of the Trustee, will furnish or cause to be
furnished to each person who at any time during the preceding calendar year was
a holder of record of any Class of Offered Certificates (or, if so provided in
applicable Treasury regulations, make available to Certificate Owners) a
statement prepared by the Servicer containing the information required to be
provided by an issuer of indebtedness under the Code for such calendar year or
the applicable portion thereof during which such person was a holder of any
Class of Offered Certificates, together with such other customary information as
the Servicer deems necessary or desirable to enable the holders of Offered
Certificates to prepare their tax returns. See "Certain Federal Income Tax
Considerations."
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement provides that on or before May 31 of
each calendar year the Servicer will cause a firm of nationally recognized
independent accountants to furnish a report to the effect that in the opinion of
such firm, the servicing and administration of the Accounts was conducted in
compliance with certain applicable terms and conditions set forth in the Pooling
and Servicing Agreement except for such exceptions or errors they believe to be
material and such other exceptions as shall be set forth in such statement. In
addition, on or before May 31 of each calendar year such accountants will
compare certain mathematical calculations of the amounts contained in the
Monthly Servicer Reports and other certificates delivered during such year with
the computer reports of the Servicer and statements of any agents engaged by the
Servicer to perform servicing activities which were the source of such amounts
and deliver a report to the Trustee stating that such amounts are in agreement
except for such exceptions which shall be set forth in such report.
The Pooling and Servicing Agreement provides for delivery to the Trustee on
or before May 31 of each calendar year of a statement signed by an officer of
the Servicer to the effect that, to the best of such officer's knowledge, the
Servicer has, or has 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 at the offices
of the Trustee referenced in "--The Trustee."
AMENDMENTS
The Pooling and Servicing Agreement and any Supplement may be amended by
the Transferor, the Servicer and the Trustee, without certificateholder consent,
to cure any ambiguity, to correct or supplement any provision therein which may
be inconsistent with any other provision therein and to add any other provisions
with respect to matters or questions arising under the Pooling and Servicing
Agreement or any Supplement which are not inconsistent with the provisions of
the Pooling and Servicing Agreement or such
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Supplement; provided, however, that such action does not have a material adverse
effect on the interests of the certificateholders. In addition, the Pooling and
Servicing Agreement and any Supplement may be amended from time to time by the
Transferor, the Servicer and the Trustee, without certificateholder consent, for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of the Pooling and Servicing Agreement or such Supplement
or of modifying in any manner the rights of certificateholders of any Series
then issued and outstanding; provided that (1) the Servicer must provide an
opinion of counsel to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the certificateholders of any
outstanding Series (or 100% of the class of certificateholders so affected shall
have consented to such amendment), (2) such amendment shall not, as evidenced by
an opinion of counsel, cause the Trust to be characterized for Federal income
tax purposes as an association taxable as
a corporation or as a "publicly traded partnership," as defined in
Section 7704(b) of the Code, taxable as a corporation or otherwise have any
material adverse impact on the Federal income taxation of any outstanding Series
of certificates or any Certificate Owner and (3) the applicable Rating Agency
shall confirm that such amendment shall not cause a reduction or withdrawal of
the rating of any outstanding Series of certificates. Any assignment or
reassignment regarding the addition or removal of Receivables from the Trust
will not require certificateholder consent under the provisions of the Pooling
and Servicing Agreement or any Supplement.
The Pooling and Servicing Agreement and any Supplement may also be amended
by the Transferor, the Servicer and the Trustee with the consent of the holders
of certificates evidencing undivided interests aggregating not less than 66 2/3%
of the principal amount of all Series adversely affected for the purpose of
adding any provisions to, changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or any Supplement or of
modifying in any manner the rights of certificateholders of any Series then
issued and outstanding. No such amendment, however, may (1) reduce in any manner
the amount of, or delay the timing of, distributions required to be made on such
Series, (2) change the definition or the manner of calculating the invested
amount, invested percentage, the applicable available amount under any
Enhancement or the investor default amount of such Series or (3) reduce the
aforesaid percentage of undivided interests the holders of which are required to
consent to any such amendment, in each case without the consent of all
certificateholders of all Series adversely affected.
Promptly following the execution of any amendment to the Pooling and
Servicing Agreement or any Supplement, the Trustee will furnish written notice
of the substance of such amendment to each certificateholder in any Series (or
with respect to an amendment of a Supplement, to the applicable Series).
LIST OF CERTIFICATEHOLDERS
Upon written request of three or more holders of any Class of Offered
Certificates or any Certificateholder or group of holders of any Class of
Offered Certificates representing undivided interests in the Trust aggregating
not less than 10% of the Class A Invested Amount or the Class B Invested Amount,
respectively, the Trustee will afford such holders access during business hours
to the current list of holders of such Class of Offered Certificates of the
Trust for purposes of communicating with other holders of such Class of Offered
Certificates with respect to their rights under the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement generally does not provide for any
annual or other meetings of Certificateholders.
THE TRUSTEE
The Fuji Bank and Trust Company is Trustee under the Pooling and Servicing
Agreement. The Transferor, 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 Offered Certificates in its own
name. The Trustee's address is The Fuji Bank and Trust Company, Two World Trade
Center, 81st Floor, New York, New York 10048, Attention: Trust Administration
Department.
For purposes of meeting the legal requirements of certain local
jurisdictions, the Trustee will have the power to appoint a co-trustee or
separate trustees of all or any part of the Trust. In the event of such
appointment, all rights, powers, duties and obligations conferred or imposed
upon the Trustee will be
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conferred or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly, or, in any jurisdiction in which the
Trustee will 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 a successor Trustee will
be appointed as provided in the Pooling and Servicing Agreement. 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, a successor Trustee will be appointed as
provided in the Pooling and Servicing Agreement. Any resignation or removal of
the Trustee and appointment of a successor Trustee does not become effective
until acceptance of the appointment by the successor Trustee.
DESCRIPTION OF THE RECEIVABLES SALE AGREEMENT
Yamaha has entered into a Receivables Sale Agreement, dated as of March 1,
1994, as amended as of May 1, 1999, between Yamaha, as purchaser, and Deutsche
Financial, as seller. Pursuant to the Receivables Sale Agreement, Deutsche
Financial has sold and will sell to Yamaha, without recourse, all of its right,
title and interest in, to and under all Receivables arising on or after
January 31, 1994 in Accounts established by Deutsche Financial with Dealers and
has assigned and will assign all of its interests in the related Product
Security to Yamaha. Deutsche Financial has represented and warranted to Yamaha
that, among other things:
(1) it is duly organized and validly existing in good standing under
the laws of the State of Nevada and is duly qualified to do business and is
in good standing in all jurisdictions in which such qualification is
necessary;
(2) it has the full corporate power, authority and legal right to own
its properties and conduct its business as such properties are presently
owned and as such business is presently conducted, and to execute, deliver
and perform its obligations under the Receivables Sale Agreement;
(3) the Receivables Sale Agreement constitutes a legal, valid and
binding obligation of Deutsche Financial; and
(4) its transfer of Receivables and related Product Security is a
valid sale of such interests to Yamaha, and that Deutsche Financial has
taken and will take all action required under the UCC (including, but not
limited to, the filing of any financing statements on Form UCC-1) to
perfect such sale to Yamaha.
DESCRIPTION OF THE RECEIVABLES PURCHASE AGREEMENT
The Receivables originated under the Accounts transferred to the Trust by
the Transferor have been and will continue to be purchased by the Transferor
from Yamaha pursuant to the Receivables Purchase Agreement entered into between
the Transferor, as purchaser, and Yamaha, as seller. A copy of the Receivables
Purchase Agreement is filed as an exhibit to the Registration Statement of which
this Prospectus is a part. The following summary describes certain terms of the
Receivables Purchase Agreement.
SALE OF RECEIVABLES
Under the Receivables Purchase Agreement, Yamaha sells to the Transferor
all its right, title and interest in, to and under the Receivables existing on
on January 31, 1994 and thereafter created under the Accounts. Pursuant to the
Pooling and Servicing Agreement, all such Receivables will be immediately
transferred by the Transferor to the Trust, and the Transferor will assign its
rights in, to and under the Receivables Purchase Agreement, together with any
related Product Security with respect to such Receivables, to the Trust. The
purchase price of the purchased Receivables will be payable by the Transferor in
cash (generally to the extent of Principal Collections released to the
Transferor) with the excess credited as a capital contribution by Yamaha, the
Transferor's parent.
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In connection with the Receivables Purchase Agreement, Yamaha causes
Deutsche Financial, and will continue itself, to indicate in its records,
including any computer files, that the Receivables arising under the Accounts
have been sold to the Transferor by Yamaha and that such Receivables have been
transferred by the Transferor to the Trust. In addition, Yamaha causes to be
provided to the Transferor a computer file or a microfiche list containing a
true and complete list showing each Account identified by account number and by
total outstanding balance on January 31, 1994 and from time to time thereafter.
The records and agreements relating to such Accounts and Receivables are not
segregated by Yamaha or Deutsche Financial from other documents and agreements
relating to other charge accounts and receivables and are not stamped or marked
to reflect the sale thereof to the Transferor. Yamaha and Deutsche Financial
have filed UCC financing statements believed to meet the requirements of state
law in California with respect to such Receivables. See "Risk Factors--Priority
of some liens over the certificates could result in losses on the certificates"
and "Certain Transfer, Security Interest and Bankruptcy Considerations."
Pursuant to the Receivables Purchase Agreement, the Transferor may require
Yamaha to repurchase Receivables existing or to be created in Accounts
designated as Removed Accounts pursuant to the Pooling and Servicing Agreement.
See "Description of the Offered Certificates--Removal of Accounts."
REPRESENTATIONS AND WARRANTIES
Yamaha represents and warrants to the Transferor to the effect, among other
things, that as of March 24, 1994 and each date on which new Accounts are
created and Receivables arising therein are sold to the Transferor:
(1) Yamaha is duly organized and validly existing in good standing
under the laws of the jurisdiction of its organization, has the full
corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform its
obligations under the Receivables Purchase Agreement;
(2) the Receivables Purchase Agreement constitutes a legal, valid and
binding obligation of Yamaha;
(3) the Receivables Purchase Agreement constitutes a valid sale to the
Transferor of all right, title and interest of Yamaha in, to and under the
Receivables and the related Product Security, whether then existing or
thereafter created in the Accounts and the proceeds thereof which is
effective as to each such Receivable upon the creation thereof; and
(4) as of March 24, 1994 and from time to time thereafter, the
computer file or list of Accounts in existence at such time, provided by
Yamaha to the Transferor is an accurate and complete listing of all such
Accounts in all material respects and the information contained therein
with respect to the identity of such Accounts and the Receivables existing
thereunder is true and correct in all material respects as of March 24,
1994 or the applicable date thereafter.
Upon the breach of certain of the representations and warranties described in
this paragraph giving rise to the Transferor's obligation to repurchase
Receivables under the Pooling and Servicing Agreement, Yamaha will repurchase
all such Receivables from the Transferor for an amount of cash equal to the
amount of cash which the Transferor is required to deposit under the Pooling and
Servicing Agreement in connection with such breach.
Yamaha covenants to the Transferor for the benefit of all
certificateholders of all Series which from time to time may have an interest in
the Trust that, as to the Receivables and the Accounts subject to the
Receivables Purchase Agreement, unless cured within 60 days from receipt of
notice from the Transferor or the Trustee, it will accept the transfer of any
Receivable which the Transferor is obligated to repurchase under the Pooling and
Servicing Agreement, if:
(1) such Receivable is not an Eligible Receivable or the related
Account is not an eligible Account;
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(2) such Receivable was not conveyed to the Transferor free and clear
of all liens (except such liens as may be permitted by the Pooling and
Servicing Agreement) or in compliance in all material respects with all
requirements of law; or
(3) Yamaha did not obtain all consents, licenses, approvals or
authorizations required in connection with the conveyance of the
Receivables to the Transferor.
Additionally, Yamaha covenants in the Receivables Purchase Agreement to
repurchase, under certain conditions, each Receivable sold by it to the
Transferor which is subject to certain specified liens immediately upon the
discovery of such liens. Yamaha shall repurchase any such Receivable, if the
Transferor is required to accept the retransfer of such Receivable under the
Pooling and Servicing Agreement. The purchase price for such Ineligible
Receivable shall be the balance of such Receivable.
Yamaha has also agreed to indemnify the Transferor and to hold the
Transferor harmless from and against any and all losses, damages and expenses
(including reasonable attorneys' fees) suffered or incurred by the Transferor if
any of the foregoing representations and warranties are materially false.
CERTAIN COVENANTS
In the Receivables Purchase Agreement, Yamaha covenants to cause compliance
with the servicing obligations relating to the Accounts and the Receivables and
Yamaha's policies and procedures relating to the Accounts unless the failure to
do so would not have a material adverse effect on the rights of the Trust, as
assignee of the Receivables existing or arising thereunder, or the
certificateholders. In that regard, Yamaha may change the terms and provisions
of such dealer agreements or policies and procedures in any respect, so long as
any such changes are permitted by the Pooling and Servicing Agreement.
In addition, Yamaha expressly acknowledges and consents to the Transferor's
assignment of its rights relating to the interests sold by Yamaha under the
Receivables Purchase Agreement to the Trustee for the benefit of the
certificateholders. Yamaha also agrees, for the benefit of the Trustee and any
provider of any Enhancement, that any amounts payable by Yamaha to the
Transferor pursuant to the Pooling and Servicing Agreement that are to be paid
by the Transferor to the Trustee for the benefit of the certificateholders will
be paid by Yamaha on behalf of the Transferor directly 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,
Yamaha or Deutsche Financial becomes party to any bankruptcy or similar
proceeding (other than as a claimant) and, if such proceeding is not voluntary,
it is not dismissed within 90 days of its institution, or if a bankruptcy
trustee is appointed for Yamaha or Deutsche Financial, Yamaha will immediately
cease to sell Receivables to the Transferor and will promptly give notice of
such event to the Transferor and to the Trustee.
CERTAIN TRANSFER, SECURITY INTEREST AND
BANKRUPTCY CONSIDERATIONS
TRANSFER OF RECEIVABLES
Pursuant to the Receivables Sale Agreement, Deutsche Financial sells and
will continue to sell to Yamaha, without recourse, all of its right, title and
interest in, to and under the Receivables existing in the Accounts established
by Deutsche Financial with Dealers, together with the particular Product
Security relating thereto, and Deutsche Financial warrants in the Receivables
Sale Agreement that such transfer is a valid sale of such interest. In turn,
pursuant to the Receivables Purchase Agreement, Yamaha has sold and will sell to
the Transferor all of its right, title and interest in, to and under the
Receivables and the related Product Security to the Transferor, which
Receivables are immediately transferred and conveyed without recourse by the
Transferor to the Trust pursuant to the Pooling and Servicing Agreement. The
Transferor has represented and warranted that such conveyance to the Trust
either constitutes a valid transfer and assignment
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to the Trust of all right, title and interest of the Transferor in, to and under
the Receivables and the related Product Security, or a grant of a security
interest to the Trust in, to and under the Receivables and the related Product
Security. The Transferor also represents and warrants to the Trust in the
Pooling and Servicing Agreement that, in the event the transfer of Receivables
and related Product Security is deemed to create a security interest under the
UCC, the Trustee (on behalf of the certificateholders) possesses a first
priority perfected security interest (subject only to permitted liens) in the
Receivables and related Product Security upon the creation of such Receivables
and the transfer of such Receivables and the related Product Security to the
Trust. For a discussion of the Trust's rights arising from these covenants and
warranties not being satisfied, see "Description of the Offered
Certificates--Covenants, Representations and Warranties."
Each of Yamaha and the Transferor has represented that the Receivables are
"accounts", "chattel paper" or "general intangibles" for purposes of the UCC as
in effect in the State of California. If the Receivables are deemed to be
chattel paper and the transfer thereof by either Yamaha to the Transferor or by
the Transferor to the Trust is deemed either to be a sale or to create a
security interest, the UCC 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 by both the Transferor
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 will not be stamped to indicate the interest of
the Transferor or the Trustee.
There are certain limited circumstances under the UCC and applicable
Federal law in which prior or subsequent transferees of Receivables and related
Product Security could have an interest in such Receivables and related Product
Security with priority over the Trust's interest. For example, a tax or other
government lien on property of Yamaha or the Transferor arising prior to the
time a Receivable and related Product Security is conveyed to the Trust may also
have priority over the interest of the Trust in such Receivable and related
Product Security. Under the Receivables Purchase Agreement, Yamaha has warranted
to the Transferor, and under the Pooling and Servicing Agreement the Transferor
has warranted to the Trust, that the Receivables and the related Product
Security have been transferred free and clear of the lien of any third party,
except as otherwise permitted by the Pooling and Servicing Agreement. Each of
Yamaha and the Transferor has also covenanted that it will not sell, pledge,
assign, transfer or grant any lien on any Receivable and the related Product
Security or the Exchangeable Transferor's Certificate (or any interest therein)
other than to the Trust. In addition, while Yamaha is the Servicer, cash
Collections on the Receivables may, under certain circumstances, be commingled
with the funds of Yamaha prior to each Distribution Date and, in the event of
the bankruptcy of Yamaha, neither the Trust nor the Transferor may have a
perfected interest in such Collections.
Because the Trust's interest in the Receivables is dependent upon the
Transferor's interest in such Receivables, any adverse change in the priority or
perfection of the Transferor's ownership or security interest would
correspondingly affect the Trust's interest in the affected Receivables.
As set forth under "Risk Factors--Priority of some liens over the
certificates could result in losses on the certificates," cash Collections will,
except in certain circumstances, be available for use by the Servicer (or
Deutsche Financial, as subservicer) until deposited into the Collection Account
on each Distribution Date. In the event of insolvency or receivership of the
Servicer (or Deutsche Financial, as subservicer) or, as the case may be, in
certain circumstances, the lapse of certain time periods, neither the Trust nor
the Transferor may have a perfected interest in such cash Collections.
CERTAIN MATTERS RELATING TO BANKRUPTCY
The Pooling and Servicing Agreement provides that, upon the appointment of
a receiver or bankruptcy trustee for the Transferor or Yamaha, such party will
promptly give notice thereof to the Trustee, and an Early Amortization Event
with respect to all Series will occur. Under the Pooling and Servicing
Agreement, no new Receivables will be transferred to the Trust and, unless
otherwise instructed within a specified period by the holders of certificates
representing undivided interests aggregating more than 50% of the aggregate
principal amount of each class of each Series or unless otherwise required by
the receiver or bankruptcy trustee for the Transferor, Yamaha or Deutsche
Financial, the Trustee will proceed to sell, dispose of or
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otherwise liquidate the Receivables in a commercially reasonable manner and on
commercially reasonable terms. The proceeds from the sale of the Receivables
would then be treated by the Trustee as Collections on the Receivables. If the
only Early Amortization Event to occur is either the insolvency of the
Transferor, Yamaha or Deutsche Financial or the appointment of a receiver or
bankruptcy trustee for the Transferor, Yamaha or Deutsche Financial, such
receiver or bankruptcy trustee may have the power to require Yamaha to continue
to transfer new Receivables to the Transferor or require the Transferor to
continue to transfer new Receivables to the Trust, as applicable, and to prevent
the early sale, liquidation or disposition of the Receivables and the
commencement of the Early Amortization Period. See "Description of the Offered
Certificates--Early Amortization Events."
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
Set forth below is a discussion of certain Federal income tax consequences
to Certificate Owners who purchase any Class of Offered Certificates at original
issuance and hold the Offered Certificates as capital assets under the Internal
Revenue Code of 1986, as amended (the "CODE"). This discussion does not purport
to be complete or to deal with all aspects of Federal income taxation that may
be relevant to Certificate Owners in light of their particular circumstances or
to certain types of Certificate Owners subject to special treatment under the
Federal income tax laws (for example, banks and life insurance companies). This
discussion is based upon provisions of the Code, the regulations promulgated
thereunder and judicial and ruling authorities as currently in effect, all of
which are subject to change, possibly retroactively. PROSPECTIVE INVESTORS ARE
ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH REGARD TO THE FEDERAL TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP OR DISPOSITION OF INTERESTS IN THE
OFFERED CERTIFICATES, AS WELL AS THE TAX CONSEQUENCES ARISING UNDER THE LAWS OF
ANY STATE, FOREIGN COUNTRY OR OTHER TAXING JURISDICTION.
CHARACTERIZATION OF THE OFFERED CERTIFICATES AS INDEBTEDNESS
The Transferor, the Trustee and each Certificate Owner (by acquiring an
interest in any Class of Offered Certificates) express in the Pooling and
Servicing Agreement their intent that, for financial accounting and tax
purposes, the Offered Certificates will be indebtedness secured by the
Receivables. The Transferor and each Certificate Owner, by acquiring an interest
in any Class of Offered Certificates, agree to treat the Offered Certificates as
indebtedness for Federal, state and local tax purposes.
Based upon the application of existing law to the facts of the transaction
as set forth in the Pooling and Servicing Agreement and other relevant
documents, Giancarlo & Gnazzo, A Professional Corporation, special tax counsel
to the Transferor ("TAX COUNSEL"), will render its opinion that the Offered
Certificates will be treated for Federal income tax purposes as secured
indebtedness. However, opinions of counsel are not binding on the Internal
Revenue Service (the "IRS"), and there can be no assurance that the IRS could
not successfully challenge this conclusion.
In general, the characterization of a transaction for Federal income tax
purposes is based upon economic substance, and the substance of the transaction
in which the Offered Certificates are issued is consistent with the treatment of
the Offered Certificates as debt for Federal income tax purposes. Although there
are certain judicial precedents holding that under appropriate circumstances a
taxpayer should be required to treat a transaction in accordance with the form
chosen by the taxpayer, regardless of the transaction's substance, the operative
provisions of the transaction and the Pooling and Servicing Agreement are at
worst ambiguous but are not inconsistent with treating the Offered Certificates
as debt and accordingly, these authorities would not be applied to require sale
characterization. Based on the foregoing, Tax Counsel has concluded that the
characterization of the Offered Certificates, for Federal income tax purposes,
would be governed by the substance of the transaction, which is the issuance of
secured debt.
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FUTURE LEGISLATION
On February 1, 1999, the Clinton Administration submitted to the House of
Representatives its fiscal year 2000 revenue proposals. The revenue proposals
included a proposal (the "PROPOSAL") limiting the circumstances in which a
corporate taxpayer could, for Federal income tax purposes, characterize a
transaction according to the substance, rather than the form, of the
transaction. If the Proposal were enacted in its present form, it might prevent
Certificate Owners that are corporations from characterizing the Offered
Certificates as debt for Federal income tax purposes. The Federal income tax
characterization of the Offered Certificates by corporate Certificate Owners
might affect the Federal income tax characterization of the Trust, which might
adversely affect the Federal income taxation of any outstanding Series of
certificates held by investors. It is unclear whether the Proposal will be
enacted, to what extent its provisions will be modified prior to enactment, and
whether its provisions, as enacted, would affect the Federal income tax
characterization of the Offered Certificates.
TAXATION OF INTEREST INCOME
Assuming that the Certificate Owners are owners of debt obligations for
Federal income tax purposes, interest generally will be taxable as ordinary
income for Federal income tax purposes when received by the Certificate Owners
utilizing the cash method of accounting and when accrued by Certificate Owners
utilizing the accrual method of accounting. Interest received on the Offered
Certificates may also constitute "investment income" for purposes of certain
limitations of the Code concerning the deductibility of investment interest
expense.
Generally, a debt instrument will not be treated for Federal income tax
purposes as issued with original issue discount ("OID"), if the debt instrument
is not issued at greater than a de minimis discount from par and all stated
interest payments on the debt instrument are "qualified stated interest"
payments. While it is not anticipated that the Offered Certificates will be
issued at a greater than de minimis discount from par, under Treasury
regulations (the "OID REGULATIONS"), it is possible that the stated interest
payments on Offered Certificates could be treated for Federal income tax
purposes as other than "qualified stated interest" payments. Under the OID
Regulations, interest payments on the Offered Certificates may not be "qualified
stated interest" payments because the Offered Certificates may be treated
(a) as not providing Certificate Owners with reasonable legal remedies to compel
timely payment of interest and (b) as not having terms and conditions that make
the likelihood of late payment (other than a late payment that occurs within a
reasonable grace period) or nonpayment a remote contingency. Although the
Pooling and Servicing Agreement does not contain provisions expressly
denominated as default provisions, it does contain provisions intended to
provide assurances that interest and principal on the Offered Certificates will
be paid even if certain adverse events occur. Moreover, the OID Regulations
provide that, for purposes of the foregoing test, the possibility of nonpayment
due to default, insolvency, or similar circumstances, is ignored. The Transferor
intends to take the position that, because nonpayment can occur only as a result
of events beyond the control of the Trust and the Trustee (principally, loss
rates and payment delays on the Receivables substantially in excess of those
anticipated), nonpayment is a remote contingency.
If the Offered Certificates are in fact issued at a greater than de minimis
discount or payments of stated interest are treated as other than "qualified
stated interest," the following general rules will apply. The excess of the
"stated redemption price at maturity" of the Offered Certificates (generally
equal to their principal amount as of the date of original issuance plus all
interest other than "qualified stated interest" payments payable prior to or at
maturity) over their original issue price (the initial offering price at which a
substantial amount of the Offered Certificates are sold) will constitute OID. A
Certificate Owner must include OID in income over the term of the Offered
Certificate under a constant yield method. Inclusion of OID under a constant
yield method would not significantly affect Certificate Owners utilizing the
accrual method of accounting, but it would accelerate the inclusion of income by
Certificate Owners utilizing the cash method of accounting. Interest included in
income as OID would not be includible again when received. Under the OID
Regulations, a holder of an Offered Certificate issued without OID but issued at
a de minimis discount from par must include such discount in income
proportionately as principal payments are made on such Offered Certificate.
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Certificate Owners should be aware that the resale of any Class of Offered
Certificates may be affected by the market discount rules of the Code. These
rules generally provide that, subject to a de minimis exception, if a holder of
an Offered Certificate acquires the Offered Certificate at a market discount
(i.e., at a price below its stated redemption price at maturity or its "revised
issue price" if it was issued with OID) and thereafter recognizes gain upon a
disposition of the Offered Certificate, the lesser of such gain or the portion
of the market discount that accrued while the Offered Certificate was held by
such holder will be treated as ordinary interest income realized at the time of
the disposition.
Each Certificate Owner should consult its own tax advisor regarding the
impact of the original issue discount and market discount rules.
SALES OF OFFERED CERTIFICATES
In general, a Certificate Owner will recognize gain or loss upon the sale,
exchange, redemption or other taxable disposition of an Offered Certificate
measured by the difference between (a) the amount of cash and the fair market
value of any property received (other than amounts attributable to, and taxable
as, accrued stated interest) and (b) the Certificate Owner's tax basis in the
Offered Certificate (as increased by any OID or market discount previously
included in income by the holder and decreased by any deductions previously
allowed for amortizable bond premium and by any payments reflecting principal or
OID received with respect to such Offered Certificate). Subject to the market
discount rules discussed above and to the one-year holding requirement for
long-term capital gain treatment, any such gain or loss generally will be
long-term capital gain, provided that the Offered Certificate was held as a
capital asset. The federal income tax rates applicable to capital gains for
taxpayers other than individuals, estates and trusts are currently the same as
those applicable to ordinary income; however, the maximum ordinary income rate
for individuals, estates and trusts is 39.6%, whereas the maximum long-term
capital gains rate for such taxpayers is 28%. Moreover, capital losses generally
may be used only to offset capital gains.
TAX CHARACTERIZATION OF THE TRUST
Certificates may be issued by the Trust which are treated for Federal
income tax purposes either as indebtedness or as an interest in a partnership.
Accordingly, the Trust could be characterized either as (a) a security device to
hold Receivables securing the repayment of the certificates of all Series, (b)
an entity whose existence is disregarded or (c) a partnership in which the
Transferor and certain certificateholders are partners, and which has issued
debt represented by other certificates (including the Offered Certificates). In
connection with the issuance of certificates of any Series, Tax Counsel will
render an opinion to the Transferor, the Trustee, any underwriters or purchasers
and any applicable Rating Agency, based on the assumptions and qualifications
set forth therein, that under then current law, the issuance of the certificates
of such Series will not cause the Trust to be characterized for Federal income
tax purposes as an association taxable as a corporation or as a "publicly traded
partnership," as defined in Section 7704(b) of the Code, taxable as a
corporation or otherwise have any material adverse impact on the Federal income
taxation of any outstanding Series of certificates held by investors.
POSSIBLE CLASSIFICATION OF THE TRANSACTION AS A PARTNERSHIP
If the Offered Certificates are not treated as debt obligations for Federal
income tax purposes, the arrangement among the Transferor and the Certificate
Owners could be classified, for Federal income tax purposes, as a partnership.
Because, in the opinion of Tax Counsel, the Offered Certificates will be
characterized as debt for Federal income tax purposes, no attempt will be made
to comply with any reporting or tax payment requirements which might be
applicable if the arrangement among the Transferor and the Certificate Owners
were treated as creating a partnership. No IRS ruling on the Federal income tax
characterization of the arrangement among the Transferor and the Certificate
Owners will be sought.
If the arrangement created by the Pooling and Servicing Agreement were
characterized as a partnership (but not a "publicly traded partnership" taxable
as a corporation) among the Transferor and the Certificate Owners, such a
partnership would not be subject to Federal income tax, but each item of income,
gain, loss, deduction and credit generated through the ownership of the
Receivables by such a partnership would
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generally be passed through to the Transferor and the Certificate Owners as
partners in such a partnership according to their respective interests therein.
The amount, timing and character of income reportable by the Certificate Owners
as partners could differ materially from the income reportable by the
Certificate Owners if the Offered Certificates are characterized as debt.
Moreover, unless the partnership were treated as engaged in a trade or business,
an individual's share of expenses of the partnership would be miscellaneous
itemized deductions that, in the aggregate, are allowed as deductions only to
the extent they exceed 2% of the individual's adjusted gross income and would be
subject to reduction under Section 68 of the Code if the individual's adjusted
gross income exceeded certain limits. As a result, the individual might be taxed
on a greater amount of income than the stated rate on the Offered Certificates.
In addition, assuming the partnership is a "publicly traded partnership" (as
defined in Section 469(k)(2) of the Code), even if it qualifies for exemption
from taxation as a corporation, all or a portion of any taxable income allocated
to a Certificate Owner that is a pension, profit-sharing or employee benefit
plan or other tax-exempt entity (including an individual retirement account)
may, under certain circumstances, constitute "unrelated business taxable income"
which generally would be taxable to the holder under the Code. Finally, if the
Pooling and Servicing Agreement were to create a partnership, the partnership
might be required to withhold Federal income tax at a rate of up to 39.6% on the
income allocable to Foreign Investors. See "--Federal Income Tax Consequences to
Foreign Investors."
If the arrangement created by the Pooling and Servicing Agreement were
characterized as a partnership, it would be treated as a "publicly traded
partnership" if ownership interests in the partnership were traded on an
"established securities market" or "readily tradable on a secondary market (or
the substantial equivalent thereof)." A "publicly traded partnership" is taxable
as a corporation unless it satisfies certain income requirements. The Trust will
not be a "publicly traded partnership" taxable as a corporation if 90% of the
gross income of the Trust is interest other than interest from a "financial
business" and certain other requirements are met. Because Treasury regulations
do not clarify the meaning of a "financial business" for this purpose, it is
unclear whether the Trust will meet such income requirements. If the arrangement
were treated as a publicly traded partnership taxable as a corporation, it would
be subject to Federal income tax at corporate tax rates on its taxable income
generated by ownership of the Receivables. Such a tax could result in reduced
distributions to Certificate Owners. Distributions to the Transferor and, unless
the Offered Certificates were treated as debt of such corporation, to the
Certificate Owners, would not be deductible in computing the taxable income of
the corporation. In addition, if the Offered Certificates were not treated as
debt of the corporation, all or a portion of any such distributions would, to
the extent of the current and accumulated earnings and profits of such
corporation, be treated as dividend income to the Certificate Owners, and in the
case of Certificate Owners that are Foreign Investors, might be subject to
withholding tax.
FEDERAL INCOME TAX CONSEQUENCES TO FOREIGN INVESTORS
Tax Counsel will render its opinion that the Offered Certificates will be
classified as debt for Federal income tax purposes. The following information
describes the U.S. Federal income tax treatment of Foreign Investors if the
Offered Certificates are treated as debt. The term "FOREIGN INVESTOR" means any
Certificate Owner other than (1) a citizen or resident of the United States, (2)
a corporation, partnership or other entity (other than an estate or trust)
organized in or under the laws of the United States or any political subdivision
thereof (unless, in the case of a partnership, Treasury regulations provide
otherwise), (3) an estate the income of which is includible in gross income for
U.S. Federal income tax purposes, regardless of its source or (4) a trust (A)
the primary supervision over the administration of which, a court within the
United States is able to exercise and (B) all substantial decisions of which,
one or more U.S. persons have the authority to control.
Interest, including OID, if any, paid to a Foreign Investor will be subject
to U.S. withholding taxes at a rate of 30% unless (a) the income is "effectively
connected" with the conduct by such Foreign Investor of a trade or business in
the United States or (b) the Foreign Investor and each securities clearing
organization, bank or other financial institution that holds the Offered
Certificates on behalf of the customer in the ordinary course of its trade or
business, in the chain between the Certificate Owner and the U.S. person
otherwise required to withhold the U.S. tax, complies with applicable
identification requirements (and the Certificate Owner does not actually or
constructively own 10% or more of the voting stock of Yamaha, is not a bank
receiving interest described in Section 881(c)(3)(A) of the Code and is not a
controlled foreign corporation
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with respect to Yamaha). Applicable identification requirements will be
satisfied if there is delivered to a securities clearing organization (1) IRS
Form W-8 signed under penalties of perjury by the Certificate Owner stating that
the Certificate Owner is not a U.S. person and providing such Certificate
Owner's name and address, (2) IRS Form 1001 signed by the Certificate Owner or
such Certificate Owner's agent claiming exemption from withholding under an
applicable tax treaty, or (3) IRS Form 4224 signed by the Certificate Owner or
such owner's agent claiming exemption from withholding of tax on income
effectively 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 Certificate Owner is a U.S.
person or that any certification on that form is false.
A Foreign Investor will not be subject to U.S. Federal income tax on gain
realized on the sale, exchange or redemption of such Offered Certificate (other
than amounts attributable to, and taxable as, accrued stated interest) provided
that (a) such gain is not effectively connected with a trade or business carried
on by the Certificate Owner in the United States and (b) in the case of a
Certificate Owner that is an individual, such Certificate Owner is not present
in the United States for 183 days or more during the taxable year in which such
sale, exchange or redemption occurs.
If the IRS were to contend successfully that the Offered Certificates are
interests in a partnership (not taxable as a corporation), a Certificate Owner
that is a Foreign Investor might be required to file a U.S. Federal income tax
return and pay tax on its share of partnership income at regular U.S. rates,
including the branch profits tax in the case of a Foreign Investor that is a
foreign corporation, and would be subject to withholding tax at a rate of up to
39.6% on its share of partnership income. If the Offered Certificates were
recharacterized as interests in a "publicly traded partnership" taxable as a
corporation, to the extent distributions on the Offered Certificates were
treated as dividends a Foreign Investor would generally be subject to
withholding tax on the gross amount of such dividends at the rate of 30% unless
such rate were reduced by an applicable treaty.
BACKUP WITHHOLDING
Each Certificate Owner (other than an exempt holder such as a corporation,
tax exempt organization, qualified pension and profit sharing trust, individual
retirement account or nonresident alien who provides certification as to status
as a nonresident) will be required to provide, under penalty of perjury, a
certificate containing the holder's name, address, correct federal taxpayer
identification number and a statement that the holder is not subject to backup
withholding. Should a nonexempt Certificate Owner fail to provide the required
certification, the Trust will be required to withhold 31% of the amount
otherwise payable to the holder, as interest or OID, and remit the withheld
amount to the IRS as a credit against the holder's Federal income tax liability.
Information returns will be sent annually to the IRS and to each holder of an
Offered Certificate setting forth the amount of interest paid (or OID accrued,
if any) on such Offered Certificate and the amount of tax withheld thereon.
NEW WITHHOLDING REGULATIONS
Recently, the Treasury Department issued new regulations (the "NEW
REGULATIONS") which make certain modifications to the backup withholding and
information reporting rules described above. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally be effective for payments made after December 31,
2000, subject to certain transition rules. Each Certificate Owner should consult
its own tax advisor regarding the impact of the New Regulations.
STATE, LOCAL AND FOREIGN TAXATION
The discussion above does not address the tax treatment of the Trust, the
Offered Certificates or the Certificate Owners under state and local tax laws or
foreign tax laws. Prospective investors are urged to consult their own tax
advisors regarding the state and local tax treatment of the Trust and the
Offered Certificates, and the consequences of purchase, ownership or disposition
of the Offered Certificates under any state or local tax law or any foreign tax
law, if applicable.
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ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code prohibit a pension,
profit-sharing, or other employee benefit plan from engaging in certain
transactions involving "plan assets" with persons that are "parties in interest"
under ERISA or "disqualified persons" under the Code with respect to the plan.
ERISA also imposes certain duties on persons who are fiduciaries of plans
subject to ERISA and prohibits certain transactions between a plan and parties
in interest with respect to such plans. Moreover, based on the reasoning of the
United States Supreme Court in John Hancock Life Ins. Co. v. Harris Trust and
Sav. Bank, 114 S. Ct. 517 (1993), an insurance company's general account may be
deemed to include assets of the Benefit Plans investing in the general account
(e.g., through the purchase of an annuity contract), and the insurance company
might be treated as a party-in-interest with respect to a Benefit Plan by virtue
of such investment. Under ERISA, any person who exercises any authority or
control respecting the management or disposition of the assets of a plan is
considered to be a fiduciary of such plan (subject to certain exceptions not
here relevant). A violation of these "prohibited transaction" rules may generate
excise tax and other liabilities under ERISA and the Code for such persons. Each
Benefit Plan fiduciary should determine whether, under the general fiduciary
standards of investment prudence and diversification, an investment in the
Offered Certificates is appropriate for the Benefit Plan, taking into account
the overall investment policy of the Benefit Plan and the composition of the
Benefit Plan's investment portfolio.
Pursuant to a regulation (the "PLAN ASSET REGULATION") issued by the
Department of Labor ("DOL") concerning the definition of what constitutes the
"plan assets" of an employee benefit plan subject to ERISA or the Code, or an
individual retirement account (an "IRA") (collectively referred to as "BENEFIT
PLANS"), the assets and properties of certain entities in which a Benefit Plan
makes an equity investment could be deemed to be assets of the Benefit Plan in
certain circumstances. Accordingly, if Benefit Plans purchase Offered
Certificates, the Trust could be deemed to hold plan assets unless an exception
under the Plan Asset Regulation is applicable to the Trust.
Under the terms of the Plan Asset Regulation, if the Trust were deemed to
hold "plan assets" by reason of a Benefit Plan's investment in an Offered
Certificate, such "plan assets" would include an undivided interest in the
assets of the Trust. In addition, the persons providing services with respect to
the assets of the Trust, including the Servicer and the Trustee, may be subject
to the fiduciary responsibility provisions of Title I of ERISA and be subject to
the prohibited transaction provisions of ERISA and Section 4975 of the Code with
respect to transactions involving such assets. Certain exemptions from the
prohibited transaction rules may be applicable, however.
THE CLASS A CERTIFICATES
The DOL granted to Chase Securities, Inc. an administrative exemption
(Prohibited Transaction Exemption 90-31) (such exemption to be hereinafter
referred to as the "EXEMPTION") from certain of the prohibited transaction rules
of ERISA and the Code with respect to the initial purchase, the holding, and the
subsequent resale by Benefit Plans of certificates (such as the Class A
Certificates) in asset backed pass-through trusts that consist of certain
receivables, loans and other obligations that meet the conditions and
requirements of the Exemption. The Transferor believes that the assets covered
by the Exemption include receivables such as the Receivables. Accordingly, the
Exemption will apply to the acquisition, holding and resale of the Class A
Certificates by a Benefit Plan, provided that specified conditions (certain of
which are described below) are met. The Transferor believes that the Exemption
will apply to the acquisition and holding of Class A Certificates by Benefit
Plans and that all conditions of the Exemption that are within its control have
been or will be met.
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Among the conditions which must be satisfied for the Exemption to apply to
the acquisition by a Benefit Plan of the Class A Certificates are the following
(each of which the Transferor believes has been or will be met in connection
with the Class A Certificates):
(1) The acquisition of the Class A Certificates by a Benefit Plan is
on terms (including the price for the Class A Certificates) that are at
least as favorable to the Benefit Plan as they would be in an arm's-length
transaction with an unrelated party;
(2) The rights and interests evidenced by the Class A Certificates
acquired by the Benefit Plan are not subordinated to the rights and
interests evidenced by other certificates of the Trust;
(3) The Class A Certificates acquired by the Benefit Plan have
received a rating at the time of such acquisition that is in one of the
three highest generic rating categories from either Standard & Poor's,
Moody's, Duff & Phelps Inc. or Fitch IBCA, Inc.;
(4) The sum of all payments made to the Underwriter in connection with
the distribution of the Class A Certificates represents not more than
reasonable compensation for underwriting the Class A Certificates. The sum
of all payments made to and retained by the Transferor pursuant to the sale
of the Receivables to the Trust represents not more than the fair market
value of such Receivables. The sum of all payments made to and retained by
the Servicer represents not more than reasonable compensation for the
Servicer's services under the Pooling and Servicing Agreement and
reimbursement of the Servicer's reasonable expenses in connection
therewith;
(5) Any Benefit Plan investing in the Class A Certificates is an
"accredited investor" as defined in Rule 501(a)(1) of Regulation D
promulgated under the Securities Act; and
(6) Where Class A Certificates are acquired by a Benefit Plan in a
case in which the advisor who has discretionary authority over or renders
investment advice to such Benefit Plan is an obligor on a Receivable (or an
affiliate of an obligor), the following conditions must be met: (A) such
advisor must be an obligor of not more than 5% of the Trust assets;
(B) the Benefit Plan cannot be an Excluded Plan (defined as a Benefit Plan
sponsored by the Transferor, the Servicer, the Trustee or the Underwriter
or any of their affiliates); (C) in the case of the initial issuance of the
Certificates, at least 50% of each Class of Certificates in which Benefit
Plans have invested, and 50% of the aggregate interests in the Trust, must
be acquired by persons independent of the Transferor, the Servicer, the
Trustee, the Underwriter and any obligor of more than 5% of the Trust
assets and any of their affiliates; (D) the Benefit Plan's investment in
the Class A Certificates must not exceed 25% of the aggregate outstanding
principal amount of the Class A Certificates; and (E) immediately after the
acquisition, no more than 25% of the assets of the Benefit Plan may be
invested in certificates for trusts sold or serviced by the same entity. As
of the date hereof, no obligor with respect to the Receivables included in
the Trust constitutes more than 5% of the Trust assets.
A Benefit Plan fiduciary wishing to confirm the availability of the
Exemption can obtain a complete copy of Prohibited Transaction Class Exemption
90-31 setting forth the full terms of the Exemption from Volume 55 of the
Federal Register (55 Fed. Reg. 23144 et seq.) or from the Underwriter.
THE CLASS B CERTIFICATES
Because the Class B Certificates are subordinated to the rights and
interests of the Class A Certificates, the Class B Certificates do not qualify
for the Exemption. Accordingly, Benefit Plans are generally not eligible to
purchase the Class B Certificates.
The DOL has, however, granted an administrative exemption applicable to
insurance companies acting through their general accounts in which Benefit Plans
have an interest (Prohibited Transaction Class Exemption 95-60), which provides
relief from certain prohibited transaction rules of ERISA and the Code in
connection with the initial purchase, the holding and the subsequent resale by
insurance company general accounts of subordinated certificates (such as the
Class B Certificates) in trusts that otherwise meet the conditions of the
Exemption described above, except the conditions that (1) the rights of the
class of
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certificates not be subordinate to other classes of certificates and (2) the
certificates be rated in one of the "three highest rating categories."
ACCORDINGLY, EXCEPT IN THE CASE OF AN INSURANCE COMPANY ACTING THROUGH ITS
GENERAL ACCOUNT AND IN COMPLIANCE WITH PROHIBITED TRANSACTION CLASS EXEMPTION
95-60, A CLASS B CERTIFICATE OR ANY INTEREST THEREIN MAY NOT BE ACQUIRED BY OR
TRANSFERRED TO ANY "BENEFIT PLAN INVESTOR" (AS DEFINED IN 29 C.F.R.
SECTION 2510.3-101) OR ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING A
CLASS B CERTIFICATE OR AN INTEREST THEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF,
AS TRUSTEE OF, OR WITH ASSETS OF, SUCH A BENEFIT PLAN INVESTOR. Each prospective
acquirer or transferee of a Class B Certificate or an interest therein, by its
acceptance of such Class B Certificate or an interest therein, will be deemed to
have represented that (1) either no "prohibited transaction" under ERISA or the
Code will occur in connection with such prospective acquirer's or transferee's
acquisition and holding of such Class B Certificate or that the acquisition and
holding of a Class B Certificate by such prospective acquirer or transferee is
subject to a statutory or administrative exemption and (2) that the prospective
acquirer's or transferee's acquisition and holding will not subject the
Transferor, the Servicer, the Trustee or the Trust to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those explicitly undertaken in the agreements relating
to the transactions described herein.
Any purchaser that is an insurance company using the assets of an insurance
company general account should note that the Small Business Job Protection Act
of 1996 added new Section 401(c) of ERISA relating to the status of the assets
of insurance company general accounts under ERISA and Section 4975 of the Code.
Pursuant to Section 401(c), the Department of Labor is required to issue final
regulations (the "GENERAL ACCOUNT REGULATIONS") not later than December 31, 1997
with respect to insurance policies issued on or before December 31, 1998 that
are supported by an insurer's general account. The General Account Regulations
are to provide guidance on which assets held by the insurer constitute "plan
assets" for purposes of the fiduciary responsibility provisions of ERISA and
Section 4975 of the Code. Section 401(c) also provides that, except in the case
of avoidance of the General Account Regulations and actions brought by the
Secretary of Labor relating to certain breaches of fiduciary duties that also
constitute breaches of state or Federal criminal law, until the date that is
18 months after the General Account Regulations become final, no liability under
the fiduciary responsibility and prohibited transaction provisions of ERISA and
Section 4975 may result on the basis of a claim that the assets of the general
account of an insurance company constitute the plan assets of any such Benefit
Plan. As of the date hereof, proposed regulations have been issued by the DOL
and final regulations are expected to be issued in the near future, although the
timing and nature of any final regulations are uncertain. It should be noted
that if these regulations are adopted substantially in the form in which
proposed, the General Account Regulations may not exempt assets of insurance
company general accounts from treatment as "plan assets" after December 31,
1998. The plan asset status of insurance company separate accounts is unaffected
by new Section 401(c) of ERISA, and separate account assets continue to be
treated as the plan assets of any such Benefit Plan invested in a separate
account.
Any Benefit Plan fiduciary that proposes to cause a Benefit Plan to
purchase any Class of Offered Certificates should consult with its counsel with
respect to the potential applicability of ERISA and the Code to such investments
and whether the Plan Asset Regulation or the Exemption or any statutory or
administrative exemption would be applicable and determine on its own whether
all conditions have been satisfied.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
(the "UNDERWRITING AGREEMENT"), the Transferor has agreed to sell to the
Underwriter, and the Underwriter has agreed to purchase from the Transferor, the
Offered Certificates.
Under the terms and conditions of the Underwriting Agreement, the
Underwriter is committed to take and pay for all the Offered Certificates if any
are taken.
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The Transferor has been advised by the Underwriter that it proposes
initially to offer the Offered Certificates to the public at the respective
public offering prices set forth on the cover page of this Prospectus, and to
certain dealers at such prices less a concession not in excess of % of the
principal amount of the Offered Certificates. The Underwriter may allow and such
dealers may reallow to other dealers a discount not in excess of % of such
principal amount. After the initial public offering, such public offering
prices, concession and reallowance may be changed. The transaction expenses
payable by the Transferor are estimated to be $ .
Until the distribution of the Offered Certificates is completed, rules of
the Commission may limit the ability of the Underwriter and certain selling
group members to bid for and purchase the Offered Certificates. As an exception
to these rules, the Underwriter is permitted to engage in certain transactions
that stabilize the price of the Offered Certificates. Such transactions consist
of bids or purchases for the purpose of pegging, fixing or maintaining the price
of the Offered Certificates.
If the Underwriter creates a short position in the Offered Certificates in
connection with this offering, (i.e., the Underwriter sells more Offered
Certificates than are set forth on the cover page of this Prospectus), the
Underwriter may reduce that short position by purchasing Offered Certificates in
the open market.
The Underwriter may also impose a penalty bid on certain selling group
members. This means that if the Underwriter purchases Offered Certificates in
the open market to reduce the Underwriter's short position or to stabilize the
price of the Offered Certificates, the Underwriter may reclaim the amount of the
selling concession from any selling group member who sold those Offered
Certificates as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Transferor nor the Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Offered Certificates. In addition,
neither the Transferor nor the Underwriter makes any representation that the
Underwriter will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
In the ordinary course of business, the Underwriter and its affiliates have
engaged and may engage in investment banking and commercial banking transactions
with the Servicer and its affiliates.
The Underwriting Agreement provides that the Transferor will indemnify the
Underwriter against certain liabilities, including liabilities under the
Securities Act, or contribute to payments the Underwriter may be required to
make in respect thereof.
Upon receipt of a request by an investor who has received an electronic
Prospectus from the Underwriter or a request by such investor's representative
within the period during which there is an obligation to deliver a Prospectus,
the Transferor or the Underwriter will promptly deliver, or cause to be
delivered, without charge, a paper copy of the Prospectus.
LEGAL MATTERS
Certain legal matters relating to the Offered Certificates will be passed
upon for the Transferor and the Servicer by Giancarlo & Gnazzo, A Professional
Corporation, San Francisco, California, and for the Underwriter by Skadden,
Arps, Slate, Meagher & Flom LLP, New York, New York. Certain federal income tax
and other matters will be passed upon for the Transferor, the Servicer and the
Trust by Giancarlo & Gnazzo, A Professional Corporation, San Francisco,
California.
80
<PAGE>
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued under the limited
circumstances described under "Description of the Offered Certificates--Issuance
of Definitive Certificates Upon the Occurrence of Certain Circumstances," all
notices, reports and statements to Certificateholders, including any monthly and
annual reports containing information concerning the Trust and the Receivables,
will be prepared by the Servicer and sent on behalf of the Trust only to DTC or
Cede, as nominee of DTC and registered holder of the Offered Certificates,
pursuant to the Pooling and Servicing Agreement. See "Description of the Offered
Certificates--Reports to Certificateholders," "--Evidence as to Compliance,"
"--Book Entry Registration of the Offered Certificates" and "--Issuance of
Definitive Certificates Upon the Occurrence of Certain Circumstances." Such
notices, reports and statements will not contain audited financial statements
with respect to the Trust. The Servicer also does not intend to send any
financial reports of the Servicer or the Transferor to Certificateholders. The
Trust will file or cause to be filed with the Commission such periodic reports
with respect to the Trust as may be required under the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), and the rules and regulations of the
Commission thereunder.
WHERE YOU CAN FIND MORE INFORMATION
The Transferor filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement (the "REGISTRATION STATEMENT") under the
Securities Act relating to the Offered Certificates. This prospectus is part of
the Registration Statement, but the Registration Statement includes additional
information.
The Trust will file or cause to be filed with the Commission such periodic
reports with respect to the Trust as may be required under the Exchange Act, and
the rules and regulations of the Commission thereunder.
You may read and copy any notices, reports, statements or other information
the Trust or the Servicer files or causes to be filed at the Commission's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing
to the Commission. Please call the Commission at (800) SEC-0330 for further
information on the operation of the public reference rooms. Our filings with the
Commission are also available to the public on the Commission's Internet site
(http://www.sec.gov), which contains reports, proxy and information statements,
and other information regarding issuers that file publicly with the Commission.
81
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
TERM PAGE
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<S> <C>
Accounts.......................................... 19
Accumulation Periods.............................. 28
Accumulation Shortfall............................ 28
Adjustment Payment................................ 57
Available Principal Funds......................... 54
Available Subordinated Amount..................... 53
Available Yield Funds............................. 53
Bankruptcy Code................................... 17
Benefit Plan Investor............................. 79
Benefit Plans..................................... 77
Business Day...................................... 27
Cede.............................................. 32
Cedel............................................. 32
Cedel Participants................................ 34
Certificate Owners................................ 32
Certificate Rates................................. 30
Certificateholders................................ 31
Certificateholders' Interest...................... 31
Certificates...................................... 37
Class............................................. 37
Class A Adjusted Invested Amount.................. 48
Class A Certificate Rate.......................... 30
Class A Certificateholders........................ 18
Class A Certificates.............................. 29
Class A Expected Final Payment Date............... 27
Class A Initial Invested Amount................... 30
Class A Invested Amount........................... 48
Class A Investor Charge-Off....................... 57
Class A Monthly Interest.......................... 55
Class A Monthly Principal......................... 55
Class B Adjusted Invested Amount.................. 49
Class B Certificate Rate.......................... 30
Class B Certificateholders........................ 18
Class B Certificates.............................. 29
Class B Expected Final Payment Date............... 27
Class B Initial Invested Amount................... 30
Class B Invested Amount........................... 48
Class B Investor Charge-Off....................... 57
Class B Monthly Interest.......................... 55
Class B Monthly Principal......................... 55
Class C Certificate Rate.......................... 30
Class C Certificateholders........................ 31
Class C Certificates.............................. 37
Class C Initial Invested Amount................... 30
Class C Invested Amount........................... 49
Class C Investor Charge-Off....................... 57
Class C Monthly Interest.......................... 55
</TABLE>
82
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
-------------------------------------------------- --------
<S> <C>
Class C Monthly Principal......................... 55
Closing Date...................................... 30
Code.............................................. 72
Collection Account................................ 45
Collection Period................................. 24
Collections....................................... 51
Commission........................................ 81
Controlled Accumulation Amount.................... 28
Controlled Accumulation Period.................... 28
Controlled Deposit Amount......................... 28
Cooperative....................................... 35
Credit Hold....................................... 21
DBNA.............................................. 17
Dealer Replacement Accounts....................... 43
Dealers........................................... 17
Defaulted Receivables............................. 57
Definitive Certificates........................... 36
Depositary........................................ 34
Determination Date................................ 44
Deutsche Financial................................ 17
Direct Participants............................... 32
Distribution Date................................. 30
DOL............................................... 77
DTC............................................... 32
DTC Participants.................................. 33
Early Amortization Event.......................... 58
Early Amortization Period......................... 58
Eligible Deposit Account.......................... 45
Eligible Institution.............................. 45
Eligible Investments.............................. 45
Eligible Receivable............................... 42
Enhancement....................................... 30
ERISA............................................. 77
Euroclear......................................... 35
Euroclear Operator................................ 35
Euroclear Participants............................ 35
Excess Principal Collections...................... 51
Exchange Act...................................... 81
Exchangeable Transferor Certificate............... 30
Exemption......................................... 77
Expected Final Payment Dates...................... 27
Final Series Termination Date..................... 58
Final Termination Date............................ 58
Fixed Allocation Percentage....................... 48
Floating Allocation Percentage.................... 48
Foreign Investor.................................. 75
General Account Regulations....................... 79
Golf Cart Transaction............................. 19
Holders........................................... 36
Indirect Participants............................. 33
</TABLE>
83
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
-------------------------------------------------- --------
<S> <C>
Industry.......................................... 36
Ineligible Receivable............................. 41
Initial Servicer Cash Collateral Deposit.......... 47
Interest Accrual Period........................... 30
Invested Amount................................... 49
Investor Default Amount........................... 57
IRA............................................... 77
IRS............................................... 72
ITT............................................... 17
LIBOR Determination Date.......................... 30
London Banking Day................................ 31
Maximum Rate...................................... 30
Minimum Transferor Percentage..................... 41
Minimum Trust Principal Component................. 46
Monthly Servicer Report........................... 65
Monthly Servicing Fee............................. 62
Moody's........................................... 47
New Accounts...................................... 43
New Products...................................... 20
New Regulations................................... 76
Offered Certificates.............................. 29
OID............................................... 73
OID Regulations................................... 73
Omnibus Proxy..................................... 34
Pay-as-Sold....................................... 22
Paying Agent...................................... 33
Payment Date Statement............................ 65
Plan Asset Regulation............................. 77
Pool Balance...................................... 24
Pooling and Servicing Agreement................... 18
Principal Collections............................. 51
Principal Funding Account......................... 46
Principal Shortfalls.............................. 51
Principal Terms................................... 39
Product Security.................................. 19
Products.......................................... 19
Proposal.......................................... 73
Rapid Accumulation Period......................... 28
Rating Agency..................................... 37
Receivables....................................... 19
Receivables Purchase Agreement.................... 17
Receivables Sale Agreement........................ 17
Record Date....................................... 31
Reference Banks................................... 31
Registration Statement............................ 81
Removed Accounts.................................. 24
Revolving Period.................................. 31
Sales Programs.................................... 22
Scheduled Payment Plans........................... 22
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
-------------------------------------------------- --------
<S> <C>
Securities Act.................................... 39
Series............................................ 19
Series 1999-1..................................... 37
Series Undistributed Principal Collections........ 55
Service Transfer.................................. 64
Servicer.......................................... 17
Servicer Cash Collateral Account.................. 46
Servicer Default.................................. 64
Servicing Agreement............................... 63
Servicing Fee..................................... 62
Servicing Fee Percentage.......................... 62
Special Funding Account........................... 46
Standard & Poor's................................. 47
Supplement........................................ 38
Systems........................................... 36
Tax Counsel....................................... 72
Telerate Page 3750................................ 31
Terms and Conditions.............................. 35
Transfer Date..................................... 47
Transferor........................................ 17
Transferor Amount................................. 44
Transferor Deposit Amount......................... 41
Transferor Interest............................... 30
Transferor Percentage............................. 49
Transferor Subordination Event.................... 52
Trust............................................. 18
Trust Principal Component......................... 41
Trustee........................................... 18
U.S. Person....................................... A-3
U.S. Wholesale Portfolio.......................... 19
UCC............................................... 32
Underwriter....................................... 37
Underwriting Agreement............................ 79
Undistributed Principal Collections............... 51
Used Products..................................... 20
Yamaha............................................ 17
Yield Collections................................. 50
Yield Factor...................................... 51
</TABLE>
85
<PAGE>
ANNEX A
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Class A
Certificates and Class B Certificates will be available only in book-entry form.
Investors in the Offered Certificates may hold such Offered Certificates through
any of DTC, Cedel or Euroclear. The Offered Certificates will be tradeable as
home market instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Offered Certificates
through Cedel and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Offered Certificates
directly through DTC will be conducted according to the rules and procedures
applicable to U.S. corporate debt obligations.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding Offered Certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of Cedel and
Euroclear (in such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Offered Certificates will be
subject to U.S. withholding taxes unless such holders meet certain requirements
and deliver appropriate U.S. tax documents to the securities clearing
organizations or their participants.
Initial Settlement
All Offered Certificates will be held in book-entry form by DTC in the name
of Cede & Co. as nominee of DTC. Investors' interests in the Offered
Certificates will be represented through financial institutions acting on their
behalf as DTC Participants. As a result, Cedel and Euroclear will hold positions
on behalf of their participants through their respective Depositaries, which in
turn will hold such positions in accounts as DTC Participants.
Investors electing to hold their Offered Certificates through DTC will
follow the settlement practices applicable to U.S. corporate debt obligations.
Investor securities custody accounts will be credited with their holdings
against payment in same-day funds on the settlement date.
Investors electing to hold their Offered Certificates through Cedel or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Offered Certificates will be credited to
the securities custody accounts on the settlement date against payment in
same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to book-entry
securities in same-day funds.
Trading between Cedel and/or Euroclear Participants. Secondary market
trading between Cedel Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and Cedel or Euroclear purchaser. When Offered
Certificates are to be transferred from the account of a DTC Participant to the
accounts of a Cedel Participant or a Euroclear Participant, the purchaser will
send instructions to Cedel or Euroclear through a Cedel Participant or Euroclear
Participant at least one business day prior to settlement. Cedel or Euroclear,
as the case may be, will instruct the respective Depositary to receive the
Offered Certificates against payment. Payment will include interest accrued on
the Offered Certificates from and including the last coupon payment date to and
excluding the settlement date, which will be on the basis of a 360-day year and
the actual number of days
A-1
<PAGE>
elapsed. Payment will then be made by the Depositary to the DTC Participant's
account against delivery of the Offered Certificates. After settlement has been
completed, the Offered Certificates will be credited to the respective clearing
system and by the clearing system, in accordance with its usual procedures, to
the Cedel Participant's or Euroclear Participant's account. The Offered
Certificates credit will appear the next day (European time) and the cash debit
will be back-valued to, and the interest on the Offered Certificates will accrue
from, the value date (which would be the preceding day when settlement occurred
in New York). If settlement is not completed on the intended value date (i.e.,
the trade fails), the Cedel or Euroclear cash debit will be valued instead as of
the actual settlement date.
Cedel Participants and Euroclear Participants will need to make available
to the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within Cedel or Euroclear. Under this approach,
they may take on credit exposure to Cedel or Euroclear until the Offered
Certificates are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit to
them, Cedel Participants or Euroclear Participants can elect not to pre-position
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, Cedel Participants or Euroclear Participants purchasing Offered
Certificates would incur overdraft charges for one day, assuming they cleared
the overdraft when the Offered Certificates were credited to their accounts.
However, interest on the Offered Certificates would accrue from the value date.
Therefore, in many cases the investment income on the Offered Certificates
earned during that one-day period may substantially reduce or offset the amount
of such overdraft charges, although this result will depend on each Cedel
Participant's or Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Offered Certificates
to the respective Depositary for the benefit of Cedel Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participants a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between Cedel or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, Cedel Participants and Euroclear Participants
may employ their customary procedures for transactions in which Offered
Certificates are to be transferred by the respective clearing system, through
the respective Depositary, to a DTC Participant. The seller will send
instructions to Cedel or Euroclear through a Cedel Participant or Euroclear
Participant at least one business day prior to settlement. In these cases, Cedel
or Euroclear will instruct the respective Depositary, as appropriate, to deliver
the Offered Certificates to the DTC Participant's account against payment.
Payment will include interest accrued on the Offered Certificates from and
including the last coupon payment date to and excluding the settlement date,
which will be on the basis of a 360-day year and the actual number of days
elapsed. The payment will then be reflected in the account of the Cedel
Participant or Euroclear Participant the following day, and receipt of the cash
proceeds in the Cedel Participant's or Euroclear Participant's account would be
back-valued to the value date (which would be the preceding day, when settlement
occurred in New York). Should the Cedel Participant or Euroclear Participant
have a line of credit with its respective clearing system and elect to be in
debt in anticipation of receipt of the sale proceeds in its account, the
back-valuation will extinguish any overdraft charges incurred over that one-day
period. If settlement is not completed on the intended value date (i.e., the
trade fails), receipt of the cash proceeds in the Cedel Participant's or
Euroclear Participant's account would instead be valued as of the actual
settlement date.
Finally, day traders that use Cedel or Euroclear and that purchase Offered
Certificates from DTC Participants for delivery to Cedel Participants or
Euroclear Participants should note that these trades would automatically fail on
the sale side unless affirmative action were taken. At least three techniques
should be readily available to eliminate this potential problem:
(a) borrowing through Cedel or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedel or Euroclear
accounts) in accordance with the clearing system's customary procedures;
A-2
<PAGE>
(b) borrowing the Offered Certificates in the U.S. from a DTC
Participant no later than one day prior to settlement, which would give the
Offered Certificates sufficient time to be reflected in their Cedel or
Euroclear account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC Participant is at
least one day prior to the value date for the sale to the Cedel Participant
or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Offered Certificates holding securities through Cedel
or Euroclear (or through DTC if the holder has an address outside the U.S.) will
be subject to the 30% U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (a) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(b) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of Offered
Certificates that are non-U.S. Persons can obtain a complete exemption from the
withholding tax by filing a signed Form W-8 (Certificate of Foreign Status). If
the information shown on Form W-8 changes, a new Form W-8 must be filed within
30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
Exemption or reduced rate for non-U.S. persons resident in treaty countries
(Form 1001). Non-U.S. Persons that are Certificate Owners residing in a country
that has a tax treaty with the United States can obtain an exemption or reduced
tax rate (depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption or Reduced Rate Certificate). If the treaty provides only for a
reduced rate, withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the Certificate Owner or
its agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal income tax reporting procedure. The Certificate Owner or, in
the case of a Form 1001 or a Form 4224 filer, its agent, files by submitting the
appropriate form to the person through whom it holds (the clearing agency, in
the case of persons holding directly on the books of the clearing agency). Form
W-8 and Form 1001 are effective for three calendar years and Form 4224 is
effective for one calendar year.
The term "U.S. PERSON" means (a) a citizen or resident of the United
States, (b) a corporation or partnership (including an entity treated as a
corporation or partnership) organized in or under the laws of the United States
or any state or the District of Columbia (unless, in the case of a partnership,
Treasury regulations provide otherwise), (c) an estate the income of which is
includible in gross income for United States tax purposes, regardless of its
source or (d) a trust if a U.S. court is able to exercise primary supervision
over the administration of such trust and one or more U.S. persons has the
authority to control all substantial decisions of the trust. This summary does
not deal with all aspects of U.S. Federal income tax withholding that may be
relevant to foreign holders of the Offered Certificates. Investors are advised
to consult their own tax advisors for specific tax advice concerning their
holding and disposing of the Offered Certificates.
Recent Treasury regulations could affect the procedures to be followed by a
non-U.S. Person in complying with the United States Federal withholding, backup
withholding and information reporting rules. The regulations generally will be
effective for payments made after December 31, 2000. Prospective investors are
advised to consult their own tax advisors regarding the effect, if any, of the
regulations on the purchase, ownership and disposition of the Offered
Certificates.
A-3
<PAGE>
PRINCIPAL OFFICE OF
YAMAHA MOTOR RECEIVABLES CORPORATION
6555 Katella Avenue
Suite A
Cypress, CA 90630
TRUSTEE
The Fuji Bank and Trust Company
Two World Trade Center
81st Floor
New York, New York 10048
LEGAL ADVISOR TO THE TRANSFEROR
AS TO UNITED STATES LAW
Giancarlo & Gnazzo,
A Professional Corporation
625 Market Street
11th Floor
San Francisco, California 94105
LEGAL ADVISOR TO THE UNDERWRITER
AS TO UNITED STATES LAW
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
INDEPENDENT ACCOUNTANTS TO THE TRANSFEROR
PriceWaterhouseCoopers LLP
575 Anton Boulevard
Suite 1100
Costa Mesa, California 92626
<PAGE>
YAMAHA MOTOR MASTER TRUST
ISSUER
SERIES 1999-1
$200,000,000
FLOATING RATE CLASS A
ASSET-BACKED CERTIFICATES
$14,035,000
FLOATING RATE CLASS B
ASSET-BACKED CERTIFICATES
YAMAHA MOTOR RECEIVABLES CORPORATION
TRANSFEROR
YAMAHA MOTOR CORPORATION, U.S.A.
SERVICER
CHASE SECURITIES INC.
UNDERWRITER
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT
INFORMATION.
WE ARE NOT OFFERING THESE CERTIFICATES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED.
WE DO NOT CLAIM THE ACCURACY OF THE INFORMATION IN THIS PROSPECTUS AS OF ANY
DATE OTHER THAN THE DATE STATED ON THE COVER OF THIS PROSPECTUS.
DEALERS WILL DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS OF THESE
CERTIFICATES AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. IN
ADDITION, ALL DEALERS SELLING THESE CERTIFICATES WILL DELIVER A PROSPECTUS UNTIL
, 1999.
------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration Fee..................................................... $ 59,501.73
Printing and Engraving............................................... $ 60,000.00
Trustee's Fee........................................................ $ 15,000.00
Legal Fees and Expenses.............................................. $400,000.00
Blue Sky Fees and Expenses........................................... $ 0.00
Accountant's Fees and Expenses....................................... $ 20,000.00
Rating Agency Fees................................................... $137,061.38
Miscellaneous Fees and Expenses...................................... $ 10,000.00
Total Expenses.................................................. $701,563.11
-----------
-----------
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware provides as follows:
145 Indemnification of Officers, Directors, Employees and Agents;
Insurance.
(a) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
(b) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified
II-1
<PAGE>
against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or
officer at the time of determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, (2) by a committee of such directors designated
by majority vote of such directors, even though less than a quorum, (3) if
there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advance ment of expenses may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to
action in such person's official capacity and as to action in another
capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such person
against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has
II-2
<PAGE>
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees).
Article XII of the Certificate of Incorporation of Yamaha Motor Receivables
Corporation provides as follows:
(a) Any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Corporation), by reason of the fact that
the person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall be indemnified and held
harmless by the Corporation to the fullest extent legally permissible under
the General Corporation Law of the State of Delaware, as amended from time
to time, against all expenses, liabilities and losses (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.
(b) To the extent that a present or former director, officer, employee
or agent of the Corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in paragraph (a)
of this Article XII, or in defense of any claim, issue or matter therein,
such person shall be indemnified by the Corporation against expenses
(including attorneys' fees) actually and reasonably incurred by such person
in connection therewith without the necessity of any action being taken by
the Corporation other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Article, unless ordered by a court, indemnification shall
be made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the present or former director,
officer, employee or agent is proper in the circumstances because the
person has met the applicable standard of conduct specified in this Article
XII. Such determination shall be made, with respect to a person who is a
director or officer at the time of such determination (1) by a majority
vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (2) by a committee of such
directors designated by majority vote of such directors, even though less
than a quorum, or (3) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion or (4) by the
holders of a majority of the shares of capital stock of the Corporation
entitled to vote thereon.
(c) The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
shall not, of itself, create a presumption that the person seeking
indemnification did not act in good faith and in a manner which the person
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person's conduct was unlawful. Entry
of a judgment by consent as part of a settlement shall not be deemed a
final adjudication of liability for negligence or misconduct in the
performance of duty, nor of any other issue or matter.
(d) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount unless it
shall ultimately be determined that such person is entitled to be
indemnified by the Corporation. Expenses (including attorneys' fees)
incurred by former directors and officers or other employees or agents of
the Corporation in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the Corporation
upon such terms and conditions, if any, as the Corporation deems
appropriate.
II-3
<PAGE>
(e) No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director
shall be liable to the extent provided by applicable law (i) for breach of
the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 174 of
the Delaware General Corporation Law or (iv) for any transaction from which
the director derived an improper personal benefit. No amendment to or
repeal of this Section (e) to Article XII shall apply to or have any effect
on the liability or alleged liability of any director of the Corporation
for or with respect to any acts or omissions of such director occurring
prior to such amendment.
(f) The indemnification and advancement of expenses provided by this
Article XII shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in
another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of
such person.
(g) Notwithstanding the foregoing provisions of this Article XII,
amounts payable by the Corporation in accordance with this Article XII
shall be payable solely to the extent of funds actually received by the
Corporation that are in excess of funds necessary to satisfy the
obligations of the Corporation pursuant to the Agreements.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not applicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------------------------------------------------------------------------------------------------------
<C> <C> <S>
1.1 -- Form of Underwriting Agreement
3.1 -- Amended and Restated Certificate of Incorporation of the Transferor
3.2 -- Bylaws of the Transferor*
4.1 -- Form of Amended and Restated Master Pooling and Servicing Agreement among the Transferor, the
Servicer and the Trustee
4.2 -- Form of Series 1999-1 Supplement to the Master Pooling and Servicing Agreement
5.1 -- Opinion of Giancarlo & Gnazzo, A Professional Corporation, re: Legality
8.1 -- Opinion of Giancarlo & Gnazzo, A Professional Corporation, re: Tax Matters
10.1 -- Form of Receivables Purchase Agreement between Yamaha Motor Corporation, U.S.A. and the Transferor**
10.2 -- Form of Servicing Agreement between Yamaha Motor Corporation, U.S.A. and ITT Commercial Finance
Corp.***
10.3 -- Form of Receivables Sale Agreement between Yamaha Motor Corporation, U.S.A. and Deutsche Financial
Services Corporation
23.1 -- Consent of Giancarlo & Gnazzo, A Professional Corporation (contained in Exhibit 5.1)
23.2 -- Consent of Giancarlo & Gnazzo, A Professional Corporation (contained in Exhibit 8.1)
24.1 -- Power of Attorney (included on page II-6)
</TABLE>
- ------------------
* Incorporated by reference to Exhibit 3.2 of Registration Statement
No. 33-72806.
** Incorporated by reference to Exhibit 10.1 of Registration Statement
No. 33-72806.
*** Incorporated by reference to Exhibit 10.2 of Registration Statement
No. 33-72806.
II-4
<PAGE>
(b) Financial Statement Schedules
Not applicable.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes as follows:
(a) To provide to the Underwriter at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriter to permit prompt delivery to each
purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for in demnification 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 Act and will be governed by the
final adjudication of such issue.
(c) For purposes of determining any liability under the Securities Act
of 1933, 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 shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.
(d) For the purpose of determining any liability under the Securities
Act of 1933, 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.
(e) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(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.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
CYPRESS, STATE OF CALIFORNIA, ON MAY 13, 1999.
YAMAHA MOTOR RECEIVABLES CORPORATION
By: ________/s/ YOSHIO MABUCHI________
Yoshio Mabuchi
Director and President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Russell D. Jura his true and lawful attorney-in-fact and agent, with full powers
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign and to file any and all amendments, including post-effective
amendments, to this Registration Statement with the Securities and Exchange
Commission, granting to said attorney-in-fact full power and authority to
perform any other act on behalf of the undersigned required to be done in
connection therewith.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------------------- -------------------
<C> <S> <C>
/s/ YOSHIO MABUCHI Director and President (principal executive May 13, 1999
- ------------------------------------------ officer)
Yoshio Mabuchi
/s/ DAISUKE IJUIN Director, Secretary and Treasurer May 13, 1999
- ------------------------------------------ (principal financial officer and principal
Daisuke Ijuin accounting officer)
/s/ RUSSELL D. JURA Director and Assistant Secretary May 13, 1999
- ------------------------------------------
Russell D. Jura
/s/ ALAN HARNISCH Director May 13, 1999
- ------------------------------------------
Alan Harnisch
/s/ WALTER G. PETTEY Director May 13, 1999
- ------------------------------------------
Walter G. Pettey
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
1.1 -- Form of Underwriting Agreement
3.1 -- Amended and Restated Certificate of Incorporation of the Transferor
3.2 -- Bylaws of the Transferor*
4.1 -- Form of Amended and Restated Master Pooling and Servicing Agreement among the Transferor, the
Servicer, and the Trustee
4.2 -- Form of Series 1999-1 Supplement to the Master Pooling and Servicing Agreement
5.1 -- Opinion of Giancarlo & Gnazzo, A Professional Corporation, re: Legality
8.1 -- Opinion of Giancarlo & Gnazzo, A Professional Corporation, re: Tax Matters
10.1 -- Form of Receivables Purchase Agreement between Yamaha Motor Corporation, U.S.A. and the Transferor**
10.2 -- Form of Servicing Agreement between Yamaha Motor Corporation, U.S.A. and ITT Commercial Finance
Corp.***
10.3 -- Form of Receivables Sale Agreement between Yamaha Motor Corporation, U.S.A. and Deutsche Financial
Services Corporation
23.1 -- Consent of Giancarlo & Gnazzo, A Professional Corporation (contained in Exhibit 5.1)
23.2 -- Consent of Giancarlo & Gnazzo, A Professional Corporation (contained in Exhibit 8.1)
24.1 -- Power of Attorney (included on page II-6)
</TABLE>
- ------------------
* Incorporated by reference to Exhibit 3.2 of Registration Statement
No. 33-72806.
** Incorporated by reference to Exhibit 10.1 of Registration Statement
No. 33-72806.
*** Incorporated by reference to Exhibit 10.2 of Registration Statement
No. 33-72806.
<PAGE>
YAMAHA MOTOR MASTER TRUST
YAMAHA MOTOR CORPORATION, U.S.A.
(Servicer)
YAMAHA MOTOR RECEIVABLES CORPORATION
(Transferor)
UNDERWRITING AGREEMENT
May __, 1999
Chase Securities Inc., as Underwriter
270 Park Avenue, 7th Floor
New York, New York 10017
Ladies and Gentlemen:
Yamaha Motor Receivables Corporation, a Delaware corporation
(the "Transferor"), proposes to cause the Yamaha Motor Master Trust (the
"Trust") to issue $____________ aggregate principal amount of Floating Rate
Series 1999-1, Class A Asset-Backed Certificates (the "Class A Certificates")
and $____________ aggregate principal amount of Floating Rate Series 1999-1,
Class B Asset-Backed Certificates (the "Class B Certificates" and, together with
the Class A Certificates, the "Certificates"). The Trust was formed and the
Certificates will be issued pursuant to an Amended and Restated Master Pooling
and Servicing Agreement, dated as of May 1, 1999, by and among the Transferor,
Yamaha Motor Corporation, U.S.A. ("Yamaha"), as servicer (in such capacity, the
"Servicer"), and The Fuji Bank and Trust Company, as trustee (in such capacity,
the "Trustee") (as amended, supplemented or otherwise modified and in effect
from time to time, and as supplemented by the Series 1999-1 Supplement, dated
as of May 1, 1999, among the Transferor, the Servicer and the Trustee (the
"Supplement"), the "Pooling and Servicing Agreement"). The Transferor also
proposes to cause the Trust to issue $________ aggregate principal amount of
Floating Rate Series 1999-1, Class C Asset-
<PAGE>
Backed Certificates (the "Class C Certificates"). The Certificates are to be
sold in a public offering by the Trust through Chase Securities Inc., as sole
underwriter (the "Underwriter"), and the Class C Certificates will be initially
retained by the Transferor. Each Certificate will represent a specified
percentage undivided interest in the Trust. The assets of the Trust include,
among other things, wholesale receivables (collectively, the "Receivables") sold
to the Transferor by Yamaha pursuant to that certain Receivables Purchase
Agreement, dated as of March 1, 1994, as amended by the First Amendment to
Receivables Purchase Agreement dated as of May 1, 1999 (as further amended,
supplemented or otherwise modified and in effect from time to time, the
"Receivables Purchase Agreement"), between Yamaha, as seller, and the
Transferor, as purchaser, generated from time to time in a portfolio of
wholesale floorplan financing arrangements and other inventory financing
accounts with dealers in products manufactured by Yamaha Motor Company, Ltd.,
Yamaha Motor Manufacturing Corporation of America and Tennessee Watercraft, Inc.
and distributed in the United States by Yamaha (collectively, the "Products"),
all monies due or to become due under the Receivables, any security interest in
the Products related to the Receivables, all recoveries on charged-off
Receivables, all of the Transferor's right, title and interest in, to and under
the Receivables Purchase Agreement, certain other property and all proceeds of
any of the foregoing. Unless otherwise stated herein, each capitalized term used
or defined herein shall have the meaning assigned to such term in the Pooling
and Servicing Agreement and shall relate only to the Certificates and no other
Series of Asset-Backed Certificates issued by the Trust.
Each of the Transferor and Yamaha agree with the Underwriter
as follows:
Section 1. Registration Statement. Each of the Transferor
and Yamaha represents and warrants to the Underwriter that:
(a) The Transferor has prepared and filed with
the Securities and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations of the Commission thereunder (the "Rules and
Regulations"), a registration statement on Form S-1 (registration number
33-74069) including a form of prospectus, relating to the Certificates. The
conditions to the use of a registration statement on Form S-1 under the
Securities Act, as set forth in the General Instruc-
2
<PAGE>
tions to Form S-1, have been satisfied in all material respects with respect to
the Transferor and the Registration Statement (as hereinafter defined).
(b) The Transferor will next file with the
Commission either, (A) prior to the effectiveness of such Registration
Statement, a further amendment thereto (including the form of final prospectus)
or (B) after effectiveness of such Registration Statement, a final prospectus in
accordance with Rules 430A and 424(b) (each as hereinafter defined). In the case
of clause (B), the Transferor has included in such Registration Statement, as
amended at the Effective Date (as hereinafter defined), all information (other
than Rule 430A Information (as hereinafter defined)) required by the Securities
Act and the Rules and Regulations 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 (defined below) and, except to the extent the Underwriter shall
agree in writing to a modification, shall be in all substantive respects in the
form furnished to the Underwriter prior to the Execution Time (defined below)
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 (defined below) which has previously been
furnished to the Underwriter) as the Transferor has advised the Underwriter,
prior to the Execution Time, will be included or made therein.
The terms that follow, when used in this Agreement, shall have
the meanings indicated. The term "Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective under the Securities Act. "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 in the preceding paragraph and any preliminary prospectus included in the
Registration Statement which, as of the Effective Date, omits Rule 430A
Information. "Prospectus" shall mean the prospectus relating to the
Certificates that is first filed with the Commission pursuant to Rule 424(b) and
any prospectus subsequently filed pursuant to Rule 424, or if no filing pursuant
to Rule 424(b) is required, shall mean the form of final prospectus included in
the Registration Statement at the Effective Date. "Registration Statement" shall
mean the registration statement referred to in the preceding paragraph and any
registration statement required to be filed under the Securities Act or the
Rules and Regulations, including incorporated documents, exhibits and financial
statements, in the form in which it has, or shall, become
3
<PAGE>
effective and, in the event that any post effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall also mean
such registration statement as so amended. Such term shall include Rule 430A
Information deemed to be included therein at the Effective Date as provided by
Rule 430A. "Rule 424" and "Rule 430A" refer to such Rules and Regulations under
the Securities Act. "Rule 430A Information" means information with respect to
the Certificates and the offering thereof permitted to be omitted from the
Registration State ment when it becomes effective pursuant to Rule 430A.
(c) On the Effective Date, the Registration
Statement did, or will, conform in all material respects to the requirements of
the Securities Act and the Rules and Regulations; on the Effective Date 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; 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 required to be stated therein or necessary to make the
statements therein 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 this representation and warranty shall
not apply to any statement or omission made in reliance upon and in conformity
with information furnished in writing to the Transferor by the Underwriter
expressly for use in the Registration Statement. As of the Closing Date, the
representations and warranties of the Transferor and the Servicer in the Pooling
and Servicing Agreement will be true and correct in all material respects.
Section 2. Sale and Delivery of the Securities; Defaults by
Under writer. (a) On the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions herein
set forth, the Transferor agrees to issue and sell the Certificates to the
Underwriter, and the Underwriter agrees to purchase from the Transferor the
Certificates. The Class A Certificates are to be purchased by the Underwriter at
the purchase price of _______% of the aggregate principal amount of the Class A
Certificates, and the Class B Certificates are to be purchased are to be
purchased by the Underwriter at the
4
<PAGE>
purchase price of __% of the aggregate principal amount of the Class B
Certificates.
(b) Payment for the Certificates shall be made
against delivery to the Underwriter of the Certificates registered in the name
of Cede & Co., as the nominee of The Depository Trust Company. The Certificates
will be made available for inspection by the Underwriter at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York, not later than
1:00 P.M., New York City time, on the Business Day prior to the Closing Date.
Payment for the Certificates by the Underwriter to the Transferor of the
purchase price therefor by immediately available funds shall be made at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP in New York, New York at
10:00 A.M., New York City time, on June __, 1999, or at such other time and
place, not later than the third full Business Day thereafter, as the Underwriter
and the Transferor may determine, such time of delivery against payment being
herein referred to as the "Closing Date." Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition to the obligations of the Underwriter hereunder. "Business Day", as
used herein, shall mean any day on which commercial banks in The City of New
York are normally open for business.
Section 3. Offering by the Underwriter. As soon as is
practicable after the Registration has been declared effective, the Underwriter
shall offer the Certificates for sale to the public upon the terms set forth in
the Prospectus.
Section 4. Conditions to the Obligation of the Underwriter.
The obligation of the Underwriter to purchase and pay for the Certificates shall
be subject, in its discretion, to the accuracy of the representations and
warranties of the Transferor and Yamaha herein as of the date hereof and as of
the Closing Date as if made on and as of the Closing Date, to the accuracy of
the statements of the Transferor's and Yamaha's officers made pursuant to the
provisions hereof, to the performance by each of the Transferor and Yamaha of
its obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 12:00 noon (New York City time) on the second Business
Day following the date hereof or such later date or time as shall have been
consented to by the Underwriter; and, as of the Closing Date, no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been
5
<PAGE>
initiated or overtly threatened by the Commission; and all requests of the
Commission for additional information (to be included in the Registration
Statement or Prospectus or otherwise) shall have been complied with; and the
Transferor shall not have filed with the Commission the Prospectus or any
amendment or supplement to the Registration Statement or Prospectus without the
consent of the Underwriter. If the Transferor has elected to rely upon Rule
430A, a Prospectus containing Rule 430A Information shall have been filed with
the Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) The Underwriter shall have received an opinion,
dated the Closing Date, of counsel for the Transferor, in form and substance
satisfactory to the Underwriter substantially to the effect set forth in Exhibit
A hereto, and the Transferor shall have furnished to such counsel such
documents as it may reasonably request for the purpose of enabling it to pass
upon such matters.
(c) The Underwriter shall have received an opinions
of counsel for the Servicer, dated the Closing Date, in form and substance
satisfactory to the Underwriter, substantially to the effect set forth in
Exhibit B hereto, and the Servicer shall have furnished to such counsel such
documents as it may reasonably request for the purpose of enabling them to pass
upon such matters.
(d) The Underwriter shall have received an opinion
of counsel to Deutsche Financial Services Corporation, dated the Closing Date,
in form and substance satisfactory to the Underwriter.
(e) The Underwriter shall have received an opinion
or opinions of Giancarlo & Gnazzo, A Professional Corporation, special counsel
for the Transferor, dated the Closing Date, in form and substance satisfactory
to the Underwriter, with respect to certain matters relating to the transfer of
the Receivables to the Trust, with respect to the perfection of the Trust's
interest in the Receivables and certain other matters in a form previously
approved by the Underwriter. In addition, the Underwriter shall have received a
reliance letter with respect to any opinion that the Transferor is required to
deliver to the Rating Agencies.
(f) The Underwriter shall have received an opinion
of Giancarlo & Gnazzo, A Professional Corporation, special counsel for Yamaha,
dated the Closing Date, in form and substance satisfactory to the Underwriter
and its coun-
6
<PAGE>
sel, with respect to certain matters relating to the sale of the Receivables by
Deutsche Financial Services Corporation to Yamaha and from Yamaha to the
Transferor and the non-consolidation of the Transferor with Yamaha.
(g) The Underwriter shall have received an opinion
from Giancarlo & Gnazzo, A Professional Corporation, special tax counsel to the
Trans feror, with respect to the Federal and California income tax
treatment of the Certificates in form and substance satisfactory to the
Underwriter.
(h) The Underwriter shall have received a
certificate, dated the Closing Date, of an officer of each of the Transferor and
Yamaha in which such officer, to the best of his or her knowledge after
reasonable investigation, shall state that the representations and warranties of
the Transferor and Yamaha, as applicable, in this Agreement are true and correct
in all material respects on and as of the Closing Date, that each of the
Transferor and Yamaha, as applicable, has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, that the respective representations and warranties
of the Transferor and the Servicer in the Supplement and in the Pooling and
Servicing Agreement are true and correct as of the dates specified in the
Supplement, that the Registration Statement has become effective, 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 threatened by
the Commission and that the information contained in the Prospectus relating to
the Transferor and the Receivables is true and accurate in all material respects
and nothing has come to his or her attention that would lead such officer to
believe that the Registration Statement or the Prospectus includes any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein not misleading.
(i) The Underwriter shall have received an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Underwriter, in form
and substance satisfactory to the Underwriter as to such matters as the
Underwriter shall reasonably request.
(j) The Underwriter shall have received an opinion
of Kramer, Levin, Naftalis & Frankel, special counsel to the Trustee, dated the
Closing Date, in form and substance satisfactory to the Underwriter and its
counsel, to the effect set forth in Exhibit C hereto.
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(k) To the extent, if any, that the ratings provided
with respect to the Certificates by the rating agencies rating the Certificates
(collectively, the "Rating Agencies") is conditional upon the furnishing of
documents or the taking of any other action by the Transferor agreed upon on or
prior to the Closing Date, the Transferor shall furnish such documents and take
any such other action.
(l) On or prior to the Closing Date, the Transferor
shall have furnished to the Underwriter a letter, dated the date of delivery
thereof, of PriceWaterhouse-Coopers LLP, confirming that they are independent
public accountants within the meaning of the Securities Act and the applicable
Rules and Regulations thereunder and addressing such matters requested by the
Underwriter and otherwise in form and in substance satisfactory to the
Underwriter and its counsel.
(m) The Underwriter shall have received written
confirmation that the Class A Certificates shall be rated "AAA" by Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.
("Standard & Poor's") and "Aaa" by Moody's Investors Service, Inc. ("Moody's")
and that the Class B Certificates shall be rated "A" by Standard & Poor's and
"A3" by Moody's.
All such opinions, certificates, letters and documents
delivered pursuant to this Agreement will comply with the provisions hereof only
if they are reasonably satisfactory in all material respects to the Underwriter.
Section 5. Representations and Warranties of the Transferor
and Yamaha. (a) The Transferor represents and warrants to, and agrees with the
Underwriter that:
(i) The Transferor meets the requirements for use of
Form S-1 and has filed with the Commission under the Securities Act in
conformity in all material respects with the Securities Act and the Rules and
Regulations a registration statement as described in Section 1 of this
Agreement.
(ii) The Registration Statement and the Prospectus
will comply as to form, in all material respects as of their respective
effective or issue dates, with the requirements of the Securities Act and the
Rules and Regulations. The exhibits to the Registration Statement and documents
incorporated by reference in the Prospectus, in each case when filed with the
Commission, conformed in all
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material respects to the requirements of the Securities Act and the Rules and
Regulations.
(iii) Each Preliminary Prospectus, at the time of
filing thereof, complied with the requirements of the Securities Act and the
Rules and Regulations and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein in the light of the
circumstances under which they were made, not misleading; provided that this
representation and warranty shall not apply to any statement or omission made in
reliance upon and in conformity with information furnished in writing to the
Transferor by the Underwriter expressly for use therein. At all times subsequent
hereto, up to and including the Closing Date, (A) the Registration Statement and
the Prospectus and any amendments or supplements thereto will contain all
statements which are required to be stated therein in accordance with the
Securities Act and the Rules and Regulations and will comply in all material
respects with the requirements of the Securities Act and the Rules and
Regulations; and (B) neither the Registration Statement nor the Prospectus nor
any amendment or supplement thereto will include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; provided that this
representation and warranty shall not apply to any statement or omission made in
reliance upon and in conformity with information furnished in writing to the
Transferor by the Underwriter expressly for use therein. The statements in the
Prospectus under the heading "Description of the Offered Certificates," insofar
as such statements purport to summarize certain provisions of the applicable
Series of Certificates and the Pooling and Servicing Agreement, provide an
accurate summary of such provisions in all material respects.
(iv) The Transferor has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with full power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus, and is duly qualified to transact business as a foreign corporation
in good standing under the laws of each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification. The Transferor is not in violation of its corporate charter or
bylaws or in default under any agreement, lease, indenture, note or instrument.
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(v) The Transferor has full corporate power to enter
into this Agreement, the Supplement, the Pooling and Servicing Agreement and the
Receiv ables Purchase Agreement and to issue, sell and deliver the Certificates
to be sold by it to the Underwriter as provided herein. The execution, delivery
and performance of this Agreement, the Supplement, the Pooling and Servicing
Agreement and the Receivables Purchase Agreement by the Transferor, and the
issuance, sale and delivery of the Certificates by the Transferor, and the
consummation by the Transferor of the transactions contemplated hereby and
thereby, will not conflict with or result in a breach or violation by the
Transferor of any of the terms or provisions of, constitute a default by the
Transferor under, or result in the creation or imposition of any lien, charge,
security interest or encumbrance upon any of the assets of the Transferor
pursuant to the terms of, any (A) indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Transferor is a
party or to which it or any of its properties is subject, (B) the charter or
bylaws of the Transferor or (C) any statute, judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to the
Transferor or any of its properties.
(vi) The Certificates are in due and proper form,
have been duly authorized and, when issued and delivered pursuant to the Pooling
and Servicing Agreement, duly authenticated by the Trustee and paid for by the
Underwriter in accordance with the terms of this Agreement, will be duly and
validly executed, authenticated, issued and delivered and entitled to the
benefits provided to the Certificates by the Pooling and Servicing Agreement,
and the Certificates, the Pooling and Servicing Agreement, the Receivables Sale
Agreement and the Receivables Purchase Agreement conform to the descriptions
thereof in the Prospectus in all material respects.
(vii) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required for the execution, delivery or performance of this Agreement,
the Supplement, the Pooling and Servicing Agreement, the Receivables Purchase
Agreement and the Certificates by the Transferor, or the consummation by the
Transferor of the transactions contemplated hereby and thereby, except such as
have been obtained under the Securities Act and state securities or blue sky
laws in connection with the purchase and distribution of the Certificates by the
Underwriter.
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(viii) The execution and delivery of the Supplement
has been duly authorized by all necessary corporate action of the Transferor. At
the Closing Date, the Supplement and the Pooling and Servicing Agreement will be
a legal, valid and binding agreement of the Transferor, enforceable against the
Transferor in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, and subject,
as to enforceability, to general principles of equity. The execution and
delivery of this Agreement have been duly authorized by all necessary corporate
action, and this Agreement has been duly executed and delivered by the
Transferor.
(ix) Except as described or referred to in the
Prospectus, there is not pending, or to the knowledge of the Transferor
threatened, any action, suit, proceeding, inquiry or investigation, to which the
Transferor is a party, or to which the property of the Transferor is subject,
before or brought by any court or governmental agency or body, which, if
determined adversely to the Transferor, would result in any material adverse
change in the business, financial position, net worth, results of operations or
prospects, or materially adversely affect the properties or assets of the
Transferor.
(x) Except as described in or contemplated by the
Prospectus, subsequent to April 1, 1999, (A) the Transferor has not sustained a
material loss or interference with its business or properties from fire, flood,
hurricane, accident, riot, civil unrest, or other calamity or act of God,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree; and (B) there has not been any change in
the capital stock of the Transferor, or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
business, management, condition (financial or otherwise), net worth, results of
operations or prospects of the Transferor.
(xi) The Transferor has or will have, on the Closing
Date, good title to the Receivables, as described in the Prospectus, free and
clear of all liens, encumbrances, claims, security interests or restrictions,
except any interest of the Trustee on behalf of the Trust.
(xii) On or before the Closing Date, the Transferor
shall have caused Yamaha's computer records relating to the Receivables
contained in any Accounts to be marked to show the Transferor's absolute
ownership of the Receivables, and the Transferor's transfer of such Receivables
to the Trust and, prior
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to and after the Closing Date, neither the Transferor nor the Servicer has taken
or shall take any action inconsistent with the Trust's interest in such
Receivables, other than as permitted by the Pooling and Servicing Agreement.
(xiii) The Transferor has full power and authority
to sell and assign the property sold or to be sold and assigned to and deposited
with the Trustee as part of the Trust and has duly authorized such sale and
assignment to the Trustee by all necessary corporate action.
(xiv) Immediately prior to the transfer of the
Receivables to the Trustee, the Transferor's interest in the Receivables, the
security interests in the Products securing the Receivables and the proceeds of
each of the foregoing was perfected upon the filing of the financing statement
on Form UCC-1 with the Secretary of State of the State of California and
constituted a perfected first priority interest therein. The Pooling and
Servicing Agreement constitutes a grant by the Transferor to the Trustee of a
valid security interest in the Receivables, the security interests in the
Products securing the Receivables and the proceeds of each of the foregoing,
which security interest is perfected upon the filing of the UCC-1 financ ing
statement with the Secretary of State of the State of California and will
constitute a first priority perfected security interest therein. No filing or
other action, other than the filing of the UCC-1 financing statements with the
Secretary of State of the State of California referred to above, is necessary to
perfect and maintain the security interest of the Trustee in the Receivables,
the security interests in the Products securing the Receivables and the
proceeds of each of the foregoing against third parties.
(xv) The Receivables are "chattel paper",
"accounts" or "general intangibles" under the Uniform Commercial Code as in
effect in the States of New York and California.
(xvi) All filings necessary under applicable law to
perfect the sale of the Receivables by DFS to Yamaha pursuant to the Receivables
Sale Agreement and the sale of the Receivables by Yamaha to the Transferor
pursuant to the Receivables Purchase Agreement, as well as the transfer of the
Receivables by the Transferor to the Trustee pursuant to the Pooling and
Servicing Agreement, have been made and, provided that neither DFS, Yamaha nor
the Transferor relocates its principal place of business in a state other than
California and that DFS and Yamaha maintain the list of Receivables for
inspection by interested parties as described
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above, no other filings (other than the filing of continuation statements) need
be made to maintain the perfection of the sale of the Receivables to Yamaha
pursuant to the Receivables Sale Agreement, the sale of the Receivables to the
Transferor pursuant to the Receivables Purchase Agreement, or the transfer of
the Receivables to the Trustee pursuant to the Pooling and Servicing Agreement.
The Transferor agrees to provide the Underwriter with copies of all filings
referenced in this subsection no later than five (5) days prior to the Closing
Date.
(xvii) The Transferor possesses all material
licenses, certificates, authorities or permits issued by the appropriate state,
Federal or foreign regulatory agencies or bodies necessary to conduct the
business now conducted by it and as described in the Prospectus, and the
Transferor has not received notice of any proceedings relating to the revocation
or modification of any such license, certificate, authority or permit which if
decided adversely to the Transferor, would, singly or in the aggregate,
materially and adversely affect the conduct of its business, operations or
financial condition.
(xviii) As of the Cut-Off Date, each of the
Receivables conforms to the descriptions thereof contained in the Prospectus.
(xix) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of 1939, as amended, and
neither the Transferor nor the Trust is and, after giving effect to the issuance
and sale of the Certificates and the application of the proceeds thereof as
described in the Prospectus, will be required to be registered as an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(xx) At the Closing Date, the Certificates and the
Pooling and Servicing Agreement will conform in all material respects to the
descriptions thereof contained in the Prospectus.
(xxi) Any taxes, fees and other governmental
charges in connection with the execution, delivery and performance of this
Agreement, the Pooling and Servicing Agreement, the Supplement and the
Certificates and any other agreements contemplated herein or therein have been
paid or will be paid by the Transferor at or prior to the Closing Date to the
extent then due.
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(b) Yamaha represents and warrants to, and agrees with the
Underwriter that:
(i) Yamaha has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with full power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus, and is duly qualified to transact business as a foreign corporation
in good standing under the laws of each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification. Yamaha is not in violation of its corporate charter or bylaws or
in default under any agreement, lease, indenture, note or instrument.
(ii) Yamaha has full corporate power to enter into
this Agreement, the Receivables Purchase Agreement, the Receivables Sale
Agreement and the Supplement. The execution, delivery and performance of this
Agreement, the Supplement, the Pooling and Servicing Agreement, the Receivables
Sale Agreement and the Receivables Purchase Agreement by Yamaha, and the consum-
mation by Yamaha of the transactions contemplated hereby and thereby, will not
conflict with or result in a breach or violation by Yamaha of any of the terms
or provisions of, constitute a default by Yamaha under, or result in the
creation or imposition of any lien, charge, security interest or encumbrance
upon any of the assets of Yamaha pursuant to the terms of, any (A) indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which Yamaha is a party or to which it or any of its properties is subject,
(B) the charter or bylaws of Yamaha or (C) any statute, judgment, decree, order,
rule or regulation of any court or governmental agency or body applicable to
Yamaha or any of its properties.
(iii) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required for the execution, delivery or performance of this Agreement,
the Supplement, the Pooling and Servicing Agreement, the Receivables Sale
Agreement and the Receivables Purchase Agreement by Yamaha, or the consummation
by Yamaha of the transac tions contemplated hereby and thereby, except such as
have been obtained.
(iv) The execution and delivery of this Agreement,
the Supplement, the Pooling and Servicing Agreement, the Receivables Purchase
Agreement and the Receivables Sale Agreement has been duly authorized by all
necessary corporate action of Yamaha. At the Closing Date, the Supplement, the
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Pooling and Servicing Agreement, the Receivables Purchase Agreement and the
Receivables Sale Agreement will be a legal, valid and binding agreement of
Yamaha, enforceable against Yamaha in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general principles of equity.
This Agreement has been duly executed and delivered by Yamaha.
(v) Except as described or referred to in the
Prospectus, there is not pending, or to the knowledge of Yamaha threatened, any
action, suit, proceeding, inquiry or investigation, to which Yamaha is a party,
or to which the property of Yamaha is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to Yamaha would
result in any material adverse change in the business, financial position, net
worth, results of operations or prospects, or materially adversely affect the
properties or assets of Yamaha.
(vi) Except as described in or contemplated by the
Prospectus, subsequent to April 1, 1999, (A) Yamaha has not sustained a
material loss or interference with its business or properties from fire, flood,
hurricane, accident, riot, civil unrest, or other calamity or act of God,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree; and (B) there has not been any change in
the capital stock of Yamaha, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the business,
management, condition (financial or otherwise), net worth, results of operations
or prospects of Yamaha.
(vii) Yamaha possesses all material licenses,
certificates, authorities or permits issued by the appropriate state, Federal or
foreign regulatory agencies or bodies necessary to conduct the business now
conducted by it and as described in the Prospectus, and Yamaha has not received
notice of any proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which, if decided adversely to Yamaha,
would, singly or in the aggregate, materially and adversely affect the conduct
of its business, operations or financial condition.
Section 6. Covenants of the Transferor. The Transferor
covenants and agrees with the Underwriter that:
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(a) The Transferor will, if required, file the
Prospectus with the Commission pursuant to and in accordance with Rule 424(b)
not later than the time specified therein. The Transferor will promptly advise
the Underwriter of any such filing. The Transferor will not file any amendment
to the Registration State ment or any supplement to the Prospectus unless the
Underwriter shall previously have been advised and furnished with a copy a
reasonable time prior to the proposed filing and the Underwriter shall not have
reasonably objected to the proposed filing. During the time when a Prospectus is
required to be delivered under the Securities Act, the Transferor will comply so
far as it is able with all requirements imposed upon it by the Securities Act
and the Rules and Regulations to the extent necessary to permit the continuance
of sales of or dealings in the Certificates in accordance with the provisions
hereof and of the Prospectus, and the Transferor will prepare and file with the
Commission any amendments to the Registration Statement or supple ments to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Certificates by the Underwriter, and will use its best
efforts to cause the same to become effective as promptly as possible. The
Transferor will advise the Underwriter, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or become effective or any supplement to the Prospectus or any amended
Prospectus has been filed.
(b) The Transferor will advise the Underwriter,
promptly after it receives notice or obtains knowledge thereof, of (i) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any order directed to the use of any Preliminary
Prospectus or the Prospectus, (ii) the suspension of the qualification of the
Certificates for offering or sale in any jurisdiction, (iii) the institution or
threatening of any proceeding for any such purpose or (iv) any request made by
the Commission for the amending or supplementing of the Registration Statement
or the Prospectus or for additional information; and the Transferor will use its
best efforts to prevent the issuance of any such order and in each case, if any
such order is issued, to obtain the lifting thereof as promptly as possible.
(c) The Transferor will arrange for the
qualification of the Certificates for offering and sale under the securities or
blue sky laws of such jurisdictions as the Underwriter may designate and will
continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Certificates; provided, however, that in
connection therewith, the Transferor shall not be
16
<PAGE>
required to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.
(d) If, at any time after the Effective Date, 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 any untrue statement of a material fact,
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or if it is necessary during such period to amend
or supplement the Prospectus to comply with the Securities Act and the Rules and
Regulations, the Transferor will promptly notify the Underwriter thereof and
will prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment which
will effect such compliance; and, in the event the Underwriter is required to
deliver a prospectus in connection with sales of any of the Certificates after
the Effective Date, the Transferor will prepare and file with the Commission any
amendments to the Registration Statement or supplements to the Prospectus which
may be necessary or advisable in connection with the distribution of the
Certificates by the Underwriter, and will use its best efforts to cause the same
to become effective as promptly as possible. The Transferor will advise the
Underwriter, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or become effective or
any supplement to the Prospectus or any amended Prospectus has been filed.
(e) The Transferor will furnish to the Underwriter
copies of the Registration Statement (one of which will be manually signed and
will be accompanied by all exhibits), each Preliminary Prospectus, the
Prospectus, and all amendments and supplements thereto, in each case as soon as
available and in such quantities as the Underwriter may reasonably request.
(f) The Transferor will apply the net proceeds from
the sale of the Certificates to be sold by it hereunder as set forth under "Use
of Proceeds" in the Prospectus. At no time will the Transferor apply the
proceeds from the sale of the Certificates in a manner which would violate, or
result in a violation of, Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
(g) The Transferor will make generally available to
its security holders as soon as practicable, but in any event not later than
eighteen (18)
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months after the effective date of the Registration Statement, an earning
statement of the Transferor (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations.
(h) For a period from the date of this Agreement
until the payment in full of the Certificates, the Transferor will cause the
Servicer to furnish to the Underwriter copies of each certificate and the annual
statements of compliance delivered to the Trustee pursuant to the Pooling and
Servicing Agreement and the annual independent certified public accountant's
servicing reports furnished to the Trustee pursuant to the Pooling and Servicing
Agreement, by first-class mail as soon as practicable after such statements and
reports are furnished to the Trustee.
(i) During the period beginning on the date hereof
and continuing to and including the Business Day following the Closing Date, the
Transferor will not offer, sell, contract to sell or otherwise dispose of any
debt securities of or guaranteed by the Transferor without the prior written
consent of the Underwriter.
Section 7. Expenses. (a) The Transferor agrees with the Under
writer that: (i) whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, the
Transferor will pay all fees and expenses incident to the performance of its
obligations hereunder, including, but not limited to, (A) the Commission's
registration fee, (B) the expenses of printing and distributing this Agreement,
the Registration Statement, the Pooling and Servicing Agreement, each
Preliminary Prospectus, the Prospectus and any amendments or supplements
thereto, and the blue sky and legal investment memoranda and any supplements
thereto, and any other document in connection with the offering, purchase, sale
and delivery of the Certificates, (C) fees and expenses of accountants and
counsel for the Transferor, (D) expenses of qualification of the Certificates
under state blue sky and securities laws and in connection with blue sky and
legal investment surveys, including the fees and disbursements of counsel to the
Underwriter in connection therewith, (E) filing fees in connection with filings
with the National Association of Securities Dealers, Inc., if any, (F) fees and
expenses of the Trustee and any agent of the Trustee and the fees and disburse
ments of counsel for the Trustee in connection with the Pooling and Servicing
Agreement and the Certificates, (G) any fees charged by the Rating Agencies for
rating the Certificates, (H) all miscellaneous expenses referred to in Item 13
of the Registration Statement and (I) all other costs and expenses incident to
the performance of its obligations
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hereunder which are not specifically provided for in this Section 7; (ii) all
out-of-pocket expenses, including agreed counsel fees, disburse ments and
expenses, incurred by the Underwriter in connection with investigating,
preparing to market and marketing the Certificates and proposing to purchase and
purchasing the Certificates under this Agreement will be borne and paid by the
Transferor if this Agreement is terminated by the Underwriter on account of the
failure, refusal or inability on the part of the Transferor to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder; and (iii) the Transferor will pay the costs and charges of its
transfer agent and registrar and the cost of preparing the certificates for the
Certificates.
(b) Except as otherwise expressly provided in this
Section 7, the Underwriter agrees to pay all of its expenses in connection with
investigating, preparing to market and marketing the Certificates and proposing
to purchase and purchasing the Certificates under this Agreement, including the
fees and expenses of its counsel, and any advertising expenses incurred by it in
making offers and sales of the Certificates.
Section 8. Indemnification and Contribution. (a) The
Transferor and Yamaha agree, jointly and severally, to indemnify and hold
harmless the Underwriter, and each person, if any, who controls the Underwriter
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person 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 a
material fact contained in the Registration Statement (or in any amendment
thereto), including the information deemed to be a part of the Registration
Statement pursuant to Rule 430A(b) of the Rules and Regulations, if applicable,
or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse the
Underwriter and each such controlling person for any legal or other expenses
reasonably incurred by the Underwriter or controlling person in connection with
investigating, defending or preparing to defend any such loss, claim, damage,
liabil ity or action at the time such expenses are incurred; provided, however,
that neither the Transferor nor Yamaha will be liable in any such case to the
extent that any such loss, claim, damage or liabil-
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ity arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any such amendment or supplement,
in reliance upon and in conformity with written information furnished to the
Transferor by the Underwriter specifically for use therein. Neither the
Transferor nor Yamaha shall be liable to the Underwriter or any person
controlling the Underwriter under the indemnity agreement in this subsection (a)
with respect to any of such documents to the extent that any such loss, claim,
damage or liability of the Underwriter or such controlling person results from
the fact that the Underwriter sold the Certificates to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference), as applicable, in any case in
which such delivery is required by the Securities Act or the Rules and
Regulations if the Transferor furnished copies thereof to the Underwriter prior
to such confirmation and, if the loss, claim, damage or liability arises out of
a defect in the Preliminary Prospectus, then the Prospectus cured such defect.
(b) The Underwriter will indemnify and hold harmless
the Transferor, Yamaha, each of their respective directors, each of the
Transferor's officers or authorized persons who signed the Registration
Statement and each person or entity, if any, who controls the Transferor or
Yamaha within the meaning of the Securities Act against any losses, claims,
damages or liabilities to which the Transferor or Yamaha or any such director,
officer or controlling person 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 or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
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 the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Transferor by
the Underwriter specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Transferor or Yamaha or any such
director,
20
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officer or controlling person in connection with investigating, defending or
preparing to defend any such loss, claim, damage, liability or action. The
Transferor acknowledges and agrees that the only such information furnished to
the Transferor by the Underwriter consists of the following: (i) the statements
in the last sentence of the cover page of the Prospectus; (ii) the statements in
the first and second sentences in the third paragraph (concerning initial
offering prices, concessions and reallowances) and in the fourth, fifth, sixth
and seventh paragraphs (concerning stabilizing and other activities) under the
heading "Underwriting" in the Prospectus.
(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 this Section 8, notify the indemnifying party in
writing 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 this Section 8. 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). After notice from the indemnifying party to such indemnified party of
its election so to assume the defense of such claim or action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation
unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Underwriter in the case of paragraph (a) of
this Section 8, representing the indemnified parties under such paragraph (a)
who are parties to such action other than local counsel), (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party, and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). An indemnifying party will not, without the
21
<PAGE>
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compro mise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) If the indemnification provided for in
Section 8(a) or (b) hereof is for any reason, other than as specified in such
provisions, unavailable to or insufficient to hold harmless an indemnified
party, then each indemnifying party shall contribute to the amount paid or
payable by each indemnified party in respect of losses, claims, damages or
liabilities (or actions in respect thereof) referred to in Sections 8(a) or (b)
hereof (i) in such proportion as is appropriate to reflect the relative benefits
received by the Transferor and Yamaha, on the one hand, and the Underwriter, on
the other, from the offering of the Certificates or, (ii) if the alloca tion
provided by clause (i) above is not permitted by applicable law, in such propor-
tion as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Transferor and Yamaha, on
the one hand, and the Underwriter, on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative benefits received by the Transferor and
Yamaha, on the one hand, and the Underwriter, 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 Transferor bear to the total underwriting
discounts and commissions received by the Underwriter, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault of the
Transferor and Yamaha, on the one hand, and the Underwriter, on the other, shall
be determined by reference to, among other things, whether the untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Transferor, Yamaha or the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
The Transferor, Yamaha and the Underwriter agree that it would
not be just and equitable if their respective obligations to contribute pursuant
to this Section 8(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to
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above in this Section 8(d). For purposes of this Section 8(d), the term
"damages" shall include any legal or other expenses reasonably incurred by the
Transferor, Yamaha or the Underwriter in connection with investigating or
defending against any action or claim which is the subject of the contribution
provisions of this Section 8(d). Notwithstanding this Section 8(d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total amount of discounts and commissions received by the
Underwriter in respect of the Certificates underwritten by it and distributed to
the public exceeds the amount of any damages which the Underwriter has otherwise
been required to pay by reason of such untrue statement or omission. 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 Transferor or Yamaha
under this Section 8 shall be in addition to any liability which the Transferor
or Yamaha may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Underwriter within the
meaning of Section 15 the Securities Act; and the obligations of the Underwriter
under this Section 8 shall be in addition to any liability which the Underwriter
may otherwise have and shall extend, upon the same terms and conditions, to each
director of the Transferor or Yamaha, to each officer of the Transferor who has
signed the Registration Statement and to each person, if any, who controls the
Transferor or Yamaha within the meaning of Section 15 the Securities Act.
Section 9. Termination. This Agreement may be terminated by
the Underwriter by notice to the Transferor prior to delivery of and payment for
the Certificates, (i) in the event that the Transferor or Yamaha shall have
failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, (ii) if on any date during the period from and including the date
hereof to and including the Closing Date, (A) any change, or development
involving a prospective change, in or affect ing particularly the business or
properties of the Transferor, Yamaha or Deutsche Financial Services Corporation
shall have occurred which, in the reasonable judg ment of the Underwriter,
materially impairs the investment quality or marketability of the Certificates,
(B) any suspension or material limitation of trading in securities generally on
the New York Stock Exchange or American Stock Exchange, or setting of minimum or
maximum prices for trading on such exchange shall have been established by
either of such exchanges or by order of the Commission or by any
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other governmental authority, (C) a banking moratorium shall have been declared
by New York, California or United States authorities or (D) there shall have
been an outbreak or material escalation of hostilities between the United States
and any foreign power, or of any other insurrection or armed conflict involving
the United States, any declaration of war by Congress or any other substantial
national or international calamity or emergency which, in the reasonable opinion
of the Underwriter, makes it impracticable or inadvisable to offer or sell the
Certificates on the terms and in the manner contemplated by the Prospectus.
Section 10. Survival. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Transferor, Yamaha, their respective officers and the Underwriter set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (a) any
investigation (or any statement as to the results thereof) made by or on behalf
of the Transferor, Yamaha, any of their respective officers or directors, any
Underwriter or any controlling person, (b) any termination of this Agreement and
(c) delivery of and payment for the Certificates. If for any reason (other than
solely by reason of the termination of this Agreement because of a failure to
satisfy a condition set forth in Section 9(ii)(B), (C) or (D) hereof), the
purchase of the Certificates by the Underwriter is not consummated, the
Transferor and Yamaha will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Certificates.
Section 11. Notices. All communications hereunder shall be
in writing and, if sent to the Underwriter, shall be mailed or delivered or sent
by telecopy to Chase Securities Inc., 270 Park Avenue, 7th Floor, New York, New
York 10017, Attention: Brad Dansker, Telecopier: (212) 834-6562 and, if sent to
the Transferor, shall be mailed or delivered or sent by telecopy to Yamaha Motor
Receivables Corporation, 6555 Katella Avenue, Suite A, Cypress, California
90630, Attention: Russell D. Jura, General Counsel, Telephone: (714) 761-7500,
and, if sent to Yamaha, shall be mailed or delivered or sent by telecopy to
Yamaha Motor Corporation, U.S.A., 6555 Katella Avenue, Cypress, California
90630, Attention: Russell D. Jura, General Counsel, Telecopier: (714) 761-7836.
Section 12. Miscellaneous. This Agreement shall inure to the
benefit of and shall be binding upon the Underwriter, the Transferor, Yamaha and
their respective successors and legal representatives, and nothing expressed or
mentioned
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in this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that the
representations, warranties, indemnities and agreements of the Transferor or
Yamaha contained in this Agreement shall also be for the benefit of any person
or persons who controls the Underwriter within the meaning of Section 15 of the
Securities Act. No purchaser of Certificates from the Underwriter shall be
deemed a successor because of such purchase. The validity and interpretation of
this Agreement shall be governed by the laws of the State of New York. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the
Transferor, Yamaha and the Underwriter.
Very truly yours,
YAMAHA MOTOR RECEIVABLES
CORPORATION, as Transferor
By:
-------------------------------------
Name:
Title:
YAMAHA MOTOR CORPORATION,
U.S.A.
By:
-------------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CHASE SECURITIES INC.,
as Underwriter
By:
---------------------------------
Name:
Title:
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<PAGE>
EXHIBIT A
Form of Transferor's Counsel Opinion
Pursuant to Section 4(b) of the Underwriting Agreement
(Capitalized terms have the meaning given to them
in the Underwriting Agreement)
(i) Yamaha Motor Receivables Corporation (the "Transferor")
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, has full power and authority to own its assets
and to transact its business as described in the Prospectus, and had at all
relevant times and now has, the power, authority and legal right to acquire and
own the Receivables;
(ii) The Transferor has and at all relevant times had all
requisite power and authority to execute and deliver the Underwriting Agreement
and the Supplement and to consummate the transactions contemplated herein and
therein;
(iii) The Certificates have been duly authorized and, when
executed and authenticated in accordance with the terms of the Pooling and
Servicing Agreement and the Supplement, and delivered and paid for pursuant to
the Underwriting Agreement, will be duly and validly issued and outstanding and
will be entitled to the benefits of the Pooling and Servicing Agreement and the
Supplement;
(iv) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required for the execution, delivery or performance of the Underwriting
Agreement, the Supplement and the Certificates by the Transferor, or the
consummation by the Transferor of the transactions contemplated hereby and
thereby, except such as have been obtained under the Securities Act and such as
may be required under state securities or blue sky laws in connection with the
purchase and distribution of the Certificates by the Underwriter;
(v) Neither the execution, delivery and performance by the
Trans feror of its obligations under the Underwriting Agreement, the Supplement
or the Pooling and Servicing Agreement, the issuance and sale of the
Certificates, nor the consummation of any other of the transactions contemplated
therein or in the Pooling and Servicing Agreement or the Supplement does or will
conflict with, result in a breach of or violation of any of the terms of, or
constitute a default under, the
A-1
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Certificate of Incorporation or By-laws of the Transferor, each as amended, or
any rule, order, statute or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Transferor or the terms of any material indenture or other material agreement or
instrument known to such counsel to which the Transferor is a party or by which
it or its properties are bound;
(vi) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge, threatened before any
court, administrative agency or other tribunal (x) asserting the invalidity of
the Underwriting Agreement, the Receivables Purchase Agreement, the Receivables
Sale Agreement, the Pooling and Servicing Agreement, the Supplement or the
Certificates, (y) seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by the Underwriting
Agreement, the Receivables Purchase Agreement, the Receivables Sale Agreement,
the Supplement, the Pooling and Servicing Agreement or the Certificates, which
might materially and adversely affect the performance by the Transferor of its
obligations under, or the validity or enforceability of, the Underwriting
Agreement, the Receivables Purchase Agree ment, the Receivables Sale Agreement,
the Supplement, the Pooling and Servicing Agreement or the Certificates or (z)
seeking adversely to affect the federal income tax attributes of the
Certificates as described in the Prospectus under the headings "Structural
Summary -- Tax Status" and "Certain Federal Income Tax Considerations";
(vii) Each of the Underwriting Agreement, the Supplement,
the Pooling and Servicing Agreement and the Receivables Purchase Agreement has
been duly authorized, executed and delivered by the Transferor and each of the
Pooling and Servicing Agreement and the Supplement constitutes a legal, valid
and binding obligation of the Transferor, enforceable against the Transferor in
accordance with its respective terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and to general equitable principles (whether such
enforceability is considered in a proceeding in equity or at law);
(viii) The Registration Statement has become effective under
the Securities Act and the Rules and Regulations, any required filing of the
Prospectus or any supplement thereto has been made with the Commission pursuant
to Rule 424(b) in the manner and within the time period required by Rule 424(b),
and no stop order suspending the effectiveness of the Registration Statement has
been issued and no
A-2
<PAGE>
proceedings for that purpose have been instituted or are pending or contem-
plated under the Securities Act or the Rule and Regulations; and the
Registration Statement and the Prospectus (other than the financial and
statistical information therein as to which such counsel need express no
opinion), as of the Effective Date, complied as to form in all material respects
with the requirements of the Securities Act and the Rules and Regulations;
(ix) The Underwriting Agreement, the Receivables Purchase
Agreement, the Receivables Sale Agreement, the Pooling and Servicing Agreement,
the Supplement and the Certificates conform in all material respects to the
descrip tions thereof contained in the Registration Statement and the
Prospectus;
(x) The Receivables Purchase Agreement, the Pooling and
Servic ing Agreement and the Supplement have not and will not be required to be
qualified under the Trust Indenture Act of 1939, as amended, and the Trust is
not now, and immediately following the sale of the Certificates pursuant hereto,
will not be, required to be registered under the Investment Company Act of 1940,
as amended;
(xi) The disclosure in the Prospectus of certain legal
proceedings, contracts and other documents and the filing of such contracts and
documents as exhibits to the Registration Statement are appropriately responsive
in all material respects to the applicable requirements of the Securities Act
and the Rules and Regulations; and
(xii) The statements in the Prospectus under the heading
"Certain Transfer, Security Interest and Bankruptcy Considerations" 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.
Such counsel also shall state that they have participated in
confer ences with officers and other representatives of the Transferor and the
Underwriter, counsel to the Underwriter, representatives of the independent
accountants for the Transferor, the Servicer and the Underwriter at which the
contents of the Registration Statement and the Prospectus were discussed and,
although they need not pass upon or assume responsibility for the factual
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, on the basis of the foregoing, nothing
has come to such counsel's attention that leads such counsel to believe that (i)
the Prospectus, or any
A-3
<PAGE>
amendments or supplements thereto, at the time the Prospectus was issued, at the
time such amendment or supplement was issued and at the Closing Date, contained
or contains any untrue statement of a material fact or omitted or omits to state
a material fact necessary to make the statements therein, not misleading or (ii)
the Registration Statement (including Rule 430A Information, if applicable, and
any amendment thereto), as of the Effective Date and the Closing Date, contained
or contains an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, not
misleading; provided, however, that such counsel need express no view with
respect to the financial and statistical data included in the Registration
Statement or the Prospectus.
A-4
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EXHIBIT B
Form of Servicer's Counsel Opinion
Pursuant to Section 4(c) of the Underwriting Agreement
(Capitalized terms have the meaning given to them in
the Underwriting Agreement)
(i) Yamaha Motor Corporation, U.S.A. ("Yamaha") is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California, has corporate power to own its assets and to
transact its business as described in the Prospectus, and had at all relevant
times and now has, the power, authority and legal right to service the
Receivables;
(ii) Yamaha has the corporate power and authority to execute
and deliver the Underwriting Agreement, the Pooling and Servicing Agreement, the
Supplement, the Receivables Purchase Agreement and the Receivables Sale Agree-
ment and to consummate the transactions contemplated therein;
(iii) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required for the execution, delivery or performance of the Pooling and
Servicing Agreement, the Supplement, the Underwriting Agreement, the Receivables
Sale Agreement or the Receivables Purchase Agreement by Yamaha, or the
consummation by the Servicer of the transactions contemplated thereby, except
such as have been obtained under the Securities Act and such as may be required
under state securities or blue sky laws in connection with the purchase and
distribution of the Certificates by the Underwriter;
(iv) Neither the execution, delivery and performance by
Yamaha of its obligations under the Pooling and Servicing Agreement, the
Supplement, the Underwriting Agreement, the Receivables Purchase Agreement, the
Receivables Sale Agreement, nor the consummation of any other of the
transactions contemplated therein will conflict with, result in a breach of or
violation of any of the terms of, or constitute a default under, the articles of
incorporation or by-laws of Yamaha, each as amended, or any rule, order, statute
or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Yamaha or the terms of any material
indenture or other material agreement or instrument known to such counsel to
which Yamaha is a party or by which it or its properties are bound;
B-1
<PAGE>
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge, threatened before any
court, administrative agency or other tribunal (x) asserting the invalidity of
the Pooling and Servicing Agreement, the Supplement, the Receivables Purchase
Agreement, the Receivables Sale Agreement or the Underwriting Agreement or (y)
seeking to prevent the consummation of any of the transactions contemplated by
the Supplement which might materially and adversely affect the performance by
Yamaha of its obligations under, or the validity or enforceability of the
Pooling and Servicing Agreement, the Supplement, the Receivables Purchase
Agreement or the Receivables Sale Agreement; and
(vi) The Supplement, the Pooling and Servicing Agreement,
the Receivables Sale Agreement, the Receivables Purchase Agreement and the Under
writing Agreement has been duly authorized, executed and delivered by Yamaha.
Each of the Supplement, the Pooling and Servicing Agreement, the Receivables
Sale Agreement and the Receivables Purchase Agreement constitutes the legal,
valid and binding obligation of Yamaha, enforceable against Yamaha in accordance
with its respective terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, moratorium, conservatorship, receivership, or other
similar laws of general applicability relating to or affecting creditors' rights
generally and the application of general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
B-2
<PAGE>
EXHIBIT C
Form of Trustee's Counsel Opinion
Pursuant to Section 4(j) of the Underwriting Agreement
(Capitalized terms have the meaning given to them
in the Underwriting Agreement)
(i) The Fuji Bank and Trust Company (the "Trustee") has
been duly incorporated and is validly existing as a banking corporation under
the laws of the State of New York and has and at all relevant times had the
power and authority to enter into and to perform all actions required of it
under the Pooling and Servicing Agreement and the Supplement;
(ii) Each of the Pooling and Servicing Agreement and the
Supple ment has been duly authorized, executed and delivered by the Trustee and
each constitutes a legal, valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, liquidation,
reorganization, moratorium, conservatorship, receivership or other similar laws
now or hereinafter in effect relating to the enforcement of creditors' rights in
general, as such laws would apply in the event of a bankruptcy, insolvency,
liquidation, reorganization, moratorium, conservatorship, receivership or
similar occurrence affecting the Trustee, and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law);
(iii) The Certificates have been duly authenticated and
delivered by the Trustee;
(iv) The execution and delivery of the Supplement and the
Pooling and Servicing Agreement by the Trustee and the performance by the
Trustee of their respective terms do not conflict with or result in a violation
of (x) any law or regulation of the United States of America or the State of New
York governing the banking or trust powers of the Trustee or (y) the Certificate
of Incorporation or Bylaws of the Trustee; and
(v) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or the State of
New York having jurisdiction over the banking or trust powers of the Trustee is
required in
C-1
<PAGE>
connection with the execution and delivery by the Trustee of the Pooling and
Servicing Agreement and the Supplement or the performance by the Trustee
thereunder.
C-2
<PAGE>
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
YAMAHA MOTOR RECEIVABLES CORPORATION
--------------------------------------------
INTRODUCTORY
This is the AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
YAMAHA MOTOR RECEIVABLES CORPORATION, duly adopted by consent of the Board of
Directors of Yamaha Motor Receivables Corporation (the "Corporation") and vote
of the shareholders of the Corporation in accordance with Section 245(b) of the
General Corporation Law of the State of Delaware. "Yamaha Motor Receivables
Corporation" is the name under which the Corporation was originally incorporated
on December 2, 1993.
ARTICLE I
NAME
The name of the Corporation is Yamaha Motor Receivables
Corporation.
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The address of the Corporation's registered office in the
State of Delaware is The Corporation Trust Company, 1209 Orange Street, City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
ARTICLE III
CORPORATE PURPOSES
The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in the following activities:
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(a) to acquire from time to time any or all right,
title and interest in, to and under all or any of the following: (i) wholesale
receivables generated from time to time in a portfolio of revolving financing
arrangements with dealers in products manufactured, sold, leased or brokered by,
or incorporating products manufactured, sold, leased or brokered by, Yamaha
Motor Company, Ltd., Yamaha Motor Manufacturing Corporation of America,
Tennessee Watercraft, Inc. or any affiliate thereof (such products, "Yamaha
Products"), (ii) leases of Yamaha Products and/or other products sold or leased
by dealers in Yamaha Products (such other products, "Other Dealer Products") and
(iii) open-end credit account receivables due from purchasers of Yamaha Products
and/or Other Dealer Products, consumer and commercial loans due from purchasers
of Yamaha Products and/or Other Dealer Products, including retail installment
sales contracts with respect to Yamaha Products and/or Other Dealer Products;
(iv) security interests and liens in or upon, and/or title to, Yamaha Products
and/or Other Dealer Products and/or other collateral securing, relating to, or
arising in connection with all or any of the foregoing; (v) insurance policies
related to all or any of the foregoing; (vi) agreements, documents, and
instruments related to all or any of the foregoing; (vii) monies due under or
owed or owing in respect of all or any of the foregoing, including, without
limitation, proceeds (including proceeds of proceeds), fees and charges; and
(viii) all other rights with respect to all or any of the foregoing
(collectively, "Receivables");
(b) to purchase, acquire, own, hold, service, sell,
assign, pledge and otherwise deal with the Receivables and to enter into any
related agreements, documents and/or instruments with any affiliates;
(c) to transfer all or certain of the Receivables to
trusts (the "Trusts") pursuant to one or more pooling and servicing agreements
or other agreements (the "Agreements") to be entered into by and among, among
others, the Corporation, the trustee or trustees named therein (collectively,
the "Trustee") and any other entity or entities acting as servicer or servicers
of such Receivables;
(d) to issue and sell one or more series and classes of
certificates, bonds, notes or other evidences of indebtedness secured or
collateralized by one or more pools of Receivables and/or by certificates of any
class issued by one or more Trusts and/or by designated assets (collectively,
the "Certificates"), provided that no such Certificate shall impose liability on
the Corporation except to the extent of the one of more pools of Receivables
and/or the Certificates securing or collateralizing such Certificates and/or the
designated assets;
(e) to hold and enjoy all of the rights and privileges
of any certificates issued by the Trusts to the Corporation under the related
Agreements and to hold and enjoy all of the rights and privileges of any class
of any series of Certificates, including any class of Certificates which may be
subordinate to any other class of Certificates and except to the extent
otherwise provided in any Certificate or Agreement, to sell, assign, pledge or
otherwise transfer any such Certificates or any interest therein;
(f) to perform its obligations under the Agreements
pursuant to which any Certificates are issued; and
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(g) to engage in any activity and to exercise any powers
permitted to corporations under the laws of the State of Delaware that are
related or incidental to the foregoing and necessary, convenient or advisable to
accomplish the foregoing.
ARTICLE IV
CORPORATE RESTRICTIONS
(a) Notwithstanding any other provision of this
Certificate of Incorporation and any provision of law that otherwise so empowers
the Corporation, the Corporation shall not, without the prior written consent of
each nationally recognized rating agency which has been requested by the
Corporation to rate any issue of any series or class of Certificates issued
pursuant to any Agreement and which is then rating such Certificates, do any of
the following:
(i) engage in any business or activity other
than those set forth in Article III;
(ii) incur any indebtedness, or assume or
guaranty any indebtedness of any other entity, other than (x) any
indebtedness incurred in connection with Certificates and (y) any
indebtedness to Yamaha Motor Corporation, U.S.A. or any affiliate
thereof incurred in connection with the acquisition of Receivables,
which indebtedness shall be subordinated to all other obligations of
the Corporation;
(iii) dissolve or liquidate; consolidate or
merge with or into any other entity or convey or transfer its
properties and assets substantially as an entirety to any entity,
unless:
(x) the entity (if other than the
Corporation) formed or surviving the consolidation or merger
or which acquires the properties and assets of the Corporation
is organized and existing under the laws of any State of the
United States or the District of Columbia, expressly assumes
the due and punctual payment or performance of, any and all
obligations of the Corporation, including those obligations of
the Corporation under any Agreement, and has a Certificate of
Incorporation containing provisions substantially identical to
the provisions of Article III, this Article IV, Article XIV
and Article XVI; and
(y) immediately after giving effect to
the transaction, no default or event of default has occurred
and is continuing under any indebtedness of the Corporation or
any agreements relating to such indebtedness; or
(iv) without the affirmative vote of 100% of the
members of the Board of Directors of the Corporation, institute
proceedings to be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against it, or
file a
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petition seeking or consent to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or consent to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Corporation or a
substantial part of its property, or make any assignment for the
benefit of creditors, or admit in writing its inability to pay its
debts generally as they become due, or take corporate action in
furtherance of any such action.
(b) The Board of Directors shall at all times include
at least two individuals who are Independent Directors. An "Independent
Director" shall be an individual who is not at such time, and shall not have
been at any time during the preceding five years, a director, officer, employee
or affiliate of Yamaha Motor Company, Ltd. or any of its subsidiaries or
affiliates, or of any major creditor thereof, and who is not the beneficial
owner, at the time of such individual's appointment as an Independent Director
or at any time thereafter while serving as an Independent Director, of more than
1,000 shares in the aggregate of all classes of common stock of Yamaha Motor
Company, Ltd. or any of its other subsidiaries or affiliates, or if greater,
such number of shares the value of which constitutes more than 10% of such
individual's net worth. The term "major creditor" shall mean a financial
institution to which Yamaha Motor Company, Ltd. or any of its other subsidiaries
or affiliates has outstanding indebtedness for borrowed money in a sum
sufficiently large as would reasonably be expected to influence the judgment of
the proposed Independent Director adversely to the interests of the Corporation
when its interests are adverse to those of Yamaha Motor Company, Ltd. or any of
its other subsidiaries or affiliates.
(c) Notwithstanding any other provision of this
Certificate of Incorporation and any provision of law that otherwise so empowers
the Corporation, the Corporation shall not, after March 31, 1995, have the power
to:
(i) transfer Receivables to a Trust in
contemplation of the issuance of Certificates by such Trust, or
(ii) issue additional Certificates (any such
Certificates, the "Additional Certificates"),
unless each nationally recognized rating agency which has
been requested by the Corporation or the Trust to rate any issue of outstanding
Certificates, whether issued by a Trust or the Corporation, and which has issued
such a rating, confirms in writing that the issuance of the Additional
Certificates, in and of itself, will not cause such rating agency to lower or
downgrade its then current rating on the outstanding Certificates; provided
that, for purposes of this limitation, Receivables transferred to Trusts and
Additional Certificates shall not include any Receivables transferred to, or
Certificates issued by or in connection with, either the Yamaha Motor Master
Trust, a trust organized under the laws of New York, pursuant to a Master
Pooling and Servicing Agreement, dated as of March 1, 1994, as amended or
supplemented, or Yamaha Motor Owner Trust, a Delaware business trust.
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ARTICLE V
CAPITAL STOCK
The total number of shares of capital stock that the
Corporation shall have authority to issue is ten thousand (10,000) shares
designated as Common Stock and the par value of each such share of Common Stock
is one dollar ($1.00), amounting in the aggregate to ten thousand dollars
($10,000).
ARTICLE VI
DENIAL OF PREEMPTIVE RIGHTS
No holder of any class of capital stock of the Corporation,
whether now or hereafter authorized, shall be entitled, as such, as a matter of
right, to subscribe for or purchase any part of any new or additional issue of
capital stock of the Corporation of any class whatsoever, or of securities
convertible into or exchangeable for capital stock of the Corporation of any
class whatsoever, whether now or hereafter authorized, or whether issued for
cash, property or services.
ARTICLE VII
DIRECTORS PROTECTED
A director shall be fully protected in relying in good faith
upon the books of account or other records of the Corporation or statements
prepared by any of its officers or by independent public accountants or by an
appraiser selected with reasonable care by the Board of Directors as to the
value and amount of the assets, liabilities and/or net profits of the
Corporation, or any other facts pertinent to the existence and amount of surplus
or other funds from which dividends might properly be declared and paid, or with
which the Corporation's capital stock might properly be purchased or redeemed.
ARTICLE VIII
CORPORATE EXISTENCE
The Corporation is to have perpetual existence.
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ARTICLE IX
NO LIABILITY OF HOLDERS OF CAPITAL STOCK FOR
CORPORATE DEBTS
The holders of the capital stock of the Corporation shall not
be personally liable for the payment of the Corporation's debts and the private
property of the holders of the capital stock of the Corporation shall not be
subject to the payment of debts of the Corporation to any extent whatsoever.
ARTICLE X
POWERS OF BOARD OF DIRECTORS
In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors of the Corporation is expressly authorized:
(a) To make, alter, amend or repeal the By-Laws, except
as otherwise expressly provided in any By-Law made by the holders of the capital
stock of the Corporation entitled to vote thereon. Any By-Law may be altered,
amended or repealed by the holders of the capital stock of the Corporation
entitled to vote thereon at any annual meeting or at any special meeting called
for that purpose.
(b) Subject to the provisions of Article III, to take,
lease, purchase or otherwise acquire, and to own, use, hold, sell, convey,
exchange, lease, mortgage or otherwise encumber, work, improve, develop, divide
and otherwise handle, deal in, dispose of real estate, real and personal
property and any interest or right therein.
(c) To determine the use and disposition of any surplus
and net profits of the Corporation, including the determination of the amount of
working capital required, to set apart out of any of the funds of the
Corporation, whether or not available for dividends, a reserve or reserves for
any proper purpose and to abolish any such reserve in the manner in which it was
created.
(d) To designate, by resolution passed by a majority of
the whole Board of Directors, one or more committees, each committee to consist
of one or more directors of the Corporation, which, to the extent provided in
the resolution designating the committee or in the By-Laws of the Corporation,
shall, subject to the limitations prescribed by law, have and may exercise all
the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require such seal. Such
committee or committees shall have such name or names as may be provided in the
By-Laws of the Corporation or as may be determined from time to time by
resolution adopted by a majority of the whole Board of Directors.
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(e) To adopt such pension, retirement, deferred
compensation or other employee benefit plans or provisions as may, from time to
time, be approved by it, providing for pensions, retirement income, deferred
compensation or other benefits for officers or employees of the Corporation and
of any corporation which is a subsidiary of the Corporation, or any of them, in
consideration for or in recognition of the services rendered by such officers or
employees or as an inducement to future efforts. No such plan or provision
which is not at the time of adoption unreasonable or unfair shall be invalidated
or in any way affected because any director shall be a beneficiary thereunder or
shall vote for any plan or provision under which he may benefit.
(f) To exercise, in addition to the powers and
authorities hereinbefore or by law conferred upon it, any such powers and
authorities and do all such acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the provisions of the laws of the State
of Delaware and of the Certificate of Incorporation and of the By-Laws of the
Corporation.
ARTICLE XI
TRANSACTIONS WITH DIRECTORS AND OFFICERS
No contract or transaction between the Corporation and one
or more of its directors or officers, or between the Corporation and any other
corporation, partnership, association or other organization in which one or more
of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
board or committee thereof which authorizes the contract or transaction, or
solely because any such director's or officer's votes are counted for such
purpose, if (1) the material facts as to the director's or officer's
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or the committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum, or (2) the material facts as to
the director's or officer's relationship or interest and as to the contract or
transaction are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
by vote of the stockholders, or (3) the contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or ratified by the
Board of Directors, a committee thereof or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or of a committee which authorizes the
contract or transaction.
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ARTICLE XII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND
OTHERS
(a) Any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Corporation), by reason of the fact that the
person is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, shall be indemnified and held harmless by the Corporation to
the fullest extent legally permissible under the General Corporation Law of the
State of Delaware, as amended from time to time, against all expenses,
liabilities and losses (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.
(b) To the extent that a present or former director,
officer, employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in
paragraph (a) of this Article XII, or in defense of any claim, issue or matter
therein, such person shall be indemnified by the Corporation against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection therewith without the necessity of any action being taken by the
Corporation other than the determination, in good faith, that such defense has
been successful. In all other cases wherein indemnification is provided by this
Article, unless ordered by a court, indemnification shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or agent is
proper in the circumstances because the person has met the applicable standard
of conduct specified in this Article XII. Such determination shall be made,
with respect to a person who is a director or officer at the time of such
determination (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion or (4) by
the holders of a majority of the shares of capital stock of the Corporation
entitled to vote thereon.
(c) The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person
seeking indemnification did not act in good faith and in a manner which the
person reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person's conduct was unlawful. Entry of a
judgment by consent as part of a settlement shall not be deemed a final
adjudication of liability for negligence or misconduct in the performance of
duty, nor of any other issue or matter.
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(d) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors in the specific case upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
unless it shall ultimately be determined that such person is entitled to be
indemnified by the Corporation. Expenses (including attorneys' fees) incurred
by former directors and officers or other employees or agents of the Corporation
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the Corporation upon such terms and conditions, if
any, as the Corporation deems appropriate.
(e) No director shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for breach
of the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit. No amendment to or repeal of this Section
(e) to Article XII shall apply to or have any effect on the liability or
alleged liability of any director of the Corporation for or with respect to any
acts or omissions of such director occurring prior to such amendment.
(f) The indemnification and advancement of expenses
provided by this Article XII shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement may be entitled under any
By-Law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in an official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such person.
(g) Notwithstanding the foregoing provisions of this
Article XII, amounts payable by the Corporation in accordance with this Article
XII shall be payable solely to the extent of funds actually received by the
Corporation that are in excess of funds necessary to satisfy the obligations of
the Corporation pursuant to the Agreements.
ARTICLE XIII
COMPROMISE OR ARRANGEMENT BETWEEN
CORPORATION AND ITS CREDITORS OR STOCKHOLDERS
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class
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of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said recognition shall,
if sanctioned by the court to which the said application has been made, be
binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
ARTICLE XIV
RESERVATION OF RIGHT TO AMEND CERTIFICATE OF
INCORPORATION
Without the prior written consent of each nationally
recognized rating agency which has been requested by the Corporation to rate any
issue of Certificates issued pursuant to any Agreement or any series or class of
Certificates and which is then rating such Certificates, the Corporation shall
not amend, alter, change or repeal Article III, Article IV, this Article XIV or
Article XVI. Subject to the foregoing limitation, the Corporation reserves the
right to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, in the manner now or hereafter prescribed by the
law of the State of Delaware, and all rights of the stockholders herein are
granted subject to this reservation.
ARTICLE XV
ELECTION OF DIRECTORS
Elections of directors need not be by written ballot unless
the By-Laws of the Corporation shall so provide.
ARTICLE XVI
CORPORATE PROCEDURES
(a) The Corporation's assets will not be commingled with
those of any direct or ultimate parent of the Corporation except as otherwise
permitted under (i) Master Pooling and Servicing Agreement, dated as of March 1,
1994, by and among the Corporation, as Transferor, Yamaha Motor Corporation,
U.S.A., as Servicer, and the Fuji Bank and Trust Company, as Trustee on behalf
of the Certificateholders of the Yamaha Motor Master Trust, as the same may be
amended or supplemented from time to time or (ii) Sale and Servicing Agreement,
dated as of March 30, 1995, by and among the Corporation, as Purchaser, Yamaha
Motor Corporation, U.S.A., as Servicer, and the Bank of Tokyo Trust Company, as
Collateral Trustee, as the same may be amended or supplemented from time to
time.
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(b) The Corporation will maintain separate corporate
records and books of account from those of any direct or ultimate parent of the
Corporation.
(c) The Corporation will conduct its business from office
space that is separate from any direct or ultimate parent of the Corporation.
ARTICLE XVII
SECTION 203 ELECTION
The Corporation expressly elects not to be governed by Section
203 of the General Corporation Law of the State of Delaware.
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================================================================================
AMENDED AND RESTATED
MASTER POOLING AND SERVICING AGREEMENT
by and among
------------
YAMAHA MOTOR RECEIVABLES CORPORATION,
as Transferor
YAMAHA MOTOR CORPORATION, U.S.A.,
as Servicer
and
THE FUJI BANK AND TRUST COMPANY,
as Trustee on behalf of
the Certificateholders of the
Yamaha Motor Master Trust
Originally dated as of March 1, 1994
Amended and Restated as of May 1, 1999
================================================================================
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.................................................................................1
SECTION 1.2 Other Definitional Provisions..............................................................15
ARTICLE II
APPOINTMENT OF TRUSTEE;
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
SECTION 2.1 Appointment of Trustee; Conveyance of Receivables; Grant...................................16
SECTION 2.2 Acceptance by Trustee......................................................................17
SECTION 2.3 Representations and Warranties.............................................................18
SECTION 2.4 Representations and Warranties of the Transferor Relating to the
Receivables................................................................................20
SECTION 2.5 Covenants of the Transferor................................................................23
SECTION 2.6 Addition of Accounts.......................................................................25
SECTION 2.7 Removal of Accounts........................................................................26
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
SECTION 3.1 Acceptance of Appointment and Other Matters Relating to the
Servicer...................................................................................28
SECTION 3.2 Servicing Compensation.....................................................................29
SECTION 3.3 Representations, Warranties and Covenants of the Servicer..................................30
SECTION 3.4 Reports and Records for the Trustee........................................................32
SECTION 3.5 Annual Servicer's Certificate..............................................................33
SECTION 3.6 Annual Independent Public Accountants' Servicing Report....................................33
SECTION 3.7 Tax Treatment..............................................................................34
SECTION 3.8 Adjustments................................................................................34
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
SECTION 4.1 Establishment of Collection Account and Allocations with
Respect to the Exchangeable Transferor's Certificate.......................................36
SECTION 4.2 Establishment and Maintenance of the Special Funding Account...............................39
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ARTICLE V
[ARTICLE V IS RESERVED AND MAY
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE VI
THE CERTIFICATES
SECTION 6.1 The Certificates...........................................................................43
SECTION 6.2 Authentication of Certificates.............................................................43
SECTION 6.3 Registration of Transfer and Exchange of Certificates......................................43
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen Certificates..........................................46
SECTION 6.5 Persons Deemed Owners......................................................................46
SECTION 6.6 Appointment of Paying Agent................................................................46
SECTION 6.7 Access to List of Certificateholders' Names and Addresses..................................47
SECTION 6.8 Authenticating Agent.......................................................................47
SECTION 6.9 Issuance of Additional Series of Certificates..............................................48
SECTION 6.10 Book-Entry Certificates....................................................................49
SECTION 6.11 Notices to Clearing Agency.................................................................50
SECTION 6.12 Definitive Certificates....................................................................50
SECTION 6.13 Meetings of Certificateholders.............................................................51
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
SECTION 7.1 Liability of the Transferor................................................................53
SECTION 7.2 Merger or Consolidation of, or Assumption of the Obligation of,
the Transferor.............................................................................53
SECTION 7.3 Limitation on Liability of the Transferor..................................................53
SECTION 7.4 Liabilities................................................................................54
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
SECTION 8.1 Liability of the Servicer..................................................................55
SECTION 8.2 Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer...........................................................................55
SECTION 8.3 Limitation on Liability of the Servicer and Others.........................................55
SECTION 8.4 Indemnification of the Trust and the Trustee...............................................56
SECTION 8.5 The Servicer Not to Resign.................................................................56
SECTION 8.6 Access to Certain Documentation and Information Regarding the
Receivables................................................................................56
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SECTION 8.7 Delegation of Duties.......................................................................57
SECTION 8.8 Examination of Records.....................................................................57
ARTICLE IX
EARLY AMORTIZATION EVENTS
SECTION 9.1 Early Amortization Events..................................................................58
SECTION 9.2 Additional Rights Upon the Occurrence of Certain Events....................................59
ARTICLE X
SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults..........................................................................61
SECTION 10.2 Trustee to Act; Appointment of Successor...................................................62
SECTION 10.3 Notification to Certificateholders.........................................................64
SECTION 10.4 Waiver of Past Defaults....................................................................64
ARTICLE XI
THE TRUSTEE
SECTION 11.1 Duties of Trustee..........................................................................65
SECTION 11.2 Certain Matters Affecting the Trustee......................................................66
SECTION 11.3 Trustee Not Liable for Recitals in Certificates............................................68
SECTION 11.4 Trustee May Own Certificates...............................................................68
SECTION 11.5 The Servicer to Pay Trustee's Fees and Expenses............................................68
SECTION 11.6 Eligibility Requirements for Trustee.......................................................68
SECTION 11.7 Resignation or Removal of Trustee..........................................................69
SECTION 11.8 Successor Trustee..........................................................................69
SECTION 11.9 Merger or Consolidation of Trustee.........................................................70
SECTION 11.10 Appointment of Co-Trustee or Separate Trustee..............................................70
SECTION 11.11 Tax Returns................................................................................71
SECTION 11.12 Trustee May Enforce Claims Without Possession of Certificates..............................71
SECTION 11.13 Suits for Enforcement......................................................................71
SECTION 11.14 Rights of Certificateholders to Direct Trustee.............................................71
SECTION 11.15 Representations and Warranties of Trustee..................................................72
SECTION 11.16 Maintenance of Office or Agency............................................................72
SECTION 11.17 Indemnification of the Trustee.............................................................72
ARTICLE XII
TERMINATION
SECTION 12.1 Termination of Trust.......................................................................73
SECTION 12.2 Optional Purchase; Final Termination Date of Investor
Certificates of any Series.................................................................73
SECTION 12.3 Final Payment with Respect to any Series...................................................74
SECTION 12.4 Transferor's Termination Rights............................................................75
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment..................................................................................76
SECTION 13.2 Protection of Right, Title and Interest to Trust...........................................77
SECTION 13.3 Limitation on Rights of Certificateholders.................................................78
SECTION 13.4 Governing Law..............................................................................78
SECTION 13.5 Notices....................................................................................78
SECTION 13.6 Severability of Provisions.................................................................79
SECTION 13.7 Assignment.................................................................................79
SECTION 13.8 Certificates Nonassessable and Fully Paid..................................................79
SECTION 13.9 Further Assurances.........................................................................79
SECTION 13.10 No Waiver; Cumulative Remedies.............................................................79
SECTION 13.11 Counterparts...............................................................................79
SECTION 13.12 Third-Party Beneficiaries..................................................................80
SECTION 13.13 Actions by Certificateholders..............................................................80
SECTION 13.14 Merger and Integration.....................................................................80
SECTION 13.15 Headings...................................................................................80
SECTION 13.16 Certificates and Opinions of Counsel.......................................................80
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EXHIBITS AND SCHEDULES
EXHIBIT A Depositary Agreement
EXHIBIT B Form of Exchangeable Transferor's Certificate
EXHIBIT C Form of Reassignment
EXHIBIT D Form of Initial Servicer Report
EXHIBIT E Form of Determination Date Statement
EXHIBIT F Form of Annual Servicer's Certificate
EXHIBIT G Form of Opinion of Counsel
SCHEDULE 1 List of Accounts
SCHEDULE 2 Collection Account
<PAGE>
AMENDED AND RESTATED MASTER POOLING AND SERVICING AGREEMENT, dated as
of May 1, 1999 (this "Agreement"), by and among YAMAHA MOTOR RECEIVABLES
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware, as Transferor, YAMAHA MOTOR CORPORATION, U.S.A., a corporation
organized and existing under the laws of the State of California, as Servicer,
and THE FUJI BANK AND TRUST COMPANY, a banking corporation organized under the
laws of the State of New York, as Trustee.
WHEREAS, the Transferor, the Servicer and the Trustee have entered into
that certain Master Pooling and Servicing Agreement, dated as of March 1, 1994
(the "Original Pooling and Servicing Agreement") and that certain Amendment No.
1 to Master Pooling and Servicing Agreement, dated as of October 1, 1995
("Amendment No. 1"); and
WHEREAS, the parties wish to amend and restate the Original Pooling and
Servicing Agreement to include Amendment No. 1 and to cure certain ambiguities
and clarify specified provisions to reflect the parties' understanding and
course of conduct with respect thereto.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other party and for the benefit of the
Certificateholders and any Enhancement Provider:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Account" shall mean each individual wholesale financing arrangement
established by DFS with a Dealer pursuant to a Floorplan Financing Agreement,
including without limitation, Initial Accounts. For purposes of calculating the
aggregate amount of the Receivables with respect to an Account at any time under
this Agreement, the term Account shall not include any Removed Accounts which
are reassigned or assigned to the Transferor or the Servicer in accordance with
the terms of this Agreement.
"Accumulation Period", with respect to any Series, shall have the
meaning specified in the applicable Supplement.
"Adjustment Payment" shall have the meaning specified in Section
3.8(a).
"Affiliate" of any Person shall mean any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For purposes of their definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Invested Amount" shall mean, with respect to any date of
determination, the sum of the Invested Amounts with respect to all Series of
Investor Certificates then outstanding.
"Agreement" shall mean this Amended and Restated Master Pooling and
Servicing Agreement and all amendments hereof and supplements hereto, including
any Supplement.
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"Amortization Period" shall mean, with respect to any Series, the
period following the Revolving Period which shall be the Accumulation Period or
Early Amortization Period (each as defined in any related Supplement).
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in Section 9.2.
"Authorized Newspaper" shall mean one or more newspapers of general
circulation in the Borough of Manhattan, The City of New York, printed in the
English language and customarily published on each Business Day, whether or not
published on Saturdays, Sundays and holidays.
"Available Subordinated Amount" shall mean, as of any date of
determination, the sum of the Available Subordinated Amounts then in effect
pursuant to all Supplements.
"Book-Entry Certificates" shall mean beneficial interests in the
Investor Certificates, ownership and transfers of which shall be evidenced or
made through book entries by a Clearing Agency as described in Section 6.10;
provided that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer permitted and Definitive Certificates
are issued to the Certificate Owners, such Definitive Certificates shall replace
Book-Entry Certificates.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in The City of New York are authorized or
obligated by law or executive order to be closed.
"Certificate" shall mean one of any Series of the Investor Certificates
or the Exchangeable Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register.
"Certificateholders' Interest" shall have the meaning specified in the
applicable Supplement.
"Certificate Interest" shall mean, with respect to a Certificate or
Series of Certificates, the interest accrued through the last day of an interest
accrual period.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly or as an
indirect participant, in accordance with the rules of such Clearing Agency).
"Certificate Principal" shall mean principal payable with respect to
the applicable Series of Investor Certificates pursuant to the applicable
Supplement.
"Certificate Rate" shall mean, with respect to any Series of
Certificates, the percentage (or formula on the basis of which such rate shall
be determined) stated in the applicable Supplement; provided that, unless
otherwise provided in the applicable Supplement to the Pooling and Serving
Agreement, in each case such rate shall be calculated on the basis of a 360-day
year consisting of twelve 30-day months.
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"Certificate Register" shall mean the register maintained pursuant to
Section 6.3, providing for the registration of the applicable Certificates and
transfers and exchanges thereof.
"Class" shall mean, with respect to any Series, any one of the classes
of Investor Certificates of that Series.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended, or any successor provision thereto.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of
initial issuance of such Series of Certificates, as specified in the related
Supplement.
"Collection Account" shall have the meaning specified in Section 4.1.
"Collections" shall mean all payments (excluding Recoveries, except as
provided herein) received by the Servicer or DFS with respect to the
Receivables, in the form of cash, checks, drafts, wire transfers or other form
of payment in accordance with the related Floorplan Financing Agreements in
effect from time to time; provided, that if, in any Collection Period, the
aggregate amount of Recoveries exceeds the amount of Defaulted Receivables for
such Collection Period, such excess shall be treated as Collections.
"Collection Period" shall mean, unless otherwise provided in a
Supplement, with respect to a Distribution Date for each Account, the period
from and including the first day of a calendar month and ending at the close of
business on the last day of such calendar month.
"Concentration Account" shall have the meaning specified in Section
3.3(a)(x).
"Controlled Amortization Period" with respect to any Series, shall have
the meaning specified in the applicable Supplement.
"Corporate Trust Office" shall mean the principal office of the Trustee
at which at any particular time its corporate business shall be administered,
which office at the date of the execution of this Agreement is located at Two
World Trade Center, 81st Floor, New York, New York 10048, Attention: Corporate
Trust Division.
"Cut-Off Date" shall mean, for each Initial Account, the close of
business on January 31, 1994.
"Date of Processing" shall mean, with respect to any transaction, the
Business Day after such transaction is first output in written form under DFS'
customary and usual servicing practices, from DFS' computer file of Accounts
(without regard to the effective date of such recordation).
"Dealer" shall mean a Person which has entered into a revolving
financing arrangement with DFS for the purpose of purchasing motorized products
manufactured by Yamaha Motor Manufacturing Corporation of America, Yamaha Motor
Company, Ltd. or Tennessee Watercraft, Inc. and distributed by
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Yamaha Motor Corporation, U.S.A. and holding such vehicles or other motorized
products for sale or lease in the ordinary course of its business.
"Dealer Replacement Account" shall have the meaning specified in
Section 2.6.
"Defaulted Receivable" shall mean, for any Collection Period, a
Receivable that has been charged off during such Collection Period. The
aggregate amount of Defaulted Receivables shall equal the product of (i) one
minus the Yield Factor and (ii) the aggregate amount of the Receivables that
were charged off during such Collection Period.
"Deficit Controlled Amortization Amount" shall have the meaning
specified in the applicable Supplement.
"Definitive Certificates" shall have the meaning specified in Section
6.10.
"Depository Agreement" shall mean the agreement among the Transferor,
the Trustee and the initial Clearing Agency, dated as of the Initial Closing
Date, in the form attached hereto as Exhibit A.
"Determination Date" shall mean, for the period from March 1, 1994 to
September 30, 1995, the fifth Business Day prior to each Distribution Date; and,
on and after October 1, 1995, the Business Day immediately preceding the fifth
calendar day prior to each Distribution Date.
"DFS" shall mean Deutsche Financial Services Corporation, a Nevada
corporation, and its successors and assigns, as successor to ITT Commercial
Finance Corp., a Nevada corporation.
"Dissolution Event" shall have the meaning specified in Section 9.2(a).
"Distribution Date" shall mean, with respect to the Series 1994-1,
Class A Asset-Backed Certificates, (i) April 15, 1994 and the fifteenth day of
each calendar month thereafter, or, if such fifteenth day is not a Business Day,
the next succeeding Business Day and (ii) the Expected Final Payment Date and,
with respect to any other Series of Certificates, the date or dates specified in
the applicable Supplement.
"Early Amortization Event" shall have, with respect to each Series, the
meaning specified in Section 9.1.
"Early Amortization Period" with respect to any Series, shall have the
meaning specified in the applicable Supplement.
"Eligible Account" shall mean, as of any date of determination, any
Account listed on Schedule 1 or otherwise added pursuant to Section 2.6, and
excluding any Removed Account.
"Eligible Deposit Account" shall mean 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, including the District of
Columbia (or any domestic branch of a foreign bank), and acting as a trustee for
funds deposited in such account, for so long as any of the securities of such
depository institution or its parent shall have a credit rating from each Rating
Agency in one of its generic credit rating categories which signifies investment
grade.
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"Eligible Deposit Account Property" shall have the meaning specified in
Section 4.1(h).
"Eligible Institution" shall mean a depository institution (which may
be the Trustee) organized under the laws of the United States or any one of the
states thereof which at all times (a) has itself, or has a parent which has,
either (i) a long-term unsecured debt rating of "A2" or better by Moody's or
(ii) a certificate of deposit rating of "P-1" by Moody's, (b) has itself, or has
a parent which has, either (i) a long-term unsecured debt rating of "AAA" by
Standard & Poor's or (ii) a certificate of deposit rating of "A-1+" by Standard
& Poor's and (c) is a member of the FDIC.
"Eligible Investments" shall mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which mature on or prior to the next succeeding Transfer Date and which
evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or
trust companies incorporated under the laws of the United States of America or
any state thereof (or domestic branches of foreign banks) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided that at the time of the Trust's investment or
contractual commitment to invest therein, the short-term debt rating of such
depository institution or trust company shall be in the highest investment
category of each Rating Agency;
(c) commercial paper or other short-term obligations having, at the
time of the Trust's investment or contractual commitment to invest therein, a
rating from each Rating Agency in its highest investment category;
(d) demand deposits, time deposits and certificates of deposit which
are fully insured by the Federal Deposit Insurance Corporation, with a person
the commercial paper of which has a credit rating from each Rating Agency in its
highest investment category;
(e) notes or bankers' acceptances (having original maturities of no
more than 365 days) issued by any depository institution or trust company
referred to in (b) above;
(f) investments in money market funds rated in the highest investment
category by each Rating Agency or otherwise approved in writing by each Rating
Agency;
(g) time deposits, other than as referred to in clause (d) above, with
a Person the commercial paper of which has a credit rating from each Rating
Agency in its highest investment category; or
(h) any other investments approved in writing by each Rating Agency.
provided that no instrument shall be an Eligible Investment if such instrument
evidences either (a) a right to receive only interest payments with respect to
the obligation underlying such instrument, or (b) a right to receive both
principal and interest payments derived from obligations underlying such
instrument where the interest and principal payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
"Eligible Receivable" shall mean each Receivable:
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(a) which was originated or acquired by the Servicer in the ordinary
course of business;
(b) which (i) arose under an Eligible Account and (ii) is payable in
United States dollars;
(c) which is owned by the Servicer at the time of sale by the Servicer
to the Transferor;
(d) which represents the obligation of a Dealer to repay an extension
of credit made to such Dealer by DFS to finance such Dealer's acquisition of
Products from Yamaha Motor Corporation, U.S.A.;
(e) which at the time of creation and, except at the Closing Date for
the initial Series, in the case of Receivables in respect of which the related
financed Product has been sold by the Dealer, at the time of transfer to the
Trust is secured by, inter alia, a perfected security or ownership interest in
the Product 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, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by the Servicer or the
Transferor in connection with the creation of such Receivable or the transfer
thereof by the Servicer to the Transferor or by the Transferor to the Trust or
the execution, delivery and performance by DFS of the Floorplan Financing
Agreement pursuant to which such Receivable was created, have been duly
obtained, effected or given and are in full force and effect;
(h) as to which at all times following the transfer of such Receivable
by the Transferor 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 (except for Liens of a lesser priority than the Lien of the Trust),
other than Liens permitted by this Agreement;
(i) which has been the subject of a valid transfer and assignment from
the Transferor to the Trust of all the Transferor's right, title and interest
therein (including any proceeds thereof);
(j) which will at all times be the legal, valid, binding 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, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);
(k) which at the time of transfer to the Trust is not subject to any
right of rescission, setoff, counterclaim or any other defense (including
defenses arising out of violations of usury laws) of the Dealer;
(l) as to which, at the time of transfer of such Receivable to the
Trust, the Servicer, DFS and the Transferor 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 the Servicer, DFS nor the Transferor has taken, or failed to take
any action, which would impair the rights of the Trust or the Certificateholders
therein; and
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(n) which constitutes an "account", "chattel paper" or a "general
intangible" as defined in Article 9 of the UCC as then in effect in the State of
California; and
(o) which, effective as of the last day of any Collection Period
commencing after the Series 1995-1 Asset-Backed Certificates and Series 1998-1
Asset-Backed Certificates have been retired, when aggregated with the balance
of all other Receivables due from such Dealer, does not exceed 1% of the Pool
Balance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Enhancement" shall mean, with respect to any Series or class of
Certificates within a Series, any letter of credit, guaranteed rate agreement,
maturity guaranty facility, cash collateral account, cash collateral guaranty,
tax protection agreement, interest rate swap or other contract or agreement for
the benefit of Certificateholders of such Series or class, as applicable.
"Enhancement Provider" shall mean, with respect to any Enhancement, the
lender, guarantor, swap provider or other provider of such Enhancement specified
in the related Supplement.
"Excess Principal Collections" shall mean, with respect to a
Distribution Date, the aggregate amount for all outstanding Series of Principal
Collections which the related Supplements specify are to be treated as "Excess
Principal Collections" for such Distribution Date, as more fully described in
Section 4.1(f).
"Exchangeable Transferor Certificate" shall mean the certificate
executed by the Transferor and authenticated by the Trustee, substantially in
the form of Exhibit B.
"Expected Final Payment Date" shall mean that date specified in the
applicable Supplement when Investor Certificateholders' principal is expected to
be paid in full, or if such day is not a Business Day, on the next succeeding
Business Day.
"FDIC" shall mean the Federal Deposit Insurance Corporation, or any
successor thereto.
"Final Termination Date" shall have the meaning specified in Section
12.1(a).
"Fixed Allocation Percentage" shall, with respect to any Series, have
the meaning specified in the applicable Supplement.
"Floating Allocation Percentage" shall, with respect to any Series,
have the meaning specified in the applicable Supplement.
"Floorplan Financing Agreement" shall mean, collectively, the group of
related agreements between and among Yamaha Motor Corporation, U.S.A., DFS and a
particular Dealer and pursuant to which (a) DFS agrees to extend credit to such
Dealer to finance the Dealer's purchase of Products distributed by Yamaha Motor
Corporation, U.S.A., (b) such Dealer grants to DFS a purchase money security
interest in the specific Products financed by DFS, certain other Products,
certain other collateral and the proceeds thereof, (c) such Dealer agrees to
repay such extensions of credit made by DFS within a certain specified period of
time and (d) the obligations of such Dealer to repay such extensions of credit
by DFS may be evidenced by one or more promissory notes of such Dealer in favor
of DFS.
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"Floorplan Financing Guidelines" shall mean DFS' written policies and
procedures with respect to the financing of Products, as such policies and
procedures may be amended, supplemented or otherwise modified and in effect from
time to time, (a) relating to the operation of its floorplan financing business,
including the written policies and procedures for determining the interest rate
charged to Dealers, the other terms and conditions relating to DFS' wholesale
financing accounts, the creditworthiness of Dealers and DFS' extension of credit
to Dealers, and (b) relating to the maintenance of accounts and collection of
receivables.
"Governmental Authority" shall mean the United States of America, any
state or other political subdivision thereof and any United States entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Holder" shall mean the Person in whose name a Certificate is
registered in the Certificate Register.
"Initial Account" shall mean each individual wholesale financing
arrangement established by DFS with a Dealer pursuant to a Floorplan Financing
Agreement which is identified on Schedule 1 hereto delivered to the Trustee on
the Closing Date of the initial Series by the Transferor.
"Initial Closing Date" shall mean March 24, 1994.
"Initial Invested Amount" shall mean, with respect to any Series, the
amount stated in the applicable Supplement.
"Initial Servicer Report" shall mean the Officer's Certificate
delivered by the Servicer to the Trustee and the Rating Agencies in accordance
with Section 3.4 hereof and substantially in the form of Exhibit D hereto.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
"Invested Amount" shall mean, with respect to any Series, the meaning
specified in the applicable Supplement.
"Invested Percentage" shall have, with respect to each Series, the
meaning set forth in the applicable Supplement.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended.
"Investor Certificate" shall mean any one of the certificates executed
by the Transferor pursuant to this Agreement and authenticated by the Trustee
substantially in the form attached to the applicable Supplement.
"Investor Certificateholder" shall mean the holder of record of an
Investor Certificate.
"Investor Charge-Offs" shall have, with respect to each Series, the
meaning specified in the applicable Supplement.
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"Investor Default Amount" shall mean, with respect to each Series for
any Collection Period, an amount equal to the product of (a) the Floating
Allocation Percentage applicable during the immediately preceding Collection
Period and (b) the amount of Defaulted Receivables for such Collection Period
less the amount of Recoveries received by the Servicer in such Collection Period
and less the full amount of any Defaulted Receivables as to which the Transferor
or Servicer became obligated to accept reassignment for such Collection Period,
unless certain events of bankruptcy, insolvency or receivership have occurred
with respect to the Transferor, the Servicer or DFS.
"Investor Monthly Servicing Fee" shall have, with respect to each
Series, the meaning specified in Section 3.2.
"ITT" shall mean ITT Commercial Finance Corp., a Nevada corporation, as
predecessor to DFS.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the Uniform Commercial
Code (other than any such financing statement filed for informational purposes
only) or comparable law of any jurisdiction to evidence any of the foregoing.
"Loan Amount" shall mean an amount equal to the sum of the outstanding
(i) principal and interest payable on the Certificates, (ii) Monthly Servicing
Fee payable pursuant to Section 3.2 hereof and (iii) Trustee's fees and expenses
payable pursuant to Section 11.5 hereof.
"Minimum Transferor Percentage" shall mean, with respect to any
Collection Period with respect to any Series, the percentage specified in the
applicable Supplement.
"Minimum Trust Principal Component" shall mean the aggregate of the
amounts set forth in each Supplement for each outstanding Series as the "Minimum
Trust Principal Component" for such Series.
"Monthly Certificateholder's Statement" shall have the meaning
specified in the applicable Supplement.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.2.
"Moody's" shall mean Moody's Investors Service, Inc.
"New Account" shall have the meaning specified in Section 2.6.
"Notes" shall have the meaning specified in Section 2.5(e).
"Officer's Certificate" shall mean a certificate signed by any Vice
President or more senior officer of the Transferor, the Servicer or DFS.
"Opinion of Counsel" shall mean a written opinion of independent
counsel, who may be counsel for the Transferor, and which shall be reasonably
acceptable to the Trustee.
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"Paying Agent" shall mean any paying agent appointed pursuant to
Section 6.6 and which shall initially be the Trustee.
"Permitted Transactions" shall have the meaning specified in Section
2.5(e).
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, Governmental Authority or other entity of
similar nature.
"Physical Property" shall have the meaning specified in the definition
of "Transfer" herein.
"Pool Balance" shall mean, as of any date of determination, the
aggregate amount of Eligible Receivables included in the Trust.
"Principal Collections" shall mean Collections other than Yield
Collections.
"Principal Funding Account", if applicable with respect to any Series,
shall have the meaning specified in the Series Supplement related to such
Series.
"Principal Shortfalls" shall mean, with respect to a Distribution Date,
the aggregate amount for all outstanding Series which the related Supplements
specify are "Principal Shortfalls" for such Distribution Date.
"Principal Terms" shall have the meaning, with respect to any
additional Series of Certificates, specified in Section 6.9(c).
"Product" shall mean motorcycles, snowmobiles, all terrain vehicles,
water vehicles and certain other motorized equipment (not including golf carts)
manufactured by Yamaha Motor Company, Ltd., Yamaha Motor Manufacturing
Corporation of America or Tennessee Watercraft, Inc. and distributed in the
United States by Yamaha Motor Corporation, U.S.A.
"Product Security" shall mean, with respect to any Receivable and,
subject to the terms of the Receivables Purchase Agreement, the security
interest granted by or on behalf of the related Dealer in the related Product.
"Publication Date" shall have the meaning specified in Section 9.2(a).
"Rating Agency" shall mean, with respect to any Series at any one time,
each nationally recognized statistical rating agency or agencies selected by the
Transferor to rate the Investor Certificates of such Series.
"Rating Agency Condition", with respect to any action under this
Agreement or any Series Supplement, shall mean that, after giving effect to such
action, such action will not result in a downgrade or withdrawal of the then
current ratings assigned by each of the Rating Agencies to the Investor
Certificates.
"Reassignment" shall have the meaning specified in Section 2.7(b)(i).
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"Receivables" shall mean, with respect to a Dealer pursuant to an
Account, all rights to payment of money (whether characterized as "accounts",
"chattel paper" or "general intangibles", each as defined in Article 9 of the
UCC) arising from a Dealer in such Account. For purposes of calculating the
aggregate amount of Receivables included in the Pool Balance at any time under
this Agreement, Receivables which the Servicer is unable to transfer to the
Transferor pursuant to the Receivables Purchase Agreement or which the
Transferor is unable to transfer to the Trust as provided in Section 2.5(b)
shall not be included in calculating the aggregate amount of Receivables.
"Receivables Purchase Agreement" shall mean the Receivables Purchase
Agreement, dated as of March 1, 1994, between the Transferor, as purchaser, and
the Servicer, as seller, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"Record Date" shall mean, unless otherwise specified with respect to a
Series in the applicable Supplement, with respect to any Distribution Date, the
last day of the month immediately preceding any Distribution Date.
"Recoveries" shall mean all amounts received with respect to Defaulted
Receivables, net of expenses allocable thereto.
"Registered Certificate" shall have the meaning specified in Section
6.1.
"Registered Certificateholder" shall mean the Holder of any Registered
Certificate.
"Relevant UCC State" shall mean all jurisdictions where UCC filing is
required to perfect and maintain the security interest of the Trustee.
"Removal Date" shall mean the date on which the Receivables in certain
designated Removed Accounts will be deleted from the Pool Balance and reassigned
by the Trustee to the Transferor.
"Removal Notice Date" shall mean the tenth Business Day prior to a
Removal Date.
"Removed Accounts" shall have the meaning set forth in Section 2.7.
"Repurchase Terms" shall mean, with respect to any additional Series of
Certificates, the terms and conditions under which the Transferor may repurchase
such Series of Certificates pursuant to Section 12.2.
"Requirements of Law" for any Person shall mean the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Responsible Officer" shall mean any officer of the Trustee assigned by
it to administer its corporate trust matters.
"Revolving Period" shall mean, with respect to each Series, the period
from and including the date of initial issuance of the Investor Certificates of
such Series to, but not including, the day on which an Amortization Period for
such Series commences.
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"Series" shall mean any Series of Investor Certificates, each as
designated in the applicable Supplement.
"Series Factor" shall, with respect to any Series, have the meaning
specified in the applicable Supplement.
"Servicer" shall mean, initially, Yamaha Motor Corporation, U.S.A. and,
thereafter, any Person appointed as successor as herein provided to service the
Receivables.
"Servicer Cash Collateral Account" shall have the meaning specified in
the applicable Supplement.
"Servicer Default" shall have the meaning specified in Section 10.1.
"Service Transfer" shall have the meaning specified in Section 10.1(d).
"Servicing Agreement" shall mean the Servicing Agreement, dated as of
March 1, 1994, between Yamaha Motor Corporation, U.S.A. and DFS, as the same may
from time to time be amended, supplemented or otherwise modified and in effect.
"Servicing Fee Percentage" shall mean, with respect to any Series, the
percentage specified in the applicable Supplement.
"Servicing Officer" shall mean any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Special Funding Account" shall have the meaning specified in Section
4.2.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group.
"Stated Series Termination Date" shall mean, with respect to any
Series, the date stated in the applicable Supplement as the termination date for
such Series.
"Successor Servicer" shall have the meaning specified in Section
10.2(a).
"Supplement" shall mean, with respect to any Series, a supplement to
this Agreement complying with the terms of Section 6.9, executed in conjunction
with any issuance of any Series.
"Termination Notice" shall have, with respect to any Series, the
meaning specified in Section 10.1(d).
"Transfer", when used with respect to Eligible Investments in any
Eligible Deposit Account (whether maintained in the Collection Account, the
Special Funding Account or any principal funding account or cash collateral
account, as specified in any Supplement), shall mean:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery, transfer thereof to the Trustee by physical delivery to the
Trustee in the State of New York indorsed to, or registered in the name of, the
Trustee or indorsed in blank, and, with
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respect to "money" as defined in Section 1-201(24) of the UCC, delivery thereof
to the Trustee in the State of New York, and with respect to a "certificated
security" (as defined in Section 8-102(1)(a) of the UCC) transfer thereof (i) by
delivery of such certificated security indorsed to, or registered in the name
of, the Trustee or indorsed in blank to a financial intermediary (as defined in
Section 8-313(4) of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated securities as
belonging solely and exclusively to the Trustee and the sending by such
financial intermediary of a confirmation to the Trustee of the purchase of such
certificated security by the Trustee, or (ii) by delivery thereof to a "clearing
corporation" (as defined in section 8-102(3) of the UCC) either in bearer form,
in registered form registered to the clearing corporation or to a "custodian
bank" (as defined in Section 8-102(4) of the UCC) or a nominee of either of them
subject to the clearing corporations exclusive control and the making by such
clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the appropriate
securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of the
certificated securities for the sole and exclusive account of the financial
intermediary, the maintenance in the State of New York of such certificated
securities by such clearing corporation or a "custodian bank" (as defined in
Section 8-102(4) of the UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the indorsement thereof to the clearing
corporation or such custodian bank or a nominee of either of them subject to the
clearing corporation's exclusive control, the sending of a confirmation to the
Trustee by the financial intermediary of the purchase by the Trustee of such
securities and the making by such financial intermediary of entries on its books
and records identifying such certificated securities as belonging solely and
exclusively to the Trustee (all of the foregoing, "Physical Property"), and, in
any event, any such Physical Property in registered form shall be in the name of
the Trustee or its nominee; and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership of any
such Eligible Deposit Account Property to the Trustee (as defined herein),
consistent with changes in applicable law or regulations or the interpretation
thereof;
(b) with respect to any book-entry securities held through the Federal
Reserve System pursuant to federal book-entry regulations, the following
procedures: book-entry registration of such property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a financial
intermediary which is also a "depositary" pursuant to applicable federal
regulations and issuance by such financial intermediary of a deposit advice or
other written confirmation of such book-entry registration to the Trustee of the
purchase by the Trustee of such book-entry securities; the making by such
financial intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to federal
book-entry regulations as belonging solely and exclusively to the Trustee and
indicating that such custodian holds such Eligible Deposit Account Property
solely as agent for the Trustee; and such additional or alternative procedures
as may hereafter become appropriate to effect complete transfer of ownership of
any such Eligible Deposit Account Property to the Trustee, consistent with
changes in applicable law or regulations or the interpretation thereof as
notified by the Servicer to the Trustee; and
(c) with respect to any item of Eligible Deposit Account Property that
is an uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of the
issuer thereof in the name of the Trustee or a financial intermediary, the
sending of a confirmation to the Trustee by the financial intermediary of the
purchase by the Trustee of such uncertificated security (if applicable), the
making by the Trustee or by such financial intermediary of entries on its books
and records identifying such uncertificated certificates as belonging solely and
exclusively to the Trustee.
"Transfer Agent and Registrar" shall have the meaning specified in
Section 6.3 and shall initially be the Trustee.
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"Transfer Date" shall mean, with respect to any Series of Certificates,
the Business Day preceding any Distribution Date.
"Transfer Deposit Amount" shall have the meaning assigned to such term
in Section 2.4(c).
"Transferor" shall mean Yamaha Motor Receivables Corporation, a
Delaware corporation, as transferor of the Receivables to the Trust pursuant to
the Receivables Purchase Agreement.
"Transferor Amount" shall mean, on any date of determination, the sum
of the Trust Principal Component and amounts on deposit in any Special Funding
Account and any Principal Funding Account at the end of the day immediately
prior to such date of determination, minus the sum of the Aggregate Invested
Amount at the end of such day for all Series and the Available Subordinated
Amount.
"Transferor Certificate" shall mean, collectively, with respect to all
Series from time to time, all Certificates issued to the Transferor in respect
of the Transferor Interest.
"Transferor Interest" shall have the meaning specified in Section
4.1(a).
"Transferor Percentage" shall mean, on any date of determination, when
used with respect to Principal Collections, Yield Collections and Receivables
(including Defaulted Receivables) or otherwise, one hundred percent (100%) minus
the sum for all Series of the Invested Percentages calculated on such date with
respect to such categories of Receivables as calculated by the Servicer.
"Trust" shall mean the trust created by this Agreement, the corpus of
which shall consist of the Trust Property.
"Trustee" shall mean the institution executing this Agreement as
trustee for the benefit of Certificateholders, or its successor in interest, or
any successor trustee appointed as herein provided.
"Trust Principal Component" shall mean, for any Collection Period, the
product of the Pool Balance at the end of the prior Collection Period and one
minus the Yield Factor or, for any other date of determination, the product of
the Pool Balance as of the date so specified in this Agreement and one minus the
Yield Factor.
"Trust Property" shall have the meaning specified in Section 2.1.
"UCC" shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
"Undistributed Principal Collections" shall have the meaning specified
in Section 4.1(f).
"Undivided Interest" shall mean the undivided interest of any
Certificateholder in the Trust.
"Yield Collections" shall mean, with respect to any Collection Period,
an amount of Collections received in such Collection Period equal to the Pool
Balance multiplied by the Yield Factor.
"Yield Factor" shall mean, initially, 1.5%, as such percentage may be
increased or decreased in accordance with the terms of this Agreement and any
Supplement.
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SECTION 1.2. Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions of
all terms defined herein shall include the singular as well as the plural form
of such terms and the masculine of such terms as well as the feminine and neuter
genders of such terms.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partly defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles on the date of determination. To the extent that
the definitions of accounting terms herein are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained herein shall control.
(c) The agreements and representations and warranties of Yamaha Motor
Corporation, U.S.A. and The Fuji Bank and Trust Company in this Agreement, in
their respective capacities as Servicer and as Trustee, shall be deemed to be
the agreements, representations and warranties of Yamaha Motor Corporation,
U.S.A. and The Fuji Bank and Trust Company solely in such respective capacity
for so long as each acts in such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of such Supplement or
this Agreement, as the case may be; Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement or any
Supplement unless otherwise specified; and the word "including" means including
without limitation.
[END OF ARTICLE I]
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ARTICLE II
APPOINTMENT OF TRUSTEE;
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
SECTION 2.1. Appointment of Trustee; Conveyance of Receivables; Grant.
(a) The Transferor appoints and authorizes The Fuji Bank and Trust Company to
act as Trustee as provided herein and to exercise such powers under this
Agreement as are delegated to the Trustee by the terms hereof together with all
such powers as are reasonably incidental thereto. The Trustee hereby accepts
such appointment and agrees to exercise such powers and perform such functions
on behalf of the Certificateholders from time to time as are specifically
delegated to the Trustee by the terms hereof.
(b) The Transferor does hereby transfer, assign, set-over, and
otherwise convey to the Trust for the benefit of the Certificateholders, without
recourse, all right, title and interest of the Transferor in, to and under the
Receivables, now existing and hereafter created in all Accounts, all monies due
or to become due with respect thereto on and after the Cut-Off Date (including
Recoveries), together with any related Product Security, all proceeds of such
Receivables, and all right, title and interest of the Transferor in, to and
under the Receivables Purchase Agreement. Such property, together with all
monies as are from time to time deposited in or credited to the Collection
Account, Principal Funding Account, Special Funding Account and the Servicer
Cash Collateral Account established pursuant to the Supplement for the Series
1994-1 Certificates and any other account or accounts maintained by the Trustee
for the benefit of the Certificateholders and all other property deposited in or
credited thereto or delivered to the Trustee, including, without limitation, all
money and Eligible Investments and all monies as are from time to time available
under any Enhancement for any Series for payment to Certificateholders shall
constitute the property of the Trust (collectively, the "Trust Property"). The
foregoing transfer, assignment, set-over and conveyance does not constitute and
is not intended to result in a creation or an assumption by the Trust, the
Trustee or any Certificateholder of any obligation of the Servicer, the
Transferor or any other Person in connection with the Accounts, the Receivables
or under any agreement or instrument relating thereto including, without
limitation, any obligation to any Dealers.
In connection with such transfer, the Transferor agrees to record and
file, at its own expense, financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the
Receivables now existing and hereafter created for the transfer of "accounts",
"chattel paper" and "general intangibles" (each as defined in the UCC in effect
in the Relevant UCC State) meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect the transfers
and assignments of the Receivables by the Transferor to the Trust, and to
deliver a file-stamped copy of such financing statements or other evidence of
such filings to the Trustee on or prior to the Closing Date.
In connection with such transfer, the Servicer agrees, on behalf of the
Transferor, at its own expense, on or prior to the initial Closing Date to cause
DFS, as subservicer, to indicate clearly and unambiguously in its computer files
that the Receivables created in connection with the Accounts have been
transferred to the Trust pursuant to this Agreement for the benefit of the
Certificateholders. On behalf of the Transferor, the Servicer further agrees to
deliver or to cause to be delivered to the Trustee (a) a computer file or
microfiche list containing a true and complete list of all Accounts with all
Dealers, identified by account number and by Receivable balance as of the
Cut-Off Date and (b) within twenty (20) Business Days of any request by the
Trustee, a new computer file or microfiche list containing a true and complete
list. Such file or list, as it may be amended, supplemented or modified from
time to time shall be marked as
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Schedule 1 to this Agreement, delivered to the Trustee as confidential and
proprietary, and is hereby incorporated into and made a part of this Agreement.
The Transferor hereby grants to the Trustee for the benefit of
Certificateholders a first priority perfected security interest in all of the
Transferor's right, title and interest in, to and under the Receivables together
with any related Product Security now existing and hereafter created, all monies
due or to become due with respect thereto on and after the Cut-Off Date
(including Recoveries), all proceeds of such Receivables and the related Product
Security, such funds as are from time to time deposited in or credited to the
Collection Account, the Special Funding Account, any Servicer Cash Collateral
Account and any Principal Funding Account and any other account or accounts
maintained by the Trustee for the benefit of Certificateholders and all other
property deposited in or credited thereto or delivered to the Trustee,
including, without limitation, all money and Eligible Investments, and all
monies as are from time to time available under any Enhancement for any Series
for payment to Certificateholders, as security for the obligation of the
Transferor to make prompt and complete payment in full of the Loan Amount. This
Agreement shall constitute a security agreement under applicable law.
Pursuant to the request of the Transferor, the Trustee has caused
Certificates in authorized denominations evidencing the entire interest in the
Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.2.
SECTION 2.2. Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, to the extent
validly transferred, assigned, set over or otherwise conveyed to the Trust as
provided in Section 2.1(b) hereof, on behalf of the Trust and the
Certificateholders, of all right, title and interest previously held by the
Transferor in, to and under the Receivables, now existing and hereafter created,
all monies due or to become due with respect thereto on and after the Cut-Off
Date (including Recoveries), together with any related Product Security, all
proceeds of such Receivables, such funds as are from time to time deposited in
the Collection Account and any other account or accounts maintained by the
Trustee for the benefit of Certificateholders, and benefits of any Enhancement
for any Series and declares that it shall hold such right, title and interest,
upon the trust herein set forth, and subject to the terms hereof for the benefit
of all Certificateholders. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Servicer
delivered to the Trustee, on behalf of the Transferor, the computer file or
microfiche list represented by the Servicer to be the computer file or
microfiche list described in the third paragraph of Section 2.1.
(b) The Trustee hereby agrees not to disclose to any Person (including
any Certificateholder or Certificate Owner) any of the account numbers or other
information contained in the computer files or microfiche lists delivered to the
Trustee by the Servicer on behalf of the Transferor pursuant to Sections 2.1 and
2.6, except as is required by law or in connection with the performance of its
duties hereunder or in enforcing the rights of the Certificateholders or to a
successor Servicer appointed pursuant to Section 10.2 or a successor Trustee
appointed pursuant to Section 12.8. The Trustee agrees to take such measures as
shall be reasonably requested by the Transferor to protect and maintain the
security and confidentiality of such information, and, in connection therewith,
shall allow the Transferor, the Servicer or DFS, on behalf of the Transferor to
inspect the Trustee's security and confidentiality arrangements from time to
time during normal business hours. The Trustee shall provide the Transferor with
written notice five (5) Business Days prior to any disclosure pursuant to this
Section 2.2(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
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SECTION 2.3. Representations and Warranties. The Transferor hereby
represents and warrants to the Trustee, on behalf of the Trust, with respect to
any Series of Certificates, as of the date of any Supplement and the related
Closing Date, unless otherwise stated in such Supplement that:
(i) Organization and Good Standing. The Transferor is a
corporation duly organized and validly existing in good standing under
the laws of the State of Delaware and has full corporate power,
authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its
obligations under this Agreement, any Supplement and the Receivables
Purchase Agreement and to execute and deliver to the Trustee the
Certificates pursuant hereto.
(ii) Due Qualification. The Transferor is duly qualified to do
business and is in good standing as a foreign corporation, and has
obtained all necessary licenses and approvals, in each jurisdiction in
which failure to so qualify or to obtain such licenses and approvals
would have a material adverse effect on the conduct of its business or
render any Receivable unenforceable; provided, however, that no
representation or warranty is made with respect to any qualifications,
licenses or approvals which the Trustee would have to obtain to do
business in any jurisdiction in which the Trustee seeks to enforce any
Receivable.
(iii) Due Authorization. The execution and delivery of this
Agreement, any Supplement and the Receivables Purchase Agreement and
the execution and delivery to the Trustee of the Certificates and the
consummation of the transactions provided for in this Agreement, any
Supplement and the Receivables Purchase Agreement have been duly
authorized by the Transferor by all necessary corporate action on the
part of the Transferor.
(iv) No Violation. The execution and delivery of this
Agreement, any Supplement, the Receivables Purchase Agreement and the
Certificates, the performance of the transactions contemplated by this
Agreement, any Supplement and the Receivables Purchase Agreement and
the fulfillment of the terms hereof will not conflict with, violate,
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material
default under, any Requirement of Law applicable to the Transferor or
any material indenture, contract, agreement, mortgage, deed of trust,
or other instrument to which the Transferor is a party or by which it
or any of its properties are bound.
(v) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Transferor, threatened against
the Transferor, before any court, regulatory body, administrative
agency, arbitrator or other tribunal or governmental instrumentality
(i) asserting the invalidity of this Agreement, any Supplement, the
Receivables Purchase Agreement or the Certificates, (ii) seeking to
prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by this Agreement, any Supplement, the
Receivables Purchase Agreement or the Certificates, (iii) seeking any
determination or ruling that, in the reasonable judgment of the
Transferor, would materially and adversely affect the performance by
the Transferor of its obligations under this Agreement, any Supplement
or the Receivables Purchase Agreement, (iv) seeking any determination
or ruling that would materially and adversely affect the validity or
enforceability of this Agreement, any Supplement, the Receivables
Purchase Agreement or
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the Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust under the United States federal or any state
income, single business or franchise tax system.
(vi) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority required to be obtained on or prior to the date as of which
this representation is being made in connection with the execution and
delivery of this Agreement, any Supplement, the Receivables Purchase
Agreement and the Certificates, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof,
have been obtained.
(vii) Record of Accounts. As of the initial Closing Date, in
the case of the Initial Accounts and, as of the applicable Removal
Date, in the case of Removed Accounts, Schedule 1 to this Agreement is
an accurate and complete listing in all material respects of all the
Accounts as of the Cut-Off Date or the applicable Removal Date, as the
case may be, and the information contained therein with respect to the
identity of such Accounts and the Receivables existing thereunder is
true and correct in all material respects as of the Cut-Off Date or
such Removal Date, as the case may be.
(viii) Valid Transfer. This Agreement constitutes a valid
conveyance, transfer and assignment to the Trust of all right, title
and interest of the Transferor in, to and under the Receivables and the
related Product Security and the proceeds thereof and all of the
Transferor's rights, remedies, powers and privileges with respect to
the Receivables under the Receivables Purchase Agreement and, upon the
filing of the financing statements described in Section 2.1 with the
Secretary of State of the State of California and, in the case of the
Receivables hereafter created and the proceeds thereof, upon the
creation thereof, the Trust shall have a first priority perfected
security interest (as defined in the UCC) in such property, except for
Liens permitted hereunder. Except as otherwise provided in this
Agreement, neither the Transferor nor any Person claiming through or
under the Transferor has any claim to or interest in the Trust
Property.
(ix) Amount of Receivables; Computer File. As of the Cut-Off
Date, the aggregate amount of Receivables to be transferred by the
Transferor to the Trust was $322,245,318.04. The computer file or
microfiche list delivered pursuant to Section 2.1 hereof is complete
and accurately reflects the information regarding the Receivables under
the Initial Accounts in all material respects.
The representations and warranties set forth in this Section 2.3 shall
survive the transfer and assignment of the Receivables to the Trust and the
issuance of the Certificates. Upon discovery by the Transferor, the Servicer or
the Trustee of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the other
parties and to any Enhancement Providers.
In the event of any breach of any of the representations and warranties
set forth in this Section 2.3 having a material adverse effect on the interests
of the Investor Certificateholders, then either the Trustee or the Holders of
Investor Certificates evidencing not less than a majority in aggregate unpaid
principal amount of all outstanding Investor Certificates, by notice then given
in writing to the Transferor (and to the Trustee, any Enhancement Providers and
the Servicer if given by the Investor Certificateholders), may direct the
Transferor to purchase the Certificateholders' Interest in such Receivables
within thirty (30) days of such notice (or within such longer period as may be
specified in such notice), and the Transferor shall be obligated to make such
purchase on a Distribution Date occurring within such 30-day period on the terms
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and conditions set forth below; provided, however, that no such purchase shall
be required to be made if, by the end of such 30-day period (or such longer
period as may be specified), the representations and warranties set forth in
this Section 2.3 shall be satisfied in all material respects, and any material
adverse effect on the Certificateholders' Interest caused thereby shall have
been cured.
The Transferor shall deposit in the Collection Account in immediately
available funds on the Business Day preceding such Distribution Date, in payment
for such purchase, an amount equal to the sum of the amounts specified therefor
with respect to each outstanding Series in the related Supplement.
Notwithstanding anything to the contrary in this Agreement, such amounts shall
be distributed to the Investor Certificateholders on such Distribution Date in
accordance with Article IV and the terms of each Supplement. Except as otherwise
provided in Section 2.4(d), if the Trustee or the Investor Certificateholders
give notice directing the Transferor to purchase the Certificateholders'
Interest as provided above, the obligation of the Transferor to purchase the
Certificateholders' Interest pursuant to this Section 2.3 shall constitute the
sole remedy respecting an event of the type specified in the first sentence of
the preceding paragraph available to the Investor Certificateholders (or the
Trustee on behalf of the Investor Certificateholders).
SECTION 2.4. Representations and Warranties of the Transferor Relating
to the Receivables.
(a) Representations and Warranties. The Transferor hereby represents
and warrants to the Trust that:
(i) Each Receivable and all related Product Security existing
on or after the Initial Closing Date has been or will have been
conveyed to the Trust free and clear of any Lien (except for Liens not
of the same or higher priority than the Lien of the Trust).
(ii) With respect to each Receivable and all related Product
Security existing on or after the Initial Closing Date, all consents,
licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with the conveyance
of such Receivable or Product Security to the Trust have been or will
have been duly obtained, effected or given and are in full force and
effect.
(iii) On the initial Closing Date, in the case of the Initial
Accounts, and, in the case of all Accounts created after the initial
Closing Date, on the applicable transfer date, each Receivable conveyed
to the Trust on such date is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed
to the Trust in accordance herewith.
(iv) Each of this Agreement, any Supplement and the
Receivables Purchase Agreement, constitutes a legal, valid and binding
obligation of the Transferor, enforceable against the Transferor in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights and
except as such enforceability may be limited by general principles of
equity (whether such enforceability is considered in a suit at law or
in equity).
(v) This Agreement constitutes either (A) a valid transfer and
assignment to the Trust of all right, title and interest of the
Transferor in, to and under the Receivables now existing and hereafter
created, together with any related Product Security,
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all monies due or to become due with respect thereto on and after the
Cut-Off Date, Recoveries, and all proceeds (as defined in the UCC as in
effect in the Relevant UCC State) of such Receivables, such funds as
are from time to time deposited in the Collection Account and any other
account or accounts maintained by the Trustee for the benefit of
Certificateholders and the benefits of any Enhancement, and such
Receivables, together with any related Product Security and all
proceeds thereof will be held by the Trust free and clear of any Lien
of any Person claiming through or under the Transferor or any of its
Affiliates except for (x) Liens permitted under Section 2.5(a), (y) the
interest of the Transferor as holder of the Exchangeable Transferor
Certificate and (z) any right of the holder of the Exchangeable
Transferor Certificate to receive interest accruing on, and investment
earnings with respect to, the Collection Account or any other account
or accounts maintained for the benefit of Certificateholders as
provided in this Agreement and any Supplement or (B) a grant of a
security interest (as defined in the UCC as in effect in the Relevant
UCC State) in such property to the Trustee on behalf of the Trust,
which is enforceable with respect to existing Receivables and the
proceeds thereof to the extent set forth in Section 9-306 of the UCC in
effect in the Relevant UCC State upon execution and delivery of this
Agreement, and which will be enforceable with respect to such
Receivables and any related Product Security thereafter created, and
the proceeds thereof to such extent, upon such creation. If this
Agreement constitutes the grant of a security interest to the Trust in
such property, upon the filing of the applicable financing statements
and in the case of the Receivables hereafter created and proceeds
thereof upon such creation, the Trust shall have a first priority
perfected security interest in such property to the extent set forth in
Section 9-306 of the UCC in effect in the Relevant UCC State relating
to such Receivables and any related Product Security, except for Liens
permitted under Section 2.5(a) hereunder. Neither the Transferor nor
any Person claiming through or under the Transferor shall have any
claim to or interest in the Collection Account or any other account or
accounts maintained for the benefit of Certificateholders, except for
any right of the Transferor to receive interest accruing on, and
investment earnings with respect to, any such account as provided in
this Agreement and any Supplement and, if this Agreement constitutes
the grant of a security interest in such property, except for the
interest of the Transferor in such property as a debtor for purposes of
the UCC as in effect in the Relevant UCC State. The Receivables
Purchase Agreement constitutes a transfer to the Transferor of all
right, title and interest of Yamaha Motor Corporation, U.S.A. in, to
and under the Receivables and related Product Security purported to be
sold and assigned thereunder, whether then existing or thereafter
created in the applicable Accounts and the proceeds thereof.
(vi) All material information with respect to the Accounts,
and all Dealers and Receivables related thereto, in the list provided
to the Trustee from time to time on Schedule 1 hereto is true and
correct in all material respects as of the date of delivery to the
Trustee.
(vii) As of the initial Closing Date, and as of any date of
determination thereafter, the computer file or list of Dealers and
Accounts provided by the Transferor to the Trustee is or will be an
accurate and complete listing of all such Dealers and Accounts in all
material respects and the information contained therein with respect to
the identity of such Dealers and Accounts and the Receivables existing
under the Accounts is true and correct in all material respects as of
the Cut-Off Date or date of determination thereafter, as applicable.
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(b) Notice of Breach. The representations and warranties set forth in
this Section 2.4 shall survive the transfer and assignment of the Receivables to
the Trust and the issuance of the Certificates. Upon discovery by the
Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.4, the party
discovering such breach shall give prompt written notice to the other parties
and to any Enhancement Providers.
(c) Reassignment. In the event any representation or warranty under
Section 2.4(a) is not true and correct as of the date specified therein with
respect to any Receivable or Account, and such breach has a material adverse
effect on the Certificateholders' Interest in any such Receivable or Account,
then, within thirty (30) days (or such longer period as may be agreed to by the
Trustee, not to exceed sixty (60) days) of the earlier to occur of the discovery
of any such event by the Transferor or the Servicer, or receipt by the
Transferor or the Servicer of written notice of any such event given by the
Trustee, DFS or any Enhancement Provider, the Transferor shall accept a
reassignment of such Receivable or, in the case of such an untrue representation
or warranty with respect to an Account, all Receivables in such Account, on the
Determination Date immediately succeeding the day of such discovery or notice on
the terms and conditions set forth in the next succeeding paragraph; provided,
however, that no such reassignment shall be required to be made with respect to
such Receivable if, by the end of such 30-day period (or such longer period as
may be agreed to by the Trustee, not to exceed sixty (60) days), the breached
representation or warranty shall then be true and correct in all material
respects, and any material adverse effect caused thereby shall have been cured.
The Transferor shall accept a reassignment of any such Receivables by
directing the Servicer to deduct, subject to the next sentence, the aggregate
principal amount of such Receivables from the Pool Balance (to the extent such
amount is otherwise included in the Pool Balance) on or prior to the end of the
Collection Period in which such reassignment obligation arises. If, following
such deduction, the Transferor Amount would be less than the Minimum Transferor
Percentage of the Trust Principal Component 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), then not later than 12:00 noon on the day on which such
reassignment occurs, the Transferor shall deposit in the Collection Account in
immediately available funds the amount (the "Transfer Deposit Amount") by which
the Transferor Amount would be less than such Minimum Transferor Percentage of
the Trust Principal Component (up to the aggregate principal amount of such
Receivables); provided that if the Transfer Deposit Amount is not deposited as
required by this sentence, then the principal amounts of such Receivables shall
only be deducted from the Pool Balance to the extent that the Transferor's
Amount is not reduced below the Minimum Transferor Percentage of the Trust
Principal Component and the Receivables the aggregate principal amounts of which
have not been so deducted shall not be reassigned to the Transferor and shall
remain part of the Trust. Upon reassignment of any such Receivable, but only
after payment by the Transferor of the Transfer Deposit Amount, if any, the
Trust shall automatically and without further action be deemed to transfer,
assign, set over and otherwise convey to the Transferor, without recourse,
representation or warranty, all the right, title and interest of the Trust in,
to and under such Receivable, all related Product Security and all moneys due or
to become due with respect thereto and all proceeds thereof. The Trustee shall
execute such documents and instruments of transfer or assignment and take such
other actions as shall reasonably be requested by the Transferor to effect the
conveyance of such Receivables pursuant to this Section 2.4(c). Except as
provided below, the obligation of the Transferor to accept a reassignment of any
such Receivable and to pay any related Transfer Deposit Amount shall constitute
the sole remedy respecting the event giving rise to such obligation available to
Certificateholders (or the Trustee on behalf of Certificateholders).
(d) Reassignment of Trust Portfolio. In the event of (1) a breach of
any of the representations or warranties set forth in Section 2.3 or 2.4(a) or
(2) a material amount of Receivables are
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not Eligible Receivables, and in either case such event has a materially adverse
effect on Investor Certificateholders, either the Trustee or the Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Aggregate Invested Amount, by notice then given in writing to the
Transferor (and to the Trustee and the Servicer, if given by the Investor
Certificateholders), may direct the Transferor to accept reassignment of all
Receivables within sixty (60) days of such notice, or within such longer period
as may be specified in such notice (not to exceed an additional sixty (60) days)
and the Transferor shall be obligated to accept such reassignment on a
Distribution Date specified by the Transferor occurring within such applicable
period on the terms and conditions set forth below; provided, however, that no
such reassignment shall be required to be made if, on the Business Day prior to
such Distribution Date, the representations and warranties contained in Section
2.3 and 2.4(a) shall then be true and correct in all material respects, or there
shall no longer be a material amount of Receivables which are not Eligible
Receivables, as the case may be.
The Transferor shall deposit on the Business Day prior to the
Distribution Date (in immediately available funds) an amount equal to the
reassignment deposit amount for such Receivables in the Collection Account for
distribution to the Investor Certificateholders pursuant to Section 12.3. The
deposit amount for such reassignment shall be equal to the Aggregate Invested
Amount on the Record Date related to the applicable Distribution Date on which
such deposit is made (less the aggregate principal amount on deposit in any
Principal Funding Account) plus an amount equal to all accrued but unpaid
interest on the Certificates of all Series at the applicable certificate rates
through the end of the interest accrual periods of such Series. Payment of the
reassignment deposit amount and all other amounts in the Collection Account in
respect of the preceding Collection Period shall be considered a prepayment in
full of all such Receivables. On the Distribution Date with respect to which
such amount has been deposited in full into the Collection Account, the
Receivables and all monies due or to become due with respect thereto and all
proceeds relating thereto shall be released to the Transferor and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as shall be reasonably
requested by the Transferor to vest in the Transferor or its designee or
assignee, all right, title and interest of the Trust in, to and under the
Receivables and any related Product Security, all monies due or to become due
with respect thereto and all proceeds thereof and as shall be specified in an
Opinion of Counsel delivered to the Trustee to the effect that such documents
and instruments comply herewith. If the Trustee or the Investor
Certificateholders give a notice directing the Transferor to accept reassignment
as provided herein, the obligation of the Transferor to accept reassignment of
the Receivables pursuant to this Section 2.4(d) shall constitute the sole remedy
respecting a breach of the representations and warranties contained in Section
2.3 or 2.4(a) or there being a material amount of Receivables which are not
Eligible Receivables available to the Investor Certificateholders or the Trustee
on behalf of the Investor Certificateholders.
(e) Nothing contained in this Section 2.4 shall create an obligation on
the part of the Trustee to verify the accuracy or continued accuracy of the
representations or warranties contained in this Section 2.4. The Trustee shall
have no obligation to give any notice pursuant to this Section 2.4 unless it has
actual knowledge of facts which would permit the giving of such notice.
SECTION 2.5. Covenants of the Transferor. The Transferor hereby
covenants that:
(a) No Liens. Except for the conveyances hereunder, the Transferor will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on, any Receivable or any related
Product Security, whether now existing or hereafter created, or any interest
therein, or the Transferor's rights, remedies, powers or privileges with respect
to the Receivables under the Receivables Purchase Agreement, or the Transferor's
Interest or the Transferor Certificates, and the Transferor shall defend the
right, title and interest of the Trust in, to and under the Receivables and the
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Product Security, whether now existing or hereafter created, and such rights,
remedies, powers and privileges, against all claims of third parties claiming
through or under the Transferor.
(b) Delivery of Collections. In the event that the Transferor, Yamaha
Motor Corporation, U.S.A. or any Affiliate thereof receives payments in respect
of Receivables, the Transferor and Yamaha Motor Corporation, U.S.A. agree to pay
or cause to be paid to the Servicer, DFS or any Successor Servicer all payments
received thereby in respect of the Receivables as soon as practicable after
receipt thereof, but in no event later than two (2) Business Days after the
receipt by the Transferor, the Servicer or any Affiliate thereof.
(c) Notice of Liens. The Transferor shall notify the Trustee promptly
after becoming aware of any Lien on any Receivable other than the conveyances
hereunder.
(d) Compliance with Laws. The Transferor hereby agrees to comply in all
material respects with all Requirements of Law applicable to the Transferor.
(e) Activities of the Transferor. The Transferor will not engage in any
business or activity of any kind or enter into any transaction other than (i)
the businesses, activities and transactions contemplated and authorized by this
Agreement or the Receivables Purchase Agreement, (ii) acquiring, selling,
financing, holding, assigning, pledging and otherwise dealing with wholesale and
retail receivables and other motorized equipment, and related activities and
transactions, (iii) transferring such receivables to trusts pursuant to a
pooling and servicing agreement or similar agreement or arrangement, (iv)
authorizing, selling and delivering any class of certificates or other
securities of any such trust, (v) acquiring from Yamaha Motor Master Trust
certificates issued by one or more trusts to which the Transferor transferred
receivables, (vi) issuing, selling, authorizing and delivering one or more
series and classes of bonds, notes or other evidences of indebtedness secured or
collateralized by one or more pools of receivables or by certificates of any
class issued by one or more trusts or by certificates of any class issued by a
trust established by the Transferor (collectively, the "Notes"), provided that
the Transferor shall have no liability under any Notes except to the extent of
the one or more pools of receivables or the certificates securing or
collateralizing such Notes, (vii) holding and enjoying all of the rights and
privileges of any certificates issued by the trusts to the Transferor under the
related agreements and holding and enjoying all of the rights and privileges of
any class of any series of Notes, including any class of Notes or certificates
which may be subordinate to any other class of Notes or certificates,
respectively, (viii) performing its obligations under the agreements and any
indenture or other agreement pursuant to which any Notes are issued, (ix)
engaging in any activity and exercising any powers permitted to corporations
under the laws of the State of Delaware that are related or incidental to the
foregoing and necessary, convenient or advisable to accomplish the foregoing,
and (x) any other activity in connection with which the Rating Agency Condition
has been satisfied (such businesses, activities and transactions, collectively,
"Permitted Transactions").
(f) Indebtedness. The Transferor will not create, incur or assume any
indebtedness or issue any securities or sell or transfer any receivables to a
trust or other Person which issues securities in respect of any such
receivables, unless (i) any such indebtedness or securities have no recourse to
any assets of the Transferor other than the specified assets to which such
indebtedness or securities relate and (ii) the Rating Agency Condition shall
have been satisfied in connection therewith prior to the incurrence or issuance
thereof.
(g) Guarantees. The Transferor will not become or remain liable,
directly or contingently, in connection with any indebtedness or other liability
of any other Person, whether by guarantee, endorsement (other than endorsements
of negotiable instruments for deposit or collection in the ordinary course of
business), agreement to purchase or purchase, agreement to supply or advance
funds, or otherwise,
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except in connection with Permitted Transactions and unless the Rating Agency
Condition shall have been satisfied with respect thereto.
(h) Investments. The Transferor will not make or suffer to exist any
loans or advances to, or extend any credit to, or make any investments (by way
of transfer of property, contributions to capital, purchase of stock or
securities or evidences of indebtedness, acquisition of the business or assets,
or otherwise) in, any Affiliate, unless prior thereto the Rating Agency
Condition shall have been satisfied with respect thereto; provided, however,
that the Transferor shall not be prohibited under this Section 2.5(h) from
declaring or paying any dividends in respect of its common stock.
(i) Stock; Merger. The Transferor will not (i) sell any shares of any
class of its capital stock to any Person (other than Yamaha Motor Corporation,
U.S.A.), or enter into any transaction of merger or consolidation unless (A) the
surviving Person of such merger or consolidation assumes all of the Transferor's
obligations under this Agreement, (B) the Transferor shall have given the Rating
Agencies and the Trustee at least ten (10) days' prior notice and the Rating
Agency Condition shall have been satisfied with respect to such transaction and
(C) such merger or consolidation does not conflict with any provisions of the
certificate of incorporation of the Transferor, or (ii) terminate, liquidate or
dissolve itself (or suffer any termination, liquidation or dissolution), or
(iii) acquire or be acquired by any Person, or (iv) otherwise make (or suffer)
any material change in the organization of or method of conducting its business.
(j) Agreements. The Transferor will not become a party to, or permit
any of its properties to be bound by, any indenture, mortgage, instrument,
contract, agreement, lease or other undertaking, except this Agreement, the
Receivables Purchase Agreement and any document relating to a Permitted
Transaction, or amend or modify its certificate of incorporation or cancel,
terminate, amend, supplement, modify or waive any of the provisions of the
Receivables Purchase Agreement or any of the other related documents to which it
is a party or request, consent or agree to or suffer to exist or permit any such
cancellation, termination, amendment, supplement, modification or waiver unless,
in any such case, the Rating Agency Condition shall have been satisfied with
respect thereto.
SECTION 2.6. Addition of Accounts.
Receivables created in all Accounts established with Dealers which have
purchased existing dealerships (each, a "Dealer Replacement Account") shall be
added automatically to the Trust. Subject to the limitations described herein,
the Transferor shall, on an ongoing basis, automatically add Receivables created
in new Accounts which do not constitute Dealer Replacement Accounts (each, a
"New Account") to the Trust subject to the following conditions:
(i) if either (a) on an annual basis, the percentage derived
by dividing the number of New Accounts added to the Trust during any
fiscal year of the Transferor by the number of Accounts in the Trust at
the beginning of such year exceeds 8% or (b) on a quarterly basis, the
percentage derived by dividing the number of New Accounts added to the
Trust during such calendar quarter by the number of Accounts in the
Trust at the beginning of such calendar quarter exceeds 5%, then the
Transferor may continue to add Receivables created in New Accounts to
the Trust only if (x) if so provided in a Supplement, the Available
Subordinated Amount is adjusted each Collection Period thereafter by
the aggregate amount of Receivables in those New Accounts included in
the Trust which New Accounts resulted in such percentage to exceed the
specified percentages therein, or (y) the Transferor obtains a letter
from each of the Rating Agencies that such action will not result in a
downgrade or withdrawal of the then current ratings assigned by each of
them to the Investor Certificates of each Series;
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(ii) if the annualized rate (averaged for a period of three
consecutive Collection Periods) of (a) Defaulted Receivables minus
Recoveries plus the repossession value of all Products repossessed
during such period to (b) the beginning Pool Balance for the related
Collection Period exceeds 7.5%, then the Transferor may continue to add
Receivables created in any New Accounts and Dealer Replacement Accounts
to the Trust only if (x) if so provided in a Supplement, the Available
Subordinated Amount is increased by the aggregate amount of the
Receivables in New Accounts and Dealer Replacement Accounts, or (y) the
Transferor obtains a letter from each of the Rating Agencies that such
action will not result in a downgrade or withdrawal of the then current
ratings assigned by each of them to the Investor Certificates of each
Series; and
(iii) if either (a) on an annual basis, the percentage derived
by dividing the number of New Accounts and Dealer Replacement Accounts
added to the Trust during any fiscal year of the Transferor by the
number of Accounts in the Trust at the beginning of such year exceeds
15% or (b) on a quarterly basis, the percentage derived by dividing the
number of New Accounts and Dealer Replacement Accounts added to the
Trust during such calendar quarter by the number of Accounts in the
Trust at the beginning of such calendar quarter exceeds 10%, then the
Transferor may continue to add any Accounts to the Trust only if (x) if
so provided in a Supplement, the Available Subordinated Amount is
increased by the aggregate amount of the Receivables in New Accounts
and Dealer Replacement Accounts, or (y) the Transferor obtains a letter
from each of the Rating Agencies that such action will not result in a
downgrade or withdrawal of the then current ratings assigned by each of
them to the Investor Certificates of each Series.
SECTION 2.7. Removal of Accounts.
(a) Subject to the conditions set forth below, on each Determination
Date on which the Transferor Amount as a percentage of the Trust Principal
Component exceeds 10% at the end of the related Collection Period, the
Transferor may, but shall not be obligated to, designate, from time to time,
Accounts for deletion and removal ("Removed Accounts") from Schedule 1 and the
reassignment by the Trust to the Transferor of the Receivables related to such
Removed Accounts; provided, however, that the Transferor shall not make more
than one such designation in any Collection Period. On or before the Removal
Notice Date, the Transferor shall give the Trustee and the Servicer written
notice that the Removed Accounts are to be deleted from Schedule 1 and the
Receivables from such Removed Accounts are to be removed from the Trust and
reassigned to the Transferor.
(b) The Transferor shall be permitted to designate and require
reassignment to it of Receivables from Removed Accounts only upon satisfaction
of the following conditions:
(i) On or prior to the Removal Date, the Transferor shall have
delivered to the Trustee for execution a written instrument of
reassignment in substantially the form of Exhibit C (the
"Reassignment") and a computer file or microfiche list containing a
true and complete list of all Removed Accounts identified by account
number and by the aggregate balance of the Receivables in such Removed
Accounts as of the Removal Notice Date, which computer file or
microfiche list shall as of the Removal Date modify and amend and be
made a part of this Agreement;
(ii) The Transferor shall represent and warrant that no
selection procedures believed by the Transferor to be materially
adverse to the interests of the Holders
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of any outstanding Series of Investor Certificates were utilized in
selecting the Removed Accounts to be removed from the Trust;
(iii) The removal of any Receivables of any Removed Accounts
on any Removal Date shall not, (a) in the reasonable belief of the
Transferor, cause an Early Amortization Event to occur or an event
which with notice or lapse of time or both would constitute an Early
Amortization Event and (b) cause the Transferor Amount as a percentage
of the Trust Principal Component to be less than the Minimum Transferor
Percentage on such Removal Date;
(iv) The Rating Agencies shall have received prior written
notice of such proposed removal of Accounts and the Transferor shall
have received written notice from the Rating Agencies that such removal
would not result in a downgrading or withdrawal of the then current
rating of any outstanding Series of the Investor Certificates;
(v) The Transferor shall have delivered to the Trustee and the
Rating Agencies an Officer's Certificate confirming the items set forth
in (i) through (iv) above (on which Officer's Certificate the Trustee
may conclusively rely and shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability in
so relying); and
(vi) The Transferor shall have delivered to the Trustee and
the Rating Agencies a favorable opinion of counsel that such removal
will not adversely affect the first priority security interest of the
Trust in the Receivables.
Upon satisfaction of the above conditions, the Trustee shall execute
and deliver the Reassignment to the Transferor, and the Receivables from the
Removed Accounts shall no longer constitute a part of the Trust; provided that
upon such Reassignment, the Transferor shall in no event continue to transfer
Receivables arising out of Accounts created on and after the effective date of
such Reassignment to the Trust without the Trustee having received (i) a
favorable opinion of counsel to the Transferor regarding the continuing
perfection and priority of the security interest in Receivables in existing
Accounts and in Receivables in Accounts created on or after the effective date
of such Reassignment in form and substance satisfactory to the Trustee and (ii)
written confirmation from each of the Rating Agencies that such transfers would
not result in a withdrawal or downgrading of the then current ratings of any
outstanding Series of Investor Certificates.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
SECTION 3.1. Acceptance of Appointment and Other Matters Relating to
the Servicer.
(a) Yamaha Motor Corporation, U.S.A. hereby agrees to act as the
initial Servicer under this Agreement. The Investor Certificateholders by their
acceptance of the Investor Certificates consent to Yamaha Motor Corporation,
U.S.A. acting as Servicer.
(b) The Servicer shall service and administer the Receivables and shall
collect payments due under the Receivables in accordance with the Servicing
Agreement and in accordance with the applicable Floorplan Financing Guidelines
and shall have full power and authority, acting alone or through any party
properly designated by it hereunder, to do any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing and subject to Section 10.1,
the Servicer is hereby authorized and empowered (i) to make withdrawals and
payments and to instruct the Trustee to make withdrawals and payments from the
Collection Account or any other account or accounts maintained for the benefit
of the Certificateholders as set forth in this Agreement and any Supplement,
(ii) unless such power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.1 of this Agreement to
instruct the Trustee to take any action permitted or required under any
Enhancement at such time as set forth in this Agreement and any Supplement,
(iii) to execute and deliver, on behalf of the Trust for the benefit of the
Certificateholders, any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable instruments,
with respect to the Receivables and, after the delinquency of any Receivable and
to the extent permitted under and in compliance with applicable law and
regulations, to commence enforcement proceedings with respect to such
Receivables, (iv) to make any filings, reports, notices, applications, or
registrations with, and to seek any consents or authorizations from, the
Securities and Exchange Commission and any state securities laws authority on
behalf of the Trust as may be necessary or advisable to comply with any federal
or state securities laws or reporting requirements and (v) to delegate certain
of its service, collection, enforcement and administrative duties hereunder with
respect to the Accounts and the Receivables to DFS or to any other Person who
agrees to conduct such duties in accordance with the Floorplan Financing
Guidelines; provided, however, that the Servicer shall notify each Rating Agency
in writing of any significant delegation of its duties to a Person other than
DFS and which is not in the ordinary course of the Servicer's business. No such
delegation will relieve the Servicer of its liability and responsibility with
respect to such duties. The Trustee shall promptly follow the written
instructions of the Servicer to withdraw funds from the Collection Account, any
Special Funding Account, any Principal Funding Account and any other account or
accounts maintained for the benefit of Certificateholders or with regard to any
Enhancement. The Trustee shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder and the Trustee shall not be
held responsible for any act or omission by the Servicer in its use of such
powers of attorney.
(c) In the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of the
provisions of Section 9.2 or the order of any court of competent jurisdiction
that the Transferor not transfer any additional Receivables to the Trust) then,
in any such event, (A) the Transferor agrees that the Servicer shall allocate,
after such date, all Principal Collections, and all amounts which would have
constituted Principal Collections but for the Transferor's inability to transfer
such Receivables (up to an aggregate amount equal to the Trust Principal
Component in the Trust as of such date) and to apply such
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amounts as Collections in accordance with Article IV and (B) for only so long as
all Collections and all amounts which would have constituted Collections are
allocated and applied in accordance with clause (A) above, Principal Collections
and all amounts which would have constituted Principal Collections but for the
Transferor's inability to transfer Receivables to the Trust which are charged
off as uncollectible in accordance with this Agreement shall continue to be
allocated in accordance with Article IV and all amounts which would have
constituted Principal Collections but for the Transferor's inability to transfer
Receivables to the Trust shall be deemed to be Principal Collections for the
purpose of calculating the applicable Invested Percentage thereunder; provided
that if the Transferor is unable pursuant to any Requirement of Law to allocate
payments on the Accounts as described above, the Transferor agrees that the
Servicer shall, in any such event, allocate, after the date that the Transferor
becomes unable to do so, payments on the Accounts with respect to the
receivables in such Accounts first to the oldest receivables in such Accounts
and such amounts shall be applied as Collections in accordance with Article IV.
(d) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other wholesale Dealer receivables.
(e) For so long as the Servicer delegates its servicing
responsibilities to any Person other than DFS in accordance with Section 3.1(b),
the Servicer shall ensure that such other Person maintain fidelity bond coverage
insuring against losses through wrongdoing of its officers and employees who are
involved in the servicing of Receivables covering such actions with such
insurers and in such amounts as the Servicer believes to be reasonable from time
to time; provided that, in the event the Servicer no longer delegates its
servicing responsibilities, the Servicer shall maintain such fidelity bond
coverage for its account.
(f) Receivables which become Defaulted Receivables shall not be
recorded on the Transferor's or the Servicer's books and records as amounts
payable, and will cease to be included as Receivables on the day on which they
become Defaulted Receivables.
SECTION 3.2. Servicing Compensation. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
monthly servicing fee in respect of any Collection Period (or portion thereof)
prior to the termination of the Trust pursuant to Section 12.1 (the "Monthly
Servicing Fee"), payable in arrears on each Distribution Date in an amount equal
to the sum of, with respect to all Series then outstanding, one-twelfth of the
product of the applicable Servicing Fee Percentages and the sum of an allocable
portion of the Transferor Amount and the Invested Amount of each Series each as
of the last day of the second preceding Collection Period. The share of the
Monthly Servicing Fee allocable to each Series of Investor Certificateholders
with respect to any Collection Period (or portion thereof) shall be equal to
one-twelfth (1/12) of the product of (A) the Servicing Fee Percentage for such
Series and (B) the sum of an allocable portion of the amount of the Transferor
Interest and the aggregate invested amount with respect to any such Series with
respect to the related Collection Period (the "Investor Monthly Servicing Fee")
and shall be paid to the Servicer pursuant to the applicable Supplement. The
remainder of the Monthly Servicing Fee shall be paid by the Transferor and in no
event shall the Trust, the Trustee or the Investor Certificateholders be liable
for the share of the Monthly Servicing Fee to be paid by the Transferor. In the
case of the first Collection Period, the Monthly Servicing Fee and the Investor
Monthly Servicing Fee shall accrue from the Cut-Off Date.
The Servicer's expenses include the amounts due to the Trustee pursuant
to Section 11.5 and the reasonable fees and disbursements of independent
accountants and all other expenses incurred by the Servicer in connection with
its activities hereunder, and include, without limitation, all other fees and
expenses of the Trust provided for in Section 8.4 hereof; provided, that the
Servicer shall not be liable for
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any liabilities, costs or expenses of the Trust, the Investor Certificateholders
or the Certificate Owners arising under any tax law, including without
limitation any federal, state or local income or franchise taxes or any other
tax imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith), except to the extent
incurred as a result of the Servicer's violation of the provisions of this
Agreement. The Servicer shall be required to pay such expenses for its own
account and shall not be entitled to any payment therefor other than the Monthly
Servicing Fee.
SECTION 3.3. Representations, Warranties and Covenants of the Servicer.
(a) Yamaha Motor Corporation, U.S.A., as Servicer, hereby makes, and any
Successor Servicer, by its appointment hereunder, shall make, on each Closing
Date (and on the date of any such appointment) the following representations,
warranties and covenants:
(i) Organization and Good Standing. Such party is a
corporation duly organized, validly existing and in good standing under
the applicable laws of the state of its incorporation and has, in all
material respects, full corporate power, authority and legal rights to
own its properties and conduct its wholesale receivable servicing
business as such properties are presently owned and as such business is
presently conducted, and to execute, deliver and perform its
obligations under this Agreement and the applicable Supplement.
(ii) Due Qualification. Such party is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt
from such requirements) and has obtained all necessary licenses and
approvals in each jurisdiction in which the servicing of the
Receivables as required by this Agreement requires such qualification
except where the failure to so qualify or obtain licenses or approvals
would not have a material adverse effect on its ability to perform its
obligations hereunder.
(iii) Due Authorization. The execution, delivery, and
performance of this Agreement and the applicable Supplement has been
duly authorized by such party by all necessary corporate action on the
part thereof.
(iv) Binding Obligation. This Agreement and the applicable
Supplement constitutes a legal, valid and binding obligation of such
party, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in
effect, affecting the enforcement of creditors' rights and except as
such enforceability may be limited by general principles of equity
(whether such enforceability considered in a proceeding at law or in
equity).
(v) No Violation. The execution and delivery of this Agreement
and the applicable Supplement by such party, the performance of the
transactions contemplated by this Agreement and the applicable
Supplement and the fulfillment of the terms hereof and thereof
applicable to such party will not conflict with, violate, result in any
breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default
under, any Requirement of Law applicable to such party or any
indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which such party is a party or by which it is bound.
(vi) No Proceedings. There are no proceedings or, to the best
knowledge of such party, investigations, pending or threatened against
such party before any court, regulatory body, administrative agency or
other tribunal or governmental
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instrumentality seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this
Agreement and the applicable Supplement, seeking any determination or
ruling that, in the reasonable judgment of such party, would materially
and adversely affect the performance by such party of its obligations
under this Agreement and the applicable Supplement, or seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement and the applicable
Supplement.
(vii) Compliance with Requirements of Law. Such party shall
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 under Requirements of Law in order
to service properly 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 material adverse effect on the interests of
Certificateholders.
(viii) No Rescission or Cancellation. Such party shall not
permit any rescission or cancellation of a Receivable except as ordered
by a court of competent jurisdiction or other Governmental Authority.
(ix) Protection of Certificateholders' Rights. Such party
shall take no action, nor omit to take any action, which would impair
the rights of Certificateholders in the Receivables nor shall it
reschedule, revise or defer payments due on any Receivable or
charge-off any Receivable except in accordance with the Floorplan
Financing Guidelines. The Servicer shall not make any material change
to the Floorplan Financing Guidelines with respect to the timing of
charge-offs of Receivables unless, after giving effect to such change,
the Rating Agency Condition is satisfied.
(x) Servicer Concentration Account. The Servicer or, if DFS is
acting as subservicer, DFS, maintains deposit accounts (collectively,
the "Concentration Account") into which it shall deposit all amounts
paid by the Dealers under Floorplan Financing Agreements. The Servicer
agrees (i) that it will not change this method of collection without
the prior written consent of any Enhancement Providers; (ii) with
respect to amounts deposited into the Concentration Account in respect
of a particular day, that it will not transfer such amounts from the
Concentration Account until the Servicer has posted all Collections in
respect of the Receivables for such day and (iii) concurrently with the
transfer of amounts from the Concentration Account in respect of a
particular day, the Servicer will make the deposits and transfers
required by the terms of this Agreement for such day.
(xi) Negative Pledge. Except for the conveyance hereunder to
the Trustee, the Servicer will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist
any Lien on, any Receivable sold and assigned to the Trust, whether now
existing or hereafter created, or any interest therein, and the
Servicer shall defend the rights, title and interest of the Trust in,
to and under any Receivable or related Product Security sold and
assigned to the Trust, whether now existing or hereafter created,
against all claims of third parties claiming through or under the
Transferor or the Servicer.
(b) Notice of Breach. The representations and warranties of the
Servicer set forth in this Section 3.3 shall survive the transfer and assignment
of the Receivables to the Trust and the issuance of the
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Certificates. Upon discovery by the Transferor, the Servicer or the Trustee of a
breach of any of the representations and warranties set forth in this Section
3.3, the party discovering such breach shall give prompt written notice to the
other parties and to any Enhancement Providers.
(c) Purchase. In the event any representation or warranty under Section
3.3(a) (vii), (viii) or (ix) with respect to the Servicer is not true and
correct in any material respect as of the date specified therein with respect to
any Receivable or Account, and such breach has a material adverse effect on the
Certificateholders' Interest in such Receivable, then, within sixty (60) days
(or such longer period as may be agreed to by the Trustee, such period not to
exceed sixty (60) days) of the earlier to occur of the discovery of any such
event by the Transferor or the Servicer, or receipt by the Transferor or the
Servicer of written notice of any such event given by the Trustee or any
Enhancement Providers, the Servicer shall purchase such Receivable or, in the
case of an untrue representation with respect to an Account, all Receivables in
such Account, on the Determination Date immediately succeeding the expiration of
such 60-day period on the terms and conditions set forth in the next succeeding
paragraph; provided, however, that no such purchase shall be required to be made
with respect to such Receivable if, by the end of such 60-day period (or such
longer period as may be agreed to by the Trustee, such period not to exceed
sixty (60) days) the breached representation or warranty shall then be true and
correct in all material respects and any material adverse effect caused thereby
shall have been cured. The Servicer shall effect such purchase by depositing to
the Collection Account on the Transfer Date related to the Collection Period the
principal amount of such Receivables and shall be applied in accordance with the
terms of this Agreement.
Upon each such payment of such purchase price, the Trust shall
automatically and without further action be deemed to transfer, assign, set over
and otherwise convey to the Servicer, without recourse, representation or
warranty, all right, title and interest of the Trust in, to and under such
Receivables, all monies due or to become due with respect thereto and all
proceeds thereof and the related Product Security. The Trustee shall execute
such documents and instruments of transfer or assignment and take such other
actions as shall be reasonably requested by the Servicer to effect the
conveyance of any such Receivables pursuant to this Section. The obligation of
the Servicer to purchase such Receivables, and to make the deposits required to
be made to the Collection Account as provided in the preceding paragraph, shall
constitute the sole remedy respecting the event giving rise to such obligation
available to Certificateholders or the Trustee on behalf of Certificateholders.
SECTION 3.4. Reports and Records for the Trustee.
(a) Initial Servicer's Report. On the Closing Date relating to any
Series, the Servicer shall prepare and deliver, as provided in Section 13.5, to
the Trustee and the Rating Agencies, an Officer's Certificate substantially in
the form of Exhibit D setting forth the Trust Principal Component, the
Transferor Interest, and the Invested Amount for each Series Outstanding as of
the end of the day two (2) Business Days preceding the Closing Date (or such
other day as specified in the applicable Supplement).
(b) Daily Reports. For so long as deposits of Collections are required
to be made daily by the Servicer pursuant to Section 4.1(g), on each Business
Day commencing on the Closing Date, the Servicer shall prepare, and make
available for inspection by the Trustee and maintain at the office of the
Servicer a record setting forth the aggregate amount of Collections processed by
the Servicer on the immediately preceding Business Day.
(c) Monthly Servicer's Certificate. On each Determination Date, the
Servicer shall forward, as provided in Section 13.5, to the Trustee, the Paying
Agent and the Rating Agencies, an Officer's Certificate signed by a Servicing
Officer substantially in the form of Exhibit E (with the Monthly
Certificateholder's Statement required pursuant to the applicable Supplement
attached) setting forth the
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following information (which, in the case of clauses (iii), (iv) and (v) below,
will be stated on the basis of an original principal amount of $1,000 per
Certificate): (i) the aggregate amount of Collections processed for the
Collection Period for such Determination Date and the aggregate amount of Yield
Collections and the aggregate amount of Principal Collections processed during
such Collection Period; (ii) the Invested Percentage on the last day of the
preceding Collection Period of each Series of Certificates with respect to
Principal Collections, the Invested Percentage on the last day of the preceding
Collection Period of each Series of Certificates with respect to Yield
Collections and Defaulted Receivables; (iii) for each Series and for each class
within any such Series, the total amount to be distributed to Investor
Certificateholders on the next succeeding Distribution Date; (iv) for each
Series and for each class within any such Series, the amount of such
distribution allocable to principal; (v) for each Series and for each class
within any such Series, the amount of such distribution allocable to interest;
(vi) for each Series and each class within a Series, the Investor Default Amount
for the immediately preceding Collection Period; (vii) for each Series and each
class within a Series, the amount of the Investor Charge-Offs and the amount of
the reimbursements of Investor Charge-Offs for such Distribution Date and the
amount of the repossession value of all Products repossessed during the related
Collection Period; (viii) for each Series, the Investor Monthly Servicing Fee
for such Distribution Date; (ix) for each Series, the existing Deficit
Controlled Amortization Amount, if applicable; (x) the aggregate amount of
Receivables in the Trust at the close of business on the last day of the
Collection Period preceding such Distribution Date; (xi) for each Series, the
Invested Amount at the close of business on the last day of the Collection
Period immediately preceding such Distribution Date; (xii) the available amount
of any Enhancement for each Series; (xiii) for each Series and each class within
a Series, the Series Factor as of the end of the related Collection Period;
(xiv) the Yield Factor or Yield Factors applicable with respect to the related
Collection Period; (xv) the amount of Collections of Receivables comprised of
interest, fees and service charges collected from Dealers during the related
Collection Period; and (xvi) whether an Early Amortization Event with respect to
any Series shall have occurred during or with respect to the related Collection
Period. The Trustee shall be under no duty to recalculate, verify or recompute
the information supplied to it under this Section 3.4.
SECTION 3.5. Annual Servicer's Certificate. The Servicer will deliver,
as provided in Section 13.5, to the Trustee and the Rating Agencies on or before
May 31 of each calendar year, beginning with 1995, an Officer's Certificate
substantially in the form of Exhibit F (a) stating that a review of the
activities of the Servicer during the preceding fiscal year (or, in the case of
the Series 1994-1 Certificates, during the initial period from the Initial
Closing Date until December 31, 1994) and of its performance under this
Agreement was made under the supervision of the officer signing such certificate
and (b) stating that to the best of such officer's knowledge, based on such
review, either there has occurred no event which, with the giving of notice or
passage of time or both, would constitute a Servicer Default and the Servicer
has fully performed all its obligations under this Agreement throughout such
year, or, if there has occurred such event or Early Amortization Event,
specifying each such event known to such officer and the nature and status
thereof. A copy of such Officer's Certificate may be obtained by any Investor
Certificateholder or Certificate Owner by a request in writing to the Trustee
addressed to the Corporate Trust Office.
SECTION 3.6. Annual Independent Public Accountants' Servicing Report.
(a) On or before May 31 of each calendar year, beginning with 1995, the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish, as provided in Section 13.5, to the Trustee, the Rating
Agencies and, as required, any Enhancement Provider a report to the effect that
in the opinion of such firm the servicing and administration of Accounts under
this Agreement was conducted in compliance with Articles III and IV and Section
8.8 of this Agreement and any Supplement, except for such exceptions or errors
as they believe to be immaterial and such other exceptions as shall be set forth
in such statement. A copy of
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such report may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
(b) On or before May 31 of each calendar year, beginning with 1995, the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or Transferor)
to furnish, as provided in Section 13.5, a report prepared using generally
accepted auditing standards to the Trustee, any Enhancement Provider, as
required, and the Rating Agencies to the effect that (i) for each of six months
randomly selected from the period covered by such report (which shall be the
period from April 1 of the calendar year preceding the year in which such report
is to be delivered, to and including March 31 of the year in which such report
is to be delivered (except for the report dated May 31, 1995, which shall cover
the period from the Initial Closing Date to March 31, 1995), they have compared
the mathematical calculations of each amount set forth in the monthly
certificates forwarded by the Servicer pursuant to Section 3.4(c) with the
Servicer's computer reports which were the source of such amounts and (ii) for
each month of the period covered by such report (which shall be the period from
April 1 of the calendar year preceding the year in which such report is to be
delivered, to and including March 31 of the year in which such report is to be
delivered (except for the report dated May 31, 1995, which shall cover the
period from the Initial Closing Date to March 31, 1995)), they have compared the
mathematical calculations of the repayment rate, net charge-offs, principal
collected and receivable balance as set forth in the monthly certificates
forwarded by the Servicer pursuant to Section 3.4(c) with the Servicer's
computer reports which were the source of such amounts and that on the basis of
such comparisons, such accountants are of the opinion that, for each of (i) and
(ii) above, such amounts are in agreement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth in such
statement. A copy of such report may be obtained by any Investor
Certificateholder or Certificate Owner by a request in writing to the Trustee
addressed to the Corporate Trust Office.
SECTION 3.7. Tax Treatment. The Transferor has structured this
Agreement and the Investor Certificates (other than any Investor Certificates
held by the Transferor) have been (or will be) issued with the intention that
such Investor Certificates will qualify under applicable tax law as indebtedness
of the Transferor, and the Transferor, any entity acquiring any direct or
indirect interest in the Exchangeable Transferor Certificate and each Investor
Certificateholder (or Certificate Owner) by acceptance of its Certificate (or,
in the case of a Certificate Owner, by virtue of such Certificate Owner's
acquisition of a beneficial interest therein) agree to treat such Investor
Certificates (or beneficial interest therein) for purposes of federal, state and
local income or franchise taxes and any other tax imposed on or measured by
income, as indebtedness. Each Certificateholder agrees that it will cause any
Certificate Owner acquiring an interest in a Certificate through it to comply
with this Agreement as to treatment as indebtedness for certain tax purposes.
SECTION 3.8. Adjustments. (a) If the Servicer adjusts downward the
amount of any Receivable because of (i) a rebate, refund or billing error to a
Dealer, (ii) such Receivable was created in respect of Products which were
refused or returned by a Dealer, (iii) a breach of the covenant contained in
Section 2.5(a) or (iv) the Servicer otherwise adjusts downward the amount of any
Receivable without receiving Collections therefor (including a reduction in the
balance of any Receivable as a result of any "holdback" amount due and owing to
such Dealer), or without charging off such amount as uncollectible, then, in any
such case, the Pool Balance will be reduced by amount of such adjustment.
Similarly, the amount of the Trust Principal Component used to calculate the
Transferor Amount, the Transferor Interest and the Floating Allocation
Percentage and the Fixed Allocation Percentage applicable to any Series will be
reduced by the amount of such adjustment. Any adjustment required pursuant to
either of the two preceding sentences shall be made on or prior to the end of
the Collection Period in which such adjustment obligation arises. In the event
that, following any such exclusion, the Transferor Amount as a percentage of the
Trust Principal Component would be less than 10%, within two (2) Business Days
of the date on which such
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adjustment obligation arises, the Transferor shall pay to the Servicer, for
deposit into the Collection Account, in immediately available funds, an amount
equal to the amount by which the Transferor Amount would be reduced below the
product of 10% and the Trust Principal Component. Any amount deposited into the
Collection Account in connection with the adjustment of a Receivable pursuant to
this Section 3.8(a) (an "Adjustment Payment") shall be applied in accordance
with Article IV and the terms of each Supplement. In the event that the Servicer
adjusts upwards the amount of any Receivable, the Pool Balance and, similarly,
the Trust Principal Component, shall be increased by the amount of such upward
adjustment.
(b) If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Receivable and such Collection was received by the
Servicer in the form of a check which is not honored for any reason or (ii) the
Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. Any Receivable in respect of which a dishonored check is received shall
be deemed not to have been paid. Notwithstanding the first two sentences of this
paragraph, no adjustments shall be made pursuant to this paragraph that will
change any amount of Collections previously reported pursuant to Section 3.4(c).
[END OF ARTICLE III]
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
SECTION 4.1. Establishment of Collection Account and Allocations with
Respect to the Exchangeable Transferor's Certificate.
(a) The Collection Account. The Trustee, for the benefit of the
Certificateholders, shall establish and maintain or cause to be established and
maintained in the name of the Trustee, an Eligible Deposit Account (the
"Collection Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders. The
Trustee shall possess all right, title and interest in and to all funds on
deposit from time to time in the Collection Account and in all proceeds thereof.
The Collection Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders. If, at any time, the
Collection Account ceases to be an Eligible Deposit Account, the Trustee (or the
Servicer on its behalf) shall, within five (5) Business Days, establish a new
Eligible Deposit Account as the Collection Account meeting the conditions
specified above, transfer any cash and/or any investments to such new Collection
Account and from the date such new Collection Account is established, it shall
be the "Collection Account." Pursuant to the authority granted to the Servicer
in Section 3.1(b), the Servicer shall have the power, revocable by the Trustee;
to make withdrawals and payments from the Collection Account and to instruct the
Trustee to make withdrawals and payments from the Collection Account for the
purposes of carrying out the Servicer's or Trustee's duties hereunder.
Each Series of Investor Certificates shall represent interests in the
Trust, including the right to receive Collections and other amounts at the times
and in the amounts specified in this Article IV to be deposited in the
Collection Account and any other accounts maintained for the benefit of the
Certificateholders or paid to the Investor Certificateholders. The Exchangeable
Transferor Certificate shall represent the interest in the Trust not represented
by any Series of Investor Certificates then outstanding, including the right to
receive Collections and other amounts at the times and in the amounts specified
in this Article IV to be paid to the Transferor (the "Transferor Interest");
provided, however, that such Exchangeable Transferor Certificate shall not
represent any interest in the Collection Account, any Principal Funding Account
or any other accounts maintained for the benefit of the Certificateholders or
the benefits of any Enhancement to be provided by an Enhancement Provider issued
with respect to any Series, except as specifically provided in this Article IV.
(b) Administration of the Collection Account. At the written direction
of the Servicer, funds on deposit in the Collection Account to be so invested
shall be invested by the Trustee in Eligible Investments. All such Eligible
Investments shall be held by the Trustee for the benefit of the
Certificateholders. Investments of funds representing Collections collected
during any Collection Period shall be invested in Eligible Investments that will
mature so that such funds will be available on the Transfer Date related to such
Collection Period. Any funds on deposit in the Collection Account to be so
invested shall be invested solely in Eligible Investments. All Eligible
Investments shall be held to maturity. The Trustee shall maintain possession of
the negotiable instruments or securities, if any, evidencing the Eligible
Investments described in clause (a) of the definition thereof from the time of
purchase thereof until the time of maturity. On each Distribution Date, all
interest and other investment earnings (net of losses and investment expenses)
on funds on deposit in the Collection Account shall be paid to the Holder of the
Exchangeable Transferor Certificate; provided, however, that for Distribution
Dates with respect to any Accumulation Period or Early Amortization Period, such
interest and earnings shall be considered Yield Collections hereunder.
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(c) Identification of Account. Schedule 2, which is hereby incorporated
into and made a part of this Agreement, identifies the Collection Account by
setting forth the account number of such account, the account designation of
such account and the name of the institution with which such account has been
established.
(d) Allocations For the Exchangeable Transferor Certificate. Unless
otherwise provided in any Supplement, the Servicer shall allocate to the Holder
of the Exchangeable Transferor Certificate an amount equal to the product of (A)
the Transferor Percentage and (B) the aggregate amount of such Collections
allocated to Principal Collections and Yield Collections, respectively, in
respect of such Collection Period. The Servicer shall deposit this amount, and
any other amounts so allocated to the Exchangeable Transferor Certificate
pursuant to any Supplement, into the Collection Account on or before the
Transfer Date.
(e) Allocations of Collections Between Yield Collections and Principal
Collections. At all times and for all purposes of this Agreement and any
Supplement, the Servicer shall allocate all Collections received for any
Collection Period between Yield Collections and Principal Collections. Such
Collections shall be allocated such that all Collections up to the product of
(i) the Pool Balance as of the beginning of such Collection Period and (ii) the
Yield Factor in effect with respect to such period shall be considered Yield
Collections and then the remainder of such Collections shall be considered
Principal Collections.
(f) Undistributed Principal Collections. On each Distribution Date, (a)
the Servicer shall allocate Excess Principal Collections to each Series as set
forth in the related Supplement and (b) the Servicer shall withdraw from the
Collection Account and pay to the Transferor the sum of (i) an amount equal to
the excess, if any, of (x) the aggregate amount for all outstanding Series of
Principal Collections which the related Supplements specify are to be treated as
"Excess Principal Collections" for such Distribution Date over (y) the aggregate
amount for all outstanding Series which the related Supplements specify are
"Principal Shortfalls" for such Distribution Date and, without duplication and
(ii) the aggregate amount for all outstanding Series of that portion of
Principal Collections which the related Supplements specify are to be allocated
and paid to the Transferor with respect to such Distribution Date; provided,
however, that such amounts shall be paid to the Transferor only if the
Transferor Amount (determined after giving effect to any Receivables transferred
to the Trust on such date) exceeds 10% of the Trust Principal Component. Any
amounts held in the Collection Account as a result of the proviso in the
preceding sentence ("Undistributed Principal Collections") shall be transferred
by the Trustee to the Special Funding Account on the next succeeding
Distribution Date for payment to the Transferor at the time the Transferor
Amount as a percentage of the Trust Principal Component exceeds 10%; provided,
however, that any Undistributed Principal Collections on deposit in the
Collection Account at any time during which any Series is in its Accumulation
Period or Early Amortization Period shall be allocated and distributed in
accordance with the terms of each Supplement.
(g) Collections. The Servicer will apply all Collections with respect
to the Receivables for each Collection Period as described in this Article IV
and each Supplement. Except as otherwise provided below, the Servicer shall
deposit Collections into the Collection Account on the Date of Processing of
such Collections and shall deposit all amounts received from the Transferor
pursuant to Sections 2.3, 2.4(d) and 3.3 and all Adjustment Payments received
from the Transferor pursuant to Section 3.8(a) in the Collection Account no more
than two (2) Business Days after the Date of Processing of such payments.
Subject to the express terms of any Supplement, but notwithstanding anything
else in this Agreement to the contrary, for so long as, and only so long as,
Yamaha Motor Corporation, U.S.A. or an Affiliate of Yamaha Motor Corporation,
U.S.A. shall be the Servicer hereunder and shall (i) maintain a short-term
credit rating (which may be an implied rating) of "P-1" by Moody's and of "A-1"
by Standard & Poor's, (ii) obtain a guarantee with respect to the Servicer's
deposit and payment obligations hereunder pursuant to a guaranty in form and
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substance acceptable to each Rating Agency (provided the guarantor maintains a
short-term credit rating of "P-1" by Moody's and of "A-1" by Standard & Poor's),
(iii) have appointed DFS as subservicer pursuant to the Servicing Agreement and
DFS shall maintain a short-term credit rating (which may be an implied rating)
of "P-1" by Moody's and of "A-1" by Standard & Poor's and Yamaha Motor
Corporation, U.S.A. and DFS shall have agreed pursuant to a document
satisfactory to the Rating Agencies that DFS shall remit collections directly to
the Collection Account rather than to Yamaha Motor Corporation, U.S.A., or (iv)
obtain a written notification from each Rating Agency to the effect that such
Rating Agency does not intend to downgrade or withdraw its then current rating
of any outstanding Series of certificates despite the Servicer's inability to
satisfy the rating requirement specified in clause (i), and for two (2) Business
Days following any reduction of either such rating or failure to satisfy the
conditions of either clause (ii) or (iii), the Servicer may, but need not,
deposit Collections or amounts received from the Transferor pursuant to Sections
2.3, 2.4(d) and 3.8(a) into the Collection Account as provided above or may make
a single deposit in the Collection Account in immediately available funds on the
Transfer Date in an amount equal to the sum of amounts received from the
Transferor pursuant to Sections 2.3, 2.4(d) and 3.8(a) with respect to the
Collection Period for each such Distribution Date and the Collections with
respect to the Collection Period for each such Distribution Date. Collections
shall not be required to be invested in Eligible Investments until such time as
they are deposited into the Collection Account. The Servicer shall notify the
Trustee of any downgrade or withdrawal of its or DFS' short-term credit rating.
Should the Servicer be required to make daily deposits of Collections
into the Collection Account pursuant to this Section, during any Early
Amortization Period or Accumulation Period, the Servicer may cease depositing
Principal Collections received in any Collection Period and allocable to a
Series in any Early Amortization Period at such time as an amount of Principal
Collections allocable to such Series and deposited into the Collection Account
equals the amount of principal scheduled or permitted to be paid on the next
succeeding Distribution Date with respect to such Series. Principal Collections
allocable to such Series in excess of such amount shall, subject to the provisos
in Section 4.1(f) and the next succeeding paragraph, be distributed on a daily
basis as they are collected to the Transferor.
Should the Servicer be required to make daily deposits of Collections
into the Collection Account pursuant to this Section, during any Early
Amortization Period or Accumulation Period, the Servicer may cease depositing
Excess Principal Collections received with respect to a Collection Period at
such time as such Excess Principal Collections deposited into the Collection
Account with respect to each Series in an Early Amortization Period or
Accumulation Period together with Principal Collections allocable to such Series
and deposited into the Collection Account with respect to such Collection Period
equals the amount of principal scheduled or permitted to be paid with respect to
such Series on the next succeeding Distribution Date and thereafter.
(h) Eligible Deposit Account Property. With respect to amounts on
deposit in each Eligible Deposit Account from time to time (such amounts
including all investments and the proceeds thereof, whether in the form of
Eligible Deposit Accounts, Physical Property, book-entry securities,
uncertificated securities, or otherwise) (collectively, the "Eligible Deposit
Account Property"), the Trustee hereby agrees that:
(i) All Eligible Deposit Account Property shall be held solely
in the name of the Trustee in Eligible Deposit Accounts or through a
Federal Reserve account. Each such Eligible Deposit Account shall be
subject to the exclusive custody and control of the Trustee, and the
Trustee shall have sole signature authority with respect thereto.
(ii) Any Eligible Deposit Account Property that constitutes
Physical Property shall be delivered to the Trustee in accordance with
paragraph (a) of the definition
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of "Transfer" and shall be held, pending maturity or disposition,
solely by the Trustee or a financial intermediary (as such term is
defined in Section 8-313(4) of the UCC) acting solely for the Trustee.
(iii) Any Eligible Deposit Account Property that is a
book-entry security held through the Federal Reserve System pursuant to
federal book-entry regulations shall be delivered in accordance with
paragraph (b) of the definition of "Transfer" and shall be maintained
by the Trustee, pending maturity or disposition, through continued
book-entry registration of such Eligible Deposit Account Property as
described in such paragraph.
(iv) Any Eligible Deposit Account Property that is an
"uncertificated security" under Article 8 of the UCC and that is not
governed by clause (iii) above shall be delivered to the Trustee in
accordance with paragraph (c) of the definition of "Transfer" and shall
be maintained by the Trustee, pending maturity or disposition, through
continued registration of the Trustee's (or its nominee's) ownership of
such security.
(v) Property of a type which is not capable of being delivered
to the Trustee in accordance with the definition of "Transfer" shall
not constitute Eligible Deposit Account Property.
Effective upon Transfer of any Eligible Deposit Account Property in the
form of Physical Property, book-entry securities, or uncertificated securities,
the Trustee shall be deemed to have represented that it has purchased such
Eligible Deposit Account Property for value, in good faith, and without notice
of any adverse claim thereto.
SECTION 4.2. Establishment and Maintenance of the Special Funding
Account.
(a) The Trustee, for the benefit of the Investor Certificateholders,
shall establish and maintain or cause to be established and maintained in the
name of the Trustee, on behalf of the Trust, an Eligible Deposit Account (the
"Special Funding Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Investor
Certificateholders. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Special Funding Account and in and
to all proceeds thereof. The Special Funding Account shall be under the sole
dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If, at any time, the Special Funding Account ceases to be an
Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall
within five (5) Business Days establish a new Eligible Deposit Account as the
Special Funding Account meeting the conditions specified above, transfer any
cash and/or any investments to such new Special Funding Account and from the
date such new Special Funding Account is established, it shall be, for the
Investor Certificates, the "Special Funding Account". Pursuant to the authority
granted to the Servicer in Section 3.1(b), the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and payments from or to instruct
the Trustee to make withdrawals and payments from the Special Funding Account as
specified below for the purposes of carrying out the Servicer's or the Trustee's
duties hereunder.
(b) If, on any date of determination, the Transferor Amount, as a
percentage of the Trust Principal Component, is less than or equal to the
Minimum Transferor Percentage, or the amount of the Trust Principal Component is
less than the Minimum Trust Principal Component for all Series, then the
Servicer shall not distribute to the Transferor any Principal Collections that
otherwise would be distributed to the Transferor, but shall deposit such funds
into the Special Funding Account on the next succeeding Distribution Date. The
Servicer shall withdraw funds on deposit in the Special Funding Account and
distribute to the Transferor on any Distribution Date to the extent that, after
giving effect to such distribution,
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the Transferor Amount, as a percentage of the Trust Principal Component, exceeds
the Minimum Transferor Percentage; provided, however, that if an Accumulation
Period or Early Amortization Period commences with respect to any Series, any
funds on deposit in the Special Funding Account shall be released from the
Special Funding Account and deposited into the Collection Account and treated as
Principal Collections to the extent necessary to cover principal payments due or
permitted to be paid for the benefit of such Series.
(c) Funds on deposit in the Special Funding Account shall, at the
direction of the Servicer, 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 Investor Certificateholders. All such Eligible
Investments shall be held to maturity. On each Distribution Date with respect to
the Revolving Period and the Accumulation Period, all interest and other
investment earnings (net of losses and investment expenses) on funds deposited
in the Special Funding Account shall be paid to the Transferor and on each
Distribution Date with respect to an Early Amortization Period, such interest
and other earnings (net of losses and investment expenses) shall be treated as
additional Yield Collections pursuant to this Agreement. Funds deposited in the
Special Funding Account on any Distribution Date (which are not otherwise
distributed in accordance with this Section 4.2) shall be invested solely in
Eligible Investments that will mature so that such funds will be available on
the Business Day prior to the following Distribution Date.
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[THE REMAINDER OF ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
41
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ARTICLE V
[ARTICLE V IS RESERVED AND MAY
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
42
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ARTICLE VI
THE CERTIFICATES
SECTION 6.1. The Certificates. Subject to Section 6.10, the Investor
Certificates of each Series and any class thereof shall be issued in fully
registered form (the "Registered Certificates"), and shall be substantially in
the form of the exhibits with respect thereto attached to the applicable
Supplement. The Exchangeable Transferor Certificate shall be substantially in
the form of Exhibit B. The Investor Certificates and the Exchangeable Transferor
Certificate shall, upon issue pursuant hereto or to Section 6.9 or Section 6.10,
be executed and delivered by the Transferor to the Trustee for authentication
and redelivery as provided in Section 6.2. Any Investor Certificates shall be
issued in minimum denominations of $1,000 and in integral multiples of $1,000 in
excess thereof, unless otherwise specified in any Supplement. If specified in
the related Supplement for any Series, the Investor Certificates shall be issued
upon initial issuance as a single certificate in an original principal amount
equal to the Initial Invested Amount as described in Section 6.10. The
Exchangeable Transferor Certificate may also be issued in one (1) or more
certificates. Each Certificate shall be executed by manual or facsimile
signature on behalf of the Transferor by its Chairman of the Board, President,
Vice Chairman of the Board or any Vice President. Certificates bearing the
manual or facsimile signature of the individual who was, at the time when such
signature was affixed, authorized to sign on behalf of the Transferor or the
Trustee shall not be rendered invalid, notwithstanding that such individual has
ceased to be so authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement or any
applicable Supplement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by or on behalf of the Trustee by the manual signature of a
duly authorized signatory, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
SECTION 6.2. Authentication of Certificates. Contemporaneously with the
assignment and transfer of the Receivables, whether now existing or hereafter
created, and the other Trust Property to the Trust, the Trustee shall
authenticate and deliver the initial Series of Investor Certificates that is
issued upon original issuance, upon the order of the Transferor, to the
underwriter or underwriters thereof. The Trustee shall authenticate and deliver
the Exchangeable Transferor Certificate to the Transferor simultaneously with
its delivery of the initial Series of Investor Certificates. Upon the issuance
of a new Series of Investor Certificates as provided in Section 6.9 of this
Agreement and the satisfaction of certain other conditions specified therein,
the Trustee shall authenticate and deliver the Investor Certificates of
additional Series (with the designation provided in the applicable Supplement),
upon the order of the Transferor, to the Persons designated in such Supplement.
Upon the order of the Transferor, the Certificates of any Series shall be duly
authenticated by or on behalf of the Trustee, in authorized denominations equal
to (in the aggregate) the Initial Invested Amount of such Series of Investor
Certificates. If specified in the related Supplement for any Series, the Trustee
shall authenticate Book-Entry Certificates that are issued upon original
issuance thereof, upon the written order of the Transferor, to a Clearing Agency
or its nominee as provided in Section 6.10 against payment of the purchase price
thereof.
SECTION 6.3. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (which may be the Trustee) (the
"Transfer Agent and Registrar") in accordance with the provisions of this
Agreement a register (the "Certificate Register") in which, subject to such
reasonable regulations as it may prescribe, the Transfer Agent and Registrar
shall provide for the registration of the
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Registered Certificates and of transfers and exchanges of the Registered
Certificates as herein provided. The Trustee is hereby initially appointed
Transfer Agent and Registrar for the purpose of registering the Registered
Certificates and transfers and exchanges of the Registered Certificates as
herein provided. The Trustee shall be permitted to resign as Transfer Agent and
Registrar upon thirty (30) days' written notice to the Transferor and the
Servicer; provided, however, that such resignation shall not be effective and
the Trustee shall continue to perform the duties of Transfer Agent and Registrar
until the Transferor has appointed a successor Transfer Agent and Registrar
acceptable to the Transferor and the Trustee. If specified in the related
Supplement for any Series of Certificates, the Transferor shall appoint any
co-transfer agent and co-registrar chosen by the Transferor, and acceptable to
the Trustee. If specified in such related Supplement, so long as the Registered
Certificates relating to such Supplement are outstanding, the Transferor shall
maintain a co-transfer agent and co-registrar in New York City or any other city
designated in such Supplement and any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar unless the context requires otherwise.
Upon surrender for registration of transfer of any Registered
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Transferor shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Certificates in authorized denominations
of the same Series representing like aggregate Undivided Interests in the Trust.
At the option of any Registered Certificateholder, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in the
Trust, upon surrender of the Registered Certificates to be exchanged at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose.
The preceding provisions of this Section 6.3 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange any Certificate of any Series
for a period of fifteen (15) days preceding the due date for any payment with
respect to the Certificates of such Series.
Whenever any Investor Certificates of any Series are so surrendered for
exchange, the Transferor shall execute and the Trustee shall authenticate, the
Investor Certificates of such Series which the Certificateholder making the
exchange is entitled to receive. Every Investor Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to the Trustee and the
Transfer Agent and Registrar duly executed by the Certificateholder thereof or
his attorney duly authorized in writing.
Except as provided in any Supplement, no service charge shall be made
for any registration of transfer or exchange of Investor Certificates, but the
Transfer Agent and Registrar and the Trustee or any co-transfer agent and
co-registrar or co-trustee may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer
or exchange of Investor Certificates.
All Investor Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Transfer Agent and Registrar and disposed of
in a manner satisfactory to the Trustee and the Transferor.
The Transferor shall execute and deliver to the Trustee Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
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(b) Except as provided in Section 7.2, the Exchangeable Transferor
Certificate shall not be sold, transferred, assigned, exchanged, pledged,
participated or otherwise conveyed, unless (A) (i) the Servicer has delivered to
the Trustee an Officer's Certificate stating that such sale, transfer,
assignment, exchange, pledge or conveyance will not, while any Series of
Certificates remains outstanding, reduce the Transferor's retained interest in
the Exchangeable Transferor Certificate below the Minimum Transferor Percentage
for any Series then outstanding and (ii) the Trustee receives prior to such
sale, transfer, assignment, exchange, pledge, participation or conveyance
written confirmation from each Rating Agency that such transfer, assignment,
exchange, pledge, participation or conveyance will not result in the Rating
Agency's reducing or withdrawing its rating on any then outstanding Series rated
by it or (B) such transfer, assignment, exchange, pledge or conveyance is made
and, in the case of (A), the Trustee receives prior thereto an Opinion of
Counsel to the effect that (x) the conveyed interest in the Transferor
Exchangeable Certificate will be treated as either debt or an interest in a
partnership for federal income tax purposes and that the conveyance of such
interest will not cause the Trust to be characterized for federal income tax
purposes as an association taxable as a corporation or otherwise have any
material adverse impact on the federal or applicable state income taxation of
any outstanding Series of Investor Certificates or any Certificate Owner and (y)
such transfer will not cause a taxable event for federal income tax purposes to
any Investor Certificateholder.
(c) The Transfer Agent and Registrar will maintain at its expense in
the Borough of Manhattan, The City of New York (or subject to Section 6.3(a) of
this Agreement any other city designated in such Supplement), an office or
offices or agency or agencies where Investor Certificates may be surrendered for
registration of transfer or exchange.
(d) Unless otherwise provided in any related Supplement, registration
of transfer of Registered Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates (which legend shall be
set forth in the Supplement relating to such Investor Certificates) shall be
effected only if:
(i) the sale is of at least U.S. $500,000 principal amount of
such Certificates and a letter from the purchaser satisfactory to
counsel to the Servicer is executed and received; or
(ii) the Registered Certificates are transferred in compliance
with Rule 144 (or any amendment thereto) or Rule 144A (or any amendment
thereto) under the United States Securities Act of 1933, as amended,
and (b) a letter from the purchaser satisfactory to counsel to the
Servicer is executed and received; or
(iii) the Registered Certificates are sold or otherwise
transferred in any other transaction that does not require registration
under the United States Securities Act of 1933, as amended, and, if the
Transferor, or the Servicer so request, an Opinion of Counsel
satisfactory to it, in form and substance satisfactory to it, is
furnished to such effect.
Registered Certificates issued upon registration of transfer of, or
Registered Certificates issued in exchange for, Registered Certificates bearing
the legend referred to above shall also bear such legend unless the Transferor,
the Servicer, the Trustee and the Transfer Agent and Registrar receive an
Opinion of Counsel satisfactory to each of them, to the effect that such legend
may be removed.
Whenever a Registered Certificate containing a legend relating to the
restrictions on transfer of such Registered Certificate as set forth in the
related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
written
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instructions from the Servicer regarding such transfer; provided that, absent
such instructions, the Transfer Agent and Registrar shall have no duty to
register any such requested transfer. The Transfer Agent and Registrar and the
Trustee shall be entitled to receive written instructions signed by a Servicing
Officer prior to registering any such transfer or authenticating new Registered
Certificates, as the case may be, and to fully rely on such written instructions
without any duty of further inquiry. The Servicer hereby agrees to indemnify the
Transfer Agent and Registrar and the Trustee and to hold each of them harmless
against any loss, liability or expense incurred without bad faith on their part
arising out of or in connection with actions taken or omitted by them in
reliance on and in accordance with any such written instructions furnished
pursuant to this Section 6.3(d).
SECTION 6.4. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Transfer Agent and Registrar, or
the Transfer Agent and Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Transfer Agent and Registrar, the Trustee and the Transferor such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Transferor shall execute and the Trustee shall
authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and aggregate Undivided
Interest, if applicable. In connection with the issuance of any new Certificate
under this Section 6.4, the Trustee or the Transfer Agent and Registrar may
require the payment by the Certificateholder of a sum sufficient to cover any
tax or other governmental expenses (including the fees and expenses of the
Trustee and Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 6.4 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
SECTION 6.5. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them shall treat the person
in whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Article IV hereof and for all
other purposes whatsoever, and neither the Trustee, the Paying Agent, the
Transfer Agent and Registrar nor any agent of any of them shall be affected by
any notice to the contrary. Notwithstanding the foregoing provisions of this
Section 6.5, in determining whether the holders of the requisite Undivided
Interests have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Certificates owned by the Transferor, the Servicer
or any affiliate thereof (as defined in Rule 405 under the Securities Act of
1933, as amended), shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates which the Trustee knows to be so owned shall be so disregarded.
Certificates so owned which have been pledged in good faith shall not be
disregarded and may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the United States, the Servicer or an
affiliate thereof (as defined above).
SECTION 6.6. Appointment of Paying Agent. The Paying Agent shall make
distributions to Investor Certificateholders from the Collection Account and the
Special Funding Account (or any other account or accounts maintained for the
benefit of Certificateholders as specified in the related Supplement for any
Series) pursuant to Article IV hereof. Any Paying Agent shall have the revocable
power to withdraw funds from the Collection Account and the Special Funding
Account (or any other account or accounts maintained for the benefit of
Certificateholders as specified in the related Supplement for any Series) for
the purpose of making distributions referred to above. The Trustee may revoke
such power and remove the Paying Agent if the Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Agreement in any material respect. The Paying Agent shall
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initially be the Trustee and any co-paying agent chosen by the Transferor and
acceptable to the Trustee. The Trustee shall be permitted to resign as Paying
Agent upon thirty (30) days' written notice to the Servicer and the Transferor.
The Transferor shall notify the Rating Agencies of any resignation or
replacement of the Paying Agent. In the event that the Trustee shall no longer
be the Paying Agent, the Transferor shall appoint a successor to act as Paying
Agent and such successor shall be acceptable to the Trustee. The Trustee shall
cause the initial Paying Agent and each successor Paying Agent or any additional
Paying Agent appointed by the Transferor to execute and deliver to the Trustee
an instrument in which such initial or successor Paying Agent or additional
Paying Agent shall agree with the Trustee that, as Paying Agent, such initial or
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Investor Certificateholders in trust for the
benefit of the Investor Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders. The Paying Agent shall return all
unclaimed funds to the Trustee and upon removal of a Paying Agent shall also
return all funds in its possession to the Trustee. The provisions of Sections
11.1, 11.2 and 11.3 of this Agreement shall apply to the Trustee also in its
role as Paying Agent, for so long as the Trustee shall act as Paying Agent. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long as the
Investor Certificates of such Series are outstanding, the Transferor shall, if
the Paying Agent is not located in New York City, appoint a co-paying agent in
New York City (for Registered Certificates only) acceptable to the Trustee.
SECTION 6.7. Access to List of Certificateholders' Names and Addresses.
The Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to the Servicer or the Paying Agent (or any agent thereof), within
five (5) Business Days after receipt by the Trustee of a request therefor from
the Servicer or the Paying Agent, respectively, in writing, a list in the form
maintained by the Trustee, of the names and addresses of the Investor
Certificateholders. If Holders representing Undivided Interests in the Trust
aggregating not less than 10% of the Invested Amount of the Investor
Certificates of such Series (collectively, the "Applicants") apply in writing to
the Trustee, and such application states that the Applicants desire to
communicate with other Investor Certificateholders of such Series with respect
to their rights under this Agreement or under the Investor Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee, after having been adequately indemnified by such
Applicants for its costs and expenses, shall afford or shall cause the Transfer
Agent and Registrar to either afford such Applicants access during normal
business hours to the most recent list of Certificateholders held by the
Trustee, or mail or cause to be mailed such list within five (5) Business Days
after the receipt of such application. Such list shall be as of a date no more
than forty-five (45) days prior to the date of receipt of such Applicants'
request.
Every Certificateholder, by receiving and holding a Certificate agrees
with the Trustee that neither the Trustee, the Transfer Agent and Registrar, nor
any of their respective agents shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the sources from which such
information was derived.
SECTION 6.8. Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
reasonably acceptable to the Transferor.
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(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Transferor. The Trustee may at
any time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Transferor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an authenticating agent shall cease to be acceptable to the Trustee or the
Transferor, the Trustee promptly may appoint a successor authenticating agent.
Any successor authenticating agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an authenticating agent.
No successor authenticating agent shall be appointed unless acceptable to the
Trustee and the Transferor.
(d) The Servicer agrees to pay, on behalf of the Trust, to each
authenticating agent from time to time reasonable compensation for its services
under this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and 11.3 of this Agreement
shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Certificates described in the Master Pooling and
Servicing Agreement.
-----------------------
as Authenticating Agent
for the Trustee,
By:
--------------------
Authorized Officer
SECTION 6.9. Issuance of Additional Series of Certificates.
(a) The Trustee shall from time to time, as directed in writing by the
Transferor and subject to the conditions precedent set forth herein, issue to
the Transferor under Section 6.1 of this Agreement for execution and redelivery
to the Trustee for authentication under Section 6.2 of this Agreement one or
more new Series of Investor Certificates. Any such Series of Investor
Certificates shall be substantially in the form specified in the applicable
Supplement and shall bear, upon its face, the designation for such Series to
which it belongs so selected by the Transferor. Except as specified in any
Supplement for a related Series, all Investor Certificates of any Series shall
be equally and ratably entitled as provided herein to the benefits hereof
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Agreement and the applicable Supplement.
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(b) The Transferor may request the issuance of a new Series of Investor
Certificates in writing at least three (3) days in advance of the Closing Date
related to such new Series. Any such written request shall state the designation
of any Series to be issued on the Closing Date and, with respect to each such
Series: (x) its Initial Invested Amount (or the method for calculating such
Initial Invested Amount), if any, which, in the aggregate, at any time, may not
be greater than the current principal amount of the Exchangeable Transferor
Certificate less the product of the Minimum Transferor Percentage and the Trust
Principal Component at such time, and (y) its Certificate Rate(s) (or the method
for allocating interest payments or other cash flow to such Series), if any. On
the Closing Date, the Trustee shall only authenticate and deliver any such
Series upon delivery to it of the following: (A) a Supplement in form
satisfactory to the Trustee executed by the Transferor and specifying the
Principal Terms of such Series, (B) the applicable Enhancement, if any, (C) an
Opinion of Counsel to the effect that the newly issued Series of Investor
Certificates will be characterized as either indebtedness or an interest in a
partnership under existing law for federal income tax purposes and that the
issuance of the newly issued Series of Investor Certificates will not have any
material adverse impact on the federal income tax characterization of any
outstanding Series of Investor Certificates that have been the subject of a
previous opinion of tax counsel, (D) written confirmation from each Rating
Agency that the issuance of such new Series will not result in the Rating
Agency's reducing or withdrawing its rating on any then outstanding Series rated
by it, and (E) a copy of the Initial Servicer Report, certified by an officer of
the Servicer, required to have been delivered two days prior to the Closing Date
for such Series pursuant to Section 3.4 hereof. Upon satisfaction of such
conditions, the Trustee shall issue, as provided above, such Series of Investor
Certificates, dated the Closing Date or such other date as specified in the
Supplement relating to such new Series.
(c) In conjunction with the issuance of such new Series, the parties
hereto shall execute a Supplement, which shall specify the relevant terms with
respect to any Series of Investor Certificates, which may include, without
limitation: (i) its name or designation, (ii) an Initial Invested Amount or the
method of calculating the Initial Invested Amount, (iii) the Certificate Rate(s)
(or formula for the determination thereof), (iv) the interest payment date or
dates and the date or dates from which interest shall accrue, (v) the method of
allocating Principal Collections for such Series and, if applicable, with
respect to other Series and the method by which the principal amount of Investor
Certificates of such Series shall amortize or accrete and the method for
allocating Yield Collections and Receivables in Accounts, (vi) the names of any
accounts to be used by such Series and the terms governing the operation of any
such account, (vii) the Servicing Fee Percentage, (viii) the Minimum Transferor
Percentage, (ix) Minimum Trust Principal Component, (x) the Stated Series
Termination Date, (xi) the terms of any Enhancement, (xii) the base rate, if
any, (xiii) the Repurchase Terms or the terms on which the Certificates of such
Series may be remarketed to other investors, (xiv) any deposit into any account
provided for such Series, (xv) the number of Classes of such Series, and if more
than one Class, the rights and priorities of each such Class, (xvi) the extent
to which the Investor Certificates will be issuable in temporary or permanent
global form, and in such case, the depository for such global certificate or
certificates, the terms and conditions, if any, upon which such global
certificate may be exchanged in whole or in part for Definitive Certificates,
and the manner in which any interest payable on a temporary or global
certificate will be paid, (xvii) the priority of any Series with respect to any
other Series, and (xviii) any other relevant terms of such Series (all such
terms, the "Principal Terms" of such Series). If on the Closing Date of such
Series there is issued and outstanding no Series of Investor Certificates which
is currently rated by a Rating Agency, then as a condition to such issuance a
nationally recognized investment banking firm or commercial bank shall also
deliver to the Trustee an officer's certificate stating, in substance, that the
issuance of such new Series will not have a material adverse effect on the
timing or distribution of payments to such other Series of Investor Certificates
then issued and outstanding.
SECTION 6.10. Book-Entry Certificates. Unless otherwise provided in any
related Supplement, the Investor Certificates, upon original issuance, will be
issued in the form of the requisite
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number of typewritten Certificates representing the Book-Entry Certificates, to
be delivered to The Depository Trust Company, the initial Clearing Agency, by,
or on behalf of, the Transferor. The Investor Certificates shall initially be
registered on the Certificate Register in the name of CEDE & Co., the nominee of
the Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Investor
Certificates, except as provided in Section 6.12 of this Agreement. Unless and
until definitive, fully registered Investor Certificates (collectively, the
"Definitive Certificates") have been issued to Certificate Owners pursuant to
Section 6.12 of this Agreement:
(i) the provision of this Section 6.10 shall be in full force
and effect;
(ii) the Transferor, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes (including
the making of distributions on the Investor Certificates) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10
conflict with any other provisions of this Agreement, the provisions of
this Section 6.10 shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency and/or the Clearing
Agency Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 6.12 of
this Agreement, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the Investor
Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of a specified percentage
of the Invested Amount of any or all Series of Certificates
outstanding, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Certificate Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in Investor Certificates.
SECTION 6.11. Notices to Clearing Agency. Whenever notice or other
communication to the Investor Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 6.12 of this Agreement, the Trustee, the
Servicer and the Paying Agent shall give all such notices and communications
specified herein to be given to Holders of the Investor Certificates to the
Clearing Agencies.
SECTION 6.12. Definitive Certificates. If Book-Entry Certificates have
been issued pursuant to Section 6.10 and if (i)(A) the Transferor advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement, and (B)
the Trustee or the Transferor is unable to locate a qualified successor, (ii)
the Transferor at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency with respect to the
Certificates or (iii) after the occurrence of a Servicer Default, Certificate
Owners representing beneficial interests aggregating more than 50% of the
Invested Amount of any Series advise the Trustee and the Clearing Agency through
the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Certificate Owners, the Trustee shall notify all Certificate Owners,
through each applicable Clearing Agency, of the
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occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Investor Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trustee shall issue
the Definitive Certificates. Neither the Transferor, the Transfer Agent and
Registrar nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee to the extent
applicable with respect to such Definitive Certificates and the Trustee shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
SECTION 6.13. Meetings of Certificateholders.
(a) Unless not permitted by the Supplement for any Series issued the
Transferor, the Servicer or the Trustee may at any time call a meeting of the
Certificateholders of such Series or of all Series, to be held at such time and
at such place as the Transferor, the Servicer or the Trustee, as the case may
be, shall determine, for the purpose of approving a modification of or amendment
to, or obtaining a waiver of, any covenant or condition set forth in this
Agreement with respect to such Series or in the Certificates of such Series,
subject to Section 13.1 of this Agreement. References in this Section 6.13 to
Certificateholders shall be deemed to refer to the Exchangeable Transferor
Certificate and only those Series of Investor Certificates for which this
Section 6.13 is applicable. Notice of any meeting of Certificateholders, setting
forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given in accordance with Section
13.5 of this Agreement and at least once in an Authorized Newspaper, the first
publication to be not less that 20 nor more than 180 days prior to the date
fixed for the meeting. To be entitled to vote at any meeting of
Certificateholders, a person shall be (i) a Holder of one or more Certificates
of the applicable Series or (ii) a person appointed by an instrument in writing
as proxy by the Holder of one or more Certificates. The only Persons who shall
be entitled to be present or to speak to any meeting of Certificateholders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Transferor, the Servicer and the Trustee and their
respective counsels.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing Undivided Interests aggregating a majority
of the Invested Amount of the applicable Series or all outstanding Series, as
the case may be, shall constitute a quorum. No business shall be transacted in
the absence of a quorum, unless a quorum is present when the meeting is called
to order. In the absence of a quorum at any such meeting, the meeting may be
adjourned for a period of not less than ten (10) days; in the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days; at the reconvening of any
meeting further adjourned for lack of a quorum, the Persons entitled to vote at
least 25% in Undivided Interest of the applicable Series or all outstanding
Series, as the case may be, shall constitute a quorum for the taking of any
action set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided above except
that such notice must be given not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage of the aggregate
principal amount of the outstanding Investor Certificates which shall constitute
a quorum.
(c) Any Certificateholder who has executed an instrument in writing
appointing a person as proxy shall be deemed to be present for the purposes of
determining a quorum and be deemed to have voted; provided that such
Certificateholder shall be considered as present or voting only with respect to
the matters covered by such instrument in writing. Subject to the provisions of
Section 13.1 of this Agreement, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance
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with this Section 6.13 shall be binding on all the Investor Certificateholders
whether or not present or represented at the meeting.
(d) The holding of Registered Certificates shall be proved by the
Certificate Register or by a certificate or certificates of the Transfer Agent
and Registrar.
(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the holders of a majority in Undivided Interest of the Certificates of
such Series represented at the meeting. No vote shall be cast or counted at any
meeting in respect of any Certificate challenged as not outstanding and ruled by
the chairman of the meeting to be not outstanding. The chairman of the meeting
shall have no right to vote except as a Certificateholder or proxy. Any meeting
of Certificateholders duly called at which a quorum is present may be adjourned
from time to time, and the meeting may be held as so adjourned without further
notice.
(f) The vote upon any resolution submitted to any meeting of
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of the Certificateholders or proxies and on which shall be inscribed
the serial number or numbers of the Certificates held or represented by them.
The permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Certificateholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was published as
provided above. The record shall be signed and verified by the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Servicer and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
[END OF ARTICLE VI]
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ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
SECTION 7.1. Liability of the Transferor. The Transferor shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by such Transferor.
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor. The Transferor shall not consolidate with or
merge into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the
Transferor is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Transferor substantially as an entirety shall be
organized and existing under the laws of the United States of America or any
State or the District of Columbia, and if the Transferor is not the surviving
entity, shall expressly assume, by an agreement supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Transferor, as applicable
hereunder and shall benefit from all the rights granted to the Transferor, as
applicable hereunder. (To the extent that any right, covenant or obligation of
the Transferor, is inapplicable to the successor entity, such successor entity
shall be subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity);
(b) the Transferor has delivered to the Trustee an Officer's
Certificate signed by a Vice President of the Transferor and an Opinion of
Counsel each stating that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section 7.2 and that all conditions
precedent herein provided for relating to such transaction have been complied
with; and
(c) the Rating Agencies have advised such Transferor and the Trustee
that the rating of the Certificates, after giving effect to such assignment and
succession, will not be lowered or withdrawn.
The obligations of the Transferor hereunder shall not be assignable nor shall
any Person succeed to the obligations of the Transferor hereunder except in each
case in accordance with the provisions of the foregoing paragraph.
SECTION 7.3. Limitation on Liability of the Transferor. The directors,
officers, employees or agents of the Transferor shall not be under any liability
to the Trust, the Trustee, the Certificateholders or any other Person hereunder
or pursuant to any document delivered hereunder, it being expressly understood
that all such liability is expressly waived and released as a condition of, and
as consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates; provided, however, that this provision shall not
protect the officers, directors, employees or agents of the Transferor against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. Except as
provided in Section 7.4, the Transferor shall not be under any liability to the
Trust, the Trustee, the Certificateholders or any other Person for any action
taken or for refraining from the taking of any action in its capacity as a
Transferor pursuant to this Agreement or any Supplement whether arising from
express or implied duties under this Agreement or any Supplement; provided,
however, that this provision shall not protect the Transferor against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason of
reckless
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disregard of obligations and duties hereunder. The Transferor may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder.
SECTION 7.4. Liabilities. Notwithstanding Section 7.3, by entering into
this Agreement, the Transferor agrees to be liable, directly to the injured
party, for the entire amount of any losses, claims, damages or liabilities
(other than those incurred by a Certificateholder in the capacity of an investor
in the Investor Certificates) arising out of or based on the arrangement created
by this Agreement and the actions of the Servicer taken pursuant hereto as
though this Agreement created a partnership under the Uniform Partnership Act as
in effect in the state of New York from time to time. The Transferor agrees to
pay, indemnify and hold harmless each Investor Certificateholder against and
from any and all such losses, claims, damages and liabilities except to the
extent that they arise from any action by such Investor Certificateholder.
Subject to Sections 8.3 and 8.4, in the event of a Service Transfer, the
Successor Servicer will indemnify and hold harmless the Transferor for any
losses, claims, damages and liabilities of the Transferor as described in this
Section 7.4 arising from the actions or omissions of such Successor Servicer.
The amount of the Transferor's liability under this Section 7.4 shall be
subordinate to the security interest of the Trust in the Receivables and shall
be payable from the assets of the Transferor at the time such liability is
asserted and at any time thereafter.
[END OF ARTICLE VII]
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ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
SECTION 8.1. Liability of the Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
SECTION 8.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety shall be a
corporation organized and existing under the laws of the United States of
America or any State or the District of Columbia, and if the Servicer is not the
surviving entity, shall expressly assume, by an agreement supplemental hereto,
executed and delivered to the Trustee, the performance of every covenant and
obligation of the Servicer hereunder. (To the extent that any right, covenant or
obligation of the Servicer, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or obligation, or benefit
from such right, as would apply, to the extent practicable, to such successor
entity.); and
(b) the Servicer has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this Section
8.2 and that all conditions precedent herein provided for relating to such
transaction have been complied with.
The Servicer shall promptly advise the Rating Agencies in writing of any such
merger, consolidation, conveyance or transfer.
SECTION 8.3. Limitation on Liability of the Servicer and Others.
Subject to the provisions of Section 8.4, the directors, officers, employees or
agents of the Servicer shall not be under any liability to the Trust, the
Transferor, the Trustee, the Certificateholders, or any other Person hereunder
or pursuant to any document delivered hereunder, it being expressly understood
that all such liability is expressly waived and released as a condition of, and
as consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates; provided, however, that this provision shall not
protect the directors, officers, employees and agents of the Servicer against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. Except as
provided in Section 8.4, the Servicer shall not be under any liability to the
Trust, the Trustee, the Certificateholders or any other Person for any action
taken or for refraining from the taking of any action in its capacity as
Servicer pursuant to this Agreement or any Supplement whether arising from
express or implied duties under this Agreement or any Supplement; provided,
however, that this provision shall not protect the Servicer against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. The Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Receivables in
accordance with this Agreement or any Supplement which in its reasonable opinion
may involve it in any expense or liability.
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SECTION 8.4. Indemnification of the Trust and the Trustee. The Servicer
shall indemnify and hold harmless the Trust, for the benefit of the
Certificateholders, and the Trustee, including its officers, directors and
employees from and against any loss, liability, expense, damage or injury
arising out of or relating to the administration of this Agreement or any
Supplement and the performance of the Trustee's duties hereunder and under any
Supplement, including but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that the Servicer shall not indemnify against any loss,
liability, expense or injury incurred by the Trustee through the Trustee's own
negligence or wilful misconduct; provided, further, that the Servicer shall not
indemnify the Trust, or the Investor Certificateholders for any liability, cost
or expense of the Trust or the Trustee or its officers, directors or employees
if any such claims, actions or proceedings relate to any federal, state or local
income or franchise taxes (or any interest or penalties with respect thereto)
required to be paid by the Trustee or the Investor Certificateholders in
connection herewith to any taxing authority. The Servicer hereby agrees to
indemnify The Fuji Bank and Trust Company in its individual capacity for any
such tax liabilities, costs or expenses arising in connection with the
performance of its obligations under this Agreement. Subject to Sections 7.1 and
7.4 and Section 10.2(b) of this Agreement, any indemnification pursuant to this
Section shall only be from the assets of the Servicer. The provisions of this
indemnity shall run directly to and be enforceable by an injured party subject
to the limitations hereof and shall survive the termination of this Agreement
and payment in full of the Certificates.
SECTION 8.5. The Servicer Not to Resign. The Servicer shall not resign
from the obligations and duties hereby imposed on it as such except (a) upon
determination that (i) the performance of its duties hereunder is or will become
impermissible under applicable law, regulation or order and (ii) there is no
reasonable action which the Servicer could take to make the performance of its
duties hereunder permissible under applicable law, or (b) upon the satisfaction
of the following conditions, (i) the assumption, by an agreement supplemental
hereto, executed by and delivered to the Trustee, of the obligations and duties
of the Servicer hereunder by the proposed successor Servicer, (ii) the written
confirmation by the Rating Agencies that the then current rating of any Series
of Certificates then outstanding will not, solely as a result of such transfer,
be reduced or withdrawn, (iii) the delivery to the Trustee of an Opinion of
Counsel substantially to the effect that (A) such transfer will not adversely
affect the treatment of any Series of Certificates then outstanding after such
transfer as debt for federal and state income tax purposes, and (B) such
transfer will not have any material adverse impact on the federal or state
income taxation of the Trust or an Investor Certificateholder or any Certificate
Owner, and (iv) the proposed successor Servicer has a net worth of not less than
$50,000,000 and its regular business includes the servicing of wholesale dealer
accounts. Any determination pursuant to clause (a) of this Section permitting
the resignation of the Servicer shall be evidenced as to clause (a)(i) of this
Section by an Opinion of Counsel to such effect delivered to the Trustee.
Notwithstanding anything in this Agreement or any Supplement to the contrary,
any Successor Servicer appointed under clause (b) of this Section shall be
deemed to be a Successor Servicer as defined hereunder. No such resignation
shall become effective until the Trustee or its duly appointed agent (which may
not be the outgoing Servicer) or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 10.2
hereof. If the Trustee is unable within 120 days of the date of such
determination to appoint a Successor Servicer pursuant to Section 10.2(a), the
Trustee or its duly appointed agent (which may not be the outgoing Servicer)
shall serve as Successor Servicer hereunder but the Trustee shall have continued
authority to appoint another Person as Successor Servicer.
SECTION 8.6. Access to Certain Documentation and Information Regarding
the Receivables. The Servicer shall provide to the Trustee access to the
documentation regarding the Accounts and the Receivables in such cases where the
Trustee is required in connection with the enforcement of the
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rights of the Investor Certificateholders, or by applicable statutes or
regulations, to review such documentation, such access being afforded without
charge but only (i) upon reasonable request, (ii) during normal business hours,
(iii) subject to such security and confidentiality procedures as the Servicer
may deem reasonably necessary and (iv) at offices designated by the Servicer.
Nothing in this Section 8.6 shall derogate from the obligation of the
Transferor, the Trustee or the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Dealers and the failure of
the Servicer to provide access as provided in this Section 8.6 as a result of
such obligation shall not constitute a breach of this Section 8.6.
SECTION 8.7. Delegation of Duties. It is understood and agreed by the
parties hereto that the Servicer may delegate certain of its duties hereunder to
any Person who agrees to conduct such duties in accordance with the applicable
Floorplan Financing Guidelines. The fees of any Person to whom such duties are
delegated shall be solely for the account of the Servicer and such Person shall
have no right to look to any assets of the Trust or the Trustee for payment of
such fees. Any such delegations shall not relieve the Servicer of its liability
and responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of Section 8.5 hereof. If any such delegation is
to a Person other than DFS or a subsidiary of DFS or otherwise is not in the
ordinary course of business (i) such Person shall have a short-term credit
rating (which may be an implied rating) of at least "P-1" by Moody's and of
"A-1" by Standard & Poor's and (ii) notification thereof shall be given to each
Rating Agency.
SECTION 8.8. Examination of Records. The Transferor and the Servicer
shall clearly and unambiguously identify each Account in its computer or other
records to reflect that the Receivables arising in such Account have been
conveyed to the Trust pursuant to this Agreement. The Transferor and the
Servicer shall, prior to the sale or transfer to a third party of any receivable
held in its custody, examine its computer and other records to determine that
such receivable is not a Receivable.
[END OF ARTICLE VIII]
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ARTICLE IX
EARLY AMORTIZATION EVENTS
SECTION 9.1. Early Amortization Events. Unless supplemented or modified
with respect to any Series of Investor Certificates by any related Supplement,
if any one of the following events shall occur:
(a) the Transferor, Yamaha Motor Corporation, U.S.A. or DFS (if it is
then acting as sub-servicer) shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Transferor,
Yamaha Motor Corporation, U.S.A. or DFS (if it is then acting as subservicer) of
or relating to all or substantially all of its property, or a decree or order of
a court or agency or supervisory authority having jurisdiction in the premises
for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Transferor, Yamaha Motor Corporation, U.S.A. or
DFS (if it is then acting as sub-servicer) and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty (60) days; or
the Transferor or Yamaha Motor Corporation, U.S.A. shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations; or such transferor shall become unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement;
(b) the Trust shall become an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(c) on any Determination Date, the Transferor Amount as of the last day
of the prior Collection Period was less than 10% of the Trust Principal
Component as of the last day of the prior Collection Period, and such condition
shall have continued unremedied for ten (10) consecutive days or more;
(d) failure on the part of the Transferor or Yamaha Motor Corporation,
U.S.A. (i) to make any payment or deposit on the date required under this
Agreement or the Receivables Purchase Agreement, as applicable (or within the
applicable grace period which will not exceed five (5) Business Days), (ii) duly
to observe or perform in any material respect the covenant of the Transferor
contained in Section 2.5(a) of this Agreement, (iii) duly to observe or perform
in any material respect any other covenants or agreements of the Transferor in
this Agreement, to the extent assigned to the Trust, in the Receivables Purchase
Agreement, which in the case of subclause (iii) hereof, continues unremedied for
a period of sixty (60) days after written notice to the Transferor or Yamaha
Motor Corporation, U.S.A., as applicable, and continues to affect materially and
adversely the interests of the Certificateholders for such period (or, with
respect to a failure arising out of the creation of certain liens upon the
Receivables or the failure by the Transferor or the Servicer to comply with
Section 2.5(a) of this Agreement immediately); provided, however, that an Early
Amortization Event described in clause (ii) or (iii) shall not be deemed to
occur if the Transferor has accepted the transfer of the related Receivable
during such period (or such longer period as the Trustee may specify not to
exceed an additional sixty (60) days) in accordance with the provisions of this
Agreement;
(e) any representation or warranty made by the Transferor in this
Agreement or any representation or warranty made by Yamaha Motor Corporation,
U.S.A. in the Receivables Purchase Agreement or any information required to be
given by the Transferor or the Servicer to the Trustee to identify the Accounts
proves to have been incorrect in any material respect when made and continues to
be incorrect
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in any material respect for a period of sixty (60) days after written notice and
as a result of which the interests of the Certificateholders are materially and
adversely affected and which continues to materially and adversely affect the
interests of the Certificateholders for such period; provided, however, that an
Early Amortization Event described in this clause (e) shall not be deemed to
occur if the Transferor has accepted the transfer of the related Receivable or
all such Receivables, if applicable, during such period (or such longer period
as the Trustee may specify not to exceed an additional sixty (60) days) in
accordance with the provisions of this Agreement;
(f) any Servicer Default occurs which would have a material adverse
effect on the Certificateholders; or
(g) Undistributed Principal Collections remain in the Special Funding
Account for twelve consecutive Collection Periods;
then, an Early Amortization Event with respect to all Series of Certificates
then outstanding shall occur without any notice or other action on the part of
the Trustee or all Investor Certificateholders immediately upon the occurrence
of such event. The Trustee shall advise the Rating Agencies in writing of the
occurrence of any Early Amortization Event of which an officer in the Trust
Administration Department of the Trustee shall have actual knowledge.
In the case of any event described in subsection (d), (e) or (f), an
Early Amortization Event will be deemed to have occurred with respect to any
Series only if, after any applicable grace period described in such clauses,
either the Trustee or Certificateholders of such Series evidencing undivided
interests aggregating more than 50% of the invested amount of such Series, by
written notice to the Transferor and the Servicer (and to the Trustee, if given
by such Certificateholders) declare that an Early Amortization Event has
occurred as of the date of such notice.
SECTION 9.2. Additional Rights Upon the Occurrence of Certain Events.
(a) If Yamaha Motor Corporation, U.S.A. or DFS (if it is then acting as
subservicer) voluntarily goes into liquidation or consents to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
Yamaha Motor Corporation, U.S.A. or the Transferor or of or relating to all or
substantially all their respective property, or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against Yamaha Motor Corporation, U.S.A. or the Transferor; or
Yamaha Motor Corporation, U.S.A. or the Transferor shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations; or the Transferor shall become unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (such voluntary liquidation, appointment, entering of such decree,
admission, filing, making, suspension or inability, a "Dissolution Event"), the
Transferor or Yamaha Motor Corporation, U.S.A. shall promptly give notice of
such event to the Trustee, and Yamaha Motor Corporation, U.S.A. shall on the day
of such appointment, voluntary liquidation, entering of such decree, admission,
filing, making, suspension or inability, as the case may be (the "Appointment
Day"), immediately cease to sell Receivables to the Transferor under the
Receivables Purchase Agreement and the Transferor will immediately cease to
transfer Receivables to the Trust hereunder. Within fifteen (15) days of the
receipt by the Trustee of the notice of a Dissolution Event, the Trustee shall
(i) publish a notice in an Authorized Newspaper that a Dissolution Event has
occurred and that the Trustee is requesting instructions from Investor
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Certificateholders whether to sell, dispose of or otherwise liquidate the
Receivables in a commercially reasonable manner and (ii) send written notice to
the Investor Certificateholders describing the provisions of this Section 9.2
and requesting instructions from such Holders, which notice shall request each
Investor Certificateholder to advise the Trustee in writing that it elects one
of the following options: (A) the Investor Certificateholder wishes the Trustee
to instruct the Servicer not to sell, dispose of or otherwise liquidate the
Receivables, or (B) the Investor Certificateholder wishes the Trustee to
instruct the Servicer to sell, dispose of or otherwise liquidate the Receivables
and to instruct the Servicer to reconstitute the Trust upon the same terms and
conditions set forth herein, or (C) the Investor Certificateholder refuses to
advise the Trustee as to the specific action the Trustee shall instruct the
Servicer to take. If, after ninety (90) days from the day notice pursuant to
clause (i) above is first published (the "Publication Date"), the Trustee shall
not have received written instructions of Holders of Investor Certificates
representing Undivided Interests aggregating in excess of 50% of the related
Invested Amount of each Series (or in the case of a series having more than one
class of investor certificates, each class of such series) to the effect that
the Trustee shall not instruct the Servicer to sell, dispose of, or otherwise
liquidate the Receivables and to instruct the Servicer to reconstitute the Trust
upon the same terms and conditions as set forth herein, the Trustee shall
instruct the Servicer to proceed to sell, dispose of, or otherwise liquidate the
Receivables in a commercially reasonable manner and on commercially reasonable
terms, which shall include the solicitation of competitive bids and the Servicer
shall proceed to consummate the sale, liquidation or disposition of the
Receivables as provided above with the highest bidder for the Receivables. If,
however, with respect to the portion of the Receivables allocable to any
outstanding Series, the holders of more than 50% of the principal amount of each
class of such Series instruct the Trustee not to sell the portion of the
Receivables allocable to such Series, the Trust shall continue with respect to
such Series pursuant to the terms of this Agreement and the Supplement. The
portion of the Receivables allocable to any Series shall be determined in the
same manner as such determination would be made pursuant to Section 12.2(c). The
Transferor or any of its Affiliates shall be permitted to bid for the
Receivables. In addition the Transferor or any of its Affiliates shall have the
right to match any bid by a third person and be granted the right to purchase
the Receivables at such matched bid price. The Trustee may obtain a prior
determination from the conservator or receiver that the terms and manner of any
proposed sale, disposition or liquidation are commercially reasonable. The
provisions of Sections 9.1 and 9.2 shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to Section (a) above shall be treated as Collections on the
Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV; provided that the Trustee shall determine conclusively
without liability for such determination the amount of such proceeds which are
allocable to Yield Collections and the amount of such proceeds which are
allocable to Principal Collections. On the day following the Distribution Date
on which such proceeds are distributed to the Investor Certificateholders, the
Trust shall terminate.
[END OF ARTICLE IX]
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ARTICLE X
SERVICER DEFAULTS
SECTION 10.1. Servicer Defaults. If any one of the following events
(each, a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee to make such payment,
transfer or deposit on or before the date occurring five (5) Business Days after
the date such payment, transfer, deposit or drawing or such instruction or
notice is required to be made or given, as the case may be, under the terms of
this Agreement or any Supplement; provided, however, that any such failure
caused by a nonwillful act of the Servicer shall not constitute a Servicer
Default if the Servicer promptly remedies such failure within five (5) Business
Days after receiving notice of such failure or otherwise becoming aware of such
failure;
(b) failure on the part of the Servicer duly to observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement or any
Supplement, which has a material adverse effect on the Certificateholders of any
Series then outstanding and which continues unremedied for a period of sixty
(60) days after the date on which the written notice of such failure requiring
the same to be remedied shall have been given to the Servicer by the Trustee or
by Investor Certificateholders evidencing interests aggregating more than 66
2/3% of the Invested Amounts of all Series, and which continues to materially
adversely affect the rights of the Holders of Investor Certificates of any
Series; the Servicer shall delegate its duties under this Agreement, except as
permitted by Section 8.7;
(c) any representation, warranty or certification made by the Servicer
in this Agreement or any Supplement or in any certificate delivered pursuant to
this Agreement or any Supplement shall prove to have been incorrect when made,
which has a material adverse effect on the rights of the Certificateholders of
any Series then outstanding and which continues to be incorrect in any material
respect and which continues to affect materially and adversely the rights of the
Certificateholders of any Series for a period of sixty (60) days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, or to the Servicer and the
Trustee by the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Invested Amount of any Series adversely
affected thereby; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property, or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty (60) days; or
the Servicer shall admit in writing its inability to pay its debts generally as
they become due, file a petition to take advantage of any applicable insolvency
or reorganization statute, make any assignment for the benefit of its creditors
or voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Invested Amount, by notice then given
in writing to the Servicer (and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may terminate all of the rights
and obligations of the Servicer as Servicer under this Agreement and in and to
the Receivables and the proceeds thereof and appoint a new
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Servicer (a "Service Transfer"). The rights and interests of the Transferor
Interest will not be affected by any Service Transfer. The Trustee, upon giving
or receiving a Termination Notice shall immediately notify the Rating Agencies
of such notice. After receipt by the Servicer of such Termination Notice, and on
the date that a Successor Servicer shall have been appointed by the Trustee
pursuant to Section 10.2, all authority and power of the Servicer under this
Agreement shall pass to and be vested in a Successor Servicer; and, without
limitation, the Trustee is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such Service Transfer. The Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder,
including, without limitation, the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under this
Agreement, including, without limitation, all authority over all Collections
which shall on the date of transfer be held by the Servicer for deposit, or
which have been deposited by the Servicer, in the Collection Account, or which
shall thereafter be received with respect to the Receivables, and in assisting
the Successor Servicer and in enforcing all rights to Recoveries. The Servicer
shall promptly transfer its electronic records relating to the Receivables to
the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.1 shall require the Servicer to disclose to the Successor Servicer
information of any kind which the Servicer reasonably deems to be confidential,
the Successor Servicer shall be required to enter into such customary licensing
and confidentiality agreements as the Servicer shall deem necessary to protect
its interest.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in Section 10.1(a) for a period of ten (10) Business Days after the
applicable grace period or under Section 10.1(b) or (c) for a period of sixty
(60) Business Days after the applicable grace period, shall not constitute a
Servicer Default if such delay or failure could not be prevented by the exercise
of reasonable diligence by the Servicer and such delay or failure was caused by
an act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion, riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns, floods,
power outages or similar causes. The preceding sentence shall not relieve the
Servicer from using its best efforts to perform its obligations in a timely
manner in accordance with the terms of this Agreement and the Servicer shall
provide the Trustee, any Enhancement Provider, the Transferor and the Holders of
Investor Certificates with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of the cause of such failure
or delay and its efforts so to perform its obligations. The Servicer shall
immediately notify the Trustee in writing of any Servicer Default.
SECTION 10.2. Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.1, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee in writing or, if no such date is
specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee (not to exceed
ninety (90) days from the date of delivery of such notice). The Trustee shall as
promptly as possible after the giving of a Termination Notice appoint a
successor servicer (the "Successor Servicer"), with the consent of any
Enhancement Provider (which consent shall not be unreasonably withheld), and
such Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to the Trustee, the Transferor and any Enhancement Provider
(which consent shall not
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be unreasonably withheld). The Transferor shall have the right to nominate to
the Trustee the name of a potential successor servicer which nominee shall be
selected by the Trustee as the Successor Servicer, subject to the consent of any
Enhancement Provider. The Trustee may obtain bids from any potential successor
servicer. If the Trustee is unable to obtain any bids from any potential
successor servicer and the Servicer delivers an Officer's Certificate to the
effect that it cannot in good faith cure the Servicer Default which gave rise to
a transfer of servicing, then the Trustee shall offer the Transferor the right
to accept reassignment of all the Receivables; provided, however, that no such
reassignment shall occur unless the Transferor shall deliver to the Trustee and
the Rating Agencies an Opinion of Counsel reasonably acceptable to the Trustee
that such reassignment would not constitute a fraudulent conveyance by the
Transferor. The reassignment deposit amount for such a reassignment shall be
equal to the Aggregate Invested Amount (less the aggregate principal amount on
deposit in any principal funding account), plus accrued interest thereon, at the
applicable Certificate Rate (through the end of the Collection Period for the
subsequent Distribution Date of reassignment). Unless the Transferor has
accepted reassignment of all of the Receivables, in the event that a Successor
Servicer has not been appointed and has not accepted its appointment at the time
when the Servicer ceases to act as Servicer, the Trustee (as trustee hereunder)
without further action shall automatically be appointed the Successor Servicer
and shall be entitled to the Monthly Servicing Fee. Notwithstanding the above,
the Trustee shall, if it is legally unable so to act, petition a court of
competent jurisdiction to appoint any established financial institution having a
net worth of not less than $50,000,000 and whose regular business includes the
servicing of wholesale dealer receivables as the Successor Servicer hereunder.
Notwithstanding anything to the contrary in this Agreement, the entire amount of
the reassignment deposit amount shall be distributed to the Investor
Certificateholders of the related Series on the subsequent Distribution Date for
such Series pursuant to Section 12.3.
(b) Upon its appointment, the Successor Servicer shall be the successor
in all respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer; provided, however, that, the outgoing Servicer
shall not be relieved of any liability hereunder for its actions prior to the
transfer of servicing hereunder; and provided further, that, (i) the outgoing
Servicer shall not indemnify the Trust or the Trustee under Section 8.4 for
acts, omissions or alleged acts or omissions by a Successor Servicer and (ii)
the outgoing Servicer shall not pay or reimburse the Trustee pursuant to Section
11.5 for any expense, disbursement or advance of the Trustee related to or
arising as a result of the negligence or bad faith of the Successor Servicer.
(c) In connection with such appointment and assumption, the Trustee
shall be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Monthly Servicing Fee permitted to the Servicer
pursuant to Section 3.2.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.1 and shall pass to and be vested in the Transferor
and, without limitation, the Transferor is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Successor Servicer agrees to cooperate with
the Transferor in effecting the termination of the responsibilities and rights
of the Successor Servicer to conduct servicing on the Receivables. The Successor
Servicer shall transfer its electronic records relating to the Receivables to
the Transferor in such electronic form as the Transferor may reasonably request
and shall transfer all other records, correspondence and documents to the
Transferor in the manner and at such times as the Transferor shall reasonably
request. To the extent that compliance with this Section 10.2 shall require
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the Successor Servicer to disclose to the Transferor information of any kind
which the Successor Servicer deems to be confidential, the Transferor shall be
required to enter into such customary licensing and confidentiality agreements
as the Successor Servicer shall deem necessary to protect its interests.
SECTION 10.3. Notification to Certificateholders. Upon the occurrence
of any Servicer Default, the Servicer shall give prompt written notice thereof
to the Trustee and the Rating Agencies, whereupon the Trustee shall give notice
thereof to the Investor Certificateholders at their respective addresses
appearing in the Certificate Register. Upon any termination or appointment of a
Successor Servicer pursuant to this Article XI, the Trustee shall give prompt
written notice thereof to Investor Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
SECTION 10.4. Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 66-2/3% of the
Invested Amount of any Series then outstanding affected by any default by the
Servicer or a Transferor may, on behalf of all Holders of Certificates of such
affected Series, waive any default by the Servicer or such Transferor in the
performance of their respective obligations hereunder and its consequences,
except a default in the failure to make any required deposits or payments of
interest or principal with respect to any Series of Certificates. Upon any such
waiver of a past default, such default shall cease to exist with respect to such
Series, and any default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement with respect to such Series. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
[END OF ARTICLE X]
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ARTICLE XI
THE TRUSTEE
SECTION 11.1. Duties of Trustee.
(a) The Trustee, prior to its receipt of actual notice of the
occurrence of a Servicer Default or Early Amortization Event and after the
curing or waiving of all Servicer Defaults or Early Amortization Events which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an officer of the Trust
Administration Department of the Trustee receives actual notice that a Servicer
Default or Early Amortization Event has occurred (which has not been cured or
waived), the Trustee (as trustee and not Successor Servicer) shall exercise such
of the rights and powers vested in it by this Agreement or any Supplement, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement or any Supplement, shall examine them to determine
whether they conform as to form to the requirements of this Agreement or any
Supplement, but shall not be required to verify the accuracy of any information,
calculations or conclusions stated therein. The Trustee shall give prompt
written notice to the Certificateholders of any material lack of conformity of
any such instrument to the applicable requirements of this Agreement or any
Supplement discovered by the Trustee which would entitle a specified percentage
of the Investor Certificateholders to take any action pursuant to this Agreement
or any Supplement.
(c) Subject to Section 11.1(a) of this Agreement, no provision of this
Agreement or any Supplement shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct; provided, however, that:
(i) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50%
of the Invested Amount of any Series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement or any Supplement in respect of such Series;
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer (other than the Trustee, in its capacity as
Successor Servicer) to comply with the obligations of the Servicer
referred to in clauses (a), (b) and (c) of Section 10.1 unless a
Responsible Officer of the Trustee obtains actual knowledge of such
failure (it being understood that knowledge of the Servicer, in its
capacity as agent for the Trustee, is not attributable to the Trustee)
or the Trustee receives written notice of such failure from the
Servicer or any Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Invested Amount of any
Series adversely affected thereby;
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(iv) in making a determination of any material and adverse
effect upon Certificateholders, the Investor Certificates, the Trustee
may, as to matters of law, rely exclusively upon an Opinion of Counsel.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in exercise of any of its rights or powers, if there is reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement or any Supplement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer or the Successor Servicer under this
Agreement or any Supplement except during such time, if any, as the Trustee
shall be the Successor Servicer in accordance with the terms of this Agreement
or any Supplement.
(e) Except for actions expressly authorized by this Agreement or any
Supplement, the Trustee shall take no action reasonably likely to impair the
interests of the Trust in any Receivable now existing or hereafter created or to
impair the value of any Receivable now existing or hereafter created.
(f) Except as specifically provided in this Agreement, the Trustee
shall have no power to vary the corpus of the Trust.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall not be the Trustee and fail to perform any obligation, duty or
agreement in the manner or on the day required to be performed by the Paying
Agent or the Transfer Agent and Registrar, as the case may be, under this
Agreement, the Trustee shall be obligated promptly upon actual knowledge of a
Responsible Officer thereof to perform such obligation, duty or agreement in the
manner so required but shall not be required to make a payment out of its own
funds.
(h) Any action, suit or proceeding brought in respect of one or more
particular Series shall have no effect on the Trustee's rights, duties and
obligations hereunder with respect to any one or more Series not the subject of
such action, suit or proceeding.
SECTION 11.2. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.1:
(a) the Trustee may request, rely on and shall be protected in acting
on, or in refraining from acting in accord with, any resolution, Officer's
Certificate, Opinion of Counsel, certificate of independent public accountants
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document, including,
without limitation, any request or instruction by the Servicer or the Transferor
to make any deposit or payment or to transfer any Receivables or Accounts,
believed by it to be genuine and to have been signed or presented to it pursuant
to this Agreement or any Supplement by the proper party or parties;
(b) the Trustee may consult with counsel as to matters of law and any
advice of counsel or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice of counsel or Opinion
of Counsel as to any actions required to be taken or withheld hereunder;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Supplement, or to
institute, conduct or defend any litigation hereunder or in
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relation hereto, at the request, order or direction of any of the
Certificateholders or Certificate Owners, pursuant to the provisions of this
Agreement or any Supplement, unless such Certificateholders or Certificate
Owners, shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee (as
Trustee but not as Successor Servicer) of the obligations, upon the occurrence
of any Servicer Default (which has not been cured or waived), to exercise such
of the rights and powers vested in it by this Agreement or any Supplement, and
to use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs;
(d) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement or any
Supplement;
(e) the Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, except to the extent specifically requested in writing so to do by
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Invested Amount of any Series which could be adversely affected
if the Trustee does not perform such acts and the Trustee is reasonably
indemnified therefor;
(f) the Trustee (in its capacity as such) may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian, and the Trustee (in its capacity as
such) shall not be responsible for any misconduct or negligence on the part of
any such agent, attorney or custodian appointed with due care by it hereunder;
(g) the Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or the
Accounts for the purpose of establishing the presence or absence of defects, the
compliance by the Transferor or Servicer with their representations, warranties
or covenants or for any other purpose;
(h) whether or not therein expressly so provided, every provision of
this Agreement or any Supplement relating to the conduct or affecting the
eligibility of or affording protection to the Trustee (in its capacity as such)
shall be subject to the provisions of Sections 11.1, 11.2 and 11.3;
(i) the permissive right of the Trustee to take actions enumerated in
this Agreement or any Supplement shall not be construed as a duty;
(j) whenever in the administration of this Agreement or any Supplement,
the Trustee shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(k) no implied covenants or obligations shall be read into this
Agreement against the Trustee; and
(l) without limiting the generality of this Section or Section 11.1,
the Trustee shall have no duty (i) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to therein or any
financing statement or continuation statement evidencing a security interest in
the Receivables or the Accounts, or to see to the maintenance of any such
recording, filing or depositing or any rerecording, refiling or redepositing of
any thereof, or (ii) to confirm or verify the contents of any reports or
certificates of the
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Servicer delivered to the Trustee pursuant to this Agreement believed by the
Trustee to be genuine and to have been signed or presented by the proper party
or parties.
SECTION 11.3. Trustee Not Liable for Recitals in Certificates. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificates of authentication on
the Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to (i) the validity or sufficiency of this Agreement or any
Supplement or of the Certificates (other than the certificates of authentication
on the Certificates), (ii) the existence or validity of any Receivable, (iii)
the validity of any transfer or assignment of any Receivable to the Trust, (iv)
the validity of any grant of a security interest to the Trust in any Receivable,
(v) the perfection of any security interest (whether as of the date hereof or at
any future time) in any Receivable, (vi) the maintenance of or the taking of any
action to maintain such perfection, (vii) the receipt by the Trustee or the
Servicer of any Receivable, (viii) the performance or enforcement of any
Receivable, (ix) the compliance by the Transferor or the Servicer with any
covenant or representation, (x) the breach by the Transferor or the Servicer of
any warranty or representation made hereunder or in any related document or the
accuracy of any such warranty or representation or (xi) any action taken by the
Servicer in the name of the Trustee. The Trustee shall not be accountable for
the use or application by the Transferor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Transferor in respect of the Receivables or deposited in or withdrawn
from the Collection Account or other Accounts now or hereafter established to
effectuate the transactions contemplated herein and in accordance with the terms
hereof.
SECTION 11.4. Trustee May Own Certificates. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee.
SECTION 11.5. The Servicer to Pay Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by it in the execution of the trust
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and the Servicer will pay or reimburse the
Trustee (without reimbursement from the Collection Account or otherwise) upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Agreement
or any Supplement (including the reasonable fees and expenses of its agents and
counsel) except any such expense, disbursement or advance as may be caused by
its negligence or bad faith and except as provided in the following sentence. If
the Trustee is appointed Successor Servicer pursuant to Section 10.2, the
provisions of this Section 11.5 shall not apply to expenses, disbursements and
advances made or incurred by the Trustee in its capacity as Successor Servicer;
provided that the Transferor will indemnify, defend and save harmless the
Trustee for any loss, liability or expense incurred by it as Successor Servicer
which is not otherwise reimbursed hereunder, except to the extent such loss,
liability or expense is caused by its negligence or bad faith as Successor
Servicer.
The obligations of the Servicer and the Transferor under this Section
11.5, Section 7.4, Section 8.4 and Section 11.17 shall survive the termination
of the Trust and the resignation or removal of the Trustee or the Servicer.
SECTION 11.6. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation or national banking association
organized and doing business under the laws of the United States of America or
any state thereof authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, a rating as to
its long-term unsecured debt obligations (or that of its parent) of at least
"Baa3" by Moody's (if Moody's shall then be a Rating Agency)
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and a rating as to its short-term deposits or long-term unsecured debt
obligations (or that of its parent) that satisfies the rating requirement of any
other applicable Rating Agency and subject to supervision or examination by
federal or state authority. If such corporation or national banking association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 11.6, the combined capital and surplus of such
corporation or national banking association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 11.6, the Trustee shall resign
immediately in the manner and with the effect specified in Section 11.7.
SECTION 11.7. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign as Trustee and be discharged
from the trust hereby created by giving written notice thereof to the Transferor
and the Servicer. Upon receiving such notice of resignation, the Transferor
shall promptly appoint a successor trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted within thirty (30) days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.6 hereof and shall fail to resign after
written request therefor by the Transferor, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Trustee and promptly
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee and shall promptly pay all fees owed to the outgoing
Trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.8 hereof and payment of all fees and expenses owed to the
outgoing Trustee. Any liability of the outgoing Trustee for its acts or
omissions shall survive such appointment of a successor trustee.
SECTION 11.8. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.7 hereof
shall execute, acknowledge and deliver to the Transferor and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder and under any Supplement, with like effect as if
originally named as Trustee herein. The predecessor Trustee shall upon payment
of its fees and expenses deliver to the successor trustee all documents held by
it hereunder, and the Transferor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
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(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.8 hereof, such successor trustee shall mail notice of such
succession hereunder to all Certificateholders at their addresses as shown in
the Certificate Register.
SECTION 11.9. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be eligible under the provisions of Section 11.6
hereof, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provision of this Agreement or any
Supplement, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee, or separate trustee, of all
or any part of the Trust, and to vest in such Person, in such capacity and for
the benefit of the Certificateholders, such title to the trust, or any part
thereof, and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.6 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder appointed with
due care; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every
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instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article XI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement or any Supplement, specifically including
every provision of this Agreement or any Supplement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement or any Supplement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 11.11. Tax Returns. In the event the Trust shall be required to
file tax returns, the Servicer shall prepare or cause to be prepared and is
authorized hereunder to sign any tax returns required to be filed by the Trust
and, to the extent possible, shall file such returns at least five days before
such returns are due to be filed. The Servicer shall prepare or shall cause to
be prepared all tax information required by law to be distributed to
Certificateholders and Certificate Owners and shall deliver such information to
the Paying Agent at least five days prior to the date it is required by law to
be distributed to Certificateholders and Certificate Owners. The Servicer will
furnish to the Trustee an Opinion of Counsel as to the preparation of all tax
returns of the Trust. In no event shall the Trustee, the Paying Agent, the
Transferor or the Servicer be liable for any liabilities, costs or expenses of
the Trust, the Investor Certificateholders or the Certificate Owners arising
under any tax law, including without limitation, federal, state or local income
or excise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto or arising from a failure to comply
therewith), except to the extent that such tax is imposed as a result of a
violation by such Person of the provisions of this Agreement or any Supplement.
SECTION 11.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any
Supplement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
SECTION 11.13. Suits for Enforcement. If a Servicer Default shall occur
and be continuing, the Trustee, in its discretion may, subject to the provisions
of Section 10.1, proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement or any Supplement by such suit, action
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or any
Supplement or in aid of the execution of any power granted in this Agreement or
any Supplement or for the enforcement of any other legal, equitable or other
remedy as the Trustee, being advised by counsel, shall deem effectual to protect
and enforce any of the rights of the Trustee or the Certificateholders.
SECTION 11.14. Rights of Certificateholders to Direct Trustee. Holders
of Investor Certificates evidencing Undivided Interests aggregating more than
50% of the Invested Amount of any Series affected by the conduct of any
proceeding or the exercise of any right conferred on the Trustee shall have the
right to direct the time, method, and place of conducting any proceeding for any
remedy available to the
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Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that the Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided further that nothing in this Agreement or any Supplement
shall impair the right of the Trustee to take any action deemed proper by the
Trustee and which is not inconsistent with such direction.
SECTION 11.15. Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(a) The Trustee is a banking corporation, organized, existing and in
good standing under the laws of the State of New York;
(b) The Trustee has full power, authority and right to execute, deliver
and perform this Agreement and any Supplement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Agreement and any Supplement; and
(c) This Agreement and any Supplement has been duly executed and
delivered by the Trustee, and assuming due execution and delivery by the other
parties thereto constitutes a legal, valid and binding obligation of the Trustee
enforceable against the Trustee in accordance with its terms.
SECTION 11.16. Maintenance of Office or Agency. The Trustee will
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where notices and demands to or upon the
Trustee in respect of the Certificates and this Agreement may be served. The
Trustee initially appoints its Corporate Trust Office as its office for such
purposes in New York. The Trustee will give prompt written notice to the
Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 11.17. Indemnification of the Trustee. The Transferor shall
indemnify the Trustee for, and hold it harmless against, any loss, liability or
expense incurred without negligence or willful misconduct on the part of the
Trustee arising out of any third-party claim or alleged third-party claim in
connection with the exercise or performance of any of its powers or duties under
this Agreement. The Trustee shall have a lien on any and all amounts which are
payable to the Transferor with respect to amounts due and owing to the Trustee
pursuant to this Section 11.17. The amount of the Transferor's liability under
this Section 11.17 shall be subordinate to the security interest of the Trust in
the Receivables and shall be payable from the assets of the Transferor at the
time such liability is asserted and at any time thereafter.
[END OF ARTICLE XI]
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ARTICLE XII
TERMINATION
SECTION 12.1. Termination of Trust.
(a) The respective obligations and responsibilities of the Transferor,
the Servicer, the Paying Agent and the Trustee and their agents hereunder
created hereby (other than the obligation of the Trustee to make payments to
Certificateholders as hereafter set forth) shall terminate, except with respect
to the duties described in Sections 2.4(b), 7.4, 8.4, 11.5, 11.17 and 12.3(b),
upon the earlier of (i) the day following the date on which funds shall have
been deposited in the Collection Account sufficient to pay the Aggregate
Invested Amount plus applicable Certificate Interest accrued through the last
day of the interest accrual period preceding such Distribution Date in full on
all Series of Investor Certificates and (ii) March 1, 2094 (the "Final
Termination Date") provided, however, that in no event shall the trust created
by this Agreement continue beyond the expiration of 21 years from the death of
the last survivor of the descendants of John D. Rockefeller living on the date
of this Agreement.
(b) If on the Distribution Date in the month immediately preceding the
month in which the Final Termination Date occurs (after giving effect to all
transfers, withdrawals, deposits and drawings to occur on such date and the
payment of principal on any Series of Certificates to be made on such
Distribution Date pursuant to Article IV) the Invested Amount of any Series
would be greater than zero, the Servicer shall sell on or prior to the
succeeding Distribution Date all of the Receivables in a commercially reasonable
manner and on commercially reasonable terms which shall include the solicitation
of competitive bids and shall consummate the sale with the highest bidder for
the Receivables. The Transferor or any of its Affiliates shall be permitted to
bid for the Receivables. In addition, the Transferor or any Affiliate shall have
the right to match any bid by a third Person and be granted the right to
purchase the Receivables at such matched bid price. The proceeds of any such
sale shall be treated as Collections on the Receivables and shall be allocated
in accordance with Article IV; provided, however, that the Trustee shall
determine conclusively the amount of such proceeds which are allocable to Yield
Collections and the amount of such proceeds which are allocable to Principal
Collections. Prior to such sale of Receivables, the Servicer shall continue to
collect Collections on the Receivables and allocate such payments in accordance
with the provisions of Article IV.
SECTION 12.2. Optional Purchase; Final Termination Date of Investor
Certificates of any Series.
(a) If provided in any Supplement with respect to a Series on any
Distribution Date the Transferor may, but shall not be obligated to, purchase
any such Series of Investor Certificates by depositing into the Collection
Account, on the Distribution Date, an amount equal to the Invested Amount
thereof plus interest accrued and unpaid thereon at the applicable Certificate
Rate through the interest accrual period related to such Distribution Date on
which the purchase will be made; provided, however, that no such purchase of any
Series of Investor Certificates shall occur unless the Transferor shall deliver
to the Trustee and the Rating Agencies an Opinion of Counsel reasonably
acceptable to the Trustee that such purchase of any Series of Investor
Certificates would not constitute a fraudulent conveyance of the Transferor.
Nothing herein limits the right of Yamaha Motor Corporation, U.S.A. or any
Affiliate to purchase Investor Certificates on the open market and submit them
to the Trustee for cancellation.
(b) The amount deposited pursuant to Section 12.2(a) of this Agreement
shall be paid to the Investor Certificateholders of the related Series pursuant
to Article IV on the Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Transferor pursuant to
Section 12.2(a) of this Agreement shall be delivered by the Transferor upon such
purchase to, and be
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cancelled by, the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor.
(c) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Stated Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Invested Amount of any Series of Certificates
is greater than zero on its Stated Series Termination Date (after giving effect
to all transfers, withdrawals, deposits and drawings to occur on such date and
the payment of principal to be made on such Series on such date), the Trustee
will sell or cause to be sold, and pay the proceeds to all Certificateholders of
such Series pro rata in final payment of all principal of and accrued interest
on such Series of Certificates, an amount of Receivables or interests in
Receivables up to 110% of the Invested Amount of such Series at the close of
business on such date (but not more than an amount of Receivables equal to the
sum of (1) the product of (A) the Transferor Percentage, (B) the Trust Principal
Component and (C) a fraction the numerator of which is the related Invested
Percentage of Yield Collections and the denominator of which is the sum of all
Invested Percentages with respect to Yield Collections of all Series outstanding
and (2) the Invested Amount of such Series). The Trustee shall conduct the sale
of Receivables in a commercially reasonable manner and on commercially
reasonable terms which shall include the solicitation of competitive bids and
shall consummate the sale with the highest bidder for the Receivables. The
Transferor or any of its Affiliates shall be permitted to bid for the
Receivables. In addition, the Transferor or any Affiliate shall have the right
to match any bid by a third Person and be granted the right to purchase the
Receivables at such matched bid price. Any proceeds of such sale in excess of
such principal and interest paid shall be paid to the Holder of the Exchangeable
Transferor Certificate. Upon such Stated Series Termination Date with respect to
the applicable Series of Certificates, final payment of all amounts allocable to
any Investor Certificates of such Series shall be made in the manner provided in
Section 12.3 of this Agreement.
SECTION 12.3. Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying (1) the Distribution
Date upon which the Investor Certificateholders of any Series may surrender
their Certificates for payment of the final distribution with respect to such
Series and cancellation, (2) the amount of any such final payment and (3) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, shall be mailed (subject to at least two (2) Business Days' prior
notice from the Servicer to the Trustee) by the Trustee to the Investor
Certificateholders of such Series mailed not later than the fifth day of the
month of such final distribution. Final payment of the Investor Certificates
will be made upon presentation and surrender of such Investor Certificates at
the office or offices therein specified in such notice. The Servicer's notice to
the Trustee in accordance with the foregoing shall be accompanied by an
Officers' Certificate setting forth the information specified in the applicable
Supplement covering the period during the then current calendar year through the
date of such notice and setting forth the date of such final distribution. The
Trustee shall give such notice to the Transfer Agent and Registrar and the
Paying Agent at the time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to Section
12.1(a) of this Agreement or the occurrence of the Stated Series Termination
Date with respect to any Series pursuant to Section 12.2 of this Agreement, all
funds then on deposit in the Collection Account shall continue to be held in
trust for the benefit of the Certificateholders and the Paying Agent or the
Trustee shall pay such funds to the Certificateholders upon surrender of their
Certificates. In the event that all of the Investor Certificateholders of such
Series shall not surrender their Certificates for cancellation within six (6)
months after the date specified in the above-mentioned notice, the Trustee shall
give a second written notice to the remaining Investor Certificateholders of
such Series upon receipt of the appropriate records from the Transfer Agent and
Registrar to surrender their Certificates for cancellation and receive the final
distribution
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with respect thereto. If within one and one-half years after the second notice
all the Investor Certificates of such Series shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Investor Certificateholders of
such Series concerning surrender of their Certificates, and the cost thereof
shall be paid out of the funds in the Collection Account held for the benefit of
such Investor Certificateholders.
(c) All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be cancelled by the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Transferor.
SECTION 12.4. Transferor's Termination Rights. Upon the termination of
the Trust pursuant to Section 12.1 and the surrender of the Exchangeable
Transferor Certificate, the Trustee shall return to the Transferor (without
recourse, representation or warranty) all right, title and interest of the Trust
in the Receivables, whether then existing or thereafter created, and all monies
due or to become due with respect thereto, all proceeds thereof except for
amounts held by the Paying Agent pursuant to Section 12.3(b). The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, as shall be reasonably requested by the Transferor to vest in
itself all right, title and interest which the Trust had in the applicable
Receivables and the Trustee shall be entitled to receive and rely conclusively
upon an Opinion of Counsel as to its execution and delivery of such instruments
being in compliance herewith.
[END OF ARTICLE XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1. Amendment.
(a) This Agreement and any Supplement may be amended from time to time
by the Servicer, the Transferor and the Trustee, without the consent of any of
the Investor Certificateholders, to cure any ambiguity, to correct or supplement
any provisions herein which may be inconsistent with any other provisions herein
or to add any other provisions with respect to matters or questions raised under
this Agreement which shall not be inconsistent with the provisions of this
Agreement, including any matters arising under Section 2.5(b) of this Agreement
necessary to effect the conveyance contemplated thereunder; provided, however,
that such action shall not adversely affect in any material respect the
interests of any of the Investor Certificateholders. Additionally, this
Agreement and any Supplement may be amended from time to time by the Servicer,
the Transferor and the Trustee, without the consent of any of the
Certificateholders, to add to or change any of the provisions of this Agreement.
Prior to executing any amendment in accordance with this Section 13.1(a) or
Section 13.1(b), the Trustee shall receive and shall be permitted to rely upon
an Opinion of Counsel to the effect that the conditions and requirements of this
Section 13.1(a) or Section 13.1(b) have been satisfied.
(b) This Agreement and any Supplement may also be amended from time to
time by the Servicer, the Transferor and the Trustee, without the consent of any
of the Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying, in any manner the rights of the Holders of Investor
Certificates; provided that (i) the Servicer shall have provided an Opinion of
Counsel to the Trustee to the effect that such amendment will not materially and
adversely affect the interests of the Investor Certificateholders of any
outstanding Series (or 100% of the class of Certificateholders so affected shall
have consented), (ii) such amendment shall not, as evidenced by an Opinion of
Counsel, cause the Trust to be characterized for federal income tax purposes as
an association taxable as a corporation or otherwise have any material adverse
impact on the federal income taxation of any outstanding Series of Investor
Certificates or any Certificate Owner and (iii) the Rating Agencies shall
confirm that such amendment shall not cause a reduction or withdrawal of the
rating of any outstanding Series of Certificates; provided, further, that such
amendment shall not reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate of such
Series without the consent of the related Investor Certificateholder, change the
definition of or the manner of calculating the interest of any Investor
Certificateholder of such Series without the consent of the related Investor
Certificateholder or reduce the percentage pursuant to clause (b) required to
consent to any such amendment, in each case without the consent of all such
Investor Certificateholders; provided, further that prior written notice of and
a copy of such proposed amendment shall be submitted to each Rating Agency.
(c) This Agreement and any Supplement may also be amended from time to
time by the Servicer, the Transferor and the Trustee with the consent of the
Holders of Investor Certificates evidencing Undivided Interests aggregating not
less than 66-2/3% of the Invested Amount of all Series adversely affected, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or modifying in any manner the rights of
the Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Investor Certificate of such Series without the consent of the related
Investor Certificateholders, (ii) change the definition of or the manner of
calculating the Invested Amount, the Invested Percentage, the applicable
available amount under any Enhancement or the Investor Default Amount of such
Series without the consent
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of each related Investor Certificateholders or (iii) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each related Investor Certificateholder; provided further that prior written
notice of and a copy of such proposed amendment shall be submitted to each
Rating Agency.
(d) Promptly after the execution of any such amendment or consent the
Trustee shall furnish written notification of the substance of such amendment to
each Investor Certificateholder, and the Servicer shall furnish written
notification of the substance of such amendment to each Rating Agency.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such Certificateholders shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(f) Any assignment or Reassignments regarding the addition to or
removal of Receivables from the Trust respectively, as provided in Sections 2.6
and 2.7, respectively, of this Agreement executed in accordance with the
provisions hereof shall not be considered amendments to this Agreement,
including, without limitation, for the purpose of Sections 13.1(a), (b), (c) and
(g) of this Agreement.
(g) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
substantially in the form of Part One of Exhibit G. The Trustee may, but shall
not be obligated to enter into any such amendment which affects the Trustee's
own rights, duties or immunities under this Agreement or otherwise.
SECTION 13.2. Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, any Supplement, all
amendments hereto and/or all financing statements, amendments and continuation
statements and any other necessary documents covering the right, title and
interest of the Trust in the property conveyed hereunder to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect the right, title and interest of the Trustee hereunder
to all property comprising the Trust. The Servicer shall deliver to the Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Transferor shall cooperate fully with the
Servicer in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this Section
13.2(a).
(b) Within thirty (30) days after the Transferor makes any change in
its name, identity or corporate structure which would make any financing
statement, amendment or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC as in effect in the Relevant UCC State, the Transferor shall give the
Trustee notice of any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of the Trust's
interest in the property conveyed hereunder.
(c) The Transferor and the Servicer will give the Trustee prompt
written notice of any relocation of any office from which the Servicer services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements, continuation statements or
amendments as may be necessary to continue the perfection of the Trust's
security
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interest in the Receivables and the proceeds thereof notwithstanding any
relocation of any office from which the Servicer services Receivables or keeps
records concerning the Receivables or of its principal executive office. The
Servicer will at all times maintain each office from which it services
Receivables, and the Transferor and the Servicer will at all times maintain
their respective principal executive offices within the United States of
America.
(d) The Servicer will deliver to the Trustee, on or before March 1 of
each year, beginning with 1995, an Opinion of Counsel, dated as of a date within
ninety (90) days of such day, substantially in the form of Part Two of Exhibit
G.
SECTION 13.3. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Investor Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Investor Certificateholder shall have any right to vote (except
as provided herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Investor Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given notice to the Trustee, and unless
the Holders of Certificates evidencing Undivided Interests aggregating more than
66-2/3% of the Invested Amount of any Series which may be adversely affected but
for the institution of such suit, action or proceeding shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty (60) days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding; it being understood
and intended, and being expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more
Certificateholders shall have the right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Certificateholders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 13.3, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity. Each Certificate Owner by its acquisition of a Book Entry Certificate
shall be deemed to have consented to the provisions of this Section 13.3.
SECTION 13.4. Governing Law. This Agreement 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.
SECTION 13.5. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
sent by facsimile transmission and confirmed by personal delivery or overnight
delivery, to (a) in the case of the Transferor, to Yamaha Motor Receivables
78
<PAGE>
Corporation, 6555 Katella Avenue, Cypress, CA 90630, Attention: Russell D. Jura,
Esq., telecopy number (714) 761-7521, (b) in the case of the Servicer, to Yamaha
Motor Corporation, U.S.A. 6555 Katella Avenue, Cypress, CA 90630, (c) in the
case of the Trustee, to The Fuji Bank and Trust Company, Two World Trade Center,
81st Floor, New York, New York 10048, Attention: Trust Administration
Department, telecopy number (212) 321-2468, or (d) as to each party, at such
other address as shall be designated by such party in a written notice to each
other party. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Copies of all notices, reports, certificates and amendments delivered
hereunder shall be mailed to the Rating Agency as follows: Moody's Investors
Service, Inc., 99 Church Street, New York, NY 10007, Attention: ABS Monitoring
Department - 4th Floor and Standard & Poor's Ratings Group, 25 Broadway, New
York, NY 10004, Attention: Asset Backed Surveillance Department.
SECTION 13.6. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
SECTION 13.7. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 7.2, 8.2 and 8.5, this
Agreement, including any Supplement, may not be assigned by the Transferor or
the Servicer, as the case may be, without the prior consent of Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 51%
of the Aggregate Invested Amount.
SECTION 13.8. Certificates Nonassessable and Fully Paid. It is the
intention of the parties to this Agreement that the Certificateholders (and the
Certificate Owners) shall not be personally liable for obligations of the Trust,
that the Undivided Interests represented by the Certificates shall be
nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and that Certificates upon authentication thereof by the Trustee
pursuant to Section 6.2 are and shall be deemed fully paid.
SECTION 13.9. Further Assurances. The Transferor and the Servicer agree
to cause Subservicer to do and perform, and Servicer agrees to cause Subservicer
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement including, without limitation,
the execution of any financing statements or continuation statements relating to
the property of the Trust for filing under the provisions of the UCC of the
Relevant UCC State.
SECTION 13.10. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Trustee or the Investor
Certificateholders, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 13.11. Counterparts. This Agreement and any 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.
79
<PAGE>
SECTION 13.12. Third-Party Beneficiaries. This Agreement and any
Supplement will inure to the benefit of and be binding upon the parties hereto,
the Certificateholders and the Certificate Owners and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other person will have any right or obligation hereunder.
SECTION 13.13. Actions by Certificateholders.
(a) Wherever in this Agreement or any Supplement a provision is made
that an action may be taken or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be taken or given by
any Investor Certificateholder of any Series, unless such provision requires a
specific percentage of Investor Certificateholders of a certain Series or all
Series.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind such Certificateholder and
every subsequent holder of such Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
SECTION 13.14. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 13.15. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 13.16. Certificates and Opinions of Counsel.
(a) Any certificate delivered may be based, insofar as it relates to
legal matters, upon an Opinion of Counsel, unless the Person delivering such
certificate knows, or in the exercise of reasonable care should know, that such
opinion with respect to the matters upon which such certificate may be based as
aforesaid is erroneous. Any Opinion of Counsel or certificate delivered
hereunder may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer or the Transferor, stating that the information with respect to such
factual matters is in the possession of such Person, unless the Person
delivering such certificate or such counsel knows, or in the exercise of
reasonable care should know, that such certificate, opinion or representations
with respect to such matters are erroneous. Any Opinion of Counsel delivered
hereunder may contain necessary exceptions and qualifications.
(b) Any Opinion of Counsel or certificate delivered hereunder may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representations by an independent public accountant or firm of
accountants, unless such counsel or the Person delivering such certificate, as
the case may be, knows that the certificate or opinions or representations with
respect to the accounting matters upon which the certificate or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous. Any certificate, opinion or representations of
any firm of independent public accountants filed with the Trustee shall contain
a statement that such firm is independent.
80
<PAGE>
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments hereunder, they may, but need not, be consolidated and form one
instrument.
81
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Master Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
YAMAHA MOTOR RECEIVABLES CORPORATION,
as Transferor
By:
---------------------------------------
Name:
Title:
YAMAHA MOTOR CORPORATION, U.S.A.,
as Servicer
By:
---------------------------------------
Name:
Title:
THE FUJI BANK AND TRUST COMPANY,
as Trustee and Paying Agent
By:
---------------------------------------
Name:
Title:
82
<PAGE>
EXHIBIT A TO
THE MASTER POOLING
AND SERVICING AGREEMENT
-----------------------
[FORM OF DEPOSITARY AGREEMENT]
A-1
<PAGE>
EXHIBIT B TO THE MASTER
POOLING AND SERVICING AGREEMENT
-------------------------------
FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
THIS CERTIFICATE OR ANY INTEREST HEREIN MAY NOT BE TRANSFERRED, ASSIGNED,
EXCHANGED OR CONVEYED, EXCEPT IN ACCORDANCE WITH SECTIONS 6.3, 6.9 AND 7.2 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. __ One Unit
YAMAHA MOTOR MASTER TRUST
EXCHANGEABLE TRANSFEROR CERTIFICATE
This Certificate represents an interest in
------------------------------------------
the Yamaha Motor Master Trust
-----------------------------
Evidencing an undivided interest in a trust, the corpus of which
consists of receivables generated or to be generated in a portfolio of wholesale
floorplan financing agreements and other inventory financing arrangements with
dealers in products manufactured or incorporating products manufactured by
Yamaha Motor Company, Ltd., Yamaha Motor Manufacturing Corporation of America
and Tennessee Watercraft, Inc., and distributed in the United States by Yamaha
Motor Corporation, U.S.A.
(Not an interest in or recourse obligation of Yamaha Motor Receivables
Corporation, Yamaha Motor Corporation, U.S.A. ("Yamaha"), or any of their
affiliates.)
This certifies that YAMAHA MOTOR RECEIVABLES CORPORATION is the
registered owner of an undivided interest in the Yamaha Motor Master Trust (the
"Trust") issued pursuant to the Amended and Restated Master Pooling and
Servicing Agreement, dated as of May 1, 1999, (the "Pooling and Servicing
Agreement; such term to include any amendment or Supplement (as defined below)
thereto) by and among Yamaha Motor Receivables Corporation, as Transferor (the
"Transferor"), Yamaha, as Servicer (in such capacity, the "Servicer"), and The
Fuji Bank and Trust Company, as Trustee (the "Trustee") (amending and restating
the Master Pooling and Servicing Agreement, dated as of March 1, 1994, as
amended by Amendment No. 1 to Master Pooling and Servicing Agreement, dated as
of October 1, 1995, each by and among the Transferor, the Servicer and the
Trustee). The
B-1
<PAGE>
corpus of the Trust consists of all of the Transferor's right, title and
interest in and to a portfolio of receivables now existing and hereafter created
(the "Receivables") arising under certain wholesale floorplan financing
arrangements and other inventory financing arrangements from time to time owned
by Deutsche Financial Services Corporation (formerly known as ITT Commercial
Finance Corp.) and identified in the Pooling and Servicing Agreement
(collectively, the "Accounts"), all monies due or to become due with respect
thereto on and after January 31, 1994 (including Recoveries) together with any
related Product Security, all proceeds of such Receivables, all right, title and
interest of the Transferor in, to and under the Receivables Purchase Agreement,
all monies as are from time to time deposited in or credited to the Collection
Account, the Servicer Cash Collateral Account and any other account or accounts
maintained for the benefit of the Certificateholders and all other property
deposited in or credited thereto, including, without limitation, Eligible
Investments and all monies as are from time to time available under any
Enhancement for any Series for payment to Certificateholders. The Receivables
arise generally from the purchase by wholesale dealers of products manufactured
by Yamaha Motor Company, Ltd., Yamaha Motor Manufacturing Corporation of America
and Tennessee Watercraft, Inc., as more fully specified in the Pooling and
Servicing Agreement.
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 may be requested from the Trustee by writing to the Trustee
at The Fuji Bank and Trust Company, Two World Trade Center, 81st Floor, New
York, New York 10048, Attention: Trust Administration Department. To the extent
not defined herein capitalized terms used herein have the meanings ascribed to
them in the Pooling and Servicing Agreement.
This Certificate is the Exchangeable Transferor Certificate,
which represents a fractional undivided interest in all assets of the Trust,
including the right to receive the Collections and other amounts at the times
and in the amounts specified in the Pooling and Servicing Agreement to be paid
to the holder of the Exchangeable Transferor Certificate, but excluding any
interest in the Collection Account, the Servicer Cash Collateral Account or any
other account or any Enhancement, except as specifically provided in the Pooling
and Servicing Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the holder
hereof by virtue of the acceptance hereof assents, and by which the holder
hereof is bound.
The interest represented by this Exchangeable Transferor
Certificate at any time in the Receivables in the Trust shall not exceed the
Transferor Interest at such time. In addition to the Exchangeable Transferor
Certificate, Investor Certificates have been and, from
B-2
<PAGE>
time to time, may be issued to investors pursuant to the Pooling and Servicing
Agreement, which will represent the interests of Investor Certificateholders in
the Trust.
The Transferor has entered into the Pooling and Servicing Agreement,
and this Certificate is issued, with the intention that, for federal, state and
local income and franchise tax purposes, the Investor Certificates (other than
those held by the Transferor) will qualify as indebtedness secured by the
Receivables. The Transferor, by entering into the Pooling and Servicing
Agreement, and the holder of this Exchangeable Transferor Certificate, by its
acceptance of this Exchangeable Transferor Certificate, agree to treat the
Investor Certificates (other than those held by the Transferor) for federal,
state and local income and franchise tax purposes as indebtedness. To the extent
that any Investor Certificate is not characterized as indebtedness by an
applicable taxing authority, the Transferor further intends that the Trust be
classified as a partnership for such tax purposes, with the holder of this
Exchangeable Transferor Certificate and the holders of the recharacterized
Investor Certificates being partners in such partnership and the remaining
Investor Certificates being indebtedness of such partnership. The holder of this
Exchangeable Transferor Certificate, by its acceptance hereof, acknowledges and
agrees to so treat its interest.
Subject to certain conditions in the Pooling and Servicing Agreement,
the obligations created by the Pooling and Servicing Agreement and the Trust
created thereby shall terminate upon the earlier of (i) March 1, 2094 and (ii)
the day after the date on which funds shall have been deposited in the
Collection Account sufficient to pay the Aggregate Invested Amount plus
applicable Certificate Interest accrued through the last day of the interest
accrual period for such Distribution Date in full on all Series of Investor
Certificates.
Upon the termination of the Trust pursuant to Article XII of the
Pooling and Servicing Agreement and the surrender of the Exchangeable Transferor
Certificate, the Trustee shall assign and convey to the Transferor (without
recourse, representation or warranty) all right, title and interest of the Trust
in the Receivables, whether then existing or thereafter created, and all
proceeds thereof (except for amounts held by the Paying Agent) and all other
Trust Property. The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be reasonably
requested by the Transferor to vest in the Transferor all right, title and
interest which the Trustee had in the applicable Receivables.
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, or be valid
for any purpose.
B-3
<PAGE>
IN WITNESS WHEREOF, Yamaha Motor Receivables Corporation has caused
this Exchangeable Transferor Certificate to be duly executed under its official
seal.
YAMAHA MOTOR RECEIVABLES
CORPORATION
By
------------------------------
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Transferor Certificate referred to in the
within-mentioned Pooling and Servicing Agreement.
Dated:
---------------
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By
------------------------------
Authorized Signatory
<PAGE>
EXHIBIT C
TO THE MASTER POOLING
AND SERVICING AGREEMENT
-----------------------
FORM OF REASSIGNMENT OF RECEIVABLES
-----------------------------------
(As required by Section 2.7(b)(i) of the
Master Pooling and Servicing Agreement)
REASSIGNMENT No. __ OF RECEIVABLES, dated as of _________, ____,
between YAMAHA MOTOR RECEIVABLES CORPORATION, a corporation organized under the
laws of the State of Delaware, and THE FUJI BANK AND TRUST COMPANY, a New York
banking corporation (the "Trustee") pursuant to the Master Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Yamaha Motor Receivables Corporation, as transferor (the
"Transferor"), Yamaha Motor Corporation, U.S.A., as Servicer, and the Trustee
are parties to the Master Pool ing and Servicing Agreement, dated as of March 1,
1994, including any Supplement (hereinaf ter as such agreement may have been, or
may from time to time be, amended, supplemented or otherwise modified and in
effect, the "Pooling and Servicing Agreement"); and
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferor wishes to remove all Receivables from certain designated Accounts
(the "Removed Accounts") and to cause the Trustee to quitclaim the Receivables
of such Removed Accounts, whether now existing or hereafter created, from the
Trust to the Transferor (as each such term is defined in the Pooling and
Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and to
quitclaim the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to them in the Pooling and
Servicing Agreement.
"Removal Date" shall mean, with respect to the Removed Accounts
designated hereby, ____________, 19__.
<PAGE>
"Removal Notice Date" shall mean, with respect to the Removed Accounts
designated hereby, _________, _____ (which shall be a date on or prior to the
tenth Business Day prior to the Removal Date).
2. Designation of Removed Accounts. The Transferor shall deliver to the
Trustee herewith, a computer file or microfiche list containing a true and
complete list of each Account which as of the Removal Date shall be deemed to be
a Removed Account, such Accounts being identified by account number and by the
aggregate balance of the Receivables in such Removed Accounts as of the Removal
Notice Date. Such list shall be marked as Schedule 1 to this Reassignment and
shall be incorporated into and made a part of this Reassignment and the Pooling
and Servicing Agreement as of the Removal Date.
3. Conveyance of Receivables. a. The Trustee does hereby quitclaim to
the Transferor, without recourse or representation (included those implied by
law) on and after the Removal Date, all right, title and interest of the Trust
in and to the Receivables now existing and hereafter created in the Removed
Accounts designated on Schedule 1 hereto, all monies due or to become due and
all amounts received with respect thereto, including all Recoveries related
thereto, and all proceeds thereof.
b. In connection with such transfer, the Trustee agrees to execute and
deliver to the Transferor on or prior to the date of this Reassignment, a
termination statement with respect to the Receivables now existing and hereafter
created in the Removed Accounts desig nated hereby (which may be a single
termination statement with respect to all such Receivables) evidencing the
release by the Trust of its lien on the Receivables in the Removed Accounts, and
meeting the requirements of applicable state law, in such manner and such
jurisdictions as are necessary to remove such lien. The Transferor shall be
responsible for filing any such termination statement and the Trustee shall have
no responsibility to see to any recording or filing of any such termination
statement.
4. Acceptance by Trustee. The Trustee hereby acknowledges that, prior
to or simulta neously with the execution and delivery of this Reassignment, the
Transferor delivered to the Trustee the computer file or microfiche list
represented by the Transferor to be as described in Section 2 of this
Reassignment.
5. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Trust as of the Removal Date:
a. Valid and Legally Binding Obligation. This Reassignment constitutes
a valid and legally binding obligation of the Transferor enforceable against the
Transferor in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); and
<PAGE>
b. Selection Procedures. No selection procedures believed by such
Transferor to be materially adverse to the interests of any outstanding Series
of Investor Certificates or any Enhancement Provider were utilized in selecting
the Removed Accounts designated hereby.
6. Conditions Precedent. The amendment of the Pooling and Servicing
Agreement set forth in Section 7 hereof is subject to the satisfaction, on or
prior to the Removal Date, of the following condition precedent:
a. Officer's Certificate. The Transferor shall have delivered to the
Trustee and the Rating Agencies an Officer's Certificate certifying that (i) on
the Removal Date, all requirements set forth in Section 2.7 of the Pooling and
Servicing Agreement for designating Removed Accounts and reconveying the
Receivables of such Removed Accounts, whether now existing or hereafter created,
have been satisfied, and (ii) each of the representations and warranties made by
the Transferor in Section 5 hereof is true and correct as of the Removal Date.
The Trustee may conclusively rely on such Officer's Certificate, shall have no
duty to make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
7. Amendment of the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement is hereby amended to provide that all references therein to
the "Pooling and Servicing Agreement," to "this Agreement" and "herein" shall be
deemed from and after the Removal Date to be a dual reference to the Pooling and
Servicing Agreement as supplemented by this Reassignment. Except as expressly
amended hereby, all of the representations, warranties, terms, covenants and
conditions of the Pooling and Servicing Agreement shall remain unamended and
shall continue to be, and shall remain, in full force and effect in accordance
with its terms and except as expressly provided herein shall not constitute or
be deemed to constitute a waiver of compliance with or a consent to
non-compliance with any term or provision of the Pooling and Servicing
Agreement.
8. Counterparts. This Reassignment 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.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reassignment of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
YAMAHA MOTOR RECEIVABLES CORPORATION,
as Transferor
By
-----------------------------------
Name:
Title:
THE FUJI BANK AND TRUST COMPANY,
as Trustee and Paying Agent
By
-----------------------------------
Name:
Title:
<PAGE>
Schedule 1
to Reassignment
of Receivables
--------------
REMOVED ACCOUNTS
----------------
<PAGE>
EXHIBIT D TO THE
MASTER POOLING AND
SERVICING AGREEMENT
-------------------
FORM OF INITIAL SERVICER'S REPORT
YAMAHA MOTOR CORPORATION, U.S.A.
---------------------------------------
YAMAHA MOTOR MASTER TRUST
---------------------------------------
The undersigned, duly authorized representative of Yamaha Motor
Corporation, U.S.A. ("Yamaha"), as Servicer pursuant to the Master Pooling and
Servicing Agreement, dated as of March 1, 1994 by and among Yamaha, as Servicer,
Yamaha Motor Receivables Corporation, as Transferor and The Fuji Bank and Trust
Company, as trustee (in such capacity the "Trustee"), does hereby certify to the
best of his or her knowledge after reasonable investigation that:
1. Yamaha is as of the date hereof the Servicer under the Pooling and
Servicing Agreement. Capitalized terms used in this Certificate have their
respective meanings set forth in the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this certificate to the Trustee.
3. This certificate is delivered pursuant to Section 3.4(a) of the
Pooling and Servicing Agreement.
4. The Trust Principal Component as of the end of the day two (2)
Business Days preceding the Closing Date was $ _________________ .
5. The Transferor Interest as of the end of the day two (2) Business
Days preceding the Closing Date was $ .
6. The Invested Amount for each Outstanding Series as of the end of the
day two (2) Business Days preceding the Closing Date was:
Series ________ $
<PAGE>
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the
Servicer, has duly executed this Certificate this day of March, 1994.
YAMAHA MOTOR CORPORATION, U.S.A.,
as Servicer
By:
-----------------------------
Name:
Title:
<PAGE>
EXHIBIT E
TO THE MASTER POOLING
AND SERVICING AGREEMENT
-----------------------
[FORM OF DETERMINATION DATE STATEMENT]
<PAGE>
EXHIBIT F
TO THE MASTER POOLING
AND SERVICING AGREEMENT
-----------------------
FORM OF ANNUAL SERVICER'S CERTIFICATE
YAMAHA MOTOR CORPORATION, U.S.A.
---------------------------------------
YAMAHA MOTOR MASTER TRUST
---------------------------------------
The undersigned, duly authorized representative of Yamaha Motor
Corporation, U.S.A. ("Yamaha"), as Servicer pursuant to the Master Pooling and
Servicing Agreement, dated as of March 1, 1994, by and among Yamaha, as
Servicer, Yamaha Motor Receivables Corporation, as Transferor and The Fuji Bank
and Trust Company, as trustee (in such capacity the "Trustee"), does hereby
certify to the best of his or her knowledge after reasonable investigation that:
1. Yamaha is, as of the date hereof, the Servicer under the Pooling and
Servicing Agreement. Capitalized terms used in this Certificate have their
respective meanings set forth in the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this certificate to the Trustee.
3. This certificate is delivered pursuant to Section 3.5 of the Pooling
and Servicing Agreement.
4. A review of the activities of the Servicer during the annual period
ended May 31, 19__ and of its performance under the Pooling and Servicing
Agreement was conducted under my supervision.
5. Based on such review, the Servicer has, to the best of my knowledge,
fully performed all its obligations under the Pooling and Servicing Agreement
throughout such calendar year
<PAGE>
and no event which, with the giving of notice or passage of time or both, would
constitute a Servicer Default has occurred except as set forth in paragraph 6
below.
6. The following is a description of each Servicer Default in the
performance of the Servicer's obligations or Early Amortization Event under the
provisions of the Pooling and Servicing Agreement known to me to have been made
during the annual period ended May 31, 19__, which sets forth in detail the (i)
nature of each such Servicer Default or Early Amortization Event, (ii) the
action taken by the Servicer, if any, to remedy each such Servicer Default or
Early Amortization Event and (iii) the current status of each such default: [If
applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ___ day of ___________, 19__.
YAMAHA MOTOR CORPORATION, U.S.A.,
as Servicer
By:
------------------------------
Name:
Title:
<PAGE>
EXHIBIT G TO MASTER POOLING
AND SERVICING AGREEMENT
---------------------------
PART ONE
--------
PROVISIONS TO BE INCLUDED IN
OPINION OF COUNSEL PURSUANT
TO SUBSECTION 13.1(g)
---------------------
The counsel rendering this opinion may rely on certificates of officers
of the Servicer as regards factual matters.
(i) The Amendment to the Pooling and Servicing Agreement, attached
hereto as Exhibit A (the "Amendment"), has been duly authorized, executed and
delivered by the Transferor and constitutes the valid and legally binding
agreement of the Transferor, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor's rights
and to general equity principles.
(ii) The Amendment has been entered into in accordance with the terms
and provisions of Section 13.1 of the Pooling and Servicing Agreement.
(iii) The Amendment will not materially and adversely affect the
interests of the Investor Certificateholders.
PART TWO
PROVISIONS TO BE INCLUDED
IN ANNUAL OPINION OF COUNSEL
PURSUANT TO SECTION 13.2(d)
---------------------------
The opinion set forth below, which is to be delivered pursuant to
subsection 13.2(d) of the Pooling and Servicing Agreement, may be subject to
certain qualifications, assumptions, limitations and exceptions taken or made in
the opinion of counsel delivered on the Closing Date with respect to similar
matters.
No filing or other action, other than such filing or action described
in such opinion, is necessary from the date of such opinion through May 31 of
the following year to continue the perfected status of the interest of the Trust
in the collateral described in the financing statements referred to in such
opinion.
<PAGE>
SCHEDULE 1
----------
LIST OF ACCOUNTS
<PAGE>
SCHEDULE 2
----------
COLLECTION ACCOUNT
No:
Designation:
Where established:
<PAGE>
Exhibit 4.2
================================================================================
SERIES 1999-1 SUPPLEMENT
Dated as of May 1, 1999
to
AMENDED AND RESTATED
MASTER POOLING AND SERVICING AGREEMENT
Dated as of May 1, 1999
by and among
YAMAHA MOTOR RECEIVABLES CORPORATION,
as Transferor,
YAMAHA MOTOR CORPORATION, U.S.A.,
as Servicer,
and
THE FUJI BANK AND TRUST COMPANY,
as Trustee on behalf of
the Certificateholders
------------------------------
YAMAHA MOTOR MASTER TRUST
SERIES 1999-1
------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
SECTION 1. Designation............................................... 2
SECTION 2. Definitions............................................... 2
SECTION 3. Minimum Transferor Percentage and Minimum
Trust Principal Component, Etc............................ 10
SECTION 4. Reassignment and Transfer Terms........................... 11
SECTION 5. Delivery and Payment for the Certificates................. 11
SECTION 6. Form of Delivery of the Series 1999-1 Certificates........ 11
SECTION 7. Transfer of Class C Certificates.......................... 12
SECTION 8. Tax Treatment............................................. 13
SECTION 9. Article IV of Agreement................................... 13
SECTION 10. Article V of Agreement.................................... 34
SECTION 11. Early Amortization Events................................. 36
SECTION 12. Series-Specific Transferor Covenants...................... 38
SECTION 13. Ratification of Master Pooling and Servicing
Agreement................................................. 38
SECTION 14. Counterparts.............................................. 38
SECTION 15. Governing Law............................................. 38
i
<PAGE>
SERIES 1999-1 SUPPLEMENT, dated as of May 1, 1999 (as amended,
supplemented or otherwise modified and in effect from time to time, this "Series
Supplement"), among YAMAHA MOTOR RECEIVABLES CORPORATION, a corporation
organized and existing under the laws of the state of Delaware, as Transferor,
YAMAHA MOTOR CORPORATION, U.S.A., a corporation organized and existing under the
laws of the state of California, as Servicer, and THE FUJI BANK AND TRUST
COMPANY, a banking corporation organized and existing under the laws of the
State of New York (together with its successors in trust thereunder as provided
in the Agreement referred to below, the "Trustee"), as Trustee under the Amended
and Restated Master Pooling and Servicing Agreement, dated as of May 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to time, the
"Agreement").
PRELIMINARY STATEMENTS
Section 6.9 of the Agreement provides, among other things,
that the Transferor and the Trustee may, at any time and from time to time,
enter into one or more supplements to the Agreement for the purpose of
authorizing the issuance by the Trustee to the Transferor, for execution and
redelivery to the Trustee for authentication, one or more Series of
certificates. The Transferor and the Servicer each hereby enter into this Series
1999-1 Supplement with the Trustee as required by Section 6.9(c) of the
Agreement to provide for the issuance, authentication and delivery of the
Floating Rate Series 1999-1, Class A Asset-Backed Certificates, the Floating
Rate Series 1999-1, Class B Asset-Backed Certificates and the Floating Rate
Series 1999-1, Class C Asset-Backed Certificates. 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.
All capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Agreement. All Article or
Section references herein shall mean Articles or Sections of the Agreement,
except as the context may require or as otherwise provided herein. Unless
otherwise stated herein, as the context otherwise requires or if such term is
otherwise defined in the Agreement, each capitalized term used or defined herein
shall relate only to the particular Series 1999-1 Certificates and to no other
Series of certificates issued by the Trust.
<PAGE>
SECTION 1. Designation. The Investor Certificates issued
pursuant to this Supplement shall be designated generally as the "Series 1999-1
Certificates".
SECTION 2. Definitions. The following words and phrases shall
have the following meanings with respect to the Series 1999-1 Certificates, and
the definitions of such terms are applicable to the singular as well as the
plural form of such terms and to the masculine as well as the feminine and
neuter genders of such terms:
"Accumulation Periods" shall mean the Controlled Accumulation
Period and the Rapid Accumulation Period.
"Accumulation Shortfall" shall mean, for the Collection Period
immediately preceding the related Distribution Date, the amount by which the
Controlled Deposit Amount exceeds the amount deposited in the Principal Funding
Account on such Distribution Date.
"Available Principal Funds" shall have the meaning specified
in the first paragraph of Section 4.9 of the Agreement, as amended hereby by
Section 9.
"Available Subordinated Amount" shall mean, with respect to
each Transferor Subordination Event, the meaning specified in Section 4.14(b) of
the Agreement, as amended hereby by Section 9, with respect to such Transferor
Subordination Event.
"Available Yield Funds" shall have the meaning specified in
the first paragraph of Section 4.9 of the Agreement, as amended hereby by
Section 9.
"Certificateholder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register.
"Certificateholders' Interest" shall have the meaning
specified in Section 4.3 of the Agreement, as amended hereby by Section 9.
"Certificates" shall mean, collectively, the Class A
Certificates, the Class B Certificates and the Class C Certificates.
"Class A Adjusted Invested Amount", for any date of
determination during the Controlled Accumulation Period, shall mean an amount
equal to the Class A Invested Amount minus the aggregate principal amount on
deposit in the Principal
2
<PAGE>
Funding Account, and for any other date of determination, shall mean the Class A
Invested Amount.
"Class A Certificate Rate" shall mean the lesser of (1)
one-month LIBOR determined as of the second London Banking Day prior to the
related Interest Accrual Period (or, in the case of the first Distribution Date,
based on the interpolated average of one-month LIBOR and two-month LIBOR
determined as of May 27, 1999 for the period from June 1, 1999 up to but
excluding July 15, 1999) plus ___% per annum or (2) the Maximum Rate, calculated
on the basis of the actual number of days in the related Interest Accrual Period
and a 360-day year.
"Class A Certificateholder" shall mean the Person in whose
name a Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean the Floating Rate Series
1999-1, Class A Asset-Backed Certificates.
"Class A Expected Final Payment Date" shall mean June 15, 2004
(or, if such day is not a Business Day, the next succeeding Business Day).
"Class A Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class A Certificates, which is $200,000,000.
"Class A Invested Amount" for any date shall mean an amount
equal to (i) the initial principal balance of the Class A Certificates, minus
(ii) the amount of principal payments made to Class A Certificateholders prior
to such date, minus (iii) the aggregate amount of Class A Investor Charge-Offs
for all prior Distribution Dates and, if the date of determination is a
Distribution Date, for such Distribution Date, plus (iv) the aggregate amount of
Yield Collections and the aggregate amount of Principal Collections applied in
respect of the Available Subordinated Amount and certain other amounts applied
on all prior Distribution Dates and, if the date of determination is a
Distribution Date, to be applied on the current Distribution Date, in each case,
for the purpose of reimbursing amounts deducted pursuant to the foregoing clause
(iii).
"Class A Investor Charge-Off" shall have the meaning specified
in Section 4.11(b) of the Agreement, as amended hereby by Section 9.
3
<PAGE>
"Class A Monthly Interest" shall mean the monthly interest
distributable in respect of the Class A Certificates as calculated in accordance
with Section 4.5(a) of the Agreement, as amended hereby by Section 9.
"Class A Monthly Principal" shall mean the monthly principal
distributable in respect of the Class A Certificates as calculated in accordance
with Section 4.6(a) of the Agreement, as amended hereby by Section 9.
"Class B Adjusted Invested Amount", for any date of
determination during the Rapid Accumulation Period, shall mean an amount equal
to the Class B Invested Amount minus the aggregate principal amount on deposit
in the Principal Funding Account, and for any other date of determination, shall
mean the Class B Invested Amount
"Class B Certificate Rate" shall mean the lesser of (1)
one-month LIBOR determined as of the second London Banking Day prior to the
related Interest Accrual Period (or, in the case of the first Distribution Date,
based on the interpolated average of one-month LIBOR and two-month LIBOR
determined as of May 27, 1999 for the period from June 1, 1999 up to but
excluding July 15, 1999) plus ___% per annum or (2) the Maximum Rate, calculated
on the basis of the actual number of days in the related Interest Accrual Period
and a 360-day year.
"Class B Certificateholder" shall mean the Person in whose
name a Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean the Floating Rate Series
1999-1, Class B Asset-Backed Certificates.
"Class B Expected Final Payment Date" shall mean July 15, 2004
(or, if such day is not a Business Day, the next succeeding Business Day).
"Class B Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class B Certificates, which is $14,035,000.
"Class B Invested Amount" for any date shall mean an amount
equal to (i) the initial principal balance of the Class B Certificates, minus
(ii) the amount of principal payments made to Class B Certificateholders prior
to such date, minus (iii) the aggregate amount of Class B Investor Charge-Offs
for all prior Distribution Dates and, if the date of determination is a
Distribution Date, for such Distribution Date, plus (iv) the aggregate amount of
Yield Collections and the aggregate amount
4
<PAGE>
of Principal Collections applied in respect of the Available Subordinated Amount
and certain other amounts applied on all prior Distribution Dates and, if the
date of determination is a Distribution Date, to be applied on the current
Distribution Date, in each case, for the purpose of reimbursing amounts deducted
pursuant to the foregoing clause (iii).
"Class B Investor Charge-Off" shall have the meaning specified
in Section 4.11(a) of the Agreement, as amended hereby by Section 9.
"Class B Monthly Interest" shall mean the monthly interest
distributable in respect of the Class B Certificates as calculated in accordance
with Section 4.5(b) of the Agreement, as amended hereby by Section 9.
"Class B Monthly Principal" shall mean the monthly principal
distributable in respect of the Class B Certificates as calculated in accordance
with Section 4.6(b) of the Agreement, as amended hereby by Section 9.
"Class C Certificate Rate" shall mean the lesser of (1)
one-month LIBOR determined as of the second London Banking Day prior to the
related Interest Accrual Period (or, in the case of the first Distribution Date,
based on the interpolated average of one-month LIBOR and two-month LIBOR
determined as of May 27, 1999 for the period from June 1, 1999 up to but
excluding July 15, 1999) plus ___% per annum or (2) the Maximum Rate, calculated
on the basis of the actual number of days in the related Interest Accrual Period
and a 360-day year.
"Class C Certificateholder" shall mean the Person in whose
name a Class C Certificate is registered in the Certificate Register.
"Class C Certificates" shall mean the Floating Rate Series
1999-1, Class C Asset-Backed Certificates.
"Class C Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class C Certificates, which is $19,883,041.
"Class C Invested Amount" for any date shall mean an amount
equal to (i) the initial principal balance of the Class C Certificates, minus
(ii) the amount of principal payments made to Class C Certificateholders prior
to such date, minus (iii) the aggregate amount of Class C Investor Charge-Offs
for all prior Distribution Dates and, if the date of determination is a
Distribution Date, for such Distribution Date, plus (iv) the aggregate amount of
Yield Collections and the aggregate amount of
5
<PAGE>
Principal Collections applied in respect of the Available Subordinated Amount
and certain other amounts applied on all prior Distribution Dates and, if the
date of determination is a Distribution Date, to be applied on the current
Distribution Date, in each case, for the purpose of reimbursing amounts deducted
pursuant to the foregoing clause (iii).
"Class C Investor Charge-Off" shall have the meaning specified
in first paragraph of Section 4.11 of the Agreement, as amended hereby by
Section 9.
"Class C Monthly Interest" shall mean the monthly interest
distributable in respect of the Class C Certificates as calculated in accordance
with Section 4.5(c) of the Agreement, as amended hereby by Section 9.
"Class C Monthly Principal" shall mean the monthly principal
distributable in respect of the Class C Certificates as calculated in accordance
with Section 4.6(c) of the Agreement, as amended hereby by Section 9.
"Closing Date" shall mean, with respect to the Series 1999-1
Certificates, June 1, 1999.
"Controlled Accumulation Amount" shall mean, with respect to
the Class A Certificates, one-sixth of the Class A Invested Amount as of the
Controlled Accumulation Date.
"Controlled Accumulation Date" shall mean December 1, 2003.
"Controlled Accumulation Period" shall mean, with respect to
the Class A Certificates, an Amortization Period commencing on the Controlled
Accumulation Date and continuing to the earlier of (x) but not including, the
commencement of the Early Amortization Period, or (y) and including, the earlier
of (1) May 31, 2004 or (2) the termination of the Trust.
"Controlled Amortization Period" shall not be applicable for
purposes of this Series Supplement.
"Controlled Deposit Amount" shall have the meaning specified
in Section 4.6(a) of the Agreement, as amended hereby by Section 9.
"Deficit Controlled Amortization Period" shall not be
applicable for purposes of this Series Supplement.
6
<PAGE>
"DFS" shall mean Deutsche Financial Services Corporation, a
Nevada corporation, formerly doing business as ITT Commercial Finance Corp.
"Distribution Date" shall mean the 15th day of each month (or,
if any such day is not a Business Day, on the next succeeding Business Day),
commencing July 15, 1999.
"Early Amortization Period" shall mean, with respect to the
Class A Certificates or the Class B Certificates, the Amortization Period
commencing on (a) the day on which an Early Amortization Event occurs or is
deemed to have occurred, (b) the Class A Expected Final Payment Date if the
Class A Invested Amount is not paid in full on such date or (c) the Class B
Expected Final Payment Date if the Class B Invested Amount is not paid in full
on such date, and continuing to and including the earlier of (i) the payment in
full to Class A Certificateholders of the Class A Initial Invested Amount and to
Class B Certificateholders of the Class B Initial Invested Amount and (ii) the
Stated Series Termination Date.
"Expected Final Payment Dates" shall mean the Class A Expected
Final Payment Date and the Class B Expected Final Payment Date.
"Fixed Allocation Percentage" shall mean, on any date of
determination with respect to any Distribution Date related to any Accumulation
Period or the Early Amortization Period, the percentage equivalent of the ratio
which the Invested Amount as of the last day of the Revolving Period bears to
the greater of (a) the Trust Principal Component on the last day of the
Collection Period immediately preceding the related Collection Period and (b)
the sum of the numerators used to calculate the invested percentage with respect
to Principal Collections for all Series (and all Classes) of certificates
outstanding for the current Distribution Date.
"Floating Allocation Percentage" shall mean, on any date of
determination with respect to any Distribution Date, the percentage equivalent
of the ratio of the sum of the Class A Adjusted Invested Amount, the Class B
Adjusted Invested Amount and the Class C Invested Amount on the last day of the
Collection Period immediately preceding the related Collection Period to the sum
of the Trust Principal Component and the amounts on deposit in the Special
Funding Account on the last day of such Collection Period immediately preceding
the related Collection Period; provided, however, that during the initial
Collection Period, the Floating Allocation Percentage will equal the percentage
equivalent of the ratio which the amount of the Initial Invested Amount bears to
the Trust Principal Component on April 30, 1999.
7
<PAGE>
"Initial Invested Amount" shall mean the sum of the Class A
Initial Invested Amount, the Class B Initial Invested Amount and the Class C
Initial Invested Amount, or $233,918,041.00.
"Initial Servicer Cash Collateral Deposit" shall mean an
amount equal to $2,675,437.50.
"Interest Accrual Period" shall mean, with respect to any
Distribution Date, the period from and including the preceding Distribution Date
or, in the case of the first Distribution Date, from and including the Closing
Date, to but excluding such Distribution Date.
"Invested Amount" shall mean, when used with respect to any
date of determination, an amount equal to the sum of the Class A Invested
Amount, the Class B Invested Amount and the Class C Invested Amount.
"Invested Percentage" shall mean, on any date of determination
with respect to any Distribution Date, (a) when used with respect to Principal
Collections during the Revolving Period, the Floating Allocation Percentage; (b)
when used with respect to Principal Collections during any Accumulation Period
or an Early Amortization Period, the Fixed Allocation Percentage; and (c) when
used with respect to Yield Collections and Defaulted Receivables at any time,
the Floating Allocation Percentage.
"Investor Charge-Offs" shall mean, for any date of
determination, the sum of the Class A Investor Charge-Offs, the Class B Investor
Charge-Offs and the Class C Investor Charge-Offs.
"LIBOR" shall mean the rate calculated by the Trustee pursuant
to Section 4.5(d) of the Agreement, as amended hereby by Section 9.
"LIBOR Determination Date" shall have the meaning specified in
Section 4.5(d) of the Agreement, as amended hereby by Section 9.
"London Banking Day" shall have the meaning specified in
Section 4.5(d) of the Agreement, as amended hereby by Section 9.
"Maximum Rate" shall mean (i) the product of (a) the Yield
Factor for such Distribution Date and (b) twelve, minus (ii) the Servicing Fee
Percentage.
8
<PAGE>
"Offered Certificates" shall mean the Class A Certificates and
the Class B Certificates.
"Principal Funding Account" shall have the meaning specified
in Section 4.8(a) of the Agreement, as amended hereby by Section 9.
"Rapid Accumulation Date" shall mean June 1, 2004.
"Rapid Accumulation Period" shall mean, with respect to the
Class B Certificates, an Amortization Period commencing on the Rapid
Accumulation Date and continuing to the earlier of (x) but not including, the
commencement of the Early Amortization Period, or (y) and including, the earlier
of (1) June 30, 2004 or (2) the termination of the Trust.
"Record Date" shall mean, with respect to any Distribution
Date, the last Business Day of the calendar month immediately preceding such
Distribution Date.
"Reference Banks" shall have the meaning specified in Section
4.5(d) of the Agreement, as amended hereby by Section 9.
"Revolving Period" shall mean, with respect to the Series
1999-1 Certificates, the period from and including the Closing Date, up to and
including the day prior to the day on which the Controlled Accumulation Period
or, if earlier, an Early Amortization Period commences.
"Securities Act" shall have the meaning specified in Section
7(b) hereof.
"Series 1999-1 Certificates" shall have the meaning specified
in Section 1 hereof.
"Series 1999-1 Principal Shortfall" shall have the meaning
specified in Section 4.6(d) of the Agreement, as amended hereby by Section 9.
"Series 1999-1 Undistributed Principal Collections" shall mean
the amount, if any, equal to the product of (a) a fraction, the numerator of
which is equal to the sum of the Class A Adjusted Invested Amount, the Class B
Adjusted Invested Amount and the Class C Invested Amount and the denominator of
which is equal to the sum of the invested amount of all Series then accumulating
or amortizing
9
<PAGE>
principal (less any amounts on deposit in any principal funding accounts) and
(b) Undistributed Principal Collections on deposit in the Collection Account and
the Special Funding Account on such Distribution Date.
"Series Factor" shall mean the percentage, as of the end of
the related Collection Period, consisting of an eight-digit decimal expressing
the Class A Invested Amount, the Class B Invested Amount or the Class C Invested
Amount, as applicable, as of such date (determined after taking into account any
increase or decrease in the Invested Amount which will occur on the following
Distribution Date) as a proportion of the Class A Initial Invested Amount, the
Class B Initial Invested Amount or the Class C Initial Invested Amount, as
applicable.
"Servicer Cash Collateral Account" shall have the meaning
specified in Section 4.7 of the Agreement, as amended hereby by Section 9.
"Servicing Fee Percentage" shall mean 2% per annum.
"Special Funding Account" shall have the meaning specified in
Section 4.2 of the Agreement.
"Stated Series Termination Date" shall mean the December 2006
Distribution Date.
"Telerate Page 3750" shall have the meaning specified in
Section 4.5(d) of the Agreement, as amended hereby by Section 9.
"Yield Factor" shall mean, initially, 1.5%, and shall increase
to 1.75% during any Accumulation Period; provided, that the Yield Factor shall
increase to 2% solely with respect to the Series 1999-1 Certificates during any
Collection Period for which one-month LIBOR (as calculated by the Trustee on the
preceding LIBOR Determination Date pursuant to Section 4.5(d)) exceeds 15 per
annum %; provided further, that if one-month LIBOR (as calculated by the Trustee
on any subsequent LIBOR Determination Date pursuant to Section 4.5(d)) decreases
thereafter to a rate equal to or less than 15% per annum, the Yield Factor shall
be reduced from 2% to 1.5% or 1.75%, as applicable.
SECTION 3. Minimum Transferor Percentage and Minimum Trust
Principal Component, Etc. The Minimum Transferor Percentage applicable to the
Series 1999-1 Certificates shall be 10%. The Minimum Trust Principal Component
with respect to the Series 1999-1 Certificates shall be $23,391,804.10. The
Servicer
10
<PAGE>
shall, pursuant to Section 3.4(a) of the Agreement, deliver an Officer's
Certificate setting forth each of the following as of the end of the day on May
27, 1999: the Trust Principal Component, the Transferor Interest and the
Invested Amount for each outstanding Series.
SECTION 4. Reassignment and Transfer Terms.
(a) The Series 1999-1 Certificates may be reassigned and
transferred to the Transferor on any Distribution Date on or after which the
Invested Amount is reduced to an amount less than or equal to 10% of the Initial
Invested Amount, subject to the provisions of Section 12.2 of the Agreement.
(b) Except in the case of an insurance company acting through
its general account and in compliance with Prohibited Transaction Class
Exemption 95-60, a Class B Certificate, a Class C Certificate or any interest
therein may not be acquired by or transferred to any "Benefit Plan Investor" (as
defined in 29 C.F.R. ss.2510.3-101) or any person who is directly or indirectly
purchasing a Class B Certificate, a Class C Certificate or an interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of, such a
Benefit Plan Investor. Each prospective acquirer or transferee of a Class B
Certificate, a Class C Certificate or an interest therein, by its acceptance of
such Class B Certificate, Class C Certificate or an interest therein, will be
deemed to have represented that (i) either no "prohibited transaction" under
ERISA or the Internal Revenue Code will occur in connection with such
prospective acquirer's or transferee's acquisition and holding of such Class B
Certificate or Class C Certificate or that the acquisition and holding of a
Class B Certificate or a Class C Certificate by such prospective acquirer or
transferee is subject to a statutory or administrative exemption and (ii) that
the prospective acquirer's or transferee's acquisition and holding will not
subject the Transferor, the Servicer, the Trustee or the Trust to any obligation
or liability (including obligations or liabilities under ERISA or Section 4975
of the Internal Revenue Code) in addition to those explicitly undertaken in the
agreements relating to the transactions described herein.
SECTION 5. Delivery and Payment for the Certificates. The
Trustee shall authenticate and deliver the Series 1999-1 Certificates in
accordance with Section 6.2 of the Agreement. The Class C Certificates shall be
issued in minimum denominations of $1,000 and integral multiples thereof;
provided, however, that one Class C Certificate may be issued in a denomination
that includes any remaining portion of the Class C Initial Invested Amount.
SECTION 6. Form of Delivery of the Series 1999-1 Certificates.
The Offered Certificates shall be delivered as provided in Section 6.10 of the
Agreement and the Class C Certificates shall be delivered in definitive form.
11
<PAGE>
SECTION 7. Transfer of Class C Certificates.
(a) The initial transfer or any pledge of the Class C
Certificates to any entity other than a corporation that is a member of the
consolidated federal income tax group of which Yamaha Motor Corporation, U.S.A.
is a member shall not occur unless the Trustee shall have received an Opinion of
Counsel to the effect that the Class C Certificates, upon such transfer, will be
characterized as debt or an interest in a partnership for federal income tax
purposes. Prior to any transfer of a Class C Certificate to any Affiliate of the
Transferor, the Servicer shall provide to the Trustee written confirmation from
each Rating Agency that such transfer will not result in the downgrade or
withdrawal of any rating on any Class of Offered Certificates. Prior to any such
transfer of a Class C Certificate, the Transferor shall certify to the Trustee
in writing whether the proposed transferee of the Class C Certificate is an
Affiliate of the Transferor and the Trustee shall be entitled to rely
conclusively on such certificate.
(b) The Class C Certificates have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") or any state
securities law. No resale or other transfer of any Class C Certificate or any
interest therein or participation thereof shall be made unless the Trustee and
the Transfer Agent and Registrar shall have received an Officer's Certificate
certifying that such resale or transfer is made (i) pursuant to an effective
registration statement under the Securities Act; (ii) in a transaction exempt
from the registration requirements of the Securities Act and applicable state
securities or "blue sky" laws; (iii) to the Transferor; or (iv) to a person who
the transferor of the Class C Certificate reasonably believes is a qualified
institutional buyer (within the meaning thereof in Rule 144A under the
Securities Act) that is aware that such resale or other transfer is being made
in reliance upon Rule 144A. Until the earlier of (i) such time as the Class C
Certificates shall be registered pursuant to a registration statement filed
under the Securities Act and (ii) the date two years from the later of the
Closing Date and the date any Class C Certificate was acquired from the
Transferor or an Affiliate of the Transferor, the Class C Certificates shall
bear a legend substantially to the effect set forth in the preceding two
sentences. Neither the Transferor, the Transfer Agent and Registrar nor the
Trustee is obligated to register the Class C Certificates under the Securities
Act, or to take any other action not otherwise required under this Series
Supplement to permit the transfer of Class C Certificates without registration.
Notwithstanding anything to the contrary contained herein, in
no event shall a Class C Certificate or any interest therein be sold,
transferred, assigned, exchanged, pledged, hypothecated, participated or
otherwise conveyed, or a security
12
<PAGE>
interest granted therein, unless the Transferor shall have consented to such
transfer. The Class C Certificates shall at all times bear a legend
substantially to the effect set forth in the preceding sentence.
SECTION 8. Tax Treatment. It is the intention of the
Transferor and the Investor Certificateholders that the Class C Certificates
(upon transfer to an entity other than the Transferor) be characterized as
either indebtedness of the Transferor or an interest in a partnership for
Federal, state and local income and franchise tax purposes and for purposes of
any other tax imposed on or measured by income. The Transferor and each Class C
Certificateholder by acceptance of its Class C Certificates agree to treat the
Class C Certificates for purposes of Federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as such
indebtedness or such an interest and to report the transactions contemplated by
this Series Supplement on all applicable tax returns in a manner consistent with
such treatment.
To the extent that any Class of Investor Certificates is
determined to represent interests in a partnership for federal income tax
purposes, it is the intention of the Transferor and the Investor
Certificateholders that (i) the holder of the Exchangeable Transferor
Certificate be designated as the tax matters partner for such partnership and
(ii) such partnership interest represent an interest limited to a capital
interest equal to the aggregate principal balance of such Class of Investor
Certificates and a share of partnership profits equal to a yield equal to the
Certificate Rate on such capital.
SECTION 9. Article IV of the Agreement. Sections 4.1 and 4.2
of the Agreement shall read in their entirety, as provided in the Agreement.
Article IV of the Agreement (except for Sections 4.1 and 4.2) shall read in its
entirety as follows and shall be applicable to the Certificates:
"ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.3. Rights of Certificateholders. The Class A
Certificates shall represent undivided interests in the Trust, consisting of the
right to receive, to the extent necessary to make the required payments with
respect to such Class A Certificates at the times and in the amounts specified
in this Agreement, (a) the
13
<PAGE>
Invested Percentage (as applicable from time to time) of Collections received
with respect to the Receivables and (b) funds on deposit in the Collection
Account, the Special Funding Account and the Principal Funding Account. The
Class B Certificates shall represent undivided interests in the Trust,
consisting of the right to receive, to the extent necessary to make required
payments with respect to such Class B Certificates at the times and in the
amounts specified in this Agreement (after application of payments in accordance
with the first sentence of this Section 4.3), (x) the Invested Percentage (as
applicable from time to time) of Collections received with respect to the
Receivables and (y) funds on deposit in the Collection Account, the Special
Funding Account and the Principal Funding Account. The Class C Certificates
shall represent undivided interests in the Trust, consisting of the right to
receive, to the extent necessary to make required payments with respect to such
Class C Certificates at the times and in the amounts specified in this Agreement
(after application of payments in accordance with the first and second sentences
of this Section 4.3), (x) the Invested Percentage (as applicable from time to
time) of Collections received with respect to the Receivables and (y) funds on
deposit in the Collection Account, the Special Funding Account and the Principal
Funding Account. (The undivided interests in the Trust referred to in the three
immediately preceding sentences are collectively referred to for the Series
1999-1 Certificates as the "Certificateholders' Interest".) The Exchangeable
Transferor Certificate shall not represent any interest in the Collection
Account, the Special Funding Account or the Principal Funding Account, except as
specifically provided in this Article IV.
SECTION 4.4. Collections and Allocations.
(a) Collections. The Servicer shall apply or shall
instruct the Trustee in writing to apply all funds on deposit in the Collection
Account allocable to the Series 1999-1 Certificates as described in this Article
IV.
(b) Allocations of Collections and Payments. For each
Collection Period, all Collections received will be treated as Yield Collections
until the amount of such Collections equals an amount equal to the product of
the Yield Factor and the Pool Balance as of the beginning of such Collection
Period. In the event that the Yield Factor applicable to the Series 1999-1
Certificates is greater than the Yield Factor applicable to any other Series,
the amount of Collections treated as Yield Collections allocable to the Series
1999-1 Certificates shall be increased accordingly and the amount of such
increase shall not be treated as Principal Collections allocable to the Series
1999-1 Certificates. By the second Business Day following the Date of Processing
a payment on a Receivable (or as otherwise specified in Section 4.1(g); provided
that with respect to clauses (i), (iii), (iv), (v), (vii) and (viii) below
during
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any Accumulation Period or any Early Amortization Period, the Servicer shall be
obligated to deposit funds into the Collection Account within two (2) Business
Days following the applicable Date of Processing, notwithstanding the provisions
of Section 4.1(g)), the Servicer shall determine whether an Early Amortization
Event has occurred or is deemed to have occurred with respect to the
Certificates, and the Servicer shall allocate Collections with respect to such
Date of Processing as follows:
(i) Floating Allocation Percentage of Yield
Collections. The Floating Allocation Percentage of Yield Collections as
of the last day of the prior Collection Period (or, if the
Determination Date for such Floating Allocation Percentage has not
occurred, the Floating Allocation Percentage as of the last day of the
second preceding Collection Period) received each day will be deposited
by the Servicer into the Collection Account within two (2) Business
Days following the Date of Processing.
(ii) During the Revolving Period. During the
Revolving Period, the Floating Allocation Percentage of Principal
Collections received each day will be deposited into the Collection
Account as Excess Principal Collections no later than two (2) Business
Days following the Date of Processing to the extent required to be
distributed to other Series on the next succeeding Distribution Date
and any excess will be remitted to the Transferor, unless such
distribution of Principal Collections would reduce the Transferor
Amount as a percentage of the Trust Principal Component below 10%
(after giving effect to any new Receivables transferred to the Trust),
in which case such amount will be retained in the Collection Account as
Undistributed Principal Collections. Any Undistributed Principal
Collections remaining in the Collection Account on the next succeeding
Distribution Date will be deposited into the Special Funding Account
and made available on subsequent Distribution Dates.
(iii) During the Controlled Accumulation Period.
During the Controlled Accumulation Period, the Fixed Allocation
Percentage of Principal Collections received each day allocable to the
Certificateholders' Interest, and any Excess Principal Collections
allocable to the Certificates pursuant to Section 4.12 will be
deposited by the Servicer into the Principal Funding Account for the
benefit of the Class A Certificateholders no later than two (2)
Business Days following the Date of Processing until the sum of all
such deposits equals the Controlled Deposit Amount; thereafter, the
Fixed Allocation Percentage of Principal Collections received each day
will be
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deposited into the Collection Account as Excess Principal Collections
to the extent required to be distributed to other Series on the next
succeeding Distribution Date.
(iv) During the Rapid Accumulation Period. During the
Rapid Accumulation Period, the Fixed Allocation Percentage of Principal
Collections received each day allocable to the Certificateholders'
Interest, and any Excess Principal Collections allocable to the
Certificates pursuant to Section 4.12 will be deposited by the Servicer
into the Principal Funding Account for the benefit of the Class B
Certificateholders no later than two (2) Business Days following the
Date of Processing until the sum of all such deposits equals the Class
B Invested Amount; thereafter, the Fixed Allocation Percentage of
Principal Collections received each day will be deposited into the
Collection Account as Excess Principal Collections to the extent
required to be distributed to other Series on the next succeeding
Distribution Date.
(v) During any Early Amortization Period and after
the Class B Expected Final Payment Date. After the Class B Expected
Final Payment Date and during an Early Amortization Period, all
Principal Collections received each day allocable to the
Certificateholders' Interest, and the Excess Principal Collections
allocable to the Certificates will be deposited by the Servicer into
the Collection Account no later than two (2) Business Days following
the Date of Processing until such deposits equal the amount of
principal required to be paid to Certificateholders.
(vi) During the Revolving Period, any Accumulation
Period and any Early Amortization Period. During the Revolving Period,
any Accumulation Period and any Early Amortization Period, if the
Transferor Percentage of Principal Collections is required to be
allocated in respect of the Available Subordinated Amount pursuant to
Section 4.14 of this Agreement, the Transferor Percentage of Principal
Collections will be deposited by the Servicer into the Collection
Account within two (2) Business Days of the Date of Processing.
(vii) During any Accumulation Period and any Early
Amortization Period. During any Accumulation Period and any Early
Amortization Period, the Transferor Percentage of Principal Collections
will be deposited by the Servicer into the Collection Account within
two (2) Business Days of the Date of Processing.
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(c) Additional Amounts.
(i) The allocations to be made pursuant to Section
4.4(b) also apply to any other deposits into the Collection Account
that are treated as Collections, payments made by the Transferor
pursuant to Sections 2.3 and 2.4(d) of the Agreement and payments made
by the Servicer pursuant to Section 3.3 of the Agreement. Such deposits
to be treated as Collections will be allocated as Yield Collections or
Principal Collections as indicated in this Agreement.
(ii) The amounts paid by the Transferor pursuant to
Section 2.4(d), Adjustment Payments, proceeds from the sale,
disposition or liquidation of the Receivables pursuant to Sections 9.2,
10.2, 12.1 or 12.2 of the Agreement and Section 4 of the Series
Supplement and amounts obtained by the Trustee pursuant to any demand
on any letter of credit, surety bond or other similar instrument
delivered pursuant to the Series Supplement or from any funds deposited
with the Trustee pursuant to the Series Supplement, shall be allocated
to the Certificateholders' Interest and allocated as Yield Collections
or Principal Collections as provided in this Agreement.
SECTION 4.5. Determination of Monthly Interest for the
Certificates.
(a) The amount of monthly interest distributable from the
Collection Account with respect to the Class A Certificates ("Class A Monthly
Interest") on any Distribution Date shall be an amount equal to one-twelfth
(1/12) of the product of (i) the Class A Certificate Rate and (ii) the Class A
Invested Amount; provided, however, with respect to the first Distribution Date
for the Class A Certificates, Class A Monthly Interest shall be equal to
$_____________. Class A Monthly Interest shall be calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day year.
(b) The amount of monthly interest distributable from the
Collection Account with respect to the Class B Certificates ("Class B Monthly
Interest") on any Distribution Date shall be an amount equal to one-twelfth
(1/12) of the product of (i) the Class B Certificate Rate and (ii) the Class B
Invested Amount; provided, however, with respect to the first Distribution Date
for the Class B Certificates, Class B Monthly Interest shall be equal to
$__________. Class B Monthly Interest shall be calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day year.
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(c) The amount of monthly interest distributable from the
Collection Account with respect to the Class C Certificates ("Class C Monthly
Interest") on any Distribution Date shall be an amount equal to one-twelfth
(1/12) of the product of (i) the Class C Certificate Rate and (ii) the Class C
Invested Amount; provided, however, with respect to the first Distribution Date
for the Class C Certificates, Class C Monthly Interest shall be equal to
$__________. Class C Monthly Interest shall be calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day year.
(d) On the second London Banking Day preceding the first
day of an Interest Accrual Period (a "LIBOR Determination Date"), until the
Stated Series Termination Date, the Trustee will determine the rate for deposits
in United States dollars having a one-month maturity, commencing on the first
day of such Interest Accrual Period, which appears on Telerate Page 3750 as of
11:00 a.m., London time, on such LIBOR Determination Date. If such rate does not
appear on Telerate Page 3750, the rate for such LIBOR Determination Date will be
determined on the basis of rates at which deposits in United States dollars
having a one-month maturity are offered by the Reference Banks at approximately
11:00 a.m., London time, on that day to prime banks in the London interbank
market. The Trustee will request the principal London office in each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for such LIBOR Determination Date will be the
arithmetic mean of the quotations (rounded upward to the nearest 0.015625%). If
fewer than two quotations are provided as requested, the rate for such LIBOR
Determination Date will be the arithmetic mean (rounded upward to the nearest
0.015625%) of the rates quoted by major banks in The City of New York, selected
by the Servicer, at approximately 11:00 a.m., New York time, on such date for
loans in United States dollars having a one-month maturity to leading European
banks; provided, however, that if the Trustee is unable to determine a rate in
accordance with one of the procedures described above, LIBOR shall be LIBOR as
determined on the most recent LIBOR Determination Date. The Class A Certificate
Rate and the Class B Certificate Rate applicable to the then current and
preceding Interest Accrual Period shall be provided by the Trustee to any
Certificateholder upon request. For purposes of calculating LIBOR, "London
Banking Day" means any business day on which dealings in deposits in United
States dollars are transacted in the London interbank market, "Telerate Page
3750" means the display page currently so designated on the Dow Jones Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates or prices) and "Reference Banks" means
three major banks in the London interbank market selected by the Servicer.
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SECTION 4.6. Determination of Monthly Principal for the
Certificates.
(a) The amount of monthly principal distributable from the
Collection Account with respect to the Class A Certificates on each Distribution
Date during the Controlled Accumulation Period or on the Class A Expected Final
Payment Date shall be equal to an amount calculated as the lesser of: (i) the
sum of (A) an amount equal to the Fixed Allocation Percentage of all Principal
Collections received during the Collection Period immediately preceding the
Class A Expected Final Payment Date or Distribution Date, as applicable
(calculated without giving effect to the allocation of Excess Principal
Collections from other Series, if any, or the allocations from the Transferor
Percentage of Principal Collections), (B) the amount, if any, of Series 1999-1
Undistributed Principal Collections for such Distribution Date and (C) the
Investor Default Amount with respect to such Distribution Date or the Class A
Expected Final Payment Date, as applicable, and any reimbursements of
unreimbursed Class A Investor Charge-Offs ("Class A Monthly Principal");
provided, however, that with respect to any Distribution Date, Class A Monthly
Principal may not exceed the Class A Adjusted Invested Amount; and (ii) the sum
of (A) the Controlled Accumulation Amount for the Collection Period immediately
preceding such Distribution Date, plus (B) any unpaid Accumulation Shortfall
related to any prior Collection Period (the "Controlled Deposit Amount").
(b) The amount of monthly principal distributable from the
Collection Account with respect to the Class B Certificates (the "Class B
Monthly Principal") on each Distribution Date beginning with the Distribution
Date on which the Class A Certificates are paid in full, shall be equal to an
amount calculated as follows: the sum of (i) an amount equal to the Fixed
Allocation Percentage of all Principal Collections received during the
Collection Period immediately preceding such Distribution Date (calculated
without giving effect to the allocation of Excess Principal Collections from
other Series, if any, or the allocation from the Transferor Percentage of
Principal Collections), (ii) the amount, if any, of Series 1999-1 Undistributed
Principal Collections for such Distribution Date, (iii) the Investor Default
Amount with respect to such Distribution Date and any reimbursements of
unreimbursed Class B Investor Charge-Offs, and if during an Early Amortization
Period, minus (iv) Class A Monthly Principal, if any, with respect to such
Distribution Date; provided, however, that with respect to any Distribution
Date, Class B Monthly Principal may not exceed an amount equal to the Class B
Invested Amount.
(c) The amount of monthly principal distributable from the
Collection Account with respect to the Class C Certificates (the "Class C
Monthly
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Principal") on each Distribution Date beginning with the Distribution Date as of
which both Classes of Offered Certificates have been paid in full, shall be
equal to an amount calculated as follows: the sum of (i) an amount equal to the
Fixed Allocation Percentage of all Principal Collections received during the
Collection Period immediately preceding such Distribution Date (calculated
without giving effect to the allocation of Excess Principal Collections from
other Series, if any, or the allocation from the Transferor Percentage of
Principal Collections), (ii) the amount, if any, of Series 1999-1 Undistributed
Principal Collections for such Distribution Date, (iii) the Investor Default
Amount with respect to such Distribution Date and any reimbursements of
unreimbursed Class C Investor Charge-Offs, and if during an Early Amortization
Period, minus (iv) Class A Monthly Principal and Class B Monthly Principal, if
any, with respect to such Distribution Date; provided, however, that with
respect to any Distribution Date, Class C Monthly Principal may not exceed an
amount equal to the Class C Invested Amount.
(d) With respect to any Distribution Date related to any
Accumulation Period or any Early Amortization Period, if (a) the sum of (x) an
amount equal to the Fixed Allocation Percentage of all Principal Collections
received during the Collection Period immediately preceding such Distribution
Date, (y) the amount, if any, of Series 1999-1 Undistributed Principal
Collections for such Distribution Date and (z) the Investor Default Amount with
respect to such Distribution Date and any reimbursements of unreimbursed Class A
Investor Charge-Offs, Class B Investor Charge-Offs and Class C Investor
Charge-Offs shall exceed (b) the sum of (i) Class A Monthly Principal, (ii)
Class B Monthly Principal and (iii) Class C Monthly Principal with respect to
any Distribution Date, then such excess amount shall be treated as Excess
Principal Collections. If, with respect to a Distribution Date related to any
Accumulation Period or Early Amortization Period, the sum of the Class A Monthly
Principal, the Class B Monthly Principal and the Class C Monthly Principal is
less than the sum of the Class A Adjusted Invested Amount, the Class B Adjusted
Invested Amount and the Class C Invested Amount, the amount of such shortfall
shall be the Series 1999-1 Principal Shortfall (the "Series 1999-1 Principal
Shortfall") with respect to such Distribution Date.
SECTION 4.7. Establishment and Maintenance of Servicer Cash
Collateral Account.
(a) The Servicer Cash Collateral Account. The Servicer, for
the benefit of the Certificateholders, shall establish and maintain or cause to
be established and maintained in the name of the Trustee, on behalf of the
Trust, an Eligible Deposit Account (the "Servicer Cash Collateral Account"),
bearing a designation
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clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders. On the Closing Date, the Servicer shall deposit the
Initial Servicer Cash Collateral Deposit into the Servicer Cash Collateral
Account. The Trustee shall possess all right, title and interest in and to all
funds on deposit from time to time in the Servicer Cash Collateral Account and
in all proceeds thereof. The Servicer Cash Collateral Account shall be under the
sole dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If, at any time, the Servicer Cash Collateral Account ceases
to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf)
shall within five (5) Business Days establish a new Eligible Deposit Account as
the Servicer Cash Collateral Account meeting the conditions specified above,
transfer any cash and/or any investments to such new Servicer Cash Collateral
Account and from the date such new Servicer Cash Collateral Account is
established, it shall be the "Servicer Cash Collateral Account."
(b) Application of Funds on Deposit in the Servicer Cash
Collateral Account. If for any reason the Servicer fails to deposit to the
Collection Account Yield Collections it has received for any Collection Period
by the Transfer Date (as indicated on the Monthly Servicer's Certificate
delivered pursuant to Section 3.4(c) of the Agreement), the Trustee shall, on
the related Distribution Date, withdraw from the Servicer Cash Collateral
Account an amount equal to the shortfall required to pay Class A Monthly
Interest and Class B Monthly Interest for such Collection Period and deposit
such amount in the Collection Account. The Servicer shall be required to remit
such amount to the Collection Account immediately upon notice from the Trustee
that the Trustee has made a withdrawal and, if no such remittance has been made
by the fifth Business Day after the Distribution Date for such Collection
Period, an Early Amortization Event shall occur on such fifth Business Day. If
the Servicer does remit such amount to the Collection Account by the fifth
Business Day after the Distribution Date for such Collection Period, the Trustee
shall withdraw such amount from the Collection Account and deposit it into the
Servicer Cash Collateral Account. On the Closing Date and on each Distribution
Date, all funds on deposit in the Servicer Cash Collateral Account shall be
invested in Eligible Investments as directed by the Servicer with maturities not
exceeding the succeeding Transfer Date, and all earnings (net of losses and
investment expenses) on such Eligible Investments shall be paid to the Servicer
on the next succeeding Distribution Date (provided that if the Servicer is
obligated to remit funds to the Collection Account pursuant to the foregoing
sentence, such earnings shall be retained in the Servicer Cash Collateral
Account). Upon the termination of the Trust in accordance with Section 12.1(a)
of this Agreement, all funds on deposit in the Servicer Cash Collateral Account
shall be remitted to the Servicer.
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(c) Optional Termination of the Servicer Cash Collateral
Account. The Servicer may elect to terminate the Servicer Cash Collateral
Account and direct the Trustee to release all funds on deposit in such account
to the Servicer if, at any time, any of the following shall occur and be
continuing:
(i) the Servicer elects to remit Collections to the
Collection Account on a daily basis;
(ii) the ratings assigned by each of Standard &
Poor's and Moody's to the short-term debt obligations of
Yamaha shall be no lower than "A-1" and "P-1", respectively;
(iii) the ratings assigned by each of Standard &
Poor's and Moody's to the short-term debt obligations of DFS
shall be no lower than "A-1" and P-1" and Yamaha and DFS shall
have agreed in a document satisfactory to the Rating Agencies
that DFS shall remit Collections directly to the Collection
Account rather than to Yamaha;
(iv) the Servicer provides a letter of credit, surety
bond or other similar instrument and related documents meeting
the requirements of the Rating Agencies; or
(v) the Servicer obtains written confirmation from
each of Standard & Poor's and Moody's that other arrangements
satisfactory to such Rating Agencies have been effectuated.
(d) Mandatory Termination of the Servicer Cash Collateral
Account. If, on any Determination Date, one-month LIBOR (as calculated by the
Trustee on the preceding LIBOR Determination Date pursuant to Section 4.5(d))
shall exceed 15% per annum, then, in such event, the Servicer shall be required
to remit all Collections to the Collection Account on a daily basis. After such
time, the Servicer Cash Collateral Account shall be terminated and the Trustee
shall release all funds on deposit in such account to the Servicer, net of any
amount not already in the Collection Account required to pay all accrued and
unpaid interest on the Certificates, which amount shall be deposited by the
Trustee into the Collection Account.
In the event that one-month LIBOR (as calculated by the
Trustee pursuant to Section 4.5(d)) shall be equal to or less than 15% per annum
on any Determination Date after the Servicer Cash Collateral Account has been
terminated, the Servicer may, but need not, reestablish and maintain the
Servicer Cash Collateral
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Account in accordance with Section 4.7(a). If the Servicer elects to reestablish
and maintain the Servicer Cash Collateral Account, the Servicer shall deposit an
amount equal to the Initial Servicer Cash Collateral Deposit into the Servicer
Cash Collateral Account. Once such deposit has been made, the Servicer shall no
longer be required to deposit Collections into the Collection Account on a daily
basis and the Servicer may, but need not, deposit such Collections on a less
frequent basis in accordance with Section 4.1(g).
SECTION 4.8. Establishment of the Principal Funding Account
for the Certificates.
(a) The Trustee, for the benefit of the
Certificateholders, shall establish and maintain or cause to be established and
maintained in the name of the Trustee, on behalf of the Trust, an Eligible
Deposit Account (the "Principal Funding Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders. The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Principal Funding Account and in
all proceeds thereof. The Principal Funding Account shall be under the sole
dominion and control of the Trustee for the benefit of the Series 1999-1
Certificateholders. If, at any time, the Principal Funding Account ceases to be
an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall,
within five (5) Business Days, establish a new Eligible Deposit Account as the
Principal Funding Account meeting the conditions specified above, transfer any
cash and/or any investments to such new Principal Funding Account and from the
date such new Principal Funding Account is established, it shall be, for the
Series 1999-1 Certificates, the "Principal Funding Account".
(b) On each Distribution Date during any Accumulation
Period, the Servicer shall withdraw from the Principal Funding Account and
deposit in the Collection Account all interest and other investment income (net
of losses and investment expenses) on funds then on deposit in the Principal
Funding Account, which amounts shall be applied pursuant to Section 4.9(a)-(i)
as Available Yield Funds.
(c) Funds on deposit in the Principal Funding Account
prior to the Class B Expected Final Payment Date shall be invested by the
Trustee (or, if authorized by the Trustee, by the Servicer on behalf of the
Trustee) in Eligible Investments determined by the Servicer; provided that the
Trustee may sell, liquidate or dispose of an Eligible Investment before its
maturity, at the written direction of the Servicer, if such sale, liquidation or
disposal would not result in a loss of all or part of the
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principal portion of such Eligible Investment or if, prior to the maturity of
such Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment.
(d) Pursuant to the authority granted to the Servicer in
Section 3.1(b), 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 Principal Funding Account for the purposes of carrying out the
Servicer's or Trustee's duties hereunder. Pursuant to the authority granted to
the Paying Agent in Sections 5.1 and 6.6, the Paying Agent shall have the power,
revocable by the Trustee, to withdraw funds from the Principal Funding Account
for the purpose of making distributions to the Certificateholders.
SECTION 4.9. Application of Funds on Deposit in the Collection
Account for the Certificates. On each Transfer Date, the Servicer shall instruct
the Trustee in writing to apply, and on the immediately succeeding Distribution
Date the Trustee, acting in accordance with such instructions, shall apply, for
the Collection Period immediately preceding such Distribution Date, from amounts
on deposit in the Collection Account (A) an amount equal to the Floating
Allocation Percentage of Yield Collections plus an amount equal to the
Transferor Percentage of Principal Collections equal to the Available
Subordinated Amount, if any, allocable to the Certificates pursuant to Section
4.13 plus any net investment income with respect to the Principal Funding
Account plus the Floating Allocation Percentage of net investment income on the
Collection Account (to the extent provided in Section 4.1(b) of the Agreement)
plus the Floating Allocation Percentage of net investment income on the Special
Funding Account to the extent provided in Section 4.2(c) of the Agreement
(collectively, the "Available Yield Funds") all in the manner set forth in
Sections 4.9(a) through 4.9(i) below and (B) an amount equal to the sum of the
remaining funds on deposit in the Collection Account with respect to such
Distribution Date including any Available Yield Funds remaining after the
application described in Sections (a) through (j) below, the Fixed Allocation
Percentage of Principal Collections, Excess Principal Collections, if any, from
other Series allocable to the Series 1999-1 Certificates pursuant to Section
4.12 and the Transferor Percentage of Principal Collections allocable to the
Series 1999-1 Certificates pursuant to Section 4.13 (collectively the "Available
Principal Funds") in the manner set forth in Section 4.9(j) of this Agreement.
(a) Class A Monthly Interest. On each Distribution Date,
the Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account and distribute to the Class A
Certificateholders to the
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extent of any Available Yield Funds, 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 paid to the Class A Certificateholders on a prior
Distribution Date, plus any additional interest at the Class A Certificate Rate
with respect to interest amounts that were due but not paid on a prior
Distribution Date.
(b) Class B Monthly Interest. On each Distribution Date,
the Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account and shall distribute to the Class B
Certificateholders to the extent of any Available Yield Funds after giving
effect to the withdrawal pursuant to Section 4.9(a), 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 paid to the Class B Certificateholders
on a prior Distribution Date, plus any additional interest at the Class B
Certificate Rate with respect to interest amounts that were due but not paid on
a prior Distribution Date.
(c) Class C Monthly Interest. On each Distribution Date,
the Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account and shall distribute to the Class C
Certificateholders to the extent of any Available Yield Funds after giving
effect to the withdrawals pursuant to Sections 4.9(a) and (b), an amount equal
to Class C Monthly Interest for such Distribution Date plus the amount of any
Class C Monthly Interest previously due but not paid to the Class C
Certificateholders on a prior Distribution Date, plus any additional interest at
the Class C Certificate Rate with respect to interest amounts that were due but
not paid on a prior Distribution Date.
(d) Investor Monthly Servicing Fee. On each Distribution
Date, the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the extent of the remaining
Available Yield Funds after giving effect to the withdrawals pursuant to
Sections 4.9(a), (b) and (c), an amount equal to the Investor Monthly Servicing
Fee for such Distribution Date plus any Investor Monthly Servicing Fee due with
respect to any prior Collection Periods but not distributed to the Servicer, and
distribute such amount to the Servicer (unless such amounts shall have been
previously netted against deposits to the Collection Account).
(e) Investor Default Amount. On each Distribution Date,
the Trustee, acting in accordance with instructions from the Servicer, shall set
aside and retain in the Collection Account, to the extent of the remaining
Available Yield Funds after giving effect to Sections 4.9(a), (b), (c) and (d),
an amount equal to the
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aggregate Investor Default Amount for such Distribution Date which amount shall
be deemed to be Principal Collections and treated as Excess Principal
Collections with respect to Distribution Dates with respect to the Revolving
Period, and thereafter will be set aside and retained in the Collection Account
first as a part of Class A Monthly Principal and then as a part of Class B
Monthly Principal during any Accumulation Period or any Early Amortization
Period and applied in accordance with Section 4.9(j) or, if applicable, will be
set aside and retained in the Collection Account and be applied as part of Class
C Monthly Principal as provided in Section 4.9(j).
(f) Reimbursement of Class A Investor Charge-Offs. On each
Distribution Date, the Trustee, acting in accordance with instructions of the
Servicer, shall set aside and retain in the Collection Account, to the extent of
the remaining Available Yield Funds after giving effect to the withdrawals
pursuant to Sections 4.9(a), (b), (c), (d) and (e), an amount equal to
reimbursements of unreimbursed Class A Investor Charge-Offs, if any, which
amount shall be set aside and retained in the Collection Account as a part of
Class A Monthly Principal during any Early Amortization Period or Accumulation
Period and applied in accordance with Section 4.9(j).
(g) Reimbursement of Class B Investor Charge-Offs. On each
Distribution Date, the Trustee, acting in accordance with instructions of the
Servicer, shall set aside and retain in the Collection Account, to the extent of
the remaining Available Yield Funds after giving effect to the withdrawals
pursuant to Sections 4.9(a), (b), (c), (d), (e) and (f), an amount equal to
reimbursements of unreimbursed Class B Investor Charge-Offs, if any, which
amount shall be deemed to be Principal Collections and treated as Excess
Principal Collections with respect to Distribution Dates with respect to the
Revolving Period, and thereafter will be set aside and retained in the
Collection Account as a part of Class B Monthly Principal during any Early
Amortization Period or Accumulation Period and applied in accordance with
Section 4.9(j).
(h) Reimbursement of Class C Investor Charge-Offs. On each
Distribution Date, the Trustee, acting in accordance with instructions from the
Servicer, shall set aside and retain in the Collection Account to the extent of
the remaining Available Yield Funds after giving effect to Sections 4.9(a), (b),
(c), (d), (e), (f) and (g), an amount equal to unreimbursed Class C Investor
Charge-Offs, if any, which amount shall be deemed to be Principal Collections
and treated as Excess Principal Collections with respect to Distribution Dates
with respect to the Revolving Period and thereafter will be set aside and
retained in the Collection Account first as a part of Class A Monthly Principal
and then as a part of Class B Monthly Principal
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during any Accumulation Period or any Early Amortization Period and applied in
accordance with Section 4.9(j) or, if applicable, will be set aside and retained
in the Collection Account and be applied as part of Class C Monthly Principal as
provided in Section 4.9(j).
(i) Excess Yield Collections. On each Distribution Date
during the Revolving Period, the Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the Collection Account and distribute to
the Transferor to the extent available, remaining Available Yield Funds after
giving effect to Sections 4.9(a) through (h) above.
(j) Principal. (A) For each Distribution Date during the
Revolving Period, the Available Principal Funds will be treated as Excess
Principal Collections and applied as provided in Section 4.1(f) of the
Agreement.
(B) For each Distribution Date during the applicable
Accumulation Period or any Early Amortization Period and thereafter, the
Available Principal Funds will be allocated in the following priority:
(i) an amount equal to the Controlled Deposit
Amount for the Class A Expected Final Payment Date or any Distribution
Date during the Controlled Accumulation Period, or an amount up to Class
A Monthly Principal for any Distribution Date during an Early
Amortization Period, plus any remaining Available Principal Funds (not
to exceed the Class A Adjusted Invested Amount), will, during the
Controlled Accumulation Period, be deposited into the Principal Funding
Account and will, during any Early Amortization Period, be allocated to
the Class A Certificateholders and distributed pursuant to Section
4.10(a)(v);
(ii) an amount equal to Class B Monthly Principal
for such Distribution Date, plus any remaining Available Principal Funds
(not to exceed the Class B Adjusted Invested Amount), will, during the
Rapid Accumulation Period, be deposited into the Principal Funding
Account and will, during any Early Amortization Period, be allocated to
the Class B Certificateholders and distributed pursuant to Section
4.10(a)(vi);
(iii) an amount equal to Class C Monthly
Principal for such Distribution Date on or after the Offered
Certificates have been paid in full, plus any remaining Available
Principal Funds, will be distributed pursuant to Section 4.10(a)(vii);
and
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(iv) an amount equal to the balance of any
remaining Available Principal Funds will be treated as Excess Principal
Collections and applied as provided in Section 4.1(f) of the Agreement.
SECTION 4.10. Distributions to Certificateholders.
(a) The Servicer shall make or shall cause the Trustee to
make the following distributions to the Paying Agent (for distribution to the
Series 1999-1 Certificateholders in accordance with Section 5.1) at the
following times from the Collection Account and the Principal Funding Account:
(i) on each Distribution Date, including the
Class A Expected Final Payment Date, the amounts on deposit in the
Collection Account described in Section 4.9(a) (other than any
investment earnings thereon) shall be distributed for payment to the
Class A Certificateholders;
(ii) on each Distribution Date, including the
Class B Expected Final Payment Date, the amounts on deposit in the
Collection Account described in Section 4.9(b) (other than any
investment earnings thereon) shall be distributed for payment to the
Class B Certificateholders;
(iii) on the Class A Expected Final Payment Date,
all amounts on deposit in the Principal Funding Account, up to a maximum
amount on such date equal to the Class A Invested Amount on such date,
shall be distributed for payment to the Class A Certificateholders;
(iv) on the Class B Expected Final Payment Date,
all amounts on deposit in the Principal Funding Account, up to a maximum
amount on such date equal to the Class B Invested Amount on such date,
shall be distributed for payment to the Class B Certificateholders;
(v) if the Class A Invested Amount is not paid in
full on the Class A Expected Final Payment Date or if an Early
Amortization Event has otherwise occurred, on each Distribution Date
thereafter until the Class A Certificateholders have been paid in full,
the amount on deposit in the Collection Account constituting Available
Principal Funds, up to a maximum amount on such date equal to the Class
A Invested Amount on such date, shall be distributed for payment to the
Class A Certificateholders;
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(vi) if the Class B Invested Amount is not paid
in full on the Class B Expected Final Payment Date or if an Early
Amortization Event has otherwise occurred, on each Distribution Date
thereafter until the Class B Certificateholders have been paid in full,
the amount on deposit in the Collection Account constituting Available
Principal Funds, up to a maximum amount on such date equal to the Class
B Invested Amount on such date, shall be distributed for payment to the
Class B Certificateholders; and
(vii) on each Distribution Date on and after the
Offered Certificates have been paid in full, all amounts on deposit in
the Collection Account constituting Available Principal Funds, up to a
maximum amount on any such date equal to the Class C Invested Amount on
such date, shall be distributed for payment to the Class C
Certificateholders.
(b) The distributions to be made pursuant to this Section
4.10 and Section 4.9 are subject to the provisions of Sections 9.2, 10.1, 12.1
and 12.2 of the Agreement and Section 4 of this Supplement.
SECTION 4.11. Investor Charge-Offs. If, on any Distribution
Date, the Available Yield Funds on deposit in the Collection Account remaining
after the withdrawals and retention required pursuant to Sections 4.9(a), (b),
(c), (d), (e), (f) and (g) is less than the Investor Default Amount for such
Distribution Date, the Class C Invested Amount will be reduced by the amount by
which such Investor Default Amount exceeds such remaining Available Yield Funds
(a "Class C Investor Charge-Off").
(a) In the event that any such reduction of the Class C
Invested Amount would cause the Class C Invested Amount to be a negative number,
the Class C Invested Amount will be reduced to zero, and the Class B Invested
Amount will be reduced by the amount by which the Class C Invested Amount would
have been reduced below zero, but not more than the Investor Default Amount for
such Distribution Date (a "Class B Investor Charge-Off"). To the extent that on
any subsequent Distribution Date there remains any Available Yield Funds on
deposit in the Collection Account after giving effect to Sections 4.9(a), (b),
(c), (d), (e) and (f), the Servicer will apply such remaining Available Yield
Funds as provided in Section 4.9(g) to reimburse the aggregate amount of Class B
Investor Charge-Offs not previously reimbursed, up to the amount so available.
(b) In the event that any such reduction of the Class B
Invested Amount would cause the Class B Invested Amount to be a negative number,
the
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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 more than the Investor Default Amount for such
Distribution Date (a "Class A Investor Charge-Off"). To the extent that on any
subsequent Distribution Date there remains any Available Yield Funds on deposit
in the Collection Account after giving effect to Sections 4.9(a), (b), (c), (d)
and (e), the Servicer will apply such remaining Available Yield Funds as
provided in Section 4.9(f) to reimburse the aggregate amount of Class A Investor
Charge-Offs not previously reimbursed, up to the amount so available.
(c) To the extent that on any subsequent Distribution Date
there remains any Available Yield Funds on deposit in the Collection Account
after giving effect to Sections 4.9(a), (b), (c), (d), (e), (f) and (g), the
Servicer will apply such remaining Available Yield Funds as provided in Section
4.9(h) to reimburse the aggregate amount of Class C Investor Charge-Offs not
previously reimbursed, up to the amount so available.
SECTION 4.12. Excess Principal Collections. Excess Principal
Collections allocated to the Series 1999-1 Certificates for any Distribution
Date pursuant to Section 4.1(f)(a), and available for distribution to the
Certificateholders pursuant to Section 4.9(j)(B), shall mean an amount equal to
the product of (x) Excess Principal Collections for all series for such
Distribution Date and (y) a fraction, the numerator of which is the Series
1999-1 Principal Shortfall for such Distribution Date and the denominator of
which is the aggregate amount of Principal Shortfalls for all series for such
Distribution Date. For any Distribution Date during the Revolving Period, Excess
Principal Collections from another series allocated to the Series 1999-1
Certificates shall be zero.
SECTION 4.13. Transferor Percentage of Principal Collections.
For any Distribution Date during any Accumulation Period or Early Amortization
Period, the Transferor Percentage of Principal Collections allocated to the
Series 1999-1 Certificates, and available for distribution to Certificateholders
pursuant to Section 4.9(j)(B), shall mean an amount equal to the product of (x)
the Transferor Percentage of Principal Collections for all series for such
Distribution Date (after giving effect to Section 4.14) and (y) a fraction, the
numerator of which is the Series 1999-1 Principal Shortfall for such
Distribution Date and the denominator of which is the aggregate amount of
Principal Shortfalls for all Series for such Distribution Date. Except as
provided in Section 4.14, for any Distribution Date with respect to the
Revolving Period, the Transferor Percentage of Principal Collections allocated
to the Series 1999-1 Certificates shall be zero.
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SECTION 4.14. Subordination of Transferor Interest In Certain
Circumstances. (a) In the event that, on any Determination Date, a Transferor
Subordination Event (as defined below) shall have occurred and be continuing,
then the Transferor's right to the Transferor Percentage of Principal
Collections received during the related Collection Period shall be subordinated
to the extent of the applicable Available Subordinated Amount. The amount of the
Transferor Percentage of Principal Collections equal to the Available
Subordinated Amount allocable to the Series 1999-1 Certificates and the
certificates of any other Series shall be included in Available Yield Funds and
applied as such pursuant to Section 4.9(a)-(i) and the remaining amount of the
Transferor Percentage of Principal Collections shall then be applied as provided
in Section 4.13.
(b) In the event that on any subsequent Determination Date
such Transferor Subordination Event shall no longer be continuing, provided that
no Early Amortization Event shall have occurred, the right of the Transferor to
receive the Transferor Percentage of Principal Collections during the related
Collection Period shall no longer be subordinated, and the Available
Subordinated Amount shall be deemed to be zero again; provided that the
Transferor's right to receive the Transferor Percentage of Principal Collections
shall remain subject to Section 4.13.
In the case of the event described in clause (d)(i) below, the
Available Subordinated Amount will be equal to 1% of the Class A Adjusted
Invested Amount and the Class B Adjusted Invested Amount as of the last day of
such Collection Period.
In the case of any event described in clause (d)(ii), (d)(iii)
or (d)(viii) below, the Available Subordinated Amount will be equal to the
dollar amount by which the aggregate balance of such Receivables exceeds the
specified percentage therein.
In the case of the event described in clause (d)(iv) below,
the Available Subordinated Amount will be equal to the dollar amount by which
such sum exceeds the specified percentage therein.
In the case of the event described in clause (d)(v) below, the
Available Subordinated Amount will be adjusted each Collection Period thereafter
by the aggregate amount of Receivables in those New Accounts included in the
Trust which caused such percentage to exceed the specified percentages therein,
or alternatively, will not be so adjusted in the event the Transferor provides
to the Trustee a letter from each of the Rating Agencies then providing a rating
for any Class of Offered
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Certificates at the Transferor's request that such event will not result in a
downgrade or withdrawal of the then current ratings assigned by each of them to
any Class of Offered Certificates.
In the case of the event described in clause (d)(vi) or
(d)(vii) below, the Available Subordinated Amount will be increased by the
aggregate amount of Receivables in New Accounts and Dealer Replacement Accounts,
or alternatively, will not be so adjusted in the event the Transferor provides
to the Trustee a letter from each of the Rating Agencies then providing a rating
for any Class of Offered Certificates at the Transferor's request that such
event will not result in a downgrade or withdrawal of the then current ratings
assigned by each of them to any Class of Offered Certificates.
Should any increase in the Available Subordinated Amount
resulting from the occurrence of an event described in clauses (d)(ii)-(d)(viii)
below cause the Transferor Amount as a percentage of the Trust Principal
Component to be less than the Minimum Transferor Percentage, then the Transferor
shall deposit funds in an amount equal to such deficiency to the Collection
Account. Any such deposit by the Transferor shall be treated as a Collection and
allocated in respect of Yield Collections and Principal Collections as specified
in this Article IV. Unless otherwise indicated, the "Available Subordinated
Amount" at any time shall be the sum of all Available Subordinated Amounts
described below at such time.
(c) The Available Subordinated Amount shall be reduced on any
Distribution Date by the amount of the Transferor Percentage of Principal
Collections which are applied as Available Yield Funds and shall be reinstated
(up to the required Available Subordinated Amount) by the amount of the
Available Yield Funds distributed to the Transferor as provided in Section
4.9(i).
(d) A "Transferor Subordination Event" with respect to the
Offered Certificates shall mean the occurrence of any of the following events at
any time:
(i) the average payment rate determined by
dividing the aggregate amount of Collections for each Collection Period
by the beginning Pool Balance for each such Collection Period, averaged
for any three consecutive Collection Periods, is less than (x) with
respect to the Collection Periods included in the period from each
November through the next succeeding April, 10% and (y) with respect to
the Collection Periods included in the period from each May through the
next succeeding October, 13%;
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(ii) as of the last day of any Collection Period,
the aggregate balance of Receivables with respect to Products
constituting all-terrain vehicles, calculated as a percentage of the
Pool Balance, exceeds 36%;
(iii) as of the last day of any Collection
Period, the aggregate balance of Receivables with respect to all
Products other than motorcycles/scooters, water vehicles, all-terrain
vehicles, outboards and snowmobiles, calculated as a percentage of the
Pool Balance, exceeds 10%;
(iv) the sum of (x) the aggregate amount of all
dealer "holdbacks" with respect to Products for which there has been no
retail sale by the Dealer, plus (y) the aggregate amount of all
discounts available to Dealers pursuant to sales programs on Products
owed by Yamaha to the Dealers, exceeds 5% of the Pool Balance;
(v) either (x) on an annual basis, the percentage
derived by dividing the number of New Accounts added to the Trust
during any fiscal year of the Transferor by the number of Accounts in
the Trust at the beginning of such year exceeds 8% or (y) on a
quarterly basis, the percentage derived by dividing the number of New
Accounts added to the Trust during such calendar quarter by the number
of Accounts in the Trust at the beginning of such calendar quarter
exceeds 5%;
(vi) the annualized rate (averaged for a period
of three consecutive Collection Periods) of (x) Defaulted Receivables
minus recoveries plus the repossession value of all Products
repossessed during each such Collection Period to (y) the beginning
Pool Balance for the related Collection Period exceeds 7.5%;
(vii) either (x) on an annual basis, the
percentage derived by dividing the number of New Accounts and Dealer
Replacement Accounts added to the Trust during any fiscal year of the
Transferor by the number of Accounts in the Trust at the beginning of
such year exceeds 15% or (y) on a quarterly basis, the percentage
derived by dividing the number of New Accounts and Dealer Replacement
Accounts added to the Trust during such calendar quarter by the number
of Accounts in the Trust at the beginning of such calendar quarter
exceeds 5%; and
(viii) as of the last day of any Collection
Period prior to the repayment in full of the Series 1995-1 Asset-Backed
Certificates and the
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Series 1998-1 Asset-Backed Certificates, the aggregate balance of
Receivables due from a single Dealer, as a percentage of the Pool
Balance, exceeds 1%.
[END OF ARTICLE IV]
SECTION 10. Article V of the Agreement. Article V of the
Agreement shall read in its entirety as follows:
"ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
SECTION 5.1. Distributions.
(a) On each Distribution Date, the Paying Agent shall
distribute to each Class A Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class A Certificateholder's pro rata share (based on the
aggregate Undivided Interests represented by Class A Certificates held by such
Class A Certificateholder) of the amounts on deposit in the Collection Account
pursuant to Section 4.10.
(b) On each Distribution Date, the Paying Agent shall
distribute to each Class B Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class B Certificateholder's pro rata share (based on the
aggregate Undivided Interests represented by Class B Certificates held by such
Class B Certificateholder) of the amounts on deposit in the Collection Account
pursuant to Section 4.10.
(c) On the Class A Expected Final Payment Date, the Paying
Agent shall distribute to each Class A Certificateholder of record as of the
preceding Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class A Certificateholder's pro rata share (based on the
aggregate Undivided Interests represented by Class A Certificates held by such
Class A Certificateholder) of the amounts on deposit in the Principal Funding
Account as are payable to the Class A Certificateholders pursuant to Section
4.10.
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(d) On the Class B Expected Final Payment Date, the Paying
Agent shall distribute to each Class B Certificateholder of record as of the
preceding Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class B Certificateholder's pro rata share (based on the
aggregate Undivided Interests represented by Class B Certificates held by such
Class B Certificateholder) of the amounts on deposit in the Principal Funding
Account as are payable to the Class B Certificateholders pursuant to Section
4.10.
(e) On each Distribution Date, the Paying Agent shall
distribute to each Class C Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class C Certificateholder's pro rata share (based on the
aggregate Undivided Interests represented by Class C Certificates held by such
Class C Certificateholder) of Class C Monthly Interest and unpaid Class C
Monthly Interest to the extent available from Yield Collections pursuant to
Section 4.9(c).
(f) On and after the date on which the Class A
Certificateholders and the Class B Certificateholders have been paid in full,
the Paying Agent shall distribute to each Class C Certificateholder of record as
of the preceding Record Date (other than as provided in Section 12.2 respecting
a final distribution) such Class C Certificateholder's pro rata share (based on
the aggregate Undivided Interests represented by Class C Certificates held by
such Class C Certificateholder) of the amounts on deposit in the Collection
Account as are payable to the Class C Certificateholders pursuant to Section
4.10.
(g) Except as provided in Section 12.2 with respect to a
final distribution, distributions to Certificateholders hereunder shall be made
by check mailed to each such Certificateholder at such Certificateholder's
address appearing in the Certificate Register without presentation or surrender
of any such Certificate or the making of any notation thereon; provided,
however, that with respect to such Certificates registered in the name of a
Clearing Agency, such distributions shall be made to such Clearing Agency in
immediately available funds.
SECTION 5.2. Statements to Certificateholders. On each
Distribution Date, the Paying Agent, on behalf of the Trustee, shall forward to
each Certificateholder a statement prepared by the Servicer setting forth
certain information relating to the Trust and the Certificates.
On or before January 31 of each calendar year, beginning with
calendar year 2000, the Paying Agent, on behalf of the Trustee, shall furnish or
cause
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to be furnished to each Person who at any time during the preceding calendar
year was a Certificateholder of Series 1999-1, a statement prepared by the
Servicer containing the information which is required to be contained in the
statement to the Certificateholders, aggregated for such calendar year or the
applicable portion thereof during which such Person was a Certificateholder of
such Series, 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 Certificateholders of such Series to
prepare their tax returns. Such obligation of the Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Paying Agent pursuant to any requirements of the
Internal Revenue Code as from time to time in effect.
[END OF ARTICLE V]"
SECTION 11. Early Amortization Events. If any one of the
events specified in Section 9.1 of the Agreement (after any grace periods or
consents applicable thereto) or any one of the following events shall occur
during either the Revolving Period or any Accumulation Period with respect to
the Series 1999-1 Certificates:
(i) there will have been three (3) consecutive
Distribution Dates on which the Class C Invested Amount is less than
the Initial Class C Invested Amount;
(ii) on any Determination Date, the Class C Invested
Amount as of the last day of the prior Collection Period is less than
8.25% of the Initial Invested Amount;
(iii) the average payment rate determined by dividing the
aggregate amount of Collections for each Collection Period by the
beginning Pool Balance for each such period, averaged for any three
consecutive Collection Periods, shall be less than (y) with respect to
the Collection Periods included in the period from each November
through the next succeeding April, 10% and (z) with respect to the
Collection Periods included in the period from each May through the
next succeeding October, 13%; provided that this clause (iii) may be
amended without the consent of any Certificateholder but with the
consent of the Transferor and the Rating Agencies;
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(iv) the annualized rate (averaged for a period of any
three consecutive Collection Periods) of (x) Defaulted Receivables
minus recoveries plus the repossession value of all Products
repossessed during each such Collection Period to (y) the beginning
Pool Balance for such Collection Period exceeds 10%; provided that this
clause (v) shall not constitute an Early Amortization Event if, upon
the occurrence of such event, the Available Subordinated Amount is
increased by an amount equal to 1% of the sum of the Class A Adjusted
Invested Amount and the Class B Adjusted Invested Amount (to the extent
such increase does not result in the Transferor Amount as a percentage
of the Trust Principal Component, to fall below the Minimum Transferor
Percentage), in which case an Early Amortization Event under this
clause (iv) shall not occur until such time as such annualized rate
equals or exceeds 11%; provided, further, that this clause (iv) may be
amended without the consent of any Certificateholder but with the
consent of the Transferor and the Rating Agencies;
(v) on any Determination Date, the Transferor Amount, as
of the last day of the prior Collection Period, shall be less than 12%
of the Trust Principal Component and the annualized rate (averaged for
a period of any two consecutive Collection Periods) determined by
dividing (x) the amount of Collections of Receivables comprised of
interest, fees and service charges collected from Dealers in the
related Collection Period by (y) the Pool Balance at the beginning of
the related Collection Period shall be less than 6%; or
(vi) the Trustee shall have made a withdrawal from the
Servicer Cash Collateral Account pursuant to Section 4.7(b) and the
Servicer shall have failed to remit Collections to the Collection
Account in the amount of such withdrawal by the fifth Business Day
after the Distribution Date for such Collection Period;
then, in the case of any event specified in Section 9.1 of the Agreement, an
Early Amortization Event with respect to all Series of Certificates then
outstanding shall occur without any notice or other action on the part of the
Trustee or all Investor Certificateholders immediately upon the occurrence of
such event, and, in the case of any event described in clauses (i)-(vi), an
Early Amortization Event with respect to only the Series 1999-1 Certificates
shall occur without any notice or other action on the part of the Trustee or the
Certificateholders or all Investor Certificateholders, as appropriate,
immediately upon the occurrence of such event.
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<PAGE>
SECTION 12. Series-Specific Transferor Covenants. The
Transferor hereby covenants and agrees, for so long as the Series 1999-1
Certificates remain outstanding and Moody's shall be a Rating Agency, as
follows:
(a) the Transferor shall not assume or guarantee the
liabilities of any other entity;
(b) the Transferor shall observe all corporate formalities
in connection with all dealings between itself and its affiliates;
(c) the Transferor shall pay its own liabilities and
expenses with its own funds, and not those of its parent; and
(d) the Transferor shall only cause certificates to be
issued by other trusts which may be formed by it and shall only issue
indebtedness secured or collateralized by accounts receivable if Moody's shall
have confirmed in writing that any such issuance will not result in a downgrade
or withdrawal of Moody's rating on any outstanding certificates issued by trusts
formed by the Transferor or outstanding indebtedness of the Transferor secured
or collateralized by accounts receivable.
SECTION 13. Ratification of Master Pooling and Servicing
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 14. Counterparts. This Series Supplement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all of such counterparts shall together constitute
but one and the same instrument.
SECTION 15. 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.
38
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Series 1999-1 Supplement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first above
written.
YAMAHA MOTOR RECEIVABLES
CORPORATION, as Transferor
By:_______________________________
Name:
Title:
YAMAHA MOTOR CORPORATION,
U.S.A., as Servicer
By:_______________________________
Name:
Title:
THE FUJI BANK AND TRUST
COMPANY, as Trustee and
Paying Agent
By:_______________________________
Name:
Title:
39
<PAGE>
EXHIBIT 5.1
[Letterhead of Giancarlo & Gnazzo, A Professional Corporation]
May 13, 1999
Yamaha Motor Receivables Corporation
6555 Katella Avenue, Suite A
Cypress, California 90630
Re: Yamaha Motor Master Trust
Floating Rate Series 1999-1 Asset-Backed Certificates
Registration Statement on Form S-1, No. 333-74069
Ladies and Gentlemen:
We have acted as special counsel to Yamaha Motor Receivables
Corporation (the "Company") in connection with the preparation and filing of the
registration statement on Form S-1 (the "Registration Statement") filed on the
date hereof with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act"), in respect of the Yamaha Motor
Master Trust (the "Trust"), Floating Rate Series 1999-1 Asset-Backed
Certificates (the "Series 1999-1 Certificates"). Capitalized terms used but not
defined herein shall have the same meaning as in the Registration Statement.
In rendering the opinion set forth below, we have examined (i) copies
of the Company's certificate of incorporation and bylaws, each as amended to
date, (ii) minutes of meetings of the Company's Board of Directors, (iii) the
forms of agreements filed as exhibits to the Registration Statement pursuant to
which the Trust was formed and the Series 1999-1 Certificates will be issued,
including the form of Pooling and Servicing Agreement (the "Agreement"), (iv)
the form of Series 1999-1 Supplement to the Agreement (the "Supplement"), (v)
the forms of the Series 1999-1 Certificates, (v) the form of Underwriting
Agreement (the "Underwriting Agreement") among the Company, Yamaha Motor
Corporation, U.S.A., and Chase Securities Inc., as Underwriter (the
"Underwriter"), and (vi) such other records and documents, certificates of
corporate and public officials, and such investigations of law, as we have
considered necessary or appropriate.
In our examination, we have assumed (i) the legal capacity of all
natural persons, 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, conformed or other copies, and the
authenticity of the originals of such copies and (ii) that the transactions
described in or contemplated by the foregoing documents have been and will be
consummated in accordance with the terms of such operative documents, and that
such documents accurately reflect the material facts of such transactions.
Members of our firm are admitted to practice in the State of New York
and we do not express any opinion as to the laws of any jurisdiction other than
the State of New York.
<PAGE>
Based on the foregoing, assuming that the issuance and sale of the
Series 1999-1 Certificates have been duly authorized by the Company, when
executed and authenticated as specified in the Agreement and the Supplement, and
delivered to and paid for by the Underwriter pursuant to the Underwriting
Agreement, the Series 1999-1 Certificates will be legally issued and
outstanding, fully paid and non-assessable, and will be entitled to the benefits
of the Agreement and the Supplement.
Other than as expressly stated above, we express no opinion on any
issue relating to the Company, the Trust, or to any series of certificates other
than the Series 1999-1 Certificates described in the Registration Statement.
We are furnishing this opinion to you solely in connection with the
filing of the Registration Statement and it is not to be relied upon, used,
circulated, quoted or otherwise referred to for any other purpose without our
express written permission.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to the reference to this firm in the Registration
Statement and related prospectus under the heading "Legal Matters." In giving
our consent, we do not hereby admit that we come within the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations promulgated thereunder.
Very truly yours,
/s/ GIANCARLO & GNAZZO,
A PROFESSIONAL CORPORATION
<PAGE>
EXHIBIT 8.1
[Letterhead of Giancarlo & Gnazzo, A Professional Corporation]
May 13, 1999
Yamaha Motor Receivables Corporation
6555 Katella Avenue, Suite A
Cypress, California 90630
Re: Yamaha Motor Master Trust
Floating Rate Series 1999-1 Asset-Backed Certificates
Registration Statement on Form S-1, No. 333-74069
Ladies and Gentlemen:
We have acted as special counsel to Yamaha Motor Receivables
Corporation (the "Company") in connection with the preparation and filing of the
registration statement on Form S-1 (the "Registration Statement") filed on the
date hereof with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act"), in respect of the Yamaha Motor
Master Trust (the "Trust"), Floating Rate Series 1999-1 Asset-Backed
Certificates (the "Series 1999-1 Certificates"). Capitalized terms used but not
defined herein shall have the same meaning as in the Registration Statement.
In rendering our opinion, we have reviewed (i) the Registration
Statement, (ii) the form of Pooling and Servicing Agreement, (iii) the form of
Supplement thereto related to the Series 1999-1 Certificates, (iv) the forms of
the Series 1999-1 Certificates, and (v) such other transaction documents,
certificates and records as we have considered necessary or appropriate for the
purposes of this opinion.
In rendering our opinion, we have assumed (i) the legal capacity of all
natural persons, 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 copies, and the authenticity of the originals
of such copies, (ii) that the transactions described in or contemplated by the
foregoing documents have been and will be consummated in accordance with the
terms of such operative documents and that such documents accurately reflect the
material facts of such transactions, and (iii) that a final version of the
Registration Statement will become the effective Registration Statement in
respect of the Certificates without material change in the facts stated. The
opinion set forth herein is expressly based upon such assumptions and
representations and upon the accuracy of those facts so assumed or represented.
Our opinion is also based on the Internal Revenue Code of 1986, as
amended, administrative rulings, judicial decisions, Treasury regulations and
other applicable authorities. The statutory provisions, regulations, and
interpretations on which our opinion is based are subject to change, possibly
retroactively. In addition, there can be no complete assurance that the Internal
Revenue Service will not take positions contrary to those stated in our opinion.
<PAGE>
Based on the foregoing, we are of the opinion that although the
discussion in the Prospectus and the Prospectus Supplement under the heading
"Federal Income Tax Consequences" does not purport to discuss all possible
United States federal income tax consequences of the purchase, ownership and
disposition of the Offered Certificates, in our opinion, such discussion taken
as whole constitutes in all material respects, a fair and accurate summary of
the United States federal income tax consequences of the purchase, ownership and
disposition of the Offered Certificates under existing law.
Other than as expressly stated above, we express no opinion on any
issue relating to the Company, the Servicer, or to any series or class of
certificates other than the Offered Certificates, or under any law other than
the federal income tax laws.
We are furnishing this opinion to you solely in connection with the
filing of the Registration Statement and it is not to be relied upon, used,
circulated, quoted or otherwise referred to for any other purpose without our
express written permission.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to the reference to this firm in the Registration
Statement and related prospectus under the heading "Certain Federal Income Tax
Considerations" and "Legal Matters." In giving our consent, we do not hereby
admit that we come within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations promulgated thereunder.
Very truly yours,
/s/ GIANCARLO & GNAZZO,
A PROFESSIONAL CORPORATION
<PAGE>
===============================================================================
RECEIVABLES SALE AGREEMENT
between
ITT COMMERCIAL FINANCE CORP.,
as Seller
and
YAMAHA MOTOR CORPORATION, U.S.A.,
as Purchaser
Dated as of March 1, 1994
===============================================================================
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
SECTION 1. Sale of the Receivables............................................7
SECTION 2. Sales Price; Remittances by ITT....................................9
SECTION 3. Payment of Sales Price on the First
Receivables Purchase Date........................................9
SECTION 4. Settlement and Ongoing Payment of Sale
Price...........................................................10
SECTION 5. Acceptance and Agreement by Yamaha................................10
SECTION 6. Representations and Warranties of ITT
Relating to ITT ................................................11
SECTION 7. Representations and Warranties of ITT
Relating to the Receivables.....................................13
SECTION 8. Covenants of ITT..................................................14
SECTION 9. Liability; Indemnification........................................16
SECTION 10. Merger or Consolidation of, or
Assumption of the Obliga-
tions of, ITT...................................................16
SECTION 11. Limitation on Liability of ITT....................................17
SECTION 12. Access to Certain Documentation and
Information Regarding the Receivables...........................18
SECTION 13. Examination of Records............................................18
SECTION 14. Termination.......................................................18
SECTION 15. Amendment.........................................................18
SECTION 16. Protection of Right, Title and Interest
to Receivables..................................................20
SECTION 17. Governing Law.....................................................21
SECTION 18. Notices...........................................................21
SECTION 19. Severability of Provisions........................................22
SECTION 20. Assignment........................................................22
SECTION 21. Further Assurances................................................22
SECTION 22. No Waiver; Cumulative Remedies....................................23
SECTION 23. Counterparts......................................................23
SECTION 24. Third Party Beneficiaries.........................................23
SECTION 25. Merger and Integration............................................23
SECTION 26. Headings..........................................................23
SECTION 27. Contrary Provisions...............................................23
i
<PAGE>
EXHIBITS
EXHIBIT A Form of Dealer Agreement
EXHIBIT B Form of ITT Agreement for Wholesale Financing
EXHIBIT C Form of ITT Financing Statement
EXHIBIT D Form of Statement of Transaction
EXHIBIT E Form of Receivables Settlement Statement
SCHEDULE 1 Schedule of Accounts
ii
<PAGE>
This RECEIVABLES SALE AGREEMENT (this "Agreement") is entered into as of
March 1, 1994 by and between YAMAHA MOTOR CORPORATION, U.S.A., a corporation
organized and existing under the laws of the State of California ("Yamaha"),
and ITT COMMERCIAL FINANCE CORP., a corporation organized and existing under
the laws of the State of Nevada ("ITT").
B A C K G R O U N D :
- - - - - - - - - -
The following statements are the mutual representations of the parties
with respect to certain factual matters forming the basis for this Agreement
and are an integral part of this Agreement.
A. Receivables. ITT owns or will own all right, title and interest in, to
and under the receivables arising out of all wholesale motorized equipment
financing accounts (collectively, the "Accounts") established or to be
established by ITT with respect to wholesale financing arrangements with
domestic dealers or manufacturers which have entered into dealer or other
purchaser agreements with Yamaha to sell products manufactured by Yamaha Motor
Manufacturing Corporation of America or Yamaha Motor Company, Ltd.
(collectively, the "Dealers"). The Receivables include the rights to payment of
money (whether characterized as "accounts", "chattel paper" or "general
intangibles", each as defined in Article 9 of the UCC) arising in each Account
received on or after January 31, 1994 (the "Cut-Off Date") until termination of
this Agreement pursuant to Section 14 hereof. The Accounts include all such
wholesale motorized equipment financing accounts as of the Cut-Off Date,
together with any such accounts created by ITT after the Cut-Off Date.
B. Sale of Receivables. The parties hereto desire that ITT sell the
Receivables in the Accounts and assign the security interest in the related
Yamaha Products (defined below) to Yamaha pursuant to the terms of this
Agreement.
<PAGE>
C. Definitions. Capitalized terms shall have the meaning assigned to them
as follows:
"Account" shall have the meaning specified in the recitals hereto.
"Affiliate" of any Person shall mean any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For purposes of their definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which commercial banking institutions in the State of California are
authorized or obligated by law or executive order to be closed.
"Certificate" shall mean one of any Series of the Investor Certificates or
the Exchangeable Transferor Certificates.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register.
"Dealer" shall have the meaning specified in the recitals hereto.
"Dealer Agreement" shall mean an agreement in substantially the form
attached hereto as Exhibit A (including addenda or modifications thereto
entered into from time to time), or any similar agreement whereby Yamaha agrees
to sell Yamaha Products to such Person for resale at retail.
"Exchangeable Transferor Certificate" shall mean the certificate executed
by YMRC and authenticated by the Trustee, substantially in the form of Exhibit
A to the Pooling and Servicing Agreement and exchangeable as provided in the
Pooling and Servicing Agreement for one or more Series of Investor Certificates
and the reissued Exchangeable Transferor Certificate.
2
<PAGE>
"Governmental Authority" shall have the meaning set forth in the Pooling
and Servicing Agreement.
"Investor Certificate" shall mean any one of the certificates executed by
YMRC pursuant to the Pooling and Servicing Agreement and authenticated by the
Trustee substantially in the form attached to the applicable Supplement to the
Pooling and Servicing Agreement.
"Investor Certificateholder" shall mean the holder of record of an
Investor Certificate.
"ITT Advance" shall mean, with respect to each Yamaha Product purchased by
a Dealer, the credit advance made by ITT to such Dealer to enable the Dealer to
purchase such Yamaha Product pursuant to the terms of the relevant ITT
Agreement for Wholesale Financing and in accordance with the terms of the
Statement of Transaction identifying such ITT Advance.
"ITT Agreement For Wholesale Financing" shall mean, with respect to each
Dealer, the agreement between such Dealer and ITT in substantially the form
attached hereto as Exhibit B.
"ITT Servicing Guidelines" shall mean ITT's written policies and
procedures, as such policies and procedures may be amended from time to time,
(a) relating to the operation of its floorplan financing business, including
the written policies and procedures for determining the interest rate charged
to Dealers, the other terms and conditions relating to ITT's wholesale
financing accounts, the creditworthiness of Dealers and the extension of credit
to Dealers, and (b) relating to the maintenance of accounts and collection of
receivables.
"ITT Financing Statement" shall mean, with respect to each Dealer, a UCC
financing statement in substantially the form attached hereto as Exhibit C.
"ITT Settlement Date" shall mean the fifteenth Business Day of each
calendar month commencing after the Cut-Off Date.
3
<PAGE>
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing.
"Moody's" shall mean Moody's Investors Service, Inc.
"Officer's Certificate" shall mean a certificate signed by any Vice
President or more senior officer of either of Yamaha or ITT and delivered to
the other party.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental authority or other entity of
similar nature.
"Pooling and Servicing Agreement" shall mean that certain Pooling and
Servicing Agreement, dated as of March 1, 1994, between YMRC and the Trustee,
as the same may be amended, supplemented or otherwise modified and in effect
from time to time.
"Proceeds" shall mean "cash proceeds" as defined in Section 9-306(1) of
the applicable UCC.
"Product Security" shall mean, with respect to any Yamaha Product, the
security interest of ITT in such Yamaha Product.
"Rating Agency" shall mean, with respect to any Series, each nationally
recognized statistical rating agency or agencies selected by YMRC to provide a
rating for the Investor Certificates of such Series.
4
<PAGE>
"Receivables" shall mean, collectively with respect to each Dealer, all
rights to payment of money (whether characterized as principal, interest, fees
expenses or otherwise) arising out of any ITT Advance to such Dealer and
identified in the Statement of Transaction sent to the Dealer by ITT for such
ITT Advance.
"Receivables Purchase Agreement" shall mean that certain Receivables
Purchase Agreement, dated as of March 1, 1994, between Yamaha, in its capacity
as seller thereunder, and Yamaha Motor Receivables Corporation, in its capacity
as purchaser thereunder, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"Receivables Purchase Date" shall mean each Business Day on which
Receivables are sold to Yamaha pursuant to Section 1 hereof.
"Receivables Settlement Statement" shall mean the monthly settlement
record delivered by ITT to Yamaha in substantially the form of Exhibit E hereto
pursuant to the terms of Section 4 hereof.
"Requirements of Law" shall have the meaning specified in the Servicing
Agreement.
"Sales Price" shall mean, with respect to each Receivable of each Dealer,
the amount identified on the Statement of Transaction; provided however, that,
on the Cut-Off Date, in the event that the amount due on any Yamaha Product is
less than amount identified in the Statement of Transaction for such Yamaha
Product, the Sales Price of such Receivable shall be equal to the then current
balance due on such Yamaha Product.
"Series" shall mean any Series of Investor Certificates, each as
designated in the applicable Supplement to the Pooling and Servicing Agreement.
"Servicing Agreement" shall mean that certain Servicing Agreement, dated
as of March 1, 1994, between ITT and Yamaha, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
5
<PAGE>
"Statement of Transaction" shall mean, with respect to each ITT Advance,
the confirmation relating thereto sent by ITT to the related Dealer, in
substantially the form attached hereto as Exhibit D.
"Standard & Poor's" shall mean Standard & Poor's Corporation.
"Successor Servicer" shall have the meaning specified in the Servicing
Agreement.
"Trustee" shall mean The Fuji Bank and Trust Company, as the trustee named
in the Pooling and Servicing Agreement, and its successors and assigns in such
capacity.
"UCC" shall mean, with respect to any state, the Uniform Commercial Code
as in effect in such state.
"Yamaha Mechanized Equipment" shall mean new goods purchased from Yamaha
by the Dealer with the proceeds of an ITT Advance.
"Yamaha Product Program Price" shall mean, with respect to any Yamaha
Product, the terms of sale of such Yamaha Product (including, without
limitation, the initial purchase price, interest rate or delivery charges),
owed to Yamaha by the related Dealer with respect to any such Yamaha Product,
which price is set forth in the relevant Dealer Agreement, the price schedules
and the sales program delivered by Yamaha to such Dealer describing the
particular Yamaha Product purchased.
"Yamaha Product" shall mean, with respect to each Statement of
Transaction, the Yamaha Mechanized Equipment.
"YMRC" shall mean Yamaha Motor Receivables Corporation, a corporation
organized and existing under the laws of the State of Delaware and a
wholly-owned subsidiary of Yamaha, in its capacity as transferor of Receivables
to the Yamaha Motor Master Trust.
A G R E E M E N T :
- - - - - - - - -
6
<PAGE>
The parties hereto, each in consideration of the promises of the other and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, hereby agree as follows:
SECTION 1. Sale of the Receivables.
(a) By execution of this Agreement, ITT does hereby sell, transfer,
assign, set over and otherwise convey to Yamaha, without recourse, all of its
right, title and interest in, to and under the Receivables and related Product
Security now existing and hereafter created of each Dealer, wherever located,
all monies due or to become due with respect thereto and all Proceeds thereof.
The parties hereto intend that the conveyance of ITT's right, title and
interest in, to and under the Receivables and related Product Security now
existing and hereafter created of each Dealer, all monies due or to become due
with respect thereto and all Proceeds thereof pursuant to the terms hereof
shall constitute a sale and not a grant of a security interest in such
property. It is the intention of ITT and Yamaha that the transfer of the
Receivables and the related Product Security contemplated herein constitute an
absolute assignment of the Receivables and related Product Security from ITT to
Yamaha and not a transfer for security. However, in the event that such
transfer is not characterized as an absolute assignment and sale, but rather as
a transfer for security, ITT hereby grants to Yamaha a security interest in and
lien on all of ITT's right, title and interest in, to and under the Receivables
and assigns the related Product Security identified on the Statements of
Transaction relating to the Receivables now existing and hereafter created of
each Dealer, wherever located, together with all monies due and to become due
with respect thereto and all Proceeds thereof, wherever located, as security
for the prompt and complete payment and performance in full of all amounts owed
by ITT to Yamaha whether now existing or hereafter arising (including, without
limitation, the prompt and complete payment in full of an amount equal to sum
of all amounts payable by Dealers to ITT with respect to the repayment of ITT
Advances) and for the performance of ITT's obligations set forth hereunder. The
foregoing sale, transfer, assignment, set-over and conveyance does not
constitute, and is not intended to result in, a creation or an assumption by
Yamaha of any
7
<PAGE>
obligation of ITT or any other Person in connection with the Dealers, the
Receivables or under any agreement or instrument relating thereto, including,
without limitation, any obligation to any Dealers, merchant banks, or insurers.
(b) In connection with such sale and assignment, ITT agrees to record and
file, at its own expense, any ITT Financing Statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Product Security related to the Receivables now existing and
hereafter created meeting the requirements of applicable UCC state laws in such
names and in such jurisdictions as are necessary to perfect the sale, transfer,
assignment and security interest of and in the Receivables and related Product
Security to Yamaha, and, upon request by Yamaha, to deliver a file-stamped copy
of such financing statements or other evidence of such filings to Yamaha on or
prior to the date hereof or from time to time, as applicable.
(c) In connection with such sale and assignment, ITT further agrees, at
its own expense, on or prior to each Receivables Purchase Date (x) to indicate
on its books and records that all Receivables created by ITT in connection with
the purchases by Dealers of Yamaha Products have been sold and assigned to
Yamaha, and that the related Product Security has been assigned to Yamaha
pursuant to this Agreement, (y) at the request of Yamaha, to deliver to Yamaha
a computer file or microfiche list containing a true and complete list
specifying, as of the Cut-Off Date and upon request of Yamaha thereafter, the
account number; the name of the Dealer; the amount of the ITT Advance made by
ITT to such Dealer pursuant to the terms of the ITT Agreement For Wholesale
Financing between ITT and such Dealer; the outstanding repayment obligation
(including principal and interest) of the Dealer in connection with such ITT
Advance; and the identification number of each Yamaha Product being purchased
by such Dealer with the proceeds of such ITT Advance. Such files or lists shall
be marked as Schedule 1 to the Servicing, which is hereby incorporated into and
made a part of this Agreement.
8
<PAGE>
(d) Yamaha shall not purchase Receivables hereunder if ITT shall become an
involuntary party to (or be made the subject of) any proceeding provided for by
any federal or state bankruptcy, insolvency or other debtor relief law (an
"Involuntary Case"), other than as creditor or claimant or if ITT shall admit
in writing its inability to pay its debts as they are due, or the commencement
by ITT of a voluntary case under the federal bankruptcy laws, as now or
hereafter in effect, or any present or future federal or state bankruptcy,
insolvency or similar law, or the consent by ITT to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of ITT or of any substantial part of its
property or the making by ITT of an assignment for the benefit of creditors or
the failure by ITT generally to pay its debts as such debt becomes due or the
taking of corporate action by ITT in furtherance of any of the foregoing.
SECTION 2. Sales Price; Remittances by ITT.
(a) The purchase price for the Receivables shall be a dollar amount equal
to the Sales Price.
(b) ITT hereby agrees that it will promptly remit to Yamaha in full all
amounts payable by Dealers to ITT with respect to the repayment of ITT
Advances.
SECTION 3. Payment of Sales Price on the First Receivables Purchase Date.
(a) The parties hereto agree that the Sales Price for each Receivable purchased
on the first Receivables Purchase Date has been paid by Yamaha on such date as
follows: (i) Yamaha agrees that ITT's obligation to deliver the proceeds of
each ITT Advance to Yamaha in connection with such Receivable has been
satisfied in full and (ii) ITT agrees that it has waived any right to payment
in cash by Yamaha for each such Receivable.
(b) The parties agree that the Sales Price for each Receivable purchased
by Yamaha after the first Receivables Purchase Date shall be paid by Yamaha on
each related Receivables Purchase Date, at Yamaha's option, in either of the
following ways: (i) by payment in cash in immediately available funds; or (ii)
in the event that the total Sales Price is not paid in full in
9
<PAGE>
cash by Yamaha on the relevant Receivables Purchase Date, Yamaha shall reduce
the amount of the ITT Advance which ITT was obligated to deliver to Yamaha
hereunder in connection with the related Yamaha Product identified on the
applicable Statement of Transaction by an amount equal to the Sales Price of
such Receivable.
SECTION 4. Settlement and Ongoing Payment of Sales Price. On each ITT
Settlement Date, ITT shall deliver to Yamaha a Receivables Settlement Statement
in substantially the form of Exhibit E hereto (the "Receivables Settlement
Statement"). Any balance due from Yamaha to ITT shall be immediately paid by
Yamaha in the manner described in Section 3(b) hereof.
SECTION 5. Acceptance and Agreement by Yamaha.
(a) Yamaha hereby acknowledges its acceptance of all right, title and
interest in, to and under the property described in Section 1(a) hereof. Yamaha
further acknowledges that, prior to or simultaneously with the execution and
delivery of this Agreement, ITT has delivered to Yamaha the computer file or
microfiche list described in clause (y) of subsection 1(c) hereof.
(b) Yamaha hereby agrees not to disclose to any Person any of the account
numbers or other information contained in the computer files or microfiche
lists marked as Schedule 1 delivered to Yamaha by ITT pursuant to subsection
1(c) or subsection hereof, except as may be required by law, to any Rating
Agency or to a Successor Servicer appointed pursuant to the Pooling and
Servicing Agreement. Yamaha agrees to take such measures as shall be reasonably
requested by ITT to protect and maintain the security and confidentiality of
such information, and, in connection therewith, shall allow ITT to inspect
Yamaha security and confidentiality arrangements from time to time during
normal business hours. Yamaha shall make reasonable efforts to provide ITT with
written notice five (5) Business Days prior to any disclosure pursuant to this
subsection 5(b) and shall cooperate with ITT to seek any protective order and
confidentiality agreement ITT deems necessary or advisable.
10
<PAGE>
SECTION 6. Representations and Warranties of ITT Relating to ITT. ITT
hereby represents and warrants to Yamaha as of the initial Receivables Purchase
Date and each Receivables Purchase Date occurring thereafter that:
(a) Organization and Good Standing. ITT is a corporation duly organized
and validly existing and in good standing under the law of the State of Nevada
and has, in all material respects, full corporate power, authority and legal
right to own its properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement.
(b) Due Qualification. ITT is duly qualified to do business and, where
necessary, is in good standing as a foreign corporation (or is exempt from such
requirement) and has obtained all necessary licenses and approvals in each
jurisdiction in which the conduct of its business requires such qualification
except where the failure to so qualify or obtain licenses or approvals would
not have an adverse effect on its ability to perform its obligations hereunder,
and has full corporate power, authority and legal right to own its properties
and conduct its business as such properties are presently owned and such
business is presently conducted.
(c) Due Authorization. The execution and delivery of this Agreement and
the consummation of the transactions provided for or contemplated by this
Agreement have been duly authorized by ITT by all necessary corporate action on
the part of ITT.
(d) No Conflict. The execution and delivery of this Agreement, the
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof and thereof, will not conflict with, result in
any breach of any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other instrument to
which ITT is a party or by which it or its properties are bound.
11
<PAGE>
(e) No Violation. The execution and delivery of this Agreement, the
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof and thereof applicable to ITT, will not
conflict with or violate any material applicable to ITT.
(f) No Proceedings. There are no proceedings or, to the best knowledge of
ITT, investigations, pending or threatened against ITT, before any Governmental
Authority (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, (iii) seeking any determination or ruling that, in the reasonable
judgment of ITT, would adversely affect the performance by ITT of its
obligations under this Agreement (iv) seeking any determination or ruling that
would adversely affect the validity or enforceability of this Agreement.
(g) All Consents Required. All authorizations, consents, licenses,
approvals, authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by ITT in
connection with the performance of the transactions contemplated by this
Agreement, and the fulfillment of the terms hereof or thereof, have been
obtained.
(h) Enforceability. This Agreement constitutes a legal, valid and binding
obligation of ITT, enforceable against ITT in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether such
enforceability is considered in a suit at law or in equity).
(i) Statements of Transaction. As of each Receivables Purchase Date, each
Statement of Transaction relating to Receivables sold on that date is an
accurate and complete listing in all material respects of all information
identified therein relating to the Dealers and the Receivables the subject
thereof.
12
<PAGE>
(j) Valid Transfer. This Agreement constitutes a valid sale, transfer and
assignment to Yamaha of all right, title and interest of ITT in, to and under
the Receivables and the related Product Security now existing and hereafter
created of each Dealer, wherever located, all monies due and to become due with
respect thereto and the Proceeds thereof. Upon the filing of the ITT Financing
Statements in accordance with Section 1(b) hereof, Yamaha shall have valid and
perfected security or ownership interest in such Receivables and the related
Product Security. Except as otherwise provided in the Pooling and Servicing
Agreement, neither ITT nor any Person claiming through or under ITT has any
claim to or interest in the Receivables or the related Product Security.
The representations and warranties set forth in this Section 6 shall
survive the sale, transfer and assignment of the Receivables and the related
Product Security to Yamaha. Upon discovery by ITT or Yamaha of a breach of any
of the foregoing representations and warranties, the party discovering such
breach shall give prompt written notice to the other party.
SECTION 7. Representations and Warranties of ITT Relating to the
Receivables.
(a) Representations and Warranties. ITT hereby represents and warrants to
Yamaha as of the first Receivables Purchase Date and each Receivables Purchase
Date occurring thereafter that:
(i) each Receivable and the related Product Security existing on each
Receivables Purchase Date has been conveyed to Yamaha free and clear of
any prior Lien (other than the Lien created hereunder); and
(ii) with respect to each Receivable and related Product Security
existing on each Receivables Purchase Date, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by ITT in
connection with the conveyance of such Receivable or Yamaha Product to
Yamaha have been duly obtained, effected or given and are in full force and
effect.
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(b) Notice of Breach. The representations and warranties set forth in this
Section 7 shall survive the sale, transfer and assignment of the Receivables
and related Product Security to Yamaha. Upon discovery by ITT or Yamaha of a
breach of any of the representations and warranties set forth in this Section
7, the party discovering such breach shall give prompt written notice to the
other party.
SECTION 8. Covenants of ITT. ITT hereby covenants and agrees that:
(a) No Liens. Except for the conveyances hereunder, ITT will not sell,
pledge, assign or transfer to any other Person, or grant, create, incur, assume
or suffer to exist any Lien on, any Receivable or any Yamaha Product, whether
now existing or hereafter created, or any interest therein, and ITT shall
defend the right, title and interest of Yamaha in, to and under the Receivables
and the related Product Security, whether now existing or hereafter created,
against all claims of third parties claiming through or under ITT.
(b) ITT Servicing Guidelines and Servicing Agreement. ITT shall comply
with and perform its servicing obligations with respect to the Dealers and
Receivables in accordance with the ITT Agreement For Wholesale Financing
relating to the Dealers, the Servicing Agreement, except insofar as any failure
to so comply or perform would not adversely affect the rights of Yamaha.
(c) Notice of Liens. ITT shall notify Yamaha promptly after becoming aware
of any superior Lien on any Receivable or on any Product Security, other than
the conveyances hereunder, under the Receivables Purchase Agreement or under
the Pooling and Servicing Agreement.
(d) Compliance with Laws. ITT hereby agrees to comply in all material
respects with all Requirements of Law applicable to ITT.
(e) Agreements with Dealers. In the case of each Dealer related to an
Account listed on the Schedule of Accounts attached to the Servicing Agreement
as Schedule I, ITT has (i) entered into an ITT Agreement
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for Wholesale Financing with each such Dealer and such agreement is the legal,
valid, binding and enforceable obligations of ITT and such Dealers, (ii) filed
or caused to be filed an ITT Financing Statement naming such Dealer as a debtor
under the Uniform Commercial Code in effect in each of the states where such
Dealer has its chief executive office or, if different, maintains possession of
any Yamaha Product and all continuation statements necessary to maintain the
effectiveness of any such ITT Financing Statements.
(f) Statements of Transaction. In the case of each ITT Advance for each
Dealer identified on Schedule I to the Servicing Agreement, ITT has sent or
will send, as applicable, a Statement of Transaction to such Dealer promptly
after making each ITT Advance. Each such ITT Statement has set forth or will
set forth, as applicable, the following:
(i) the name, address and account number of the Dealer;
(ii) the amount of the ITT Advance pursuant to the terms of the ITT
Agreement for Wholesale Financing between ITT and such Dealer;
(iii) the repayment obligation (including principal and interest) of
such Dealer in connection with such ITT Advance and the terms thereof; and
(iv) the description of each Yamaha Product being purchased by such
Yamaha Dealer with the proceeds of the above-referenced ITT Advance.
In the case of each Statement of Transaction, ITT also agrees to deliver to
each Dealer, as applicable, a notice of reminder of interest payments to be
made by such Dealer in connection with the ITT Advance to such Dealer
identified in such Statement of Transaction.
(g) Receivables Settlement Statements. A Receivables Settlement Statement
in the form of Exhibit E hereto shall be delivered by ITT to Yamaha on or
before each ITT Settlement Date and on the first Receiv-
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<PAGE>
ables Purchase Date and shall identify all Receivables sold to Yamaha as of
such date. Such schedule shall include, among other things:
(i) the names of the Dealers; and
(ii) the aggregate amount of ITT Advances made to such Dealers under
all Statements of Transaction.
(h) Financing Statements. ITT shall not execute UCC financing statements
(including, without limitation, assignments under the applicable UCC) covering
any of the Receivables or related Product Security for any party other than
Yamaha. ITT shall not be required to execute UCC assignments covering any
Product Security except (i) in the event Yamaha has requested it to do so; and
(ii) ITT's short-term debt rating is lowered below "P-2" by Moody's or "A-1" by
Standard and Poor's. In such event, ITT shall execute UCC assignments with
respect to the related Product Security in favor of Yamaha.
SECTION 9. Liability; Indemnification. ITT shall be liable for each
obligation, covenant, representation and warranty of ITT arising under or
related to this Agreement. ITT agrees to indemnify Yamaha and to hold Yamaha
harmless from and against any and all losses, damages and expenses (including
reasonable attorneys' fees) suffered or incurred by Yamaha as a result of a
material breach of a covenant, representation or warranty hereunder;
provided, however, that ITT shall not indemnify Yamaha if such acts, omissions
or alleged acts or omissions constitute fraud, gross negligence or wilful
misconduct by Yamaha.
SECTION 10. Merger or Consolidation of, or Assumption of the Obligations
of, ITT.
(a) ITT shall not consolidate with or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety to
any Person unless:
(i) the corporation formed by such consolidation or into which ITT is
merged or the Person which acquires by conveyance or
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<PAGE>
transfer the properties and assets of ITT substantially as an entirety
shall be a corporation organized and existing under the laws of the United
States of America or any state or the District of Columbia, and, if ITT is
not the surviving entity, shall expressly assume, by an agreement
supplemental hereto, executed and delivered to Yamaha in form satisfactory
to Yamaha, the performance of every covenant and obligation of ITT
hereunder. (To the extent that any right, covenant or obligation of ITT is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity); and
(ii) ITT has delivered to Yamaha, an officers' certificate signed by
a Vice President (or any more senior officer) of ITT and an opinion of
counsel (in form and substance satisfactory to Yamaha) each stating that
such consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 10 and that all conditions precedent
herein provided for relating to such transaction have been complied with.
ITT shall promptly advise the Rating Agencies in writing of any such merger,
consolidation, conveyance or transfer.
SECTION 11. Limitation on Liability of ITT. Subject to Section 9 of this
Agreement, neither ITT nor any of its directors or officers or employees or
agents in its capacity as seller hereunder shall be under any liability to
Yamaha or any other Person for any action taken or for refraining from the
taking of any action in the capacity as seller pursuant to this Agreement
whether arising from express or implied duties under this Agreement; provided,
however, that this provision shall not protect ITT or any such person against
any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. ITT and
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any director or officer or employee or agent of ITT may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.
SECTION 12. Access to Certain Documentation and Information Regarding the
Receivables. ITT shall provide to Yamaha reasonable access to all records and
documentation regarding the Dealers, the Receivables and the Yamaha Products in
such cases where required in connection with the performance by Yamaha of its
obligations under this Agreement, or by applicable statutes or regulations to
review such documentation, such access being afforded without charge but only
(i) upon reasonable prior request, (ii) during normal business hours, (iii)
subject to such protective orders and confidentiality agreements or procedures
as ITT reasonably deems necessary or advisable and (iv) at offices designated
by ITT. Nothing in this Section 12 shall derogate from the obligation of ITT to
observe any applicable law prohibiting disclosure of information regarding the
Dealers, and the failure of ITT to provide access as provided in this Section
12 as a result of such obligation shall not constitute a breach of this Section
12.
SECTION 13. Examination of Records. ITT shall indicate clearly and
unambiguously in its computer files or other records that the Receivables and
related Product Security have been conveyed to Yamaha pursuant to this
Agreement and the Financing Program Agreements. ITT shall, prior to the sale or
transfer to a third party of any receivable held in its custody, examine its
computer and other records to determine that such receivable is not a
Receivable.
SECTION 14. Termination. This Agreement may be terminated at any time by
either of the parties hereto with no less than twelve (12) months' written
notice to the other party prior to the proposed date of effectiveness of
termination; provided that this Agreement shall remain effective as to
obligations hereunder arising or that may arise on account of transactions
consummated prior to the effective date of such termination.
SECTION 15. Amendment.
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(a) This Agreement may be amended from time to time by ITT and Yamaha,
without the consent of the Trustee, YMRC or any of the Investor
Certificateholders, (x) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein or
to add any other provisions with respect to matters or questions raised under
this Agreement which are not inconsistent with the provisions of this Agreement
or (y) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or modifying in any manner
the rights of the Investor Certificateholders; provided, however, that (i)
Yamaha shall have provided to the Trustee an Officer's Certificate to the
effect that such action will not materially and adversely affect the interests
of such Investor Certificateholders (or 100% of the Class of Investor
Certificateholders so affected shall have consented), (ii) each Rating Agency
rating the Investor Certificates confirms that such action will not result in
the reduction or withdrawal of its rating of Investor Certificates and (iii)
such action will not, as evidenced by an opinion of counsel satisfactory to the
Trustee, cause the Yamaha Motor Master Trust to be characterized for Federal
income tax purposes as an association taxable as a corporation or adversely
affect the treatment of the Investor Certificates as debt for Federal income
tax purposes.
(b) This Agreement may also be amended from time to time by ITT and Yamaha
with the consent of the Investor Certificateholders evidencing Undivided
Interests in the Investor Certificates (as defined in the Pooling and Servicing
Agreement) aggregating not less than 66-2/3% of the Invested Amount (as defined
in the Pooling and Servicing Agreement) of each and every Series adversely
affected, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Investor Certificateholders of any Series then issued
and outstanding; provided, however, that no such amendment under this
subsection shall (i) reduce in any manner the amount of, or delay the timing
of, Collections (as defined in the Pooling and Servicing Agreement) on the
Receivables or payments or distributions which are required to be made on any
Investor Certificate of such
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Series without the consent of the related Investor Certificateholder, or (ii)
reduce the aforesaid percentage required to consent to any such amendment, in
each case without the consent of all such Investor Certificateholders.
(c) Prior to the execution of any such amendment or consent, Yamaha shall
furnish written notification of the substance of such amendment to the Rating
Agencies.
(d) Promptly after the execution of any such amendment or consent, Yamaha
shall furnish written notification of the substance of such amendment to the
Trustee.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 15 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Investor Certificateholders shall
be subject to such reasonable requirements as the Trustee may prescribe.
SECTION 16. Protection of Right, Title and Interest to Receivables.
(a) ITT shall cause this Agreement, all amendments hereto and/or all
financing statements and continuation statements and any other necessary
documents covering ITT's and Yamaha's right, title and interest in, to and
under the Receivables and related Product Security to be promptly recorded,
registered and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required by law fully to
preserve and protect the right, title and interest of Yamaha hereunder in, to
and under the Receivables and related Product Security. At the request of
Yamaha, ITT shall deliver to Yamaha file-stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. Yamaha shall
cooperate fully with ITT in connection with the obligations set forth above and
will
20
<PAGE>
execute any and all documents reasonably required to fulfill the intent of this
Section 16(a).
(b) Within thirty (30) days after ITT makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with the term of this Agreement
seriously misleading within the meaning of Section 9-402(7) of the UCC as in
effect in the applicable UCC State, ITT shall give Yamaha notice of any such
change and shall file such financing statements or amendments as may be
necessary to continue the perfection of Yamaha security interest in the
Receivables and the Proceeds thereof.
(c) ITT will give Yamaha prompt written notice of any relocation of any
office from which it keeps records concerning the Receivables or of its
principal executive office, and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new
financing statement and shall file such financing statements or amendments as
may be necessary to perfect or to continue the perfection of Yamaha security
interest in the Receivables and the Proceeds thereof. ITT will at all times
maintain each office from which it services Receivables and its principal
executive office within the United States of America.
SECTION 17. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of California without reference to its conflicts of
law provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 18. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to (a) in
the case of ITT Commercial Finance Corp., 8251 Maryland Avenue, Clayton, MO
63105, Attention: General Counsel and (b) in the case of Yamaha Motor
Corporation, U.S.A., 6555 Katella Avenue, Cypress, CA 90630, Attention: Russell
D. Jura, Esq.; or, as to each party, at such other address as shall be
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designated by such party in a written notice to each other party. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the party receives such
notice.
SECTION 19. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement.
SECTION 20. Assignment. Notwithstanding anything to the contrary contained
herein, this Agreement may not be assigned by Yamaha or ITT except as
contemplated by this Section 20 of this Agreement; provided, however, that
simultaneously with the execution and delivery of this Agreement, Yamaha shall
assign all of its right, title and interest herein to the Yamaha Motor
Receivables Corporation ("YMRC"), a Delaware corporation, which will
simultaneously assign all of its right, title and interest therein to the
Trustee for the benefit of the Investor Certificateholders of all Series as
provided in Section of the Pooling and Servicing Agreement, to which ITT hereby
expressly consents. ITT agrees to perform its obligations hereunder for the
benefit of YMRC and the Yamaha Motor Master Trust and that YMRC and the Trustee
may enforce the provisions of this Agreement, exercise the rights of Yamaha and
enforce the obligations of ITT hereunder without the consent of Yamaha.
SECTION 21. Further Assurances. ITT and Yamaha agree to do and perform,
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by YMRC or the Trustee more fully
to effect the purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements relating to
the Receivables for filing under the provisions of the Relevant UCC State of
any applicable jurisdiction.
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SECTION 22. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of ITT or Yamaha, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
SECTION 23. Counterparts. This Agreement 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 24. Third Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, and, in addition, shall
inure to the benefit of the Trustee and YMRC and the Investor
Certificateholders and their respective successors and permitted assigns.
Except as otherwise provided in this Agreement, no other person will have any
right or obligation hereunder.
SECTION 25. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 26. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 27. Contrary Provisions. Unless otherwise provided herein to the
contrary, to the extent any provision contained in this Agreement conflicts
with any provision of any other agreement or understanding between the parties
hereto, the provision contained in this Agreement shall supersede such other
provision and be controlling with respect to the parties hereto; pro-
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vided that to the extent this Agreement does not conflict with or contradict a
provision contained in any other agreement or understanding between the parties
hereto now and in the future, the terms of any and all such other agreements
shall remain in full force and effect in accordance with their respective
terms.
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IN WITNESS WHEREOF, ITT and Yamaha have caused this Receivables Sale
Agreement to be duly executed by their respective officers as of the day and
year first above written.
ITT COMMERCIAL FINANCE CORP.
By:
-------------------------------
Name:
Title:
YAMAHA MOTOR CORPORATION, U.S.A.,
By:
-------------------------------
Name:
Title:
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EXHIBIT A
[FORM OF DEALER AGREEMENT]
A-1
<PAGE>
EXHIBIT B
[FORM OF ITT AGREEMENT FOR WHOLESALE FINANCING]
B-1
<PAGE>
EXHIBIT C
[FORM OF ITT FINANCING STATEMENT]
C-1
<PAGE>
EXHIBIT D
[FORM OF STATEMENT OF TRANSACTION]
D-1
<PAGE>
EXHIBIT E
[FORM OF RECEIVABLES SETTLEMENT STATEMENT]
E-1
<PAGE>
Schedule 1
SCHEDULE OF ACCOUNTS
1
