<PAGE> 1
REGISTRATION NO. 33-57827
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-1*
AMENDMENT NO. 3
TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FORD CREDIT AUTO LEASE TRUST 1995-1
(Issuer of the Notes)
RCL TRUST 1995-1
(Originator of the Trust described herein)
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
FORD MOTOR CREDIT A Delaware Trust FORD CREDIT LEASING
COMPANY Primary Standard Industrial Classification COMPANY, INC.
(Originator of the Registrant; issuer of Code Number (Originator of the Registrant)
a corporate Limited RV Guaranty) IRS Employer No. [Application Pending]
A Delaware Corporation The American Road A Delaware Corporation
Primary Standard Industrial Classification Dearborn, Michigan 48121 Primary Standard Industrial Classification
Code Number (313) 594-9876 Code Number
IRS Employer No. 38-1612444 IRS Employer No. [Application Pending]
The American Road _____________ The American Road
Dearborn, Michigan 48121 Dearborn, Michigan 48121
(313) 322-3000 (313) 845-4072
</TABLE>
J. D. BRINGARD, ESQ.
Ford Motor Credit Company
The American Road
Dearborn, Michigan 48121
(313) 594-7742
(Name and Address of Agent for Service
for each of the above named entities)
Copy to:
SUSAN M. CURTIS, ESQ.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
(212) 735-3000
____________
Approximate date of commencement of proposed sale to the public: As
soon as practicable on or after the effective date of this Registration
Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Securities Amount Being Offering Price Aggregate Amount of
Being Registered Registered Per Unit (1) Offering Price (1) Registration Fee (3)
<S> <C> <C> <C> <C>
Class A-1 Asset Backed Notes . . . . $ 333,333.00 100% $ $ 114.94
Class A-2 Asset Backed Notes . . . . $ 333,333.00 100% $ $ 114.94
Class A-3 Asset Backed Notes . . . . $ 333,334.00 100% $ $ 114.95
Limited RV Guaranty . . . . . . . . . (2) (2) (2) (2)
TOTAL . . . . . . . . . . . . . . . . $ 1,000,000.00 $ $ 344.83
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Not applicable.
(3) 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.
* This Registration Statement constitutes a filing on Form S-1 in respect of
the Asset Backed Notes and a filing on Form S-3 in respect of the Limited RV
Guaranty.
<PAGE> 2
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Items and Caption in Form S-1 Caption in Prospectus
----------------------------- ---------------------
<S> <C> <C>
1. Forepart of Registration Statement and Outside Forepart of Registration Statement; Outside Front
Front Cover Page of Prospectus . . . . . . Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of Inside Front Cover Page of Prospectus
Prospectus . . . . . . . . . . . . . . . .
3. Summary Information, Risk Factors and Ratio of Summary; Special Considerations; Management's
Earnings to Fixed Charges . . . . . . . . Discussion and Analysis of Financial Condition and
Results of Operations
4. Use of Proceeds . . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . . *
6. Dilution . . . . . . . . . . . . . . . . . . . *
7. Selling Security Holders . . . . . . . . . . . *
8. Plan of Distribution . . . . . . . . . . . . . Underwriting
9. Description of Securities to be Registered . . Outside Front Cover Page of Prospectus; Inside
Front Cover Page of Prospectus; Summary; The
Issuer; Property of the Issuer; The Leases and
Leased Vehicles; Maturity, Prepayment and Yield
Considerations; Pool Factors and Trading Informa-
tion; Description of the Notes; Description of the
Administrative Agency Agreement; Additional
Document Provisions; Ratings of the Notes
10. Interest of Named Experts and Counsel . . . . . *
11. Information with Respect to the Registrant . . Outside Front Cover Page of Prospectus; Inside Front
Cover Page of Prospectus; Summary; Ford Credit; The
Issuer; Property of the Issuer; The Transferor; The
Series 1995-1 Certificates; The Leases and the
Leased Vehicles; Management's Discussion and
Analysis of Financial Condition and Results of
Operations; Additional Document Provisions
12. Disclosure of Commission Position on In-
demnification for Securities Act
Liabilities . . . . . . . . . . . . . . . See Part II
13. Other Expenses of Issuance and Distribution . . See Part II
14. Indemnification of Directors and Officers . . . See Part II
15. Recent Sales of Unregistered Securities . . . . *
16. Exhibits and Financial Statements . . . . . . See Part II
17. Undertakings . . . . . . . . . . . . . . . . . See Part II
</TABLE>
_______________________
* Answer negative or Item inapplicable
<PAGE> 3
THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
Subject to Completion
Dated _______ __, 1995
$ __________________________
FORD CREDIT AUTO LEASE TRUST 1995-1 ISSUER
___% CLASS A-1 ASSET BACKED NOTES
___% CLASS A-2 ASSET BACKED NOTES
___% CLASS A-3 ASSET BACKED NOTES
RCL TRUST 1995-1
TRANSFEROR
FORD MOTOR CREDIT COMPANY
ADMINISTRATIVE AGENT
Ford Credit Auto Lease Trust 1995-1 (the "Issuer") will be formed pursuant
to a Lease Trust Agreement to be dated as of _________ __, 1995 between The
Chase Manhattan Bank (USA) (the "RCL Trustee") in its capacity as trustee of
the RCL Trust 1995-1 (the "Transferor") and PNC Bank, Delaware (the "Lease
Trustee") in its capacity as trustee of the Issuer. Pursuant to an Indenture
to be dated as of _________ ___, 1995 between the Lease Trustee, on behalf of
the Issuer, and Chemical Bank, as Indenture Trustee, the Issuer will issue
notes secured by interests in certain retail automotive leases and leased
vehicles, including $_________ initial principal balance of ___% Class A-1
Asset Backed Notes (the "Class A-1 Notes"), $_________ initial principal
balance of ___% Class A-2 Asset Backed Notes (the "Class A-2 Notes") and
$_________ initial principal balance of ___% Class A-3 Asset Backed Notes (the
"Class A-3 Notes" and, together with the Class A-1 Notes and the Class A-2
Notes, the "Notes"). The Issuer also will issue $_______
(cover continued on following pages)
EXCEPT TO THE EXTENT OF THE LIMITED RV GUARANTY OF FORD MOTOR CREDIT COMPANY,
AS DESCRIBED HEREIN, THE NOTES REPRESENT OBLIGATIONS OF THE ISSUER ONLY AND DO
NOT REPRESENT INTERESTS IN, RECOURSE TO OR OBLIGATIONS OF THE TRANSFEROR, FORD
MOTOR CREDIT COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
INITIAL PRICE TO UNDERWRITING PROCEEDS TO
PRINCIPAL BALANCE PUBLIC (1) DISCOUNT THE ISSUER (1)(2)
<S> <C> <C> <C> <C> <C>
Class A-1 Notes $ % % %
Class A-2 Notes $ % % %
Class A-3 Notes $ % % %
Total $ $ $ $
</TABLE>
(1) Plus accrued interest, if any, calculated from , 1995.
(2) Before deducting expenses payable by the Issuer estimated at $ .
The Notes are offered by the Underwriter when, as, and if issued and
accepted by the Underwriter and subject to its right to reject orders in whole
or in part. The Underwriter reserves the right to withdraw, cancel or modify
such offer. It is expected that the Notes will be delivered in book-entry form
through the facilities of The Depository Trust Company on or about _________
__, 1995 against payment therefor in immediately available funds.
J.P. Morgan Securities Inc.
The date of this Prospectus is _____________, 1995
<PAGE> 4
initial principal balance of ___% Asset Backed Lease Trust Certificates (the
"Lease Trust Certificates"). The Lease Trust Certificates are not being
offered hereby.
As more fully described herein, the assets of the Issuer will
include certificates (the "Series 1995-1 Certificates") transferred to the
Issuer by the Transferor representing a 100% undivided beneficial interest in
specified retail automobile and light-duty truck leases originated in the
states of California, New York and Pennsylvania (the "Series 1995-1 Leases"),
all payments from lessees (the "Obligors") thereunder, the related leased
vehicles (the "Series 1995-1 Leased Vehicles") and all proceeds from the sale
of Series 1995-1 Leased Vehicles upon termination of the related Series 1995-1
Leases. Subject to the security interest granted to the Indenture Trustee
pursuant to the Indenture to secure the Notes, the Issuer will enter into the
Program Operating Lease with the Transferor pursuant to which the Transferor
will be entitled to the benefits of the Series 1995-1 Certificates during the
term of the underlying Series 1995-1 Leases in exchange for the payment by the
Transferor of certain amounts paid under the underlying Series 1995-1 Leases
and paid from the sale of Series 1995-1 Leased Vehicles. These payments will
be applied by the Issuer, together with other amounts payable on the Series
1995-1 Certificates, to pay interest on and principal of the Notes and Lease
Trust Certificates. See "Series 1995-1 Certificates--Lease of the Series
1995-1 Certificates to the Transferor." The Issuer will have the benefit of
the Reserve Account established by the Transferor to secure certain of its
payments under the Program Operating Lease and the benefit of the Limited RV
Guaranty issued by Ford Credit to cover shortfalls, if any, between the
Residual Value (as defined herein) of Series 1995-1 Leased Vehicles which are
sold on or after expiration of the related Series 1995-1 Leases and the amounts
actually received from the sale of such vehicles. In addition, the aggregate
initial principal balance of the Notes and Lease Trust Certificates will be
overcollateralized to the extent that the initial Pool Balance (as defined
herein) exceeds such aggregate initial principal balance. As outlined above
and as more fully described herein, the sources of payments on the Notes will
be limited to the Series 1995-1 Certificates (including the payments by the
Transferor under the Program Operating Lease and the overcollateralization
provided by the excess of the initial Pool Balance over the aggregate initial
balance of the Notes and the Lease Trust Certificates) and the benefits
provided by the Reserve Account and the Limited RV Guaranty.
Interest on the Notes will accrue at the respective fixed per
annum interest rates specified above and generally will be payable quarterly
on ____________ 15, ____________ 15, ____________ 15 and ____________ 15 of
each year, commencing ____________ 15, 1995 or, if any such day is not a
business day, on the next succeeding business day (each, a "Payment Date").
Principal of the Notes will be payable on each Payment Date to the extent
described herein. No principal payments will be made (i) on the Class A-2
Notes until the Class A-1 Notes have been paid in full or (ii) on the Class A-3
Notes until the Class A-1 Notes and the Class A-2 Notes have been paid in full;
provided that if an Event of Default under the Indenture has occurred and the
maturity of the Notes has been accelerated, principal payments will be made on
the Notes on a pro rata basis based on their respective principal balances,
without any distinction among Classes. No principal will be payable on the
Lease Trust Certificates until the Notes have been paid in full.
The Stated Maturity of the Class A-1 Notes will be the _____
15, 199_ Payment Date. The Stated Maturity of the Class A-2 Notes and the
Class A-3 Notes will be the ________ 15, 199_ Payment Date. However, payment
in full of any Class of Notes could occur earlier than such date as described
herein.
PROSPECTIVE INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH
UNDER "SPECIAL CONSIDERATIONS" FOR A DISCUSSION OF THE MATERIAL RISKS IN
CONNECTION WITH THE PURCHASE OF THE NOTES.
THERE IS CURRENTLY NO SECONDARY MARKET FOR THE NOTES OFFERED
HEREBY. THE UNDERWRITER EXPECTS, BUT WILL NOT BE OBLIGATED, TO MAKE A MARKET
IN THE NOTES. THERE CAN BE NO ASSURANCE THAT A SECONDARY MARKET FOR ANY OF THE
NOTES WILL DEVELOP OR, IF ONE DOES DEVELOP, THAT IT WILL PROVIDE THE
NOTEHOLDERS WITH LIQUIDITY OF INVESTMENT OR THAT IT WILL CONTINUE FOR THE LIFE
OF THE NOTES OFFERED HEREBY.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE NOTES AT
2
<PAGE> 5
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRANSFEROR, THE ISSUER, THE
ADMINISTRATIVE AGENT OR THE UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS, NOR ANY SALE MADE HEREUNDER, SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
UNTIL ____________, 1995 (90 DAYS AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE NOTES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reports to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Ford Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Property of the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
FCTT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
The Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Series 1995-1 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
The Leases and Leased Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Maturity, Prepayment and Yield Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Pool Factors and Trading Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . 42
Description of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Description of the Administrative Agency Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Additional Document Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Ratings of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Certain Legal Aspects of FCTT and the Series 1995-1 Certificates . . . . . . . . . . . . . . . . . . . . . 68
Certain Legal Aspects of the Leases and Leased Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Certain State Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>
3
<PAGE> 6
INCORPORATION BY REFERENCE
Ford Motor Credit Company ("Ford Credit") is subject to the
reporting requirements under the Securities Exchange Act of 1934, as amended.
Ford Credit's Annual Report on Form 10-K for the year ended December 31, 1993,
Ford Credit's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994, June 30, 1994 and September 30, 1994 and Ford Credit's Current Reports
on Form 8-K dated January 11, 1994, February 11, 1994, February 25, 1994, March
18, 1994, April 14, 1994, May 11, 1994, June 27, 1994, August 22, 1994, October
17, 1994, October 31, 1994, December 9, 1994, January 17, 1995, February 13,
1995, February 17, 1995 and February 21, 1995 are incorporated in this
Prospectus by reference. All documents filed by Ford Credit pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date of this Prospectus and prior to the termination of the offering of the
Notes shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing of such documents. Such reports
include, and such documents may include, information concerning Ford Motor
Company, as well as Ford Credit.
Ford Credit undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, on the written or
oral request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated by reference in this Prospectus
other than exhibits to such documents. Written or telephonic requests for such
documents should be directed to Ford Motor Credit Company, The American Road,
Dearborn, Michigan 48121, Attention: Public Affairs Department (Telephone:
313-584-1096).
AVAILABLE INFORMATION
The Transferor, as originator of the Issuer, has filed a
Registration Statement under the Securities Act of 1933, as amended, with the
Securities and Exchange Commission (the "Commission") on behalf of the Issuer
with respect to the Notes offered pursuant to this Prospectus. For further
information, reference is made to the Registration Statement and amendments
thereof and to the exhibits thereto, which are available for inspection without
charge at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center, 13th Floor,
New York, New York 10048; and Northwest Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of the Registration Statement and amendments
thereof and exhibits thereto may be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.
REPORTS TO NOTEHOLDERS
Unless and until Definitive Notes are issued, quarterly
unaudited reports containing information concerning the Issuer will be prepared
by the Administrative Agent and sent by the Indenture Trustee on behalf of the
Issuer only to Cede & Co. ("Cede"), as nominee of The Depository Trust Company
("DTC") and registered holder of the Notes. See "Description of the
Notes--Book-Entry Registration." Such reports will not constitute financial
statements prepared in accordance with generally accepted accounting
principles. See "Pool Factors and Trading Information" for additional
information concerning periodic reports to Noteholders.
4
<PAGE> 7
OVERVIEW -- TRANSFER OF SERIES 1995-1 CERTIFICATES
[CHART]
5
<PAGE> 8
SUMMARY
The following summary is qualified in its entirety by
reference to the detailed information appearing elsewhere in this Prospectus.
Certain capitalized terms used herein are defined in the "Glossary of Terms" or
elsewhere in this Prospectus.
Overview . . . . . . . As more fully described herein, Dealers located in
California, New York and Pennsylvania have
originated certain retail lease contracts for
automobiles and light-duty trucks on or after
____________, 1994 and have assigned and will
assign such lease contracts and the related
vehicles to the Ford Credit Titling Trust
("FCTT"), a trust established by Ford Credit and
Ford Credit Leasing, a special purpose wholly-
owned subsidiary of Ford Credit. Ford Credit and
Ford Credit Leasing are the initial beneficiaries
of FCTT and have instructed the Administrative
Agent to select, in accordance with certain
eligibility criteria, Leases and Leased Vehicles
held by FCTT to be designated as Series 1995-1
Assets. On the Closing Date, the Series 1995-1
Certificates representing the beneficial interest
in the Series 1995-1 Assets will be issued to Ford
Credit and Ford Credit Leasing. Immediately
thereafter, Ford Credit and Ford Credit Leasing
will contribute their Series 1995-1 Certificates
to the Transferor which in turn will transfer the
Series 1995-1 Certificates to the Issuer. The
Issuer will issue the Notes pursuant to the
Indenture and will pledge the Series 1995-1
Certificates to the Indenture Trustee as security
for the Notes.
Pursuant to the Program Operating Lease the Issuer
will lease the Series 1995-1 Certificates,
subject to the lien securing the Notes, back to
the Transferor in exchange for the obligation of
the Transferor to make certain payments during the
period that each underlying Series 1995-1 Leased
Vehicle is subject to the Program Operating Lease.
Such payments (the "Program Operating Lease
Payments") generally will be equal to the Monthly
Payments scheduled to be made by Obligors under
the Series 1995-1 Leases, any amounts scheduled to
be paid in respect of Excess Wear and Tear and
Excess Mileage by Obligors under the Series 1995-1
Leases and an amount equal to the Adjusted Balance
Subject to Lease Charges of Series 1995-1 Leased
Vehicles which are sold before their Scheduled
Lease End Dates. The Issuer will apply such
Program Operating Lease Payments, together with
certain proceeds (as described in
"Summary--Transferor Leased Vehicle Purchase
Option") from Series 1995-1 Leased Vehicles which
are sold on or after their Scheduled Lease End
Dates, to pay interest and principal on the Notes
and the Lease Trust Certificates in accordance
with their respective terms. On the Closing Date,
the Transferor will establish the Reserve Account
and Ford Credit will issue the Limited RV Guaranty
for the benefit of the Issuer. The Reserve
Account will secure the Transferor's obligation to
make Program Operating Lease Payments on a
quarterly basis in an amount equal to (x) interest
due on the Notes and Lease Trust Certificates, (y)
a specified portion of principal received on the
Series 1995-1 Leases and (z) the Uncollected
Excess Wear and Tear and Excess Mileage on the
Series 1995-1 Leases. The Limited RV Guaranty
will provide limited coverage of shortfalls
between the amounts realized from the sale of
Series 1995-1 Leased Vehicles following scheduled
terminations of the related Series 1995-1 Leases
(including amounts collected in respect of Excess
Wear and Tear and Excess Mileage and reduced by
amounts required to be remitted to the Obligor
under applicable law) and the Residual Values (as
such Residual Values are decreased by Uncollected
Excess Wear and Tear and Excess Mileage) of such
Series 1995-1 Leased Vehicles. Amounts payable to
the Issuer with respect to the Series 1995-1
Certificates and the Program Operating Lease
(including amounts drawn from the Reserve Account
and the Limited RV Guaranty) will be applied to
pay interest on and
6
<PAGE> 9
principal of the Notes. The Issuer has pledged
such amounts to the Indenture Trustee to secure
payment of the Notes.
The Issuer . . . . . . Ford Credit Auto Lease Trust 1995-1, established
pursuant to the Lease Trust Agreement.
The Lease Trustee . . . PNC Bank, Delaware, as Lease Trustee under the
Lease Trust Agreement.
The Indenture Trustee . Chemical Bank, as Indenture Trustee under the
Indenture.
The Administrative
Agent and Limited
Guarantor . . . . . . . Ford Credit, a wholly owned subsidiary of Ford
Motor Company, is the Administrative Agent and the
provider of the Limited RV Guaranty. See
"Description of the Administrative Agency
Agreement" and "Description of the Notes--Limited
RV Guaranty."
Ford Credit Leasing . . Ford Credit Leasing Company, Inc., a wholly-owned
special purpose subsidiary of Ford Credit.
The Transferor . . . . The Transferor will be formed by Ford Credit and
Ford Credit Leasing as a Delaware business trust
pursuant to the RCL Trust Agreement. The RCL
Trustee is The Chase Manhattan Bank (USA), a
Delaware banking corporation. See "The
Transferor."
The Notes . . . . . . . On the Closing Date the Issuer will issue,
pursuant to the Indenture, Class A-1 Notes in an
initial principal balance of $__________; Class
A-2 Notes in an initial principal balance of
$__________; and Class A-3 Notes in an initial
principal balance of $__________. Concurrently
with the issuance of the Notes, the Issuer will
issue Lease Trust Certificates in an initial
principal balance of $________. The Lease Trust
Certificates are not being offered hereby.
Interest . . . . . . . The Class A-1 Notes will bear interest at the
rate of ___% per annum, the Class A-2 Notes
will bear interest at the rate of __% per
annum and the Class A-3 Notes will bear
interest at the rate of __% per annum.
Interest on the principal balance of the
Notes will accrue at the applicable interest
rate either from and including the Closing
Date (in the case of the first Payment Date)
or from and including the fifteenth day of
the third calendar month preceding the
calendar month in which such Payment Date
occurs, to but excluding the fifteenth day of
the calendar month in which such Payment Date
occurs. Interest will be payable on each
Payment Date to Noteholders of record on the
Record Date. Interest accrued but not paid
as of any Payment Date will be due on the
next Payment Date together with interest on
such amount (to the extent lawful) at a rate
per annum equal to the interest rate for the
applicable Class plus 2.0%. Interest will be
calculated based on a 360-day year of twelve
30-day months. See "Description of the
Notes--Interest."
Principal . . . . . . . The aggregate amount of principal of the
Notes paid on each Payment Date will equal
the Total Available Funds remaining after
giving effect on such Payment Date to (i) the
payment of the Administrative Agent Fee,
(ii) the payment of interest on each Class of
Notes outstanding and on the Lease Trust
Certificates, (iii) the payment of the
Limited RV Guaranty Fee and (iv) the deposit
to the Reserve Account of the Reserve
Account Deposit Amount, if any. Principal of
the Notes will be paid to holders of each
Class of Notes sequentially until the
principal balance of such Class is reduced to
zero. No principal payments will be made (i)
on the Class A-2 Notes until the principal
balance of the Class A-1 Notes has been
reduced to zero, (ii) on
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<PAGE> 10
the Class A-3 Notes until the principal
balance of the Class A-1 Notes and the Class
A-2 Notes have each been reduced to zero, and
(iii) on the Lease Trust Certificates until
the principal balance of the Class A-3 Notes
has been reduced to zero; provided that if an
Event of Default under the Indenture has
occurred and the maturity of the Notes has
been accelerated, principal payments will be
made on a pro rata basis to holders of the
Class A-1 Notes, the Class A-2 Notes and
Class A-3 Notes based on their respective
principal balances without any distinction
among Classes. See "Description of the
Notes--Indenture" for a discussion of the
Events of Default under the Indenture and the
remedies available to the Indenture Trustee
and the Noteholders.
As described in "Description of the
Notes--The Indenture Cash Flows," the "Total
Available Funds" available to make payments
on any Payment Date will be equal to the sum
of the Available Funds, the Reserve Account
Draw Amount, the Reserve Account Release
Amount and the RV Guaranty Draw Amount, and
the "Available Funds" on deposit in the
Collection Account on any Payment Date will
be equal to the Collections deposited therein
on each of the two Distribution Dates
preceding and the Distribution Date occurring
on such Payment Date (or on each business day
during the related Accrual Period if any
Monthly Remittance Condition has not been
satisfied) plus the Aggregate Net Sale
Proceeds Advances and Aggregate Net Monthly
Payment Advances deposited on such Payment
Date. See "Description of the Notes--Reserve
Account Withdrawals and Deposits" for a
description of how the Reserve Account Draw
Amount and the Reserve Account Release Amount
are calculated and "Description of the
Notes--Limited RV Guaranty" for a description
of how the RV Guaranty Draw Amount is
calculated.
The rate of payment and the yield to
maturity on each Class of Notes generally
will be directly related to the rate at which
payments are made on the Series 1995-1 Leases
and in respect of the Series 1995-1 Leased
Vehicles. The rate of prepayments on the
Series 1995-1 Leases may be influenced by a
variety of economic, social and other factors
including competing consumer finance products
and the conditions in the used car market.
If there are prepayments in full of the
Series 1995-1 Leases, Noteholders will bear
the risk of being able to reinvest principal
payments of the Notes at yields at least
equal to the yield on their respective Class
of Notes. For further discussion of the
factors which may affect the amount and
timing of payments of principal of the Notes,
see "Maturity, Prepayment and Yield
Considerations." See also "Description of
the Notes--Principal" and "--The Indenture
Cash Flows."
Optional
Redemption
of the Notes . . . . . The Administrative Agent may, at its option,
purchase the Series 1995-1 Certificates on
any Payment Date on which the Pool Balance
has declined to less than 10% of the Initial
Pool Balance. The Initial Pool Balance will
exceed the initial aggregate principal
balance of the Notes by __%. The Issuer does
not anticipate, although no assurances can be
given, that the Pool Balance will decline to
a level permitting the Administrative Agent
to purchase the Series 1995-1 Certificates
while the Notes are outstanding. If,
however, such a decline occurs and the
Administrative Agent exercises such option,
the Notes will be redeemed in whole, but not
in part, on the Payment Date of such
exercise. See "Description of the
Notes--Optional Redemption."
FCTT . . . . . . . FCTT is a trust formed pursuant to the FCTT
Agreement. The FCTT Trustee is Comerica Bank,
a Michigan banking corporation. FCTT was
formed for the purpose of holding title to
vehicles subject to leases in order to enable
Ford Credit to obtain the benefits of
financing such vehicles and leases without
retitling. Vehicles which would otherwise be
sold by Dealers to Ford Credit are instead
sold to FCTT. The
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<PAGE> 11
FCTT Trustee will hold the assets of FCTT in
trust for the benefit of the beneficiaries of
FCTT. As of the date of this Prospectus, the
primary assets of FCTT are Leases and Leased
Vehicles assigned to it by Dealers located in
California, New York and Pennsylvania and all
amounts payable in connection therewith. See
"FCTT--Creation of FCTT by Ford Credit and
Ford Credit Leasing." Until Series 1995-1
Assets are designated and Series 1995-1
Certificates are issued in connection with
the securitization described in this
Prospectus, Ford Credit and Ford Credit
Leasing will be the only beneficiaries of
FCTT. Ford Credit will hold an Exchangeable
Beneficial Certificate (an "EBC")
representing a 98% beneficial interest in
FCTT and the FCTT Assets and Ford Credit
Leasing will hold an EBC representing a 2%
beneficial interest in FCTT and the FCTT
Assets. After the issuance of the Series
1995-1 Certificates on the Closing Date, the
EBCs will represent the beneficial interest
in the FCTT Assets other than the Series
1995-1 Assets and any other Series Specified
Assets which are designated from time to
time. See "FCTT--Exchangeable Beneficial
Certificates and Specified Beneficial
Certificates."
Payments by or on behalf of Obligors made on
or in respect of FCTT Assets other than the
Series 1995-1 Assets will not be available to
make payments on the Notes or the Lease Trust
Certificates. Neither Ford Credit nor Ford
Credit Leasing, as holders of the EBCs, nor
holders of any Specified Beneficial
Certificates ("SBCs") which may be issued
from time to time (whether in connection with
a future securitization or for any other
purpose) will have any interest in the Series
1995-1 Assets.
The Series 1995-1
Assets . . . . . . . The Series 1995-1 Leases will consist of a
pool of retail closed-end lease contracts
originated by Dealers and assigned to FCTT.
Each Series 1995-1 Lease is an operating
lease for accounting purposes and a "true
lease" for tax purposes and will be purchased
by FCTT, together with the related Series
1995-1 Leased Vehicle, from the Dealer for an
amount equal to the Balance Subject to Lease
Charges. The Obligor under each Series 1995-1
Lease is obligated to make a fixed total
monthly payment (a "Total Monthly Payment")
to the Administrative Agent, acting on behalf
of FCTT and the holders of the Series 1995-1
Certificates, equal to the sum of (i) the
Monthly Payment, (ii) the Use and Lease Tax
Amount (payable to tax authorities), and
(iii) the Vehicle Insurance and Maintenance
Amount (payable to Dealers). Only the
Monthly Payment portion of each Total Monthly
Payment is available to holders of the Series
1995-1 Certificates. See "Description of the
Administrative Agency Agreement--Remittance
of Payments; Allocation of Funds."
The Monthly Payments remitted by Obligors
will be used to make Program Operating Lease
Payments to the Issuer and are included in
the Total Available Funds used to pay
interest on and principal of the Notes and
Lease Trust Certificates. See "Description
of the Notes--The Indenture Cash Flows."
The Series 1995-1 Leases consist of ________
individual Leases. The aggregate Balance
Subject to Lease Charges of the Series 1995-1
Leases as of their respective dates of
origination was $_________. As of the Series
1995-1 Cut-Off Date, the Pool Balance was
$_________ (the "Initial Pool Balance") and
the aggregate Residual Values of the Series
1995-1 Leased Vehicles were $________. The
Series 1995-1 Leases and Series 1995-1 Leased
Vehicles were selected by the Administrative
Agent at the direction of Ford Credit and
Ford Credit Leasing as holders of the EBCs
from FCTT's portfolio of Leases and Leased
Vehicles, based upon the General Eligibility
Criteria and the Specific Eligibility
Criteria described herein. See "The Leases
and Leased Vehicles," "FCTT--Exchangeable
Beneficial Certificates and Specified
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<PAGE> 12
Beneficial Certificates" and "Additional Document
Provisions -- Representations, Warranties and
Covenants."
The Series 1995-1
Certificates . . . . . The Series 1995-1 Certificates will represent
in the aggregate a 100% beneficial interest
in the Series 1995-1 Assets and will entitle
the holders thereof to all proceeds of and
payments in connection with the Series 1995-1
Assets. The Series 1995-1 Certificates will
not evidence legal title to or direct
ownership of the Series 1995-1 Assets nor
will they represent a beneficial interest in
any FCTT Assets other than the Series 1995-1
Assets. See "FCTT--Exchangeable Beneficial
Certificates and Specified Beneficial
Certificates." The Indenture Trustee as
assignee of the Issuer will have a perfected
security interest in the underlying Series
1995-1 Leases but will not have a security
interest in the underlying Series 1995-1
Leased Vehicles. For a discussion of the
security interests in the Series 1995-1
Certificates, the Series 1995-1 Leases and
the Series 1995-1 Leased Vehicles, see
"Certain Legal Aspects of the Leases and
Leased Vehicles."
Contribution, Transfer,
and Lease of Series
1995-1 Certificates . . On the Closing Date, Ford Credit and Ford
Credit Leasing each will contribute their
respective Series 1995-1 Certificates to the
Transferor pursuant to the Asset Contribution
Agreement. The Transferor will transfer the
Series 1995-1 Certificates to the Issuer
pursuant to the Transfer Agreement. Subject
to the pledge by the Issuer of its interest
in such Series 1995-1 Certificates to the
Indenture Trustee to secure payment of the
Notes, the Issuer will lease the Series
1995-1 Certificates back to the Transferor
pursuant to the Program Operating Lease. The
Transferor will assign 1% of all of its
assets and obligations, including its rights
and obligations under the Program Operating
Lease and the Transferor Lease Trust
Certificate, to Ford Credit Leasing. For
convenience, however, these rights and
obligations are referred to herein as rights
and obligations of the Transferor. See "The
Transferor--Creation by Ford Credit and Ford
Credit Leasing; Assignment to Ford Credit
Leasing."
Under the Program Operating Lease, the
Transferor will be entitled to receive all
payments and proceeds with respect to the
Series 1995-1 Certificates during the term of
the Program Operating Lease and will be
required to use such proceeds to make
payments to the Issuer under the Program
Operating Lease. Because the Program
Operating Lease expires with respect to the
portion of the Series 1995-1 Certificates
representing the beneficial interest in a
Series 1995-1 Leased Vehicle at the end of
the related Series 1995-1 Lease (and before
the subsequent sale of such Series 1995-1
Leased Vehicle), the Issuer will receive
directly the proceeds from the sale of Series
1995-1 Leased Vehicles following scheduled
termination of the related Series 1995-1
Leases. Except for certain amounts allocated
for payment to the Transferor in the event
that a Series 1995-1 Leased Vehicle is sold
for more than its Residual Value (as reduced
by Uncollected Excess Wear and Tear and
Excess Mileage) at the end of the related
Series 1995-1 Lease, during the term of the
Program Operating Lease all payments and
proceeds with respect to Series 1995-1 Assets
will be paid through to the Issuer either as
holder of the Series 1995-1 Certificates or
as lessor under the Program Operating Lease.
See "Series 1995-1 Certificates."
Property of the Issuer;
Pledge to the
Indenture Trustee . . . Pursuant to the Indenture and prior to
entering into the Program Operating Lease,
the Issuer will pledge its interest in the
Lease Trust Estate to secure its obligation
to pay interest and principal on the Notes.
The "Lease Trust Estate" consists of (i) the
rights
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<PAGE> 13
of the Issuer under the Series 1995-1
Certificates, (ii) the rights under the
Program Operating Lease, (iii) the Issuer's
rights to all funds on deposit from time to
time in the Collection Account and the
Payahead Account (including investment income
on amounts on deposit in the Collection
Account) and proceeds thereof, (iv) the
Payment Account and proceeds thereof, (v)
the rights of the Transferor under the Asset
Contribution Agreement, (vi) the rights as
beneficiary of the Limited RV Guaranty, (vii)
the rights as holder of the Series 1995-1
Certificates under the Administrative Agency
Agreement and the Series 1995-1 Supplement,
(viii) the security interest of the Issuer in
amounts credited to the Reserve Account and
the right to make withdrawals therefrom and
(ix) all proceeds of the foregoing. See
"Property of the Issuer" and "Series 1995-1
Certificates--Pledge of the Series 1995-1
Certificates to the Indenture Trustee."
Transferor Leased
Vehicle Purchase
Option . . . . . . . Under the Program Operating Lease, the
Transferor may, at its option, purchase the
Issuer's beneficial interest in any Series
1995-1 Leased Vehicle which is sold at
auction following the Scheduled Lease End
Date of the related Series 1995-1 Lease. The
Transferor may exercise such option by
paying to the Issuer an amount equal to the
Residual Value of such Series 1995-1 Leased
Vehicle minus any amounts due from the
related Obligor for Uncollected Excess Wear
and Tear and Excess Mileage (such amount, the
"Transferor Purchase Option Price"). The
Transferor will only exercise such option if
neither the Obligor nor the Dealer exercises
its option to purchase the Series 1995-1
Leased Vehicle, and the Sale Proceeds of such
Series 1995-1 Leased Vehicle exceed the
Transferor Purchase Option Price. Because
the Transferor intends to exercise this
option when available, Sale Proceeds received
by the Issuer with respect to any Series
1995-1 Leased Vehicle the related Series
1995-1 Lease of which terminated on or after
its Scheduled Lease End Date will never
exceed the Transferor Purchase Option Price.
The Transferor will retain any excess of the
Sale Proceeds of such Series 1995-1 Leased
Vehicle over the related Transferor Purchase
Option Price, and such amounts will not be
available to pay interest or principal on the
Notes. See "Series 1995-1 Certificates--
Lease of the Series 1995-1 Certificates to
the Transferor" for further discussion of the
purchase option of the Transferor and
"Description of the Administrative Agency
Agreement--Sale of Leased Vehicles" for a
discussion of the process by which the
Administrative Agent sells Series 1995-1
Leased Vehicles after their respective
Scheduled Lease End Dates.
Noteholders will not be subject to delay in
receipt of principal resulting from a delay
in the sale of Series 1995-1 Leased Vehicles
after their respective Scheduled Lease End
Dates to the extent that the Administrative
Agent makes Sale Proceeds Advances of the
Residual Values of Series 1995-1 Leased
Vehicles as described in "--Sale Proceeds
Advances" and "Description of the
Administrative Agency Agreement--Advances of
Sale Proceeds."
Reserve Account . . . . Amounts on deposit in the Reserve Account
from time to time (the "Reserve Account
Amount") are available to cover shortfalls in
the Basic Payment portion of Program
Operating Lease Payments. The "Basic
Payment," as of any Payment Date, is the sum
of (i) the Required Interest Payment, (ii)
the portion of the Pool Balance Decline
resulting from the termination of Series
1995-1 Leases before their respective
Scheduled Lease End Dates, (iii) the portion
of the aggregate Monthly Payments allocated
to a decline in the aggregate Adjusted
Balance Subject to Lease Charges of the
Series 1995-1 Leases and (iv) the Uncollected
Excess Wear and Tear and Excess Mileage with
respect to Series 1995-1 Leases for such
Accrual Period. The "Initial Reserve Account
Deposit" is $________. On each Payment Date
on which the
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<PAGE> 14
Reserve Account Amount is less than the
Required Reserve Account Amount for such
Payment Date, after giving effect to any
withdrawal of a Reserve Account Draw Amount
on such Payment Date, the Indenture Trustee
will deposit, from Total Available Funds, the
Reserve Account Deposit Amount, if any, in
the Reserve Account. The "Required Reserve
Account Amount" as of any Payment Date will
be the lesser of (i) __% of the Pool Balance
as of the last day of the related Accrual
Period and (ii) the sum of the aggregate
principal balance of the Notes and the Lease
Trust Certificates as of such Payment Date,
before giving effect to any payments made on
such Payment Date; provided that the Required
Reserve Account Amount will not in any event
be less than $__________. On each Payment
Date, the Indenture Trustee will, if
necessary, withdraw the Reserve Account Draw
Amount from the Reserve Account and use such
amount to pay the Program Operating Lease
Payments. To the extent that on any Payment
Date the Reserve Account Amount is greater
than the Required Reserve Account Amount,
after giving effect to any withdrawal of a
Reserve Account Draw Amount on such Payment
Date, the Indenture Trustee will release the
Reserve Account Release Amount from the
Reserve Account. The Reserve Account Release
Amount, if any, and the Reserve Account Draw
Amount, if any, will be included in the Total
Available Funds available for distribution to
Noteholders and Lease Trust
Certificateholders. See "Description of the
Notes--Reserve Account Withdrawals and
Deposits" and "--The Indenture Cash Flows."
Limited RV
Guaranty . . . . . . . The Limited RV Guaranty, issued by Ford
Credit in favor of the Issuer, will cover the
shortfall, if any, between (x) the Residual
Value (as decreased by Uncollected Excess
Wear and Tear and Excess Mileage) of a Series
1995-1 Leased Vehicle the related Series
1995-1 Lease of which terminated on or after
its Scheduled Lease End Date and (y) proceeds
from the sale thereof (including amounts
collected in respect of Excess Wear and Tear
and Excess Mileage and reduced by amounts
required to be remitted to the Obligor under
applicable law). If the Transferor exercises
its option to purchase a Series 1995-1 Leased
Vehicle, the proceeds from the sale available
to the Issuer will be limited to the
Transferor Purchase Option Price.
The Limited RV Guaranty will not exceed an
aggregate amount of $______ for all Series
1995-1 Leased Vehicles. No reinstatement
will be made for amounts drawn under the
Limited RV Guaranty. See "Description of the
Notes--Limited RV Guaranty." The Limited RV
Guaranty will not cover shortfalls, if any,
in proceeds from the sale of Series 1995-1
Leased Vehicles as a result of early
terminations (voluntary or liquidations) or
shortfalls in Monthly Payments from or
amounts owed in respect of Excess Wear and
Tear and Excess Mileage by Obligors (which
amounts are considered to be Series 1995-1
Credit Losses and not Series 1995-1 Residual
Losses because the Obligors are contractually
committed to pay such amounts). Any such
shortfalls will be covered, to the extent
necessary for the Transferor to make the
Basic Payment under the Program Operating
Lease and to the extent funds are available
therefor, by amounts on deposit in the
Reserve Account.
As compensation for providing the Limited RV
Guaranty, Ford Credit will be entitled to
receive the Limited RV Guaranty Fee on each
Payment Date in the amount of ___% (per
annum) of the outstanding amount of such
Limited RV Guaranty, before giving effect to
amounts drawn on the Limited RV Guaranty on
such Payment Date. See "Description of the
Notes--Limited RV Guaranty" and "--The
Indenture Cash Flows."
Overcollateralization . On the Closing Date, the Issuer will acquire
the Series 1995-1 Certificates representing a
beneficial interest in Series 1995-1 Assets
with an Initial Pool Balance of $____.
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<PAGE> 15
Because the initial principal balance of the
Notes and Lease Trust Certificates
constitutes __% of the Initial Pool Balance
as of the Closing Date, the remaining portion
of the Initial Pool Balance provides
overcollateralization for the benefit of the
Notes and the Lease Trust Certificates.
When the principal balance of the Notes and
the Lease Trust Certificates have each been
reduced to zero, the Issuer will be dissolved
and the remaining assets, including the
Series 1995-1 Certificates, will be
distributed to the Transferor. See "The
Issuer--Capitalization of the Issuer."
The Administrative
Agent . . . . . . . The Administrative Agent will act as servicer
with respect to all Leases and Leased
Vehicles owned by FCTT (including the Series
1995-1 Leases and Series 1995-1 Leased
Vehicles) and will be the custodian of the
related Lease Files. The Administrative
Agent will receive the Administrative Agent
Fee and the Supplemental Administrative Agent
Fee as additional compensation for servicing
the Series 1995-1 Assets (including disposing
of Series 1995-1 Leased Vehicles) and
administering the distribution of funds in
respect thereof. The Administrative Agent
Fee as of any Payment Date will be equal to
the sum of the product of 1% per annum and
the Pool Balance as of the beginning of each
Collection Period in the related Accrual
Period. See "Description of the
Administrative Agency Agreement."
Administrative
Purchases . . . . . . . Ford Credit and Ford Credit Leasing, as
holders of the EBCs, will be required to
purchase the beneficial interest in any
Series 1995-1 Lease and Series 1995-1 Leased
Vehicle as to which (i) all of the Specific
Eligibility Criteria and General Eligibility
Criteria were not satisfied on the Series
1995-1 Cut-Off Date, (ii) an uncured breach
of certain covenants by the Administrative
Agent has occurred, (iii) the Administrative
Agent has granted a Term Extension or (iv)
the Series 1995-1 Leased Vehicle is relocated
to a jurisdiction in which FCTT is not
authorized to hold the related certificate
of title. Any such purchase shall be
effected by the deposit of the Administrative
Purchase Amount in the Collection Account on
the Distribution Date following discovery of
such occurrence. See "Description of the
Administrative Agency
Agreement--Administrative Purchases."
Monthly
Payment Advances . . . The Administrative Agent will be obligated to
make a Monthly Payment Advance in an amount
equal to any unpaid portion of the Monthly
Payments due under a Series 1995-1 Lease
during an Accrual Period, but only if the
Administrative Agent determines, in its sole
discretion, that such Monthly Payment Advance
will be recoverable from subsequent
Collections on such Series 1995-1 Lease
(excluding Sale Proceeds). See "Description
of the Notes--Advances" and "Description of
the Administrative Agency Agreement--Monthly
Payment Advances."
Sale Proceeds
Advances . . . . . . . The Administrative Agent will be obligated to
make a Sale Proceeds Advance in an amount
equal to the Residual Value of any Series
1995-1 Leased Vehicle which has not been sold
by the last business day of the Accrual
Period in which the Scheduled Lease End Date
of the related Series 1995-1 Lease occurred,
but only if the Administrative Agent
determines, in its sole discretion, that such
Sale Proceeds Advance will be recoverable
from the Sale Proceeds of such Series 1995-1
Leased Vehicle. See "Description of the
Notes--Advances" and "Description of the
Administrative Agency Agreement--Advances of
Sale Proceeds."
Tax Status . . . . . . Special Tax Counsel will render its opinion,
subject to the matters discussed under
"Certain Federal Income Tax Consequences,"
that for federal income tax purposes
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<PAGE> 16
(i) the Notes will be characterized as debt
and (ii) neither FCTT, the Transferor nor the
Issuer will be subject to taxation at the
entity level. In the opinion of Michigan Tax
Counsel, assuming the foregoing
characterizations for federal income tax
purposes, (i) the Notes will be
characterized as debt for Michigan income and
single business tax purposes, (ii) none of
FCTT, the Transferor or the Issuer will incur
a liability under either the Michigan single
business tax or the Michigan income tax at
the entity level and (iii) Holders not
otherwise subject to tax in Michigan would
not become subject to tax in Michigan solely
because of a Holder's ownership of the Notes.
See "Certain Federal Income Tax Consequences"
and "Certain State Tax Consequences" for
additional information concerning the
application of federal income tax and
Michigan tax laws, respectively.
ERISA
Considerations . . . . Subject to the considerations discussed under
"ERISA Considerations," the Notes are
eligible for purchase by employee benefit
plans.
Ratings of
the Notes . . . . . . . It is a condition of the issuance of the
Class A-1 Notes that the Class A-1 Notes be
rated "AAA" or its equivalent by at least one
Rating Agency. It is a condition of the
issuance of the Class A-2 Notes that the
Class A-2 Notes be rated "AAA" or its
equivalent by at least one Rating Agency. It
is a condition of the issuance of the Class
A-3 Notes that the Class A-3 Notes be rated
no lower than "A" or its equivalent by at
least one Rating Agency. The rating of the
Class A-3 Notes is based in part on the
rating of Ford Credit as the provider of the
Limited RV Guaranty. There can be no
assurance that such ratings will not be
lowered or withdrawn by a Rating Agency if
circumstances so warrant. See "Ratings of
the Notes," "Special Considerations--ERISA
Liabilities; Effect on Ratings" and "--Rating
of Class A-3 Notes Dependent on Ford Credit
Performance Under Limited RV Guaranty."
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<PAGE> 17
SPECIAL CONSIDERATIONS
LIMITED LIQUIDITY
There is currently no secondary market for the Notes offered hereby.
The Underwriter expects, but will not be obligated, to make a market in the
Notes. There can be no assurance that a secondary market for any of the Notes
will develop or, if one does develop, that it will provide the Noteholders with
liquidity of investment or that it will continue for the life of the Notes
offered hereby.
LIMITED ASSETS
The assets of the Issuer, which have been pledged to the Indenture
Trustee to secure the payment of interest and principal on the Notes, are
limited to the Lease Trust Estate, including the interest in the Series 1995-1
Certificates held by the Issuer under the Program Operating Lease, the right to
receive payments from the Transferor under the Program Operating Lease, a
security interest in the amounts credited to the Reserve Account to secure
certain of the payments required under the Program Operating Lease and the
rights as beneficiary of the Limited RV Guaranty. The Issuer will not have,
nor is it permitted or expected to have, any other significant assets or other
sources of funds. The Notes represent obligations of the Issuer, and are not
insured or guaranteed by the Transferor, Ford Credit, Ford Credit Leasing, the
RCL Trustee, the Lease Trustee, the Indenture Trustee or any other person or
entity. Moreover, although payment of interest and principal on the Notes is
ultimately dependent on the payments made under the Series 1995-1 Leases by
Obligors and proceeds from the disposition of the Series 1995-1 Leased
Vehicles, neither the Issuer nor the Transferor has a direct ownership interest
in any Series 1995-1 Lease or a direct ownership interest or perfected
security interest in any Series 1995-1 Leased Vehicle. Because the interest of
the Indenture Trustee, as pledgee of the Issuer, is in the Series 1995-1
Certificates and other assets described above and not in the Series 1995-1
Assets, upon the occurrence of an Event of Default, the Indenture Trustee would
have no rights with respect to either the Series 1995-1 Leases or the Series
1995-1 Leased Vehicles but instead would be limited to exercising its rights
with respect to the Series 1995-1 Certificates and the other assets described
above. See "Property of the Issuer."
LIMITED OBLIGATIONS OF THE ISSUER, THE TRANSFEROR, FORD CREDIT AND FORD CREDIT
LEASING
The Notes are solely obligations of the Issuer, and neither the
Transferor, Ford Credit nor Ford Credit Leasing is obligated to pay interest on
or principal of the Notes (except indirectly to the extent of payments required
under the Program Operating Lease and the Limited RV Guaranty). The
Transferor's obligation to the Issuer, and Ford Credit Leasing's obligation to
the Issuer, is limited to making Program Operating Lease Payments as required
under the Program Operating Lease. If, after application of amounts on deposit
in the Reserve Account, the Transferor or Ford Credit Leasing does not have
sufficient funds to pay to the Issuer the Program Operating Lease Payments on
any Payment Date, the Noteholders could incur a loss on their investment.
Ford Credit's obligation to the Issuer to make up shortfalls in the
proceeds received in connection with the disposition of any Series 1995-1
Leased Vehicle after the scheduled expiration of the related Series 1995-1
Lease is limited to the total amount of the Limited RV Guaranty. Because the
Limited RV Guaranty is not reinstated, the aggregate amount of the Limited RV
Guaranty will be reduced by the amount, if any, paid under the Limited RV
Guaranty on any Payment Date. If the aggregate amount of the Limited RV
Guaranty is reduced to zero, the Noteholders could incur a loss on their
investment. The Limited RV Guaranty will be available only to cover shortfalls
in the amounts received for Series 1995-1 Vehicles after expiration of the
related Series 1995-1 Lease on or after its Scheduled Lease End Date. The
amount available to the Issuer from the sale of a Series 1995-1 Leased Vehicle
on or after its Scheduled Lease End Date will be reduced by the Uncollected
Excess Wear and Tear and Excess Mileage, if any, with respect to such vehicle.
In addition, the amount of Sale Proceeds received by the Issuer in the event
the Transferor exercises its option to purchase such vehicle is limited to its
Transferor Purchase Option Price (the Residual Value of such Series 1995-1
Leased Vehicle minus Uncollected Excess Wear
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and Tear and Excess Mileage, if any). Uncollected Excess Wear and Tear and
Excess Mileage will be a component of the Series 1995-1 Credit Loss with
respect to a Collection Period and, to the extent necessary for the Transferor
to make the Basic Payment under the Program Operating Lease with respect to any
Payment Date and to the extent funds are available therefor, will be covered by
amounts on deposit in the Reserve Account. See "Description of the
Notes--Limited RV Guaranty."
RESIDUAL VALUE RISK
The Residual Value of each Leased Vehicle, including each Series
1995-1 Leased Vehicle, is stated in the related Lease, including the Series
1995-1 Leases, and is determined by Ford Credit as Administrative Agent for
FCTT. Ford Credit sets the Residual Value for a particular model of Leased
Vehicle by reference to its estimate of the wholesale market value of such
model at the end of the Lease Term. However, in connection with sales
incentive programs for particular models, Ford Credit may increase the Residual
Values set forth in Leases to levels above its estimate of the wholesale market
values of such Leased Vehicles at the end of their respective Lease Terms, in
order to stimulate sales of particular models by reducing the amount of the
Total Monthly Payments which would be owed by Obligors. See "The Leases and
the Leased Vehicles--Delinquency, Repossession, Residual Value and Loss Data."
At the end of each Lease, each Leased Vehicle is either purchased by
the Obligor or the Dealer for a price greater than or equal to its Residual
Value or is returned to the Administrative Agent. For Series 1995-1 Leased
Vehicles which are purchased by the Obligor or Dealer, the full Residual Value
of such vehicles is applied to make distributions on the Series 1995-1
Certificates. To the extent that a Series 1995-1 Leased Vehicle is not
purchased by the related Obligor or Dealer, the Administrative Agent will sell
such Series 1995-1 Leased Vehicle at auction and proceeds of the sale will be
applied to make distributions on the Series 1995-1 Certificates. Any
shortfalls between (x) proceeds realized from the sale of Series 1995-1 Leased
Vehicles (including amounts collected in respect of Excess Wear and Tear and
Excess Mileage and reduced by amounts required to be remitted to the Obligor
under applicable law) after their respective Scheduled Lease End Dates and (y)
their respective Residual Values (as such Residual Values are decreased by
Uncollected Excess Wear and Tear and Excess Mileage) will reduce the amounts
available for distribution on the Series 1995-1 Certificates, and, to the
extent the Available RV Guaranty Amount is exhausted, the Noteholders could
suffer a loss on their investment. Any Sale Proceeds of a Series 1995-1 Leased
Vehicle which are in excess of its Residual Value minus Uncollected Excess Wear
and Tear and Excess Mileage will be paid to the Transferor and therefore will
not be available for distribution on the Series 1995-1 Certificates. See "The
Series 1995-1 Certificates--Lease of the Series 1995-1 Certificates to the
Transferor." As described in "Description of the Notes--Limited RV Guaranty,"
Uncollected Excess Wear and Tear and Excess Mileage is considered a Series
1995-1 Credit Loss (and not a Series 1995-1 Residual Loss) and is included in
the calculation of the Reserve Account Draw Amount (and not in the calculation
of the RV Guaranty Draw Amount). There can be no assurance that the historical
realization of the Residual Values through purchases by the Obligor or a Dealer
or from sale at auction will be indicative of future realizations on the Series
1995-1 Leased Vehicles. In addition, any shortfalls between Liquidation
Proceeds and the Adjusted Balance Subject to Lease Charges of the related
Series 1995-1 Leased Vehicle as of the date the related Series 1995-1 Lease
became a Liquidated Lease will also reduce the amounts available for
distribution on the Series 1995-1 Certificates and, to the extent that the
Reserve Account Amount is exhausted, the Noteholders could suffer a loss on
their investment.
Because on the last business day of each Accrual Period the
Administrative Agent is obligated to make a Sale Proceeds Advance of the
Residual Value of each Series 1995-1 Leased Vehicle for which the Scheduled
Lease End Date has occurred but the related Sale Proceeds have not been
received, Noteholders will not be subject to delays in the receipt of principal
payments due to delays in the sale of Series 1995-1 Leased Vehicles by the
Administrative Agent to the extent that the Administrative Agent makes such
Sale Proceeds Advances. The Administrative Agent is obligated to make a Sale
Proceeds Advance with respect to a Series 1995-1 Leased Vehicle only to the
extent that it believes such advances are recoverable from the Sale Proceeds of
such Series 1995-1 Leased Vehicle; if the Administrative Agent determined that
Sale Proceeds Advances were not recoverable from
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Sale Proceeds on the Series 1995-1 Leased Vehicles which had not been sold, or
if it otherwise failed to honor its contractual obligation to make Sale
Proceeds Advances, Noteholders could be subject to delays in the receipt of
principal payments to the extent that there is a delay in the receipt of
proceeds from the sale of Series 1995-1 Leased Vehicles. See "Description of
the Administrative Agency Agreement--Sale of Leased Vehicles" and "--Advances
of Sale Proceeds."
GEOGRAPHIC, ECONOMIC AND OTHER FACTORS
The Dealers which originated the Series 1995-1 Leases are located,
and the Obligors generally are located, in California, New York or
Pennsylvania. Due to the geographic concentration in these three states
adverse economic conditions in one or more of these states may have a
significant impact on the performance of the Series 1995-1 Assets. Economic
factors such as unemployment, interest rates, the rate of inflation and
consumer perceptions of the economy may affect the rate of prepayment and
defaults on the Series 1995-1 Leases. In addition, natural disasters in one
or more of the states may affect the rate of prepayment and defaults on the
Series 1995-1 Leases and the ability to realize the Residual Value of a Series
1995-1 Lease Vehicle upon sale. These economic factors, as well as other
factors such as consumer perceptions of used vehicle values (and Ford vehicles
in particular), may also affect the ability to realize the Residual Value of a
Series 1995-1 Leased Vehicle upon sale.
STRUCTURAL CONSIDERATIONS
Beneficial Interests
The Issuer does not directly own the Leases or the Leased Vehicles
which constitute the Series 1995-1 Assets nor does it have a perfected security
interest in the Series 1995-1 Leased Vehicles. Because ownership and,
generally, the perfection of a security interest in a vehicle is governed by
the certificate of title statute of the state in which a vehicle is located,
and because obtaining a perfected security interest or an ownership interest in
a vehicle would result in the administrative burden and expense of retitling
vehicles, title to the Series 1995-1 Assets is held by the FCTT Trustee on
behalf of FCTT which will issue the Series 1995-1 Certificates representing
beneficial interests in the Series 1995-1 Assets. Before the designation of
certain specified Leases and Leased Vehicles as the Series 1995-1 Assets and
the issuance of the Series 1995-1 Certificates, the EBCs, held by Ford Credit
and Ford Credit Leasing, will represent the beneficial interest in all of the
FCTT Assets. After the issuance of the Series 1995-1 Certificates, the FCTT
Trustee and the Administrative Agent are required to account separately for the
proceeds relating to the Series 1995-1 Assets and to the other FCTT Assets.
Neither the holders of the EBCs nor the holders of any other Series will have
any rights to the Series 1995-1 Assets, payments relating thereto or the
proceeds thereof. After the contribution of the Series 1995-1 Certificates by
Ford Credit and Ford Credit Leasing to the Transferor and the subsequent
transfer of such Series 1995-1 Certificates to the Issuer, the beneficial
interest in the Series 1995-1 Assets will be held by the Issuer, subject to the
pledge of the Series 1995-1 Certificates to the Indenture Trustee and the
rights of the Transferor under the Program Operating Lease.
Allocation of FCTT Liabilities
The FCTT Agreement provides that the holders of the Series 1995-1
Certificates are responsible for liabilities to third parties or to the FCTT
Trustee incurred in connection with any Series 1995-1 Assets and further
provides that the holders of the Series 1995-1 Certificates will not be
responsible for liabilities incurred in connection with the other assets of
FCTT. Holders of the EBCs will be responsible for any liabilities to third
parties or liabilities of FCTT incurred in connection with any Non-Specified
Assets, and the holders from time to time of any other Series will be
responsible for any liabilities to third parties and liabilities of FCTT
incurred in connection with the related Series Specified Assets. Such
allocations are not binding on third parties, and to the extent that
liabilities arising with respect to the assets of FCTT or imposed upon the FCTT
Trustee are not satisfied in accordance with the allocations described above,
the Series 1995-1 Assets could be used to satisfy such liabilities. To protect
against such liabilities, Ford Credit maintains self-insurance for the benefit
of itself and FCTT and
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maintains excess liability insurance policies naming Ford Credit and FCTT as
insured parties. In addition, Ford Credit and Ford Credit Leasing have agreed
to indemnify the Issuer and each will be liable as if FCTT were a partnership
and each were a general partner. If the Contingent and Excess Liability
Insurance is insufficient and Ford Credit and Ford Credit Leasing fail to
perform their obligations to indemnify the Issuer against such liabilities and
amounts otherwise distributable to Ford Credit and Ford Credit Leasing as
holders of the EBCs are insufficient to satisfy such liabilities, the Series
1995-1 Assets, together with the other assets of FCTT, could be used to satisfy
the liabilities to third parties and to the FCTT Trustee, and the Noteholders
could incur a loss on their investment. See "Certain Legal Aspects of FCTT and
the Series 1995-1 Certificates--Insurance."
The Issuer does not own the Series 1995-1 Assets but instead has an
indirect beneficial interest therein. Therefore, a third-party creditor or
claimant who has a perfected security interest in or otherwise obtains a lien
on any Series 1995-1 Asset will have priority over the interest of the FCTT
Trustee. If such creditor or claimant has a claim on any Series 1995-1 Asset,
the effect is the same as if such creditor or claimant had a claim on the
Issuer and the Issuer owned such Series 1995-1 Asset (that is, the Issuer's
interest in the Series 1995-1 Asset would be subject to the prior perfected
claim). However, because other assets in addition to the Series 1995-1 Assets
are held by FCTT, and third-party creditors of FCTT are not bound by the
allocation of liabilities described above, a general creditor of FCTT may
obtain a lien either on all or any one of the Series 1995-1 Assets with respect
to a claim unrelated to such Series 1995-1 Assets or on all of the assets of
FCTT, including the Series 1995-1 Assets, regardless of whether such claim
would have been allocated to such Series 1995-1 Assets under the terms of the
FCTT Agreement.
Such liens could include judgment liens arising from either
successful claims under federal and state consumer protection laws with respect
to Leases and Leased Vehicles or from successful claims against FCTT arising
from operation of Leased Vehicles constituting assets of FCTT. Other general
liens which could arise include tax liens arising against the Transferor or the
Issuer, liens arising under various federal and state criminal statutes and
certain liens in favor of the Pension Benefit Guaranty Corporation (the
"PBGC"). See "--Consumer Protection Laws," "--ERISA Liabilities; Effect on
Ratings" and "--Vicarious Tort Liability." Ford Credit and Ford Credit Leasing
have each represented that as of the Series 1995-1 Cut-Off Date, there were no
creditors or claimants with respect to the Series 1995-1 Assets or FCTT.
The FCTT Assets are located in several states, the tax laws of which
vary. In the event that any state imposes a tax on FCTT at the entity level,
Ford Credit and Ford Credit Leasing have agreed to indemnify the holders of the
SBCs for the full amount of such taxes. If Ford Credit and Ford Credit Leasing
should fail to fulfill their respective indemnification obligations, amounts
otherwise distributable to them as holders of the EBCs will be used to satisfy
such indemnification obligations. However, it is possible that the Noteholders
could incur a loss on their investment because Ford Credit and Ford Credit
Leasing did not have sufficient assets available (including on the EBCs) to
satisfy such state tax liabilities.
The FCTT Agreement provides for Ford Credit and Ford Credit Leasing
to be liable as if FCTT were a partnership and each were a general partner to
the extent necessary after giving effect to the allocation of liabilities
severally to the holders of certificates representing their respective
beneficial interest in assets of FCTT. However, it is possible that the
Noteholders could incur a loss on their investment to the extent that any such
claim was allocable to the Issuer as holder of the Series 1995-1 Certificates
either because a lien arose in connection with the Series 1995-1 Assets or
because Ford Credit and Ford Credit Leasing did not have sufficient assets
available (including distributions on the EBCs) to satisfy such claimant or
creditor in full.
TERMINATION OF FCTT IN CERTAIN CIRCUMSTANCES
If a bankruptcy or insolvency occurs with respect to Ford Credit
Leasing or the Transferor, the FCTT Agreement provides that FCTT will be
terminated, and if a bankruptcy or insolvency occurs with respect to the
Issuer, if the Transferor is terminated upon the bankruptcy or insolvency of
Ford Credit Leasing, or if the
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<PAGE> 21
Issuer becomes bankrupt or insolvent or is terminated as a result of the
bankruptcy, insolvency or termination of RCL Trust or Ford Credit Leasing, the
FCTT Agreement provides that FCTT will be terminated with respect to holding
the Series 1995-1 Assets. In each case the FCTT Trustee is required to
distribute the Series 1995-1 Assets to the holder of the Series 1995-1
Certificates. Because the Issuer has pledged its rights to the Series 1995-1
Certificates to the Indenture Trustee, such distribution would be made to the
Indenture Trustee who would be responsible for re-titling the Series 1995-1
Leased Vehicles. The cost of such re-titling would reduce the amounts payable
from the Series 1995-1 Assets which are available for payments of interest on
and principal of the Notes, and in such event the Noteholders could suffer a
loss on their investment.
INSOLVENCY OF FORD CREDIT -- SUBSTANTIVE CONSOLIDATION WITH FORD CREDIT; TRUE
SALE
As described under "Certain Legal Aspects of FCTT and the Series
1995-1 Certificates--Insolvency Related Matters," the transactions described
herein have been structured and the parties to the Basic Documents described
herein have undertaken to act in a manner such that the voluntary or
involuntary commencement of an insolvency-related case or proceeding under the
Bankruptcy Code or similar state laws by or against Ford Credit should not
result in either Ford Credit Leasing, FCTT or the Transferor becoming subject
to a similar case or proceeding, and should not result in the substantive
consolidation of the assets and liabilities of Ford Credit Leasing, FCTT or the
Transferor with those of Ford Credit for purposes of such case or proceeding.
Each of Ford Credit and Ford Credit Leasing intends that its transfer of its
Series 1995-1 Certificate to the Transferor be an absolute transfer (that is,
a "true sale") of all its interest in such Series 1995-1 Certificate, and each
will so treat and report such transfer for all relevant purposes. Special
counsel to Ford Credit will deliver a legal opinion to the effect that (i) the
assets and liabilities of each of Ford Credit Leasing, FCTT and the Transferor
would not be substantively consolidated with those of Ford Credit if Ford
Credit were to become the subject of a case under the Bankruptcy Code, and
(ii) the transfer of the Series 1995-1 Certificates by each of Ford Credit and
Ford Credit Leasing would constitute an absolute transfer of all interest in
such Series 1995-1 Certificates and, therefore, such Series 1995-1 Certificates
(including payment thereon and the proceeds thereof) would not be property of
either Ford Credit or Ford Credit Leasing, as the case may be, if either were
to become the subject of a case under the Bankruptcy Code. Such conclusions
are reasoned conclusions, based upon various assumptions regarding factual
matters and future events, as to which there necessarily can be no assurance,
and such legal opinion should not be regarded as a guaranty of the result a
court would reach in an actual case before it. If Ford Credit Leasing, FCTT or
the Transferor were to become the subject of an insolvency-related case or
proceeding, or if a bankruptcy trustee, Ford Credit as debtor in possession, a
creditor or other party having standing were to assert that Ford Credit
Leasing, FCTT or the Transferor should be substantively consolidated with Ford
Credit, or that the transfer of the Series 1995-1 Certificates from Ford Credit
(or, if applicable, Ford Credit Leasing) should be recharacterized as a pledge
of such Series 1995-1 Certificates to secure a borrowing, then delays in
payments on the Series 1995-1 Certificates or (in the event of such an
insolvency-related case or proceeding or should the court rule in favor of such
assertion) reductions in such payments could occur, resulting in delays (or
reductions) in payments on the Notes and a potential loss to Noteholders on
their investment.
INSOLVENCY OF FORD CREDIT -- PREFERENCE RISK
If Ford Credit were to become the subject of a case under the
Bankruptcy Code, Administrative Purchase Amounts paid by Ford Credit pursuant
to the Administrative Agency Agreement and payments made by Ford Credit under
the Limited RV Guaranty might be recoverable as preferential transfers from
Ford Credit to the extent made within a year of the commencement of such case.
Such a case (or a similar case or proceeding under applicable state law)
with respect to Ford Credit also would be an event of default under the
Administrative Agency Agreement, which could result in the removal of Ford
Credit as Administrative Agent. Either of such occurrences could adversely
affect timely payment to Noteholders and, if payments previously made by Ford
Credit were to be recovered, losses to Noteholders could result.
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REQUIRED SALE OF ASSETS IN CERTAIN CIRCUMSTANCES
If a bankruptcy or insolvency occurs with respect to the Transferor
(which is intended to be a limited purpose business trust) or the Transferor is
terminated (which could occur upon the bankruptcy or insolvency of Ford Credit
Leasing (which is intended to be a special purpose corporation), the Lease
Trust Agreement provides that the Issuer will be dissolved and the Indenture
Trustee will be required to sell the assets of the Issuer, which consist
primarily of the Series 1995-1 Certificates, in a commercially reasonable
manner and on commercially reasonable terms. The proceeds from the sale of the
assets of the Issuer will be distributed to Noteholders and holders of Lease
Trust Certificates in the priority set forth in the Indenture, and if such
proceeds are not sufficient to pay the Notes in full, the amount of principal
returned to Noteholders would be reduced, and the Noteholders would incur a
loss on their investment. See "Additional Document Provisions--The Lease Trust
Agreement--Termination."
MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS
The rate of payment of principal and the yield to maturity on each
Class of Notes generally will be directly related to the rate at which payments
on the Series 1995-1 Leases and in respect of the Series 1995-1 Leased Vehicles
are received. To the extent that Obligors make Total Monthly Payments when due
(or the Administrative Agent makes Monthly Payment Advances) and the Residual
Values of Series 1995-1 Leased Vehicles are not realized until their respective
Scheduled Lease End Dates, the minimum principal payable quarterly to
Noteholders can be determined with certainty. Partial prepayments will be
treated as Payaheads and will not increase the rate of payment of principal of
the Notes because such payments will be held and paid out to Noteholders as
principal only when required to meet a shortfall in a subsequent payment from
the related Obligor. However, because the Residual Values of Series 1995-1
Leased Vehicles account for a large portion of the Pool Balance the rate of
payment of principal increases substantially in _____ 1997 when Series 1995-1
Leases begin to reach their Scheduled Lease End Dates. See "The Leases and
Leased Vehicles." Further, prepayment of the entire Adjusted Balance Subject
to Lease Charges of a Series 1995-1 Lease, whether in the form of Voluntary
Early Termination Proceeds, Liquidation Proceeds or Administrative Purchases,
will have the effect of increasing the rate of payment of principal on the
Notes. In addition, no principal will be paid on any Class of Notes until each
prior Class has been paid in full, unless an Event of Default under the
Indenture has occurred and the maturity of the Notes has been accelerated, in
which case principal will be paid on a pro rata basis to the holders of the
Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes based on their
respective principal balances without any distinction among Classes. The rate
of payment of principal of the Notes also will be increased by the application
to the payment of principal (after payment of interest) on the Notes of the
portion of the Monthly Payments, if any, not applied to reduce the Pool Balance
or to pay certain fees. To the extent Series 1995-1 Leases which have higher
Retail Operating Lease Factors are prepaid faster than others, the amount of
such additional portion of the Monthly Payments available to pay principal of
the Notes will be reduced. See "Maturity, Prepayment and Yield
Considerations."
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and regulations,
including the federal Consumer Leasing Act of 1976 and Regulation M promulgated
by the Board of Governors of the Federal Reserve System, impose requirements on
retail lease contracts such as the Series 1995-1 Leases. These laws apply to
FCTT as the assignee of each Series 1995-1 Lease and may also apply to the
Issuer as holder of the Series 1995-1 Certificates which represent a beneficial
interest in the Series 1995-1 Leases, among other things. The failure of FCTT,
or the Administrative Agent acting on behalf of FCTT, to comply with such laws
and regulations may give rise to liabilities on the part of FCTT, and claims by
FCTT or the Administrative Agent acting on behalf of FCTT with respect to
Obligors may be subject to set-off as a result of such non-compliance.
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Each of California, New York and Pennsylvania has adopted a "Lemon
Law" that provides users of vehicles, including lessees, certain rights with
respect to vehicles which are substandard. Such Lemon Laws apply with respect
to the Series 1995-1 Leased Vehicles. A successful claim under a Lemon Law
could result in, among other things, the termination of the related Series
1995-1 Lease and/or the refunding to the related Obligor of some portion of
Total Monthly Payments paid by such Obligor. Any such refund would reduce the
amounts distributed with respect to the Series 1995-1 Certificates, which
could, in certain circumstances, reduce the payments to Noteholders. See
"Certain Legal Aspects of the Leases and Leased Vehicles--Consumer Protection
Laws."
ERISA LIABILITIES; EFFECT ON RATINGS
It is possible that the PBGC could assert that the assets of FCTT,
including the Series 1995-1 Assets, should be subject to liens in favor of the
PBGC to satisfy any unpaid ERISA obligations of any member of an "affiliated
group" that includes Ford Credit, Ford and their respective affiliates.
Because such "affiliated group" has historically substantially fully funded
their ERISA obligations (none of which arise under multiple employer plans),
the Transferor believes that the likelihood of any such liability arising and
the PBGC attempting to assert such a lien (including a lien against the Series
1995-1 Assets) is remote. However, if an unfunded ERISA liability of the
affiliated group arises, there can be no assurance that the PBGC will not
attempt to assert a lien. The ratings of the Notes may be downgraded in the
event of any unfunded ERISA liability of any member of the affiliated group.
There are currently no unfunded ERISA liabilities in the Ford affiliated group,
although there can be no assurance that the current level of funding will
continue in the future. See "Ratings of the Notes."
VICARIOUS TORT LIABILITY
Although FCTT will hold title to the Series 1995-1 Leased Vehicles
and the Issuer, as holder of the Series 1995-1 Certificates (subject to the
pledge to the Indenture Trustee and the rights of the Transferor under the
Program Operating Lease), will have a beneficial interest therein, the Series
1995-1 Leased Vehicles will be operated by the related Obligors and their
respective invitees. State laws differ as to whether anyone suffering injury
to person or property involving a leased vehicle may bring an action against
the owner of the vehicle merely by virtue of its ownership of the vehicle. To
the extent that applicable state law permits such an action, FCTT and the FCTT
Assets, including the Series 1995-1 Assets, may be subject to liability to such
an injured party. FCTT is named as an insured party under the Contingent and
Excess Liability Insurance. In the event that vicarious liability was imposed
on FCTT as owner of a Series 1995-1 Leased Vehicle (or, in certain
circumstances a Leased Vehicle that is not a Series 1995-1 Leased Vehicle) and
the coverage provided by the Contingent and Excess Liability Insurance was
insufficient to cover the full amount of such loss, and Ford Credit and Ford
Credit Leasing failed to perform their obligations to indemnify the Issuer, the
Noteholders could incur a loss on their investment. See "--Structural
Considerations," "Certain Legal Aspects of FCTT and the Series 1995-1
Certificates" and "Certain Legal Aspects of the Leases and Leased
Vehicles--Vicarious Liability."
RATING OF THE CLASS A-3 NOTES DEPENDENT ON FORD CREDIT PERFORMANCE UNDER
LIMITED RV GUARANTY
Principal on the Class A-3 Notes is paid only after the principal
amount of the Class A-1 Notes and the Class A-2 Notes have each been reduced to
zero (except when an Event of Default has occurred, in which instance principal
is paid to all Classes pro rata). Consequently, repayment of such principal to
the Class A-3 Noteholders depends largely on proceeds from the disposition of
Series 1995-1 Leased Vehicles and, to the extent that such amounts are less
than the aggregate Residual Values of such Series 1995-1 Leases with respect to
any Payment Date, amounts paid by Ford Credit under the Limited RV Guaranty to
make up such shortfall. Because the obligation under the Limited RV Guaranty
is an unsecured obligation of Ford Credit, in the event of a downgrade in the
rating or ratings assigned to Ford Credit, the rating assigned to the Class A-3
Notes could be reduced. See "Ratings of the Notes" and "Description of the
Notes--Limited RV Guaranty."
ADMINISTRATIVE AGENT DEFAULT
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Ford Credit is the Administrative Agent with respect to the Leases
and Leased Vehicles, including the Series 1995-1 Leases and Series 1995-1
Leased Vehicles. Administrative Agent Events of Default may occur with respect
to all beneficiaries of FCTT, including the Issuer, or only with respect to one
or more Series. Upon the occurrence of an Administrative Agent Event of
Default with respect to all beneficiaries of FCTT, the FCTT Trustee, if so
directed by 100% of the beneficiaries of FCTT (including the Indenture Trustee,
as secured party for the Issuer, as holder of the Series 1995-1 Certificates
and any other holder of a Series, but excluding Ford Credit and Ford Credit
Leasing), may terminate all of the rights and obligations of Ford Credit under
the Administrative Agency Agreement. Upon the occurrence of an Administrative
Agent Event of Default with respect to Series 1995-1, the Indenture Trustee may
terminate all of the rights and obligations of Ford Credit with respect to
Series 1995-1 only, and the FCTT Trustee will become the successor
Administrative Agent until such time as a successor Administrative Agent is
appointed pursuant to the terms of the Administrative Agency Agreement. Any
replacement of Ford Credit as Administrative Agent in servicing the Leases and
disposing of the Leased Vehicles could have an adverse effect on the timely
receipt of interest and principal by the Noteholders. See "Description of the
Administrative Agency Agreement--Administrative Agent Events of Default."
BOOK-ENTRY REGISTRATION
Each Class of the Notes will be initially represented by one or more
physical notes registered in the name of Cede or any successor nominee for DTC
and will not be registered in the names of the beneficial owners of Notes or
their nominees. Accordingly, unless and until Definitive Notes are issued,
holders of beneficial interests in Notes will not be recognized by the
Indenture Trustee as Noteholders and will only be able to exercise the rights
of Noteholders indirectly through DTC and its participants. See "Description
of the Notes--Book-Entry Registration."
FORD CREDIT
Ford Credit was incorporated in Delaware in 1959 and is a wholly
owned subsidiary of Ford Motor Company ("Ford").
Ford Credit provides wholesale financing and capital loans to
franchised Ford vehicle dealers and other dealers associated with such dealers
and purchases retail installment sale contracts and retail leases from them.
Ford Credit also makes loans to vehicle leasing companies, the majority of
which are affiliated with such dealers. In addition, a wholly-owned subsidiary
of Ford Credit provides these financing services in the United States to other
vehicle dealers. More than 85% of all new vehicles financed by Ford Credit are
manufactured by Ford or its affiliates. Ford Credit also provides retail
financing for used vehicles built by Ford and other manufacturers. In addition
to vehicle financing, Ford Credit makes loans to affiliates of Ford, finances
certain receivables of Ford and its subsidiaries, and offers diversified
financing services which are managed by USL Capital Corporation, a wholly owned
subsidiary of Ford Holdings, Inc. ("Ford Holdings"). Ford Credit also manages
the insurance businesses of The American Road Insurance Company, a wholly owned
subsidiary of Ford Holdings. Ford Credit also is a significant equity
participant in Ford Holdings whose primary activities are consumer and
commercial financing operations, insurance underwriting and equipment leasing.
The mailing address of Ford Credit's executive offices is The
American Road, Dearborn, Michigan 48121. The telephone number of such offices
is (313) 322-3000.
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THE ISSUER
FORMATION OF THE ISSUER
The Issuer is a trust formed under the laws of the State of Delaware
pursuant to the Lease Trust Agreement solely for the purposes of the
transactions described in this Prospectus. After its formation, the Issuer
will not engage in any activity other than (i) issuing the Notes and Lease
Trust Certificates, (ii) using the proceeds from the sale of the Notes and
Lease Trust Certificates to acquire the Series 1995-1 Certificates and the
other property of the Lease Trust Estate, (iii) making payments on the Notes
and Lease Trust Certificates, (iv) entering into and performing its obligations
under the Basic Documents to which it is a party and (v) engaging in other
transactions, including entering into agreements, that are necessary, suitable
or convenient to accomplish the foregoing or are incidental thereto or
connected therewith.
CAPITALIZATION OF THE ISSUER
On the Closing Date, the Issuer will be capitalized with $__________
of Notes and $________ of Lease Trust Certificates. Transferor Lease Trust
Certificates with an aggregate initial principal balance of $________ will be
sold to the Transferor and Ford Credit Leasing and the remaining Lease Trust
Certificates will be sold to third party investors that are expected to be
unaffiliated with the Transferor, the Administrative Agent, their respective
affiliates or the Issuer. The proceeds from the sale of the Notes and the
Lease Trust Certificates will be used to pay the cash portion of the
acquisition price paid to the Transferor for the Series 1995-1 Certificates
pursuant to the Transfer Agreement. The remaining portion of the acquisition
price (the "Deferred Amount") will be paid by the Issuer to the holders of the
Transferor Lease Trust Certificates after the principal balance of the Notes
and the Lease Trust Certificates have each been reduced to zero, and then only
to the extent of any remaining payments or proceeds from the Series 1995-1
Certificates.
The following table illustrates the capitalization of the Issuer as
of the Closing Date, as if the issuance and sale of the Notes and Lease Trust
Certificates and the incurrence of the obligation to pay the Deferred Amount
had taken place on such date:
<TABLE>
<S> <C>
Class A-1 Notes . . . . . . . . . . . . . . . . . . . . . $__________
Class A-2 Notes . . . . . . . . . . . . . . . . . . . . . $__________
Class A-3 Notes . . . . . . . . . . . . . . . . . . . . . $__________
Lease Trust Certificates . . . . . . . . . . . . . . . . $__________
Deferred Amount . . . . . . . . . . . . . . . . . . . . . $__________
</TABLE>
THE LEASE TRUSTEE
PNC Bank, Delaware, a Delaware banking corporation, is the Lease
Trustee under the Lease Trust Agreement. The principal offices of the Lease
Trustee are located at 222 Delaware Avenue, Wilmington, Delaware 19801. The
Transferor, Ford Credit and their affiliates may maintain normal commercial
banking relationships with the Lease Trustee and its affiliates. The fees and
expenses of the Lease Trustee will be paid by the Administrative Agent, acting
on behalf of the holders of the EBCs.
PROPERTY OF THE ISSUER
On the Closing Date, the Series 1995-1 Certificates will be
transferred to the Issuer pursuant to the Transfer Agreement. The Issuer will
then pledge its interest in the Series 1995-1 Certificates to the Indenture
Trustee under the Indenture and then, subject to such pledge, will lease the
Series 1995-1 Certificates back to the Transferor pursuant to the Program
Operating Lease. The Program Operating Lease with respect to the beneficial
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<PAGE> 26
interest in each Series 1995-1 Leased Vehicle expires with respect to such
Series 1995-1 Leased Vehicle on the day immediately preceding the sale of such
Series 1995-1 Leased Vehicle, but only if such sale occurs on or after the
related Scheduled Lease End Date. See "Series 1995-1 Certificates." After
giving effect to the transactions described herein and effected by the Basic
Documents, the property of the Issuer (the "Lease Trust Estate") will consist
of (i) the rights of the Issuer under the Series 1995-1 Certificates, (ii) the
rights under the Program Operating Lease, (iii) the Issuer's rights to all
funds on deposit from time to time in the Collection Account and the Payahead
Account (including investment income of amounts on deposit in the Collection
Account) and proceeds thereof, (iv) the Payment Account and proceeds thereof,
(v) the rights of the Transferor under the Asset Contribution Agreement, (vi)
the rights as beneficiary of the Limited RV Guaranty, (vii) the rights as
holder of the Series 1995-1 Certificates under the Administrative Agency
Agreement and the Series 1995-1 Supplement, (viii) the security interest of the
Issuer in amounts credited to the Reserve Account and the right to make
withdrawals therefrom and (ix) all proceeds of the foregoing. All of the Lease
Trust Estate is pledged to the Indenture Trustee pursuant to the terms of the
Indenture.
Because the Series 1995-1 Certificates represent the beneficial
interest in the Series 1995-1 Assets, Noteholders are dependent on payments
made on the Series 1995-1 Leases and proceeds received in connection with the
disposition of Series 1995-1 Leased Vehicles for payment of interest on and
principal of the Notes. The Issuer will not have a direct ownership interest
in the Series 1995-1 Leases, or a direct ownership interest or perfected
security interest in the Series 1995-1 Leased Vehicles (which will be titled in
the name of FCTT), and it is therefore possible that a claim or lien with
respect to the Series 1995-1 Leased Vehicles or on FCTT could limit the amounts
paid to the holders of the Series 1995-1 Certificates to less than the amount
due from the related Obligors or realized from the sale of Series 1995-1 Leased
Vehicles. To the extent that a claim or lien delays disposition of Series
1995-1 Leased Vehicles or reduces the amount paid to the holders of the Series
1995-1 Certificates as holders of the beneficial interest in the Series 1995-1
Assets, Noteholders could be subject to delays in payment or losses on their
investment. See "Special Considerations--Structural Considerations,"
"Description of the Notes--Reserve Account Withdrawals and Deposits,"
"Description of the Notes--Limited RV Guaranty," "Series 1995-1 Certificates"
and "Certain Legal Aspects of FCTT and the Series 1995-1 Certificates."
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be applied, together
with the proceeds from the sale of the Lease Trust Certificates, to acquire the
Series 1995-1 Certificates from the Transferor pursuant to the Transfer
Agreement.
FCTT
CREATION OF FCTT BY FORD CREDIT
AND FORD CREDIT LEASING
Ford Credit Titling Trust ("FCTT") was formed by Ford Credit and Ford
Credit Leasing, a special-purpose, wholly-owned subsidiary of Ford Credit,
pursuant to the terms of the FCTT Agreement. The primary purpose of FCTT is to
acquire from Dealers located in specified jurisdictions the Leases and Leased
Vehicles originated by such Dealers and to conserve and hold such Leases and
Leased Vehicles on behalf of the beneficiaries from time to time of FCTT. As
of the date hereof, Ford Credit has directed that each lease under the RCL Plan
which is originated by Dealers in California, New York and Pennsylvania, and
the related leased vehicle, be assigned by Dealers to FCTT, except that if the
obligor under the lease is located in a state other than California, New York
and Pennsylvania, such lease and the related leased vehicle is assigned to Ford
Credit instead of FCTT. All the Series 1995-1 Leases and Series 1995-1 Leased
Vehicles were originated in California, New York or Pennsylvania with Obligors
located in such states. The Administrative Agent has advised the Issuer that
it
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<PAGE> 27
anticipates that after the date hereof, additional states will be added to the
list of states in which Dealers will assign Leases and Leased Vehicles to FCTT.
Leases and Leased Vehicles originated in such additional states will constitute
FCTT Assets but will not constitute Series 1995-1 Assets. See "--Lease
Origination from Dealers and Assignment to FCTT."
THE FCTT TRUSTEE
Comerica Bank, a Michigan banking corporation, is the FCTT Trustee.
The principal offices of Comerica Bank are located in Detroit, Michigan. The
Transferor, Ford Credit and their affiliates may maintain normal commercial
banking relationships with Comerica Bank and its affiliates.
LEASE ORIGINATION FROM DEALERS AND ASSIGNMENT TO FCTT
Dealers originate Leases on a form providing for the assignment
thereof to FCTT. Each Leased Vehicle which is assigned to FCTT previously has
been sold to the Dealer by Ford or, in certain limited circumstances, by
another manufacturer of motor vehicles. The Dealer has negotiated the terms of
the Lease with the Obligor, including an option to purchase the related Leased
Vehicle on the Scheduled Lease End Date for an amount greater than or equal to
the Residual Value of the Leased Vehicle. Upon entering into a Lease with an
Obligor and approval of such Lease by the Administrative Agent, Dealers assign
the Lease, the related Leased Vehicle, the first Total Monthly Payment received
from the Obligor and rights to any security deposit or reconditioning reserve
to FCTT against payment of the related Balance Subject to Lease Charges. As of
the date of the assignment, FCTT holds the title to and is the record owner of
the Lease and Leased Vehicle. Until such date as the Lease and Leased Vehicle
are designated as Series Specified Assets in connection with the issuance of
any Series, the beneficial interest in such Lease and Leased Vehicle is held by
Ford Credit and Ford Credit Leasing as holders of the Exchangeable Beneficial
Certificates. See "-- Exchangeable Beneficial Certificates and Specified
Beneficial Certificates." Pursuant to agreements between Ford Credit and the
Dealers, each Dealer is obligated, after originating and assigning Leases and
Leased Vehicles to FCTT, to repurchase such Leases and Leased Vehicles which do
not meet certain representations and warranties made by such Dealer. The
Administrative Agent has paid or will pay applicable sales, use and similar
taxes to the appropriate authorities from amounts collected from Obligors or
otherwise.
TITLING OF LEASED VEHICLES
The Administrative Agent, on behalf of FCTT, purchases the Leases and
related Leased Vehicles, including the Series 1995-1 Leases and the related
Series 1995-1 Leased Vehicles, from the originating Dealers and causes the
certificate of title for each Leased Vehicle to be issued in the name "Ford
Credit Titling Trust," or "Ford Credit Titling Trust, Comerica Bank, Trustee"
or in a substantially similar name acceptable to the relevant governmental
departments or agencies. No lien will be placed on the certificate of title to
indicate the interests of the beneficiaries of FCTT, and new certificates of
title will not be issued in connection with the transfer of any beneficial
interests in FCTT. Therefore, there will be no indication on the certificates
of title for the Series 1995-1 Leased Vehicles that the Issuer or any other
person has an interest in such Series 1995-1 Leased Vehicles. In certain
circumstances, however, certificates of title to the Leased Vehicles will
reflect a lien recorded in favor of the Administrative Agent, including therein
the address of an office of the Administrative Agent at which Leases and the
certificates of title to Leased Vehicles are to be delivered. This lien exists
only to assure delivery of the certificates of title to the correct location;
the Administrative Agent will not have an interest in the Leased Vehicles,
although for administrative convenience, it (or a third-party contractor hired
by it) will hold the certificates of title as custodian on behalf of the FCTT
Trustee. See "Special Considerations--Structural Considerations" and "Certain
Legal Aspects of FCTT and the Series 1995-1 Certificates."
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<PAGE> 28
EXCHANGEABLE BENEFICIAL CERTIFICATES
AND SPECIFIED BENEFICIAL CERTIFICATES
Prior to the issuance of the Series 1995-1 Certificates and the
securitization described herein, the FCTT Trustee issued to Ford Credit and
Ford Credit Leasing, as the beneficiaries of FCTT, Exchangeable Beneficial
Certificates (each, an "EBC") representing the entire beneficial interest in
the FCTT Assets (representing a 98% beneficial interest in the FCTT Assets in
the case of Ford Credit, and a 2% beneficial interest in the case of Ford
Credit Leasing). Neither Ford Credit nor Ford Credit Leasing may transfer or
assign their respective EBCs (except in exchange for a Specified Beneficial
Certificate). As described below, in addition to the EBCs, the FCTT Trustee
may issue from time to time Specified Beneficial Certificates ("SBCs")
representing beneficial interests in certain designated FCTT Assets. The
Series 1995-1 Certificates are the first series of SBCs issued by FCTT. After
the issuance of the Series 1995-1 Certificates and until any other SBCs are
issued, the EBCs will represent the beneficial interest in all of the FCTT
Assets other than those FCTT Assets which are designated as Series 1995-1
Assets (such other FCTT Assets, the "Non-Specified Assets"). The beneficial
interest in FCTT and the FCTT Assets as of any date is represented by the EBCs
and each outstanding SBC.
Pursuant to the FCTT Agreement, the Administrative Agent, acting at
the unanimous direction of the holders of the EBCs, may at any time deliver to
the FCTT Trustee a Series Specification Notice identifying certain FCTT Assets
to be designated as Series Specified Assets and the date ( the "Series Issue
Date") upon which an SBC representing the beneficial interest in such Series
Specified Assets will be issued to each holder of an EBC. On the Series Issue
Date, the FCTT Trustee will deliver an SBC to each holder of an EBC. Upon
delivery of the SBC, such holder's beneficial interest in the FCTT Assets will
be represented by the EBC (with respect to the Non-Specified Assets) and each
SBC (with respect to Series Specified Assets). As described in "Series 1995-1
Certificates--Issuance of Series 1995-1 Certificates to Ford Credit and Ford
Credit Leasing," the Series 1995-1 Certificate to be issued to Ford Credit
will be an SBC representing a 98% beneficial interest in the Series 1995-1
Assets and the Series 1995-1 Certificate to be issued to Ford Credit Leasing
will be an SBC representing a 2% beneficial interest in the Series 1995-1
Assets. While Series 1995-1 is the first Series to be issued by the FCTT
Trustee, Ford Credit and Ford Credit Leasing expect from time to time to
designate other FCTT Assets as Series Specified Assets and to issue additional
Series representing beneficial interests in such Series Specified Assets.
As set forth in the FCTT Agreement and the Administrative Agency
Agreement, the holders from time to time of any SBC will have a beneficial
interest in the related Series Specified Assets, will be entitled to receive
such percentage interest of the proceeds of the related Series Specified Assets
set forth in such SBC and, acting together with each other holder of an SBC
representing a beneficial interest in such Series Specified Assets, will be
entitled to direct the FCTT Trustee to take actions or refrain from taking
actions with respect to such Series Specified Assets. The holders from time to
time of any SBCs will not be entitled to receive proceeds from Non-Specified
Assets or from any other Series Specified Assets which may exist from time to
time. However, it is possible in certain circumstances that notwithstanding
the allocations of liabilities and the indemnities set forth in the FCTT
Agreement, certain Series Specified Assets could be attached or proceeds of
such Series Specified Assets could be used to satisfy a claim with respect to
Non-Specified Assets or other Series Specified Assets. See "Special
Considerations--Structural Considerations."
THE TRANSFEROR
DELAWARE BUSINESS TRUST
The Transferor is a business trust formed under the laws of the State
of Delaware pursuant to the RCL Trust Agreement for purposes of the
transactions described herein. The activities of the Transferor are limited to
(i) acquiring and transferring the Series 1995-1 Certificates and entering into
and performing its obligations under the Program Operating Lease; (ii) acting
as depositor to the Issuer and entering into the Lease Trust Agreement and
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<PAGE> 29
acquiring and holding certain Lease Trust Certificates issued thereunder; and
(iii) making distributions and executing agreements as are necessary, suitable
or convenient to accomplish the foregoing. In addition, after entering into
the Program Operating Lease the Transferor will assign a 1% interest in all of
its assets and liabilities to Ford Credit Leasing. See "--Creation by Ford
Credit and Ford Credit Leasing; Assignment to Ford Credit Leasing" and "Series
1995-1 Certificates--Lease of the Series 1995-1 Certificates to the
Transferor."
RCL TRUSTEE
The RCL Trustee is The Chase Manhattan Bank (USA), a Delaware banking
corporation, with offices located at 802 Delaware Avenue, Wilmington, Delaware
19801. The fees and expenses of the RCL Trustee will be paid by the
Administrative Agent, acting on behalf of the holders of EBCs.
CREATION BY FORD CREDIT AND FORD CREDIT
LEASING; ASSIGNMENT TO FORD CREDIT LEASING
Prior to the issuance of the Series 1995-1 Certificates and the
securitization described herein, Ford Credit held a 98% beneficial interest in
the Transferor and Ford Credit Leasing held a 2% beneficial interest in the
Transferor. Because the Transferor will assign a 1% interest in its assets and
liabilities to Ford Credit Leasing on the Closing Date, the beneficial interest
in the Transferor held by Ford Credit and Ford Credit Leasing will be changed
by the amount so assigned. After the assignment on the Closing Date, Ford
Credit Leasing, in addition to a direct right to 1% of all assets of the
Transferor (and an obligation to pay 1% of all liabilities of the Transferor),
will retain the right as a beneficiary of the Transferor to receive
distributions of the assets of the Transferor (and be required to pay
obligations of the Transferor) in an amount equal to 1/99 of such distributions
(and such obligations) after giving effect to the assignment to Ford Credit
Leasing. Ford Credit as a beneficiary of the Transferor will retain the right
to receive distributions of the assets of the Transferor (and be required to
pay obligations of the Transferor) in an amount equal to 98/99 of such
distributions (and such obligations) after giving effect to the assignment to
Ford Credit Leasing. As described in "Series 1995-1 Certificates--Lease of the
Series 1995-1 Certificates to the Transferor," the primary obligation of the
Transferor after the Closing Date is to make Program Operating Lease Payments
and its primary assets after the Closing Date are the interest it has as lessee
of the Series 1995-1 Certificates pursuant to the Program Operating Lease, its
interest in the Reserve Fund, and the Transferor Lease Trust Certificate.
SERIES 1995-1 CERTIFICATES
ISSUANCE OF SERIES 1995-1 CERTIFICATES
TO FORD CREDIT AND FORD CREDIT LEASING
The Series 1995-1 Certificates will be the first SBCs issued by FCTT.
See "FCTT--Exchangeable Beneficial Certificates and Specified Beneficial
Certificates." On the Closing Date, the FCTT Trustee will (i) issue a Series
1995-1 Certificate to Ford Credit, as holder of an EBC, representing Ford
Credit's 98% beneficial interest in the FCTT Assets which were designated as
Series 1995-1 Assets pursuant to the Series Specification Notice relating to
Series 1995-1 and (ii) issue a Series 1995-1 Certificate to Ford Credit
Leasing, as holder of an EBC, representing Ford Credit Leasing's 2% beneficial
interest in the FCTT Assets which were designated as Series 1995-1 Assets
pursuant to the Series Specification Notice relating to Series 1995-1.
CONTRIBUTION OF SERIES 1995-1
CERTIFICATES TO THE TRANSFEROR
On the Closing Date, Ford Credit and Ford Credit Leasing each will
convey its respective Series 1995-1 Certificate to the Transferor pursuant to
the terms of the Asset Contribution Agreement. Ford Credit and
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<PAGE> 30
Ford Credit Leasing each will covenant to treat the conveyance of the Series
1995-1 Certificates to the Transferor as an absolute transfer for all purposes.
Upon the conveyance of the Series 1995-1 Certificates, the value of the
beneficial interests of Ford Credit and Ford Credit Leasing in the Transferor
will be increased by the value of the Series 1995-1 Certificates. See "The
Transferor--Creation by Ford Credit and Ford Credit Leasing; Assignment to Ford
Credit Leasing."
In addition to the conveyance of the Series 1995-1 Certificates, Ford
Credit and Ford Credit Leasing also will convey to the Transferor their rights
in the Series 1995-1 Supplement and under the Administrative Agency Agreement
with respect to Series 1995-1.
The Administrative Agent in the Series 1995-1 Supplement and Ford
Credit and Ford Credit Leasing in the Asset Contribution Agreement will make
certain representations and warranties with respect to the Series 1995-1
Assets. See "The Leases and Leased Vehicles--Eligibility Criteria" and
"Additional Document Provisions--Representations, Warranties and Covenants."
In the event of a breach of any representation and warranty, or if any
representation and warranty proves to have not been true when made, and such
breach or failure has not been cured by the end of the second Collection Period
following discovery or receipt of notice, Ford Credit and Ford Credit Leasing,
or the Administrative Agent on behalf of Ford Credit and Ford Credit Leasing,
will repurchase the beneficial interest in the Series 1995-1 Asset to which
such breach or failure relates for an amount equal to the Administrative
Purchase Amount on the next Distribution Date. See "Description of the
Administrative Agency Agreement--Administrative Purchases."
TRANSFER OF THE SERIES 1995-1
CERTIFICATES TO THE ISSUER
On the Closing Date, immediately following the conveyance of the
Series 1995-1 Certificates to the Transferor pursuant to the Asset Contribution
Agreement as described in "--Contribution of Series 1995-1 Certificates to the
Transferor," the Transferor, pursuant to the terms of the Transfer Agreement,
will transfer the Series 1995-1 Certificates to the Issuer. The Transferor
also will assign to the Issuer the rights under the Administrative Agency
Agreement and the Series 1995-1 Supplement conveyed to it by Ford Credit and
Ford Credit Leasing pursuant to the Asset Contribution Agreement. In exchange
for such transfer and assignment, the Issuer will agree to pay to the
Transferor an amount equal to the Initial Pool Balance. The portion of such
acquisition price paid to the Transferor on the Closing Date in cash will equal
the net proceeds from the sale of the Notes and Lease Trust Certificates. The
remaining portion of such acquisition price constitutes the Deferred Amount and
will be payable by the Issuer to the Transferor and Ford Credit Leasing as
holders of the Transferor Lease Trust Certificates after the principal balance
of the Notes and the Lease Trust Certificates have each been reduced to zero,
and then only to the extent of any remaining payments or proceeds from the
Series 1995-1 Certificates.
PLEDGE OF THE SERIES 1995-1 CERTIFICATES
TO THE INDENTURE TRUSTEE
Immediately following the transfer of the Series 1995-1 Certificates
to the Issuer as described in "--Transfer of the Series 1995-1 Certificates to
the Issuer," the Issuer will pledge its interest in the Series 1995-1
Certificates as part of the Lease Trust Estate pledged to the Indenture Trustee
as security for the repayment of the Notes. See "Property of the Issuer."
LEASE OF THE SERIES 1995-1
CERTIFICATES TO THE TRANSFEROR
Immediately following the transfer of the Series 1995-1 Certificates
to the Issuer and the pledge to the Indenture Trustee of the Issuer's interest
therein as described in "--Transfer of the Series 1995-1 Certificates to the
Issuer" and "--Pledge of the Series 1995-1 Certificates to the Indenture
Trustee," the Issuer and the Transferor
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<PAGE> 31
will enter into the Program Operating Lease pursuant to which the Transferor
will lease the Series 1995-1 Certificates during the term of the Program
Operating Lease. As lessee, the Transferor will be entitled to receive all
proceeds from the Series 1995-1 Certificates during the term of the Program
Operating Lease and will be required to make Program Operating Lease Payments
to the Issuer, subject to the assignment by the Transferor of 1% of its assets
and obligations to Ford Credit Leasing. See "The Transferor--Creation by Ford
Credit and Ford Credit Leasing; Assignment to Ford Credit Leasing."
Because the Program Operating Lease expires with respect to the
portion of the Series 1995-1 Certificates representing the beneficial interest
in a Series 1995-1 Leased Vehicle on the day preceding the sale of such Series
1995-1 Leased Vehicle, if such sale occurs on or after such Series 1995-1
Leased Vehicle's Scheduled Lease End Date, the Transferor will receive all
Monthly Payments with respect to Series 1995-1 Leases, and all Sale Proceeds of
those Series 1995-1 Leased Vehicles the related Series 1995-1 Leases of which
terminate before their Scheduled Lease End Date. These amounts are included in
the Program Operating Lease Payments payable by the Transferor, as lessee under
the Program Operating Lease. In addition, the Program Operating Lease Payments
include all amounts of Excess Wear and Tear and Excess Mileage. The Transferor
is obligated to make Program Operating Lease Payments to the Issuer for so long
as the Notes and Lease Trust Certificates are outstanding. Such Program
Operating Lease Payments will be deemed made to the extent that Collections
comprised of Monthly Payments (or Monthly Payment Advances), Voluntary Early
Termination Proceeds and Liquidation Proceeds in an amount equal to such
Monthly Payments, Uncollected Excess Wear and Tear and Excess Mileage and
Adjusted Balance Subject to Lease Charges of all Leases which terminate before
their Scheduled Lease End Dates are deposited by the Administrative Agent in
the Collection Account. The Transferor will not receive the Sale Proceeds of
those Series 1995-1 Leased Vehicles whose Series 1995-1 Leases terminate on or
after their respective Scheduled Lease End Dates. The right to such Sale
Proceeds (as limited by the Transferor Purchase Option Price) is property of
the Issuer pledged pursuant to the Indenture.
To the extent that the Transferor does not make the Basic Payment
portion of the Program Operating Lease Payment due on any Payment Date, the
Indenture Trustee will make a drawing on the Reserve Account. The "Basic
Payment," as of any Payment Date, is the sum of (i) the Required Interest
Payment, (ii) the portion of the Pool Balance Decline resulting from
termination of Series 1995-1 Leases before their respective Scheduled Lease End
Dates, (iii) the portion of the aggregate Monthly Payments allocated to a
decline in the aggregate Adjusted Balance Subject to Lease Charges of the
Series 1995-1 Leases and (iv) Uncollected Excess Wear and Tear and Excess
Mileage with respect to Series 1995-1 Leases for such Accrual Period. See
"Description of the Notes--Reserve Account Deposits and Withdrawals."
Defaults under the Program Operating Lease include failure by the
Transferor to pay the Required Interest Payment portion of the Basic Payment to
the Issuer, or breach of a representation and warranty, or the failure to
observe or perform certain covenants. Upon the occurrence of an event of
default under the Program Operating Lease, (i) the Indenture Trustee as
assignee of the rights of the Issuer in the Program Operating Lease pursuant to
the pledge of the Lease Trust Estate would be entitled to terminate the Program
Operating Lease and obtain the right to receive directly all distributions with
respect to the Series 1995-1 Certificates and (ii) an Event of Default would
occur under the Indenture which would permit the Noteholders to accelerate the
maturity of the Notes and in certain circumstances cause the sale of the Lease
Trust Estate. See "Description of the Notes--Indenture."
Transferor Leased Vehicle Purchase Option. Under the Program
Operating Lease, the Transferor may, at its option, purchase the Issuer's
beneficial interest in any Series 1995-1 Leased Vehicle not purchased by the
related Dealer or Obligor following the Scheduled Lease End Date of the related
Series 1995-1 Lease by paying to the Issuer an amount equal to the Residual
Value of such Series 1995-1 Leased Vehicle minus any amounts due from the
related Obligor for Uncollected Excess Wear and Tear and Excess Mileage (the
"Transferor Purchase Option Price"). The Transferor will exercise such option
only if neither the Obligor nor the Dealer exercises its option to purchase the
Series 1995- 1 Leased Vehicle and the related Sale Proceeds exceed the
Transferor Purchase
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<PAGE> 32
Option Price. Because the Transferor intends to exercise this option when
available, the amounts received by the Issuer with respect to the sale of any
Series 1995-1 Leased Vehicle the related Series 1995-1 Lease of which was
terminated on or after its Scheduled Lease End Date will never exceed the
Transferor Purchase Option Price. The Transferor will retain any excess of
the Sale Proceeds of such Series 1995-1 Leased Vehicle over the related
Transferor Purchase Option Price, and such amounts will not be available to pay
interest on or principal of the Notes.
THE LEASES AND LEASED VEHICLES
ORIGINATION PROCEDURES
The Ford Credit Red Carpet Lease Plan (the "Red Carpet Lease
Plan") is one of a number of financing programs offered by Dealers to assist
their customers in the acquisition of new automobiles and light-duty trucks.
Under the Red Carpet Lease Plan, an Obligor enters into a Lease that requires
the Obligor to make Total Monthly Payments for a predetermined number of months
("Lease Term") in return for the use of the related Leased Vehicle. At the
end of the Lease Term, the Obligor has the option to purchase the Leased
Vehicle or return it to the Dealer. Dealers negotiate the terms of the Lease
with prospective lessees in accordance with guidelines set by Ford Credit.
A credit application completed by a prospective lessee is
evaluated by Ford Credit with consideration given to, among other things, the
prospective lessee's credit history, current income, and years at present
address. Ford Credit uses a proprietary credit scoring model that measures the
probability of payment for each potential obligor given information concerning
the prospective lessee, the price of the Leased Vehicle and terms of the Lease.
Credit analysts at the applicable Ford Credit branch office evaluate credit
applications and accept or reject such applications based on the information
set forth therein and the proprietary credit scoring model or in some cases
based on additional information obtained from the relevant Dealer. Credit
analysts may also propose changes to the terms of the Lease to increase the
probability of payment such as a larger down payment or a less expensive
vehicle.
If the credit application is approved and the prospective
lessee agrees to the terms of the Lease, the Dealer completes the transaction
documentation and submits it to Ford Credit. Prior to the Obligor taking
possession of the Leased Vehicle, the Dealer must: (i) collect the first Total
Monthly Payment, including a refundable security deposit (which in a limited
number of instances may be waived), (ii) obtain written evidence that the
Obligor has purchased adequate insurance coverage, and (iii) ensure that all
required license fees, registration fees and up-front taxes are paid. Certain
fees and taxes may be financed by the Dealer and included in the Obligor's
Total Monthly Payment (such fees and taxes, the "Use and Lease Tax Amounts").
The Dealer is responsible for registering and titling the Leased Vehicle; it is
registered in the name of the Obligor, the Obligor and FCTT or FCTT only and
titled in the name of Ford Credit or FCTT as the case may be. Titles are
mailed directly to the appropriate Ford Credit branch office or to a central
office of an independent contractor hired by Ford Credit.
SERVICING PROCEDURES
The Leases, including the Series 1995-1 Leases, are serviced
through Ford Credit branch offices. Approximately 19 days before a Total
Monthly Payment is due, Ford Credit sends the Obligor an invoice. The Obligor
is instructed to send the Total Monthly Payment to one of several regional
lockboxes dedicated to the collection of payments for Leases and retail
installment contracts. If an Obligor does not make the payment within 10 days
of its due date, a late fee is assessed. At that time, Ford Credit initiates
collection procedures by mailing a past due notice to the Obligor. In cases
such as chronic delinquency, payment default, multiple returned checks or
bankruptcy, a Lease generally is assigned to a Ford Credit customer service
representative after it has become
<PAGE> 33
15 days delinquent. In other cases, collection assignments are issued when a
Lease becomes 22 days delinquent. The Obligor will be contacted to determine
the cause of the delinquency and to help the Obligor develop plans to resolve
it. If the Obligor cannot make the past due payment, Ford Credit will either
grant a Payment Extension or repossess the Leased Vehicle. If a Payment
Extension is granted, the Obligor is assessed a fee and the Lease Term is
extended one month (although the Obligor is not permitted to drive the Leased
Vehicle more than the originally agreed upon number of miles without incurring
excess mileage fees). If repossession is necessary, the Obligor may agree to
return the Leased Vehicle to Ford Credit or the Vehicle will be repossessed by
a contractor hired by Ford Credit.
Any Obligor not in default is permitted to terminate its Lease
before the Scheduled Lease End Date (a "Voluntary Early Termination") if the
Obligor: (i) returns the Leased Vehicle to the Dealer, (ii) pays the
difference, if any, between (a) the sum of the Adjusted Balance Subject to
Lease Charges and any past due amounts and (b) the fair market wholesale value
of the Leased Vehicle as agreed to by the Obligor and the Dealer, and (iii)
pays a fee of $200. The Dealer is required to pay an amount equal to such
agreed fair market wholesale value to Ford Credit or FCTT, as the case may be.
As described in "Description of the Notes--Indenture Cash Flows," Voluntary
Early Termination Proceeds are included in the Collections deposited in the
Series 1995-1 Collections Account and used to pay interest and principal on the
Notes. See "Maturity, Prepayment and Yield Considerations" for a discussion of
the effect of prepayments of the Series 1995-1 Leases on the payment of
principal of the Notes.
At the Scheduled Lease End Date, the Obligor may (i) purchase
the Leased Vehicle for an amount greater than or equal to its Residual Value or
(ii) return the Vehicle to the Dealer. At this time, the Dealer may purchase
the Leased Vehicle for an amount equal to its Residual Value or return it to
Ford Credit to be sold at auction. If the Dealer does not purchase the
Vehicle, the Dealer will inspect the Leased Vehicle, complete a Vehicle
Conditioning Report ("VCR") and submit the VCR to Ford Credit. The Dealer will
assess any additional charges for excess wear and tear or excess mileage on the
basis of the VCR. See "Description of the Notes--Indenture Cash Flows" and
"Series 1995-1 Certificates--Lease of the Series 1995-1 Certificates to the
Transferor--Transferor Leased Vehicle Purchase Option" for a description of how
amounts collected from the sale of Series 1995-1 Leased Vehicles are
distributed as Collections (and therefore are paid through to Noteholders) and,
in certain circumstances, to the Transferor (and are therefore not paid through
to Noteholders).
All Leased Vehicles that are returned to Ford Credit will be
inspected to ensure that the VCR properly reflects the condition of the Leased
Vehicle and that the Dealer has billed the Obligor for all excess wear and tear
and excess mileage charges due. If the VCR does not properly reflect the
condition of the Leased Vehicle, Ford Credit may seek reimbursement for any
discrepancies from the returning Dealer. The Leased Vehicle is then shipped to
one of several Ford Credit regional auction locations. In an attempt to
maximize proceeds from the auction of Leased Vehicles, Ford Credit has
established an "Extra Step" program to refurbish and recondition vehicles
returned at the end of 24-month leases. The results of each auction are
monitored and Leased Vehicles will generally be transported to the regional
auction where Ford Credit believes the highest auction proceeds will be
realized.
DELINQUENCY, REPOSSESSION, RESIDUAL VALUE AND LOSS DATA
The following tables set forth Ford Credit's average Red
Carpet Lease asset balance and loss experience for each of the periods shown
with respect to the leases and leased vehicles under the Red Carpet Lease Plan
(the "Red Carpet Lease Portfolio") in California, New York and Pennsylvania.
Because the Obligors on the Series 1995-1 Leases will reside in and have
entered into a Lease with a Dealer located in either California, New York or
Pennsylvania, actual loss experience with respect to the Series 1995-1 Leases
in the future may be different from the loss experience for the Red Carpet
Lease Portfolio in California, New York and Pennsylvania. There can be no
assurance that the loss experience for the Red Carpet Lease Portfolio or Series
1995-1 Leases in the future will be similar to the historical experience set
forth below.
31
<PAGE> 34
Because Ford Credit has not historically maintained separate
records based on the term of leases, the data set forth in the following tables
includes data for finance leases (classified by Ford Credit as leases which
have a term of more than 36 months) and operating leases (classified by Ford
Credit as leases which have a term of 36 months or less). However, management
believes that to the extent that there are any material differences between the
historical delinquency and loss statistics for finance leases and operating
leases, the delinquencies and losses would be higher on a mixed pool of finance
leases and operating leases (such as that reflected in the tables) than in a
pool consisting solely of operating leases (such as the Series 1995-1 Leases).
This is because, in the opinion of management based on its experience
servicing both finance leases and operating leases, there is a positive
correlation between increased credit risk and the duration of the lease. In
addition, management believes that the statistics provided in such tables
closely reflect the performance of the Red Carpet Lease Portfolio because even
as the portfolio has grown, the proportion of operating leases in the Red
Carpet Lease Portfolio has increased: in 1990, the proportion of leases in the
Red Carpet Lease Portfolio which were operating leases was approximately
78.6%, while in 1994, the proportion of leases which were operating leases was
approximately 98.8%. During this four year period the number of new
originations grew from approximately 141,000 to 595,000 per year.
32
<PAGE> 35
RED CARPET LEASE PORTFOLIO
(California, New York and Pennsylvania(1))
Historical Loss Experience(2)
Calendar Year
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
AVERAGE CONTRACTS OUTSTANDING (000)
California 41 47 52 73 118
New York 33 38 46 60 78
Pennsylvania 14 16 16 18 26
Total-Three State(3) 88 101 113 151 222
AVERAGE NET RCL ASSETS (BILLIONS)
California 0.5 0.6 0.7 1.1 1.8
New York 0.4 0.5 0.7 0.9 1.2
Pennsylvania 0.2 0.2 0.2 0.3 0.4
Total-Three State 1.1 1.3 1.6 2.3 3.5
NET CREDIT LOSSES (MILLIONS)(3)
California 8.2 12.8 9.7 8.9 11.4
New York 3.9 3.4 3.0 2.4 2.7
Pennsylvania 1.0 0.8 0.5 0.5 0.4
Total-Three State 13.1 17.0 13.2 11.8 14.5
NET CREDIT LOSSES AS PCT. OF
AVERAGE RCL ASSETS(3)
California 1.59% 2.01% 1.33% 0.81% 0.62%
New York 0.99 0.66 0.47 0.26 0.22
Pennsylvania 0.66 0.44 0.25 0.21 0.09
Total-Three State 1.23% 1.26% 0.84% 0.52% 0.41%
REPOSSESSIONS - UNITS (000)
California 2 .1 3.0 3.0 3.4 4.7
New York 0.9 0.9 1.0 1.0 1.3
Pennsylvania 0.4 0.3 0.3 0.2 0.4
Total-Three State 3.4 4.2 4.3 4.6 6.4
% of Avg. Contracts - Three State 3.86% 4.17% 3 .80% 3.04% 2.86%
Average Gross Loss per Repossession 3,795 3,374 2,401 3,474 3,137
AVERAGE DELINQUENCY RATIOS
THREE STATES
31-60 Days Past Due 2.81% 2.39% 2.11% 1.74% 1.63%
61-90 Days Past Due 0.41 0.32 0.25 0.16 0.17
Over 90 Days Past Due 0.16 0.13 0.08 0.05 0.04
Total 3.38% 2.84% 2.44% 1.95% 1.84%
AVERAGE DAILY UNITS OVER
60 DAYS PAST DUE (000) 0.5 0.5 0.4 0.3 0.5
</TABLE>
- ---------------
1. Regional data is based on results from branch offices located in
California, New York and Pennsylvania and may include a small number of
Leases associated with Obligors living outside of those states.
2. Includes operating and finance (original terms greater than 36 month)
leases. Only operating leases (original terms less than or equal to 36
months) are part of this securitization structure. Totals may not equal
the sum of the respective columns due to rounding.
3. "Net Credit Losses" means with respect to the period (i) the aggregate
adjusted balance subject to lease charges of all lease contracts and
related leased vehicles which are determined to be uncollectible during
such period plus the aggregate amount of uncollected charges for excess
wear and tear and excess mileage relating to lease contracts which
terminated during the period with respect to which proceeds from the sale
of the related leased vehicle were received in the period plus any
uncollected monthly payments received in the period with respect to leased
vehicles sold during the period minus (ii) all amounts received in the
period with respect to lease contracts and related leased vehicles which
were determined to be uncollectible during the period and recoveries
received in the period on lease contracts and related leased vehicles
charged-off in the period or any previous period.
33
<PAGE> 36
The reduction in Net Credit Losses is a result of fewer leased
vehicles being repossessed (as a percentage of the number of leases
outstanding) and an increase in the amount recovered for each vehicle which has
been repossessed. Management of Ford Credit believes that this trend is a
result of actions taken to improve procedures relating to credit quality and
collection procedures. In particular, efforts have been made to reduce the
proportion of longer term (and therefor higher risk) leases as a percentage of
the total number of leases, introduce improved risk rating guides, increase the
number of collection personnel and improve their training, and contact lessees
promptly on delinquent accounts. In addition, the general improvement in the
economy, combined with a reduction in market interest rates, have had a
positive effect on Net Credit Losses.
The following tables provide residual value and residual loss
information for each of the periods shown with respect to the Red Carpet Lease
Portfolio in California, New York and Pennsylvania exclusively.
RED CARPET LEASE PORTFOLIO(1)
(California, New York and Pennsylvania Only(2))
Residual Value Analysis
Calendar Year
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
Residual value of all vehicles the
related lease of which terminated in the
period ($000) 27,878 100,810 248,922 339,094 576,191
Residual value as a percentage of MSRP
of all vehicles the related lease of
which terminated in the period(3) 44.0% 43.0% 42.5% 42.1% 47.5%
Aggregate Residual Losses(4) ($000) 1,175 5,831 6,777 4,128 6,889
Aggregate Residual Losses as a
percentage of residual value of all
vehicles the related lease of which
terminated in the period 4.2% 5.8% 2.7% 1.2% 1.2%
Vehicles returned with a Residual Loss as
a percentage of all
vehicles the related lease of which
terminated in the period 19.2% 29.2% 15.3% 7.3% 7.6%
</TABLE>
- ---------------
(1) 24-month and 36-month leases only.
(2) Regional Data based on results on leases for which the related obligor
resides in California, New York, or Pennsylvania.
(3) MSRP is the Manufacturer's Suggested Retail Price, which will generally
exceed the balance subject to lease charges at inception of a lease.
(4) A Residual Loss is the amount by which the residual value of a leased
vehicle the related lease of which terminated on or after the end of its
lease term exceeds the sum of (i) sale proceeds of such leased vehicle
(including collected excess wear and tear and excess mileage) and (ii)
uncollected excess wear and tear and excess mileage.
During the period 1990-1994, a total of 17.6% of all
leased vehicles subject to 24- and 36-month leases were not purchased either
by the dealer or the lessee and were returned to Ford Credit as of their
respective scheduled lease end dates. Of the leased vehicles returned on
or after their scheduled lease end dates and subsequently sold by Ford
Credit at auction, 64.2% were sold for a loss versus 35.8% which were sold
for a gain. (Due to obligor and dealer purchase options, the opportunity
to realize a gain on a vehicle is given first to the obligor, then to the
related dealer, and finally to Ford Credit.)
For the period 1990-1994, 129,564 leased vehicles with a
residual exposure of $1.3 billion experienced aggregate residual losses of
$25.0 million. For all leased vehicles with 24- and 36-month
34
<PAGE> 37
leases which terminated between 1990 and 1994, annual aggregate residual
losses as a percent of residual exposure ranged from 1.2% to 5.8%, with a
cumulative average of 1.9%. In 1994, aggregate residual losses as a percent
of residual exposure were less than 1.2%.
ELIGIBILITY CRITERIA
The Series 1995-1 Leases and related Series 1995-1 Leased
Vehicles were purchased by Ford Credit as Administrative Agent on behalf of
FCTT, in the ordinary course of business in accordance with the origination
procedures set forth above. The Series 1995-1 Leases were selected from the
Leases in FCTT's portfolio by several criteria (the "Specific Eligibility
Criteria"), including the following: each related Series 1995-1 Leased
Vehicle was a new automobile or light-duty truck at the inception of the
related Series 1995-1 Lease and each Series 1995-1 Lease (a) was entered into
by a Dealer located in and an Obligor with a billing address in California, New
York or Pennsylvania; (b) provides for Constant Yield Payments that fully
amortize the Balance Subject to Lease Charges of such Series 1995-1 Lease to a
final payment equal to the Residual Value of the related Series 1995-1 Leased
Vehicle over the term of such Series 1995-1 Lease; (c) was not more than 30
days past due as of the Series 1995-1 Cut-Off Date and has never been extended;
(d) was originated on or after December 1, 1994; (e) has a Scheduled Lease End
Date not later than 36 months from the date it was entered into; (f) has a
Retail Operating Lease Factor equal to or greater than _%; (g) was not
originated under the Advance Payment Program; (h) is not subject to a holdback
of Excess Deferred Gross; and (i) does not provide for recourse to the related
Dealer. (Series 1995-1 Supplement, Section 3.1; Asset Contribution Agreement,
Section 3.2). The Series 1995-1 Leases were selected from FCTT's portfolio of
Leases that were Non-Specified Assets, in each case meeting the Specific
Eligibility Criteria and the other General Eligibility Criteria set forth in
"Additional Document Provisions--Representations, Warranties and Covenants."
No selection procedures believed to be adverse to the Noteholders were utilized
in selecting the Series 1995-1 Leases from qualifying Leases.
CHARACTERISTICS OF THE SERIES 1995-1 ASSETS
The following table provides data with respect to the composition of the Series
1995-1 Assets.
<TABLE>
<CAPTION>
COMPOSITION OF THE SERIES 1995-1 ASSETS
<S> <C>
Initial Pool Balance $
Number of Series 1995-1 Leases leases
Average Adjusted Balance Subject to Lease Charges $
Average Balance Subject to Lease Charges $
Weighted Average Original Lease Term(1) months
Weighted Average Remaining Lease Term(1) months
Average Retail Operating Lease Charge(2) %
Aggregate Residual Value as a Percent of Aggregate MSRP %
Residual Value as a Percent of the Initial Pool Balance %
</TABLE>
(1) Weighted by Adjusted Balance Subject to Lease Charges as of the Series
1995-1 Cut-Off Date.
(2) Excluding a fixed additional fee included in the determination of the
amount of the Monthly Payment (0.11% of the Balance Subject to Lease
Charges). Including such fee would have the effect of increasing the
yield of Series 1995-1 Assets.
35
<PAGE> 38
The following tables provide the geographic, lease charge,
lease term and vehicle line distribution of the Series 1995-1 Assets.
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF THE SERIES 1995-1 ASSETS
<S> <C>
California %
New York %
Pennsylvania %
Total 100%
</TABLE>
DISTRIBUTION OF THE SERIES 1995-1 ASSETS BY LEASE CHARGE
<TABLE>
<CAPTION>
Percentage of
Number of Aggregate Adjusted Balance Initial
Range Leases Subject to Lease Charges Pool Balance
<S> <C> <C> <C> <C> <C>
3.00 to 3.50 $ %
3.51 to 4.00
4.01 to 4.50
4.51 to 5.00
5.01 to 5.50
5.51 to 6.00
6.01 to 6.50
6.51 to 7.00
7.01 to 7.50
7.51 to 8.00
8.01 to 8.50
8.51 to 9.00
9.01 to 9.50
9.51 to 10.00
10.01 to 10.50
10.51 to 11.00
11.01 to 11.50
</TABLE>
DISTRIBUTION BY LEASE TERM
<TABLE>
<CAPTION>
Percentage of
Number of Aggregate Adjusted Balance Subject to Lease Initial
Lease Term Leases Charges Pool Balance
<S> <C> <C> <C>
24 Months $ %
36 Months
Total
</TABLE>
36
<PAGE> 39
DISTRIBUTION BY VEHICLE LINE
<TABLE>
<CAPTION> Percentage of
Number of Aggregate Adjusted Balance Subject Initial
Leases to Lease Charges Pool Balance
<S> <C> <C> <C>
Ford Automobile $ %
Ford Light-Duty Truck
Lincoln-Mercury
Other
Total
</TABLE>
The following table depicts the projected cash flows of the
Series 1995-1 Certificates assuming no prepayments and no defaults.
SERIES 1995-1 LEASES
PROJECTED AMORTIZATION AT 0% ABS, ASSUMING NO DEFAULTS
<TABLE>
<CAPTION>
Adjusted Balance
Subject to Monthly Principal Portion Non-Principal Portion of
Months Lease Charges Payments of Monthly Payment Monthly Payment Weighted Average Yield
<S> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
</TABLE>
37
<PAGE> 40
<TABLE>
<CAPTION>
Adjusted Balance
Subject to Lease Monthly Principal Portion Non-Principal Portion of
Months Charges Payments of Monthly Payment Monthly Payment Weighted Average Yield
<S> <C> <C> <C> <C> <C>
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
</TABLE>
The Percentage of Note Balance Outstanding table was prepared
on the basis of certain assumptions, including the assumptions that (i) all
Monthly Payments and Scheduled Termination Sale Proceeds are timely received,
and that no Series 1995-1 Lease is ever delinquent, (ii) none of the Series
1995-1 Leases is repurchased by the Administrative Agent, (iii) there are no
credit losses on the Series 1995-1 Leases, (iv) the Administrative Agent does
not exercise its optional redemption as described herein, (v) distribution of
principal and interest on the Notes and Lease Trust Certificates is made on
[____, 15, _____ 15, _____, 15 and _____15] of each year starting on _____ 15,
1995, (vi) the Administrative Agent Fee is 1% per annum, (vii) all prepayments
are prepayments in full, (viii) the Reserve Account is funded in an amount
equal to the Initial Reserve Account Deposit and the Required Reserve Account
Amount decreases in accordance with the formulas described herein, and (x) as
of the Cut-off Date, the Series 1995-1 Leases have the characteristics set
forth below.
The Series 1995-1 Leases are treated, for cash-flow analysis
purposes, as eight discrete sub-pools, each corresponding to lease originations
in the months of December, 1994 through March, 1995. Originations in each
month are divided further into groups having the same original terms.
<TABLE>
<CAPTION>
Weighted Weighted
Average Average Weighted Weighted Weighted Average
Principal Original Remaining Average Average Residual
Balance Term Term(1) Lease Age Lease Factor Value
<S> <C> <C> <C> <C> <C>
$ 24 Months 21 Months 3 Months % $
$ 24 22 2 % $
$ 24 23 1 % $
$ 24 24 0 % $
$ 36 33 3 % $
$ 36 34 2 % $
$ 36 35 1 % $
</TABLE>
38
<PAGE> 41
<TABLE>
<CAPTION>
Weighted Weighted
Average Average Weighted Weighted Weighted Average
Principal Original Remaining Average Average Residual
Balance Term Term(1) Lease Age Lease Factor Value
<S> <C> <C> <C> <C> <C>
$ 36 36 0 % $
</TABLE>
1. Includes payment of the Residual Value one month after the Scheduled Lease
End Date.
Each of the subpools is treated as a level-payment lease, which
amortizes the Adjusted Balance Subject to Lease Charges outstanding to the
Residual Value by the Scheduled Lease End Date. Monthly Payments are assumed
to be made in advance. The Residual Value is assumed to be collected one month
after the Scheduled Lease End Date.
Analysis of unaudited data from Ford Credit's Red Carpet Lease
portfolio indicates a temporal pattern of prepayments, with prepayment activity
generally at lower levels in the early months of the lease, followed by a rapid
rise in prepayment activity in the later months.
For the purpose of generating the Percentage of Note Balance
Outstanding table shown below, a standard prepayment assumption (the
"Prepayment Assumption") was used for each of the subpools which in the
aggregate represent the Series 1995-1 Leases. The prepayment model used in the
Prepayment Assumption is based on the "ABS" model, in which a constant number
of leases are assumed to prepay in full in each month. Unlike the standard ABS
model, the Prepayment Assumption incorporates varying monthly ABS rates over
the life of the leases. The ABS Rates assumed by the Prepayment Assumption are
set forth below:
<TABLE>
<CAPTION>
24-Month Leases
Month of Lease Life Monthly ABS Rate (%)
<S> <C>
Month 1 through 15 0.40%
Month 16 0.75%
Month 17 0.90%
Month 18 1.00%
Month 19 2.20%
Month 20 3.40%
Month 21 4.60%
Month 22 5.80%
Month 23 7.00%
Month 24 1.20%
</TABLE>
<TABLE>
<CAPTION>
36-Month Leases
Month of Lease Life Monthly ABS Rate (%)
<S> <C>
Month 1 through 20 0.50%
Month 21 through 30 1.25%
Month 31 1.30%
Month 32 2.50%
Month 33 3.70%
Month 34 4.90%
Month 35 6.10%
</TABLE>
39
<PAGE> 42
<TABLE>
<S> <C>
Month 36 1.35%
</TABLE>
The Prepayment Assumption is expressed in terms of months of lease
life, not in terms of months of projected cash flow. For example, a 24-month
lease with two months' seasoning as of the Cut-off Date will reach 0.75% ABS at
the 14th month of the projection at 100% of the Prepayment Assumption (as
opposed to the 16th month for a lease with 0 months' seasoning).
In the Percentage of Note Balance Outstanding table, multiples of the
Prepayment Assumption are calculated as follows. For a 24- month lease with 0
months seasoning, 50% Prepayment Assumption means 0.2% ABS for 15 months,
followed by ABS rates of 0.375%, 0.45%, 0.5%, 1.1%, 1.7%, 2.3%, 2.6%, 3.5%, and
0.6%.
Although the Prepayment Assumption is based on analysis of Ford
Credit's unaudited prepayment data, there can be no assurance to investors that
such experience will provide a reliable basis to predict the amount or the
timing of receipt of prepayments on the Series 1995-1 Leases.
<TABLE>
<CAPTION>
PERCENTAGE OF NOTE BALANCE OUTSTANDING
AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION
Class A-1 Notes Class A-2 Notes Class A-3 Notes
-------------------------------- ------------------------------- ---------------------------------
Payment Date 0% 50% 100% 125% 0% 50% 100% 125% 0% 50% 100% 125%
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial
</TABLE>
Weighted Avg. Life
(years)(1)
- -----------
(1) The weighted average life of each Class of Notes is determined by (i)
multiplying the amount of each distribution in reduction of principal
balance by the number of years from the date of the issuance of the Notes
to the related Payment Date, (ii) adding the results and (iii) dividing
the sum by the aggregate distributions in reduction of principal balance
referred to in clause (i).
40
<PAGE> 43
MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS
The rate of payment of principal and the yield to maturity on
each Class of Notes generally will be directly related to the rate at which
payments on the Series 1995-1 Leases and in respect of the Series 1995-1 Leased
Vehicles are received. To the extent that Obligors make Total Monthly Payments
when due (or the Administrative Agent makes Monthly Payment Advances) and the
Residual Values of Series 1995-1 Leased Vehicles are not realized until their
respective Scheduled Lease End Dates, the minimum principal payable quarterly
to Noteholders can be determined with certainty (such minimum principal
payment rate is reflected in the data in the column headed "0% ABS" in the
table "Percentage of Note Balance Outstanding" in "The Leases and Leased
Vehicles"). However, the rate of payment of principal on the Notes will be
shifted forward to the prepayment date to the extent that any Series 1995-1
Lease is prepaid in full, whether due to the receipt of Voluntary Early
Termination Proceeds, Administrative Agent Purchase Amounts or Liquidation
Proceeds. Partial prepayments will be treated as Payaheads and will not
increase the rate of payment of principal of the Notes because such payments
will be held and paid out to Noteholders as principal only when required to
meet a shortfall in a subsequent payment from the related Obligor.
Additionally, an investor's expected yield will be affected by
(i) the price the investor paid for the Notes, (ii) the rate of prepayments of
the Series 1995-1 Leases and (iii) the investor's assumed reinvestment rate.
For example, if prepayments on the Series 1995-1 Leases are slower than
anticipated, the investor's expected yield will be lower if the interest rates
are higher than the investor anticipated and higher if interest rates are lower
than the investor anticipated. Conversely, if prepayments on the Series 1995-1
Leases are faster than anticipated, the investor's expected yield will be
higher if interest rates are higher than the investor anticipated and lower if
interest rates are lower than the investor anticipated.
Because Residual Value is a large component of the Adjusted
Balance Subject to Lease Charges, the timing of the cashflows generated by the
Series 1995-1 Assets will be heavily weighted toward the Scheduled Lease End
Dates when the Residual Values of the Series 1995-1 Leased Vehicles are
realized. The rate of payment of principal on the Notes increases
substantially in _____ 1997 when Series 1995-1 Leases begin to reach their
Scheduled Lease End Dates. In general, prepayments of Series 1995-1 Leases in
full will have the effect of shortening the weighted average life of the Notes
(the average amount of time during which each dollar of the principal balance
of Notes is outstanding) and thereby reducing the yield to maturity on the
Notes. Additionally, holders of some Classes will not receive any principal
payments until other Classes have been paid in full, unless an Event of Default
under the Indenture has occurred and the maturity of the Notes has been
accelerated, in which case principal will be paid pro rata to the holders of
the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes without distinction
among Classes. As the rate of payment of principal on each Class of Notes
depends primarily on the rate of payment (including prepayments) of the Series
1995-1 Leases, final payment on each Class of Notes could occur significantly
earlier than the respective Stated Maturities. If there are prepayments in full
of Series 1995-1 Leases, Noteholders will bear the risk of being able to
reinvest principal payments of the Notes at yields at least equal to the yield
on their respective Class of Notes.
A prepayment of a Series 1995-1 Lease in full may be in the
form of Voluntary Early Termination Proceeds, resulting from a Voluntary Early
Termination of such Series 1995-1 Lease, Liquidation Proceeds, following a
bankruptcy of or default by the Obligor, or Administrative Purchase Amounts,
following the occurrence of certain events set forth in "Description of the
Administrative Agency Agreement-- Administrative Purchases." The rate of
prepayments on the Series 1995-1 Leases may be influenced by a variety of
economic, social and other factors including competing consumer finance
products and the conditions in the used car market. For 24-month leases
originated between 1989 and 1992, Ford Credit believes approximately 33% of the
leases prepaid in full before their respective scheduled lease end dates. For
36-month leases originated between 1989 and 1992, Ford Credit believes
approximately 42% of the leases prepaid in full before their respective
scheduled lease end dates.
Additionally, the rate of payment of principal of each Class
of Notes will be increased by the application to pay principal of Notes (after
payment of interest) of the portion, if any, of Monthly Payments not
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used to reduce the Pool Balance or to pay certain fees in any given month. To
the extent Series 1995-1 Leases which have higher Retail Operating Lease
Factors are prepaid faster than others, the amount of such additional portion
of the Monthly Payments available to pay principal of the Notes will be
reduced. See "Description of the Notes--The Indenture Cash Flows."
POOL FACTORS AND TRADING INFORMATION
The Note Pool Factor for each Class of Notes will be a seven
digit decimal which the Administrative Agent will compute prior to each Payment
Date. The "Note Pool Factor" with respect to any Class of Notes as of any
applicable Payment Date represents the remaining outstanding principal balance
of such Class of Notes as of the applicable Payment Date (after giving effect
to payments made on such Payment Date), expressed as a fraction of the initial
outstanding principal balance of such Class of Notes. Each Note Pool Factor
will initially be 1.0000000 and thereafter will decline to reflect reductions
in the outstanding principal balance of the applicable Class of Notes. A
Noteholder's portion of the principal balance of the related Class of Notes is
the product of (i) the original denomination of such Noteholder's Note and (ii)
the applicable Note Pool Factor.
The Noteholders will receive reports on or about each Payment
Date for the Accrual Period immediately preceding such Payment Date containing
information regarding: (i) payments received on Series 1995-1 Assets, (ii) the
Pool Balance, (iii) the Note Pool Factor of each Class of Notes (as of such
Payment Date after giving effect to payments made on such Payment Date) and
(iv) various other information. See "Description of the Notes--Statement to
Noteholders" for a description of the additional information provided to
Noteholders on each Payment Date. In addition, Noteholders of record during
any calendar year will be furnished information for tax reporting purposes not
later than the latest date permitted by law.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SOURCES OF CAPITAL AND LIQUIDITY
The Issuer's primary sources of capital will be (i) the net
proceeds of the Lease Trust Certificates and (ii) the net proceeds of the Notes
offered hereby. See "The Issuer--Capitalization of the Issuer."
The Issuer's primary sources of liquidity will be payments on
the Series 1995-1 Certificates received either directly by the Issuer or
indirectly pursuant to payments under the Program Operating Lease (including
amounts available from the Reserve Account) and amounts available under the
Limited RV Guaranty.
RESULTS OF OPERATIONS
The Issuer is newly formed and, accordingly, has no results of
operations as of the date of this Prospectus. Because the Issuer does not have
any operating history, there has not been included in this Prospectus any
historical or pro forma ratio of earnings to fixed charges. The payments
received under the Program Operating Lease and payments on other assets owned
by the Issuer and the interest costs of the Notes and the Lease Trust
Certificates will determine the Issuer's results of operations in the future.
The income generated from the Issuer's assets will be used to pay interest on
and principal of the Notes, related costs and expenses of the Issuer, to the
extent not included in items payable by the Administrative Agent pursuant to
the Administrative Agency Agreement, and distributions to the holders of the
Lease Trust Certificates, and after payment in full of the Notes and Lease
Trust Certificates, the Deferred Amount. The principal periodic expense of the
Issuer is expected to be, but is not limited to, the Administrative Agent Fee.
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DESCRIPTION OF THE NOTES
GENERAL
The Notes will be issued pursuant to the terms of the
Indenture. A copy of the Indenture will be filed with the Commission following
the issuance of the Notes. The following description summarizes the material
terms of the Notes and the Indenture. The summary does not purport to be
complete and is qualified in its entirety by reference to the provisions of the
Notes and the Indenture.
The Notes will be issued in denominations of $1,000 and
integral multiples thereof in book-entry form. (Indenture, Sections 2.2 and
2.10). Each Class of Notes will initially be represented by one or more
Notes, in each case registered in the name of Cede, the nominee of DTC.
Accordingly, Cede is expected to be the holder of record of the Notes of each
Class. Unless and until Definitive Notes are issued under the limited
circumstances described herein, no beneficial owner of a Note (each, a "Note
Owner") will be entitled to receive a physical certificate representing such
owner's Note, except as set forth in "--Definitive Notes." Unless and until
any Class of Notes is issued in fully registered, certificated form
("Definitive Notes) under the limited circumstances described in "--Definitive
Notes," all references herein to distributions, notices, reports and statements
to Noteholders will refer to the same actions made with respect to DTC or Cede,
as the case may be, for the benefit of Note Owners in accordance with DTC
procedures. (Indenture, Sections 2.10 and 2.12).
BOOK-ENTRY REGISTRATION
DTC is a limited-purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the UCC in effect in the State of
New York and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). DTC holds securities for its participating members (the
"Participants") and facilitates the clearance and settlement of securities
transactions between Participants through electronic book-entry changes in
accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Underwriter), banks, trust companies and clearing corporations.
Indirect access to the DTC system also is available to banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly (the "Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Note Owners that are not Participants or Indirect Participants
but that desire to purchase, sell or otherwise transfer ownership of or an
interest in the Notes may do so only through Participants or Indirect
Participants. Participants receive a credit for the Notes in DTC's records.
The ownership interest of each Note Owner is in turn recorded on the
Participants' and Indirect Participants' respective records. Note Owners will
not receive written confirmation from DTC of their purchase, but Note Owners
are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the
Participant or Indirect Participant through which the Note Owner entered into
the transaction. Transfers of ownership interests in the Notes will be
accomplished by entries made on the books of Participants acting on behalf of
Note Owners.
To facilitate subsequent transfers, all Notes deposited by
Participants with DTC will be registered in the name of Cede, as nominee of
DTC. The deposit of Notes with DTC and their registration in the name of Cede
will effect no change in beneficial ownership. DTC has no knowledge of the
actual Note Owners and its records reflect only the identity of the
Participants to whose accounts such Notes are credited, which may or may not be
the Note Owners. Participants and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to
Participants, by Participants to Indirect Participants and by Participants and
Indirect Participants to Note Owners will be governed by arrangements among
them, subject to any statutory or regulatory requirements as may be in effect
from time to time.
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DTC's practice is to credit Participants' accounts on each Payment
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on such Payment
Date. Payments by Participants and Indirect Participants to Note Owners will
be governed by standing instructions and customary practices, as in 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 Participant
and not of DTC, the Indenture Trustee, the Lease Trustee, the RCL Trustee, the
Administrative Agent, the Transferor or the Issuer, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal of and interest on the Notes to DTC will be the responsibility of the
Indenture Trustee, disbursement of such payments to Direct Participants will be
the responsibility of DTC and disbursement of such payments to Note Owners
will be the responsibility of Participants and Indirect Participants. As a
result, under the book-entry format, Note Owners may experience some delay in
their receipt of payments.
Because DTC can only act on behalf of Participants, who in turn act
on behalf of Indirect Participants and certain banks, the ability of a Note
Owner to pledge Notes to persons or entities that do not participate in the DTC
system, or otherwise take actions with respect to such Notes, may be limited
due to the lack of a physical certificate for such Notes.
Neither DTC nor Cede will consent or vote with respect to the Notes.
Under its usual procedures, DTC mails an "Omnibus Proxy" to the Indenture
Trustee as soon as possible after any applicable record date for such a consent
or vote. The Omnibus Proxy assigns Cede's consenting or voting rights to those
Participants to whose accounts the Notes are credited on that record date
(identified in a listing attached to the Omnibus Proxy).
Neither the Indenture Trustee, the Lease Trustee, the RCL Trustee,
the Administrative Agent, the Transferor or the Issuer will have any liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of the Notes held by Cede, as nominee of DTC, or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
DEFINITIVE NOTES
Definitive Notes will be issued to Note Owners rather than to DTC
only if (i) DTC is no longer willing or able to discharge its responsibilities
with respect to the Notes and the Administrative Agent is not able to locate a
qualified successor, (ii) the Issuer, at its option, elects to terminate
book-entry registration through DTC or (iii) after an Event of Default, Note
Owners representing not less than a majority of the aggregate principal balance
of the Notes advise the Indenture Trustee through DTC or its successor in
writing that the continuation of book-entry registration through DTC or its
successor is no longer in the best interest of Note Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC will notify all Note Owners, through Participants, of
the availability through DTC of Definitive Notes. Upon surrender by DTC of the
notes representing the Notes and the receipt of instructions for
re-registration, the Indenture Trustee will issue Definitive Notes to Note
Owners, who thereupon will become Noteholders for all purposes of the
Indenture. (Indenture, Section 2.12).
Payments on the Notes will thereafter be made by the Indenture
Trustee directly to holders of Notes in accordance with the procedures set
forth herein and in the Indenture. Interest payments and any principal
payments on the Definitive Notes on each Payment Date will be made to holders
in whose names the Definitive Notes were registered at the close of business on
the Record Date with respect to such Payment Date. Payments will be made by
check mailed to the address of such holders as they appear on the Note Register
or, under certain circumstances as provided in the Indenture, by wire transfer
to a bank or depository institution located in the United States and having
appropriate facilities therefor. (Indenture, Section 2.7). The final payment
on any Notes (whether Definitive Notes or global notes registered in the name
of Cede representing the Notes), however, will be made only upon presentation
and surrender of such Definitive Notes or global notes at the office or agency
specified in the notice of final distribution to Noteholders. (Indenture,
Section 7.7).
Definitive Notes will be transferable and exchangeable at the offices
of the Indenture Trustee or the Note Registrar to be set forth in the
Indenture. No service charge will be imposed for any registration of
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transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith. (Indenture, Section 2.4).
INTEREST
Interest on the principal balance of the Class A-1 Notes will accrue
at the rate of ___% per annum; interest on the principal balance of the
Class A-2 Notes will accrue at the rate of ___% per annum; and interest on the
principal balance of the Class A-3 Notes will accrue at the rate of ___% per
annum. (Indenture, Section 2.1). Interest on the Notes will be payable to the
Noteholders quarterly on each Payment Date to Noteholders of record on the
Record Date preceding such Payment Date. Interest on the principal balance of
the Notes will accrue at the applicable interest rate either from and including
the Closing Date (in the case of the first Payment Date) or from and including
the fifteenth day of the third calendar month preceding the calendar month in
which such Payment Date occurs, to but excluding the fifteenth day of the
calendar month in which such Payment Date occurs. Interest accrued but not paid
as of any Payment Date will be due on the next Payment Date together with
interest on such amount (to the extent lawful) at a rate per annum equal to the
interest rate for the applicable Class plus 2.0%. Interest will be calculated
on the basis of a 360-day year consisting of twelve 30-day months. (Indenture,
Section 1.1). Interest accrued as of any Payment Date but not paid on such
Payment Date will be due on the next Payment Date together with interest on such
amount at the interest rate with respect to such Class as set forth above.
(Indenture, Section 2.7). Interest payments on the Notes will be made from the
Total Available Funds as described in "--The Indenture Cash Flows."
Interest payments to all Classes of Noteholders will have the same
priority. If the amount of interest on the principal balance of the Class A-1
Notes, the principal balance of the Class A-2 Notes and the principal balance
of the Class A-3 Notes exceeds the Total Available Funds with respect to such
Payment Date, each Noteholder will receive its pro rata share (based on the
total amount of interest due to all Noteholders) of the amount available to be
distributed in respect of interest on the outstanding Notes.
PRINCIPAL
Principal payments will be made to the Noteholders sequentially on
each Payment Date in an amount equal to the Total Available Funds with respect
to such Payment Date after giving effect to the payment of interest to
Noteholders, the payment of interest to the Lease Trust Certificateholders, the
payment to Ford Credit of the Limited RV Guaranty Fee with respect to such
Payment Date and the deposit of the Reserve Account Deposit Amount, if any,
with respect to such Payment Date. No principal payments will be made to the
Class A-2 Noteholders until the principal balance of the Class A-1 Notes has
been reduced to zero and no principal payments will be made to the Class A-3
Noteholders until the principal balance of the Class A-1 Notes and the Class
A-2 Notes each have been reduced to zero (Indenture, Section 8.4); provided
that if an Event of Default under the Indenture has occurred and the maturity
of the Notes has been accelerated, principal payments will be made to the
holders of the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes on
a pro rata basis based on their respective principal balances without any
distinction among Classes (Indenture, Section 5.4).
Payments of principal with respect to the Lease Trust Certificates
will not be made until the aggregate principal balance of the Notes has been
reduced to zero. The Transferor and Ford Credit Leasing as holders of the
Transferor Lease Trust Certificates entitling them to the Deferred Amount will
receive all amounts from the Series 1995-1 Certificates after the aggregate
principal balance of Lease Trust Certificates has been reduced to zero. See
"--The Indenture Cash Flows" and "--The Accounts--The Reserve Account."
OPTIONAL REDEMPTION
If the Administrative Agent exercises its option to purchase the
Series 1995-1 Certificates on any Payment Date on which the Pool Balance has
declined to less than 10% of the Initial Pool Balance, the Notes will be
redeemed on such date in whole, but not in part, for the Redemption Price. The
Administrative Agent or the Lease Trustee will provide at least 25 days' prior
notice of the redemption of the Notes to the Indenture Trustee (who will
provide notice to the Noteholders). On such Payment Date the aggregate
principal balance of the Notes
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will be due and payable at the Redemption Price and unless all the Notes are
not redeemed on such Payment Date no interest will accrue on the Notes after
such Payment Date. (Indenture, Section 10.1; Series 1995-1 Supplement, Section
7.1).
Because the Initial Pool Balance is greater than the sum of the
initial principal balance of the Notes and the Lease Trust Certificates (the
Notes constitute less than 90% of the initial capitalization of the Issuer),
absent substantial shortfalls in amounts available from the Series 1995-1
Certificates to pay Noteholders, it is likely that the Notes will have been
paid in full on or before the Payment Date on which the Administrative Agent is
permitted to exercise its option to purchase the Series 1995-1 Certificates.
See "The Issuer--Capitalization of the Issuer."
THE INDENTURE TRUSTEE
Chemical Bank is the Indenture Trustee under the Indenture. The
Indenture Trustee is a New York corporation and its corporate trust offices are
located at ____________. The Transferor, Ford Credit and their respective
affiliates may maintain normal commercial banking relationships with the
Indenture Trustee and its affiliates.
THE ACCOUNTS
The Collection Account. The Collection Account will be established
at an Eligible Institution by the Administrative Agent in the name of the
Transferor, subject to the security interest of the Issuer and the Indenture
Trustee. Amounts deposited therein will be invested in Permitted Investments,
upon instructions from the RCL Trustee, with a maturity no later than the next
Payment Date. Income (or losses, if any) on such investments, if any, will be
credited (or charged) to the Collection Account and will be available to make
payments on the Notes and Lease Trust Certificates. (Series 1995-1 Supplement,
Section 5.1). The Collection Account will initially be established with the
FCTT Trustee. If the FCTT Trustee ceases to be an Eligible Institution, the
Collection Account will be moved to an Eligible Institution within 30 days.
(Series 1995-1 Supplement, Section 5.1).
The Payahead Account. The Payahead Account will be established at an
Eligible Institution by the Administrative Agent in the name of the Transferor,
subject to the security interest of the Issuer and Indenture Trustee.
Payaheads deposited therein will be invested in Permitted Investments, upon
instructions from the RCL Trustee, with a maturity no later than the next
Collection Period Settlement Date. Income (or losses, if any) on such
investments, if any, will be distributed to the beneficiaries of the Transferor
(or, in the case of losses, deducted from distributions to such beneficiaries).
The Payahead Account will be initially established with the FCTT Trustee. If
the FCTT Trustee ceases to be an Eligible Institution, the Payahead Account
will be moved to an Eligible Institution within 30 days. The Administrative
Agent is required to deposit Payaheads in the Payahead Account only if it has
failed to meet a Monthly Remittance Condition. Payahead Credits will be
applied by the Administrative Agent on each Distribution Date if any Monthly
Payment with respect to a Series 1995-1 Lease has not been paid in the related
Collection Period. (Series 1995-1 Supplement, Section 5.1).
The Payment Account. The Payment Account will be an Eligible Account
established by the Administrative Agent in the name of the Indenture Trustee in
trust for the benefit of the Noteholders and the Lease Trust
Certificateholders. Amounts deposited therein will be under the sole dominion
and control of the Indenture Trustee, and will not be invested. (Indenture,
Sections 8.1 and 8.5). The Payment Account will initially be established with
the Indenture Trustee. If the Payment Account may no longer be maintained at
the Indenture Trustee, the Payment Account will be moved within 30 days.
The Reserve Account. The Reserve Account will be an account
established at an Eligible Institution in the name of the Transferor, subject
to the security interest of the Issuer and the Indenture Trustee. Amounts
deposited therein will be invested in Reserve Account Investments and will be
credited (or any losses will be charged) to the Reserve Account. The Reserve
Account will be initially established with the Indenture Trustee. If the
Indenture Trustee ceases to be an Eligible Institution, the Reserve Account
will be moved to an Eligible Institution within 30 days. The Reserve Account
is established to secure the Basic Payment portion of the Program Operating
Lease Payments required to be made by the Transferor under the Program
Operating Lease. See "--
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Reserve Account Withdrawals and Deposits" for a description of the amounts to
be deposited to and withdrawn from the Reserve Account.
THE INDENTURE CASH FLOWS
Monthly or Daily Deposits to Collection Account. On each
Distribution Date, or on each business day if each Monthly Remittance Condition
has not been satisfied, the Administrative Agent will deposit all Collections
with respect to Series 1995-1 Assets into the Collection Account. (Series
1995-1 Supplement, Section 5.2).
"Collections" means with respect to Series 1995-1 Assets and
any Collection Period, all of the following amounts received by the
Administrative Agent in such Collection Period: (i) all Monthly
Payments and Payahead Credits; (ii) all Administrative Purchase
Amounts; (iii) all Available Scheduled Termination Sale Proceeds;
(iv) all Voluntary Early Termination Proceeds; (v) all Liquidation
Proceeds; and (vi) all Recoveries.
"Monthly Payment" means with respect to any Lease, the amount payable
monthly by the Obligor equal to the Constant Yield Payment and the
Additional Fee and certain other fees and charges for such month.
"Payahead Credits" means with respect to any Series 1995-1 Lease the
amount of a Payahead with respect to an Obligor either paid by the
Administrative Agent (if each Monthly Remittance Condition is
satisfied) or withdrawn from the Payahead Account, and applied
against the Monthly Payment due in such Collection Period with
respect to such Lease.
"Administrative Purchase Amount" means with respect to any Lease as
of the end of a Collection Period as to which a breach of certain
representations, warranties or covenants has occurred (including
those resulting from a Term Extension or the re-titling of a Leased
Vehicle), the Adjusted Balance Subject to Lease Charges as of such
date plus any overdue Monthly Payments which have not been paid by
the Obligor.
"Available Scheduled Termination Sale Proceeds" means with respect to
a Collection Period all Sale Proceeds received by the Administrative
Agent in such Collection Period for Series 1995-1 Leased Vehicles
which were sold on or after the termination of the related Series
1995-1 Leases at their respective Scheduled Lease End Dates
(increased by amounts collected in connection with Excess Wear and
Tear and Excess Mileage and reduced by amounts required to be
remitted to the related Obligors under applicable law); provided that
to the extent the Transferor exercises its option to purchase a
Series 1995-1 Leased Vehicle, the Available Scheduled Termination
Sale Proceeds for any Series 1995-1 Leased Vehicle will not exceed
the Transferor Purchase Option Price. See "Series 1995-1
Certificates--Lease of the Series 1995-1 Certificates to the
Transferor."
"Voluntary Early Termination Proceeds" means all amounts received in
connection with a Voluntary Early Termination, which amount is equal
to the Adjusted Balance Subject to Lease Charges at the time of
termination plus all unpaid Monthly Payments due but not paid as of
the date of termination.
"Liquidation Proceeds" means all amounts received with respect to a
Liquidated Lease and the related Leased Vehicle in the month in
which such Lease became a Liquidated Lease, net of any amounts,
remitted to the Obligor as required by law. A "Liquidated Lease"
means a Lease which is in default and with respect to which the
Administrative Agent has repossessed or attempted to repossess the
related Leased Vehicle or the related Obligor is the subject of a
bankruptcy proceeding.
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"Recoveries" means, with respect to any Collection Period, (i) all
amounts received during such Collection Period (net of taxes) with
respect to Leases which became Liquidated Leases before such
Collection Period plus (ii) all amounts received with respect to
Leases which expired on their respective Scheduled Lease End Dates
before such Collection Period and with respect to which the proceeds
from the sale of the related Leased Vehicles were received before
such Collection Period, minus any amounts remitted to the Obligor as
required by law.
Quarterly Deposits to the Collection Account. On the business day
preceding each Payment Date, the Administrative Agent acting on behalf of the
Issuer will deliver to the Indenture Trustee instructions setting forth the
information necessary to make all disbursements and payments with respect to
such Payment Date. (Indenture, Section 8.3).
On each Payment Date, the Administrative Agent will make a deposit or
withdrawal from the Collection Account in an amount equal to the sum of the
Aggregate Net Sale Proceeds Advances and Aggregate Net Monthly Payment Advances
to be made by the Administrative Agent for the preceding Accrual Period.
(Series 1995-1 Supplement, Sections 5.2 and 5.4).
"Aggregate Net Sale Proceeds Advances" means, with respect to any
Accrual Period, the aggregate Sale Proceeds Advances made by the
Administrative Agent with respect to such Accrual Period minus the
amount received by the Administrative Agent in such Accrual Period as
repayment of Sale Proceeds Advances which were made with respect to
previous Accrual Periods. See "Description of the Administrative
Agency Agreement--Advances of Sale Proceeds."
"Aggregate Net Monthly Payment Advances" means, with respect to any
Accrual Period, the aggregate Monthly Payment Advances made by the
Administrative Agent with respect to such Accrual Period minus the
amount received by the Administrative Agent in such Accrual Period
as repayment of Monthly Payment Advances which were made with respect
to a previous Accrual Period. See "Description of the Administrative
Agency Agreement--Monthly Payment Advances."
On each Payment Date, based on the instructions of the Administrative
Agent delivered on the preceding business day, the Indenture Trustee will
determine the aggregate amount of Available Funds on deposit in the Collection
Account (after giving effect to all deposits of Collections on such Payment
Date and the deposit or withdrawal of the Aggregate Net Monthly Payment
Advances and the Aggregate Net Sale Proceeds Advances on such Payment Date).
The "Available Funds" on deposit in the Collection Account on any
Payment Date will be equal to the Collections deposited therein on
each of the two preceding Distribution Dates (including earnings on
investments of such amounts) and Collections deposited therein on the
Distribution Date occurring on such Payment Date (or on each business
day during the related Accrual Period if any Monthly Remittance
Condition has not been satisfied) plus the total Aggregate Net Sale
Proceeds Advances and Aggregate Net Monthly Payment Advances
deposited on such Payment Date.
On each Payment Date, the Indenture Trustee will withdraw from the
Reserve Account and deposit to the Collection Account the Reserve Account Draw
Amount (if any) and the Reserve Account Release Amount (if any), and the
Indenture Trustee will draw on the Limited RV Guaranty and deposit to the
Collection Account the RV Guaranty Draw Amount (if any). The "Total Available
Funds" on deposit in the Collection Account on any Payment Date will be equal
to the sum of the Available Funds, the Reserve Account Draw Amount, the Reserve
Account Release Amount and the RV Guaranty Draw Amount. See "--Reserve Account
Withdrawals and Deposits" for a description of how the Reserve Account Draw
Amount and the Reserve Account Release Amount are calculated and "--Limited RV
Guaranty" for a description of how the RV Guaranty Draw Amount is calculated.
(Indenture, Sections 8.3 and 8.4).
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Deposits to the Payment Account. On each Payment Date the
Administrative Agent will deposit to the Payment Account the Total Available
Funds on deposit in the Collection Account. (Indenture, Section 8.4).
Withdrawals from the Payment Account. On each Payment Date, the
Indenture Trustee will apply the Total Available Funds in the following order
of priority:
(i) to the Administrative Agent, the Administrative Agent Fee;
(ii) to the Noteholders, pro rata without any priority among
Classes, to pay interest due on the outstanding Notes on such Payment Date
(plus, but only to the extent permitted under applicable law, interest on
any overdue interest at the interest rate of or the applicable Class plus
2.0%);
(iii) to an account held by the Lease Trustee for distribution to
Lease Trust Certificateholders, to pay interest (and interest on any
overdue interest) due on the Lease Trust Certificates on such Payment
Date;
(iv) to Ford Credit, to pay the Limited RV Guaranty Fee with
respect to the related Accrual Period;
(v) to the Reserve Account, to pay the Reserve Account Deposit
Amount for such Payment Date, if any; and
(vi) to the Noteholders, to pay principal with respect to each
Class of Notes outstanding, sequentially, until the Notes have been paid
in full; provided that if an Event of Default has occurred under the
Indenture and the maturity of the Notes has been accelerated, principal
payments will be made on a pro rata basis to holders of the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes based on their
respective principal balances, without distinction among Classes.
Any Total Available Funds remaining in the Payment Account after the
Class A-3 Notes have been paid in full will be deposited in an account held by
the Lease Trustee for distribution to Lease Trust Certificateholders or
otherwise in accordance with the terms of the Lease Trust Agreement.
(Indenture, Section 8.4). See "--Limited RV Guaranty" and "--Reserve Account
Withdrawals and Deposits."
LIMITED RV GUARANTY
On the Closing Date, Ford Credit will issue a limited guaranty (the
"Limited RV Guaranty") in favor of the Lease Trustee acting on behalf of the
Issuer, who will assign its rights thereunder to the Indenture Trustee as part
of the Lease Trust Estate pledged pursuant to the Indenture. The "Initial RV
Guaranty Amount" will be $________, and the "Available RV Guaranty Amount" as
of any Payment Date will equal the Initial RV Guaranty Amount minus the
aggregate RV Guaranty Draw Amounts made on each preceding Payment Date. No
reinstatement will be made for amounts drawn under the Limited RV Guaranty.
The Limited RV Guaranty is available to cover losses with respect to
Sale Proceeds (including amounts collected in respect of Excess Wear and Tear
and Excess Mileage and reduced by amounts required to be remitted to the
Obligor under applicable law) of Series 1995-1 Leased Vehicles which were sold
on or after the Scheduled Lease End Dates of the respective related Series
1995-1 Leases for less than their respective Residual Values (as such Residual
Values are decreased by Uncollected Excess Wear and Tear and Excess Mileage).
The amount available from the Limited RV Guaranty will not include amounts
payable in respect of Uncollected Excess Wear and Tear and Excess Mileage, if
any, with respect to such vehicle. The amount of such Uncollected Excess Wear
and Tear and Excess Mileage is considered a Series 1995-1 Credit Loss because
the Obligor is contractually obligated to pay such amount, and therefore it
will not be a component of the RV Guaranty Draw Amount but will be a component
of the Reserve Account Draw Amount. On any Payment Date, the "RV Guaranty Draw
Amount" will equal the lesser of (i) the amount, if any, by which the Required
Scheduled Termination Sale Proceeds exceeds
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the Accrual Available Scheduled Termination Sale Proceeds and (ii) the
Available RV Guaranty Amount as of such Payment Date. The "RV Guaranty Draw
Shortfall" for any Payment Date is the amount, if any, by which (i) the
Required Scheduled Termination Sale Proceeds minus the Accrual Available
Scheduled Termination Sale Proceeds is greater than (ii) the Available RV
Guaranty Amount.
The "Required Scheduled Termination Sale Proceeds" for any Payment
Date is the aggregate Residual Values of all Series 1995-1 Leased
Vehicles the related Series 1995-1 Leases of which reached their
Scheduled Lease End Dates sold in the related Accrual Period minus
the aggregate Uncollected Excess Wear and Tear and Excess Mileage
with respect to such Series 1995-1 Leased Vehicles.
The "Accrual Available Scheduled Termination Sale Proceeds" on any
Payment Date is equal to (i) the Available Scheduled Termination Sale
Proceeds for each of the three preceding Collection Periods, plus
(ii) Administrative Purchase Amounts deposited in connection with
Term Extensions.
As compensation for issuing the Limited RV Guaranty, Ford Credit will
on each Payment Date, to the extent that funds are available after payments of
interest to Noteholders and Lease Trust Certificateholders, receive the Limited
RV Guaranty Fee. The "Limited RV Guaranty Fee" with respect to any Payment
Date is ___% (per annum) of the outstanding amount of the Limited RV Guaranty
as of such Payment Date, before giving effect to any draw on such Payment Date
on the Limited RV Guaranty. See "--The Indenture Cash Flows."
RESERVE ACCOUNT WITHDRAWALS AND DEPOSITS
Amounts on deposit in the Reserve Account from time to time (the
"Reserve Account Amount") are available to cover shortfalls in the Basic
Payment portion of Program Operating Lease Payments in an amount equal to (i)
for Liquidated Leases, the difference between (x) the aggregate amounts
received from Obligors and from the disposition of the related Series 1995-1
Leased Vehicles and (y) the aggregate Adjusted Balance Subject to Lease Charges
of such Liquidated Leases and the related uncollected Monthly Payments from
Obligors of such Liquidated Leases, (ii) for Series 1995-1 Leases which
terminate on or after their respective Scheduled Lease End Dates, the sum of
(x) the aggregate uncollected Monthly Payments from the related Obligors and
(y) the aggregate Uncollected Excess Wear and Tear and Excess Mileage for such
Series 1995-1 Leases. See "--Limited RV Guaranty." The initial amount
deposited in the Reserve Account on the Closing Date will be $____________ (the
"Initial Reserve Account Deposit"). The Reserve Account Amount will be
increased by each Reserve Account Deposit Amount deposited therein and will be
decreased by the amount of each Reserve Account Draw Amount and Reserve Account
Release Amount on each Payment Date. The "Required Reserve Account Amount" as
of any Payment Date will be the lesser of (i) __% of the Pool Balance as of the
last day of the related Accrual Period and (ii) the sum of the aggregate
principal balance of the Notes and the Lease Trust Certificates as of such
Payment Date, before giving effect to any payments made on such Payment Date;
provided that the Required Reserve Account Amount will not in any event be
less than $___________________.
Reserve Account Draw Amount. If, on any Payment Date, the sum of the
Available Funds, the RV Guaranty Draw Amount and any RV Guaranty Draw
Shortfall is less than the sum of the Required Interest Payment and
the Pool Balance Decline, the Indenture Trustee will withdraw an
amount equal to the amount of such shortfall from the Reserve
Account, up to the amount of the Reserve Account Amount as of such
Payment Date (such withdrawal, the "Reserve Account Draw Amount").
Reserve Account Deposit Amount. On each Payment Date, the Reserve
Account Deposit Amount will be deposited if necessary in the Reserve
Account from the amounts on deposit in the Payment Account after
giving effect to the payment of interest on the Notes, interest on
the Lease Trust Certificates and the Limited RV Guaranty Fee. The
"Reserve Account Deposit Amount," if any, on any Payment Date is the
lesser of (i) the difference between the Required Reserve Account
Amount and the Reserve Account Amount, each as of such Payment Date
after giving effect to
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any releases or withdrawals from the Reserve Account on such Payment
Date, and (ii) the amount, if any, by which the sum of Available
Funds, the RV Guaranty Draw Amount and any RV Guaranty Draw Shortfall
exceeds the sum of the Required Interest Payment and the Pool Balance
Decline.
Reserve Account Release Amount. On each Payment Date, the Reserve
Account Release Amount will be included in the Total Available Funds
to make payments under the Indenture. The "Reserve Account Release
Amount" on each Payment Date is the amount, if any, by which the
Reserve Account Amount as of the prior Payment Date exceeds the sum
of the Reserve Account Draw Amount and the Required Reserve Account
Amount as of such Payment Date.
ADVANCES
The Administrative Agent will make a Monthly Payment Advance on each
Payment Date with respect to Monthly Payments not received with respect to a
Series 1995-1 Lease as of the end of the related Accrual Period but only if the
Administrative Agent determines in its sole discretion that such Monthly
Payment Advance will be recoverable from subsequent Monthly Payments on such
Series 1995-1 Lease. The Administrative Agent will make Sale Proceeds
Advances for Sale Proceeds which have not been received as of the end of the
related Accrual Period with respect to Series 1995-1 Leased Vehicles which were
sold in such Accrual Period on or after their respective Scheduled Lease End
Dates. On each Payment Date, the Administrative Agent will deposit to, or
withdraw from, the Collection Account the Aggregate Net Sale Proceeds Advances
and the Aggregate Net Monthly Payment Advances (Series 1995-1 Supplement,
Section 5.2). See "--The Indenture Cash Flows," "Description of the
Administrative Agency Agreement--Advances of Sale Proceeds" and "Description of
the Administrative Agency Agreement--Monthly Payment Advances."
MONTHLY REMITTANCE CONDITION
The Administrative Agency Agreement requires the Administrative Agent
to make all deposits of amounts received from Obligors during each Collection
Period on each business day, net of amounts payable in respect of the
Administrative Agent Fee. However, so long as each Monthly Remittance
Condition is satisfied, the Administrative Agent may retain such amounts until
the related Distribution Date. Pending deposit into the Collection Account,
collections of amounts received from Obligors may be employed by the
Administrative Agent at its own risk and for its own benefit and will not be
segregated from its own funds. Deposits or withdrawals from the Collection
Account with respect to Monthly Payment Advances and Sale Proceeds Advances
will be made on each Payment Date on a net basis. (Series 1995-1 Supplement,
Section 5.2).
STATEMENTS TO NOTEHOLDERS
On or prior to each Payment Date, the Administrative Agent will
prepare and provide the Indenture Trustee a statement to be included with the
report delivered to Noteholders described in "Pool Factors and Trading
Information" setting forth the following information with respect to such
Payment Date: (i) the amount of the distribution allocable to principal and
interest with respect to each Class of Notes outstanding; (ii) the aggregate
amount of Collections deposited in the Payment Account; (iii) the Aggregate Net
Sale Proceeds Advances and Aggregate Net Monthly Payment Advances deposited in
the Payment Account; (iv) the amount of Available Funds; (v) the Reserve
Account Draw Amount and/or the Reserve Account Release Amount, if any; (vi) the
amount of Total Available Funds; (vii) the RV Guaranty Draw Amount, if any;
(viii) the amount deposited in the Certificate Distribution Account for
payment of interest to Lease Trust Certificateholders; (ix) the Limited RV
Guaranty Fee; (x) the Reserve Account Deposit Amount, if any; (xi) the
aggregate outstanding balance of Notes and Lease Trust Certificates and the
Pool Balance; (xii) the Available RV Guaranty Draw Amount (after giving effect
to the RV Guaranty Draw Amount for such Payment Date, if any); (xiii) the
Reserve Account Amount (after giving effect to the Reserve Account Draw Amount,
Reserve Account Release Amount and/or the Reserve Account Deposit Amount for
such Payment Date); (xiv) the aggregate of the Series 1995-1 Credit Losses for
each of the three preceding Collection Periods; and (xv) the aggregate of the
Series 1995-1 Residual Losses for each of the three preceding Collection
Periods.
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INDENTURE
Events of Default. The "Events of Default" in the Indenture consist
of (i) a default for five days or more in the payment of interest on any Note;
(ii) on any date, the sum of (x) the aggregate principal balance of the Notes
and (y) the principal balance of the Lease Trust Certificates is equal to or in
excess of the Pool Balance; (iii) a default in the payment of principal of any
Note at Stated Maturity or on the Redemption Date; (iv) the occurrence of an
event of default under the Program Operating Lease; (v) a default in the
observance or performance of any material covenant or agreement, or any
representation or warranty made in the Indenture or in any certificate or
writing delivered pursuant thereto proves to have been incorrect in any
material respect as of the time when made, and the continuation of such default
for a period of 60 days or in the case of a materially incorrect representation
or warranty, 30 days, after notice thereof is given to the Lease Trustee by the
Indenture Trustee or the Lease Trustee and the Indenture Trustee by the holders
of not less than 25% of the aggregate principal balance of the Notes or (vi)
certain events of bankruptcy, insolvency, receivership or liquidation of the
Issuer. (Indenture, Section 5.1).
Noteholders holding not less than a majority of the aggregate
principal balance of the Notes may waive any past default or Event of Default
prior to the declaration of the acceleration of the maturity of the Notes,
except a default (i) in payment of principal of or interest on any of the Notes
or (ii) in respect of any covenant or provision in the Indenture which cannot
be modified or amended without unanimous consent of the Noteholders.
(Indenture Section, 5.12).
Remedies. If an Event of Default should occur and be continuing, the
Indenture Trustee or the holders of a majority of the aggregate principal
balance of the Notes may declare the principal of the Notes to be immediately
due and payable. Such declaration may be rescinded by the holders of a
majority of the aggregate principal balance of the Notes before a judgment or
decree for payment of the amount due has been obtained by the Indenture Trustee
if (i) the Issuer has deposited with the Indenture Trustee an amount sufficient
to pay (x) all interest on and principal of the Notes as if the Event of
Default giving rise to such declaration had not occurred and (y) all amounts
advanced by the Indenture Trustee and its costs and expenses and (ii) all
Events of Default (other than the nonpayment of principal of the Notes that has
become due solely by such acceleration) have been cured or waived (Indenture,
Section 5.2). Any such rescission could be treated, for federal income tax
purposes, as a constructive exchange of the Notes for deemed new Notes upon
which gain or loss would be recognized.
If the Notes have been declared due and payable following an Event of
Default, the Indenture Trustee may institute proceedings to collect amounts
due, exercise remedies as a secured party including foreclosure or sale of the
Lease Trust Estate, or elect to maintain the Lease Trust Estate and continue to
apply proceeds from the Lease Trust Estate as if there had been no declaration
of acceleration. The Indenture Trustee may not, however, unless it is required
to sell the Lease Trust Estate pursuant to the Lease Trust Agreement as a
result of the bankruptcy, insolvency or termination of the Transferor or the
bankruptcy or insolvency of Ford Credit Leasing, sell the Lease Trust Estate
following an Event of Default (other than the occurrence of an Event of Default
described in clauses (i), (ii) or (iii) above) unless (i) 100% of the
Noteholders consent thereto, (ii) the proceeds of such sale are sufficient to
pay in full the principal of and the accrued interest on the then outstanding
Notes and Lease Trust Certificates or (iii) the Indenture Trustee determines
that the Lease Trust Estate would not be sufficient on an ongoing basis to make
all payments on the Notes as such payments would have become due if such
obligations had not been declared due and payable, and the Indenture Trustee
obtains the consent of holders of 66-2/3% of the aggregate principal balance of
the Notes. The Indenture Trustee may, but need not, obtain and rely upon an
opinion of an independent accountant or investment banking firm as to the
sufficiency of the Lease Trust Estate to pay interest and principal on the
Notes on an ongoing basis. (Indenture, Section 5.4).
In the event of a sale of the Lease Trust Estate, either as a result
of the bankruptcy, insolvency or termination of the Transferor or the
bankruptcy or insolvency of Ford Credit Leasing, or following the occurrence of
certain Events of Default pursuant to the direction of the Indenture Trustee or
the Noteholders, the proceeds of such sale shall be distributed first to the
Indenture Trustee for amounts due as compensation or indemnity payments
pursuant to the terms of the Indenture; second to the Noteholders for interest
which is due and unpaid, ratably, without preference or priority among the
Classes; and third to the Noteholders for principal which
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is due and unpaid, ratably, without any distinction among Classes. Any
remaining amounts shall be distributed to the Lease Trust Certificateholders
for amounts due and unpaid in accordance with the terms of the Lease Trust
Agreement and then the Deferred Amount will be paid to the Transferor and Ford
Credit Leasing as holders of the Transferor Lease Trust Certificates.
(Indenture, Section 5.4).
Subject to the provisions of the Indenture relating to the duties of
the Indenture Trustee, in case an Event of Default shall occur and be
continuing with respect to the Notes, the Indenture Trustee will be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Noteholders, if the Indenture Trustee
reasonably believes it will not be adequately indemnified against the costs,
expenses and liabilities which might be incurred by it in complying with such
request. Subject to such provisions for indemnification and certain
limitations contained in the Indenture, the holders of not less than a majority
of the aggregate principal balance of the Notes will have the right to direct
the time, method and place of conducting any proceeding or any remedy available
to the Indenture Trustee or exercising any trust power conferred on the
Indenture Trustee, and the holders of not less than a majority of the aggregate
principal balance of the Notes may, in certain cases, waive any default with
respect thereto, except a default in the payment of principal or interest or a
default in respect of a covenant or provision of the Indenture that cannot be
modified without the waiver or consent of all of the holders of the outstanding
Notes. Until such time, if any, as Definitive Notes have been issued, the
Indenture Trustee will act only in accordance with the instructions of Cede, as
nominee for DTC. However, under the rules, regulations and procedures creating
and affecting DTC and its operations, DTC will act only in accordance with the
instructions of the Participants to whom Notes are credited, which will in turn
act in accordance with the instructions of persons holding beneficial interests
in such Notes through such Participants. Accordingly, although only Cede will
be entitled to vote under the Indenture, Note Owners will be entitled to
instruct DTC as to the manner in which to vote. (Indenture, Section 5.11 and
5.12).
No Noteholder will have the right to institute any proceeding with
respect to the Indenture, unless (i) such Noteholder previously has given to
the Indenture Trustee written notice of a continuing Event of Default, (ii) the
holders of not less than 25% of the aggregate principal balance of the Notes
have made written request of the Indenture Trustee to institute such proceeding
in its own name as Indenture Trustee, (iii) such Noteholder or Noteholders have
offered the Indenture Trustee reasonable indemnity, (iv) the Indenture Trustee
has for 60 days failed to institute such proceeding and (v) no direction
inconsistent with such written request has been given to the Indenture Trustee
during such 60-day period by the holders of a majority of the aggregate
principal balance of the Notes. (Indenture, Section 5.6).
Neither the Indenture Trustee nor the Lease Trustee in their
respective individual capacities, nor any holder of a Lease Trust Certificate,
nor any of their respective owners, beneficiaries, agents, officers, directors,
employees, successors or assigns will, in the absence of an express agreement
to the contrary, be personally liable for the payment of interest on or
principal of the Notes or for the agreements of the Issuer and the Lease
Trustee, in its capacity as trustee, contained in the Indenture.
Certain Covenants. The Issuer may not consolidate with or merge into
any other entity, unless (i) the entity formed by or surviving such
consolidation or merger is organized under the laws of the United States, any
state or the District of Columbia, (ii) such entity expressly assumes the
Issuer's obligation to make due and punctual payments upon the Notes and the
performance or observance of every agreement and covenant of the Issuer under
the Indenture, (iii) no Event of Default shall have occurred and be continuing
immediately after such merger or consolidation, (iv) the Issuer has been
advised that the then outstanding rating or ratings of each Class of the Notes
would not be reduced or withdrawn by the Rating Agencies as a result of such
merger or consolidation, (v) any action that is necessary to maintain the lien
and security created by the Indenture shall have been taken and (vi) the Lease
Trustee has received an Opinion of Counsel to the effect that such
consolidation or merger would have no material adverse tax consequences to the
Issuer, FCTT, the Transferor or to any Noteholder or Lease Trust
Certificateholder. (Indenture, Section 3.10).
The Issuer will not, among other things, (i) except as expressly
permitted by the Indenture, the Program Operating Lease and the other Basic
Documents, sell, transfer, exchange or otherwise dispose of any of the assets
of the Issuer, (ii) claim any credit on or make any deduction from the
principal and interest payable in
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respect of the Notes (other than amounts withheld under the Code or applicable
state law) or assert any claim against any present or former holder of Notes
because of the payment of taxes levied or assessed upon the Issuer, (iii)
dissolve or liquidate in whole or in part or (iv) permit (x) the validity or
effectiveness of the Indenture to be impaired, (y) any person to be released
from any covenants or obligations with respect to the Notes under the Indenture
except as may be expressly permitted thereby or (z) any lien, charge, excise,
claim, security interest, mortgage or other encumbrance to be created on or
extend to or otherwise arise upon or burden the assets of the Issuer or any
part thereof, or any interest therein or the proceeds therefrom. (Indenture,
Section 3.8).
The Issuer may not engage in any activities other than financing,
acquiring, owning, pledging, leasing (subject to the lien of the Indenture) and
managing the Series 1995-1 Certificates as contemplated by the Indenture and
the other Basic Documents. (Indenture, Section 3.12).
The Issuer will not incur, assume or guarantee any indebtedness other
than indebtedness incurred pursuant to the Notes and the Lease Trust
Certificates or otherwise in accordance with the Basic Documents. (Indenture,
Section 3.13).
The Issuer will or will cause the Administrative Agent to deliver to
the Indenture Trustee on the business day preceding each Payment Date the
disbursement and payment instructions as required pursuant to the Indenture.
(Indenture, Section 8.3).
Replacement of the Indenture Trustee. Noteholders holding not less
than a majority of the aggregate principal balance of the Notes may remove the
Indenture Trustee without cause by so notifying the Indenture Trustee and the
Lease Trustee, and following such removal may appoint a successor Indenture
Trustee.
The Indenture Trustee may resign at any time by so notifying the
Lease Trustee and the Noteholders. The Lease Trustee is required to remove the
Indenture Trustee if the Indenture Trustee (i) ceases to be eligible to
continue as the Indenture Trustee, (ii) is adjudged to be bankrupt or
insolvent, or (iii) otherwise becomes incapable of acting. Upon the
resignation or required removal of the Indenture Trustee, or the failure of the
Noteholders to appoint a successor Indenture Trustee following the removal
without cause of the Indenture Trustee, the Lease Trustee will be required
promptly to appoint a successor Indenture Trustee. (Indenture, Section 6.8).
Duties of Indenture Trustee . Except during the continuance of an
Event of Default, the Indenture Trustee will (i) perform such duties and only
such duties as are specifically set forth in the Indenture, (ii) rely, as to
the truth of the statements and the correctness of the opinions expressed in
certificates or opinions furnished to the Indenture Trustee which conform to
the requirements of the Indenture, and (iii) examine such certificates and
opinions to determine whether or not they conform to the requirements of the
Indenture. Upon the continuance of an Event of Default, the Indenture Trustee
will be required to exercise the rights and powers vested in it by the
Indenture and use the same degree of care and skill in the exercise thereof as
a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. (Indenture, Section 6.1).
Compensation and Indemnity. The Issuer will (i) pay to the Indenture
Trustee from time to time reasonable compensation for its services, (ii)
reimburse the Indenture Trustee for all expenses reasonably incurred and (iii)
indemnify the Indenture Trustee against any and all losses, liability or
expense (including attorneys' fees) incurred by it in connection with the
performance of its duties. The Indenture Trustee will not be indemnified
against any loss, liability or expense incurred by it through its own willful
misconduct, negligence or bad faith, except that, the Indenture Trustee will
not be liable (i) for any error of judgment made by it in good faith unless it
is proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts, (ii) with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it from Noteholders in
accordance with the terms of the Indenture, and (iii) for interest on any money
received by it except as the Indenture Trustee and the Lease Trustee may agree
in writing. The Indenture Trustee will not be deemed to have knowledge of any
event unless an officer of the Indenture Trustee has actual knowledge thereof
or has received written notice thereof in accordance with the provisions of the
Indenture. (Indenture, Sections 6.1 and 6.7).
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Access to Noteholder Lists. If Definitive Notes are issued in the
limited circumstances set forth in "--Definitive Notes," and the Indenture
Trustee is not the Note Registrar, the Lease Trustee will furnish or cause to
be furnished to the Indenture Trustee a list of the names and addresses of the
Noteholders (i) as of each Record Date, within five days thereafter and (ii) as
of not more than 10 days prior to the time such list is furnished, within 30
days after receipt by the Lease Trustee of a written request therefor.
(Indenture, Section 7.1).
Annual Compliance Statement. The Issuer will be required to file
annually with the Indenture Trustee a written statement as to the fulfillment
of its obligations under the Indenture. (Indenture, Section 3.9).
Indenture Trustee's Annual Report. The Indenture Trustee will be
required to mail each year to all Noteholders a brief report relating to its
eligibility and qualification to continue as the Indenture Trustee under the
Indenture, any amounts advanced by it under the Indenture, the amount, interest
rate and maturity date of certain indebtedness owing by the Issuer to the
Indenture Trustee in its individual capacity, the property and funds physically
held by the Indenture Trustee as such and any action taken by it that
materially affects the Notes and that has not been previously reported.
(Indenture, Section 3.17).
Satisfaction and Discharge of Indenture. The Indenture will be
discharged with respect to the collateral securing the Notes upon the delivery
to the Indenture Trustee for cancellation of all the Notes or, with certain
limitations, including receipt of certain opinions with respect to tax matters,
upon deposit with the Indenture Trustee of funds sufficient for the payment in
full of all of the Notes. (Indenture, Section 4.1).
Modification of Indenture. With the consent of the holders of not
less than a majority of the aggregate principal balance of the Notes, the Lease
Trustee, on behalf of the Issuer, and the Indenture Trustee may execute a
supplemental indenture to add provisions to, or change in any manner or
eliminate any provisions of, the Indenture with respect to the Notes, or to
modify (except as provided below) in any manner the rights of the Noteholders,
provided that certain opinions with respect to tax matters are obtained.
(Indenture, Section 9.2).
Without the consent of the holder of each outstanding Note affected
thereby, however, no supplemental indenture may (i) change the Stated Maturity
of or interest on any Note or reduce the principal amount thereof, the interest
rate specified thereon or the Redemption Price with respect thereto or change
any place of payment where, or the coin or currency in which, any Note or any
interest thereon is payable, (ii) impair the right to institute suit for the
enforcement of certain provisions of the Indenture regarding payment, (iii)
reduce the percentage of the aggregate principal balance of the Notes the
consent of the holders of which is required for any such supplemental indenture
or the consent of the holders of which is required for any waiver of compliance
with certain provisions of the Indenture or of certain defaults thereunder and
their consequences as provided for in the Indenture, (iv) modify or alter the
provisions of the Indenture regarding the voting of Notes held by the Issuer,
the Transferor, the Administrative Agent, an affiliate of any of them or any
obligor on the Notes, (v) reduce the percentage of the aggregate principal
balance of the Notes the consent of the holders of which is required to direct
the Indenture Trustee to sell or liquidate the Lease Trust Estate if the
proceeds of such sale would be insufficient to pay the principal balance and
accrued but unpaid interest on the Notes, (vi) decrease the percentage of the
aggregate principal balance of the Notes required to amend the sections of the
Indenture which specify the applicable percentage of the aggregate principal
balance of the Notes necessary to amend the Indenture or the other Basic
Documents or (vii) permit the creation of any lien ranking prior to or on a
parity with the lien of the Indenture with respect to any of the collateral for
the Notes or, except as otherwise permitted or contemplated in the Indenture,
terminate the lien of the Indenture on any such collateral or deprive the
holder of any Note of the security afforded by the lien of the Indenture.
The Lease Trustee, on behalf of the Issuer, and the Indenture Trustee
may also enter into supplemental indentures, without obtaining the consent of
Noteholders but with written notice to the Rating Agencies, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of modifying in any manner the rights of
Noteholders; provided, that such action will not, (i) as evidenced by an
Opinion of Counsel, materially and adversely affect the interests of any
Noteholder, (ii) as confirmed by each Rating Agency rating the Notes, cause the
then current rating assigned to any Class of Notes to be withdrawn or reduced
or (iii) as evidenced by an Opinion of Counsel (x) affect that treatment of the
Notes
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as debt for federal income tax purposes, (y) be deemed to cause a taxable
exchange of the Notes for federal income tax purposes or (z) cause the Issuer
to be taxable as an "association" or publicly traded partnership taxable as a
corporation for federal income tax purposes. (Indenture, Section 9.1).
The Lease Trust Agreement requires the Lease Trustee to give the
Lease Trust Certificateholders 30 days written notice of any proposed
supplemental indenture if it materially adversely affects the Lease Trust
Certificateholders or if Noteholders consent is required and provides that the
Lease Trustee will not enter into such amendment unless Lease Trust
Certificateholders holding 25% or more of the principal balance of Lease Trust
Certificates consent in writing. See "Additional Document Provisions--The
Lease Trust Agreement."
DESCRIPTION OF THE ADMINISTRATIVE AGENCY AGREEMENT
DUTIES OF THE ADMINISTRATIVE AGENT
The duties of the Administrative Agent with respect to the Series
1995-1 Assets are set forth in the Administrative Agency Agreement and the
Series 1995-1 Supplement. The Administrative Agent will manage, service,
administer, and make collections on the Series 1995-1 Leases using the same
degree of skill and attention that it exercises with respect to all comparable
retail automotive leases and retail installment sales contracts that it
services for itself or others ("Accepted Servicing Practices"). The
Administrative Agent will collect and post all payments, respond to inquiries
of Obligors, investigate delinquencies, commence legal proceedings to enforce
Series 1995-1 Leases against delinquent Obligors, send invoices to Obligors,
account for collections, furnish monthly and annual statements to the FCTT
Trustee with respect to distributions, make Sale Proceeds Advances and Monthly
Payment Advances, and pay Administrative Purchase Amounts. The Administrative
Agent will be required to take all necessary steps to maintain evidence of
FCTT's ownership on the certificate of title of each Series 1995-1 Leased
Vehicle. The Administrative Agent will obtain all licenses required to be held
by FCTT in connection with the ownership of Series 1995-1 Leases and Series
1995-1 Leased Vehicles. The Administrative Agent may contract with third
parties to perform its duties under the Administrative Agency Agreement, but
shall remain responsible for the performance of such duties. (Administrative
Agency Agreement, Sections 4.1 and 4.5).
The Administrative Agency Agreement also sets forth the duties of the
Administrative Agent with respect to the origination and purchase of Leases and
Leased Vehicles by FCTT and the obtaining of certificates of title for such
Leased Vehicles. See "FCTT--Lease Origination from Dealers and Assignment to
FCTT" and "--Titling of Leased Vehicles."
COLLECTION OF TOTAL MONTHLY PAYMENTS; EXTENSION OF LEASES
The Administrative Agent will collect all payments under the Series
1995-1 Leases. The Administrative Agent may grant extensions, rebates, or
adjustments on Series 1995-1 Leases in accordance with Accepted Servicing
Practices and in its discretion waive any late payment charge or any other fees
that may be collected in the ordinary course of servicing a Series 1995-1
Lease. (Administrative Agency Agreement, Section 4.2).
The Administrative Agent may grant an extension of the Lease Term (a
"Term Extension") if the Obligor requesting such extension is not in default
under the Series 1995-1 Lease at the time of such request and agrees to
continue to make Total Monthly Payments in the same amount as required under
the original terms of such Series 1995-1 Lease. Because the granting of a Term
Extension with respect to any Series 1995-1 Lease would be deemed to have a
material and adverse effect on holders of the Series 1995-1 Certificates, the
Administrative Agent will be required to purchase the beneficial interest in
the related Series 1995-1 Leased Vehicle as of the date of such Term Extension.
See "-- Administrative Purchases."
The Administrative Agent may also extend the term of a Series 1995-1
Lease in accordance with Accepted Servicing Practices, by waiving the Total
Monthly Payment due in any month in exchange for extending the term of the
Series 1995-1 Lease for one or more additional months beyond the Scheduled
Lease End Date for
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each month for which the Total Monthly Payment is waived (such extension, a
"Payment Extension"). The Obligor under any Payment Extension does not receive
an increase in the aggregate number of miles which the Series 1995-1 Leased
Vehicle may be driven by the Obligor without incurring an additional charge for
excess mileage under the related Series 1995-1 Lease. The Administrative Agent
may not grant Payment Extensions in excess of, in the aggregate, three months
beyond the Scheduled Lease End Date of the related Series 1995-1 Lease.
(Administrative Agency Agreement, Section 4.2).
REALIZATION ON LIQUIDATED LEASES
The Administrative Agent will use reasonable efforts (i) to repossess
any Series 1995-1 Leased Vehicle if it determines that eventual payment in full
of the related Series 1995-1 Lease is unlikely and (ii) to maximize Liquidation
Proceeds. Upon repossession, the Administrative Agent has discretion to repair
a damaged Series 1995-1 Leased Vehicle or sell such vehicle without repairs.
This determination will be based on whether the Administrative Agent believes
repairs will increase the related Liquidation Proceeds by an amount greater
than the cost of such repairs. (Administrative Agency Agreement, Section 4.3).
ADMINISTRATIVE PURCHASES
The Administrative Agent on behalf of Ford Credit and Ford Credit
Leasing, as holders of the EBCs, will be required to purchase the Issuer's
beneficial interest in any Series 1995-1 Asset as to which: either (i) any of
the Specific Eligibility Criteria and General Eligibility Criteria were not
satisfied on the Series 1995-1 Cut-Off Date; (ii) the Administrative Agent has
breached certain covenants in the Administrative Agency Agreement by either (a)
failing to make reasonable efforts to collect Total Monthly Payments from the
related Obligor, (b) failing to maintain record ownership in such Series 1995-1
Leased Vehicle, (c) changing the Retail Operating Lease Factor of such Series
1995-1 Lease, (d) modifying the number or amount of Monthly Payments due under
the Series 1995-1 Lease, except in connection with a Payment Extension, or (e)
otherwise impairing the rights of FCTT or the Issuer in such Series 1995-1
Lease or Series 1995-1 Leased Vehicle and, in each case, such breach continues
unremedied for a specified period; (iii) the related Series 1995-1 Leased
Vehicle has been relocated to a jurisdiction where FCTT is not qualified or
authorized to maintain evidence of the ownership of Series 1995-1 Leased
Vehicles; or (iv) the Administrative Agent has granted a Term Extension. The
amount payable for each such purchase will be the Administrative Purchase
Amount of the Series 1995-1 Lease and Series 1995-1 Leased Vehicle.
(Administrative Agency Agreement, Sections 4.2, 4.5, 4.6 and 4.7; Series 1995-1
Supplement, Section 5.5).
SALE OF LEASED VEHICLES
On the Scheduled Lease End Date of a Series 1995-1 Lease, the Obligor
has the option to purchase the related Series 1995-1 Leased Vehicle for an
amount equal to or greater than its Residual Value. If the Obligor does not
purchase the Leased Vehicle, the Dealer may, at its option, purchase the Leased
Vehicle. If either the Obligor or the Dealer exercises such option, the
Administrative Agent, on behalf of FCTT will sell the Series 1995-1 Leased
Vehicle to the Dealer for an amount equal to the Residual Value thereof plus
any unpaid amounts owing from the related Obligor. If neither the related
Obligor nor the Dealer elects to purchase a Series 1995-1 Leased Vehicle upon
termination of the related Lease, the Dealer will inspect the Series 1995-1
Leased Vehicle and assess any charges in respect of Excess Wear and Tear and
Excess Mileage, and the Administrative Agent will sell such Series 1995-1
Leased Vehicle at auction, or otherwise in accordance with Accepted Servicing
Practices. The Sale Proceeds received by the Issuer with respect to a Series
1995-1 Leased Vehicle sold at auction are limited to the Transferor Purchase
Option Price. See "Series 1995-1 Certificates--Lease of the Series 1995-1
Certificates to the Transferor" and "Special Considerations--Residual Value
Risk." (Administrative Agency Agreement, 5.1, 5.2 and 5._).
If the Dealer determines that a Series 1995-1 Leased Vehicle requires
repairs in respect of Excess Wear and Tear and Excess Mileage, either the
Obligor will pay the estimated costs of such repairs or the Administrative
Agent will grant the Obligor a one-month Term Extension to permit the Obligor
to effect such repairs at its own expense. The Administrative Agent will
purchase the beneficial interest in the Series 1995-1 Leased Vehicle for the
Administrative Purchase Amount if it grants a Term Extension. See
"--Administrative Purchases".
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The Administrative Agent will apply any security deposit or reconditioning
reserve to pay any amounts owed in respect of Uncollected Excess Wear and Tear
or Excess Mileage which are not paid by the Obligor. (Administrative Agency
Agreement, Section 5.1).
Upon receipt of Sale Proceeds, the Administrative Agent will deliver
the related certificate of title to the Obligor, Dealer or other purchaser, as
the case may be. The Administrative Agent will deposit the Sale Proceeds from
the sale of Series 1995-1 Leased Vehicles (but not an amount in excess of the
Transferor Purchase Option Price) in the Collection Account on the next
following Distribution Date, or on the date it receives such proceeds if any
Monthly Remittance Condition has not been satisfied. (Administrative Agency
Agreement, Sections 5.2 and 5.3). See "Series 1995-1 Certificates--Lease of
Series 1995-1 Certificates to the Transferor."
ADVANCES OF SALE PROCEEDS
If the Scheduled Lease End Date with respect to a Series 1995-1 Lease
occurs and the related Series 1995-1 Leased Vehicle is not sold by the last
business day of the Accrual Period in which the related Scheduled Lease End
Date occurred, the Administrative Agent will, on the related Payment Date, make
an advance (a "Sale Proceeds Advance") equal to the Residual Value of such
Series 1995-1 Leased Vehicle, but only if the Administrative Agent determines,
in its sole discretion, that such Sale Proceeds Advance will be recoverable
from the Sale Proceeds of the related Series 1995-1 Leased Vehicle. To the
extent such Sale Proceeds are insufficient to reimburse the Sale Proceeds
Advance, such Sale Proceeds Advance will be reimbursed first from the Sale
Proceeds of other Series 1995-1 Leased Vehicles and then, if required after the
Notes and Lease Trust Certificates have been paid in full, from a draw on the
Limited RV Guaranty. (Administrative Agency Agreement, Section 5.4; Series
1995-1 Supplement, Section 5.4).
VOLUNTARY EARLY TERMINATIONS, LIQUIDATED LEASES AND RECOVERIES
Upon termination of a Series 1995-1 Lease prior to its Scheduled
Lease End Date and receipt by the Administrative Agent of the related Voluntary
Early Termination Proceeds or Liquidation Proceeds, as the case may be, the
Administrative Agent will deliver the related certificate of title to the
purchaser, if any, of the related Series 1995-1 Leased Vehicle. From and after
such date the Series 1995-1 Certificates will represent a beneficial interest
in the Voluntary Early Termination Proceeds or Liquidation Proceeds and
Recoveries received with respect to such Series 1995-1 Asset and will no longer
represent an interest in such Series 1995-1 Lease or Series 1995-1 Leased
Vehicle. (Administrative Agency Agreement, Section 5.5).
REMITTANCE OF PAYMENTS; ALLOCATION OF FUNDS
The Administrative Agent will apply Total Monthly Payments received
during each Collection Period from each Obligor in the following order of
priority to pay (i) current and overdue Monthly Payments and Use and Lease Tax
Amounts, in the chronological order in which such payments were due; and (ii)
current and overdue Vehicle Insurance and Maintenance Amounts due to the
related Dealer. The Administrative Agent will retain amounts credited to
overdue Monthly Payments to the extent of any unreimbursed Monthly Payment
Advances with respect to the related Series 1995-1 Lease. (Administrative
Agency Agreement, Section 6.1; Series 1995-1 Supplement, Section 5.2).
If on any Distribution Date any portion of a Monthly Payment due on a
Series 1995-1 Lease during the related Collection Period has not been received
from the Obligor, the Administrative Agent will apply an amount equal to the
lesser of (i) the amount of Payaheads credited to such Obligor and (ii) the
portion of such Monthly Payment not received to pay the Monthly Payment with
respect to such Series 1995-1 Lease, and reduce the amount credited to such
Obligor by the amount so applied. Payaheads received from an Obligor in any
Collection Period will be credited to such Obligor. (Administrative Agency
Agreement, Section 6.1).
The Administrative Agent will apply Sale Proceeds (up to the
Transferor Purchase Option Price, if applicable), Voluntary Early Termination
Proceeds and Recoveries which are not from Liquidated Leases received during a
Collection Period in the following order of priority: (i) to pay any sales, use
and lease taxes; (ii) to reduce
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the Adjusted Balance Subject to Lease Charges of such Series 1995-1 Leased
Vehicle until such Adjusted Balance Subject to Lease Charges has been reduced
to zero; (iii) to pay Uncollected Excess Wear and Tear and Excess Mileage
charges, if any; and (iv) as a Total Monthly Payment until an amount equal to
the Total Monthly Payment due in such Collection Period has been credited as
set forth in the first paragraph of this section. (Administrative Agency
Agreement, Section 6.1).
The Administrative Agent will apply Liquidation Proceeds and
Recoveries from Liquidated Leases received during a Collection Period in the
following order of priority: (i) to pay any sales, use and lease taxes; (ii)
to reduce the Adjusted Balance Subject to Lease Charges until such Adjusted
Balance Subject to Lease Charges has been reduced to zero and (iii) as a Total
Monthly Payment until an amount equal to the Total Monthly Payment due in such
Collection Period has been credited as set forth in the first paragraph of this
section. (Administrative Agency Agreement, Section 6.1).
The Administrative Agent will pay any Use and Lease Tax Amounts and
any other sales, use and lease taxes and any Vehicle Insurance and Maintenance
Amounts due in connection with a payment received from an Obligor to the
appropriate tax authorities and originating Dealers, respectively, and such
amounts will not be available to pay interest of and principal on the Notes or
the Lease Trust Certificates. (Administrative Agency Agreement, Section 6.1).
MONTHLY PAYMENT ADVANCES
If one or more Monthly Payments due (or any portion thereof) with
respect to a Series 1995-1 Lease during any Accrual Period has not been
deposited to the Collection Account as of the last day of such Accrual Period,
the Administrative Agent will make an advance (a "Monthly Payment Advance") in
an amount equal to the sum of the Monthly Payments due with respect to such
Series 1995-1 Lease during such Accrual Period minus amounts received from the
related Obligor, but only if the Administrative Agent determines, in its sole
discretion, that such Monthly Payment Advance will be recoverable from
subsequent Monthly Payments on such Series 1995-1 Lease. To the extent
subsequent Monthly Payments with respect to such Series 1995-1 Lease are
insufficient to reimburse the Monthly Payment Advance, such Monthly Payment
Advance will be reimbursed first from Collections (other than Sale Proceeds)
with respect to other Series 1995-1 Leases and then, if required, from a draw
on the Reserve Account. (Administrative Agency Agreement, Section 6.3).
STATEMENTS TO HOLDERS
On each Distribution Date, the FCTT Trustee will deliver to the Lease
Trustee a statement relying on the information included in the certificate of
the Administrative Agent described in "--Reporting" for the related Collection
Period, setting forth for such Collection Period the following information with
respect to the Series 1995-1 Assets: (i) the aggregate Monthly Payments
received by the Administrative Agent; (ii) the Pool Balance as of the beginning
and end of such Collection Period and the portion of such Pool Balance
constituting the aggregate Residual Values of the Series 1995-1 Leased
Vehicles; (iii) the aggregate Administrative Purchase Amounts paid; (iv) the
aggregate Available Scheduled Termination Sale Proceeds, Voluntary Early
Termination Proceeds, Liquidation Proceeds and Recoveries received by the
Administrative Agent (separately stated); (vi) the aggregate amount of
Payaheads credited to Obligors as of the beginning and end of the related
Collection Period; (v) the outstanding Sale Proceeds Advances as of the
beginning and end of the related Collection Period, the aggregate Residual
Values of related Series 1995-1 Leased Vehicles the related Series 1995-1
Leases of which have expired on or after their respective Scheduled Lease End
Dates, which are unsold as of the beginning and end of the related Collection
Period; and (vi) the outstanding Monthly Payment Advances as of the beginning
and end of the related Collection Period and the outstanding amount of Monthly
Payments which were due but not collected from the related Obligors as of the
beginning and end of the related Collection Period. In addition to the
foregoing, on each Payment Date the FCTT Trustee will include in such
statement: (i) the Series 1995-1 Credit Loss with respect to each of the three
preceding Collection Periods; and (ii) the Series 1995-1 Residual Loss with
respect to each of the three preceding Collection Periods. (Administrative
Agency Agreement, Section 6.4; Series 1995-1 Supplement, Section 6.1).
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NO RESIGNATION
The Administrative Agent may not resign from its obligations and
duties under the Administrative Agency Agreement unless, as evidenced by an
Opinion of Counsel, the performance of its duties is no longer permissible
under applicable law. No such resignation will become effective until the FCTT
Trustee or a successor Administrative Agent has assumed the responsibilities
and obligations of the Administrative Agent. (Administrative Agency Agreement,
Section 7.2).
ADMINISTRATIVE AGENT EVENTS OF DEFAULT
Each of the following will constitute an event of default under the
Administrative Agency Agreement (each, an "Administrative Agent Event of
Default"): (i) failure by the Administrative Agent to make any distribution
required by the Administrative Agency Agreement or the Series 1995-1 Supplement
for three business days after written notice of such failure to the
Administrative Agent or after discovery of such failure by the Administrative
Agent; (ii) any failure by the Administrative Agent to observe or to perform in
any material respect any of its covenants or agreements in the Administrative
Agency Agreement or the Series 1995-1 Supplement, which failure materially
adversely affects the holders of the EBCs, the Issuer, as holder of the Series
1995-1 Certificates, or any other holder of an SBC, and continues for a period
of 30 days after written notice of such failure to the Administrative Agent or
after discovery of such failure by the Administrative Agent; (iii) any
representation, warranty, report or certification of the Administrative Agent
in, or pursuant to, the Administrative Agency Agreement or the Series 1995-1
Supplement was incorrect when made, which has a material adverse effect on any
holder of an EBC, the Issuer, or any other holder of an SBC, and continues for
a period of 30 days after written notice thereof to the Administrative Agent
or after discovery of such failure by the Administrative Agent; or (iv) the
occurrence of certain events of bankruptcy, insolvency, receivership or
liquidation with respect to the Administrative Agent; provided, however that
the occurrence of an event set forth in clauses (i), (ii), and (iii) with
respect to Series 1995-1 will be an Administrative Agent Event of Default only
with respect to Series 1995-1 and will not be an Administrative Agent Event of
Default with respect to any other Series or the EBCs. (Administrative Agency
Agreement, Section 7.1).
Upon the occurrence of any Administrative Agent Event of Default the
sole remedy available to the holders of the EBCs and the SBCs will be to remove
the Administrative Agent and appoint a successor Administrative Agent. See
"--Removal of the Administrative Agent."
REMOVAL OF THE ADMINISTRATIVE AGENT
Upon the occurrence of an Administrative Agent Event of Default, the
FCTT Trustee may, to the extent such Administrative Agent Event of Default
relates (i) to all FCTT Assets, upon direction of the holders of the Series
1995-1 Certificates (which will be the Indenture Trustee so long as any of the
Notes are outstanding), all holders of any other SBCs and the holders of the
EBCs (excluding Ford Credit and Ford Credit Leasing or any other affiliate of
the Administrative Agent), terminate all of the rights and obligations of the
Administrative Agent under the Administrative Agency Agreement with respect to
all FCTT Assets, or (ii) only to the Series 1995-1 Assets, upon direction of
the holders of the Series 1995-1 Certificates (which will be the Indenture
Trustee, so long as any of the Notes are outstanding), terminate all of the
rights and obligations of the Administrative Agent under the Administrative
Agency Agreement and the Series 1995-1 Supplement, with respect to the Series
1995-1 Assets. In each case, the FCTT Trustee will effect such termination by
delivering notice thereof to the Administrative Agent (with a copy to each
Rating Agency then rating the Notes, the Lease Trust Certificates and any other
securities based on any SBCs affected by such Administrative Agent Event of
Default). (Administrative Agency Agreement, Section 7.1).
APPOINTMENT OF A SUCCESSOR
Upon termination or resignation of the Administrative Agent, the
predecessor Administrative Agent will continue to perform its functions as
Administrative Agent, in the case of termination of the Administrative Agent,
until the earlier of the date specified in the termination notice or, if no
such date is specified therein, the
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date of the Administrative Agent's receipt of such notice and, in the case of
resignation of the Administrative Agent, until the later of (i) 45 days after
the delivery to the FCTT Trustee of the written resignation notice and (ii) the
date upon which the predecessor Administrative Agent becomes unable to act as
Administrative Agent, as specified in the resignation notice and accompanying
Opinion of Counsel. (Administrative Agency Agreement, Section 7.3).
In the event of the Administrative Agent's termination with respect
to all FCTT Assets or resignation, the FCTT Trustee, acting at the direction of
the holders of the EBCs and the outstanding SBCs will appoint a successor
Administrative Agent. In the event of a termination of the Administrative
Agent with respect to the Series 1995-1 Assets only, the FCTT Trustee, acting
at the direction of the holders of the Series 1995-1 Certificates (which will
be the Indenture Trustee so long as any of the Notes are outstanding) will
appoint a successor Administrative Agent. In each such case, the FCTT Trustee
will have the right to approve the successor Administrative Agent, such
approval not to be unreasonably withheld. If a successor Administrative Agent
is not appointed by the effective date of the predecessor Administrative
Agent's resignation or termination, then the FCTT Trustee will act as successor
Administrative Agent. If the FCTT Trustee is legally unable to act as
Administrative Agent, then the FCTT Trustee will be required to appoint, or
petition a court of competent jurisdiction to appoint, any established
institution, having a net worth of not less than $100,000,000 and whose regular
business includes the servicing of retail automotive leases and selling
vehicles at the termination of leases, as the successor Administrative Agent.
(Administrative Agency Agreement, Section 7.3).
Upon appointment, the successor Administrative Agent will assume all
of the rights and obligations of the Administrative Agent under the
Administrative Agency Agreement; provided, however, that no successor
Administrative Agent will have any responsibilities with respect to the
purchase of additional Leases and Leased Vehicles by FCTT or with respect to
making Monthly Payment Advances or Sale Proceeds Advances. (Administrative
Agency Agreement, Section 7.3).
Any compensation payable to a successor Administrative Agent may not
be in excess of that permitted the predecessor Administrative Agent unless the
holders of the EBCs bear such excess costs exclusively. (Administrative Agency
Agreement, Section 7.3).
Any predecessor Administrative Agent will be entitled to
reimbursement for any outstanding Sale Proceeds Advances and Monthly Payment
Advances to the extent funds are available therefor. (Administrative Agency
Agreement, Section 7.4).
CUSTODY OF LEASE FILES
The Administrative Agent will be the custodian of the Lease Files
(including certificates of title) for FCTT, including with respect to the
Series 1995-1 Assets. The Administrative Agent will be required to maintain
accurate and complete accounts, records, and computer systems pertaining to
each Lease File and to conduct, or cause to be conducted, periodic audits of
the Lease Files and of the related accounts, records, and computer systems.
The Administrative Agent will maintain each Lease File at (i) one of
the offices specified in the Administrative Agency Agreement, (ii) at such
other office (which may be a third party contracted by the Administrative Agent
to hold Lease Files) as the Administrative Agent specifies to the FCTT Trustee
by written notice not later than 90 days after any change in location or (iii)
at one of the offices included in a list delivered to the FCTT Trustee not less
frequently than every 90 days. The Administrative Agent will make available to
the FCTT Trustee, the Lease Trustee, and the Indenture Trustee a list of
locations of the Lease Files, the Lease Files, and the related accounts,
records, and computer systems maintained by the Administrative Agent at such
times as the FCTT Trustee, the Lease Trustee or the Indenture Trustee may
instruct. As soon as practicable after any termination or resignation of the
Administrative Agent, the Administrative Agent will deliver the Lease Files and
the related accounts and records maintained by the Administrative Agent to the
FCTT Trustee or any successor Administrative Agent.
The Administrative Agent as custodian of the Lease Files will
indemnify the FCTT Trustee, the Issuer, and the Indenture Trustee for any and
all liabilities that result from any improper act or omission of the
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Administrative Agent with respect to the Lease Files pertaining to the Series
1995-1 Assets. The Administrative Agent will not be liable for claims
resulting from the willful misfeasance, bad faith, or negligence of the FCTT
Trustee with respect to the Lease Files. (Administrative Agency Agreement,
Section 4.4).
REPORTING
On or before the tenth day of each calendar month, the Administrative
Agent will deliver to the FCTT Trustee a certificate containing information
relating to the distribution, on the following Distribution Date, of
Collections from the preceding Collection Period and the information the FCTT
Trustee will provide to the Lease Trustee on such Distribution Date.
(Administrative Agency Agreement, Section 4.9).
On or before April 30th of each year, the Administrative Agent will
deliver to the FCTT Trustee an officer's certificate, dated as of December 31
of the preceding calendar year, stating that (i) a review of the activities of
the Administrative Agent during the preceding 12-month period and of its
performance under the Administrative Agency Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based
on such review, the Administrative Agent has fulfilled all of its obligations
under the Administrative Agency Agreement throughout such period, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof.
(Administrative Agency Agreement, Section 4.10).
The Administrative Agent will be required to deliver to the FCTT
Trustee, within five business days of having obtained knowledge thereof,
written notice in an officer's certificate of any event which with the giving
of notice or lapse of time, or both, would become an Administrative Agent Event
of Default. (Administrative Agency Agreement, Section 4.10).
On or before April 30 of each year beginning April 30, 1996, a firm
of independent certified public accountants, who may also render other services
to the Administrative Agent or to Ford or any affiliate of either of them, will
deliver a report to the Administrative Agent, the FCTT Trustee, the Lease
Trustee and the Indenture Trustee (with a copy to each Rating Agency then
rating the Notes and the Lease Trust Certificates), stating that such firm has
audited the financial statements of the Administrative Agent for the prior
calendar year and that such audit (i) was made in accordance with generally
accepted auditing standards, (ii) included procedures relating to retail
automotive leases serviced for others in accordance with applicable industry
standards, and (iii) except as described in such report, disclosed no
exceptions or errors in the records relating to the Series 1995-1 Leases
serviced that, in the firm's opinion, should be included in such report.
(Administrative Agency Agreement, Section 4.11).
ADDITIONAL DOCUMENT PROVISIONS
THE LEASE TRUST AGREEMENT
Authority and Duties of the Lease Trustee. The Lease Trustee will
administer the Issuer in the interest of the Lease Trust Certificateholders,
subject to the lien of the Indenture, in accordance with the Lease Trust
Agreement and the other Basic Documents. (Lease Trust Agreement, Section 6.2).
The Lease Trust Certificateholders may, by written instruction,
direct the Lease Trustee in the administration of the Issuer. However, the
Lease Trustee will not be required to follow any such instruction if it
reasonably determines or is advised by counsel that so doing (i) is likely to
result in liability to the Lease Trustee, (ii) is contrary to the terms of the
Lease Trust Agreement or any other Basic Document, or (iii) is unlawful. (Lease
Trust Agreement Section 6.3).
The Lease Trustee will not be required to perform any of the
obligations of the Issuer under the Lease Trust Agreement or the other Basic
Documents that are required to be performed by (i) the Administrative Agent
under the Administrative Agency Agreement or the Series 1995-1 Supplement,
(ii) the Transferor under the
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Transfer Agreement or the Program Operating Lease or (iii) the Indenture
Trustee under the Indenture. (Lease Trust Agreement, Section 7.1).
Restrictions on Actions by Lease Trustee. The Lease Trustee may not
(i) initiate or settle any claim or lawsuit involving the Issuer (unless
brought by the Administrative Agent to collect amounts owed under a Series
1995-1 Lease), (ii) amend the Indenture where Noteholder consent is required,
(iii) amend the Indenture where Noteholder consent is not required if such
amendment materially adversely affects the Lease Trust Certificateholders or
(iv) amend any Basic Document other than the Indenture if such amendment
materially affects the Lease Trust Certificateholders, unless (a) the Lease
Trustee provides 30 days written notice thereof to the Lease Trust
Certificateholders and the Rating Agencies and (b) Lease Trust
Certificateholders holding at least 25% of the aggregate principal balance of
the Lease Trust Certificates do not object in writing to any such proposed
amendment within 30 days of such notice. (Lease Trust Agreement, Section 4.1).
Actions by Lease Trust Certificateholders with Respect to Certain
Matters. In general, Lease Trust Certificateholders holding not less than a
majority of the principal balance of the Lease Trust Certificates may take, or
direct the Lease Trustee to take, any action permitted under the Lease Trust
Agreement; provided, however, that the Lease Trustee will not be required to
follow any directions of the Lease Trust Certificateholders if so doing would
be contrary to any obligation of the Lease Trustee or the Issuer; and provided
further, that the Lease Trustee may not, except upon the occurrence of an
Administrative Agent Event of Default subsequent to the payment in full of the
Notes and in accordance with the written directions of Lease Trust
Certificateholders holding at least 66-2/3% of the aggregate principal balance
of the Lease Trust Certificates, (i) remove the Administrative Agent with
respect to Series 1995-1 Assets, (ii) appoint a successor Administrative Agent
with respect thereto, or (iii) other than following a bankruptcy and
dissolution of the Issuer or Ford Credit Leasing, sell the Series 1995-1
Certificates. (Lease Trust Agreement, Section 4.2, 4.4 and 4.5).
The right of the Lease Trust Certificateholders to take any action
affecting the Lease Trust Estate will be subject to the rights of the Indenture
Trustee under the Indenture.
Resignation and Removal of the Lease Trustee. The Lease Trustee may
resign at any time upon written notice to the Administrative Agent, the
Transferor and the Lease Trust Certificateholders, whereupon the Transferor
will be obligated to appoint a successor Lease Trustee. The Transferor or the
Lease Trust Certificateholders holding not less than a majority of the
aggregate principal balance of the Lease Trust Certificates may remove the
Lease Trustee if the Lease Trustee ceases to be eligible, becomes insolvent or
becomes legally unable to act. Upon removal of the Lease Trustee, the
Transferor or the Lease Trust Certificateholders holding not less than a
majority of the aggregate principal balance of the Lease Trust Certificates
will appoint a successor Lease Trustee. The Transferor will be required to
deliver written notice to the Rating Agencies of any resignation or removal of
the Lease Trustee. (Lease Trust Agreement, Section 10.2).
The Lease Trustee, and any successor thereto, must at all times (i)
be able to exercise corporate trust powers, (ii) be subject to supervision or
examination by federal or state authorities, (iii) have a combined capital and
surplus of $50,000,000 and (iv) have a long-term debt rating of investment
grade by each of the Rating Agencies or be otherwise acceptable to the Rating
Agencies. (Lease Trust Agreement, Section 10.1). Any co-trustee or separate
trustee appointed for the purpose of meeting applicable state requirements will
not be required to meet these eligibility requirements. (Lease Trust
Agreement, Section 10.5).
Termination. The Lease Trust Agreement will terminate (i) upon the
final distribution of all moneys or other property or proceeds of the Lease
Trust Estate in accordance with the terms of the Indenture and the final
distribution on the Transferor Lease Trust Certificates pursuant to the Lease
Trust Agreement or (ii) 90 days following the occurrence of certain events of
bankruptcy, insolvency, receivership or liquidation with respect to the
Transferor or Ford Credit Leasing. Upon termination of the Lease Trust
Agreement, the Lease Trustee will direct the Indenture Trustee to sell the
assets of the Lease Trust Estate, other than amounts on deposit in the Payment
Account, in a commercially reasonable manner and on commercially reasonable
terms. (Lease Trust Agreement, Sections 9.1 and 9.2). The Indenture Trustee
will apply the proceeds of such sale to pay amounts owed
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to the Indenture Trustee and interest and principal on the Notes and Lease
Trust Certificates in accordance with the terms of the Indenture. See
"Description of the Notes--Indenture--Remedies."
Indemnification. The Transferor will indemnify the Lease Trustee for
any expenses incurred by the Lease Trustee in the performance of its duties
under the Lease Trust Agreement. The Transferor will not be entitled to make
any claim upon the Lease Trust Estate for the payment of any such indemnified
expenses (Lease Trust Agreement, Section 8.2). The Transferor will not
indemnify the Lease Trustee for expenses resulting from the willful
misconduct, bad faith or negligence of the Lease Trustee, or for the inaccuracy
of any representation or warranty of the Lease Trustee in the Lease Trust
Agreement. The Lease Trustee will not be liable for (i) any error of judgment
made by an officer of the Lease Trustee, (ii) any action taken or omitted to be
taken in accordance with the instructions of any Lease Trust Certificateholder,
the Indenture Trustee, the Transferor or the Administrative Agent, (iii) the
interest on or principal of the Notes or the Lease Trust Certificates and (iv)
the default or misconduct of the Administrative Agent, the Transferor, or the
Indenture Trustee. (Lease Trust Agreement, Section 7.1).
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Administrative Agent, in the Series 1995-1 Supplement, and each
of Ford Credit and Ford Credit Leasing, in the Asset Contribution Agreement,
will represent and warrant that each Series 1995-1 Lease and Series 1995-1
Leased Vehicle meet the Specific Eligibility Criteria set forth in "The Leases
and the Leased Vehicles--Eligibility Criteria" and certain other eligibility
criteria (the "General Eligibility Criteria") including, among other things,
that (i) each Series 1995-1 Leased Vehicle was titled in the name of "Ford
Credit Titling Trust," "Ford Credit Titling Trust, Comerica Bank, Trustee" or
such substantially similar words acceptable to the relevant governmental
authority; (ii) the Residual Value of each Series 1995-1 Leased Vehicle does
not exceed an amount established by the Administrative Agent consistent with
its policies and practices regarding the setting of residual values as applied
with respect to closed-end retail automobile and light-duty truck leases; (iii)
all of the originating Dealer's right, title and interest in such Series 1995-1
Lease and the related Series 1995-1 Leased Vehicle was validly assigned by such
Dealer to FCTT; (iv) each Series 1995-1 Lease was originated by a Dealer in the
ordinary course of its business and in compliance with the Administrative
Agent's normal credit and collection policies and practices and contains
customary and enforceable provisions; (v) at its inception, and at the Series
1995-1 Cut-Off Date, 1995, each Series 1995-1 Lease complied in all material
respects with all requirements of applicable federal, state, and local laws and
regulations; (vi) each Series 1995-1 Lease represents the genuine, legal, valid
and binding payment obligation in writing of the related Obligor, enforceable
by the holder thereof in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and general principles of equity;
(vii) none of the Series 1995-1 Leases is an obligation of the United States of
America or any state or of any agency, department, or instrumentality of the
United States of America or any state; (viii) as of the date of the Series
Specification Notice with respect to Series 1995-1, no Series 1995-1 Lease had
been satisfied, subordinated, rescinded, cancelled or terminated; (ix) no
provision (other than the assessment of a security deposit or reconditioning
reserve) of a Series 1995-1 Lease has been waived; (x) no right of rescission,
setoff, counterclaim, or defense has been asserted or threatened with respect
to any Series 1995-1 Lease; (xi) each Obligor, to the best knowledge of the
Administrative Agent, has obtained or agreed to obtain physical damage
insurance and liability insurance covering the Series 1995-1 Leased Vehicle as
required under the related Series 1995-1 Lease; (xii) no Series 1995-1 Asset
has been sold, transferred, assigned, or pledged by any Dealer to any person or
entity other than FCTT; (xiii) the FCTT Trustee, for the benefit of the Issuer,
has good and marketable title to each Series 1995-1 Lease and each Series
1995-1 Leased Vehicle, free and clear of all liens, encumbrances, security
interests, and rights of others, including liens or claims for work, labor or
material relating to such Series 1995-1 Leased Vehicle; (xiv) no Series 1995-1
Leased Vehicle or Series 1995-1 Lease is subject to the laws of, and no Series
1995-1 Lease was originated in, any jurisdiction under which the sale,
transfer, and assignment of such Series 1995-1 Lease and Series 1995-1 Leased
Vehicle to FCTT or of a beneficial interest in such Series 1995-1 Lease or
Series 1995-1 Leased Vehicle pursuant to transfers of Series 1995-1
Certificates is unlawful, void, or voidable; (xv) no Dealer has entered into
any agreement with any Obligor that prohibits, restricts or conditions the
assignment of any portion of the related Series 1995-1 Lease; (xvi) all filings
(including, without limitation, UCC filings) necessary in any jurisdiction to
give Comerica, on behalf of FCTT, a first perfected
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ownership interest in each Series 1995-1 Lease have been made; (xvii) each
Series 1995-1 Lease constitutes "chattel paper" as defined in the UCC; and
(xviii) there is only one original of each Series 1995-1 Lease, which is held
by the Administrative Agent on behalf of FCTT. (Series 1995-1 Supplement,
Section 3.1; Asset Contribution Agreement, Section 3.2). See "Description of
Administrative Agency Agreement--Administrative Purchases" for circumstances
in which a breach of the foregoing representations will cause a purchase of the
beneficial interest in the Series 1995-1 Leases and Series 1995-1 Leased
Vehicles.
AMENDMENT PROVISIONS
General. So long as any of the Notes are outstanding, the Issuer's
rights as holder of the Series 1995-1 Certificates will be subject to the
Indenture, and after the Notes have been paid in full will be subject to the
Program Operating Lease. The Indenture Trustee's consent will be required in
each case where the consent of the holder of the Series 1995-1 Certificates is
required to amend the FCTT Agreement, the Administrative Agency Agreement, the
Series 1995-1 Supplement, the Asset Contribution Agreement, the Program
Operating Lease and the Lease Trust Agreement. The Indenture Trustee will be
the holder of the Series 1995-1 Certificates for purposes of determining
whether any proposed amendment to such agreements will materially and adversely
affect the interests of the holder of the Series 1995-1 Certificates.
The FCTT Agreement, the RCL Trust Agreement, the Asset Contribution
Agreement, the Program Operating Lease, the Administrative Agency Agreement
(including the Series 1995-1 Supplement) each may be amended without the
consent of the holder of the Series 1995-1 Certificates to (i) cure any
ambiguity therein, (ii) correct or supplement any provision which may be
inconsistent with any other provision therein, (iii) add, change or eliminate
any other provisions therein with respect to matters or questions arising
thereunder (in the case of the FCTT Agreement and the Administrative Agency
Agreement, only with respect to the Non-Specified Assets or the EBCs, and in
the case of the RCL Trust Agreement, only with respect to amounts available for
distribution to the beneficiaries of the Transferor); provided, however, (x)
that such amendment may not, as evidenced by an Opinion of Counsel, materially
and adversely affect the interests of the holder of the Series 1995-1
Certificates, (y) as confirmed by each Rating Agency that such amendment may
not cause the then current rating assigned to any Class of Notes or the Lease
Trust Certificates to be withdrawn or reduced and (z) an Opinion of Counsel as
to certain tax matters is delivered.
The FCTT Agreement, the Program Operating Lease and the
Administrative Agency Agreement may be amended at any time, with the consent of
the holder of the Series 1995-1 Certificates and, in the case of the FCTT
Agreement, the unanimous consent of the holders of the EBCs (initially Ford
Credit and Ford Credit Leasing) to add any provisions thereto or change in
any manner or eliminate any of the provisions therein, provided however, that
(i) such amendment may not materially and adversely affect the interests of the
holders of the Series 1995-1 Certificates or of any other Series, without the
unanimous consent of the holders of all Series affected thereby, and (ii) an
Opinion of Counsel as to certain tax matters is delivered. (FCTT Agreement,
Section 8.1; RCL Trust Agreement, Section 8.1; Asset Contribution Agreement,
Section 6.3; Program Operating Lease, Section 13.4; Administrative Agency
Agreement, Section 8.1).
Amendment of the Lease Trust Agreement. The Lease Trust Agreement
may be amended by the Transferor and the Lease Trustee, with prior written
notice to the Rating Agencies, without the consent of any of the Noteholders or
the Lease Trust Certificateholders, to cure any ambiguity or defect therein, to
correct or supplement any provisions therein, to add any provisions thereto or
change in any manner or eliminate any of the provisions therein or to modify in
any manner the rights of the Noteholders or the Lease Trust Certificateholders;
provided, that no such amendment may, (i) as evidenced by an Opinion of
Counsel, materially adversely affect the interests of the Indenture Trustee,
any Noteholder or Lease Trust Certificateholder, (ii) as confirmed by each
Rating Agency, cause the then current rating of any Class of Notes or the Lease
Trust Certificates to be withdrawn or reduced or (iii) as evidenced by an
Opinion of Counsel, cause the Issuer to be taxed as an "association" or
publicly traded partnership for federal income or state income or franchise tax
purposes. (Lease Trust Agreement, Section 12.1).
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The Lease Trust Agreement may be amended by the Transferor and the
Lease Trustee, with prior written notice to each Rating Agency, with the
consent of the Noteholders holding not less than a majority of the aggregate
principal balance of each Class of Notes and, to the extent affected thereby,
the consent of Lease Trust Certificateholders holding not less than a majority
of the aggregate principal balance of the Lease Trust Certificates, to add any
provisions thereto or change in any manner or eliminate any of the provisions
therein or modify in any manner the rights of the Noteholders or the Lease
Trust Certificateholders; provided, that no such amendment may (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of
distributions that are required to be made for the benefit of the Noteholders
or the Lease Trust Certificateholders, (ii) reduce the percentage of the
aggregate principal balance of each Class of Notes or the aggregate principal
balance of the Lease Trust Certificates required to consent to any such
amendment, without the consent of the holders of 100% of all outstanding Lease
Trust Certificates (other than the Transferor Lease Trust Certificates) or
(iii) as evidenced by an Opinion of Counsel (x) affect the treatment of the
Notes as debt for federal income tax purposes, (y) be deemed to cause a taxable
exchange of the Notes for federal income tax purposes or (z) cause the Issuer
to be taxable as an "association" or publicly traded partnership taxable as a
corporation for federal income or state income or franchise tax purposes.
(Lease Trust Agreement, Section 12.1).
BANKRUPTCY PROVISIONS
Ford Credit Leasing. The FCTT Trustee, the Lease Trustee, the
Transferor, the Indenture Trustee, the RCL Trustee, Ford Credit, the
Administrative Agent, each holder of an EBC and each holder of an SBC will
covenant, and each Lease Trust Certificateholder by accepting a Lease Trust
Certificate and each Noteholder by accepting a Note, will covenant that for a
period of one year and one day after payment in full of all amounts due each
holder of an EBC and each holder of an SBC, they will not institute, or join in
instituting, any bankruptcy, reorganization, insolvency or liquidation
proceeding, or other similar proceeding against Ford Credit Leasing. (RCL Trust
Agreement, Section 10.8; Administrative Agency Agreement, Section 8.9; FCTT
Agreement, Section 9.8; Lease Trust Agreement, Section 12.8).
FCTT. The FCTT Trustee will not have the power to commence a
voluntary bankruptcy proceeding with respect to FCTT unless each holder of an
EBC (initially Ford Credit and Ford Credit Leasing) and each holder of an SBC
approves such commencement and certifies to the FCTT Trustee that it reasonably
believes that FCTT is insolvent. (FCTT Agreement, Section 9.8). The
Administrative Agent will not have authority to commence a voluntary bankruptcy
proceeding with respect to FCTT. (Administrative Agency Agreement, Section
8.9).
The FCTT Trustee, the Lease Trustee, the Transferor, the Indenture
Trustee, the RCL Trustee, Ford Credit, Ford Credit Leasing, the Administrative
Agent, each holder of an EBC and each holder of an SBC, will covenant that for
a period of one year and one day after payment in full of all distributions
owing to each holder of an EBC and each holder of an SBC, they will not
institute, or join in instituting, any bankruptcy, reorganization, insolvency
or liquidation proceeding, or other similar proceeding against FCTT. (FCTT
Agreement, Section 9.8; Administrative Agency Agreement, Section 8.9).
The Transferor. The RCL Trustee will not have the power to commence
a voluntary bankruptcy proceeding with respect to the Transferor unless it
reasonably believes that the Transferor is insolvent and each beneficiary of
the Transferor approves such commencement and certifies to the RCL Trustee that
it reasonably believes that the Transferor is insolvent. (RCL Trust Agreement,
Section 10.8).
The Lease Trustee, the Transferor, the Indenture Trustee, each Lease
Trust Certificateholder by accepting a Lease Trust Certificate and each
Noteholder by accepting a Note, will covenant not to institute or join in the
institution of any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, against the Transferor and the RCL Trustee for a
period of one year and a day after the Notes have been paid in full. (Lease
Trust Agreement, Section 12.8; Indenture, Section 11.16).
The Issuer. The Lease Trustee will not have the power to commence a
voluntary bankruptcy proceeding with respect to the Issuer unless each Lease
Trust Certificateholder and each Noteholder approves such
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commencement and certifies to the Lease Trustee that it reasonably believes
that the Issuer is insolvent. (Lease Trust Agreement, Section 4.3).
The Lease Trustee, the Transferor, the Indenture Trustee and each
Lease Trust Certificateholder by accepting a Lease Trust Certificate and each
Noteholder by accepting a Note, will covenant not to institute, or join in
instituting, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, against the Issuer for a period of one year and a day
after the Notes have been paid in full; provided that 100% of the Noteholders
may institute, or join in instituting any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings. (Lease Trust Agreement,
Section 12.8; Indenture, Section 11.16).
FEES AND EXPENSES
FCTT Trustee. On each Payment Date, the FCTT Trustee will be
entitled to a fee for its services with respect to Series 1995-1 Assets (the
"Comerica Fee"), which shall be paid by the Administrative Agent on behalf of
the holders of the EBCs. The amount of such fee will equal a pro rata
percentage of the total fees and expenses payable to the FCTT Trustee with
respect to all FCTT Assets (excluding any extraordinary items relating only to
specific Series or the EBCs), the amount of which will be agreed upon from time
to time by the FCTT Trustee and the holders of the EBCs. (FCTT Agreement,
Section 6.8; Series 1995-1 Supplement, Section 4.2).
The Administrative Agent. Each Accrual Period, as compensation for
servicing the Series 1995-1 Assets and administering the distribution of funds
in respect thereof, the Administrative Agent will be paid the Administrative
Agent Fee (equal to the sum of the product of 1% per annum and the Pool Balance
as of the beginning of each Collection Period in the related Accrual Period)
from the Total Available Funds distributed on the related Payment Date. The
Administrative Agent also will receive the Supplemental Administrative Agent
Fee and certain other fees collected in connection with Series 1995-1 Assets.
The Administrative Agent will be entitled at all times to retain the amount of
Administrative Agent Fees such fees from Collections for so long as each
Monthly Remittance Condition is satisfied; otherwise it will be paid such
amounts on each Distribution Date. (Administrative Agency Agreement, Section
4.8; Series 1995-1 Supplement, Section 4.3).
The Administrative Agent also will receive fees with respect to the
servicing and administration of the Non-Specified Assets and other Series
Specified Assets from payments and proceeds of such Non-Specified Assets and
other Series Specified Assets.
The Administrative Agent will pay all expenses incurred by it in the
performance of its duties under the Administrative Agency Agreement, including
fees and disbursements of independent accountants, taxes imposed on the
Administrative Agent and expenses incurred in connection with distributions and
reports to the FCTT Trustee, the Lease Trustee and the Indenture Trustee. The
Administrative Agent will be required to pay all expenses relating to the sale
or disposition of any Series 1995-1 Leased Vehicle after the termination of the
related Series 1995-1 Lease. (Administrative Agency Agreement, Section 4.13).
The RCL Trustee. The Transferor will pay the RCL Trustee such fees
as Ford Credit, Ford Credit Leasing and the RCL Trustee from time to time
agree. The RCL Trustee will be reimbursed for all reasonable expenses incurred
either directly by Ford Credit and Ford Credit Leasing or from amounts
available for distribution to the beneficiaries of the Transferor. (RCL Trust
Agreement, Section 6.9).
The Lease Trustee. The Transferor will pay the Lease Trustee such
fees as have been agreed between the Transferor and the Lease Trustee and will
reimburse the Lease Trustee for all reasonable expenses. The Transferor will
not be entitled to be reimbursed from the Lease Trust Estate for the payment of
such expenses. (Lease Trust Agreement, Section 8.1).
GOVERNING LAW
The FCTT Agreement will be governed by the laws of the State of
Michigan.
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The Administrative Agency Agreement, the Series 1995-1 Supplement,
the Asset Contribution Agreement, the Transfer Agreement, the Program Operating
Lease, the Limited RV Guaranty and the Indenture each will be governed by the
laws of the State of New York.
The RCL Trust Agreement and the Lease Trust Agreement each will be
governed by the laws of the State of Delaware.
RATINGS OF THE NOTES
It is a condition of the issuance of the Class A-1 Notes that the
Class A-1 Notes be rated "AAA" or its equivalent by at least one Rating Agency.
It is a condition of the issuance of the Class A-2 Notes that the Class A-2
Notes be rated "AAA" or its equivalent by at least one Rating Agency. It is a
condition of the issuance of the Class A-3 Notes that the Class A-3 Notes be
rated no lower than "A" or its equivalent by at least one Rating Agency. The
ratings of the Notes could be downgraded in the event of any unfunded ERISA
liability of the Ford affiliated group. Further, the payment of principal on
the Class A-3 Notes will be based primarily on the proceeds received from the
sale of Series 1995-1 Leased Vehicles and, to the extent that such amounts are
less than the aggregate Residual Values of the Series 1995-1 Leased Vehicles,
on payments under the Limited RV Guaranty provided by Ford Credit. Because the
Limited RV Guaranty is an unsecured obligation of Ford Credit, a downgrade in
the rating of Ford Credit may cause the rating assigned to the Class A-3 Notes
to be downgraded. See "Special Considerations--Rating of the Class A-3 Notes
Dependent on Ford Credit Performance Under Limited RV Guaranty."
The rating assigned to any Class of Notes is not a recommendation to
purchase, hold or sell such Class of Notes, inasmuch as such rating does not
comment as to market price of suitability for a particular investor. There is
no assurance that the rating with respect to any Class of Notes will remain for
any given period of time or that the rating will not be lowered or withdrawn
entirely by such Rating Agency if in its judgment circumstances in the future
so warrant.
CERTAIN LEGAL ASPECTS OF FCTT
AND THE SERIES 1995-1 CERTIFICATES
SERIES 1995-1 CERTIFICATES
The Series 1995-1 Certificates will be issued pursuant to the FCTT
Agreement and will evidence a beneficial interest in FCTT and the Series 1995-1
Assets. The Series 1995-1 Certificates will not represent a direct interest in
the Series 1995-1 Assets or any other assets of FCTT the beneficial interest in
which is represented by the EBCs or any other Series which may be issued
pursuant to the FCTT Agreement. Except in certain limited circumstances as
described in "Special Considerations--Structural Considerations," proceeds from
assets of FCTT other than the Series 1995-1 Assets will not be available to
make payments with respect to the Series 1995-1 Certificates or to cover
expenses and liabilities of FCTT allocable to the Series 1995-1 Assets. See
"FCTT--Exchangeable Beneficial Certificates and Specified Beneficial
Certificates."
INSOLVENCY RELATED MATTERS
Each of Ford Credit, Ford Credit Leasing, FCTT (or the FCTT Trustee
when acting on its behalf) and the Transferor (or the RCL Trustee when acting
on its behalf) has taken steps in structuring the transactions described herein
and has undertaken to act throughout the life of such transactions in a manner
intended to ensure that the voluntary or involuntary commencement of a case or
proceeding by or against Ford Credit under the Bankruptcy Code or similar
applicable state laws ("Insolvency Laws") will not result in the commencement
of a similar case or proceeding under such Insolvency Laws with respect to any
of Ford Credit Leasing, FCTT or the Transferor, and that the separate legal
existence of each of Ford Credit Leasing, FCTT and the Transferor will be
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respected such that none of their respective assets and liabilities will be
consolidated with the assets and liabilities of Ford Credit.
Ford Credit Leasing has been formed as a separate, limited-purpose
corporate subsidiary of Ford Credit pursuant to a certificate of incorporation
containing certain limitations (including restrictions on the nature of Ford
Credit Leasing's business and its ability to incur indebtedness, a requirement
that, under certain circumstances, it have at least two "Independent Directors"
and a restriction on its ability to voluntarily commence a case or proceeding
under any Insolvency Law without the unanimous affirmative vote of all of its
directors, including each Independent Director). Ford Credit Leasing has
represented that it has no intention of voluntarily commencing a case or
proceeding under any Insolvency Law for so long as it is solvent and it does
not reasonably foresee becoming insolvent.
The activities of FCTT are limited by the terms of the FCTT Agreement
which also provides that FCTT is not intended to be and shall not constitute a
"business trust" within the meaning of the Bankruptcy Code (which provision, if
respected, would result in FCTT not being eligible to become a debtor in a case
under the Bankruptcy Code). To the extent that FCTT may be eligible for relief
under any Insolvency Law, the FCTT Trustee is not authorized to commence a case
or proceeding thereunder without the consent of each holder of an EBC and each
holder of an SBC. Each of the FCTT Trustee, Ford Credit, Ford Credit Leasing
and the holders from time to time of the Series 1995-1 Certificates have agreed
not to institute a case or proceeding against FCTT under any Insolvency Law for
a period of one year and a day after payment in full of all distributions under
the FCTT Agreement.
The activities of the Transferor are limited by the terms of the RCL
Trust Agreement. The Transferor has been formed as a Delaware business trust
pursuant to the applicable statute. To the extent that the Transferor may be
eligible for relief under any Insolvency Law, the RCL Trustee is not authorized
to commence a case or proceeding thereunder without the consent of Ford Credit
and Ford Credit Leasing, as the sole beneficiaries of the Transferor. Each of
the RCL Trustee, Ford Credit and Ford Credit Leasing has agreed not to
institute a case or proceeding against the Transferor under any Insolvency Law
for a period of one year and a day after payment in full of the Series 1995-1
Certificates.
There can be no assurance, however, that the limitations on the
activities of Ford Credit Leasing, FCTT and the Transferor, as well as the
restrictions on their respective abilities to obtain relief under Insolvency
Laws or lack of eligibility thereunder, as described above, would prevent a
court from concluding that their respective assets and liabilities should be
consolidated with those of Ford Credit if Ford Credit becomes the subject of a
case or proceeding under any Insolvency Law. Skadden, Arps, Slate, Meagher &
Flom, special counsel to Ford Credit, will deliver an opinion based on a
reasoned analysis of analogous case law (although there is no precedent based
on directly similar facts) to the effect that, subject to certain facts,
assumptions and qualifications specified therein, under present reported
decisional authority and statutes applicable to federal bankruptcy cases, if
Ford Credit were to become the subject of a case under the Bankruptcy Code, it
would not be a proper exercise by a court of its equitable discretion to
disregard the separate legal existence of any of Ford Credit Leasing, FCTT or
the Transferor from that of Ford Credit and to require the consolidation of the
assets and liabilities of any of Ford Credit Leasing, FCTT or the Transferor
with the assets and liabilities of Ford Credit. Among other things, such
opinion will assume that each of Ford Credit Leasing, FCTT (or the FCTT Trustee
when acting on its behalf) and the Transferor (or the RCL Trustee when acting
on its behalf) will follow certain procedures in the conduct of its affairs,
including maintaining records and books of account separate from those of Ford
Credit, refraining from commingling its respective assets with those of Ford
Credit, doing business from an office separate from that of Ford Credit and
refraining from holding itself out as having agreed to pay, or being liable
for, the debts of Ford Credit. In addition, such opinion will assume that
other than as expressly provided by the FCTT Agreement, the Administrative
Agency Agreement and the Limited RV Guaranty (each of which contains terms and
conditions consistent with those that would be arrived at on an arms' length
basis between unaffiliated entities in the belief of the parties thereto), Ford
Credit will not generally guaranty the obligations of Ford Credit Leasing, FCTT
or the Transferor to third parties, and will not conduct the day-to-day
business or activities of any thereof other than in its capacity as
Administrative Agent acting under and in accordance with the Administrative
Agency Agreement. Each of Ford Credit, Ford Credit Leasing, FCTT and the
Transferor intends to follow and has represented to such counsel that it will
follow these and other procedures related to maintaining the separate identity
and legal existences
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of each of Ford Credit Leasing, FCTT and the Transferor. Such a legal opinion,
however, is not binding on any court.
If a case or proceeding under any Insolvency Law were to be commenced
by or against any of Ford Credit Leasing, FCTT or the Transferor, or if a court
were to conclude in favor of the consolidation of the assets and liabilities of
any thereof with those of Ford Credit, or if an attempt were made to litigate
any of the foregoing issues, delays in distributions on the Series 1995-1
Certificates (and possible reductions in the amount of such distributions) to
the Issuer (either directly or, if the Program Operating Lease remains in
effect, indirectly to the extent resulting in delayed or reduced payments from
the Transferor to the Issuer under the Program Operating Lease), and therefore
to the Noteholders, could occur. In addition, if a bankruptcy or insolvency
occurs with respect to Ford Credit Leasing or the Transferor, the FCTT
Agreement provides that FCTT will be terminated, and if the Issue becomes
bankrupt or insolvent, or is terminated (which could occur as a result of the
bankruptcy or insolvency of Ford Credit Leasing or the bankruptcy, insolvency
or termination of the Transferor), the FCTT Agreement provides that FCTT will
be terminated with respect to holding the Series 1995-1 Assets. In each case
the FCTT Trustee is required to distribute the Series 1995-1 Assets to the
holder of the Series 1995-1 Certificates. Because the Issuer has pledged its
rights to the Series 1995-1 Certificates to the Indenture Trustee, such
distribution would be made to the Indenture Trustee who would be responsible
for retitling the Series 1995-1 Leased Vehicles. The cost of such re-titling
would reduce the amounts payable from the Series 1995-1 Assets which are
available for payments of interest on and principal of the Notes, and in such
event Noteholders could suffer a loss on their investment.
Each of Ford Credit and Ford Credit Leasing will treat its conveyance
of the Series 1995-1 Certificates to the Transferor as an absolute transfer of
all of its interest therein for all purposes, including without limitation tax
and financial accounting purposes. If such conveyances constitute absolute
transfers, the Series 1995-1 Certificates and the proceeds thereof would not be
part of Ford Credit's or Ford Credit Leasing's bankruptcy estate under Section
541 of the Bankruptcy Code should Ford Credit or Ford Credit Leasing become the
subject of a case thereunder. However, if a case or proceeding under any
Insolvency Law were commenced by or against Ford Credit or Ford Credit Leasing,
and a creditor, receiver or trustee-in-bankruptcy of Ford Credit or Ford Credit
Leasing were to take the position that the transfer of the Series 1995-1
Certificates by Ford Credit and Ford Credit Leasing to the Transferor should
instead be treated as a pledge of such Series 1995-1 Certificates to secure a
borrowing by Ford Credit and Ford Credit Leasing, delays in payments of
proceeds of such Series 1995-1 Certificates to the Issuer, and therefore to the
Noteholders, could occur or (should the court rule in favor of such creditor,
receiver or trustee-in-bankruptcy) reductions in the amount of such payments
could result. Skadden, Arps, Slate, Meagher & Flom will deliver an opinion to
the effect that, subject to certain facts, assumptions and qualifications
specified therein, in the event that either Ford Credit or Ford Credit Leasing
were to become the subject of a case under the Bankruptcy Code subsequent to
the transfer of the Series 1995-1 Certificates to the Transferor, the transfer
of the Series 1995-1 Certificates from Ford Credit and Ford Credit Leasing
would be respected as an absolute transfer (that is, a "true sale") of the
Series 1995-1 Certificates from Ford Credit and Ford Credit Leasing to the
Transferor, and the Series 1995-1 Certificates and the proceeds thereof would
not be included in Ford Credit's or Ford Credit Leasing's bankruptcy estate
pursuant to Section 541 of the Bankruptcy Code. As indicated above, such a
legal opinion is not binding on any court.
As a precautionary measure, the Transferor will take the actions
requisite to obtaining a perfected security interest in the Series 1995-1
Certificates as against Ford Credit and Ford Credit Leasing. Accordingly, if
the conveyances of the Series 1995-1 Certificates by Ford Credit and Ford
Credit Leasing to the Transferor were not respected as absolute transfers, the
Transferor (and ultimately the Issuer and the Indenture Trustee as successors
in interest) should be treated as a secured creditor of Ford Credit and Ford
Credit Leasing, although a case or proceeding under any Insolvency Law with
respect to Ford Credit or Ford Credit Leasing could result in delays or
reductions in distributions under the Series 1995-1 Certificates as indicated
above notwithstanding such perfected security interest.
In the event that Ford Credit were to become subject to a case under
the Bankruptcy Code, certain payments made within one year of the commencement
of such case may be recoverable by Ford Credit as debtor-in-possession or by a
creditor or a trustee in bankruptcy as a preferential transfer from Ford
Credit. These payments
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include payments made by Ford Credit under the Limited RV Guaranty and the
portion of payments of Administrative Purchase Amounts allocable to Ford
Credit in respect of the purchase of beneficial interests in certain Series
1995-1 Assets as to which an uncured breach of certain representations and
warranties or certain servicing covenants has occurred. See "Description of
the Notes--Limited RV Guaranty" and "Description of the Administrative Agency
Agreement--Administrative Purchases."
In addition, the commencement of a case or proceeding under any
Insolvency Law with respect to Ford Credit is an Administrative Agent Event of
Default, and if so directed by the holders of the Series 1995-1 Certificates
(which for such purpose will be the Indenture Trustee so long as the Notes are
outstanding), Ford Credit may be removed as the Administrative Agent, which may
have an adverse impact on timely payments to Noteholders. However, if the
commencement of such a case or proceeding were the only default, Ford Credit
(or its trustee-in bankruptcy) may have the power to prevent any such removal.
See "Description of the Administrative Agency Agreement--Administrative Agent
Events of Default" and "--Additional Administrative Agency Agreement
Provisions--Removal of the Administrative Agent."
INSURANCE
Each Obligor is required to maintain liability, collision and
comprehensive insurance coverage in certain amounts on its Leased Vehicle at
all times during the term of the related Lease. The cost of such insurance is
borne solely by the Obligor. Failure to comply with stipulated insurance
requirements may result in early termination of the Lease.
The failure of Obligors to maintain the required insurance coverage
for claims arising from injuries caused by the Series 1995-1 Leased Vehicles
could result in reductions in distributions on the Series 1995-1 Certificates
and losses to Noteholders on their investments.
To protect against such losses, Ford Credit self-insures against the
first $5 million per occurrence for property damage or personal liability
suffered by third persons caused by any vehicle owned by Ford Credit or FCTT.
Additionally, Ford maintains excess insurance policies which name FCTT as an
additional insured party. These policies cover claims in excess of $5 million
per occurrence (together with the self-insurance of Ford Credit, the
"Contingent and Excess Liability Insurance"). To the extent the Contingent and
Excess Liability Insurance is insufficient to cover the full amount of any such
claims and no third party reimbursement for such claims is available and Ford
Credit and Ford Credit Leasing fail to perform their obligations to indemnify
the Issuer, the Noteholders could incur a loss on their investment to the
extent that payment of such claims reduce the amounts otherwise distributable
to the Noteholders from the Series 1995-1 Certificates.
In the event that a Series 1995-1 Leased Vehicle is damaged, the
failure of the related Obligor to maintain the required collision insurance
coverage could result in a reduction of amounts distributable with respect to
the related Series 1995-1 Assets and therefore a reduction in the aggregate
amount distributable on the Series 1995-1 Certificates. In the event that
collision coverage is exhausted and no third-party reimbursement for such
damage to a Series 1995-1 Leased Vehicle is available, the Noteholders could
incur a loss on their investment.
Ford Credit provides Obligors with Guaranteed Automobile Protection
(GAP) coverage on Leased Vehicles, including the Series 1995-1 Leased Vehicles.
In the event a Leased Vehicle is destroyed or stolen, GAP coverage would
reimburse the Obligor for the difference between the insurance valuation of the
Leased Vehicle and the remaining amount required to be paid under the Lease.
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CERTAIN LEGAL ASPECTS OF THE LEASES
AND LEASED VEHICLES
UCC FILINGS
The Series 1995-1 Certificates are either certificated securities or
general intangibles under the UCC as in effect in the State of Michigan. To
the extent that the Series 1995-1 Certificates are certificated securities, the
Indenture Trustee has perfected its interest by possession. To the extent that
the Series 1995-1 Certificates are general intangibles and the transfer thereof
is deemed to be a transfer for security, the Transferor will file UCC-1
financing statements against both Ford Credit and Ford Credit Leasing with the
Michigan Secretary of State to perfect its interest in such Series 1995-1
Certificates. The Transferor has assigned its perfected security interest to
the Issuer which in turn has assigned such interest to the Indenture Trustee.
Financing statements covering the Series 1995-1 Certificates will also be filed
naming (i) the Transferor as debtor and the Issuer as secured party, which
financing statement has been assigned to the Indenture Trustee and (ii) the
Issuer as debtor and the Indenture Trustee as secured party.
The FCTT Assets consist principally of the Leases and the ownership
interest in the Leased Vehicles (subject to the rights of the Obligors under
the Leases). In the event that the Series 1995-1 Certificates are viewed as
representing a transfer of the assets of the FCTT, the Series 1995-1 Leases are
"chattel paper" as defined in the UCC as in effect in the State of Michigan.
Pursuant to the Michigan UCC, when the debtor's chief executive offices are
located in Michigan, a non-possessory security interest in chattel paper may be
perfected by filing a UCC-1 financing statement with the Michigan Secretary of
State. Accordingly, UCC-1 financing statements relating to the Series 1995-1
Leases will be filed naming: (i) FCTT as debtor and Ford Credit and Ford Credit
Leasing as secured parties, which financing statements will be assigned to the
Transferor, the Issuer and then the Indenture Trustee; (ii) each of Ford Credit
and Ford Credit Leasing as debtors and the Transferor as secured party, which
financing statement has been assigned to the Issuer and then the Indenture
Trustee; (iii) the Transferor as debtor and the Issuer as secured party, which
financing statement has been assigned to the Indenture Trustee and (iv) the
Issuer as debtor and the Indenture Trustee as secured party. Perfection and
the effect of perfection or non-perfection of a security interest in the Series
1995-1 Leased Vehicles are governed by the certificate of title statutes of the
states in which such Series 1995-1 Leased Vehicles are located. Because of the
administrative burden and expense of perfecting an interest in motor vehicles
under the certificate of title statutes in California, New York and
Pennsylvania, the Indenture Trustee's interest in the Series 1995-1 Leased
Vehicles will be unperfected, and if the transfer of the Series 1995-1
Certificates were viewed as a transfer of the Series 1995-1 Assets, the
Indenture Trustee would only have a perfected security interest in the Series
1995-1 Leases. However, the Indenture Trustee's security interest in the
Series 1995-1 Leases could be subordinate to persons who take actual possession
of the Series 1995-1 Leases without knowledge of such security interest. The
Series 1995-1 Leases will not be stamped to indicate these precautionary
security arrangements.
VICARIOUS TORT LIABILITY
The Series 1995-1 Leased Vehicles will be operated by the Obligors
and their respective invitees. State laws differ as to whether anyone
suffering injury to person or property as a result of an accident involving a
leased vehicle may bring an action against the person who, holding title to the
vehicle, is its legal owner.
In California, under Section 17150, California Vehicle Code, the
owner of a motor vehicle that is subject to a lease is responsible for injuries
to persons or property resulting from the negligent or wrongful operation of
the vehicle by any person using the vehicle with the owner's permission. The
owner's liability for personal injuries is limited to $15,000 per person and
$30,000 in total per accident and for property damage is limited to $5,000 per
accident. Recourse for any judgment arising out of the operation of the
vehicle must first be had against the operator's property, if the operator is
within the court's jurisdiction.
In New York, under Section 388, New York Vehicle and Traffic Law, the
owner of a motor vehicle that is subject to a lease is responsible for injuries
to persons or property resulting from the negligent operation of the vehicle by
any person using the vehicle with the owner's permission. A lessee of a motor
vehicle is considered an owner of the vehicle if the lessee has the exclusive
use of the vehicle for a period greater than 30
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days. In situations involving more than one owner of the same vehicle, the
liability of the owners for negligent operation of the vehicle is joint and
several.
In Pennsylvania, a victim of such an accident has no cause of action
against the owner of a leased vehicle arising from the negligent operation of
such leased vehicle unless the owner has negligently entrusted or negligently
continues to entrust the vehicle to an inappropriate lessee.
Following an accident involving a Series 1995-1 Leased Vehicle, under
certain circumstances FCTT may be the subject of an action for damages as a
result of its ownership of such Series 1995-1 Leased Vehicle. In the event
that liability on FCTT were imposed and the coverage provided by the Contingent
and Excess Liability Insurance was insufficient to cover the full amount of
such claims (or, in certain circumstances claims arising from ownership of
Leased Vehicles that are not Series 1995-1 Leased Vehicles), claims could be
imposed against the assets of FCTT, including the Series 1995-1 Leased
Vehicles. The Noteholders could incur a loss on their investment to the extent
that payment of such claims reduced the amounts otherwise distributable to the
Noteholders.
REPOSSESSION OF LEASED VEHICLES
In the event of a default by an Obligor, the Administrative Agent
will notify the Obligor and, after affording the Obligor an opportunity to
cure, will repossess the Series 1995-1 Leased Vehicle if the Obligor remains in
default. Under California, New York and Pennsylvania law, repossession may
take place without notice, but only if it can be accomplished without a breach
of the peace. If repossession cannot be achieved peaceably, court action would
be required. In Pennsylvania, a writ of replevin may be used to accomplish
repossession.
After repossession, the Administrative Agent may afford the Obligor
an opportunity to cure the default. Absent cure, the Administrative Agent will
ordinarily attempt to sell the Series 1995-1 Leased Vehicle. There is no
assurance that the proceeds from such a sale will equal or exceed the remaining
amounts due under the related Series 1995-1 Lease at the time of the Obligor's
default.
DEFICIENCY JUDGMENTS
Once a repossessed Series 1995-1 Leased Vehicle is sold, the proceeds
from the sale will be used to cover the expenses of repossession and resale and
then to satisfy any remaining amounts due under the related Series 1995-1
Lease. The amount of such shortfall will be treated as a credit loss, and will
be included the calculation of the Series 1995-1 Credit Loss in the Collection
Period in which the related Series 1995-1 Lease became a Liquidated Lease. If
the proceeds from the sale of the Series 1995-1 Leased Vehicle are insufficient
to satisfy the remaining amount due under the related Series 1995-1 Lease, the
Administrative Agent may seek a deficiency judgment for the amount of any
shortfall. To the extent such deficiency judgment is collected in a Collection
Period other than the Collection Period in which such Series 1995-1 Lease
became a Liquidated Lease, such amount shall be treated as a Recovery.
However, California, New York and Pennsylvania place limits on a
secured party's ability to obtain a deficiency judgment. In these states, a
deficiency judgment may be prohibited or reduced in amount if the Obligor was
not given proper notice of the resale or if the terms of the resale were not
commercially reasonable. Even if a deficiency judgment is obtained, there is
no assurance that the full amount of the judgment would ultimately be
collected. A deficiency judgment is a personal judgment against the defaulting
Obligor, who generally has few remaining assets or sources of income after
repossession. As a result, obtaining a deficiency judgment may not be useful
in that only a small portion of it, or perhaps none of it, will ever be
collected.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and regulations
impose requirements on retail lease contracts such as the Series 1995-1 Leases.
The federal Consumer Leasing Act of 1976 and Regulation M promulgated by the
Board of Governors of the Federal Reserve System, for example, require that a
number of disclosures be made at the time a vehicle is leased, including the
amount of any periodic payments and the
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circumstances under which the lessee may terminate the lease prior to the end
of the lease term. The various consumer protection laws would apply to FCTT as
the assignee of each Series 1995-1 Lease and may also apply to the Issuer as
holder of the Series 1995-1 Certificates which represent a beneficial interest
in the Series 1995-1 Leases, among other things. The failure of FCTT, or the
Administrative Agent acting on behalf of FCTT, to comply with such laws and
regulations may give rise to liabilities on the part of FCTT, and claims by
FCTT or the Administrative Agent acting on behalf of FCTT with respect to
Obligors may be subject to set-off as a result of non-compliance with such laws
and regulations.
Courts have applied general equitable principles in litigation
relating to repossession and deficiency balances. These equitable principles
may have the effect of relieving a lessee from some or all of the legal
consequences of a default.
In several cases, consumers have asserted that the self-help remedies
of lessors violate the due process protection provided under the Fourteenth
Amendment to the Constitution of the United States. Courts have generally
found that repossession and resale by a lessor do not involve sufficient state
action to afford constitutional protection to consumers.
Each of New York, California and Pennsylvania has adopted a law
(each, a "Lemon Law") providing redress to consumers who purchase or lease a
vehicle which remains out of conformance with its manufacturer's warranty after
a specified number of attempts to correct a problem or after a specific time
period. A successful claim under a Lemon Law with respect to a Series 1995-1
Leased Vehicle could result in, among other things, the termination of the
related Series 1995-1 Lease and/or the refunding to the related Obligor of some
portion of the Total Monthly Payments paid by such Obligor. To the extent an
Obligor is no longer required to make Total Monthly Payments with respect to a
Series 1995-1 Lease subject to a Lemon Law, or amounts are refunded to such
Obligor, such Series 1995-1 Lease will be deemed to be a Liquidated Lease and
the amounts received with respect to such lease will be limited to Liquidation
Proceeds and Recoveries. The net amount lost will be treated as a Series
1995-1 Credit Loss. Although FCTT or the Administrative Agent acting on behalf
of FCTT may be able to assert a claim against the manufacturer of any such
defective Series 1995-1 Leased Vehicle, there can be no assurance that any such
claim would be successful.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a summary of the anticipated material United
States federal income tax consequences of the purchase, ownership and
disposition of the Notes. This discussion is based upon current provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), existing and
proposed Treasury Regulations thereunder, current administrative rulings,
judicial decisions and other applicable authorities in effect as of the date
hereof, all of which are subject to change, possibly with retroactive effect.
There can be no assurance that the Internal Revenue Service ("IRS") will not
challenge the conclusions reached herein, and no ruling from the IRS has been
or will be sought on any of the issues discussed below.
This summary does not purport to deal with all aspects of federal
income taxation that may be relevant to Note Owners in light of their personal
investment circumstances nor, except for certain limited discussions of
particular topics, to certain types of Note Owners subject to special treatment
under the federal income tax laws (e.g., financial institutions,
broker-dealers, life insurance companies and tax-exempt organizations). This
information is directed to Note Owners who hold the Notes as "capital assets"
within the meaning of Section 1221 of the Code.
GENERAL
Tax Status of the Notes, FCTT, the Transferor and the Issuer. On the
Closing Date, Skadden, Arps, Slate, Meagher & Flom ("Special Tax Counsel"),
will render its opinion that for federal income tax purposes under existing
law, and subject to the assumptions and qualifications therein: (i) the Notes
will be treated as debt and (ii) neither FCTT, the Transferor nor the Issuer
will not be subject to taxation at the entity level.
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Stated Interest. Stated interest on each Class of Notes will be
taxable as ordinary income for federal income tax purposes when received or
accrued in accordance with a Note Owner's method of tax accounting.
Original Issue Discount. A Note will be treated as issued with OID
if the excess of the Note's "stated redemption price at maturity" over its
issue price equals or exceeds 1/4 of 1 percent of the Note's stated redemption
price at maturity multiplied by the number of complete years (based on the
anticipated weighted average life of a Note) to its maturity. Generally, the
issue price of a Note should be the first price at which a substantial amount
of the Notes included in the issue of which the Note is a part is sold to other
than bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers. The stated
redemption price at maturity of a Note will equal the principal amount of the
Note.
If the Notes are treated as issued with OID, a Note Owner will be
required to include OID in income before the receipt of cash attributable to
such income using the constant-yield method. The amount of OID includible in
income is the sum of the daily portions of OID with respect to a Note for each
day during the taxable year or portion of the taxable year in which the Note
Owner holds the Note. The amount of OID includible in income by a Note Owner
of a Note will be computed by allocating to each day during a taxable year a
pro rata portion of the OID that accrued during the relevant "accrual period."
Such OID is generally equal to the product of the yield to maturity of the Note
(adjusted for the length of the accrual period) and its adjusted issue price at
the beginning of the accrual period, reduced by any payments of "qualified
stated interest." Accrual periods with respect to a Note may be any set of
periods (which may be of varying lengths) selected by the Note Owner as long as
(i) no accrual period is longer than one year and (ii) each scheduled payment
of interest or principal on the Note occurs on either the final or first day of
an accrual period.
The adjusted issue price of a Note is the sum of its issue price
plus prior accruals of OID, reduced by the total payments made with respect to
such Note in all prior periods, other than "qualified stated interest
payments." Qualified stated interest payments are interest payments on the
Notes that are unconditionally payable at least annually at a single fixed rate
applied to the outstanding principal amount of the obligation.
Under the Code, the amount of OID to be included in income by a
holder of a debt instrument that is subject to acceleration due to prepayments
on other obligations securing such instruments (a "Prepayable Obligation") is
computed by taking into account the anticipated rate of prepayments assumed in
pricing the debt instrument. It is unclear whether this provision will apply
to the Notes, the payments on which are secured by payments on the Series
1995-1 Leases, rather than by payments on other debt obligations. In the
absence of regulations, however, and based on the legislative history of the
relevant Code provisions, it appears that the rules applicable to a Prepayable
Obligation would not apply to the Notes. If, however, the Prepayable
Obligation rules were to apply, the portion of OID includible in the income of
a Note Owner for any period would be increased or decreased to take account of
whether prepayments on the Series 1995-1 Leases (including as a result of a
default and liquidation) occurred at a greater or lesser rate than anticipated.
Market Discount. The Notes, whether or not issued with original
issue discount, will be subject to the "market discount rules" of section 1276
of the Code. In general, these rules provide that if the Note Owner purchases a
Note at a market discount (i.e., a discount from its original issue price plus
any accrued original issue discount that exceeds a de minimis amount specified
in the Code) and thereafter (a) recognizes gain upon a disposition, or (b)
receives payments of principal, the lesser of (i) such gain or principal
payment, or (ii) the accrued market discount will be taxed as ordinary interest
income. Generally, the accrued market discount will be the total market
discount on the Note multiplied by a fraction, the numerator of which is the
number of days the Note Owner held the Note and the denominator of which is the
number of days from the date the Note Owner acquired the Note until its
maturity date. The Note Owner may elect, however, to determine accrued market
discount under the constant-yield method.
Limitations imposed by the Code which are intended to match
deductions with the taxation of income may defer deductions for interest on
indebtedness incurred or continued, or short-sale expenses incurred, to
purchase or carry a Note with accrued market discount. A Note Owner may elect
to include market discount in gross income as it accrues and, if such Note
Owner makes such an election, is exempt from this rule. The
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adjusted basis of a Note subject to such election will be increased to reflect
market discount included in gross income, thereby reducing any gain or
increasing any loss on a sale or taxable disposition.
Election to Treat All Interest as Original Issue Discount. A Note
Owner may elect to include in gross income all interest that accrues on a Note
using the constant-yield method described above under the heading "--Original
Issue Discount," with modifications described below. For purposes of this
election, interest includes stated interest, OID, de minimis original issue
discount, market discount, de minimis market discount and unstated interest, as
adjusted by any amortizable bond premium (described below under "--Amortizable
Bond Premium") or acquisition premium.
In applying the constant-yield method to a Note with respect to which
this election has been made, the issue price of the Note will equal the
electing U.S. Note Owner's adjusted basis in the Note immediately after its
acquisition, the issue date of the Note will be the date of its acquisition by
the electing Note Owner, and no payments on the Note will be treated as
payments of qualified stated interest. This election will generally apply only
to the Note with respect to which it is made and may not be revoked without the
consent of the IRS. Note Owners should consult with their own tax advisers as
to the effect in their circumstances of making this election.
Amortizable Bond Premium. In general, if a Note Owner purchases a
Note at a premium (i.e., an amount in excess of the amount payable upon the
maturity thereof, such Note Owner will be considered to have purchased such
Note with "amortizable bond premium" equal to the amount of such excess. Such
Note Owner may elect to amortize such bond premium as an offset to interest
income and not as a separate deduction item as it accrues under a
constant-yield method over the remaining term of the Note. Such Note Owner's
tax basis in the Note will be reduced by the amount of the amortized bond
premium. Any such election shall apply to all debt instruments (other than
instruments the interest on which is excludible from gross income) held by the
Note Owner at the beginning of the first taxable year for which the election
applies or thereafter acquired and is irrevocable without the consent of the
Service. Bond premium on a Note held by a Note Owner who does not elect to
amortize the premium will decrease the gain or increase the loss otherwise
recognized on the disposition of the Note.
Disposition of Notes. A Note Owner's adjusted tax basis in a Note
will be its cost, increased by the amount of any OID, market discount and gain
previously included in income with respect to the Note, and reduced by the
amount of any payments on the Note that is not qualified stated interest and
the amount of bond premium previously amortized with respect to the Note. A
Note Owner will generally recognize gain or loss on the sale or retirement of a
Note equal to the difference between the amount realized on the sale or
retirement and the tax basis of the Note. Such gain or loss will be capital
gain or loss (except to the extent attributable to accrued but unpaid interest
or as described above under "--Market Discount") and will be long-term capital
gain or loss if the Note was held for more than one year. In addition, if the
Prepayable Obligation rules apply, any OID that has not accrued at the time of
the payment in full of a Note will be treated as ordinary income.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Indenture Trustee will be required to report annually to the IRS,
and to each Note Owner, the amount of interest paid on the Notes (and the
amount withheld for federal income taxes, if any) for each calendar year,
except as to exempt recipients (generally, corporations, tax-exempt
organizations, qualified pension and profit-sharing trusts, individual
retirement accounts, or nonresident aliens who provide certification as to
their status). Each Note Owner (other than Note Owners who are not subject to
the reporting requirements) will be required to provide, under penalties of
perjury, a certificate containing the Note Owner's name, address, correct
federal taxpayer identification number and a statement that the Holder is not
subject to backup withholding. Should a non-exempt Note Owner fail to provide
the required certification, the Indenture Trustee will be required to withhold
(or cause to be withheld) 31% of the interest otherwise payable to the Note
Owner, and remit the withheld amounts to the IRS as a credit against the Note
Owner's federal income tax liability.
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TAX CONSEQUENCES TO FOREIGN INVESTORS
The following information describes the U.S. federal income tax
treatment of investors that are not U.S. persons (each, a "Foreign Person").
The term "Foreign Person" means any person other than (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity organized
in or under the laws of the United States or any political subdivision thereof
or (iii) an estate or trust the income of which is includible in gross income
for U.S. federal income tax purposes, regardless of its source.
(a) Interest paid or accrued to a Foreign Person that is not
effectively connected with the conduct of a trade or business within the
United States by the Foreign Person, will generally be considered
"portfolio interest" and generally will not be subject to United States
federal income tax and withholding tax, as long as the Foreign Person (i)
is not actually or constructively a "10 percent shareholder" of the Issuer
or a "controlled foreign corporation" with respect to which the Issuer is
a "related person" within the meaning of the Code, and (ii) provides an
appropriate statement, signed under penalties of perjury, certifying that
the Holder is a Foreign Person and providing that Foreign Person's name
and address. If the information provided in this statement changes, the
Foreign Person must so inform the Indenture Trustee within 30 days of such
change. The statement generally must be provided in the year a payment
occurs or in either of the two preceding years. If such interest were not
portfolio interest, then it would be subject to United States federal
income and withholding tax at a rate of 30 percent unless reduced or
eliminated pursuant to an applicable income tax treaty.
(b) Any capital gain realized on the sale or other taxable
disposition of a Note by a Foreign Person will be exempt from United
States federal income and withholding tax, provided that (i) the gain is
not effectively connected with the conduct of a trade or business in the
United States by the Foreign Person, and (ii) in the case of an individual
Foreign Person, the Foreign Person is not present in the United States for
183 days or more in the taxable year.
(c) If the interest, gain or income on a Note held by a Foreign
Person is effectively connected with the conduct of a trade or business in
the United States by the Foreign Person, the Holder (although exempt from
the withholding tax previously discussed if a duly executed Form 4224 is
furnished) generally will be subject to United States federal income tax
on the interest, gain or income at regular federal income tax rates. In
addition, if the Foreign Person is a foreign corporation, it may be
subject to a branch profits tax equal to 30 percent of its "effectively
connected earnings and profits" within the meaning of the Code for the
taxable year, as adjusted for certain items, unless it qualifies for a
lower rate under an applicable tax treaty.
CERTAIN STATE TAX CONSEQUENCES
Because of the variation in each state's income tax laws, it is
impossible to predict tax consequences to Note Owners in all states. Note
Owners are urged to consult their own tax advisors with respect to state tax
consequences arising out of the purchase, ownership and disposition of Notes.
In general, state tax laws conform to federal income tax principles,
and partnerships, grantor trusts and mere security devices are not subject to
tax at the entity level. The State of Michigan, however, imposes a single
business tax on corporations, partnerships and other entities doing business in
Michigan. Because the Administrative Agent is headquartered in Michigan, tax
authorities in Michigan may attempt to assert that FCTT, the Transferor or the
Issuer is subject to an entity level tax.
In the opinion of the General Counsel of Ford Credit ("Michigan Tax
Counsel"), assuming that the Notes will be treated as debt for federal income
tax purposes, the Notes will be treated as debt for Michigan income and single
business tax purposes. Assuming further that none of FCTT, the Transferor or
the Issuer will be subject to federal income taxes at the entity level, none of
FCTT, the Transferor or the Issuer will be subject to either the Michigan
single business tax or the Michigan income tax at the entity level. Further,
in the opinion of Michigan Tax Counsel, Note Owners not otherwise subject to
taxation in Michigan would not become subject to taxation in Michigan solely
because of a Note Owner's ownership of Notes. The foregoing opinions are based
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upon present provisions of Michigan statutes and the regulations promulgated
thereunder, and applicable judicial or ruling authority, all of which are
subject to change, which change may be retroactive. No ruling on any of the
issues discussed below will be sought from the Michigan Department of Treasury.
* * *
THE FEDERAL AND STATE TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A NOTE
OWNER'S PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR
TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE,
LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and/or Section 4975 of the Code, prohibits a pension,
profit-sharing or other employee benefit plan, as well as individual retirement
accounts and Keogh Plans (each a "Benefit Plan") from engaging in certain
transactions with persons that are "parties in interest" under ERISA or
"disqualified persons" under the Code with respect to such Benefit Plan. A
violation of these "prohibited transaction" rules may result in an excise tax
or other penalties and liabilities under ERISA and the Code for such persons.
Title I of ERISA also requires that fiduciaries of a Benefit Plan subject to
ERISA make investments that are prudent, diversified (except if prudent not to
do so) and in accordance with governing plan documents.
Certain transactions involving the Issuer might be deemed to
constitute prohibited transactions under ERISA and the Code if assets of the
Issuer were deemed to be assets of a Benefit Plan. Under a regulation issued
by the United States Department of Labor (the "Plan Assets Regulation"), the
assets of the Issuer would be treated as plan assets of a Benefit Plan for the
purposes of ERISA and the Code only if the Benefit Plan acquires an "Equity
Interest" in the Issuer and none of the exceptions contained in the Plan Assets
Regulation (discussed below) is applicable. An Equity Interest is defined
under the Plan Assets Regulation as an interest other than an instrument which
is treated as indebtedness under applicable local law and which has no
substantial equity features. The Transferor believes that the Notes should be
treated as indebtedness without substantial equity features for purposes of the
Plan Assets Regulation. However, without regard to whether the Notes are
treated as an Equity Interest for such purposes, the acquisition or holding of
Notes by or on behalf of a Benefit Plan could be considered to give rise to a
prohibited transaction if the Issuer, the Lease Trustee or the Indenture
Trustee, or any of their respective affiliates, is or becomes a party in
interest or a disqualified person with respect to such Benefit Plan. In such
case, certain exemptions from the prohibited transaction rules could be
applicable depending on the type and circumstances of the plan fiduciary making
the decision to acquire a Note. Included among these exemptions are:
Prohibited Transaction Class Exemption ("PTCE") 90-1, regarding investments by
insurance company pooled separate accounts; PTCE 91-38 regarding investments by
bank collective investment funds; and PTCE 84-14, regarding transactions
effected by "qualified professional asset managers.
Employee benefit plans that are governmental plans (as defined in
Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33)
of ERISA) are not subject to ERISA requirements.
A plan fiduciary considering the purchase of Notes should consult its
tax and/or legal advisors regarding whether the assets of the Issuer would be
considered plan assets, the possibility of exemptive relief from the prohibited
transaction rules and other issues and their potential consequences.
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UNDERWRITING
Subject to the terms and conditions set forth in the underwriting
agreement (the "Underwriting Agreement"), the Transferor has agreed to cause
the Issuer to sell to J.P. Morgan Securities Inc. (the "Underwriter") and the
Underwriter has agreed to purchase the $____________ principal amount of the
Class A-1 Notes, the $____________ principal amount of the Class A-2 Notes and
the $__________ principal amount of the Class A-3 Notes.
The Transferor has been advised by the Underwriter that it proposes
initially to offer the Class A-1 Notes, Class A-2 Notes and the Class A-3 Notes
to the public at the respective prices set forth on the cover page of this
Prospectus, and to certain dealers at such prices less an initial concession
not in excess of __% per Class A-1 Note,__% per Class A-2 Note and ___% per
Class A-3 Note. The Underwriter may allow and such dealers may reallow a
concession not in excess of ___% per Class A-1 Note, ___% per Class A-2 Note
and ___% per Class A-3 Note to certain other dealers. After the initial public
offering of the Notes, the public offering prices and such concessions may be
changed.
In the ordinary course of business, the Underwriter and its
affiliates have engaged and may engage in investment banking and commercial
banking transactions with Ford and its affiliates.
The Transferor has agreed to indemnify the Underwriter against
certain liabilities, including civil liabilities under the Securities Act of
1933, or to contribute to payments which the Underwriter may be required to
make in respect thereof.
LEGAL MATTERS
Certain legal matters relating to the Notes will be passed upon for
the Issuer and Ford Credit by J.D. Bringard, Esq., Vice President -- General
Counsel of Ford Credit, and for the Underwriter by Skadden, Arps, Slate,
Meagher & Flom, New York, New York. Certain federal income tax and other
matters will be passed upon for the Issuer by Skadden, Arps, Slate, Meagher &
Flom. Certain Michigan income tax and other matters will be passed upon for
the Issuer by Mr. Bringard.
Mr. Bringard is a full time employee of Ford Credit and owns and
holds options to purchase shares of Common Stock of Ford. Skadden, Arps,
Slate, Meagher & Flom has from time to time represented Ford and Ford Credit in
connection with certain transactions.
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GLOSSARY OF TERMS
"Accepted Servicing Practices" is defined on page 56 in
"Description of the Administrative Agency Agreement--Duties of the
Administrative Agent."
"Accrual Available Scheduled Termination Sale Proceeds" is defined on
page 50 in "Description of the Notes--Limited RV Guaranty."
"Accrual Period" means, (i) with respect to any Payment Date other
than the first Payment Date, the period from and including the first day of the
third preceding Collection Period up to and including the last day of the
preceding Collection Period, and (ii) with respect to the first Payment Date,
the period from and including the Closing Date up to and including the last day
of the preceding Collection Period, in each case whether or not such day is a
business day.
"Additional Fee" means a fixed amount included in each Monthly
Payment made by Obligors.
"Adjusted Balance Subject to Lease Charges" means, with respect to
any Leased Vehicle as of any date, the Balance Subject to Lease Charges minus
the sum of the principal portion of all Constant Yield Payments which have been
scheduled to have been received as of such date; provided that the Adjusted
Balance Subject to Lease Charges of a Leased Vehicle shall be zero as of the
date on which the related Lease terminates, whether on or after the Scheduled
Lease End Date or earlier, or if an Administrative Purchase Amount has been
received with respect to such Lease and Leased Vehicle.
"Administrative Agency Agreement" means the agreement dated as of
January 31, 1994 among Comerica Bank, as trustee, Ford Credit, as
Administrative Agent, and Ford Credit and Ford Credit Leasing, as
beneficiaries.
"Administrative Agent" is Ford Credit.
"Administrative Agent Fee" means as of any Payment Date the fee
payable to the Administrative Agent equal to the sum of the product of 1% per
annum and the Pool Balance as of the beginning of each Collection Period in the
related Accrual Period.
"Administrative Agent Event of Default" is defined on page 60 in
"Description of the Administrative Agency Agreement--Administrative Agent
Events of Default."
"Administrative Purchase Amount" is defined on page 47 in
"Description of the Notes--The Indenture Cash Flows."
"Advanced Payment Program" means, with respect to any lease
originated under the Red Carpet Lease Plan, a payment option of the related
lessee pursuant to which such lessee prepays all monthly payments in a single
advance payment, generally discounted to reflect the present value of such
single advance payment and the reduction in the risk of credit loss.
"Aggregate Net Monthly Payment Advances" is defined on page 48 in
"Description of the Notes--The Indenture Cash Flows."
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"Aggregate Net Sale Proceeds Advances" is defined on page 48 in
"Description of the Notes--The Indenture Cash Flows."
"Asset Contribution Agreement" means the agreement dated as of ______
__, 1995 among Ford Credit, as a contributor, Ford Credit Leasing, as a
contributor and the Transferor, as contributee.
"Available Funds" is defined on page 48 in "Description of the
Notes--The Indenture Cash Flows" and page 8 in "Summary--Principal."
"Available RV Guaranty Amount" is defined on page 49 in
"Description of the Notes--Limited RV Guaranty."
"Available Scheduled Termination Sale Proceeds" is defined on page
47 in "Description of the Notes--The Indenture Cash Flows."
"Balance Subject to Lease Charges" means the amount paid by FCTT to
the Dealer in connection with the acquisition of the Lease and Leased Vehicle,
which is the total acquisition cost used to calculate the Monthly Payment.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Section Section 101-1330.
"Basic Documents" means the FCTT Agreement, the Administrative Agency
Agreement, the Series 1995-1 Supplement, the Program Operating Lease, the Asset
Contribution Agreement, the Transfer Agreement, the Limited RV Guaranty, the
Lease Trust Agreement, the Indenture, and each instrument and certificate
delivered in connection therewith.
"Basic Payment" is defined on page 11 in "Summary--Reserve Account"
and on page 29 in "Series 1995-1 Certificates--Lease of the Series 1995-1
Certificates to the Transferor."
"Benefit Plan" is defined on page 78 in "ERISA Considerations."
"Cede" means Cede & Co.
"Class" means a class of Notes; as the case may be, the Class A-1
Notes, the Class A-2 Notes or the Class A-3 Notes.
"Class A-1 Notes" means the Class A-1 __% Asset Backed Notes of the
Issuer.
"Class A-2 Notes" means the Class A-2 __% Asset Backed Notes of the
Issuer.
"Class A-3 Notes" means the Class A-3 __% Asset Backed Notes of the
Issuer.
"Closing Date" means _______ __, 1995.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collections" is defined on page 47 in "Description of the
Notes--The Indenture Cash Flows."
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"Collection Account" means the Series 1995-1 Collection Account
established pursuant to the Series 1995-1 Supplement.
"Collection Period" means any calendar month.
"Collection Period Settlement Date" means, with respect to any
Collection Period, the business day preceding the related Distribution Date.
"Comerica Fee" is defined on page 67 in "Additional Document
Provisions--Fees and Expenses--FCTT Trustee."
"Commission" means the Securities and Exchange Commission.
"Constant Yield Payment" means the payment made by the Obligor which
provides a fixed internal rate of return equal to the Retail Operating Lease
Factor and amortizes the Balance Subject to Lease Charges of the related Leased
Vehicle to the Residual Value over the term of the Lease.
"Contingent and Excess Liability Insurance" is defined on page 71
in "Certain Legal Aspects of FCTT and the Series 1995-1
Certificates--Insurance."
"Dealer" means a motor vehicle dealer who, in the ordinary course of
business, leases automobiles and light-duty trucks to Obligors pursuant to the
Red Carpet Lease Plan or such other plan as Ford Credit or its affiliates may
implement from time to time.
"Deferred Amount" is defined on page 23 in "The
Issuer--Capitalization of the Issuer."
"Definitive Notes" is defined on page 43 in "Description of the
Notes--General."
"Distribution Date" means the date on which distributions are made
with respect to the Series 1995-1 Certificates, which shall be the 15th day of
each month, and if such day is not a business day, the next succeeding business
day.
"DTC" means The Depository Trust Company.
"EBC" means an Exchangeable Beneficial Certificate.
"Eligible Account" means a segregated trust account at a financial
institution having a long-term debt rating by each Rating Agency of at least
"Baa3" or the equivalent.
"Eligible Institution" means a depository institution organized under
the laws of the United States of America or any one of the states thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or one of the States thereof and
subject to supervision and examination by federal or state banking authorities
which at all times has a short-term deposit rating of P-1 by Moody's Investors
Service, Inc. and A-1+ by Standard and Poor's Ratings Group and, in the case of
any such institution organized under the laws of the United States of America,
whose deposits are insured by the Federal Deposit Insurance Corporation or any
successor thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"Events of Default" means any of the events of default under the
Indenture as set forth on page 52 in "Descriptions of the Notes--
Indenture--Events of Default."
"Excess Deferred Gross" means, with respect to any Lease and Leased
Vehicle, the amount, if any, withheld from the total amount paid to the related
Dealer in connection with assignment of such Lease and Leased Vehicle. Excess
Deferred Gross is withheld if the acquisition cost of a Leased Vehicle exceeds
the manufacturer's suggested retail price of a Leased Vehicle, if the Residual
Value of a Leased Vehicle as set forth in the related Lease exceeds the
maximum amount permitted for such Leased Vehicle by the Administrative Agent,
or the security deposit or reconditioning reserve for such Lease is waived by
the Dealer.
"Excess Wear and Tear and Excess Mileage" means, with respect to any
Lease and Leased Vehicle, amounts due from an Obligor upon termination of such
Lease on or after the Scheduled Lease End Date (i) as a result of excess wear
and tear with respect to the related Leased Vehicle and (ii) mileage charges
incurred in excess of the amount permitted pursuant to the related Lease.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Beneficial Certificate" or "EBC" means a certificate of
beneficial interest in FCTT and the Non-Specified Assets.
"FCTT" means Ford Credit Titling Trust, formed pursuant to the FCTT
Agreement.
"FCTT Agreement" means the Amended and Restated Trust Agreement dated
as of January 31, 1994 among the FCTT Trustee, Ford Credit and Ford Credit
Leasing.
"FCTT Assets" means (i) each Lease and related Leased Vehicle, (ii)
all collections of monies with respect to such Lease and related Leased
Vehicle, (iii) the related certificates of title, (iv) the rights of the lessor
to any security deposit or reconditioning reserve, (v) any recourse to Dealers
with respect to such Leases and Leased Vehicles and (vi) all proceeds of the
foregoing.
"FCTT Trustee" means Comerica Bank, in its capacity as trustee of
FCTT.
"Ford" means Ford Motor Company.
"Ford Credit" means Ford Motor Credit Company.
"Ford Credit Leasing" means Ford Credit Leasing Company, Inc.
"Ford Holdings" means Ford Holdings, Inc.
"Foreign Person" is defined on page 77 in "Certain Federal Income
Tax Consequences--Tax Consequences to Foreign Investors."
"General Eligibility Criteria" is defined on page 64 in "Additional
Document Provisions--Representations, Warranties and Covenants."
"Indenture" means the Indenture dated as of _____________ __, 1995
between the Issuer and the Indenture Trustee.
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"Indenture Trustee" is Chemical Bank.
"Indirect Participants" is defined on page 43 in "Description of
the Notes--Book-Entry Registration."
"Initial Pool Balance" is defined on page 9 in "Summary--The Series
1995-1 Assets."
"Initial Reserve Account Deposit" is defined on page 11 in
"Summary--Reserve Account" and on page 50 in "Description of the Notes--
Reserve Account Withdrawals and Deposits."
"Initial RV Guaranty Amount" is defined on page 49 in "Description
of the Notes--Limited RV Guaranty."
"Insolvency Laws" is defined on page 68 in "Certain Legal Aspects
of FCTT and the Series 1995-1 Certificates--Insolvency Related Matters."
"IRS" means the Internal Revenue Service.
"Issuer" is Ford Credit Auto Lease Trust 1995-1.
"Lease" means any retail lease contract for an automobile or a
light-duty truck which has been entered into between an Obligor and a Dealer
and assigned by the Dealer to FCTT.
"Lease Files" means the certificate of title (or application
therefor), the original of the Lease and related documentation with respect to
a Lease and Leased Vehicle.
"Lease Term" is defined on page 30 in "The Leases and Leased
Vehicles--Origination Procedures."
"Lease Trust Agreement" means the Ford Credit Auto Lease Trust 1995-1
Trust Agreement dated as of ___________ __, 1995 between the RCL Trustee and
the Lease Trustee.
"Lease Trustee" is PNC Bank, Delaware.
"Lease Trust Certificates" means the __% Asset Backed Lease Trust
Certificates of the Issuer.
"Lease Trust Certificateholders" means the holders of any Lease Trust
Certificates.
"Lease Trust Estate" is defined on page 24 in "Property of the
Issuer" and on page 10 in "Summary--Property of the Issuer; Pledge to the
Indenture Trustee."
"Leased Vehicle" means any automobile or light-duty truck which is
subject to a Lease.
"Lemon Law" is defined on page 74 in "Certain Legal Aspects of the
Lease and Leased Vehicles--Consumer Protections Laws."
"Limited Guarantor" is Ford Credit, as provider of the Limited RV
Guaranty.
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"Limited RV Guaranty" is defined on page 49 in "Description of the
Notes--Limited RV Guaranty."
"Limited RV Guaranty Fee" is defined on page 50 in "Description of
the Notes--Limited RV Guaranty."
"Liquidated Lease" is defined on page 47 in "Description of the
Notes--The Indenture Cash Flows."
"Liquidation Proceeds" is defined on page 47 in "Description of the
Notes--The Indenture Cash Flows."
"Michigan Tax Counsel" is J.D. Bringard, Esq., Vice
President--General Counsel of Ford Credit.
"Monthly Payment" is defined on page 47 in "Description of the
Notes--The Indenture Cash Flows."
"Monthly Payment Advance" is defined on page 59 in "Description of
the Administrative Agency Agreement--Monthly Payment Advances."
"Monthly Remittance Condition" means that (i) Ford Credit is the
Administrative Agent, (ii) the rating of Ford Credit's short-term unsecured
debt is at least P-1 by Moody's Investors Service, Inc. and A-1 by Standard &
Poor's Ratings Group and (iii) no Administrative Agent Event of Default with
respect to Series 1995-1 shall have occurred under the Administrative Agency
Agreement.
"Non-Specified Assets" is defined on page 26 in "FCTT--Exchangeable
Beneficial Certificates and Specified Beneficial Certificates."
"Noteholder" means, as of any date, the individual or entity in whose
name a Note is registered on the Note Register.
"Note Owner" is defined on page 43 in "Description of the
Notes--General."
"Note Pool Factor" is defined on page 42 in "Pool Factors and
Trading Information."
"Note Register" means the Note register maintained pursuant to the
Indenture.
"Note Registrar" means, initially, the Indenture Trustee.
"Notes" means the Class A-1 Notes, the Class A-2 Notes and the Class
A-3 Notes.
"Obligor" means the lessee under a Lease.
"OID" means Original Issue Discount.
"Opinion of Counsel" means a written opinion of counsel which may be
counsel to Ford Credit.
"Participants" is defined on page 43 in "Description of the
Notes--Book-Entry Registration."
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"Payaheads" are amounts received in a Collection Period from Obligors
in excess of the amount required to be currently applied against such Obligor's
current and past due Monthly Payments and which are not proceeds from the
disposition of the related Leased Vehicle.
"Payahead Account" means the Series 1995-1 Payahead Account
established pursuant to the Series 1995-1 Supplement.
"Payahead Credits" is defined on page 47 in "Description of the
Notes--The Indenture Cash Flows."
"Payment Account" means the Series 1995-1 Payments Account
established pursuant to the Indenture.
"Payment Date" means _______ 15, ________ 15, ________ 15, and
________ 15, of each year, commencing __________ 15, 1995 or if any such day is
not a business day, the next succeeding business day.
"Payment Extension" is defined on page 57 in "Description of the
Administrative Agency Agreement--Collection of Total Monthly Payments;
Extension of Leases."
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Investments" means (i) direct obligations of, and
obligations fully guaranteed by, the United States of America or any agency or
instrumentality of the United States the obligations of which are backed by the
full faith and credit of the United States; (ii) commercial paper issued by
any corporation incorporated under the laws of the United States or any State
so long as at the time such commercial paper is issued it is rated at least P-1
by Moody's Investors Service, Inc. and A-1 by Standard and Poor's Ratings
Group; (iii) any money-market fund or other overnight money fund customarily
used by ________ for the investment of amounts on deposit in "sweep account" or
other short-term asset management accounts maintained on behalf of clients
whose funds are under the management of the ________ or similar department of
_________ or the parent of ________; or (iv) any other investment otherwise
approved by any Rating Agency.
"Plan Asset Regulations" is defined on page 78 in "ERISA
Considerations."
"Pool Balance" means, as of any date of determination, the aggregate
Adjusted Balance Subject to Lease Charges of Series 1995-1 Leased Vehicles as
of such date.
"Pool Balance Decline" means, with respect to any Payment Date, the
difference between the Pool Balance at the beginning of the related Accrual
Period and the Pool Balance as of the end of the related Accrual Period.
"Prepayable Obligation" is defined on page 75 in "Certain Federal
Income Tax Consequences--General--Original Issue Discount."
"Prepayment Assumption" is defined on page 39 in "The Leases and
Leased Vehicles--Characteristics of the Series 1995-1 Assets."
"Program Operating Lease" means the agreement dated as of _____ __,
1995 between the Issuer as lessor and the Transferor as lessee.
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"Program Operating Lease Payments" is defined on page 6 in
"Summary--Overview."
"Prospectus" means this prospectus relating to the Notes.
"PTCE" means Prohibited Transaction Class Exemption.
"Rating Agency" means a nationally recognized rating agency rating
the Notes and/or the Lease Trust Certificates at the request of the Issuer.
"RCL Trust Agreement" means the Amended and Restated Trust Agreement
dated as of ________ __, 1995 by and among Ford Credit, Ford Credit Leasing and
the RCL Trustee.
"RCL Trustee" is The Chase Manhattan Bank (USA).
"Record Date" means, with respect to any Payment Date or Redemption
Date, the close of business on the fourteenth day of the calendar month in
which such Payment Date or Redemption Date occurs (or, if Definitive Notes are
issued, the last day of the preceding calendar month).
"Recoveries" is defined on page 47 in "Description of the Notes--The
Indenture Cash Flows."
"Red Carpet Lease Plan" is defined on page 30 in "The Leases and
Leased Vehicles--Origination Procedures."
"Red Carpet Lease Portfolio" is defined on page 31 in "The Leases and
Leased Vehicles--Delinquency, Repossession, Residual Value and Loss Data."
"Redemption Date" means the Payment Date on which the Series 1995-1
Certificates are purchased by the Administrative Agent pursuant to the Series
1995-1 Supplement, which Payment Date shall be the date on which the Notes are
redeemed pursuant to the Indenture.
"Redemption Price" means the outstanding principal amount of the
Notes plus accrued and unpaid interest thereon, to but not including the
Redemption Date.
"Required Interest Payment" on any Payment Date means the amount of
interest accrued on the outstanding Notes and Lease Trust Certificates since
the preceding Payment Date (or, in the case of the first Payment Date, since
the Closing Date) plus any previously due but unpaid interest (and interest
thereon) plus the Limited RV Guaranty Fee due on such Payment Date.
"Required Reserve Account Amount" is defined on page 12 in
"Summary--Reserve Account" and on page 50 in "Description of the
Notes--Reserve Account Withdrawals and Deposits."
"Required Scheduled Termination Sale Proceeds" is defined on page
50 in "Description of the Notes--Limited RV Guaranty."
"Reserve Account" means the Reserve Account established pursuant to
the Program Operating Lease.
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"Reserve Account Amount" is defined on page 11 in "Summary--Reserve
Account" and on page 50 in "Description of the Notes--Reserve Account
Withdrawals and Deposits."
"Reserve Account Deposit Amount" is defined on page 50 in
"Description of the Notes--Reserve Account Withdrawals and Deposits."
"Reserve Account Draw Amount" is defined on page 50 in "Description
of the Notes--Reserve Account Withdrawals and Deposits."
"Reserve Account Investments" means ________.
"Reserve Account Release Amount" is defined on page 51 in
"Description of the Notes--Reserve Account Withdrawals and Deposits."
"Residual Value" means the value of the Leased Vehicle at its
Scheduled Lease End Date as calculated by the Administrative Agent at the
inception of the related Lease and set forth in the related Lease.
"Retail Operating Lease Factor" means the per annum yield of a Lease
determined by the Administrative Agent.
"RV Guaranty Draw Amount" is defined on page 49 in "Description of
the Notes--Limited RV Guaranty."
"RV Guaranty Draw Shortfall" is defined on page 50 in "Description
of the Notes--Limited RV Guaranty."
"Sale Proceeds" means all amounts realized from the sale of Leased
Vehicles.
"Sale Proceeds Advance" is defined on page 58 in "Description of
the Administrative Agency Agreement--Advances of Sale Proceeds."
"SBC" means a Specified Beneficial Certificate.
"Scheduled Lease End Date" means with respect to any Lease, the date
set forth in such Lease as the termination date for such Lease.
"Series" means any series of Specified Beneficial Certificates.
"Series 1995-1" means the Series 1995-1 Certificates and the related
Series 1995-1 Assets.
"Series 1995-1 Assets" are the Series Specified Assets with respect
to Series 1995-1, including the Series 1995-1 Leases and Series 1995-1 Leased
Vehicles.
"Series 1995-1 Certificates" means the series of Specified Beneficial
Certificates designated as Series 1995-1 representing an interest in the Series
1995-1 Assets.
"Series 1995-1 Credit Loss" means with respect to any Collection
Period and Series 1995-1 Assets, (i) the aggregate Adjusted Balance Subject to
Lease Charges of all Series 1995-1 Leases and Series 1995-1 Leased
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Vehicles which become Liquidated Leases during such Collection Period, plus the
aggregate amount of Uncollected Excess Wear and Tear and Excess Mileage
relating to Series 1995-1 Leased Vehicles which were sold in such Collection
Period with respect to which Sale Proceeds of the related Series 1995-1 Leased
Vehicle were received plus any uncollected Monthly Payments minus (ii)
Liquidation Proceeds and Recoveries received during such Collection Period.
"Series 1995-1 Cut-Off Date" means ____________ __, 1995.
"Series 1995-1 Leases" means the Leases designated in the Series
Specification Notice relating to Series 1995-1 and the Series 1995-1
Supplement.
"Series 1995-1 Leased Vehicles" means the Leased Vehicles designated
in the Series Specification Notice relating to Series 1995-1 and the Series
1995-1 Supplement.
"Series 1995-1 Residual Loss" means the aggregate Residual Values of
all Series 1995-1 Leased Vehicles the related Series 1995-1 Leases of which
terminated on or after their respective Scheduled Lease End Dates in a
Collection Period minus Sale Proceeds of such Series 1995-1 Leased Vehicles
(but in no event for any Series 1995-1 Leased Vehicle, an amount greater than
the Transferor Purchase Option Price) minus amounts assessed against Obligors
with respect to Excess Wear and Tear and Excess Mileage with respect to such
Series 1995-1 Leased Vehicles.
"Series 1995-1 Supplement" means the Series 1995-1 Supplement to the
Administrative Agency Agreement.
"Series Issue Date" is defined on page 26 in "FCTT--Exchangeable
Beneficial Certificates and Specified Beneficial Certificates."
"Series Specified Assets" means the Leases and Leased Vehicles
designated in the Series Specification Notice and the Supplement relating to
such Series, including the related certificates of title and all other FCTT
Assets relating to such Leases and Leased Vehicles.
"Series Specification Notice" means a notice delivered by the
Administrative Agent, acting at the unanimous direction of the holders of the
EBCs, to the FCTT Trustee directing such FCTT Trustee to (i) designate certain
FCTT Assets as Series Specified Assets, (ii) designate a date on which SBCs
representing the interest in such Series Specified Assets are to be issued to
the holders of the EBCs and (iii) set the date on which payments related to
such Series Specified Assets shall be allocated to the related SBCs. The
Series Specification Notice relating to Series 1995-1 shall contain such
additional information as is reasonably necessary for the FCTT Trustee to
identify separately the Series 1995- 1 Assets and to allocate proceeds from
such Series 1995-1 Assets.
"Special Tax Counsel" is Skadden, Arps, Slate, Meagher & Flom.
"Specific Eligibility Criteria" is defined on page 35 in "The
Leases and Leased Vehicles--Eligibility Criteria."
"Specified Beneficial Certificate" or "SBC" means a certificate
representing a beneficial interest in FCTT and certain designated Series
Specified Assets.
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"Stated Maturity" means with respect to the Class A-1 Notes, the
___________ 15, 199_ Payment Date and with respect to the Class A-2 Notes and
the Class A-3 Notes, the _______ 15, 199_ Payment Date.
"Supplemental Administrative Agent Fee" means, with respect to any
Collection Period, all late fees, prepayment charges and certain other
administrative fees and expenses or similar charges allowed by applicable law
with respect to Leases and Leased Vehicles.
"Term Extension" is defined on page 56 in "Description of the
Administrative Agency Agreement--Collection of Total Monthly Payments;
Extension of Leases."
"Total Available Funds" is defined on page 48 in "Description of
the Notes--The Indenture Cash Flows" and on page 8 in "Summary--Principal."
"Total Monthly Payment" is defined on page 9 in "Summary--The Series
1995-1 Assets."
"Transfer Agreement" means the Transfer Agreement dated as of ______
__, 1995 between the Transferor, as transferor, and the Lease Trustee, on
behalf of the Issuer, as transferee.
"Transferor" is RCL Trust 1995-1.
"Transferor Lease Trust Certificates" means the Lease Trust
Certificates held by the Transferor and Ford Credit Leasing which in addition
to representing the rights of a Lease Trust Certificate also represents the
right to the Deferred Amount.
"Transferor Purchase Option Price" is defined on page 11 in
"Summary--Transferor Leased Vehicle Purchase Option" and on page 29 in "Series
1995-1 Certificates--Lease of Series 1995-1 Certificates to the Transferor."
"UCC" means the Uniform Commercial Code.
"Uncollected Excess Wear and Tear and Excess Mileage" means, with
respect to any Payment Date and the related Accrual Period, all amounts which
are due but not collected from an Obligor with respect to a Series 1995-1 Lease
which terminated on its Scheduled Lease End Date as a result of (i) excess wear
and tear with respect to such Series 1995-1 Leased Vehicle and (ii) mileage
charges incurred in excess of the amount permitted pursuant to the related
Series 1995-1 Lease.
"Underwriting Agreement" is defined on page 79 in "Underwriting."
"Underwriter" is J.P. Morgan Securities Inc.
"Use and Lease Tax Amounts" is defined on page 30 in "The Leases and
the Leased Vehicles--Origination Procedures."
"VCR" is defined on page 31 in "Leases and Leased Vehicles--Servicing
Procedures."
"Vehicle Insurance and Maintenance Amounts" means, with respect to
any Lease, any payment due in connection with a Monthly Payment for remittance
to the related Dealer in connection with servicing of the related Leased
Vehicle or the provision of vehicle insurance.
90
<PAGE> 93
"Voluntary Early Termination" is defined on page 31 in "Leases and
Leased Vehicles--Servicing Procedures."
"Voluntary Early Termination Proceeds" is defined on page 47 in
"Description of the Notes--The Indenture Cash Flows."
91
<PAGE> 94
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with the
offering described in this Registration Statement.
<TABLE>
<S> <C>
Securities and Exchange Commission . . . . . . . . . . . . . . . . . . . . . . . $______
Rating agency fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $______
Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $______
Accountants' fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $______
Fees and expenses of the RCL Trustee . . . . . . . . . . . . . . . . . . . . . . $______
Fees and expenses of the Lease Trustee . . . . . . . . . . . . . . . . . . . . . $______
Fees and expenses of the Indenture Trustee . . . . . . . . . . . . . . . . . . . $______
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $______
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
=======
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 3803 of the Delaware Business Trust Statute provides
as follows:
3803. Liability of Beneficial Owners and Trustees.
(a) Except to the extent otherwise provided in the governing
instrument of the business trust, the beneficial owners shall be entitled to
the same limitation of personal liability extended to stockholders of private
corporations for profit.
(b) Except to the extent otherwise provided in the governing
instrument of a business trust, a trustee, when acting in such capacity, shall
not be personally liable to any person other than the business trust or a
beneficial owner for any act, omission or obligation of the business trust or
any trustee thereof.
Section 3817 of the Delaware Business Trust Statute provides
as follows:
3817. Indemnification.
(a) Subject to such standards and restrictions, if any, as are set
forth in the governing instrument of a business trust, a business trust shall
have the power to indemnify and hold harmless any trustee or beneficial owner
or other person from and against any and all claims and demands whatsoever.
(b) The absence of a provision for indemnity in the governing
instrument of a business trust shall not be construed to deprive any trustee or
beneficial owner or other person of any right to indemnity which is otherwise
available to such person under the laws of this State.
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<PAGE> 95
Section 2.7 of the Amended and Restated Trust Agreement of RCL
Trust 1995-1 provides as follows:
Section 2.7 Indemnification. Notwithstanding Section 3803 of
the Trust Statute, Ford Credit Leasing shall be liable to any injured party
entitled thereto and shall indemnify, defend and hold harmless the RCL Trustee,
including its successors, assigns, officers, directors, shareholders,
employees and agents, for all losses, claims, damages, liabilities and expenses
("Liabilities") of RCL, or incurred in connection with RCL Assets to the
extent that Ford Credit Leasing would be liable if RCL were a partnership
under the Delaware Revised Uniform Limited Partnership Act and Ford Credit
Leasing was a general partner thereof, and Ford Credit Leasing hereby covenants
and agrees that it will maintain capital in an amount sufficient to maintain
its status as a general partner of RCL and the Lease Trust; provided, however,
that in no event shall the RCL Trustee be indemnified or held harmless for any
Liabilities incurred (i) by reason of the RCL Trustee's willful malfeasance,
bad faith or negligence or (ii) incurred by reason of the RCL Trustee's breach
of its representations and warranties set forth in Section 6.6. In addition,
if necessary, to the extent not otherwise reimbursed, the RCL Trustee shall be
entitled to indemnification from the RCL Account, subject to the liens under
the Basic Documents of the Lease Trustee on behalf of the Lease Trust and the
Indenture Trustee on behalf of the Noteholders, for any claims against the RCL
Trustee the indemnification for which is provided pursuant to this Section
2.7.
Section 145 of the General Corporation Law of Delaware
provides as follows:
145. Indemnification of officers, directors, employees and agents; insurance --
(a) A corporation may 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 he 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 him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he 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 his 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 he 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 his conduct was unlawful.
(b) A corporation may 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 he 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 him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he 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
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<PAGE> 96
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 director, officer, employee or agent 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, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him 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 director,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (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) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending a 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 he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors 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
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
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 him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him 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 he 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
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<PAGE> 97
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 he 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 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 Ninth, Section 5 of the Certificate of Incorporation
of Ford Motor Credit Company provides as follows:
SECTION 5.
Indemnification
5.1. Directors, Officers and Employees of the Corporation. Every
person now or hereafter serving as a director, officer or employee of the
corporation shall be indemnified and held harmless by the corporation from and
against any and all loss, cost, liability and expense that may be imposed upon
or incurred by him in connection with or resulting from any claim, action,
suit, or proceeding, civil or criminal, in which he may become involved, as a
party or otherwise, by reason of his being or having been a director, officer
or employee of the corporation, whether or not he continues to be such at the
time such loss, cost, liability or expense shall have been imposed or incurred.
As used herein, the term "loss, cost, liability and expense" shall include, but
shall not be limited to, counsel fees and disbursements and amounts of
judgments, fines or penalties against, and amounts paid in settlement by, any
such director, officer or employee; provided, however, that no such director,
officer or employee shall be entitled to claim such indemnity: (1) with
respect to any matter as to which there shall have been a final adjudication
that he has committed or allowed some act or omission, (a) otherwise than in
good faith in what he considered to be the best interests of the corporation,
and (b) without reasonable cause to believe that such act or omission was proper
and legal; or (2) in the event of a settlement of such claim, action, suit, or
proceeding unless (a) the court having jurisdiction thereof shall have approved
of such settlement with knowledge of the indemnity provided herein, or (b) a
written opinion of independent legal counsel, selected by or in manner
determined by the Board of Directors, shall have been rendered substantially
concurrently with such settlement, to the effect that it was not probable that
the matter as to which indemnification is being made would have resulted in a
final adjudication as specified in clause (1) above, and that the said loss,
cost, liability or expense may properly be borne by the corporation. A
conviction or judgment (whether based on a plea of guilty or nolo contendere or
its equivalent, or after trial) in a criminal action, suit or proceeding shall
not be deemed an adjudication that such director, officer or employee has
committed or allowed some act or omission as hereinabove provided if
independent legal counsel, selected as hereinabove set forth, shall
substantially concurrently with such conviction or judgment give to the
corporation a written opinion that such director, officer or employee was
acting in good faith in what he considered to be the best interests of the
corporation or was not without reasonable cause to believe that such act or
omission was proper and legal.
II-4
<PAGE> 98
5.2. Directors, Officers and Employees of Subsidiaries. Every person
(including a director, officer or employee of the corporation) who at the
request of the corporation acts as a director, officer or employee of any other
corporation in which the corporation owns shares of stock or of which it is a
creditor shall be indemnified to the same extent and subject to the same
conditions that the directors, officers and employees of the corporation are
indemnified under the preceding paragraph, except that the amounts of such
loss, cost, liability or expense paid to any such director, officer or employee
shall be reduced by and to the extent of any amounts which may be collected by
him from such other corporation.
5.3. Miscellaneous. The provisions of this Section 5 of Article
NINTH shall cover claims, actions, suits and proceedings, civil or criminal,
whether now pending or hereafter commenced and shall be retroactive to cover
acts or omissions or alleged acts or omissions which heretofore have taken
place. In the event of death of any person having a right of indemnification
under the provisions of this Section 5 of Article NINTH, such right shall inure
to the benefit of his heirs, executors, administrators and personal
representatives. If any part of this Section 5 of Article NINTH should be
found to be invalid or ineffective in any proceeding, the validity and effect
of the remaining provisions shall not be affected.
5.4. Indemnification Not Exclusive. The foregoing right of
indemnification shall not be deemed exclusive of any other right to which those
indemnified may be entitled, and the corporation may provide additional
indemnity and rights to its directors, officers or employees.
Article V of the Certificate of Incorporation of Ford Credit
Leasing Company, Inc. provides as follows:
ARTICLE V
(a) A director of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability
(i) for any 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) under Section 174 of the Delaware
General Corporation Law or
(iv) for any transaction from which the
director derived an improper personal benefit.
If the Delaware General Corporation Law is amended
after approval by the stockholders of this Article V to authorize corporate
action further eliminating or limiting the personal liability of directors,
then the liability of a director of the corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation
Law, as so amended.
(b) Any repeal or modification of paragraph (a) of this Article V by
the stockholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
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<PAGE> 99
(c) (i) Each person who was or is made a party or is threatened to
be made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative, investigative or otherwise (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director, officer or employee of
the corporation or is or was serving at the request of the corporation as a
director, officer or employee of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer or employee or in any other capacity
while serving as a director, officer or employee, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits the corporation to provide broader indemnification rights than said law
permitted the corporation to provide prior to such amendment), against all
expense, liability and loss (including penalties, fines, judgments, attorneys'
fees, amounts paid or to he paid in settlement and excise taxes imposed on
fiduciaries with respect to (i) employee benefit plans, (ii) charitable
organizations or (iii) similar matters) reasonably incurred or suffered by such
person in connection therewith and such indemnification shall continue as to a
person who has ceased to be a director, officer or employee and shall inure to
the benefit of his or her heirs, executors and administrators; provided,
however, that the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person (other than pursuant to subparagraph (c)(ii) of this Article V)
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the corporation. The right to indemnification conferred in this
subparagraph (c)(i) of Article V shall be a contract right and shall include
the right to be paid by the corporation the expenses incurred in defending any
such proceeding in advance of its final disposition; provided, however, that,
if the Delaware General Corporation Law so requires, the payment of such
expenses incurred by a director or officer in his or her capacity as a director
or officer (and not in any other capacity in which service was or is rendered
by such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final disposition of a
proceeding shall be made only upon delivery to the corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined that such director or officer
is not entitled to be indemnified under this subparagraph (c)(i) of Article V
or otherwise.
(ii) If a claim which the corporation is
obligated to pay under subparagraph (c)(i) of this Article V is not
paid in full by the corporation within 60 days after a written claim
has been received by the corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the corporation)
that the claimant has not met the standards of conduct which make it
permissible under the Delaware General Corporation Law for the
corporation to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the corporation. Neither
the failure of the corporation (including its Board of Directors,
independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because
he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the
corporation (including its Board of Directors, independent legal
counsel or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or
create a presumption that the Claimant has not met the applicable
standard of conduct.
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<PAGE> 100
(iii) The provisions of this paragraph (c)
of Article V shall cover claims, actions, suits and proceedings, civil
or criminal, whether now pending or hereafter commenced, and shall be
retroactive to cover acts or omissions or alleged acts or omissions
which heretofore have taken place. If any part of this paragraph (c)
of Article V should be found to be invalid or ineffective in any
proceeding, the validity and effect of the remaining provisions shall
not be affected.
(iv) The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of
its final disposition conferred in this paragraph (c) of Article V
shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, By-Law, agreement, vote of stockholders or
disinterested directors or otherwise.
(v) The corporation may maintain insurance,
at its expense, to protect itself and any director, officer, employee
or agent of the corporation or another corporation, partnership, joint
venture, trust or other enterprise against any such expense, liability
or loss, whether or not the corporation would have the power to
indemnify such person against such expense, liability or loss under
the Delaware General Corporation Law.
(vi) The corporation may, to the extent
authorized from time to time by the Board of Directors, grant rights
to indemnification, and rights to be paid by the corporation the
expenses incurred in defending any proceeding in advance of its final
disposition, to any agent of the corporation to the fullest extent of
the provisions of this paragraph (c) of Article V with respect to the
indemnification and advancement of expenses of director, officers and
employees of the corporation.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not Applicable
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS.
(A) EXHIBITS:
<TABLE>
<S> <C> <C>
1.1 - Form of Underwriting Agreement.*
3.1 - Form of Amended and Restated Trust Agreement of RCL
Trust 1995-1, among Ford Credit, Ford Credit Leasing and the
RCL Trustee.**
3.2 - Restated Certificate of Incorporation of Ford Motor Credit
Company.***
3.3 - By-Laws of Ford Motor Credit Company.***
3.4 - Certificate of Incorporation of Ford Credit Leasing Company,
Inc.**
3.5 - By-Laws of Ford Credit Leasing Company, Inc.**
4.1 - Form of Trust Agreement of the Issuer, between the RCL Trustee
and the Lease Trustee.**
4.2 - Form of Trust Indenture, between the Lease Trustee and the
Indenture Trustee.**
4.3 - Form of Class A-1 Note (included as part of Exhibit 4.2).**
4.4 - Form of Class A-2 Note (included as part of Exhibit 4.2).**
4.5 - Form of Class A-3 Note (included as part of Exhibit 4.2).**
4.6 - Form of Limited RV Guaranty.**
5.1 - Opinion of J.D. Bringard, Esq., Vice President-General Counsel
of Ford Motor Credit Company with respect to legality.*
8.1 - Opinion of Skadden, Arps, Slate, Meagher & Flom with
respect to tax matters.*
</TABLE>
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<PAGE> 101
<TABLE>
<S> <C> <C>
8.2 - Opinion of J.D. Bringard, Esq., Vice President-General Counsel
of Ford Motor Credit Company with respect to Michigan income tax
matters.*
10.1 - Form of FCTT Trust Agreement, among Ford Credit, Ford Credit
Leasing and Comerica.**
10.2 - Form of Administrative Agency Agreement, among Comerica, Ford
Credit and Ford Credit Leasing.**
10.3 - Form of Series 1995-1 Supplement, among Comerica, Ford Credit
and Ford Credit Leasing.**
10.4 - Form of Asset Contribution Agreement, among Ford Credit, Ford
Credit Leasing and the RCL Trustee.**
10.5 - Form of Transfer Agreement, between the RCL Trustee and the
Lease Trustee.**
10.6 - Form of Program Operating Lease, between the RCL Trustee and
the Lease Trustee.**
10.7 - Form of Appendix A and Appendix I - Definitions.**
15.1 - Letter from Coopers & Lybrand regarding Unaudited Interim
Financial Information.*
23.1 - Consent of J.D. Bringard Esq., Vice President - General Counsel
of Ford Motor Credit Company (included as part of Exhibit 5.1).*
23.2 - Consent of Skadden, Arps, Slate, Meagher & Flom (included as
part of Exhibit 8.1).*
23.3 - Consent of Coopers & Lybrand.*
24.1 - Powers of Attorney of officers and directors of Ford Motor
Credit Company.**
24.2 - Powers of Attorney of officers and directors Ford Credit
Leasing Company, Inc.**
25.1 - Form T-1 of Chemical Bank.*
25.2 - Form T-2 of [name of officer of Chemical Bank].*
</TABLE>
- ---------------
* To be filed by amendment
** Previously filed
*** Incorporated by reference to Exhibits 3.1 (Restated Certificate of
Incorporation) and 3.2 (By-Laws) to Ford Motor Credit Company's
Registration Statement on Form S-1 (Registration No. 33-25082)
(B) FINANCIAL STATEMENTS:
[Not Applicable]
ITEM 17. UNDERTAKINGS.
(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 provisions described under Item 14
above, 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 indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes that:
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<PAGE> 102
(1) 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(b) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under
the Securities Act of 1933 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.
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<PAGE> 103
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant has duly caused this Amendment No. 3 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Detroit and the State of Michigan on the 19th day
of April, 1995.
RCL TRUST 1995-1
By FORD MOTOR CREDIT COMPANY,
Depositor and Beneficiary of the Registrant
By WILLIAM E. ODOM *
-----------------------------------
(William E. Odom, Chairman
of the Board of Directors of
Ford Motor Credit Company)
By FORD CREDIT LEASING COMPANY,
INC., Depositor and Beneficiary
of the Registrant
By HURLEY D. SMITH *
------------------------------------
(Hurley D. Smith, Chairman
of the Board of Directors of
Ford Credit Leasing Company, Inc.)
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 3 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Detroit and the
State of Michigan on the 19th day of April, 1995.
FORD MOTOR CREDIT COMPANY
By WILLIAM E. ODOM *
--------------------------------
(William E. Odom, Chairman
of the Board of Directors of
Ford Motor Credit Company)
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<PAGE> 104
Pursuant to the requirements of the Securities Act of 1933,
this Amendment No. 3 to the Registration Statement has been signed below by the
following officers and directors of FORD MOTOR CREDIT COMPANY, in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
WILLIAM E. ODOM * Chairman of the April 19, 1995
- ----------------------------------- Board of Directors
(William E. Odom) and Director (princi-
pal executive officer)
KENNETH J. COATES * Director and Executive April 19, 1995
- ------------------------------------ Vice President-Finance
(Kenneth J. Coates) (principal financial
officer)
TERRENCE F. MARRS * Controller (principal April 19, 1995
- ----------------------------------- accounting officer)
(Terrence F. Marrs)
JOHN G. CLISSOLD * Director April 19, 1995
- -------------------------------------
(John G. Clissold)
EDSEL B. FORD II * Director April 19, 1995
- --------------------------------------
(Edsel B. Ford II)
DAVID N. MCCAMMON * Director April 19, 1995
- --------------------------------
(David N. McCammon)
ROBERT D. WARNER * Director April 19, 1995
- -----------------------------------
(Robert D. Warner)
KENNETH WHIPPLE * Director April 19, 1995
- ------------------------------------
(Kenneth Whipple)
* By /s/ R. P. CONRAD
--------------------------------
(R. P. Conrad, Attorney in Fact)
</TABLE>
II-11
<PAGE> 105
Pursuant to the requirements of the Securities Act of 1933,
this Amendment No. 3 to the Registration Statement has been signed below by the
following officers and directors of FORD CREDIT LEASING COMPANY, INC., in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
HURLEY D. SMITH * Chairman of the Board of April 19, 1995
- ------------------------------------ Directors and Director
(Hurley D. Smith) (principal executive
officer)
TERRENCE F. MARRS * Controller (principal April 19, 1995
- ----------------------------------- financial officer)
(Terrence F. Marrs)
RICHARD P. CONRAD * Director April 19, 1995
- -----------------------------------
(Richard P. Conrad)
KEVIN F. KELLY * Director April 19, 1995
- -------------------------------------
(Kevin F. Kelly)
MARIO SPIVAK * Director April 19, 1995
- --------------------------------------
(Mario Spivak)
* By /s/ R. P. CONRAD
-------------------------------
(R. P. Conrad, Attorney in Fact)
</TABLE>
II-12
<PAGE> 106
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION PAGE
- -------- ----------- ----
<S> <C> <C> <C>
1.1 - Form of Underwriting Agreement.*
3.1 - Form of Amended and Restated Trust Agreement of RCL Trust 1995-1, among Ford
Credit, Ford Credit Leasing and the RCL Trustee.**
3.2 - Restated Certificate of Incorporation of Ford Motor Credit Company.***
3.3 - By-Laws of Ford Motor Credit Company.***
3.4 - Certificate of Incorporation of Ford Credit Leasing Company, Inc.**
3.5 - By-Laws of Ford Credit Leasing Company, Inc.**
4.1 - Form of Trust Agreement of the Issuer, between the RCL Trustee and the Lease
Trustee.**
4.2 - Form of Trust Indenture, between the Lease Trustee and the Indenture Trustee.**
4.3 - Form of Class A-1 Note (included as part of Exhibit 4.2). **
4.4 - Form of Class A-2 Note (included as part of Exhibit 4.2). **
4.5 - Form of Class A-3 Note (included as part of Exhibit 4.2). **
4.6 - Form of Limited RV Guaranty.**
5.1 - Opinion of J.D. Bringard, Esq., Vice President-General Counsel of Ford Motor Credit
Company with respect to legality.*
8.1 - Opinion of Skadden, Arps, Slate, Meagher & Flom with respect to tax matters.*
8.2 - Opinion of J.D. Bringard, Esq., Vice President-General Counsel of Ford Motor Credit
Company with respect to Michigan income tax matters.*
10.1 - Form of FCTT Agreement, among Ford Credit, Ford Credit Leasing and Comerica.**
10.2 - Form of Administrative Agency Agreement, among Comerica, Ford Credit and Ford
Credit Leasing.**
10.3 - Form of Series 1995-1 Supplement, among Comerica, Ford Credit and Ford Credit
Leasing.**
10.4 - Form of Asset Contribution Agreement, among Ford Credit, Ford Credit Leasing and the
RCL Trustee.**
10.5 - Form of Transfer Agreement, between the RCL Trustee and the Lease Trustee.**
10.6 - Form of Program Operating Lease, between the RCL Trustee and the Lease
Trustee.**
10.7 - Form of Appendix A and Appendix I - Definitions.**
15.1 - Letter from Coopers & Lybrand regarding Unaudited Interim Financial Information.*
23.1 - Consent of J.D. Bringard Esq., Vice President - General Counsel of Ford Motor Credit
Company (included as part of Exhibit 5.1).*
23.2 - Consent of Skadden, Arps, Slate, Meagher & Flom (included as part of Exhibit 8.1).*
23.3 - Consent of Coopers & Lybrand.*
24.1 - Powers of Attorney of officers and directors of Ford Motor Credit Company.**
24.2 - Powers of Attorney of officers and directors of Ford Credit Leasing Company, Inc.**
25.1 - Form T-1 of Chemical Bank.*
25.2 - Form T-2 of [name of officer of Chemical Bank].*
</TABLE>
- ---------------
* To be filed by amendment
** Previously filed
*** Incorporated by reference to Exhibits 3.1 (Restated Certificate of
Incorporation) and 3.2 (By-Laws) to Ford Motor Credit Company's
Registration Statement on Form S-1 (Registration No. 33-25082)
