<PAGE> 1
As filed with the Securities and Exchange Commission on February 17, 2000
Registration No. 333-95489
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------------
Amendment No.1
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ORIX Credit Alliance Receivables Trust 2000-A
(Issuer of the Notes)
ORIX Credit Alliance Receivables Corporation III
(Depositor of the Trust described herein)
(Exact name of Registrant as specified in its charter)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 6150 22-3693707
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
300 LIGHTING WAY
SECAUCUS, NEW JERSEY 07096
(201) 601-9166
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
C/O JOSEPH J. MCDEVITT, JR.
ORIX CREDIT ALLIANCE, INC.
300 LIGHTING WAY
SECAUCUS, NEW JERSEY 07096
(201) 601-9000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
DAVID M. HUGGIN, ESQ. PAUL MURPHY, ESQ.
SULLIVAN & CROMWELL MOORE & VAN ALLEN, PLLC
125 BROAD STREET 100 NORTH TRYON STREET
NEW YORK, NEW YORK 10004 CHARLOTTE, NORTH CAROLINA 28202
(212) 558-4000 (704) 331-3510
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED TRANSFER TO THE PUBLIC: As
soon as practicable after the effective date of this Registration Statement.
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,
check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES TO BE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
REGISTERED REGISTERED(1) AGGREGATE PRICE PER UNIT(2) AGGREGATE OFFERING PRICE(2) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A-1 Receivable-Backed Notes $ 95,789,957 100% $ 95,789,957 $25,289
- ---------------------------------------------------------------------------------------------------------------------------------
Class A-2 Receivable-Backed Notes $ 50,780,218 100% $ 50,780,218 $13,406
- ---------------------------------------------------------------------------------------------------------------------------------
Class A-3 Receivable-Backed Notes $112,957,133 100% $112,957,133 $29,821
- ---------------------------------------------------------------------------------------------------------------------------------
Class A-4 Receivable-Backed Notes $ 14,570,460 100% $ 14,570,460 $ 3,847
- ---------------------------------------------------------------------------------------------------------------------------------
Class B Receivable-Backed Notes $ 8,655,719 100% $ 8,655,719 $ 2,286
- ---------------------------------------------------------------------------------------------------------------------------------
Class C Receivable-Backed Notes $ 4,327,860 100% $ 4,327,860 $ 1,143
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL $287,081,347 100% $287,081,347 $75,792
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amount of Notes being registered represents the maximum aggregate
principal amount of Notes currently expected to be offered for sale.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(a). $1,584 of the registration fee was paid upon
the initial filing.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER
TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED FEBRUARY 17, 2000
PRELIMINARY PROSPECTUS
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
RECEIVABLE-BACKED NOTES, SERIES 2000-A
<TABLE>
<S> <C>
ORIX CREDIT ALLIANCE ORIX CREDIT ALLIANCE, INC.,
RECEIVABLES CORPORATION III, AS SERVICER
AS TRUST DEPOSITOR
</TABLE>
$287,081,347
(approximate)
------------------------
We are offering the following six classes of Receivable-Backed Notes,
Series 2000-A:
<TABLE>
<CAPTION>
INITIAL AGGREGATE FIRST UNDERWRITING
CLASS OF PRINCIPAL AMOUNT PAYMENT STATED MATURITY PRICE TO PUBLIC DISCOUNT
NOTES (APPROXIMATE) COUPON RATE DATE DATE PER NOTE PER NOTE
- -------- ----------------- ----------- ------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
A-1 $ 95,789,957 % 3/15/00 March 15, 2001 % %
A-2 $ 50,780,218 % 3/15/00 April 15, 2002 % %
A-3 $112,957,133 % 3/15/00 May 15, 2004 % %
A-4 $ 14,570,460 % 3/15/00 March 15, 2005 % %
B $ 8,655,719 % 3/15/00 September 15, 2005 % %
C $ 4,327,860 % 3/15/00 November 15, 2007 % %
</TABLE>
The total price to the public is $ . The total underwriting discount is
$ . The total proceeds to the trust is $ .
YOU SHOULD CAREFULLY CONSIDER THE FACTORS SET FORTH UNDER
"RISK FACTORS" ON PAGE 10 OF THIS PROSPECTUS.
The notes are not obligations of and will not represent interests in, and
are not guaranteed or insured by, the trust depositor, the owner trustee, the
indenture trustee, ORIX Credit Alliance, Inc. or any of their respective
affiliates, or any governmental agency.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
FIRST UNION SECURITIES, INC.
The date of this prospectus is February , 2000.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Important Notice about Information
Presented in this Prospectus............. i
Summary.................................... 1
Risk Factors............................... 10
The Absence of Existing Markets for the
Notes May Limit Your Ability to Resell
the Notes.............................. 10
Prepayments on the Contracts May Cause an
Earlier Repayment of the Notes than You
Expect and You May Not Be Able To Find
Investments with the Same Yield as the
Notes at the Time of the Repayment..... 10
The Price at Which You Can Resell Your
Notes May Decrease if the Ratings of
Your Notes Change...................... 10
The Subordination of the Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes, Class
B Notes and the Class C Notes is a
Limited Form of Credit Enhancement..... 10
Limited Assets Secure the Notes;
Noteholders Will Have No Recourse to
the Originator, Servicer or their
Affiliates in the Event Delinquencies
and Losses Deplete the Trust's
Assets................................. 11
Because Disproportionate Amounts of
Contracts Relate to Three States,
Adverse Events in Those States and
Surrounding Regions May Cause Increased
Defaults and Delinquencies............. 11
Because Disproportionate Amounts of
Contracts Relate to Equipment Used in
Particular Industries, Adverse Economic
Conditions in Those Industries May
Cause Increased Defaults and
Delinquencies.......................... 11
Even if We Repossess and Sell the
Equipment Relating to a Contract After
an Obligor Defaults, Shortfalls in
Amounts Available To Pay the Notes May
Occur if the Market Value of the
Equipment Has Declined................. 11
Servicer's Retention of Contract Files
May Hinder Our Ability to Realize the
Value of Equipment Securing the
Contracts.............................. 12
Failure to Record Assignment of Perfected
Security Interest May Hinder Our
Ability to Realize the Value of
Equipment Securing the Contracts....... 12
Repurchase Obligation of Trust Depositor
and Originator Provides You Only
Limited Protection Against Liens on the
Contracts.............................. 12
If a Bankruptcy Court Rules that the
Transfer of Contracts from the
Originator to the Trust Depositor was
not a True Sale then Payments on the
Contracts Could Be Reduced or
Delayed................................ 13
Insolvency of the Trust Depositor or the
Trust Could Delay or Reduce Payments to
You.................................... 13
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Proceeds From Required Sale of the
Contracts Following Trust Depositor
Bankruptcy May Not Be Sufficient to
Repay the Notes in Full................ 13
End-User Bankruptcy May Reduce or Delay
Collections on the Contracts........... 14
Transfer of Servicing May Delay Payments
to Noteholders Due to Contract
Processing Delays...................... 14
Year 2000 Issues May Impact ORIX Credit
Alliance's Ability to Service the
Contracts.............................. 14
Book-Entry Registration Will Result in
Your Inability to Exercise Directly
Your Rights as a Noteholder............ 14
Use of Proceeds............................ 15
Calculation of Contract Principal
Balance.................................. 15
Composition of the Contracts............... 15
Distribution of the Contracts by Contract
Interest Rate.......................... 16
Distribution of the Contracts by Payment
Frequency.............................. 17
Distribution of the Contracts by State in
Which Obligors Are Located............. 18
Distribution of the Contracts by Obligor
Industry............................... 19
Distribution of the Contracts by Original
Principal Balance...................... 19
Distribution of the Contracts by Current
Principal Balance...................... 19
Distribution of the Contracts by Original
Contract Term.......................... 20
Distribution of the Contracts by
Remaining Months to Stated Maturity.... 20
Distribution of Contracts by New/Used
Equipment Financed..................... 20
Delinquency and Loss Information........... 21
Definition of Delinquency for the Contracts
Transferred to the Trust................. 23
The Contracts.............................. 23
End-User Contracts....................... 23
Conditional Sale Agreements.............. 24
Leases................................... 24
Secured Promissory Notes................. 25
Equipment................................ 26
Contract Files........................... 26
How Collections on the Contracts are
Treated................................ 26
Prepayment and Yield Considerations........ 26
Weighted Average Life...................... 33
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ORIX Credit Alliance, Inc. ................ 35
Equipment Finance Business............... 35
Ancillary Businesses..................... 35
Summary Financial Data................... 36
Management............................... 36
Credit Approval, Collection and
Review Process......................... 38
Terms of Contracts..................... 39
Recourse Provisions.................... 39
Extension/Revision Procedures.......... 40
Pre-Litigation Workout/Judgment
Recovery............................ 40
Legal Proceedings...................... 40
Year 2000 Readiness Disclosure......... 41
Mainframe Systems and Applications..... 41
Personal Computer and Network
Applications........................ 41
Third-Party Compliance................. 41
Contingency Plans...................... 42
Cost................................... 42
The Trust.................................. 42
General.................................. 42
Termination of Trust..................... 43
Other Information........................ 43
The Trust Depositor........................ 43
Description of the Notes and Indenture..... 44
General.................................. 44
Interest and Principal................... 44
Amounts Available for Payments on the
Notes.................................. 45
Allocations.............................. 46
Prior to an Event of Default........... 46
Following an Event of Default.......... 48
Reserve Fund............................. 51
Spread Fund.............................. 52
Collection Account and Collection
Period................................. 52
Events of Default........................ 54
Remedies After Events of Default......... 55
The Indenture Trustee.................... 55
Governing Law............................ 56
Amendments............................... 56
Servicing Compensation and Payment of
Expenses............................... 57
Optional Redemption...................... 58
Mandatory Redemption..................... 58
Reports.................................. 58
List of Noteholders...................... 59
Administration Agreement................. 59
Book-Entry Registration.................. 60
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Issuance of Certificated Notes at a Later
Date................................... 63
The Certificates........................... 63
The Transfer and Servicing Agreement....... 64
Conveyance of the Contracts.............. 64
Representations and Warranties;
Definition of Eligible Contracts....... 64
Remedies for Breaches of Representations
and Warranties; Definition of
Ineligible Contracts................... 67
Concentration Amounts; Definition of
Excess Contract........................ 68
Material Modifications to Contracts...... 69
Substitute Contracts..................... 70
Definition of Defaulted Contracts........ 70
Indemnification.......................... 70
Servicing Standard and Servicer
Advances............................... 71
Servicer Resignation..................... 71
Servicer Default......................... 71
Evidence as to Compliance................ 73
Amendments............................... 73
The Owner Trustee........................ 74
Material Federal Income Tax
Considerations........................... 75
General.................................. 75
Classification of the Notes and the
Trust.................................. 75
General Tax Treatment of Noteholders..... 76
United States Holders.................. 76
Payments of Interest................... 76
Purchase, Sale and Retirement of the
Notes............................... 76
Backup Withholding and Information
Reporting........................... 76
United States Alien Holders............ 77
Backup Withholding and Information
Reporting........................... 78
State and Local Tax Considerations......... 78
New Jersey Tax Considerations............ 78
Other States............................. 78
Legal Investment........................... 78
ERISA Considerations....................... 79
Prohibited Transactions.................. 79
Plan of Distribution....................... 80
General.................................. 80
Rating of the Notes........................ 81
Legal Matters.............................. 82
Experts.................................... 82
Index of Terms............................. 83
Report of Independent Public Accountants... F-1
Balance Sheet.............................. F-2
</TABLE>
<PAGE> 5
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
Within the period during which there is an obligation to deliver a
prospectus, the underwriter will, at your request, promptly deliver to you, or
cause to be delivered to you, without charge, a paper copy of this prospectus.
No dealer, salesman or other person is authorized to give any information
or to make any representation not contained in this prospectus. If anyone makes
such a representation to you, you should not rely on it.
This prospectus does not constitute an offer to sell or a solicitation of
any offer to buy any security other than the notes offered by this prospectus,
nor does it constitute an offer to sell or a solicitation of any offer to buy
any of the notes to any person in any jurisdiction in which the person making
such offer or solicitation is not qualified to do so or to anyone to whom it is
unlawful to make such an offer or solicitation to such person.
i
<PAGE> 6
SUMMARY
The following is only a summary of the terms of the notes. It does not
contain all the information that may be important to you. You should read this
entire prospectus. In addition, you may wish to read the documents governing the
transfer of the contracts, the formation of the trust and the issuance of notes.
Those documents have been filed as exhibits to the registration statement of
which this prospectus is a part.
There are material risks associated with an investment in the notes. See
"Risk Factors" on page 10 for a discussion of factors you should consider before
making an investment in the notes.
OBJECTIVE..................... The trust will issue notes to investors. The
notes will be secured by commercial finance
contracts acquired by the trust depositor from
the originator.
THE TRUST..................... ORIX Credit Alliance Receivables Trust 2000-A,
a Delaware business trust, was established
pursuant to the trust agreement dated as of
January 27, 2000. The Trust's offices will be
in care of The Bank of New York (Delaware), as
owner trustee, at 502 White Clay Center,
Newark, Delaware 19714-6973, telephone number
(302) 283-8079.
THE ORIGINATOR................ The contracts are originated by ORIX Credit
Alliance, Inc. either directly from end-users
of financed equipment or indirectly from
vendors, that is manufacturers or dealers in
the financed equipment who assign their
contracts with end-users to ORIX Credit
Alliance, Inc. ORIX Credit Alliance, Inc's
principal executive offices are located at 300
Lighting Way, Secaucus, New Jersey 07096-1525,
telephone (201) 601-9000
THE TRUST DEPOSITOR........... ORIX Credit Alliance Receivables Corporation
III. The trust depositor is a wholly owned,
limited purpose subsidiary of ORIX Credit
Alliance, Inc. The trust depositor's principal
executive offices are located at 300 Lighting
Way, Secaucus, New Jersey 07096-1525, telephone
(201) 601-9618.
THE SERVICER.................. ORIX Credit Alliance, Inc.
THE INDENTURE TRUSTEE......... Harris Trust and Savings Bank, an Illinois
state banking corporation.
THE TRUST'S ASSETS
A. THE CONTRACTS............ The trust's assets will primarily consist of
the contracts. The contracts consist of
installment loan and installment sale
contracts, finance leases and title retention
and other security agreements with companies.
The contracts have financed equipment purchased
for commercial purposes. The equipment is
typically "low-obsolescence," "multiple-use"
capital equipment. It is used in industries and
businesses such as trucking and transportation,
construction and road building, wood and pulp,
machine shop, crane and crane rental and
printing, publishing and photoengraving, among
others.
Most of the contracts provide for a series of
scheduled payment installments calculated to
amortize fully the principal balance of the
contract over its term at the contract rate.
The principal
1
<PAGE> 7
balance of a contract is the sum of the total
scheduled remaining amounts of principal
payable to the originator by an obligor under a
contract, exclusive of finance charges. The
initial principal amount is typically the
amount advanced to fund the equipment purchased
and is in most instances less than the cost to
the obligor of the financed equipment.
As of February 1, 2000, approximately 14.56% by
aggregate outstanding principal balance of the
contracts had customized payment schedules and
balloon payments. Customized payment contracts
are obligations of obligors who have seasonal
downtimes or variations in cash flow typically
arising from weather conditions or industry
characteristics. During such downtimes, the
contract payment schedules may omit or reduce
required payments for generally up to three
months per year. The scheduled payments are at
higher amounts to assure that the contract does
not extend beyond a term appropriate for the
creditworthiness of the obligor and to meet the
originator's yield requirements. Balloon
contracts provide for a series of scheduled
payments over the term of the contract and a
larger amount, generally up to 30% of the
original principal balance, at the end of the
contract. The monthly payment includes the
amount necessary to amortize the non-balloon
payment portion of the contracts over the term
of the contract plus interest on the balloon
portion of the contract.
On the closing date ORIX Credit Alliance, Inc.
will transfer the contracts and security
interests in the related equipment to the trust
depositor. The trust depositor will then
transfer them to the trust on the same date.
The contracts have been selected on a random
basis from ORIX Credit Alliance, Inc.'s
portfolio of contracts that meet the
eligibility criteria specified in the transfer
and servicing agreement.
None of the obligors on the contracts are
located outside of the United States and its
territories. As of February 1, 2000, contracts
of any single obligor or commonly controlled
group of obligors do not constitute more than
approximately 1.0% of the aggregate outstanding
principal balance of the contracts, and no more
than 10.28% of the aggregate outstanding
principal balance of the contracts relates to
obligors located in the same state.
As of February 1, 2000, no contract has any
scheduled payments that are more than 60 days
delinquent. A contract is considered delinquent
if anything less than each full payment is
received by its contractual due date.
See "The Transfer and Servicing
Agreement -- Representations and Warranties;
Definition of Eligible Contracts" and "The
Contracts" and "Composition of the Contracts".
2
<PAGE> 8
As of February 1, 2000, the contracts had the
following characteristics:
<TABLE>
<S> <C>
Number of contracts....................... 4,387
Aggregate contract outstanding principal
balance................................. $288,523,968
Average contract outstanding principal
balance................................. $65,768
Weighted average contract rate............ 9.80%
Weighted average original term............ 51.1 months
Range..................................... 10-84 months
Weighted average remaining term........... 37.3 months
Range..................................... 7-80 months
</TABLE>
Changes in characteristics of the contracts
between February 1, 2000 and the closing date
will not affect more than 5.00% of the
aggregate outstanding principal balance of the
contracts.
For further information regarding the
contracts, see "Composition of the Contracts"
and "The Contracts", as well as "The Transfer
and Servicing Agreement -- Representations and
Warranties; Definition of Eligible Contracts"
and "-- Concentration Amounts; Definition of
Excess Contract".
We may replace a contract that is part of the
trust's assets with a substitute contract or
contracts:
- if we subsequently determine that a
contract was not eligible to be sold to
the trust at the time of its sale to the
trust;
- if the terms of such contract are to be
subsequently amended in a manner not
permitted by the transfer and servicing
agreement;
- if such contract is subject to a
casualty loss;
- if we did not remove and replace that
contract, the obligor or equipment
concentrations of contracts would exceed
the limits described in "The Transfer
and Servicing Agreement -- Concentration
Amounts; Definition of Excess Contract";
- if such contract is prepaid; or
- if such contract becomes a defaulted
contract.
See "The Transfer and Servicing
Agreement -- Substitute Contracts". The
substitute contracts will have been originated
under the same credit criteria and policies as
the contracts they replace.
B. RESERVE FUND............. On the closing date the trust depositor will
establish in bank accounts in the name of the
indenture trustee a reserve fund. This fund
provides you with limited protection in the
event collections from obligors on the
contracts are insufficient to make payments on
the notes. We cannot assure you, however, that
this protection will be adequate to prevent
shortfalls in amounts
3
<PAGE> 9
available to make payment on the notes. The
initial balance of the reserve fund will be
approximately $4,306,220, which will equal 1.5%
of the original principal balance of the notes.
Additional deposits will be required to be made
in subsequent months out of available
collections on the contracts to this fund (a)
to increase the reserve fund to an amount equal
to the greater of (i) 3% of the outstanding
principal of the notes and (ii) the lesser of
(A) 1% of the initial principal of the notes
and (B) the outstanding principal of the notes
and (b) in subsequent months thereafter, if
necessary, to maintain the required amount in
the fund. If, on any payment date, the amounts
available for distribution exceed the amounts
needed to pay amounts owed to the servicer and
to the indenture trustee and to pay interest
and principal on the notes, the excess will be
deposited into this fund. However, the amount
deposited in the reserve fund shall not exceed
the amount required above. Investment earnings
on amounts held in the reserve fund will be
available for distribution to you.
If on any payment date, collections on the
contracts and amounts, if any, on deposit in
the spread fund are less than the amount needed
to pay interest on or principal of the notes
then due, the indenture trustee will withdraw
funds from the reserve fund to pay the interest
and principal due.
The conditions under which we will withdraw
amounts from the reserve fund are more
specifically described in the "Description of
the Notes and Indenture -- Allocations" and
"-- Reserve Fund".
C. SPREAD FUND................ On the closing date the trust depositor will
establish an additional bank account, the
spread fund, in the name of the indenture
trustee to hold available funds whenever a
spread event exists. A spread event will exist
if any of the following occurs and is
continuing: (a) ORIX Credit Alliance, Inc. is
no longer the servicer, (b) the average monthly
rate of delinquencies on contracts in excess of
90 days over any three consecutive months
exceeds 5% of the aggregate outstanding
principal balance of the contracts or (c) the
cumulative net loss percentage with respect to
the contracts exceeds a specified "loss trigger
percentage" (initially 1.00%) that will be
increased over time.
Notwithstanding the foregoing: (i) the spread
event referred to in clause (b) above may be
cured on any distribution date if the
three-month delinquency percentage for the
preceding two collection periods is less than
or equal to 5% for each of such periods and
(ii) the spread event referenced in clause (c)
may be cured if the cumulative net loss
percentage is less than the associated loss
trigger percentage for that period. Amounts
that may be held in this fund provide you with
additional limited protection in the event
collections from obligors on the contracts are
insufficient to make payments on the notes. We
cannot assure you, however, that this
additional protection will be adequate to
prevent shortfalls in amounts available to make
4
<PAGE> 10
payment on the notes. If on any payment date, a
spread event exists and the amounts available
for distribution exceed the amounts needed to
pay amounts owed to the servicer (including
amounts due to the indenture trustee) to pay
interest and principal on the notes and to make
any required deposits to the reserve fund, the
excess will be deposited into the spread fund.
Investment earnings on amounts held in the
spread fund will be available for distribution
to you.
If on any payment date, collections on the
contracts are less than the amount needed to
pay interest and principal due on the notes and
make all required deposits to the reserve fund,
the indenture trustee will withdraw funds from
the spread fund to pay the interest and
principal and make such deposits. If on any
subsequent payment date, no spread event
continues to exist, amounts in the spread fund
will be distributed in the same order of
priority as are amounts in the collection
account.
The calculations related to a spread event and
the conditions under which we will withdraw
amounts from the spread fund are more
specifically described in the "Description of
the Notes and Indenture -- Allocations" and
"-- Spread Fund".
TERMS OF THE NOTES............ The basic terms of the notes will be as
described below. See "Description of the Notes
and Indenture". We will pay principal and
interest due on the notes using:
- collections of payments due under the
contracts held by the trust;
- earnings on amounts held in the
collection account;
- late charges relating to a contract if
the late charges were included in the
contract's terms as of the date the
contract was purchased by the trust;
- amounts earned on amounts held in the
reserve fund and the spread fund (if
any);
- amounts received upon the prepayment or
purchase of contracts or liquidation of
the contracts and disposition of the
related equipment upon defaults under
contracts;
- amounts received from vendor recourse,
if any;
- amounts in the reserve fund more
specifically described in "Description
of the Notes and Indenture -- Reserve
Fund"; and
- amounts in the spread fund more
specifically described in "Description
of the Notes and Indenture -- Spread
Fund".
See "Description of the Notes and
Indenture -- Amounts Available for Payments on
the Notes".
You may purchase the notes in minimum
denominations of $1,000, and in integral
multiples of $1,000 in excess of the
5
<PAGE> 11
minimum denominations; provided, however, that
one note of each class will be available for
purchase in an incremental denomination of less
than $1,000. We will offer the notes only in
book-entry form.
A. EVENTS OF DEFAULT........ Events of default with respect to the notes
include:
- failure to pay accrued interest on any
payment date,
- failure to pay outstanding principal on
the maturity date,
- breach of representations and warranties
with respect to the contracts which are
materially incorrect and which have a
material adverse effect on the
noteholders and continues unremedied for
a period of sixty days, and
- the occurrence of insolvency events with
respect to the trust depositor or the
trust.
See "Description of the Notes and
Indenture -- Events of Default".
B. INTEREST................. On a payment date, we will first repay any
outstanding servicer advances. Second, we will
pay the servicer's monthly servicing fee (which
includes therein amounts due to the indenture
trustee). Third, we will pay interest on the
notes at the rates specified on the cover of
this prospectus in the following order:
<TABLE>
<CAPTION>
CLASS OF NOTES RECEIVING INTEREST PAYMENT
NOTES PRIOR TO SPECIFIED CLASS
-------- -------------------------------------
<S> <C>
A-1, A-2,
A-3, A-4........... None
B.................. Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes
C.................. Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes,
Class B Notes
</TABLE>
See "Description of the Notes and
Indenture -- Allocations".
We will calculate interest on the Class A-1
Notes on the basis of actual days elapsed over
a year of 360 days. We will calculate interest
on all other notes on the basis of a year of
360 days consisting of twelve 30-day months.
C. PRINCIPAL................ On a payment date, after we pay interest on the
notes, we will pay principal on the notes in
the following order:
<TABLE>
<CAPTION>
CLASS OF NOTES RECEIVING PRINCIPAL PAYMENT
NOTES PRIOR TO SPECIFIED CLASS
-------- -----------------------------------------------
<S> <C>
A-1 None
A-2 Class A-l Notes
</TABLE>
6
<PAGE> 12
<TABLE>
<CAPTION>
CLASS OF NOTES RECEIVING PRINCIPAL PAYMENT
NOTES PRIOR TO SPECIFIED CLASS
-------- -----------------------------------------------
<S> <C>
A-3 Class A-1 Notes, Class A-2 Notes
Class B Notes and Class C Notes will receive
principal payments prior to Class A-3 Notes on
any payment date on which the outstanding
principal amount of the Class A-2 Notes is
greater than $0.
A-4 Class A-1 Notes, Class A-2 Notes, Class A-3
Notes
Class B Notes and Class C Notes will receive
principal payments prior to Class A-4 Notes on
any payment date on which the outstanding
principal amount of the Class A-3 Notes is
greater than $0.
B Class A-1 Notes, Class A-2 Notes
Class A-3 Notes will receive principal payments
prior to Class B Notes after the outstanding
principal amount of the Class A-1 Notes and
Class A-2 Notes is reduced to $0.
Class A-4 Notes will receive principal payments
prior to Class B Notes only after the
outstanding principal amount of the Class A-1
Notes, Class A-2 Notes and Class A-3 Notes is
reduced to $0.
C Class A-l Notes, Class A-2 Notes, Class B Notes
Class A-3 Notes will receive principal payments
prior to Class C Notes only after the
outstanding principal amount of the Class A-1
Notes and Class A-2 Notes is reduced to $0.
Class A-4 Notes will receive principal payments
prior to Class C Notes only after the
outstanding principal amount of the Class A-1
Notes, Class A-2 Notes and Class A-3 Notes is
reduced to $0.
</TABLE>
See "Description of the Notes and
Indenture -- Allocations".
The amount of principal paid on a Class A-1
Note prior to its stated maturity date will be
based on the amount that the aggregate
principal balance of the contracts has declined
during the most recent full collection period.
Each collection period is approximately a
month.
After the Class A-1 Notes have been paid in
full, the amount of principal paid on any other
class of notes will be the amount necessary to
reduce the outstanding principal of that class
of notes to an amount equal to a specified
percentage of the aggregate principal balance
of the contracts as of the related
determination date. The percentage used is the
ratio of the initial principal amount of such
class of notes to the original pool balance of
the contracts minus the initial principal
amount of the Class A-1 Notes.
7
<PAGE> 13
Following an event of default, we will not make
principal payments in the order described
above. Instead, we will pay principal on the
notes in the following order:
- outstanding principal of Class A-l Notes
- pro rata, to the outstanding principal
of Class A-2 Notes, Class A-3 Notes and
Class A-4 Notes
- outstanding principal of Class B Notes
- outstanding principal of Class C Notes
See "Description of the Notes and
Indenture -- Allocations" and "-- Events of
Default".
D. PAYMENT DATES............ You will receive distributions of interest and
principal on the 15th day of each month, or if
that day is not a business day, the next
business day.
E. STATED MATURITY DATE..... The notes will mature on the date shown on the
cover of this prospectus, except that if the
day is not a business day, then the stated
maturity date will be the next business day.
F. OPTIONAL REDEMPTION...... If the aggregate outstanding principal balance
of the contracts at the time is less than or
equal to 15% of the initial aggregate principal
balance of the contracts as of February 1,
2000, the trust may redeem all, but not less
than all, of the outstanding notes. If the
trust does redeem all of the outstanding notes,
the redemption price will be equal to the
unpaid principal amount of the notes plus
accrued and unpaid interest through the date of
redemption.
G. MANDATORY REDEMPTION....... If on any payment date, the aggregate amounts
on deposit in the collection account, the
reserve fund and the spread fund are greater
than or equal to the sum of (i) the entire
outstanding note principal balance, (ii) the
interest accrued thereon, (iii) any accrued and
unpaid servicing fee (including therein amounts
owed to the indenture trustee) and (iv)
unreimbursed servicer advances, the amounts on
deposit in the reserve fund and the spread fund
will be deposited in the collection account and
used to redeem the notes in full. The
redemption price will be equal to the unpaid
principal amount of the notes plus accrued and
unpaid interest through the date of redemption.
SERVICING; SERVICING FEE...... The servicer will be responsible for servicing,
managing and administering the contracts and
related interests, and enforcing and making
collections on the contracts. See "The Transfer
and Servicing Agreement -- Servicing Standard
and Servicer Advances".
The servicer will be entitled to receive a
monthly fee equal to the product of:
(1) one-twelfth of 1.00% and
8
<PAGE> 14
(2) the aggregate outstanding principal
balance of the contracts in the trust
as of the beginning of the related
collection period.
The fee is payable out of amounts we receive on
the contracts. Amounts payable to the indenture
trustee are included in such fee.
See "Description of the Notes and
Indenture -- Servicing Compensation and Payment
of Expenses" and "The Transfer and Servicing
Agreement".
MATERIAL FEDERAL INCOME TAX
CONSIDERATIONS.............. In the opinion of Sullivan & Cromwell, federal
tax counsel to the trust depositor, for federal
income tax purposes, the notes will be
characterized as debt, and the trust will not
be characterized as an association or a
publicly traded partnership taxable as a
corporation. You, by accepting a note, agree to
treat the note as indebtedness. See "Material
Federal Income Tax Considerations".
ERISA CONSIDERATIONS.......... Subject to the considerations discussed under
"ERISA Considerations", the notes will be
eligible for purchase by some employee benefit
plans. Any benefit plan fiduciary considering
purchase of the notes should, however, consult
with its counsel regarding the consequences of
its purchase under ERISA and the Internal
Revenue Code. See "ERISA Considerations".
RATING........................ We will not issue the notes unless they receive
ratings from the following rating agencies as
set forth below:
<TABLE>
<CAPTION>
CLASS MOODY'S STANDARD &
OF INVESTORS POOR'S FITCH
NOTE SERVICE RATINGS GROUP IBCA, INC.
----- --------- ------------- ----------
<S> <C> <C> <C>
A-1 P-1 A-1+ F1+/AAA
A-2 Aaa AAA AAA
A-3 Aaa AAA AAA
A-4 Aaa AAA AAA
B A2 A A
C Baa2 BBB BBB
</TABLE>
A rating is not a recommendation to purchase,
hold or sell notes since a rating does not
address market price or suitability for a
particular investor. A rating may be subject to
revision or withdrawal at any time by the
assigning rating agency. See "Rating of the
Notes".
9
<PAGE> 15
RISK FACTORS
You should carefully consider the following risk factors before you invest
in the notes.
THE ABSENCE OF EXISTING MARKETS FOR THE NOTES MAY LIMIT YOUR ABILITY TO RESELL
THE NOTES
There is currently no public market for the notes and we cannot assure you
that one will develop. Thus, you may not be able to resell your notes at all, or
may be able to do so only at a substantial discount. The underwriter may assist
in resales of the notes but it is not obligated to do so. We do not intend to
apply for listing of the notes on any securities exchange or for the inclusion
of the notes on any automated quotation system. Even if a secondary market does
develop, it may not continue.
PREPAYMENTS ON THE CONTRACTS MAY CAUSE AN EARLIER REPAYMENT OF THE NOTES THAN
YOU EXPECT AND YOU MAY NOT BE ABLE TO FIND INVESTMENTS WITH THE SAME YIELD AS
THE NOTES AT THE TIME OF THE REPAYMENT
The terms of some of the contracts permit prepayment. Where prepayments are
permitted, obligors may be required to pay a premium as a condition to
prepayment. Prepayments may cause us to pay principal on the notes sooner than
you expected. Similarly, upon the occurrence of an event of default, you may
also receive principal on the notes sooner than you expected. See "Description
of the Notes and Indenture -- Events of Default" and "Prepayment and Yield
Consideration". You may not be able to reinvest those distributions of principal
at yields equivalent to the yield on the notes; therefore, the ultimate return
you receive on your investment in the notes may be less than the return you
expected on the notes. The rate of early terminations of contracts due to
prepayments, including defaults, is influenced by various factors including:
- changes in customer requirements;
- the level of interest rates;
- the level of casualty losses; and
- the overall economic environment.
We cannot assure you that prepayments on the contracts held by the trust
will conform to any historical experience. We cannot predict the actual rate of
prepayments which will be experienced on the contracts.
THE PRICE AT WHICH YOU CAN RESELL YOUR NOTES MAY DECREASE IF THE RATINGS OF YOUR
NOTES CHANGE
Moody's Investors Service, Standard & Poor's Ratings Group and Fitch IBCA,
Inc. are the rating agencies rating the notes. At any time, a rating may be
lowered or withdrawn entirely by a rating agency rating the notes. In the event
that the rating initially assigned to any note is subsequently lowered or
withdrawn for any reason, you may not be able to resell your notes without a
substantial discount. For more detailed information regarding the ratings
assigned to any class of the notes, see "Rating of the Notes."
THE SUBORDINATION OF THE CLASS A-2 NOTES, CLASS A-3 NOTES, CLASS A-4 NOTES,
CLASS B NOTES AND THE CLASS C NOTES IS A LIMITED FORM OF CREDIT ENHANCEMENT
We will pay interest and principal on some classes of notes prior to paying
interest and principal on other classes of notes. See "Description of the Notes
and Indenture--Allocations". The subordination of some classes of notes to
others means that the subordinated classes of notes are more likely to suffer
the consequences of delinquent payments and defaults on the contracts than the
notes which receive payments prior to those subordinated classes.
The more senior classes of notes could lose the credit enhancement provided
by the more subordinate classes and the reserve fund and the spread fund if
delinquencies and defaults on the contracts increase and if the collections on
the contracts and amounts in the reserve fund and the spread fund are
insufficient to pay even the more senior classes of notes.
10
<PAGE> 16
LIMITED ASSETS SECURE THE NOTES; NOTEHOLDERS WILL HAVE NO RECOURSE TO THE
ORIGINATOR, SERVICER OR THEIR AFFILIATES IN THE EVENT DELINQUENCIES AND LOSSES
DEPLETE THE TRUST'S ASSETS
The trust is a limited purpose trust with limited assets. Moreover, you
have no recourse to the general credit of the servicer, originator, the owner
trustee, the indenture trustee or their affiliates. Therefore, you must rely
solely upon the contracts for payment of principal and interest on the notes. If
payments on the contracts are delinquent or are insufficient to make payments on
the notes, no assets other than the reserve fund will be available to make
payments on the notes. Similarly, in the event that contracts become defaulted
contracts, the proceeds from the sale of the equipment securing the contracts
may be insufficient to make payments on the notes. There can be no assurance
that the delinquency and loss experience of the contracts will be comparable to
the information set forth in "Delinquency and Loss Information".
BECAUSE DISPROPORTIONATE AMOUNTS OF CONTRACTS RELATE TO THREE STATES, ADVERSE
CONDITIONS IN THOSE STATES AND SURROUNDING REGIONS MAY CAUSE INCREASED DEFAULTS
AND DELINQUENCIES
If adverse economic conditions were particularly severe in the geographic
regions in which there are substantial concentrations of obligors, the amount of
delinquent payments and defaults on the contracts may increase. As a result, the
overall timing and amount of collections on the contracts held by the trust may
differ from what you may have expected, and you may experience delays or
reductions in payments you expected to receive. As of February 1, 2000,
approximately 10.28% of the aggregate principal balance of the contracts held by
the trust related to obligors located in California, 8.28% to obligors in
Pennsylvania and 5.65% to obligors in New York. No other state accounts for more
than 5.00% of the aggregate principal balance of the contracts. The contracts in
these three states represent in the aggregate approximately 24.21% of the
aggregate principal balance of the contracts held by the trust. An example of an
adverse condition is if there were a substantial downturn and declining prices
in the wood and pulp business in particular states, this could reduce revenues
for obligors in those states and ultimately reduce the associated obligors'
ability to make timely payments on their related contracts.
BECAUSE DISPROPORTIONATE AMOUNTS OF CONTRACTS RELATE TO EQUIPMENT USED IN
PARTICULAR INDUSTRIES, ADVERSE ECONOMIC CONDITIONS IN THOSE INDUSTRIES MAY CAUSE
INCREASED DEFAULTS AND DELINQUENCIES
If the industries in which there is a substantial concentration of obligors
experience adverse events or economic conditions, the overall timing and amount
of collections on the contracts held by the trust may differ from what you may
have expected. This could result in delays or reduced payments to you. As of
February 1, 2000, contracts constituting approximately 45.42% of the aggregate
principal balance of the contracts held by the trust relate to equipment used in
the trucking industry, 28.45% relate to the construction and road building
business, 11.58% relate to the wood and pulp business and 7.88% relate to the
machine shop industry. A reduction in the demand for trucking and transportation
services may consequently cause an increase in delinquencies and defaults on
contracts with obligors associated with the trucking and transportation
industry. A decrease in the demand in the new construction and road building
industry, the wood and pulp industry or machine shop industry, could reduce
revenues in the construction and road building industry, the wood and pulp
industry or machine shop industry, as the case may be, and this may consequently
increase delinquencies and defaults on the related contracts. No other industry
accounts for more than 5.00% of the aggregate principal balance of the contracts
held by the trust.
EVEN IF WE REPOSSESS AND SELL THE EQUIPMENT RELATING TO A CONTRACT AFTER AN
OBLIGOR DEFAULTS, SHORTFALLS IN AMOUNTS AVAILABLE TO PAY THE NOTES MAY OCCUR IF
THE MARKET VALUE OF THE EQUIPMENT HAS DECLINED
If a contract held by the trust becomes a defaulted contract, the only
sources of payment for amounts expected to be paid on that contract will be the
income and proceeds from the sale of any related repossessed equipment and a
deficiency judgment, if any, against the obligor under the defaulted contract as
well as, to the extent available, vendor recourse. See "The Transfer and
Servicing Agreement -- Definition of Defaulted Contracts". Since the market
value of the equipment may decline faster than the contract outstanding
principal balance, the servicer may not recover the entire amount due on the
contract,
11
<PAGE> 17
might not receive any recoveries on the equipment and the obligor may be unable
to pay any deficiency judgment. The reserve fund and the spread fund are
intended to make up for deficiencies in the proceeds and recoveries on the
contracts. However, this protection is limited and could be depleted if those
deficiencies are larger than we currently anticipate.
SERVICER'S RETENTION OF CONTRACT FILES MAY HINDER OUR ABILITY TO REALIZE THE
VALUE OF EQUIPMENT SECURING THE CONTRACTS
To facilitate servicing and reduce administrative costs, the servicer will
retain possession of the documents evidencing the contracts held by the trust.
Because the documents evidencing the contracts will remain in servicer's
possession, if a subsequent purchaser were able to take physical possession of
the documents without knowledge of their assignment, that purchaser could have a
security interest in the contracts senior to the trust's security interest. In
the event that we must rely upon repossession and sale of the related equipment
securing defaulted contracts to recover principal and interest due on the
defaulted contracts, our ability to realize upon the equipment may be limited
due to the existence of a third party's senior security interest in those
contracts. Also, the physical possession of the documents by such a subsequent
purchaser could limit the trust's ability to enforce and receive payments on the
contracts. In any such event, distributions to you could be delayed or reduced.
FAILURE TO RECORD ASSIGNMENT OF PERFECTED SECURITY INTEREST MAY HINDER OUR
ABILITY TO REALIZE THE VALUE OF EQUIPMENT SECURING THE CONTRACTS
In connection with the conveyance of the contracts to the trust, security
interests in the equipment securing the contracts have been assigned by the
originator to the trust depositor and will be assigned by the trust depositor to
the trust. Due to the administrative burden and expense associated with amending
and paying the filing fee for the assignment of more than 4,300 Uniform
Commercial Code financing statements in 49 states and the District of Columbia
where equipment is located, we will not file any assignments of the UCC
financing statements evidencing the assignment of the security interests in the
equipment to the trust depositor, the trust or the indenture trustee. In
addition, certificates or filings with respect to any titled equipment which
name the originator as lienholder will not be amended to evidence the assignment
of the security interests in the equipment to the trust depositor, the trust or
the indenture trustee. Because neither the trust depositor's, trust's, owner
trustee's or indenture trustee's name appears on the UCC financing statements or
on the title registrations, as applicable, the originator or servicer could
inadvertently release the security interest in the equipment securing a
contract. In such event, we would not have a perfected security interest in the
equipment. Without a perfected security interest, we may not be able to fully
realize the value of any repossessed equipment if the related contract becomes a
defaulted contract. It has been the general policy of the originator to file or
cause to be filed UCC financing statements and, in the case of titled equipment,
to have its lienholder status noted on the certificate of title, with respect to
the equipment relating to the contracts.
REPURCHASE OBLIGATION OF TRUST DEPOSITOR AND ORIGINATOR PROVIDES YOU ONLY
LIMITED PROTECTION AGAINST LIENS ON THE CONTRACTS
Federal or state law may grant liens on a contract that have priority over
the trust's interest. To the extent a lien having priority over the trust's lien
exists with respect to a contract and/or the related equipment, the trust's
interest in the asset will be subordinate to such lien. In the event the
creditor associated with such lien exercises its remedies on its security
interest it is unlikely that, after the senior creditor is repaid, sufficient
cash proceeds from the contract and related equipment will be available to pay
the contract outstanding principal balance to the trust. An example of a lien
arising under federal or state law is a tax or other government lien on property
of the originator or the trust depositor arising prior to the time a contract is
conveyed to the trust. The tax lien may have priority over the interest of the
trust in the contract.
Under the transfer and servicing agreement, the originator will warrant to
the trust that the contracts transferred thereunder will be transferred free and
clear of the lien of any third party. The originator and
12
<PAGE> 18
the trust depositor also will jointly and severally warrant to the trust that
they will not sell, pledge, assign, transfer or grant any lien on the contracts.
In the event that such warranties are not true with respect to any contract, the
trust depositor and the originator are required under the transfer and servicing
agreement to repurchase the contract. There can be no assurance that the trust
depositor or originator will be able to repurchase a contract at the time we
request it.
IF A BANKRUPTCY COURT RULES THAT THE TRANSFER OF CONTRACTS FROM THE ORIGINATOR
TO THE TRUST DEPOSITOR WAS NOT A TRUE SALE THEN PAYMENTS ON THE CONTRACTS COULD
BE REDUCED OR DELAYED
If the originator became a debtor in a bankruptcy case and creditors of the
originator, or the originator acting as a debtor-in-possession or a bankruptcy
trustee, were to assert that the transfer of the contracts from the originator
to the trust depositor was ineffective to remove such contracts from the
originator's estate, the distribution of proceeds of the contracts to the trust
might be subject to the automatic stay provisions of the United States
Bankruptcy Code. This would delay the distribution of those proceeds for an
uncertain period of time. Furthermore, if the bankruptcy court rules in favor of
the creditor or originator, reductions in payments under the contracts to the
trust could occur. In either case, distributions to you then could be delayed or
reduced. In addition, a bankruptcy trustee would have the power to sell the
contracts if the proceeds of the sale could satisfy the amount of the debt
deemed owed by the originator. The bankruptcy trustee could also substitute
other collateral in lieu of the contracts to secure the debt. Additionally, the
bankruptcy court could adjust the debt if the originator were to file for
reorganization under Chapter 11 of the Bankruptcy Code. In its transfer
agreement with the trust depositor, the originator will warrant to the trust
depositor that the conveyance of the contracts to the trust depositor is a valid
sale and transfer of the contracts to the trust depositor. In addition, the
originator and the trust depositor have agreed that they will each treat the
transactions described in this prospectus as a sale of the contracts to the
trust depositor. The originator will take all actions that are required under
applicable law to perfect the trust depositor's ownership interest in the
contracts sold by the originator.
INSOLVENCY OF THE TRUST DEPOSITOR OR THE TRUST COULD DELAY OR REDUCE PAYMENTS TO
YOU
If the trust depositor were to become a debtor in a bankruptcy case and
creditors of the trust depositor, or the trust depositor acting as a
debtor-in-possession, were to assert that the sale of the contracts to the trust
was ineffective to remove such contracts from the trust depositor's estate, then
delays in payments under the contracts to the trust could occur or, reductions
in the amount of payments under the contracts to the trust could result.
Distributions to you then could be delayed or reduced. The trust depositor will
warrant in the transfer and servicing agreement that the conveyance of the
contracts to the trust is a valid sale of the contracts to the trust. The trust
depositor will also warrant that the security interest in the contracts granted
by the trust to the indenture trustee is a valid and duly perfected security
interest. The trust depositor will also agree to take all actions that are
required under applicable law to perfect the trust's and the indenture trustee's
respective interests in the contracts. In the event the trust depositor becomes
subject to insolvency proceedings, the trust, the trust's interest in the
trust's assets and the trust's obligation to make payments on the notes might
also become subject to the insolvency proceedings. We believe that the trust
will be considered bankruptcy remote from the originator. However, no law firm
in this transaction will be rendering an opinion to that effect.
PROCEEDS FROM REQUIRED SALE OF THE CONTRACTS FOLLOWING TRUST DEPOSITOR
BANKRUPTCY MAY NOT BE SUFFICIENT TO REPAY THE NOTES IN FULL
If the trust depositor is bankrupt or insolvent, then an event of default
would occur with respect to the notes. Under the indenture and the transfer and
servicing agreement, and assuming the trust was not then a debtor in a
bankruptcy case, the indenture trustee would be required to sell the interests
in the contracts. If the sum of the proceeds of the sale of the contracts and
the proceeds of any collections on the contracts is insufficient to pay you in
full, then you may suffer losses on your investment in the notes.
13
<PAGE> 19
END-USER BANKRUPTCY MAY REDUCE OR DELAY COLLECTIONS ON THE CONTRACTS
Bankruptcy and insolvency laws could affect your interests in contracts
with bankrupt end-user obligors if those laws result in any of the contracts
being written off as uncollectible or result in delay in payments due on any
contracts. As a result, you may be subject to delays in receiving payments, and
you may also suffer losses if collections from the remaining unaffected
contracts and the reserve fund are insufficient to cover losses to the trust.
State laws impose requirements and restrictions relating to foreclosure sales
and obtaining deficiency judgments following foreclosure sales. In the event
that you must rely on repossession and disposition of equipment to recover
amounts due on defaulted contracts, the amounts due may not be realized due to
these requirements and restrictions. Factors that may affect whether you receive
the full amount due on a contract include the failure to file financing
statements to perfect the originator's, or trust's security interest in the
equipment securing the contract. The depreciation, obsolescence, damage or loss
of any item of equipment will also affect whether you receive the full amount
due on a contract.
TRANSFER OF SERVICING MAY DELAY PAYMENTS TO NOTEHOLDERS DUE TO CONTRACT
PROCESSING DELAYS
If ORIX Credit Alliance, Inc. were to cease acting as servicer, delays in
processing payments on the contracts and information in respect thereof could
occur and result in delays in payments to you.
YEAR 2000 ISSUES MAY IMPACT ORIX CREDIT ALLIANCE'S ABILITY TO SERVICE THE
CONTRACTS
If ORIX Credit Alliance, Inc., as servicer, does not have computerized
systems that are Year 2000 compliant by the Year 2000, its ability to service
the contracts may be materially and adversely affected. Similarly, if the
indenture trustee does not have computerized systems that are Year 2000
compliant by the Year 2000, its ability to make distributions to you may be
materially and adversely affected. The "Year 2000" issue concerns the potential
exposures related to the automated generation of business and financial
misinformation resulting from the application of computer programs which have
been written using two digits to identify a year in the date field rather than
four. These programs could fail or produce erroneous results during the
transition from the Year 1999 to the Year 2000.
ORIX Credit Alliance, Inc. has taken significant steps to address the Year
2000 issue. While ORIX Credit Alliance, Inc. has not experienced Year 2000
problems to date, it continues to bear some risk related to the Year 2000 issue
and could be materially adversely affected if other entities not affiliated with
it do not appropriately address their own Year 2000 compliance issues. These
other entities include those providing contingency plans or outsourced
technology services such as mainframe and application support, as well as
borrowers and power companies. Due to this uncertainty, ORIX Credit Alliance,
Inc. is unable to represent that there could be no material adverse consequences
related to the Year 2000 issue; however, it believes that it is doing what is
reasonably necessary to provide the expertise, resources, assessments and
corrective procedures for the Year 2000 issues which could have a material
adverse impact on its operations or financial condition. See "ORIX Credit
Alliance, Inc. -- Year 2000 Readiness Disclosure".
BOOK-ENTRY REGISTRATION WILL RESULT IN YOUR INABILITY TO EXERCISE DIRECTLY YOUR
RIGHTS AS A NOTEHOLDER
The notes will be registered in the name of Cede & Co., as nominee of The
Depositary Trust Company. As a result, unless and until definitive notes are
issued, you will not be recognized by the trust, the owner trustee or the
indenture trustee as a noteholder. You will only be able to exercise the rights
of noteholders indirectly, through DTC, Euroclear or Clearstream Luxembourg
(formerly Cedelbank) and their respective participating organizations. You will
receive reports and other information provided for in the indenture only to the
extent provided by DTC, Euroclear or Clearstream Luxembourg or by directly
contacting the Indenture Trustee and providing proof of ownership or beneficial
interest. If you are a beneficial owner of the book-entry notes, your ability to
pledge your notes, and the liquidity of your notes in general, may be limited
due to the fact that you will not have a physical note. In addition, you may
experience delays in receiving payments on your notes.
14
<PAGE> 20
USE OF PROCEEDS
In consideration of the trust depositor's transfer of the contracts to the
trust, the trust will transfer the net proceeds from the sale of the notes to
the trust depositor. The trust depositor will acquire the contracts on the
closing date from the originator.
CALCULATION OF CONTRACT PRINCIPAL BALANCE
As used in this prospectus, the principal balance of a contract as of any
date indicated refers to the sum of the total remaining payments due from the
obligor to the originator that were, at the time of origination, designated as
principal payments. These principal payments represent the unpaid portion of the
original amount financed. This amount excludes all payments relating to finance
charges.
COMPOSITION OF THE CONTRACTS
On the closing date the trust depositor will transfer to the trust the
contracts as of February 1, 2000 and may from time to time substitute contracts
as of the applicable cutoff dates under the transfer and servicing agreement.
The contracts were selected on a random basis from ORIX Credit Alliance, Inc.'s
portfolio of contracts based on a pool of contracts that met the eligibility
criteria described in the transfer and servicing agreement. See "The Transfer
and Servicing Agreement -- Representations and Warranties; Definition of
Eligible Contracts" and "-- Concentration Amounts; Definition of Excess
Contract." The originator will represent that all of the contracts transferred
to the trust relate to commercial financings, rather than to consumer leases or
consumer loans or financings. No selection procedures believed by the trust
depositor to be adverse to you were used in selecting the contracts for transfer
to the trust under the transfer and servicing agreement. The originator will
sell the contracts to the trust depositor on the closing date under a separate
transfer agreement.
The composition and distribution of the contracts by contract rate, payment
frequency, geographic distribution, type of equipment, original principal
balance, current principal balance, original term and remaining term are set
forth in the following tables and are reported as of February 1, 2000. For
further information regarding the contracts, see "The Contracts".
As the obligors pay amounts owed by them under the contracts, the aggregate
principal balance of all of the contracts held by the trust will decrease. This
decrease in the principal balance of the contracts is referred to as
amortization. The rate at which the principal balance of each contract is
reduced may vary from contract to contract. The variance will depend in large
part on the contract terms and the manner in which the obligor makes its
payments. As a result, the statistical distribution of the contracts held by the
trust, including the concentration of obligors in any one state or of the
contracts with respect to any one equipment type will vary as the contract
balances amortize.
While reading the tables you should note that:
- Classification by obligor industry is based on ORIX Credit Alliance,
Inc.'s customary procedures for determining obligor industry.
- Percentages and amounts set forth in the following tables may not total
due to rounding.
- The final scheduled payment on the contract with the latest maturity or
expiration is prior to November 15, 2006.
Some of the contracts intended, as of February 1, 2000, to be transferred
to the trust may be determined not to meet the eligibility requirements and
those contracts may not be transferred to the trust on the closing date for the
transfer of the contracts to the trust. While the statistical distribution of
the characteristics as of the closing date for the final pool of contracts will
vary somewhat from the statistical distribution of the characteristics as of
February 1, 2000 as presented in this prospectus, the variance will not be
material. Changes in the characteristics of the contracts between February 1,
2000 and the closing date will not affect more than 5.00% of the aggregate
principal balance of the contracts.
15
<PAGE> 21
The information presented in the following tables is as of February 1,
2000. The percentages and balances set forth in each of the following tables may
not total due to rounding.
<TABLE>
<S> <C>
NUMBER OF CONTRACTS......................................... 4,387
AGGREGATE CONTRACT OUTSTANDING PRINCIPAL BALANCE............ $288,523,968
AVERAGE CONTRACT OUTSTANDING PRINCIPAL BALANCE.............. $65,768
WEIGHTED AVERAGE CONTRACT RATE.............................. 9.80%
WEIGHTED AVERAGE ORIGINAL TERM.............................. 51.1 MONTHS
(RANGE) (IN MONTHS)......................................... 10-84 MONTHS
WEIGHTED AVERAGE REMAINING TERM............................. 37.3 MONTHS
(RANGE) (IN MONTHS)......................................... 7-80 MONTHS
</TABLE>
DISTRIBUTION OF THE CONTRACTS BY CONTRACT INTEREST RATE
AS OF FEBRUARY 1, 2000
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
NUMBER OF NUMBER OF AGGREGATE AGGREGATE
CONTRACT INTEREST RATE RANGE CONTRACTS CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ---------------------------- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
7.001%- 7.500%........................... 9 0.21% $ 3,044,475 1.06%
7.501%- 8.000%........................... 45 1.03 8,137,833 2.82
8.001%- 8.500%........................... 97 2.21 14,866,198 5.15
8.501%- 9.000%........................... 428 9.76 39,369,315 13.65
9.001%- 9.500%........................... 697 15.89 57,716,369 20.00
9.501%-10.000%........................... 829 18.90 60,158,584 20.85
10.001%-10.500%........................... 680 15.50 38,883,797 13.48
10.501%-11.000%........................... 571 13.02 30,789,605 10.67
11.001%-11.500%........................... 267 6.09 12,153,042 4.21
11.501%-12.000%........................... 190 4.33 6,714,269 2.33
12.001%-12.500%........................... 179 4.08 6,209,528 2.15
12.501%-13.000%........................... 169 3.85 4,911,688 1.70
13.001%-13.500%........................... 64 1.46 1,536,529 0.53
13.501%-14.000%........................... 57 1.30 1,536,738 0.53
14.001%-14.500%........................... 28 0.64 797,862 0.28
14.501%-15.000%........................... 17 0.39 443,955 0.15
15.001%-15.500%........................... 26 0.59 505,890 0.18
15.501%-16.000%........................... 15 0.34 372,430 0.13
Greater Than 16.000%...................... 19 0.43 375,861 0.13
----- ------ ------------ -------
TOTAL(1)........................ 4,387 100.00% $288,523,968 100.00%
===== ====== ============ =======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
16
<PAGE> 22
DISTRIBUTION OF THE CONTRACTS BY PAYMENT FREQUENCY
AS OF FEBRUARY 1, 2000
Constant monthly payment contracts generally provide for regular monthly
payments by obligors of a constant fixed amount. Skip payment contracts are used
for obligors who have seasonal downtimes or variations in cash flow typically
arising from weather conditions or industry characteristics. During such
downtimes, the contract payment schedules omit required payments for generally
up to three months per year. Other customized payment contracts provide for
payment schedules that may entail various combinations of skip payments, reduced
payments and balloon payments to match anticipated variations in obligors' cash
flows. Balloon payment contracts generally provide for regular monthly payments
by obligors of a smaller fixed amount than a constant monthly payment rate would
require but also provide for a larger balloon payment at the end of the contract
term. Scheduled payments on balloon contracts, skip contracts and other
customized contracts are at amounts to assure that the contract does not extend
beyond a term appropriate for the creditworthiness of the obligor and to meet
the originator's yield requirements.
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
NUMBER OF NUMBER OF AGGREGATE AGGREGATE
PAYMENT FREQUENCY CONTRACTS CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ----------------- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Constant Monthly Payments................. 3,963 90.34% $246,522,163 85.44%
Skip Payments............................. 171 3.90 15,351,099 5.32
Other Customized Payments................. 157 3.58 15,250,040 5.29
Balloon Payments.......................... 96 2.19 11,400,666 3.95
----- ------ ------------ ------
TOTAL(1)........................ 4,387 100.00% $288,523,968 100.00%
===== ====== ============ ======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
17
<PAGE> 23
DISTRIBUTION OF THE CONTRACTS BY STATE IN WHICH OBLIGORS ARE LOCATED
AS OF FEBRUARY 1, 2000
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
NUMBER OF NUMBER OF AGGREGATE AGGREGATE
STATE CONTRACTS CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ----- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Alabama............................. 151 3.44% $ 12,201,920 4.23%
Alaska.............................. 1 0.02 61,956 0.02
Arizona............................. 69 1.57 4,211,582 1.46
Arkansas............................ 28 0.64 2,203,123 0.76
California.......................... 575 13.11 29,650,716 10.28
Colorado............................ 22 0.50 2,119,668 0.73
Connecticut......................... 58 1.32 3,265,853 1.13
Delaware............................ 25 0.57 1,346,664 0.47
District of Columbia................ 3 0.07 101,203 0.04
Florida............................. 78 1.78 7,813,362 2.71
Georgia............................. 167 3.81 11,366,591 3.94
Idaho............................... 21 0.48 1,062,109 0.37
Illinois............................ 162 3.69 7,724,857 2.68
Indiana............................. 115 2.62 5,726,415 1.98
Iowa................................ 12 0.27 636,085 0.22
Kansas.............................. 18 0.41 3,308,099 1.15
Kentucky............................ 103 2.35 5,496,473 1.91
Louisiana........................... 39 0.89 4,950,732 1.72
Maine............................... 51 1.16 2,204,764 0.76
Maryland............................ 129 2.94 6,631,678 2.30
Massachusetts....................... 140 3.19 11,178,348 3.87
Michigan............................ 139 3.17 7,528,583 2.61
Minnesota........................... 15 0.34 882,666 0.31
Mississippi......................... 102 2.33 8,346,995 2.89
Missouri............................ 25 0.57 1,426,547 0.49
Montana............................. 3 0.07 212,810 0.07
Nebraska............................ 6 0.14 240,767 0.08
Nevada.............................. 20 0.46 1,434,875 0.50
New Hampshire....................... 64 1.46 3,330,798 1.15
New Jersey.......................... 189 4.31 11,263,232 3.90
New Mexico.......................... 21 0.48 2,746,268 0.95
New York............................ 253 5.77 16,312,736 5.65
North Carolina...................... 158 3.60 8,923,217 3.09
North Dakota........................ 1 0.02 94,648 0.03
Ohio................................ 163 3.72 8,571,964 2.97
Oklahoma............................ 16 0.36 3,298,207 1.14
Oregon.............................. 105 2.39 10,464,098 3.63
Pennsylvania........................ 400 9.12 23,878,194 8.28
Rhode Island........................ 24 0.55 2,848,639 0.99
South Carolina...................... 103 2.35 6,574,382 2.28
South Dakota........................ 1 0.02 49,752 0.02
Tennessee........................... 116 2.64 8,031,653 2.78
Texas............................... 172 3.92 14,108,185 4.89
Utah................................ 12 0.27 1,279,247 0.44
Vermont............................. 8 0.18 459,738 0.16
Virginia............................ 110 2.51 7,680,485 2.66
Washington.......................... 83 1.89 6,704,615 2.32
West Virginia....................... 80 1.82 6,249,602 2.17
Wisconsin........................... 24 0.55 1,701,724 0.59
Wyoming............................. 7 0.16 617,140 0.21
----- ------ ------------ ------
TOTAL(1).................. 4,387 100.00% $288,523,968 100.00%
===== ====== ============ ======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
18
<PAGE> 24
DISTRIBUTION OF THE CONTRACTS BY OBLIGOR INDUSTRY
AS OF FEBRUARY 1, 2000
(ORDERED BY PERCENTAGE OF AGGREGATE PRINCIPAL BALANCE)
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
NUMBER OF NUMBER OF AGGREGATE AGGREGATE
OBLIGOR INDUSTRY CONTRACTS CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ---------------- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Trucking............................ 2,529 57.65% $131,051,248 45.42%
Construction and Road Building...... 1,060 24.16 82,090,937 28.45
Wood and Pulp Industries............ 365 8.32 33,417,852 11.58
Machine Shop........................ 222 5.06 22,734,558 7.88
Materials Processing................ 68 1.55 3,270,490 1.13
Other............................... 143 3.26 15,958,883 5.53
----- ------ ------------ ------
TOTAL(1).................. 4,387 100.00% $288,523,968 100.00%
===== ====== ============ ======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
DISTRIBUTION OF THE CONTRACTS BY ORIGINAL PRINCIPAL BALANCE
AS OF FEBRUARY 1, 2000
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
ORIGINAL GROSS NUMBER OF NUMBER AGGREGATE AGGREGATE
PRINCIPAL BALANCE CONTRACTS OF CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ----------------- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
$ 1,000-$ 20,000................. 160 3.65% $ 2,090,546 0.72%
$ 20,001-$ 40,000................. 978 22.29 20,066,607 6.95
$ 40,001-$ 60,000................. 919 20.95 31,183,239 10.81
$ 60,001-$ 80,000................. 683 15.57 33,591,704 11.64
$ 80,001-$ 100,000.................. 590 13.45 39,471,613 13.68
$100,001-$ 250,000.................. 865 19.72 88,213,120 30.57
$250,001-$ 500,000.................. 130 2.96 32,381,694 11.22
$500,001-$1,000,000................. 47 1.07 25,791,713 8.94
Greater Than $1,000,000............. 15 0.34 15,733,732 5.45
----- ------ ------------ ------
TOTAL(1).................. 4,387 100.00% $288,523,968 100.00%
===== ====== ============ ======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
DISTRIBUTION OF THE CONTRACTS BY CURRENT PRINCIPAL BALANCE
AS OF FEBRUARY 1, 2000
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
CURRENT PRINCIPAL NUMBER OF NUMBER AGGREGATE AGGREGATE
BALANCE CONTRACTS OF CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ----------------- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
$ 1,000-$ 20,000................. 759 17.30% $ 11,446,904 3.97%
$ 20,001-$ 40,000................. 1,260 28.72 36,952,381 12.81
$ 40,001-$ 60,000................. 845 19.26 41,789,968 14.48
$ 60,001-$ 80,000................. 557 12.70 38,689,440 13.41
$ 80,001-$ 100,000.................. 402 9.16 35,646,241 12.35
$100,001-$ 250,000.................. 440 10.03 62,614,716 21.70
$250,001-$ 500,000.................. 81 1.85 27,258,991 9.45
$500,001-$1,000,000................. 35 0.80 23,712,194 8.22
Greater Than $1,000,000............. 8 0.18 10,413,132 3.61
----- ------ ------------ ------
TOTAL(1).................. 4,387 100.00% $288,523,968 100.00%
===== ====== ============ ======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
19
<PAGE> 25
DISTRIBUTION OF THE CONTRACTS BY ORIGINAL CONTRACT TERM
AS OF FEBRUARY 1, 2000
<TABLE>
<CAPTION>
PERCENTAGE OF AGGREGATE PERCENTAGE OF
ORIGINAL TERM NUMBER OF NUMBER OF PRINCIPAL AGGREGATE
(MONTHS) CONTRACTS CONTRACTS BALANCE PRINCIPAL BALANCE
- ------------- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
1-12............................... 2 0.05% $ 119,111 0.04%
13-24............................... 163 3.72 4,978,049 1.73
25-36............................... 1,081 24.64 46,616,623 16.16
37-48............................... 1,485 33.85 91,988,390 31.88
49-60............................... 1,523 34.72 125,213,287 43.40
61-72............................... 122 2.78 14,666,743 5.08
73-84............................... 11 0.25 4,941,765 1.71
----- ------ ------------ ------
TOTAL:(1)................. 4,387 100.00% $288,523,968 100.00%
===== ====== ============ ======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
DISTRIBUTION OF THE CONTRACTS BY REMAINING MONTHS TO STATED MATURITY
AS OF FEBRUARY 1, 2000
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
REMAINING TERM NUMBER OF NUMBER OF AGGREGATE AGGREGATE
(MONTHS) CONTRACTS CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- -------------- --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
1-12............................... 258 5.88% $ 6,177,758 2.14%
13-24............................... 1,120 25.53 43,908,964 15.22
25-36............................... 1,377 31.39 86,569,261 30.00
37-48............................... 1,097 25.01 87,626,529 30.37
49-60............................... 520 11.85 59,074,657 20.47
61-72............................... 9 0.21 1,695,166 0.59
73-84............................... 6 0.14 3,471,632 1.20
----- ------ ------------ ------
TOTAL:(1)................. 4,387 100.00% $288,523,968 100.00%
===== ====== ============ ======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
DISTRIBUTION OF THE CONTRACTS BY NEW/USED EQUIPMENT FINANCED
AS OF FEBRUARY 1, 2000
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
NUMBER OF NUMBER OF AGGREGATE AGGREGATE
NEW/USED EQUIPMENT CONTRACTS CONTRACTS PRINCIPAL BALANCE PRINCIPAL BALANCE
- ------------------ --------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
New Equipment....................... 2,320 52.88% $162,998,949 56.49%
Used Equipment...................... 1,857 42.33 99,419,671 34.46
Mixed (New and Used)................ 210 4.79 26,105,348 9.05
----- ------ ------------ ------
TOTAL:(1)................. 4,387 100.00% $288,523,968 100.00%
===== ====== ============ ======
</TABLE>
- ---------------
(1) Amounts in columns may not total due to rounding.
20
<PAGE> 26
DELINQUENCY AND LOSS INFORMATION
The originator treats a contract as delinquent if the obligor does not make
a scheduled payment at the time or in the amount required by the contract terms.
Contract terms require payment by the obligor by each contractual payment due
date.
The following tables set forth the originator's delinquency and loss
experience on its aggregate equipment lease and loan portfolio. Not all of the
contracts in the originator's aggregate portfolio will be transferred to the
trust. Therefore, the data in the following tables includes delinquency and loss
experience for all contracts owned by ORIX Credit Alliance, Inc. (including its
wholly owned subsidiaries), including contracts being transferred to the trust
depositor and the trust. The delinquency and loss experience set forth in the
following tables is described in terms of gross receivables and repossessed
assets. The contract information is calculated based on the entire receivable
due, including the principal balance and all finance charges.
The data presented in the following tables and the period to period
discussion below reflect historical results and there is no assurance that the
delinquency or loss experience of the contracts will be similar to that set
forth below.
The data presented in the following tables as at and for the nine months
ended December 31, 1999 and December 31, 1998 are derived from unaudited
financial information of ORIX Credit Alliance, Inc. The data presented in the
following tables as at and for the twelve months ended March 31, 1999, March 31,
1998 and March 31, 1997 are derived from audited financial information of ORIX
Credit Alliance, Inc.
CONTRACT PORTFOLIO
DELINQUENCY EXPERIENCE
(DOLLARS IN THOUSANDS)
AS OF
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998 MARCH 31, 1999 MARCH 31, 1998 MARCH 31, 1997
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT.............. $2,455,423 74.0% $2,241,905 77.9% $2,440,277 79.3% $2,128,275 79.1% $2,176,347 78.1%
PAST DUE (1):
1-30 days............ 513,854 15.5 399,335 13.9 404,199 13.1 363,940 13.5 404,626 14.5
31-60 days........... 218,820 6.6 146,234 5.1 151,344 4.9 137,717 5.1 125,529 4.5
61-90 days........... 37,307 1.1 33,862 1.2 26,169 0.8 16,236 0.6 20,760 0.7
91-120 days.......... 20,861 0.6 14,941 0.5 9,957 0.3 10,354 0.4 12,988 0.5
121-180 days......... 26,364 0.8 12,491 0.4 18,209 0.6 9,056 0.3 13,675 0.5
Over 180 days........ 47,184 1.4 28,656 1.0 28,571 0.9 23,573 0.9 32,084 1.2
---------- ----- ---------- ----- ---------- ----- ---------- ----- ---------- -----
GROSS
RECEIVABLES(2)..... $3,319,813 100.0% $2,877,424 100.0% $3,078,726 100.0% $2,689,151 100.0% $2,786,009 100.0%
========== ===== ========== ===== ========== ===== ========== ===== ========== =====
</TABLE>
- ---------------
(1) The delinquency analysis is prepared on a contractual basis. Accordingly,
the entire contract, including principal and all earned and unearned finance
charges, is considered delinquent if any portion of a payment due has not
been made by its contractual payment due date, subject to any grace periods
permitted by the contract or required by law. Any cash collected on a
delinquent account is applied against the earliest amount due. Therefore, an
account classified as delinquent may be a paying account.
(2) Amounts in columns may not total due to rounding.
21
<PAGE> 27
CONTRACT PORTFOLIO
CREDIT/LOSS REPOSSESSION EXPERIENCE(1)
(DOLLARS IN THOUSANDS)
FOR THE
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS TWELVE MONTHS TWELVE MONTHS TWELVE MONTHS
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998 MARCH 31, 1999 MARCH 31, 1998 MARCH 31, 1997
------------------ ------------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
AVERAGE GROSS PORTFOLIO
OUTSTANDING DURING THE
PERIOD................ 3,199,270(3) 2,783,288 2,883,939 2,737,580 2,714,777
AVERAGE REPOSSESSIONS AS
A PERCENT OF AVERAGE
GROSS PORTFOLIO
OUTSTANDING(2)........ 0.78% 0.67% 0.68% 0.70% 0.63%
NET LOSSES
AS A PERCENT OF
LIQUIDATIONS(4)(5)(6)... 0.69% 0.61% 0.67% 0.61% 0.58%
NET LOSSES AS A PERCENT
OF AVERAGE GROSS
OWNED PORTFOLIO
OUTSTANDING(2)(4)(5)... 0.33% 0.32% 0.33% 0.33% 0.30%
</TABLE>
- ---------------
(1) Except as indicated, all amounts and percentages are based on the gross
amount scheduled to be paid on each contract, including unearned finance and
other charges.
(2) Annualized.
(3) Excludes secured asset-based loans of $165.8 million at December 31, 1999.
(4) A portion of the contracts provide for full or partial recourse to vendor
assignors. Approximately 11%, 12%, and 13% of the aggregate principal
amounts of the contracts acquired during the years ended March 31, 1999,
1998 and 1997, respectively, provide for full or partial recourse to vendor
assignors.
(5) Net losses are equal to the aggregate of the principal balances, or portions
thereof, of all contracts (plus accrued but unpaid interest thereon) which
are determined to be uncollectible in the period, less any recoveries on
contracts charged off in the period or any prior periods or any amounts
recovered from vendor assignors through recourse arrangements, excluding any
losses resulting from repossession expenses.
(6) Liquidations represent a reduction in the outstanding balances of the
receivables as a result of cash payments.
The net loss figures above reflect the fact that ORIX Credit Alliance, Inc.
had full or partial recourse to assignors on a portion of the contracts. In the
event of an assignor's bankruptcy, a bankruptcy trustee or the assignor as a
debtor in possession might attempt to characterize recourse sales of contracts
as loans to the assignor secured by the contracts; such an attempt, if
successful, could result in payment delays or losses on the affected contracts.
The delinquency and loss information set forth above includes receivables
purchased by ORIX Credit Alliance, Inc. as part of its rediscount operation from
other commercial finance companies. As of December 31, 1999, approximately
$179.6 million of net receivable contracts (or approximately 6.37% of total net
receivable contracts) were attributable to such rediscount operations. None of
these receivable contracts are included in the contracts that will be
transferred to the trust. For information regarding a recent development
regarding these purchased receivables, see "ORIX Credit Alliance,
Inc. -- Ancillary Businesses."
NINE MONTHS ENDED DECEMBER 31, 1999 VERSUS NINE MONTHS ENDED DECEMBER 31, 1998
The amounts over 90 days past due, as a percentage of total gross
receivables, increased 1.00% to 2.84% at December 31, 1999 from 1.84% at March
31, 1999. Average repossessions as a percentage of average gross portfolio for
the nine months ended December 31, 1999 increased 0.10% to 0.78% from 0.68% for
the twelve months ended March 31, 1999.
The amounts over 90 days past due, as a percentage of total gross
receivables, increased 0.35% to 1.95% at December 31, 1998 from 1.60% at March
31, 1998. Average repossessions as a percentage of
22
<PAGE> 28
average gross portfolio outstanding for the nine months ended December 31, 1998
decreased 0.03% to 0.67% from 0.70% for the twelve months ended March 31, 1998.
Net losses as a percentage of liquidations increased 0.08% to 0.69% for the
nine months ended December 31, 1999 when compared to the nine months ended
December 31, 1998. Net losses as a percentage of the average gross owned
portfolio outstanding was 0.33% for the nine months ended December 31, 1999 and
0.32% for the nine months ended December 31, 1998.
During May and June 1999, ORIX Credit Alliance, Inc. implemented plans
which consolidated its middle market branch network into six divisional
operating centers. During this transition, employees, including those with
collection duties, were relocated from the branches to these operating centers.
Consequently, much of the company's efforts were focused on physically moving
branch office operations to new locations and, as expected, there was a
deterioration in delinquency statistics. This major cost-cutting project has now
been completed.
TWELVE MONTHS ENDED MARCH 31, 1999 VERSUS TWELVE MONTHS ENDED MARCH 31, 1998
The amounts over 90 days past due, as a percentage of total gross
receivables, increased 0.24% to 1.84% at March 31, 1999 from 1.60% at March 31,
1998. Average repossessions as a percentage of average gross portfolio
outstanding for the twelve months ended March 31, 1999 decreased 0.02% to 0.68%
from 0.70% for the twelve months ended March 31, 1998. Net losses as a
percentage of liquidations increased 0.06% to 0.67% for the twelve months ended
March 31, 1999 from 0.61% for the twelve months ended March 31, 1998. Net losses
as a percentage of the average gross owned portfolio outstanding was 0.33% for
both of the twelve months ended March 31, 1999 and 1998. We believe that
stability in delinquency and loss experience is a result of continued favorable
economic conditions and consistent application of credit standards on the part
of the originator.
TWELVE MONTHS ENDED MARCH 31, 1998 VERSUS TWELVE MONTHS ENDED MARCH 31, 1997
The amounts over 90 days past due, as a percentage of total gross
receivables, decreased 0.51% to 1.60% at March 31, 1998 from 2.11% at March 31,
1997. Average repossessions as a percentage of average gross portfolio
outstanding for the twelve months ended March 31, 1998 increased to 0.70% from
0.63% for the twelve months ended March 31, 1997. Net losses as a percentage of
liquidations increased 0.03% to 0.61% for the twelve months ended March 31, 1998
from 0.58% for the twelve months ended March 31, 1997. Net losses as a
percentage of the average gross owned portfolio outstanding increased 0.03% to
0.33% for the twelve months ended March 31, 1998 from 0.30% for the twelve
months ended March 31, 1997. We believe that stability in delinquency and loss
experience is a result of continued favorable economic conditions and consistent
application of credit standards on the part of the originator.
DEFINITION OF DELINQUENCY FOR THE CONTRACTS TRANSFERRED TO THE TRUST
As of February 1, 2000 no contract sold to the trust was delinquent on any
scheduled payments for more than 60 days. Delinquent contract balances are
monitored on a contractual basis. The total outstanding contract balance,
including unearned finance charges, is considered delinquent if anything less
than each full payment is received by the contractual due date.
There are no non-performing contracts included in the contracts sold to the
trust. For a definition of defaulted contracts, see "The Transfer and Servicing
Agreement -- Definition of Defaulted Contracts".
THE CONTRACTS
The trust will be entitled to all collections on account of the contracts
and related equipment. However, the trust will not be entitled to the Excluded
Amounts. See "Description of the Notes and Indenture -- Amounts Available for
Payments on the Notes". All of the contracts are commercial contracts.
END-USER CONTRACTS
The following discussion describes the end-user contracts. All of the
end-user contracts in respect of equipment to be included from time to time in
the trust are of one of the following types:
- conditional sale agreements;
- leases; and
- secured promissory notes.
23
<PAGE> 29
There is no limit on the number of contracts which may consist of any of the
foregoing types. Each contract must be an eligible contract as of the applicable
cutoff date. In order for a contract to be eligible to be transferred to the
trust and to be a trust asset it must have the characteristics which are more
fully described in "The Transfer and Servicing Agreement -- Representations and
Warranties; Definition of Eligible Contracts".
A portion of the end-user contracts included in the pool of contracts being
transferred to the trust will consist of end-user contracts originated by
vendors (equipment manufacturers or dealers) and assigned to the originator
under individual assignments from vendors. Vendor assignments are at times made
without recourse against the vendor for end-user defaults. Additionally, each
vendor assignment of a contract will contain typical vendor representations,
warranties and covenants. In the event of a breach by the vendor of such
representations, warranties or covenants, the originator will either pursue
repurchase or replacement of the contracts and financed equipment by the vendor
or a contract damage payment from the vendor.
CONDITIONAL SALE AGREEMENTS
The originator offers financing for equipment under conditional sale
agreements assigned to the originator by vendors. Most of the conditional sale
agreements transferred to the trust will consist of either the originator's
standard pre-printed form, or of the vendors' standard, pre-printed forms. These
forms have been reviewed and approved for use by the originator. The conditional
sale agreement sets forth the description of each item financed thereunder and
the schedule of installment payments. Most of the financings under conditional
sale agreements are fixed rate and are for a one- to seven-year term. Most of
the payments under conditional sale agreements are due monthly. Conditional sale
agreement terms include the following:
- a grant by the end-user of a security interest in any related equipment
which is then assigned by the vendor to the originator;
- the end-user is required to maintain the equipment, keep it free and
clear of liens and encumbrances and pay all taxes related to the
equipment;
- no modification or disposal of the equipment without the originator's
consent;
- the equipment is sold "as is";
- the end-user's indemnity against liabilities arising from the use,
possession or ownership of the equipment;
- the end-user's unconditional obligation to pay the installment payments
required under the terms of the agreement; and
- may allow prepayment of the obligation upon the payment, where allowed by
applicable law, of a prepayment premium.
The conditional sale agreement also requires each end-user to maintain
insurance for the benefit of the originator as a loss payee; the terms of which
may vary. The terms of a conditional sale agreement may be modified at its
inception at the end-user's request. These modifications must either be approved
by the originator's legal department and/or management, depending on the type of
modification, before the originator will agree to accept an assignment of the
conditional sale agreement from a vendor.
LEASES
The originator, either directly or by assignment from vendors, offers
financing of equipment under leases. Leases may consist of individual lease
agreements each relating to a single, separate transaction or may consist of
individual transactions written under and governed by a master lease agreement
which contains the general terms and conditions of the transaction. Specific
terms and conditions, such as descriptions of the specific equipment being
leased or financed and the schedule of related rental payments, are contained in
a supplement or schedule to the master lease agreement, which is signed by the
end-user, as lessee, and either the vendor or the originator, as lessor. The
supplement or schedule incorporates the master lease agreement by reference and
is treated by the originator as a separate lease. Each lease is originated in
the ordinary course of business by either the originator or a vendor. The vendor
assigns leases to the originator through a vendor finance agreement or vendor
assignment.
The initial terms of most of the leases transferred to the trust range from
one to seven years. Each lease provides for the periodic payment by the end-user
of rent in advance or arrears, usually monthly or quarterly. The periodic
payments represent the amortization, usually on a level basis, of the total
amount that an end-user is required to pay throughout the term of a lease.
24
<PAGE> 30
The leases to be transferred to the trust are "net leases" under which the
end-user assumes responsibility for the items financed thereunder, including
operation, maintenance, repair, insurance and the payment of all sales and use
and property taxes relating to such financed item during the lease term. The
originator or vendor is named as loss payee on insurance policies covering the
equipment. The end-user further agrees to indemnify the lessor for any
liabilities arising out of the use or operation of the item financed by the
end-user. In most leases, the lessor is also authorized to perform the
end-user's obligations under the leases at the end-user's expense, if it so
elects, in cases where the end-user has failed to perform. In addition, the
leases often contain "hell or high water" clauses unconditionally obligating the
end-user to make periodic payments, without setoff, at the times and in the
amounts specified in the lease. If the originator is the lessor, the lease
contains no express or implied warranties with respect to the items financed
thereunder other than an implied warranty of quiet enjoyment. If a vendor is the
lessor, the lease or a related agreement may contain representations and
warranties relating to the items financed thereunder in addition to a warranty
of quiet enjoyment; however, the end-user agrees not to assert any warranty
claims against any assignee of the vendor, including the originator, by way of
setoff, counterclaim or otherwise, and further agrees that it may only bring
such claims against the vendor. All leases of equipment require the end-user to
maintain, at its expense, casualty insurance covering damage to or loss of the
equipment during the lease term.
The leases are intended for security as defined in Section 1-201(37) of the
New Jersey Uniform Commercial Code. Under leases intended for security, the
lessor in effect finances the "purchase" of the leased property by the lessee
and retains a security interest in the leased property. The lessee retains the
leased property for substantially all its economic life and the lessor retains
no significant residual interest. Such leases are considered conditional sales
type leases for federal income tax purposes and, accordingly, the lessor does
not take any federal tax benefits associated with the ownership of depreciable
property. End of lease options for such leases depend on the terms of the
related individual lease agreement or master lease agreement supplement or
schedule. Those terms provide for the purchase of the equipment at a specified
nominal price (in each case less than $102.00).
End-users under a lease are either prohibited from altering or modifying
the equipment or may alter or modify the equipment only to the extent the
alterations or modifications are readily removable without damage to the
equipment.
The standard terms and conditions of a lease or a master lease agreement
may be modified at the inception of a lease at the request of the end-user. The
modifications must be approved by the originator's legal department and/or
management, depending on the type of modification, before the originator will
agree to enter into the lease or accept an assignment of the lease from a
vendor. Common permitted modifications include, but are not limited to, the
following:
- prearranged mid-lease purchase options, early termination options and
lease extension options as described above;
- modifications to the lessor's equipment inspection rights;
- modifications to the end-user's insurance requirements permitting the
end-user to self-insure against casualty to the equipment;
- the end-user's right to assign the lease or sub-lease the financed items
to an affiliated entity, so long as the end-user remains liable under the
lease and promptly notifies the lessor or its assignee of such assignment
or sublease; and
- extended grace periods for late payments of rent.
SECURED PROMISSORY NOTES
The originator also provides direct initial financing or refinancing of new
or existing equipment under secured promissory notes, which consist of an
installment note and a separate security agreement or a self-contained
integrated document containing both a promissory note and security agreement. In
an initial financing transaction, the originator pays to the vendor the purchase
price for the equipment and in a refinancing transaction, the originator pays
off an end-user's existing financing source. In the case of a refinancing
transaction, upon payment to the existing financing source, the originator
obtains a release of the other party's lien on the financed equipment. In either
case, the originator records its own lien against the financed equipment and
takes possession of the secured promissory note, which constitutes chattel paper
under the Uniform Commercial Code. In either case, the transaction is documented
as a direct loan by the originator to the end-user of the equipment using a
secured promissory note. Except for the lack of
25
<PAGE> 31
references to "sale" or "purchase" of equipment, the terms and conditions
contained in a secured promissory note are substantially similar to those
contained in a conditional sale agreement.
EQUIPMENT
The end-user contracts cover a wide variety of new and used equipment. Some
examples of the types of equipment are: trucks, commercial trailers and other
commercial vehicles, construction and road building equipment, wood and pulp
industrial equipment, machine shop equipment and cranes and crane rental
equipment. The security interests of the originator in the equipment subject to
an end-user contract will be transferred to the trust.
CONTRACT FILES
The originator will indicate in its books and records, including the
appropriate computer files relating to the contracts, that the contracts have
been transferred to the trust for the benefit of the holders of the notes and
certificates. The originator will also deliver to the indenture trustee a
computer file or microfiche or written list containing a true and complete list
of all contracts which have been transferred to the trust, identified by account
number and by the contract outstanding principal balance as of the applicable
cutoff date.
HOW COLLECTIONS ON THE CONTRACTS ARE TREATED
All collections received with respect to the contracts will be allocated as
described in "Description of the Notes and Indenture -- Allocations".
Prepayments will be treated as though they were received on the last day of the
collection period in which they are actually received for purposes of
calculating amounts available for distribution to you. Payments of principal on
the contracts made in advance of their due date will be treated as though they
were received on the last day of the collection period in which such principal
payments were actually received. Each collection period coincides with a
calendar month.
PREPAYMENT AND YIELD CONSIDERATIONS
The rate of principal payments on the notes, the aggregate amount of each
interest payment on the notes and the yield to maturity of the notes are
directly related to the rate of payments on the underlying contracts. The
payments on the contracts may be in the form of payments scheduled to be made
under the terms of the contracts, prepayments or liquidations due to default,
casualty and other events which cannot be specified at present. Any payments
other than scheduled payments may result in distributions to you of amounts
which would otherwise have been distributed over the remaining term of the
contracts. Each prepayment on a contract, if the contract is not replaced by the
trust depositor with a comparable substitute contract as described under "The
Transfer and Servicing Agreement -- Substitute Contracts", will shorten the
weighted average remaining term of the contracts and the weighted average life
of the notes.
In general, the rate of payments on the contracts may be influenced by a
number of other factors, including general economic conditions. The rate of
principal payments with respect to any class of notes may also be affected by
any repurchase by the trust depositor of contracts under the transfer and
servicing agreement. Under the transfer and servicing agreement, the trust
depositor and the originator must repurchase contracts if there is:
- a breach of representation or warranty as to the contracts which causes
such contract to be ineligible to be a trust asset; or
- the exercise by the trust depositor of its repurchase option when the
aggregate principal balance of the contracts is less than 15% of the
aggregate principal balance of the contracts as of February 1, 2000, the
initial cutoff date.
Further, the servicer may permit the obligor under a contract to make an
optional prepayment in an amount which is less than the amount sufficient to
repay the portion of such contract, together with accrued interest, so long as
the trust is indemnified for any such insufficiency by the originator. In the
case of contracts which must be removed from the trust assets due to their
failure to have the characteristics set forth in the transfer and servicing
agreement or which are Excess Contracts, the rate of prepayment would also be
influenced by the trust depositor's decision not to repurchase those contracts
and instead, to accept substitute contracts. See "The Transfer and Servicing
Agreement -- Substitute Contracts". In the event of a repurchase, the repurchase
price will decrease the aggregate principal balance of the contracts, leading to
a principal repayment and causing the corresponding weighted average life of the
notes to
26
<PAGE> 32
decrease. See "Risk Factors -- Prepayments on the Contracts May Cause an Earlier
Repayment of the Notes than You Expect and You May Not Be Able To Find
Investments with the Same Yield as the Notes at the Time of the Repayment".
A higher than anticipated rate of prepayment will reduce the aggregate
principal balance of the contracts more quickly than expected and thereby result
in an increase in the rate at which principal is paid to you and reduce the
aggregate interest payments you may have expected to receive on the notes.
The effective yield will depend upon, among other things, the amount of and
rate at which principal is paid to you. You will bear any reinvestment risks
resulting from a faster or slower incidence of prepayment of contracts. The
reinvestment risks include the risk that interest rates may be lower at the time
you receive payments from the trust than interest rates would otherwise have
been had the prepayments not been made or had the prepayments been made at a
different time.
The following chart sets forth the percentage of the initial principal
amount of the Class A-l Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes, Class B Notes and Class C Notes which would be outstanding on the
distribution dates set forth below assuming an annual constant prepayment rate
of 0.00%, 12.00%, 15.00%, 18.00% and 21.00%, respectively. Such information is
hypothetical and is set forth for illustrative purposes only. The annual
constant prepayment rate assumes that a fraction of the outstanding contracts is
prepaid on each distribution date, which implies that each contract in the pool
of contracts is equally likely to prepay. This fraction, expressed as a
percentage, is annualized to arrive at the annual constant prepayment rate for
the contracts. The annual constant prepayment rate measures prepayments based on
the outstanding principal balances of the contracts, after the payment of all
payments scheduled to be made under the terms of the contracts during each
collection period. The annual constant prepayment rate further assumes that all
contracts are the same size and amortize at the same rate and that each contract
will be either paid as scheduled or prepaid in full. The amounts set forth below
are based upon the timely receipt of scheduled monthly contract payments as of
February 1, 2000, assumes that the trust depositor exercises its option to cause
a redemption of the notes when the aggregate principal balance of the contracts
is less than 15% of the aggregate principal balance of the contracts as of
February 1, 2000, and assumes the closing date for the transfer of the contracts
to the trust is February 25, 2000. These tables are based upon the outstanding
principal balance. In addition, it is assumed for the purposes of these tables
only, that the trust issues the notes in the following amounts and at the
following interest rates:
<TABLE>
<CAPTION>
CLASS INITIAL PRINCIPAL AMOUNT INTEREST RATE
- ----- ------------------------ -------------
<S> <C> <C>
A-1 $ 95,789,957 6.27957%
A-2 $ 50,780,218 7.00000%
A-3 $112,957,133 7.43000%
A-4 $ 14,570,460 7.54000%
B $ 8,655,719 7.89000%
C $ 4,327,860 8.33000%
</TABLE>
27
<PAGE> 33
PERCENTAGE OF THE INITIAL CLASS A-1 NOTES PRINCIPAL AMOUNT
AT THE ANNUAL CONSTANT PREPAYMENT RATES SET FORTH BELOW
<TABLE>
<CAPTION>
0% 12% 15% 18% 21%
-- --- --- --- ---
<S> <C> <C> <C> <C> <C>
Closing............................... 100.00% 100.00% 100.00% 100.00% 100.00%
03/15/2000............................ 91.12 88.02 87.19 86.33 85.44
04/15/2000............................ 83.52 77.52 75.91 74.25 72.55
05/15/2000............................ 75.50 66.80 64.48 62.11 59.66
06/15/2000............................ 67.30 56.10 53.14 50.11 47.01
07/15/2000............................ 58.94 45.45 41.91 38.29 34.60
08/15/2000............................ 50.57 34.98 30.92 26.79 22.58
09/15/2000............................ 42.17 24.68 20.15 15.56 10.90
10/15/2000............................ 33.53 14.35 9.43 4.44 0.00
11/15/2000............................ 25.00 4.32 0.00 0.00 0.00
12/15/2000............................ 16.48 0.00 0.00 0.00 0.00
01/15/2001............................ 8.01 0.00 0.00 0.00 0.00
02/15/2001............................ 0.00 0.00 0.00 0.00 0.00
Weighted Average Life (Years)
To Call:............................ 0.52yr 0.40yr 0.37yr 0.35yr 0.33yr
</TABLE>
PERCENTAGE OF THE INITIAL CLASS A-2 NOTES PRINCIPAL AMOUNT
AT THE ANNUAL CONSTANT PREPAYMENT RATES SET FORTH BELOW
<TABLE>
<CAPTION>
0% 12% 15% 18% 21%
-- --- --- --- ---
<S> <C> <C> <C> <C> <C>
Closing............................... 100.00% 100.00% 100.00% 100.00% 100.00%
03/15/2000............................ 100.00 100.00 100.00 100.00 100.00
04/15/2000............................ 100.00 100.00 100.00 100.00 100.00
05/15/2000............................ 100.00 100.00 100.00 100.00 100.00
06/15/2000............................ 100.00 100.00 100.00 100.00 100.00
07/15/2000............................ 100.00 100.00 100.00 100.00 100.00
08/15/2000............................ 100.00 100.00 100.00 100.00 100.00
09/15/2000............................ 100.00 100.00 100.00 100.00 100.00
10/15/2000............................ 100.00 100.00 100.00 100.00 98.94
11/15/2000............................ 100.00 100.00 98.32 89.03 79.65
12/15/2000............................ 100.00 90.37 80.64 70.85 61.00
01/15/2001............................ 100.00 73.61 63.44 53.25 43.03
02/15/2001............................ 99.97 57.84 47.31 36.77 26.24
03/15/2001............................ 86.08 42.47 31.64 20.85 10.08
04/15/2001............................ 72.26 27.46 16.41 5.42 0.00
05/15/2001............................ 58.20 12.52 1.33 0.00 0.00
06/15/2001............................ 44.10 0.00 0.00 0.00 0.00
07/15/2001............................ 30.00 0.00 0.00 0.00 0.00
08/15/2001............................ 16.11 0.00 0.00 0.00 0.00
09/15/2001............................ 2.34 0.00 0.00 0.00 0.00
10/15/2001............................ 0.00 0.00 0.00 0.00 0.00
Weighted Average Life (Years)
To Call:............................ 1.31yrs 1.06yrs 1.00yr 0.95yr 0.90yr
</TABLE>
28
<PAGE> 34
PERCENTAGE OF THE INITIAL CLASS A-3 NOTES PRINCIPAL AMOUNT
AT THE ANNUAL CONSTANT PREPAYMENT RATES SET FORTH BELOW
<TABLE>
<CAPTION>
0% 12% 15% 18% 21%
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Closing....................................... 100.00% 100.00% 100.00% 100.00% 100.00%
03/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
04/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
05/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
06/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
07/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
08/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
09/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
10/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
11/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
12/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
01/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
02/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
03/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
04/15/2001.................................... 100.00 100.00 100.00 100.00 97.53
05/15/2001.................................... 100.00 100.00 100.00 95.61 90.67
06/15/2001.................................... 100.00 99.03 93.97 88.97 84.03
07/15/2001.................................... 100.00 92.55 87.50 82.51 77.61
08/15/2001.................................... 100.00 86.28 81.25 76.31 71.46
09/15/2001.................................... 100.00 80.17 75.20 70.33 65.56
10/15/2001.................................... 95.05 74.34 69.44 64.65 59.98
11/15/2001.................................... 89.17 68.71 63.90 59.22 54.67
12/15/2001.................................... 83.34 63.23 58.54 53.99 49.57
01/15/2002.................................... 77.74 58.04 53.48 49.06 44.79
02/15/2002.................................... 72.59 53.30 48.87 44.58 40.46
03/15/2002.................................... 67.58 48.76 44.46 40.33 36.35
04/15/2002.................................... 62.66 44.38 40.23 36.25 32.44
05/15/2002.................................... 57.77 40.11 36.13 32.32 28.68
06/15/2002.................................... 53.06 36.05 32.24 28.61 25.15
07/15/2002.................................... 48.39 32.10 28.48 25.04 0.00
08/15/2002.................................... 44.00 28.43 25.00 0.00 0.00
09/15/2002.................................... 39.81 24.98 0.00 0.00 0.00
10/15/2002.................................... 35.85 0.00 0.00 0.00 0.00
11/15/2002.................................... 32.03 0.00 0.00 0.00 0.00
12/15/2002.................................... 28.31 0.00 0.00 0.00 0.00
01/15/2003.................................... 24.80 0.00 0.00 0.00 0.00
02/15/2003.................................... 0.00 0.00 0.00 0.00 0.00
Weighted Average Life (Years).................
To Call:.................................... 2.40yrs 2.08yrs 2.00yrs 1.93yrs 1.85yrs
</TABLE>
29
<PAGE> 35
PERCENTAGE OF THE INITIAL CLASS A-4 NOTES PRINCIPAL AMOUNT
AT THE ANNUAL CONSTANT PREPAYMENT RATES SET FORTH BELOW
<TABLE>
<CAPTION>
0% 12% 15% 18% 21%
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Closing....................................... 100.00% 100.00% 100.00% 100.00% 100.00%
03/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
04/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
05/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
06/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
07/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
08/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
09/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
10/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
11/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
12/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
01/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
02/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
03/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
04/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
05/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
06/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
07/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
08/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
09/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
10/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
11/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
12/15/2001.................................... 100.00 100.00 100.00 100.00 100.00
01/15/2002.................................... 100.00 100.00 100.00 100.00 100.00
02/15/2002.................................... 100.00 100.00 100.00 100.00 100.00
03/15/2002.................................... 100.00 100.00 100.00 100.00 100.00
04/15/2002.................................... 100.00 100.00 100.00 100.00 100.00
05/15/2002.................................... 100.00 100.00 100.00 100.00 100.00
06/15/2002.................................... 100.00 100.00 100.00 100.00 100.00
07/15/2002.................................... 100.00 100.00 100.00 100.00 0.00
08/15/2002.................................... 100.00 100.00 100.00 0.00 0.00
09/15/2002.................................... 100.00 100.00 0.00 0.00 0.00
10/15/2002.................................... 100.00 0.00 0.00 0.00 0.00
11/15/2002.................................... 100.00 0.00 0.00 0.00 0.00
12/15/2002.................................... 100.00 0.00 0.00 0.00 0.00
01/15/2003.................................... 100.00 0.00 0.00 0.00 0.00
02/15/2003.................................... 0.00 0.00 0.00 0.00 0.00
Weighted Average Life (Years).................
To Call:.................................... 2.97yrs 2.64yrs 2.56yrs 2.47yrs 2.39yrs
</TABLE>
30
<PAGE> 36
PERCENTAGE OF THE INITIAL CLASS B NOTES PRINCIPAL AMOUNT
AT THE ANNUAL CONSTANT PREPAYMENT RATES SET FORTH BELOW
<TABLE>
<CAPTION>
0% 12% 15% 18% 21%
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Closing....................................... 100.00% 100.00% 100.00% 100.00% 100.00%
03/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
04/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
05/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
06/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
07/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
08/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
09/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
10/15/2000.................................... 100.00 100.00 100.00 100.00 99.70
11/15/2000.................................... 100.00 100.00 99.52 96.88 94.21
12/15/2000.................................... 100.00 97.26 94.49 91.70 88.89
01/15/2001.................................... 100.00 92.48 89.59 86.69 83.77
02/15/2001.................................... 99.99 87.99 84.99 81.99 78.99
03/15/2001.................................... 96.04 83.62 80.53 77.46 74.39
04/15/2001.................................... 92.10 79.34 76.19 73.07 69.96
05/15/2001.................................... 88.10 75.09 71.90 68.74 65.61
06/15/2001.................................... 84.08 70.90 67.70 64.53 61.40
07/15/2001.................................... 80.06 66.80 63.60 60.44 57.33
08/15/2001.................................... 76.11 62.83 59.64 56.51 53.44
09/15/2001.................................... 72.19 58.96 55.81 52.72 49.70
10/15/2001.................................... 68.39 55.27 52.16 49.13 46.17
11/15/2001.................................... 64.66 51.70 48.65 45.69 42.80
12/15/2001.................................... 60.97 48.23 45.26 42.37 39.57
01/15/2002.................................... 57.42 44.94 42.05 39.25 36.55
02/15/2002.................................... 54.16 41.94 39.13 36.42 33.80
03/15/2002.................................... 50.98 39.06 36.34 33.72 31.20
04/15/2002.................................... 47.86 36.28 33.66 31.14 28.72
05/15/2002.................................... 44.77 33.58 31.06 28.65 26.34
06/15/2002.................................... 41.78 31.01 28.60 26.30 24.11
07/15/2002.................................... 38.82 28.51 26.21 24.03 0.00
08/15/2002.................................... 36.04 26.18 24.01 0.00 0.00
09/15/2002.................................... 33.39 24.00 0.00 0.00 0.00
10/15/2002.................................... 30.88 0.00 0.00 0.00 0.00
11/15/2002.................................... 28.46 0.00 0.00 0.00 0.00
12/15/2002.................................... 26.11 0.00 0.00 0.00 0.00
01/15/2003.................................... 23.88 0.00 0.00 0.00 0.00
02/15/2003.................................... 0.00 0.00 0.00 0.00 0.00
Weighted Average Life (Years)
To Call:.................................... 2.14yrs 1.84yrs 1.76yrs 1.70yrs 1.63yrs
</TABLE>
31
<PAGE> 37
PERCENTAGE OF THE INITIAL CLASS C NOTES PRINCIPAL AMOUNT
AT THE ANNUAL CONSTANT PREPAYMENT RATES SET FORTH BELOW
<TABLE>
<CAPTION>
0% 12% 15% 18% 21%
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Closing....................................... 100.00% 100.00% 100.00% 100.00% 100.00%
03/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
04/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
05/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
06/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
07/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
08/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
09/15/2000.................................... 100.00 100.00 100.00 100.00 100.00
10/15/2000.................................... 100.00 100.00 100.00 100.00 99.70
11/15/2000.................................... 100.00 100.00 99.52 96.88 94.21
12/15/2000.................................... 100.00 97.26 94.49 91.70 88.89
01/15/2001.................................... 100.00 92.48 89.59 86.69 83.77
02/15/2001.................................... 99.99 87.99 84.99 81.99 78.99
03/15/2001.................................... 96.04 83.62 80.53 77.46 74.39
04/15/2001.................................... 92.10 79.34 76.19 73.07 69.96
05/15/2001.................................... 88.10 75.09 71.90 68.74 65.61
06/15/2001.................................... 84.08 70.90 67.70 64.53 61.40
07/15/2001.................................... 80.06 66.80 63.60 60.44 57.33
08/15/2001.................................... 76.11 62.83 59.64 56.51 53.44
09/15/2001.................................... 72.19 58.96 55.81 52.72 49.70
10/15/2001.................................... 68.39 55.27 52.16 49.13 46.17
11/15/2001.................................... 64.66 51.70 48.65 45.69 42.80
12/15/2001.................................... 60.97 48.23 45.26 42.37 39.57
01/15/2002.................................... 57.42 44.94 42.05 39.25 36.55
02/15/2002.................................... 54.16 41.94 39.13 36.42 33.80
03/15/2002.................................... 50.98 39.06 36.34 33.72 31.20
04/15/2002.................................... 47.86 36.28 33.66 31.14 28.72
05/15/2002.................................... 44.77 33.58 31.06 28.65 26.34
06/15/2002.................................... 41.78 31.01 28.60 26.30 24.11
07/15/2002.................................... 38.82 28.51 26.21 24.03 0.00
08/15/2002.................................... 36.04 26.18 24.01 0.00 0.00
09/15/2002.................................... 33.39 24.00 0.00 0.00 0.00
10/15/2002.................................... 30.88 0.00 0.00 0.00 0.00
11/15/2002.................................... 28.46 0.00 0.00 0.00 0.00
12/15/2002.................................... 26.11 0.00 0.00 0.00 0.00
01/15/2003.................................... 23.88 0.00 0.00 0.00 0.00
02/15/2003.................................... 0.00 0.00 0.00 0.00 0.00
Weighted Average Life (Years)
To Call:.................................... 2.14yrs 1.84yrs 1.76yrs 1.70yrs 1.63yrs
</TABLE>
32
<PAGE> 38
WEIGHTED AVERAGE LIFE
If the trust depositor does not exercise its option to cause a redemption
of the notes when the aggregate principal balance of the contracts is less than
15% of the aggregate principal balance of the contracts as of February 1, 2000,
the average life of each class of notes would be as follows:
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED WEIGHTED WEIGHTED WEIGHTED
AVERAGE LIFE AVERAGE LIFE AVERAGE LIFE AVERAGE LIFE AVERAGE LIFE
ASSUMING 0% ASSUMING 12% ASSUMING 15% ASSUMING 18% ASSUMING 21%
ANNUAL CONSTANT ANNUAL CONSTANT ANNUAL CONSTANT ANNUAL CONSTANT ANNUAL CONSTANT
CLASS PREPAYMENT RATE PREPAYMENT RATE PREPAYMENT RATE PREPAYMENT RATE PREPAYMENT RATE
- ----- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
A-1 0.52yrs 0.40yrs 0.37yrs 0.35yrs 0.33yrs
A-2 1.31yrs 1.06yrs 1.00yrs 0.95yrs 0.90yrs
A-3 2.48yrs 2.16yrs 2.09yrs 2.01yrs 1.94yrs
A-4 4.12yrs 3.85yrs 3.78yrs 3.70yrs 3.62yrs
B 2.36yrs 2.06yrs 2.00yrs 1.93yrs 1.87yrs
C 2.37yrs 2.06yrs 2.00yrs 1.95yrs 1.88yrs
</TABLE>
The weighted average life of a note is determined by:
- multiplying the amount of each cash distribution in reduction of the
outstanding principal amount of such class of notes, by the number of
years from the closing date of the transfer of the contracts to the trust
to the respective note payment date on which such class of notes is
repaid in full;
- adding the results; and
- dividing the sum by the initial principal amount of such class of notes.
The following shows the scheduled cashflows (including both principal and
finance charges) from the contracts:
<TABLE>
<CAPTION>
COLLECTION PERIOD SCHEDULED CASHFLOW
- ----------------- ------------------
<S> <C>
February -- 2000............................................ $10,837,313.72
March -- 2000............................................... 9,547,838.97
April -- 2000............................................... 9,887,035.45
May -- 2000................................................. 9,994,811.54
June -- 2000................................................ 10,089,277.66
July -- 2000................................................ 10,028,336.10
August -- 2000.............................................. 10,002,996.57
September -- 2000........................................... 10,157,840.14
October -- 2000............................................. 9,991,947.43
November -- 2000............................................ 9,913,976.02
December -- 2000............................................ 9,795,054.71
January -- 2001............................................. 9,307,821.27
February -- 2001............................................ 9,182,996.06
March -- 2001............................................... 9,082,126.99
April -- 2001............................................... 9,155,779.87
May -- 2001................................................. 9,109,584.85
June -- 2001................................................ 9,050,118.56
July -- 2001................................................ 8,870,158.49
August -- 2001.............................................. 8,747,051.36
September -- 2001........................................... 8,446,967.33
October -- 2001............................................. 8,255,839.50
November -- 2001............................................ 8,123,309.65
December -- 2001............................................ 7,783,973.44
January -- 2002............................................. 7,181,022.32
February -- 2002............................................ 6,963,744.17
March -- 2002............................................... 6,804,380.29
April -- 2002............................................... 6,713,379.54
May -- 2002................................................. 6,453,637.47
June -- 2002................................................ 6,350,052.03
July -- 2002................................................ 5,965,528.90
</TABLE>
33
<PAGE> 39
<TABLE>
<CAPTION>
COLLECTION PERIOD SCHEDULED CASHFLOW
- ----------------- ------------------
<S> <C>
August -- 2002.............................................. 5,677,538.94
September -- 2002........................................... 5,357,069.73
October -- 2002............................................. 5,143,931.69
November -- 2002............................................ 4,981,647.59
December -- 2002............................................ 4,697,581.01
January -- 2003............................................. 4,233,591.36
February -- 2003............................................ 4,159,746.46
March -- 2003............................................... 3,732,107.18
April -- 2003............................................... 3,643,146.10
May -- 2003................................................. 3,540,478.19
June -- 2003................................................ 3,275,781.09
July -- 2003................................................ 3,189,226.20
August -- 2003.............................................. 2,616,456.01
September -- 2003........................................... 2,236,623.12
October -- 2003............................................. 2,156,014.11
November -- 2003............................................ 1,919,236.34
December -- 2003............................................ 1,761,186.39
January -- 2004............................................. 1,604,232.46
February -- 2004............................................ 1,585,676.41
March -- 2004............................................... 1,583,235.28
April -- 2004............................................... 1,442,557.07
May -- 2004................................................. 1,204,213.78
June -- 2004................................................ 1,146,855.19
July -- 2004................................................ 1,039,631.93
August -- 2004.............................................. 701,811.44
September -- 2004........................................... 333,269.18
October -- 2004............................................. 238,613.37
November -- 2004............................................ 312,619.55
December -- 2004............................................ 286,645.81
January -- 2005............................................. 147,397.16
February -- 2005............................................ 141,405.16
March -- 2005............................................... 91,574.50
April -- 2005............................................... 86,995.50
May -- 2005................................................. 86,995.50
June -- 2005................................................ 86,995.50
July -- 2005................................................ 78,411.50
August -- 2005.............................................. 76,418.50
September -- 2005........................................... 75,411.50
October -- 2005............................................. 67,421.50
November -- 2005............................................ 65,838.50
December -- 2005............................................ 64,026.00
January -- 2006............................................. 58,799.00
February -- 2006............................................ 58,799.00
March -- 2006............................................... 58,799.00
April -- 2006............................................... 58,466.06
May -- 2006................................................. 42,949.00
June -- 2006................................................ 42,949.00
July -- 2006................................................ 21,195.00
August -- 2006.............................................. 8,795.00
September -- 2006........................................... 4,545.00
October -- 2006............................................. 4,545.00
</TABLE>
34
<PAGE> 40
ORIX CREDIT ALLIANCE, INC.
EQUIPMENT FINANCE BUSINESS
ORIX Credit Alliance, Inc. is a major provider in the United States of
financing to middle-market end-users of capital equipment. The company finances
equipment for middle-market end-users of income-producing and labor-saving
equipment principally through fixed-rate installment sale financing and full
pay-out leasing programs.
ORIX Credit Alliance, Inc. was originally organized in Delaware in 1963 and
in 1985 was reincorporated in New York. The company is wholly-owned by and the
only operating subsidiary in the United States of ORIX Commercial Alliance
Corporation, an indirect wholly-owned subsidiary of ORIX Corporation, a Japanese
corporation with activities in the non-bank finance and leasing business
throughout the world. At February 1, 2000, ORIX Credit Alliance, Inc. had
approximately 625 full-time employees. The company's executive office is located
at 300 Lighting Way, Secaucus, New Jersey 07096-1525 (telephone: (201)
601-9000).
ORIX Credit Alliance, Inc. conducts its middle-market business through six
full-service divisional operating centers located throughout the United States
and one in Canada. Each center is responsible for business development, credit
approval within designated limits and portfolio administration within its
assigned geographic area. These centers are responsible for the management of
over 100 salespeople based in approximately 50 major cities, with each center
responsible for those salespeople working within its assigned coverage area. The
company's division managers have, on average, approximately 19 years experience
with the company. All contracts information is entered into the company's
management information system from these divisional centers. The company's home
office has the capability of retrieving all accounting information the moment it
is entered into the system at a division center.
ANCILLARY BUSINESSES
ORIX Credit Alliance, Inc. (including its wholly owned subsidiaries)
conducts several ancillary businesses that complement its middle market
equipment finance business. These include its rediscount, small ticket,
insurance agency, premium finance and secured asset based lending operations.
Through the rediscount operation, it purchases equipment receivable
contracts from small to mid-size finance and leasing companies. ORIX Credit
Alliance, Inc. may retain such companies to continue to service receivable
contracts purchased or may service the contracts directly. As of December 31,
1999, total net receivable contracts attributable to such rediscount operation
were approximately $106.6 million.
In October 1999, a commercial finance company, which earlier in 1999 had
sold ORIX Credit Alliance, Inc. receivable contracts it continued to service,
failed to remit current collections of approximately $3.6 million. Consequently,
ORIX Credit Alliance, Inc. has taken over servicing these accounts directly and
is vigorously pursuing payment of such unremitted collections. As of December
31, 1999, these receivable contracts aggregated approximately $73.9 million, net
of unearned finance charges and the aforementioned collections. Since ORIX
Credit Alliance, Inc. currently believes that at least a portion of the
aforementioned $3.6 million in remittances will not be recovered and a portion
of such receivable contracts may not be collectible, ORIX Credit Alliance, Inc.
has charged earnings in the current fiscal year for $7.7 million of costs and
losses estimated to be attributable to this matter.
None of the receivable contracts purchased from this commercial finance
company or otherwise related to ORIX Credit Alliance Inc.'s rediscount or small
ticket operations are included in the contracts that will be transferred to the
trust.
The small ticket operation generally finances equipment with purchase
prices under $15,000 and at December 31, 1999 included approximately $107.6
million of net receivables. The insurance agency operation includes placement of
physical damage coverage and credit life insurance in connection with equipment
being financed and represented $1.5 million of revenues for the fiscal year
ended March 31,
35
<PAGE> 41
1999. The premium finance operation includes revenues of approximately $1.4
million for the fiscal year ended March 31, 1999 from financing insurance
premiums. The asset based lending operation commenced in February 1999. It
includes loans secured by business receivables and inventory and represented
approximately $165.8 million of loan receivables at December 31, 1999.
SUMMARY FINANCIAL DATA
Set forth below is summary financial information with respect to ORIX
Credit Alliance, Inc. The data presented in the following tables as at and for
the nine months ended December 31, 1999 and December 31, 1998 are derived from
unaudited financial statements of ORIX Credit Alliance, Inc. The data presented
in the following tables as at and for the twelve months ended March 31, 1999,
March 31, 1998 and March 31, 1997 are derived from audited financial statements
of ORIX Credit Alliance, Inc.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF MARCH 31,
------------------ --------------------------
1999 1998 1999 1998 1997
------- ------- ------ ------ ------
(IN BILLIONS)
<S> <C> <C> <C> <C> <C>
TOTAL ASSETS.................................. $3.023 $2.447 $2.623 $2.271 $2.352
TOTAL LIABILITIES............................. $2.586 $2.028 $2.198 $1.884 $1.977
TOTAL STOCKHOLDERS' EQUITY.................... $0.437 $0.419 $0.425 $0.387 $0.375
</TABLE>
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED DECEMBER 31, FOR THE FISCAL YEAR ENDED MARCH 31,
-------------------- -----------------------------------
1999 1998 1999 1998 1997
-------- -------- --------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES................................ $205.6 $187.4 $249.2 $259.4 $248.3
NET INCOME.................................... $ 26.0 $ 32.2 $ 38.7 $ 49.3 $ 47.3
</TABLE>
ORIX Credit Alliance, Inc. will not be obligated with respect to the notes
or the certificates except to the limited extent described herein.
MANAGEMENT
The senior management of ORIX Credit Alliance, Inc. are:
Philip D. Cooper, Chairman of the Board, President and Chief Executive
Officer
Mr. Cooper, age 50, joined ORIX Credit Alliance, Inc. in 1971 as an
assistant accounting supervisor in a branch office. He has served in various
functions in the branch system, becoming manager of the Baltimore branch in
1982. In 1988, he was appointed division manager and was responsible for the
supervision of five branches and the rediscount operation. Mr. Cooper has held
various officerships and was appointed President in September 1993, Chief
Executive Officer in April 1994 and Chairman of the Board of Directors in April
1998. He also serves on the Executive, Audit and Compensation Committees of the
Board of Directors. On February 8, 2000, Mr. Cooper announced that he will
retire on March 31, 2000 for health reasons, but will continue as a consultant
and remain on the Board of Directors during the following year and a half. Mr.
Cooper received a Bachelor of Arts degree in 1976 from New Jersey City
University.
Sandy Kallick, Senior Executive Vice President and Chief Operating Officer
Mr. Kallick, age 48, joined ORIX Credit Alliance, Inc. in 1980 as an
accounting supervisor in the Chicago branch and was promoted to Operations
Manager the following year. In 1987, he became the branch manager of the
California branch. In 1992, he was appointed division manager. In 1997, Mr.
Kallick joined the home office staff. Mr. Kallick has held various officerships,
currently is Senior Executive Vice President, and is on the Board of Directors
where he serves on the Executive, Audit, Employee Benefits, Employee Incentive
Savings Plan and Employee Retirement Plan Committees. Mr. Kallick attended the
University of Illinois, where he majored in business.
36
<PAGE> 42
John H. Moss, Director and Vice Chairman of the Board
Mr. Moss, age 63, was appointed in January 2000 to the Board of Directors
of ORIX Credit Alliance, Inc. and will serve as Vice Chairman during the
transition following Mr. Cooper's retirement. He became President and Chief
Executive Officer of ORIX USA Corporation ("ORIX USA") and a member of its Board
of Directors in December 1999. In January 2000, Mr. Moss was also elected to the
boards of ORIX Commercial Alliance Corporation and ORIX Business Credit, Inc.
Prior to joining ORIX USA, Mr. Moss had been President and Chief Executive
Officer of Sanwa Business Credit Corporation ("SBCC") from January 1997. He
joined SBCC in 1991 as executive vice president and chief credit officer
responsible for that company's risk management division and credit process. Mr.
Moss has an extensive background in risk/portfolio management, with expertise in
corporate finance and credit. Before joining SBCC, Mr. Moss had more than 27
years of experience in the banking industry of which 22 years were with
Citicorp. His key assignments included: vice president/area manager overseeing
Citibank's largest international banking and loan production office; senior
credit officer for a $3 billion commercial loan portfolio; and regional
executive at Citicorp/Citibank, supervising the corporate finance business for
25 midwestern states for non-investment grade and private corporations. Mr. Moss
also spent five years at Merrill Lynch Private Capital. He opened, staffed and
managed the San Francisco office. He was responsible for merchant banking
transactions for very high net worth individuals. This included identifying and
developing clients, lending money and creating fee-generating business for
Merrill Lynch. Mr. Moss received his undergraduate degrees in industrial
engineering and history from Yale University and his MBA from the University of
Chicago.
Thomas A. Janci, Executive Vice President and Division Manager
Mr. Janci, age 54, joined ORIX Credit Alliance, Inc. in 1968 in the
accounting department of the Chicago office, and worked in various capacities in
that office, including sales. In 1976, he opened the branch in Pittsburgh,
Pennsylvania, which he managed until 1989. In 1989, he became the branch manager
in Concord, California. In 1991, he was appointed division manager. Mr. Janci
has held various officerships and currently serves as Executive Vice President.
Mr. Janci attended Syracuse University and served as an interpreter for the U.S.
Air Force during the years 1963-1967.
Mark S. Lasher, Executive Vice President and Division Manager
Mr. Lasher, age 58, began his career with ORIX Credit Alliance, Inc. in
1969 on the accounting staff of the home office. He subsequently filled various
functions in the home office and at branches advancing to become branch manager
of the Orangeburg, New York branch in 1976. In 1988, he was appointed division
manager. Mr. Lasher has advanced through various officerships and is currently
an Executive Vice President and a member of the Board of Directors, serving on
the Executive Committee. Previously he worked as a public accountant from 1965
to 1968 having graduated from Pace University with a degree in Business
Administration. He was on active duty with the United States Armed Forces in
1963 followed by six years of United States National Guard duty.
Joseph J. McDevitt, Jr., Executive Vice President, Chief Financial Officer
and Treasurer
Mr. McDevitt, age 53, joined ORIX Credit Alliance, Inc. in 1993 to assume
responsibility for funding and cash management operations. From 1968 to 1981, he
had been a certified public accountant with Deloitte & Touche. In 1981, he
joined Mack Financial Corporation as Controller and served in that capacity for
five years. From 1986 until joining ORIX Credit Alliance, Inc., he served as
Assistant Treasurer of Mack Trucks, Inc. and Treasurer of Mack Financial
Corporation. He is on the Board of Directors where he serves on the Executive,
Employee Incentive Savings Plan and Employee Retirement Plan Committees and is
responsible for overseeing all financial operations. Mr. McDevitt received a
Bachelor of Science degree in Economics from Villanova University. He is also an
alumnus of the Graduate School of Credit and Financial Management conducted at
Dartmouth College by the National Association of Credit Managers. Mr. McDevitt
served in the United States Army Reserve from 1968 to 1974.
37
<PAGE> 43
Hal B. Parkerson, Executive Vice President and General Counsel
Mr. Parkerson, age 53, joined ORIX Credit Alliance, Inc. in 1989 as a Vice
President and subsequently became a Senior Vice President in the Law Department.
After graduating from law school, he practiced at the firm of Dewey Ballantine
and later was the General Counsel of Chrysler Capital Corporation and Equilease
Corporation. He serves on the Board of Directors and is a member of its
Executive and Employee Benefits Committees. He is admitted to the Bar in the
states of New York and Pennsylvania and has an undergraduate degree in
accounting from Emory University and a law degree from Columbia University. He
is a member of the Association of Commercial Finance Attorneys, the New York
State Bar Association and the Association of the Bar of the City of New York.
Robert J. Salge, Executive Vice President and Senior Loan Officer
Mr. Salge, age 62, began his career with ORIX Credit Alliance, Inc. in 1968
after twelve years in commercial banking. He initially worked on the president's
staff where he established ORIX Credit Alliance, Inc.'s first Treasury
Department. In 1970 he joined home office new business operations and eventually
became its operations manager. From 1977 to 1981 he rejoined the president's
staff and was involved mostly in senior credit administration. He was
subsequently the initial branch manager of the rediscount branch. In September
1991 he became senior loan officer. He is on the Board of Directors serving on
its Employee Benefits Committee. Mr. Salge received a Bachelor of Science degree
from St. Peter's College and attended the New York University Graduate School of
Business Administration. He served in the United States Army Reserve and was
part of the "Berlin Wall" reserve activation in 1961.
CREDIT APPROVAL, COLLECTION AND REVIEW PROCESS
The primary responsibilities for credit approval, monitoring, review and
collections are placed with the credit officers in the divisional operations
center that approved the credit. Generally, credit officers at a center are most
familiar with an individual customer's credit profile and most knowledgeable
concerning the collateral securing the loan. ORIX Credit Alliance, Inc.
generally evaluates applications on the basis of the collateral being financed
and the cash flow and general creditworthiness of the obligor, as well as
assignor recourse where applicable. The company considers obsolescence,
depreciation, secondary marketability, installation and transportation costs and
environmental factors in evaluating collateral. Traditional credit criteria,
adjusted for specific industries, are used to evaluate obligors. All contracts
originated or purchased by ORIX Credit Alliance, Inc. conform to the company's
underwriting standards.
Each divisional operating center has at least two credit officers
authorized to make credit decisions, both of whom are necessary in the approval
process. Each person with credit authority has an assigned credit limit, which
is used in conjunction with at least one other person having credit authority at
that center, to determine the maximum credit that can be approved by them.
In all cases, credit limits apply to the total obligor exposure, and not to
individual transactions. Any two credit officers may together approve a
transaction in the amount of the lesser of: (i) twice the credit authority of
the credit officer with the lower credit authority or (ii) the credit authority
of the credit officer with the higher credit authority. For example, if
individual A and individual B had credit authorities of $100,000 and $300,000,
respectively, they could jointly approve a $200,000 transaction. The maximum
credit authority for any one obligor at any center is $2 million. For certain
industries or transaction types that are deemed to involve more risk, center
credit authority is reduced. Transactions from $2 million to $15 million require
home office approvals depending on total exposure as do transactions below $2
million involving certain industries or transaction types that are deemed to
involve more risk. Transactions in excess of $15 million must be approved by
ORIX Corporation.
Once a transaction is funded, the company's divisional operating centers
are responsible for collecting funds, maintaining the integrity of the portfolio
and working with troubled accounts to maximize collections of delinquent or
non-accrual loans. In some cases, center personnel may implement a revised
payment schedule consistent with the company's criteria (by rewriting or
extending the contract generally at the same or higher interest rate) and
reflecting the customer's present ability to pay.
38
<PAGE> 44
In addition to center level monitoring of individual accounts, the
company's home office senior management analyze reports generated for each
center to track the overall credit quality of the company's portfolio. The
company's systems are capable of generating daily reports by center to track
contracts, invoices, collections, collateral, and a variety of other financial
data. Senior management periodically visit center offices to review the status
of problem accounts, review credit files, and check adherence to the company's
policies and procedures. To supplement these procedures, credit and operational
audits are conducted, including regular on-site visits by the company's internal
audit department, designed to ensure that credit quality remains consistent with
senior management's expectations. The internal audit department is directly
responsible to the audit committee of the company's board of directors.
As servicer, ORIX Credit Alliance, Inc. will continue to apply the
processes described above to the management of the contracts that have been sold
to the trust.
Terms of Contracts.
ORIX Credit Alliance, Inc. offers a variety of repayment schedules tailored
to the applicant's anticipated cash flows, such as annual, semi-annual,
quarterly and monthly payments. The contracts, including the contracts being
transferred to the trust, are normally amortized with equal monthly payments but
some contracts provide for a large, lump-sum payment (a "balloon") of principal
at maturity. Also, a customized payment schedule, under which payments for
generally up to three months per year may be reduced or eliminated to coincide
with slow work periods, can be selected by the obligor at the time the contract
is originated, in which case the twelve annual payments are replaced with larger
less frequent payments. As of February 1, 2000 approximately 14.56% of the
contracts to be transferred to the trust contain customized payment schedules.
The maximum amount that the company will finance under a contract varies
based on the obligor's credit history, the type of equipment financed, whether
the equipment is new or used, the payment schedule and the length of the term of
the contract. The amount financed is calculated as a percentage of the value of
the related equipment. For new equipment, such value is based on the selling
price of the related equipment. The value of used equipment is based on the
"as-is" value of the related equipment reported in the most recent edition of
applicable industrial guidebooks or, if such information is unavailable, on the
company's management's best estimate based on its experience with equipment of
such type.
Obligors are required to obtain and maintain physical damage insurance
covering the financed equipment. The company verifies insurance coverage on the
equipment at the time the contract is originated and is required to be named as
the payee on the insurance policy. Insurers are requested to notify the company
ten days prior to a cancellation of coverage or a change in payee. Under the
transfer and servicing agreement, the servicer is not obligated to obtain
substitute coverage in the event of a cancellation or lapse of coverage, but may
elect to do so.
At the origination of a contract, the principal balance will in almost all
instances be less than the cost of the financed equipment to the obligor.
However, values of the financed equipment are subject to variation caused by a
variety of factors, including depreciation, market conditions, obsolescence and
wear and tear. There can be no assurance that the payout schedules under the
contracts, including the contracts being transferred to the trust, will in all
instances result in the outstanding principal balance of a contract being less
than the value of the related financed equipment.
Recourse Provisions.
Each contract, including the contracts being transferred to the trust,
represents a full recourse obligation of the named obligor. Frequently, the
contracts are also fully guaranteed by the principal(s) of the obligor and/or
affiliated entities. In addition, some of the contracts are entitled to full or
partial recourse to the originating assignor. Recourse to these assignors varies
among contracts from full to limited. Limited recourse may be keyed to fixed
dollar amounts or to a percentage of the contract's balance and may or may not
require that the financed equipment be recovered and/or sold prior to payment.
Recourse from an originating assignor may, in certain instances, have the
benefit of security in
39
<PAGE> 45
the form of deposits, reserves, holdbacks from the assignor or rights to the
assignor's portion of future payments.
Extension/Revision Procedures.
Contracts may be extended or revised when payment delinquencies result from
temporary interruptions in an obligor's cash flow or where other factors justify
an extension. Extensions of existing contracts are considered a new extension of
credit and appropriate credit approvals as outlined above are required. A
contract may be extended by the divisional operating center (subject to the
center's credit limits) for various reasons including, but not limited to,
seasonal/weather problems, a labor strike or other unscheduled work stoppage or
the rescheduling of a balloon maturity payment. ORIX Credit Alliance, Inc.
charges obligors an amount which is generally equal to interest accrued on the
unpaid balance of the contract during the period that payments are not required
to be made as a result of the extension. The transfer and servicing agreement
will permit the servicer to extend or revise contracts in accordance with its
customary practices. See "The Transfer and Servicing Agreement-Material
Modifications to Contracts".
Pre-Litigation Workout/Judgment Recovery.
ORIX Credit Alliance, Inc. has a pre-litigation workout department to
reduce costs and expenses associated with the rehabilitation of problem
accounts. When litigation becomes necessary, the company's legal staff initiates
legal claims against an obligor and forwards judgments received against obligors
to the company's judgment recovery team. The judgment recovery team's objective
is to continuously search for hidden assets of obligors and to collect on
court-awarded judgments at the earliest possible time.
Legal Proceedings.
ORIX Credit Alliance, Inc. is a party to various legal proceedings, many of
which are initiated as part of efforts to collect overdue accounts. Of the
active litigation matters, approximately 110 involve actions in which ORIX
Credit Alliance Inc. is a defendant or a counterclaim defendant. Of these
litigation matters, many result from being served in connection with a
foreclosure action by another lienholder where it holds a lien or has filed a
judgment. ORIX Credit Alliance, Inc. is also a party to various litigation
matters which seek a recovery against it. These actions often fall into
categories commonly described as lender liability cases and employment
litigation.
ORIX Credit Alliance, Inc. is a party to a lawsuit, filed in 1996, in which
three former customers have asserted claims against it on behalf of themselves,
and are seeking to assert claims as a class action (that is, the three customers
contend that they can represent a large group of former customers in asserting
claims against it). Those three customers allege that ORIX Credit Alliance, Inc.
has acted improperly in its financing practices and they claim that they, as
well as the other customers that they seek to represent, are entitled to
compensatory and punitive damages from ORIX Credit Alliance, Inc. ORIX Credit
Alliance, Inc. has denied engaging in the pattern of wrongful conduct alleged in
the lawsuit and ORIX Credit Alliance, Inc.'s management also believes that it
has substantive defenses to the legal points raised in the lawsuit. The court
has dismissed many of the claims raised by the three customers in the lawsuit,
including the claims that had provided the primary basis for their assertion
that they could represent a class of other customers. The court has not,
however, yet had occasion to rule on whether the case can be maintained as a
class action. ORIX Credit Alliance, Inc. is vigorously defending against this
lawsuit.
Although the ultimate outcome of various lawsuits cannot be accurately
assessed, especially where a case is in its early stages, the management of ORIX
Credit Alliance, Inc. believes that none of these proceedings, either
individually or together, will have a material adverse impact on its operations
or its consolidated financial condition.
On the subject of employment litigation pending against ORIX Credit Alliance,
Inc., ORIX Credit Alliance, Inc. is a defendant in a lawsuit brought by a former
executive who alleges age discrimination and breach of contract in connection
with the termination of his employment. It is vigorously defending against this
lawsuit.
40
<PAGE> 46
Year 2000 Readiness Disclosure.
The Year 2000 ("Y2K") issue stems from original computer programming
practices that used two digits instead of four digits to express the year. For
those systems designed using these practices, the new year could be interpreted
to be "1900" instead of "2000" when computer clocks move from "99" to "00".
There is general agreement that the Year 2000 issue can negatively affect any
computer technology, platform or system in the world.
Failure to properly address this problem, as it relates to internal
systems, could have an adverse effect on ORIX Credit Alliance, Inc., including
the inability, for a period of time, to be able to properly bill customers,
collect and apply payments and produce accurate financial data. The failure of
third parties on which the company relies for products and services to
successfully correct this situation could also have a disruptive impact on the
company's ability to operate in its normal manner. Such a failure could affect,
among other things, the collectibility of the company's contracts portfolio.
ORIX Credit Alliance, Inc. has addressed these issues as follows. A Y2K
project team was formed in 1997. This team reviewed all areas of the company's
operations for potential Y2K concerns. Based on this review, a project plan
detailing the steps needed to be performed and the critical dates for such
performance was developed. The project team meets bi-weekly to monitor progress
and periodic reports are made to the electronic data processing steering
committee, which consists of the chief executive officer, the chief operating
officer, the chief financial officer, the treasurer and the controller.
The company's Y2K remediation efforts have been organized into three
general areas: mainframe systems and applications, personal computer and network
applications and third-party compliance. The following is a summary of the
company's status in each of these areas:
Mainframe Systems and Applications.
A new single production RISC-based AS/400 is in place and running parallel
to the company's two CISC-based AS/400's. Code conversion is 100% complete. Unit
conversion testing and user acceptance testing was completed before the end of
1999.
Personal Computer and Network Applications.
ORIX Credit Alliance, Inc. has completed the introduction of CA-NET as a
wide area network ("WAN") based "front-end" information processing system.
Operating in a Windows NT environment, the system is currently installed and is
100% operational in the six divisional operating centers and the Canadian
subsidiary. This process also brought all necessary hardware and vendor software
into compliance.
Third-Party Compliance.
Confirmation of Y2K compliance had progressed prior to the end of 1999 as
follows for the following areas:
- Facilities compliance (100% complete)
- Outside vendor compliance (100% complete)
- Customer compliance (100% complete)
- Financed equipment compliance (100% complete)
Although the company has confidence in its Y2K efforts and has not
experienced Y2K problems to date, there are no assurances that every system and
every vendor/supplier is Year 2000 ready. Even though the company has been
diligent in making inquiries of third parties as to their Y2K readiness, the
company has no means of verifying the accuracy of all responses. Furthermore,
the company's own remediation procedures, to the extent any may be needed, could
be hampered by unexpected disruptions and delays outside the company's control.
41
<PAGE> 47
Contingency Plans.
The company has also developed detailed contingency plans that will assist
in resuming operations and continuing to operate normally during a potential
disruption caused by the century date change. The detailed project plan has been
designed to provide adequate room for small, unexpected delays and disruptions.
In addition, the company has retained additional resources beyond project
completion in order to repair any systems that fail unexpectedly. The
contingency plans also include various workarounds and alternate procedures,
including the utilization of backup computer files and printouts and alternative
vendors/suppliers and service providers. These Y2K contingency plans were
developed in addition to the company's existing business recovery plans.
Cost.
It is expected that the final Y2K project cost, which commenced in early
1997, will approximate $2,500,000. This cost estimate is based on the company's
current projections of the costs to be incurred in order to complete the project
plan. In the event that the company has to make use of its contingency plans,
this total cost is likely to increase.
The above Y2K information is deemed to be a "Year 2000 Readiness
Disclosure" as defined in the Year 2000 Information and Readiness Disclosure Act
and is subject to the terms thereof. All Y2K information is provided for
information purposes and may not be taken as a form of covenant, warranty,
representation or guarantee of any kind.
THE TRUST
GENERAL
The trust is organized as a business trust under the laws of the State of
Delaware under a trust agreement dated as of January 27, 2000. The trust was
formed solely for the purpose of effectuating the transactions described in this
prospectus. Prior to formation, the trust had no assets or obligations and no
operating history. Upon formation, the trust will not engage in any business
activity other than:
(1) acquiring, managing and holding the contracts and related
interests described in this prospectus,
(2) issuing the notes and certificates,
(3) making distributions and payments on the notes and certificates,
and
(4) engaging in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the above listed
activities or are incidental to those activities.
As a consequence, we do not expect to have any source of capital resources
other than the assets that will be transferred to the trust as described in this
prospectus. As of the date of this prospectus, neither the trust depositor nor
the trust is subject to any legal proceedings.
We will initially be capitalized with $1,442,621, representing the
principal balance of the certificates. These certificates will be sold to the
trust depositor. If the issuance and sale of the notes and the certificates had
taken place on February 1, 2000, our capitalization would consist solely of the
notes with an aggregate principal amount of $287,081,347 and certificates with a
$1,442,621 balance. We will use the proceeds from the initial sale of the notes
and the certificates to purchase the contracts from the trust depositor pursuant
to the transfer and servicing agreement.
The servicer will service the contracts pursuant to the transfer and
servicing agreement, and will be compensated for acting as the servicer. See
"Description of the Notes and Indenture -- Servicing Compensation and Payment of
Expenses". To facilitate servicing and to minimize administrative burden and
expense, the servicer will be appointed custodian for the contracts by the
indenture trustee.
42
<PAGE> 48
TERMINATION OF TRUST
The trust will terminate only on the earlier of
(1) the day following the day on which the aggregate principal amount
of all notes is zero; provided, that the trust depositor shall have
delivered a written notice to the owner trustee electing to terminate the
trust, or
(2) if the contracts are sold, disposed of or liquidated following the
occurrence of events relating to bankruptcy or insolvency, promptly
following such transfer, disposition or liquidation.
Upon termination of the trust, all right, title and interest in the trust's
assets (other than amounts in accounts maintained by the trust for the final
payment of principal and interest to the holders of the notes and certificate)
will be conveyed and transferred to the holder of the certificates and any
permitted assignee.
OTHER INFORMATION
The trust depositor has filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended, with
respect to the notes offered by this prospectus. For further information, you
should read the registration statement. The registration statement may be
inspected and copied at the public reference facilities maintained by the
Securities and Exchange Commission at the following locations:
<TABLE>
<CAPTION>
<S> <C> <C>
450 Fifth Street, N.W. Citicorp Center Seven World Trade Center
Room 1024 500 West Madison, Suite 1300
Washington, D.C. 20549 Suite 1400 New York, New York 10048
Chicago, Illinois 60661
</TABLE>
You may obtain copies of the registration statement for a fee from the
Public Reference Branch of the Securities and Exchange Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Securities and Exchange Commission
also maintains a public access site on the internet through the World Wide Web
at which you may view reports, information statements and other information,
including all electronic filings, regarding the trust depositor and the trust.
The internet address of the World Wide Web site is http://www.sec.gov. The
servicer, on behalf of the trust, will also file or cause to be filed with the
Securities and Exchange Commission the periodic reports required under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission thereunder. Copies of those reports can
be obtained as described above.
THE TRUST DEPOSITOR
The trust depositor is a wholly owned bankruptcy-remote subsidiary of ORIX
Credit Alliance, Inc. The trust depositor was formed solely for the purpose of
acquiring from the originator contracts as well as other financial assets and
conveying or depositing the same into trusts or other securitization vehicles.
As a bankruptcy-remote entity, the trust depositor's operations will be
restricted so that it does not engage in business with, or incur liabilities to,
any other entity other than the indenture trustee and other trustees and agents
on behalf of other investors in nonrecourse, asset-backed financings. The
restrictions are intended to prevent the trust depositor from engaging in
business with other entities which may bring bankruptcy proceedings against the
trust depositor. The restrictions are also intended to reduce the risk that the
trust depositor will be consolidated into the bankruptcy proceedings of any
other entity.
The trust depositor will have no other assets available to pay amounts
owing under the indenture except the trust's assets, including the contracts and
the security interests in the equipment, the proceeds of the contracts and
earnings on the amounts on deposit in the collection account and with respect to
the reserve fund. The trust depositor's address is 300 Lighting Way, Secaucus,
New Jersey 07096-1525, and its phone number is (201) 601-9618.
43
<PAGE> 49
DESCRIPTION OF THE NOTES AND INDENTURE
The statements under this caption describe all of the material terms of the
notes and an indenture, to be dated as of the closing date, between the trust
and the indenture trustee. However, these statements are summaries. For a more
detailed description of the terms of the notes, you should read the transfer and
servicing agreement and the indenture, the forms of which have been filed as
exhibits to the registration statement of which this prospectus is a part.
Unless and until definitive notes are issued under the limited
circumstances described therein, all references to actions taken by noteholders
shall, in the case of the book-entry notes, refer to actions taken by DTC,
Euroclear or Clearstream Luxembourg, as applicable, upon instructions from their
respective participants, and all references herein to distributions, notices,
reports and statements to noteholders shall, in the case of the book-entry
notes, refer to distributions, notices, reports and statements to DTC or Cede &
Co., Euroclear or Clearstream Luxembourg, as applicable, as the registered
holder of the book-entry notes, as the case may be, for distribution to
beneficial owners in accordance with their respective procedures.
GENERAL
The offered notes will consist of six classes, the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and
the Class C Notes. The notes will be issued under the indenture.
The notes will be available for purchase in minimum denominations of $1,000
and in integral multiples of $1,000 in book-entry form; provided, however, that
one note of each class will be issued in an incremental denomination of less
than $1,000. The Class A-l Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes, Class B Notes and Class C Notes will initially be represented by one or
more certificates registered in the name of the nominee of The Depository Trust
Company, except as set forth below. Payments on the notes will be made as
described below to the noteholders in whose names the notes were registered at
the close of business on the day immediately preceding the day on which such
payments will be made. However, the final payment on the notes offered hereby
will be made only upon presentation and surrender of the notes. All payments
with respect to the principal of and interest on the notes will be made in
immediately available funds. See "-- Book-Entry Registration".
The indenture trustee will be granted a first priority lien on the trust's
assets to secure the notes; provided, that distributions on the notes will be
allocated as provided in "-- Allocations". The notes are nonrecourse obligations
of the trust only and do not represent interests in or obligations of the
originator, the servicer or the trust depositor, or any affiliate of such
persons.
INTEREST AND PRINCIPAL
Interest on the notes will be payable on the 15th day of each calendar
month, or if that day is not a business day, the next business day, beginning on
March 15, 2000 until the notes have been paid in full or have matured. Interest
on the notes will be paid at the respective rates specified on the cover of this
prospectus. Interest on each class of notes will accrue at the interest rate
specified for the class, for the period from and including the most recent date
on which interest has been paid. However, in the case of the initial interest
payment date, interest will accrue from the closing date for the initial
transfer of the contracts to the trust to but excluding the following payment
date. The interest will accrue on the outstanding principal amount of the notes
as of the first day of the interest accrual period.
The stated maturity dates of the notes are specified on the cover of this
prospectus. However, if all payments on the contracts are made as scheduled,
final payment with respect to the notes would occur prior to stated maturity.
Prior to the respective stated maturity dates, amounts to be applied in
reduction of the outstanding principal amount of any note, including the payment
of the Class A Principal Payment Amount, Class B Principal Payment Amount or
Class C Principal Payment Amount payable on any payment date, will not be due
and payable, although the failure of the trust depositor or servicer to remit
44
<PAGE> 50
any amounts available for payment on the notes will, after the applicable grace
period, constitute an event of default under the indenture. See "-- Events of
Default".
We will pay interest and principal on the notes using amounts representing
primarily collections of payments due under the contracts and amounts received
upon prepayment or purchase of the contracts or liquidation of the contracts and
disposition of the related equipment upon defaults thereunder, but only after we
use those amounts to repay servicer advances and servicing fees (which includes
amounts owed to the indenture trustee). See "-- Amounts Available for Payments
on the Notes" and "The Transfer and Servicing Agreement -- Servicing Standard
and Servicer Advances".
AMOUNTS AVAILABLE FOR PAYMENTS ON THE NOTES
As of any payment date which shall be the 15th day of each calendar month
or, if such day is not a business day, the next business day, the amounts
available for payment of interest and principal consist of:
- except for Excluded Amounts, all amounts on deposit in the collection
account as of the third business day immediately preceding the payment
date on account of scheduled payments due on or before, and prepayments
received on or before, the last day of the immediately preceding
collection period;
- recoveries on account of previously defaulted contracts received during
the preceding collection period, including proceeds of repossessed
equipment or other security or other property, insurance proceeds,
amounts representing late fees unrelated to servicer advances and
penalties and amounts, if any, subsequently received from the related
vendor, net of reimbursable collection and liquidation expenses.
Collection and liquidation expenses are reimbursable to the servicer only
to the extent recoveries on a contract provide funds sufficient, after
payment of all principal and finance charges due with respect to such
contract, to cover related collection and liquidation expenses incurred
by the servicer;
- amounts held in the collection account as of the last day of the
immediately preceding collection period, together with investment
earnings credited to the collection account, the reserve fund and the
spread fund (if any);
- late charges relating to a contract received during the preceding
collection period, provided that the late charges were included in the
contract's terms as of the applicable cutoff date;
- funds on deposit in the reserve fund in the amount specified in
"-- Reserve Fund"; and
- funds on deposit in the spread fund as specified in "-- Spread Fund"; and
- proceeds of any of the above items.
Each collection period for purposes of determining the amounts available
for distribution on the notes coincides with the previous calendar month.
Amounts available for distribution to you will not include any amounts
payable on an account of the equipment which exceeds the sum of the scheduled
payments, late charges and expenses described above payable under the related
contract.
Prepayments on the contracts which are treated as available amounts are:
- optional prepayments which are partial and full prepayments, which the
servicer has received, and expressly permitted the related obligor to
make, in advance of its scheduled due date;
- payments upon repurchases by the originator through the trust depositor
as a result of the breach of representations and warranties or covenants
in the transfer and servicing agreement;
- liquidation proceeds from the sale, lease or re-lease of the equipment,
proceeds of related insurance policies and net recoveries with respect to
any defaulted contracts; and
- payments upon an optional termination of the trust.
45
<PAGE> 51
If the servicer permits an obligor to prepay a contract in an amount less
than its principal balance plus accrued, unpaid interest at the discount rate,
the originator will make up the difference.
"Excluded Amounts" means:
- collections on deposit in the collection account or otherwise received by
the servicer on or with respect to the contracts or related equipment,
which collections are attributable to any taxes, fees or other charges
imposed by any governmental authority;
- collections representing reimbursements of insurance premiums or payments
for services that were not financed by the originator;
- other non-contract charges reimbursable to the servicer in accordance
with the servicer's customary policies and procedures; and
- collections with respect to repurchased or expired contracts.
ALLOCATIONS
Prior to an Event of Default.
On each payment date prior to the occurrence of an event of default under
the indenture, the servicer shall instruct the indenture trustee to withdraw,
and on the payment date the indenture trustee shall withdraw, from the
collection account the amounts needed to make the following payments. See
"-- Amounts Available for Payment on the Notes" and "-- Events of Default". The
payments listed below will be made only to the extent there are sufficient
amounts available on the payment date. We will make payments on the 15th day of
each calendar month, or if such day is not a business day, the next business
day, in the following order of priority:
FIRST, to the servicer, reimbursement for the amount of any scheduled
payments on the contracts which were not received when due and which the
servicer advanced for deposit in the collection account;
SECOND, if a successor servicer were being appointed, to the indenture
trustee, the costs and expenses associated with the appointment of such
successor servicer and the transition relating thereto (which amount shall not,
taken in the aggregate with all other amounts withdrawn for such purpose, exceed
$100,000);
THIRD, to the servicer, its monthly servicing fee for the preceding monthly
period, which includes the amounts payable for the fees, expenses and indemnity
payments, if any, due and payable to the indenture trustee and the owner
trustee;
FOURTH, to the holders of the notes, the amounts specified in the following
table and in the order set forth in the following table:
<TABLE>
<CAPTION>
CLASS OF NOTE
RECEIVING PAYMENT AMOUNT TO BE PAID
- ----------------- -----------------
<C> <S>
A-1, A-2, A-3 and A-4 Interest accrued on the Class A-l Notes, Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes at their respective
interest rates for the period from and including the most
recent date on which interest has been paid to, but
excluding, the current interest payment date.
B Interest accrued on the Class B Notes at the Class B Note
interest rate for the period from and including the most
recent date on which interest has been paid to, but
excluding, the current interest payment date.
C Interest accrued on the Class C Notes at the Class C Note
interest rate for the period from and including the most
recent date on which interest has been paid to, but
excluding, the current interest payment date.
A-1 The Class A Principal Payment Amount, until the outstanding
principal of the Class A-l Notes is reduced to $0.
A-2 - $0, prior to the payment date on which the outstanding
principal of the Class A-1 Notes is reduced to $0.
- Class A Principal Payment Amount less the amount needed to
reduce the outstanding principal of the Class A-1 Notes to
$0, on subsequent payment dates until the outstanding
principal of the Class A-2 Notes is reduced to $0.
</TABLE>
46
<PAGE> 52
<TABLE>
<CAPTION>
CLASS OF NOTE
RECEIVING PAYMENT AMOUNT TO BE PAID
- ----------------- -----------------
<C> <S>
A-3 - $0, prior to the payment date on which the outstanding
principal of the Class A-1 Notes and Class A-2 Notes is
reduced to $0.
- Class A Principal Payment Amount less the amount needed to
reduce the outstanding principal of the Class A-1 Notes and
Class A-2 Notes to $0, on subsequent payment dates until
the outstanding principal of the Class A-3 Notes is
reduced to $0.
A-4 - $0, prior to the payment date on which the outstanding
principal of the Class A-1 Notes, Class A-2 Notes and Class
A-3 Notes is reduced to $0.
- Class A Principal Payment Amount less the amount needed to
reduce the outstanding principal amount of the Class A-1
Notes, Class A-2 Notes and Class A-3 Notes to $0, on
subsequent payment dates until the outstanding principal
of the Class A-4 Notes is reduced to $0.
B - $0, prior to the payment date on which the outstanding
principal of the Class A-1 Notes is reduced to $0.
- Class B Principal Payment Amount, on subsequent payment
dates until the outstanding principal of the Class B Notes
is reduced to $0.
C - $0, prior to the payment date on which the outstanding
principal of the Class A-1 Notes is reduced to $0.
- Class C Principal Payment Amount, on subsequent payment
dates until the outstanding principal of the Class C Notes
is reduced to $0.
A-2 - $0, prior to the payment date on which the outstanding
principal of the Class A-1 Notes is reduced to $0.
- Additional Principal, on subsequent payment dates until
the outstanding principal of the Class A-2 Notes is reduced
to $0.
A-3 - $0, prior to the payment date on which the outstanding
principal of the Class A-1 Notes and Class A-2 Notes is
reduced to $0.
- The excess of Additional Principal over the amount needed
to reduce the outstanding principal of the Class A-2 Notes
to $0, on subsequent payment dates until the outstanding
principal of the Class A-3 Notes is reduced to $0.
A-4 - $0, prior to the payment date on which the outstanding
principal of the Class A-1 Note, Class A-2 Notes and Class
A-3 Notes is reduced to $0.
- The excess of Additional Principal over the amount needed
to reduce the outstanding principal of the Class A-2 Notes
and Class A-3 Notes to $0, on subsequent payment dates
until the outstanding principal of the Class A-4 Notes is
reduced to $0.
B - $0, prior to the payment date on which the outstanding
principal of the Class A-4 Notes is reduced to $0.
- The excess of Additional Principal over the amount needed
to reduce the outstanding principal of the Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes to $0, on subsequent
payment dates until the outstanding principal of the Class
B Notes is reduced to $0.
C - $0, prior to the payment date on which the outstanding
principal of the Class B Notes is reduced to $0.
- The excess of Additional Principal over the amount needed
to reduce the outstanding principal of the Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes and Class B Notes to $0,
on subsequent payment dates until the outstanding
principal of the Class C Notes is reduced to $0.
</TABLE>
FIFTH, to the holders of the notes, to the extent there are available
amounts (including all collections through the determination date and amounts in
the reserve fund) sufficient to pay in full the remaining outstanding principal
of all of the notes;
SIXTH, to the extent that any amounts remain after allocating the amounts
available for distribution on the notes, the indenture trustee will deposit into
the reserve fund an amount, if any, which, when so deposited, causes the balance
in the reserve fund to equal the Required Reserve Amount;
47
<PAGE> 53
SEVENTH, if a spread event exists, to the extent that any amounts remain
after allocating the amounts available for payments described above, the
indenture trustee will deposit such remaining amounts into the spread fund;
EIGHTH, to the indenture trustee and the owner trustee, any remaining
amounts payable to them, respectively; and
NINTH, any excess shall be paid to the holder of the certificates.
The indenture trustee will distribute available amounts on each note within
each class of notes based on the outstanding principal amount of the note
relative to the aggregate outstanding principal amount of that class of notes.
Following an Event of Default.
On the third business day prior to each payment date after the occurrence
of an event of default under the indenture, the servicer shall instruct the
indenture trustee to withdraw, and on the payment date the indenture trustee
will follow the instructions to withdraw, from the collection account the
amounts needed to make the following payments. See "-- Amounts Available for
Payment on the Notes" and see "-- Events of Default." The payments listed below
will be made only to the extent there are sufficient amounts available on such
payment date. We will make payments on the 15th day of each calendar month, or
if such day is not a business day, the next business day, in the following order
of priority:
FIRST, pay to the indenture trustee, the amount of (a) any unpaid fees,
expenses (including legal fees and expenses) and indemnity payments; and (b) if
a successor servicer were being appointed, to the indenture trustee, the costs
and expenses associated with the appointment of such successor servicer and the
transition relating thereto (which amounts described in (a) and (b) shall not,
taken in the aggregate with all other amounts withdrawn for such purpose, exceed
$100,000);
SECOND, pay to the noteholders, reimbursement for any indemnity payments
noteholders may have elected to make to the indenture trustee;
THIRD, to the servicer, its monthly servicing fee for the preceding monthly
period together with any amounts in respect of the servicer's fee that were due
in respect of prior monthly periods that remain unpaid;
FOURTH, to the holders of the notes the amounts specified in the following
table and in the order set forth in the following table:
<TABLE>
<CAPTION>
CLASS OF NOTE
RECEIVING PAYMENT AMOUNT TO BE PAID
- ----------------- -----------------
<S> <C>
A-1, A-2, A-3 and A-4 Interest accrued on the Class A-l Notes, Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes at their respective
interest rates for the period from and including the most
recent date on which interest has been paid to, but
excluding, the current interest payment date.
B Interest accrued on the Class B Notes at the Class B Note
interest rate for the period from and including the most
recent date on which interest has been paid to, but
excluding, the current interest payment date.
C Interest accrued on the Class C Notes at the Class C Note
interest rate for the period from and including the most
recent date on which interest has been paid to, but
excluding, the current interest payment date.
A-1 Outstanding principal of the Class A-l Notes.
A-2, A-3 and A-4 Outstanding principal of the Class A-2 Notes, Class A-3
Notes and Class A-4 Notes, pro rata according to the
outstanding principal for each class of notes.
B Outstanding principal of the Class B Notes.
C Outstanding principal of the Class C Notes;
</TABLE>
FIFTH, pay to the indenture trustee all amounts due it and not paid
pursuant to clause FIRST by reason of the limitation in such clause; and
SIXTH, any excess shall be paid to the holder of the certificates.
48
<PAGE> 54
The terms used in describing the calculation of interest and principal
payments and allocations on the notes are defined as follows:
"Additional Principal" means, with respect to a date on which principal is
to be paid,
(1) if the Class B Target Investor Principal Amount and the Class C
Target Investor Principal Amount exceed the Class B Floor and the Class C
Floor, respectively, an amount of $0; or
(2) if any of the conditions in clause (1) are not satisfied, an
amount equal to the excess, if any, of
(A) the Monthly Principal Amount, over
(B) the sum of the Class A Principal Payment Amount, Class B
Principal Payment Amount and Class C Principal Payment Amount for such
payment date.
"Class A Percentage" means approximately 92.51497%, which is the ratio of:
(1) the sum of the initial principal amount of the Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes to
(2) the Original Pool Balance minus the initial principal amount of
the Class A-l Notes.
"Class A Principal Payment Amount" means, with respect to a date on which
principal is to be paid,
(1) while all or any portion of the Class A-1 Notes remain outstanding
after giving effect to payments on such day, the Monthly Principal Amount;
(2) on the payment date on which the outstanding principal of the
Class A-l Notes is reduced to $0, the sum of:
(A) the amount necessary to reduce the outstanding principal of the
Class A-l Notes to $0; and
(B) the amount necessary to reduce the sum of the outstanding
principal amount of the Class A-2 Notes, Class A-3 Notes and Class A-4
Notes to the Class A Target Investor Principal Amount; or
(3) on any subsequent payment dates, the amount necessary to reduce
the sum of outstanding principal amount of the Class A-2 Notes, Class A-3
Notes and Class A-4 Notes to the Class A Target Investor Principal Amount.
"Class A Target Investor Principal Amount" means, with respect to a date on
which principal is to be paid, an amount equal to the product of:
(1) the Class A Percentage and
(2) the Pool Balance as of the last day of the immediately preceding
completed collection period.
"Class B Floor" means, with respect to a date on which principal is to be
paid,
(1) 1.625% of the Original Pool Balance plus
(2) the Cumulative Loss Amount as of such payment date, minus
(3) the sum of
(A) the outstanding principal amount of the Class C Notes as of the
immediately preceding payment date after giving effect to all principal
payments made on such prior payment date,
(B) the Overcollateralization Balance as of the immediately
preceding payment date and
(C) the amount on deposit in the reserve fund after giving effect
to amounts to be withdrawn on such payment date.
"Class B Percentage" means approximately 4.49102%, which is the ratio of:
(1) the initial principal amount of the Class B Notes to
(2) the Original Pool Balance minus the initial principal amount of
the Class A-l Notes.
"Class B Principal Payment Amount" means, with respect to a date on which
principal is to be paid,
(1) while there is outstanding principal on the Class A-l Notes, $0;
and
49
<PAGE> 55
(2) after the outstanding principal amount of the Class A-l Notes is
reduced to $0, the amount necessary to reduce the aggregate outstanding
principal amount of the Class B Notes to the greater of:
(A) the Class B Target Investor Principal Amount; or (B) the Class
B Floor.
"Class B Target Investor Principal Amount" means, with respect to a date on
which principal is to be paid, an amount equal to the product of:
(1) the Class B Percentage and
(2) the Pool Balance as of the last day of immediately preceding
completed collection period.
"Class C Floor" means, with respect to a date on which principal is to be
paid,
(1) 0.70% of the Original Pool Balance plus
(2) the Cumulative Loss Amount as of such payment date, minus
(3) the sum of
(A) the Overcollateralization Balance as of the immediately
preceding payment date and
(B) the amount on deposit in the reserve fund after giving effect
to amounts to be withdrawn on such payment date; provided, however, that
if the outstanding principal amount of the Class B Notes is less than or
equal to the Class B Floor on such payment date, the Class C Floor will
equal the outstanding principal amount of the Class C Notes utilized in
the calculation of the Class B Floor for such payment date.
"Class C Percentage" means approximately 2.24551%, which is the ratio of:
(1) the initial principal amount of the Class C Notes to
(2) the Original Pool Balance minus the initial principal amount of
the Class A-1 Notes.
"Class C Principal Payment Amount" means, with respect to a date on which
principal is to be paid,
(1) while there is outstanding principal on the Class A-1 Notes, $0;
and
(2) after the outstanding principal amount of the Class A-1 Notes is
reduced to $0, the amount necessary to reduce the aggregate outstanding
principal amount of the Class C Notes to the greater of:
(A) the Class C Target Investor Principal Amount; or (B) the Class
C Floor.
"Class C Target Investor Principal Amount" means, with respect to a date on
which principal is to be paid, an amount equal to the product of:
(1) the Class C Percentage and
(2) the Pool Balance as of the last day of immediately preceding
completed collection period.
"Cumulative Loss Amount" means, with respect to a date on which principal
is to be paid, an amount equal to the excess, if any, of
(1) the total of:
(A) the outstanding principal amounts of all of the notes as of the
immediately preceding payment date after giving effect to all principal
payments made on such date, plus
(B) the Overcollateralization Balance as of the immediately
preceding payment date, minus
(C) the lesser of
(1) the Monthly Principal Amount; and
(2) the amounts available for distribution on the notes after
paying all amounts owing to the servicer and all interest due on the
notes on such payment date, over
(2) the Pool Balance as of the last day of the immediately preceding
completed collection period.
50
<PAGE> 56
"Monthly Principal Amount" means, with respect to any payment date, an
amount equal to the excess, if any, of:
(1) the total of:
(A) the outstanding principal amounts of all of the notes as of the
immediately preceding payment date after giving effect to all principal
payments made on such date, plus
(B) the Overcollateralization Balance as of the immediately
preceding payment date, over
(2) the Pool Balance as of the last day of the collection period
completed immediately prior to such date.
"Original Pool Balance" means the aggregate principal balance of the
contracts transferred to the trust as of the closing date.
"Overcollateralization Balance" means with respect to a payment date, an
amount equal to the excess, if any, of:
(1) the Pool Balance as of the last day of the collection period
completed immediately prior to such date, over
(2) the sum of the outstanding principal amount of all of the notes as
of such date after giving effect to all principal payments made on such
date.
"Pool Balance" means, with respect to any payment date, an amount equal to
the aggregate remaining principal balance of the contracts at the end of the
related collection period (after giving effect to defaulted contracts, prepaid
contracts and contracts subject to a warranty event).
RESERVE FUND
The reserve fund will be an account held in the name of the indenture
trustee on behalf of you. On the closing date for the transfer of the contracts
to the trust, the reserve fund balance will be $4,306,220. On any payment date,
after distributing the available amounts to the servicer, the indenture trustee,
the owner trustee and the noteholders as described in "-- Allocations", we will
deposit the remaining available amounts into the reserve fund until the amounts
in the reserve fund equal the Required Reserve Amount.
"Required Reserve Amount" means with respect to a payment date, an amount
equal to the greater of (a) 3.00% of the outstanding principal amount of the
notes as of the last day of the immediately preceding completed collection
period and (b) the lesser of (I) 1.00% of the initial principal amount of the
notes and (II) the outstanding principal amount of the notes as of such last day
of the immediately preceding completed collection period.
If on any payment date, collections on the contracts and amounts, if any,
in the spread fund are less than the amount needed to pay interest or principal
due on the notes, the indenture trustee will withdraw funds from the reserve
fund to pay the interest and principal.
Amounts in the reserve fund will be invested in investments deemed to be
eligible investments for funds held in the collection account. See
"-- Collection Account and Collection Period". Earnings on the eligible
investments will be treated as amounts available for distribution to the
noteholders and the holder of the certificates.
If on any payment date, there are excess available amounts remaining after
we pay the servicer and noteholders and increase the reserve fund balance to the
Required Reserve Amount as described in "-- Allocations" and no spread event
exists, we will distribute such excess to the holder of the certificates. Upon
any such distributions to the holder of the certificates, you will have no
further rights in, or claims to, such amounts.
We will allocate amounts withdrawn from the reserve fund as described in
"-- Allocations". Upon making these payments in full, the funds on deposit in
the reserve fund in excess of the Required Reserve Amount shall be paid to the
holder of the certificates unless a spread event exists.
51
<PAGE> 57
SPREAD FUND
The spread fund will be an account held in the name of the indenture
trustee on behalf of you that will hold available funds when a spread event
exists.
A spread event means the occurrence of one or more of the following: (a)
ORIX Credit Alliance, Inc. is no longer the servicer (other than in the
circumstances that permit a successor servicer by merger or acquisition as set
forth under "The Transfer and Servicing Agreement -- Servicer Resignation"); (b)
the three-month delinquency percentage calculated on the related distribution
date is greater than 5.00%; or (c) the cumulative net loss percentage on the
related determination date exceeds the loss trigger percentage set forth below:
<TABLE>
<CAPTION>
LOSS TRIGGER
COLLECTION PERIOD PERCENTAGE
----------------- ------------
<S> <C>
1(st) through, and including, the 11(th) collection
period: 1.00%
12(th) through, and including, the 17(th)collection
period: 1.25%
18(th) through, and including, the 23(rd)collection
period: 1.50%
24(th) collection period ongoing: 2.00%
</TABLE>
Notwithstanding the foregoing: (i) the spread event referred to in clause
(b) above may be cured on any distribution date if the three-month delinquency
percentage for the preceding two collection periods is less than or equal to 5%
for each of such periods and (ii) the spread event referenced in clause (c) may
be cured if the cumulative net loss percentage is less than the associated loss
trigger percentage for that period. The three-month delinquency percentage means
with respect to any distribution date commencing with the third distribution
date, the percentage equivalent of a fraction, (a) the numerator of which is the
sum of the monthly delinquency percentages for such distribution date and the
two immediately preceding distribution dates, and (b) the denominator of which
is three. The monthly delinquency percentage means with respect to any
distribution date, the percentage equivalent of a fraction, (a) the numerator of
which is the aggregate contract principal balance of all contracts which are
more than 90 days delinquent as of the last day of the immediately preceding
collection period, and (b) the denominator of which is the pool balance as of
the last day of the immediately preceding collection period. The cumulative net
loss percentage means with respect to any distribution date, the percentage
equivalent of a fraction, (a) the numerator of which is the cumulative net
losses of all contracts as of the last day of the immediately preceding
collection period, and (b) the denominator of which is the original pool
balance.
Amounts in the spread fund will be invested in investments deemed to be
eligible investments for funds held in the collection account. See "--Collection
Account and Collection Period". Earnings on the eligible investments will be
treated as amounts available for distribution to the noteholders and the holder
of the certificates.
We will allocate amounts withdrawn from the spread fund as described in
"--Allocations". If on any payment date, there are excess available amounts
remaining after we pay the servicer, the indenture trustee, the owner trustee
and the noteholders and increase the reserve fund balance to the Required
Reserve Amount as described in "--Allocations" and no spread event exists, we
will distribute such excess as provided under "--Allocations". Upon any such
distributions, you will have no further rights in, or claims to, such amounts.
COLLECTION ACCOUNT AND COLLECTION PERIOD
The servicer, for your benefit, shall cause to be established an account
referred to as the "collection account" maintained in the name of the indenture
trustee, with an office or branch of a depository institution or trust company,
which may be the indenture trustee, organized under any state laws or laws of
the United States of America and located in the state designated by the
servicer. This account will be a non-interest bearing segregated corporate trust
account bearing a designation clearly indicating that the funds deposited in the
account are held in trust for the benefit of the noteholders.
52
<PAGE> 58
At all times such depository institution or trust company shall have the
following characteristics and the amounts in the collection account will be
invested in the following eligible investments:
ELIGIBLE DEPOSITORY INSTITUTION OR TRUST COMPANY
- - the corporate trust department of the indenture trustee or
- - a depository institution organized under any state laws or the laws of the
United States of America or the District of Columbia or any domestic branch of
a foreign bank,
(1) (A) which has either
(i) a long-term unsecured debt rating acceptable to the rating agencies
rating the notes or
(ii) a short-term unsecured debt rating or certificate of deposit rating
acceptable to the rating agencies,
(B) the parent corporation of which has either
(i) a long-term unsecured debt rating acceptable to the rating agencies
rating the notes or
(ii) a short-term unsecured debt rating or certificate of deposit rating
acceptable to the rating agencies or
(C) is otherwise acceptable to the rating agencies rating the notes and
(2) whose deposits are insured by the Federal Deposit Insurance Corporation
and which have a rating acceptable to the rating agencies.
ELIGIBLE INVESTMENTS
- - obligations fully guaranteed by the United States of America;
- - demand deposits, time deposits or certificates of deposit of depository
institutions or trust companies having commercial paper and short-term
unsecured debt obligations, other than such obligation whose rating is based
on the credit of another person, with the highest rating from each rating
agency rating the notes;
- - commercial paper or other short-term obligations having the highest rating
from each rating agency rating the notes at the time the trust purchased it;
- - demand deposits, time deposits and certificates of deposit which are fully
insured by the FDIC and which have a rating acceptable to the rating agencies;
- - notes or bankers' acceptance issued by any depository institution or trust
company having commercial paper and short-term unsecured debt obligations,
other than such obligation whose rating is based on the credit of another
person, with the highest rating from each rating agency rating the notes;
- - money market funds which have the highest rating from, or have otherwise been
approved in writing by, each rating agency rating the notes;
- - time deposits with an entity, the commercial paper of which has the highest
rating from the rating agency rating the notes;
- - eligible repurchase agreements which have a rating acceptable to the rating
agencies; and
- - any other investments approved in writing by the rating agencies.
Funds in the collection account may be invested in debt obligations of ORIX
Credit Alliance, Inc. or its affiliates so long as the obligations qualify as
the above described eligible investments.
Any earnings, net of losses and investment expenses, on funds in the
collection account will be held in that account and be treated as amounts
available for distribution to you. The servicer will have the revocable power to
instruct the indenture trustee to make withdrawals and payments from the
collection account for the purpose of carrying out its duties under the transfer
and servicing agreement.
If any institution at which any of the collection account, reserve fund or
spread fund is established ceases to be an eligible institution as described
above, the servicer shall, within ten business days after receiving notice of
that fact, establish a replacement account at another institution meeting the
above eligibility requirements.
Each collection period begins on the first day of a calendar month and ends
on and includes the last day of the calendar month.
53
<PAGE> 59
EVENTS OF DEFAULT
Allocations of amounts of payments to you will be made as described above
under " -- Allocations; Prior to an Event of Default" unless and until an event
of default has occurred, in which case allocations of amounts will be made as
described above under " -- Allocations; Following an Event of Default".
An "event of default" refers to any of the following events:
- failure to pay the full amount of accrued interest on any note on a
payment date;
- failure to pay the then outstanding principal amount of any note, if any,
on its related maturity date of the note;
- (1) failure on the part of the originator to make any payment or deposit
required under the transfer and servicing agreement within three business
days after the date the payment or deposit is required to be made, or
(2) failure on the part of the originator, the trust depositor, the trust,
the indenture trustee or the owner trustee to observe or perform any other
covenants or agreements in the transfer and servicing agreement or the
indenture, which failure has a material adverse effect on the noteholders
and which continues unremedied for a period of 60 days after written
notice; provided, there is no 60-day cure period if the originator does
not accept reassignment of ineligible contracts as required by the
transfer and servicing agreement, and further provided that only a
five-day cure period shall apply in the case of a failure by the
originator or the owner trustee to comply with their respective covenants
not to grant a security interest in or otherwise intentionally create a
lien on the contracts;
- any representation or warranty made by the originator, the trust
depositor, the indenture trustee or the owner trustee in the transfer and
servicing agreement or any information required to be given by the
originator or the trust depositor to the indenture trustee to identify
the contracts was incorrect in any material respect when made and
continues to be incorrect in any material respect for a period of 60 days
after written notice and as a result of which the noteholders' interests
are materially and adversely affected; provided, however, that an event
of default shall not be deemed to occur under the transfer and servicing
agreement if the originator has repurchased the related contracts through
the trust depositor during such period under the terms of the transfer
and servicing agreement;
- the occurrence of any of the following events with respect to the trust
depositor or the trust:
(1) a court files a decree or order for relief against the party in an
involuntary case under the Bankruptcy Code of the United States or
any other liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar debt or relief laws affecting the rights of
creditors; provided that, in the case of any such proceeding
instituted against any of these parties, either such proceedings
shall remain undismissed or unstayed for a period of 60 days, or any
actions sought in such proceeding (including an order for relief
against, or the appointment of a receiver, trustee, custodian or
other similar official for, such party or any substantial part of
such party's property) shall occur,
(2) the party commences a voluntary case under any insolvency law,
(3) the party consents to a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official taking possession of any
substantial part of its property,
(4) the party makes a general assignment for the benefit of creditors, or
(5) the party fails to pay its debts as those debts become due;
- the occurrence of any of the above events (1 through 5) with respect to
the originator or the servicer; and
54
<PAGE> 60
- the trust becomes an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In the case of any event described above, an event of default with respect
to the notes will be deemed to have occurred; provided the event of default
(unless it occurs under any of the five bankruptcy or insolvency events with
respect to the trust depositor or the trust described above) may be waived if
the Required Holders provide written notice to the indenture trustee, the trust
depositor and the servicer of the waiver. In the event the servicer or a
responsible officer of the owner trustee or of the indenture trustee has actual
knowledge of an event of default, it will be required to notify, among others,
the trust depositor, the originator, the servicer and the owner trustee.
"Required Holders" means:
(1) prior to the payment in full of the Class A-1 Notes, Class A-2
Notes, Class A-3 Notes and Class A-4 Notes outstanding, holders of Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes,
respectively, evidencing more than 66 2/3% of the aggregate of principal
amount of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class
A-4 Notes voting as a single class, and
(2) from and after the payment in full of the Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes and Class A-4 Notes outstanding, holders of
Class B Notes evidencing more than 66 2/3% of the aggregate principal
amount of the Class B Notes outstanding, and
(3) from and after the payment in full of the Class B Notes
outstanding, holders of Class C Notes evidencing more than 66 2/3% of the
aggregate principal amount of the Class C Notes outstanding.
If events relating to the bankruptcy or insolvency of the trust depositor
occur on the day of such event, the trust depositor will promptly give notice to
the indenture trustee of the event, and the indenture trustee will give notice
thereof promptly to the holders of the notes and, upon being notified in writing
by the Required Holders, promptly act to sell, dispose of or otherwise liquidate
the contracts in a commercially reasonable manner and on commercially reasonable
terms. The proceeds from any transfer, disposition or liquidation of contracts
will be deposited in the collection account and allocated as described in the
transfer and servicing agreement and in " -- Allocations". If the proceeds of
any collections on contracts in the collection account allocated to noteholders
of any class is not sufficient to pay the principal amount of the notes of the
class in full, those noteholders will incur a loss.
REMEDIES AFTER EVENTS OF DEFAULT
If an event of default relating to bankruptcy or insolvency of the Trust
Depositor or the Trust as described under the heading "Events of Default" has
occurred, then the unpaid principal of the notes, together with interest accrued
but unpaid and all other amounts due to you under the indenture, shall
immediately become due and payable.
If an event of default other than the event of default relating to
bankruptcy or insolvency as described under the heading "Events of Default"
occurs, the Required Holders may waive the event of default by sending a written
notice of the waiver to the indenture trustee, the servicer and the trust
depositor. If the Required Holders do not waive the event of default then the
unpaid principal of the notes, together with interest accrued but unpaid and all
other amounts due to you under the indenture, shall immediately and without
further act become due and payable.
THE INDENTURE TRUSTEE
The indenture trustee with respect to the notes is Harris Trust and Savings
Bank. ORIX Credit Alliance, Inc. and its affiliates may from time to time enter
into banking and trustee relationships with the indenture trustee and its
affiliates. ORIX Credit Alliance, Inc. and its affiliates may hold notes in
their own names; however, any notes so held shall not be entitled to participate
in any decisions made or instructions given to the indenture trustee by the
noteholders as a group.
55
<PAGE> 61
The indenture trustee's responsibilities will be ministerial in nature,
consisting principally of:
- the distribution of monies as required by the indenture or the transfer
and servicing agreement;
- the authentication and registration of transfer of notes under the
indenture; and
- the delivery of information received from the trust depositor.
For purposes of meeting the legal requirements of any jurisdictions in
which any part of the trust's assets may at the time be located, the indenture
trustee will have the power to appoint a co-trustee or separate trustee of all
or any part of the trust's assets. To the extent permitted by law, all rights,
powers, duties and obligations conferred or imposed upon the indenture trustee
will be conferred or imposed upon and exercised or performed by the indenture
trustee and the separate trustee or co-trustee jointly. In any jurisdiction in
which the indenture trustee will be incompetent or unqualified to perform as
required by the indenture, all rights, powers, duties and obligations conferred
or imposed upon the indenture trustee will be conferred or imposed upon such
separate trustee or co-trustee who shall exercise and perform such rights,
powers, duties and obligations solely at the direction of the indenture trustee.
The indenture trustee may resign at any time, in which event a successor
indenture trustee which meets the requirements of Section 310(a) of the Trust
Indenture Act of 1939, as amended, will be appointed by the trust. The trust may
also remove the indenture trustee if the indenture trustee ceases to be eligible
to continue as the trustee under the indenture. In such circumstances, a
successor indenture trustee which meets the requirements of Section 310(a) of
the Trust Indenture Act will be appointed by the trust. Any resignation or
removal of the indenture trustee and appointment of a successor indenture
trustee does not become effective until acceptance of the appointment by the
successor indenture trustee.
GOVERNING LAW
The indenture will be governed by the laws of the State of New York.
AMENDMENTS
The owner trustee, the trust depositor, and the indenture trustee, without
the written consent of the Required Holders represented thereby, may execute an
amendment of or a supplement to the indenture to, among other things, cure any
ambiguity, to correct or supplement any provision in the indenture which may be
inconsistent with any other provision in the indenture or to make any other
provisions with respect to matters or questions arising under the indenture;
provided that such action shall not adversely affect the interests of the
holders of the notes in any material respect as evidenced by an opinion of
counsel. Additionally, the indenture trustee, with the written consent of the
Required Holders represented thereby, may consent to or execute an amendment of
or supplement to, or waiver or consent under, the indenture. But, in each case
the consent of each noteholder is required to:
(1) reduce the amount or extend the time of payment of any amount
owing or payable under any note,
(2) increase or reduce the interest payable on any note,
(3) alter or modify the provisions of the transfer and servicing
agreement with respect to the order of priorities in which collections on
the contracts shall be paid to noteholders or with respect to the amount or
timing of payments on the notes,
(4) reduce, modify or amend any indemnities in favor of any noteholder
or in favor of or to be paid by the trust depositor, or alter the
definition of "Indemnitees" to exclude any noteholder, except as consented
to by each person adversely affected by the change,
(5) make any interest or principal payable in a currency other than
U.S. dollars,
(6) permit the creation of any lien on the contracts senior to or on a
parity with the lien of the indenture or permit the termination or
derogation of the lien of the indenture,
56
<PAGE> 62
(7) modify, amend or supplement the provisions of the transfer and
servicing agreement relating to amendments, waivers and supplements to the
indenture, the transfer and servicing agreement or any other document, or
(8) modify the percentage of noteholders required to make any
modification of the indenture or to direct the indenture trustee to sell or
liquidate the contracts.
However, only the consent of the affected holder shall be required for any
decrease in an amount of or the rate of interest payable on the note or any
extension for the time of payment of any amount payable under the note.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The servicer's compensation with respect to its servicing activities and
reimbursement for its expenses will be a servicing fee calculated monthly in
conjunction with the collection periods for the notes. The servicer's monthly
fee will be an amount equal to the product of
(1) one-twelfth,
(2) 1.00% and
(3) the Pool Balance as of the beginning of the related collection
period.
The servicer's fee (which prior to an event of default includes the
indenture trustee's fee, expenses and indemnity payments, if any) will be funded
from payments due under the contracts and amounts received upon the prepayment
or purchase of contracts or liquidation of the contracts and disposition of the
related equipment upon defaults thereunder. See "--Amounts Available for
Payments on the Notes". The servicer's monthly fee will be paid on the 15th day
of each calendar month from the collection account or, if such day is not a
business day, the next business day. See " -- Allocations" above.
The servicer will pay from its servicing compensation some of the expenses
incurred in connection with servicing the contracts including, without
limitation:
- expenses related to the enforcement of the contracts except that if a
defaulted obligor under a contract is required to pay the costs of
enforcement and the servicer recovers excess funds sufficient, after
payment of all principal and finance charges due with respect to such
contract, to pay any of such costs, servicer will be reimbursed for such
costs out of such excess;
- payment, prior to an event of default, of the fees, expenses (including
legal fees and expenses) and disbursements of the indenture trustee and
the owner trustee and independent accountants; and
- any fees which are not expressly stated in the transfer and servicing
agreement to be payable by the trust or the trust depositor.
However, the servicer will not pay federal, state, local and foreign
income, franchise or other taxes based on income, if any, or any interest or
penalties on such income, imposed upon the trust.
In the event that ORIX Credit Alliance, Inc. is acting as servicer and
fails to pay the fees, expenses (including legal fees and expenses) and
disbursements of the indenture trustee and the owner trustee, the indenture
trustee and the owner trustee will be entitled to receive the portion of the
servicer's monthly servicing fee that is equal to those unpaid amounts.
In the event prior to an event of default a successor servicer shall be
appointed or the indenture trustee shall serve as successor servicer, an
additional amount will be payable to the indenture trustee to the extent
necessary to cover additional costs and expenses related to the transition to
the successor servicer, provided that the cumulative aggregate amount of such
payments shall not exceed $100,000. After an event of default, such amount will
be included with other payments due the indenture trustee and all such payments
will be subject to an overall limitation of $100,000 until the notes are paid in
full.
57
<PAGE> 63
OPTIONAL REDEMPTION
If the aggregate principal balance of the contracts is less than 15% of the
initial aggregate principal balance of the contracts as of February 1, 2000, the
trust depositor will have the option to use the trust to purchase without
penalty all, but not less than all, of the remaining outstanding notes and
certificate. The trust depositor will exercise this option only on a payment
date for the notes and upon payment of the full redemption price to the
indenture trustee. The redemption price will be equal to the sum of the
outstanding principal amount of the notes and certificate, together with accrued
interest through the date of redemption. Following any redemption, you will have
no further rights with respect to the trust's assets.
MANDATORY REDEMPTION
If on any payment date, the aggregate amounts on deposit in the collection
account, the reserve fund and the spread fund are greater than or equal to the
sum of (i) the entire outstanding note principal balance, (ii) the interest
accrued thereon, (iii) any accrued and unpaid servicing fee (including therein
amounts owed to the indenture trustee) and (iv) unreimbursed servicer advances,
the amounts on deposit in the reserve fund and the spread fund will be deposited
in the collection account and used to redeem the notes in full. The redemption
price will be equal to the unpaid principal amount of the notes plus accrued and
unpaid interest through the date of redemption.
REPORTS
No later than the third business day prior to each payment date, the
servicer will forward to the indenture trustee, the owner trustee, each rating
agency rating the notes and First Union Securities, Inc. a monthly report
prepared by the servicer setting forth information with respect to the trust and
the notes and certificate, including:
(1) the aggregate principal balance of the contracts
(A) as of the end of the related collection period and
(B) as of the end of the second collection period preceding such
interest and principal payment date;
(2) the Class A Principal Payment Amount, Class B Principal Payment
Amount, Class C Principal Payment Amount and Additional Principal including
the calculations utilized in the determination of those principal payment
amounts;
(3) the aggregate principal balance of contracts held by the trust
which were 31, 61 and 91 days or more delinquent as of the end of such
collection period;
(4) the aggregate principal balance of contracts that became defaulted
contracts during such collection period and cumulatively for each preceding
collection period;
(5) the monthly servicing fee for the related collection period;
(6) the amounts available for distribution to the holders of the notes
with respect to the related collection period, including the calculation of
those amounts;
(7) the total amount distributed on the notes;
(8) the amount allocable to principal on each class of the notes;
(9) the amount allocable to interest on each class of the notes;
(10) any servicer advances;
(11) the balances in the reserve fund and the spread fund; and
(12) the three-month delinquency percentage and the cumulative net
loss percentage.
58
<PAGE> 64
On each payment date, the indenture trustee (or an agent on its behalf),
will forward or make available to each noteholder of record a copy of the
monthly report.
The servicer will forward to the indenture trustee, the owner trustee, each
rating agency rating the notes and First Union Securities, Inc. (a) within 120
days after each calendar quarter, commencing with the quarter ending March 31,
2000, the unaudited quarterly financial statement of the servicer and (b) within
120 days after each fiscal year of the servicer, commencing with the fiscal year
ending March 31, 2000, the audited annual financial statement of the servicer,
together with the related report of the independent accountants to the servicer.
On the payment date following the receipt of each such financial statements and
report, the indenture trustee will forward to each noteholder of record a copy
of such financial statements and report.
On or before February 28 of each calendar year, commencing February 28,
2001, the indenture trustee will furnish or cause to be furnished to each person
who at any time during the preceding calendar year was a noteholder of record, a
statement provided by the servicer containing the information required to be
provided by an issuer of indebtedness under the Internal Revenue Code of 1986,
as amended for such preceding calendar year or the applicable portion of the
year during which you were a noteholder, together with such other customary
information as is necessary to enable you to prepare your tax returns. See
"Material Federal Income Tax Considerations".
As long as the notes remain in book-entry form, periodic reports,
containing information concerning the trust, the contracts, the notes and the
certificate, will be prepared by the servicer and sent on behalf of the trust to
Cede & Co., as nominee of DTC, and the Euroclear System or Clearstream
Luxembourg as registered holders of the notes. These reports will be made
available by DTC, Euroclear or Clearstream Luxembourg and its participants to
holders of interests in the notes as required by the rules, regulations and
procedures creating and affecting DTC, Euroclear and Clearstream Luxembourg,
respectively. See "-- Book -- Entry Registration" and "-- Reports". These
reports will not constitute financial statements prepared in accordance with
generally accepted accounting principles or that have been examined and reported
upon by, with an opinion expressed by, an independent or certified public
accountant. Upon the issuance of fully registered, certificated notes, these
reports will be sent to each registered noteholder.
LIST OF NOTEHOLDERS
If the notes are subsequently issued in fully registered, certificated
form, the indenture trustee will afford you access during normal business hours
and upon prior written notice to the current list of noteholders for purpose of
communicating with other noteholders with respect to their rights under the
indenture, the transfer and servicing agreement or the notes. The indenture
trustee will provide this list upon written request of any noteholder or group
of noteholders of record holding notes evidencing not less than 10% of the
aggregate unpaid principal amount of the notes. While the notes are held in
book-entry form, holders of beneficial interests in the notes will not have
access to a list of other holders of beneficial interests in the notes, which
may impede the ability of such holders of beneficial interests to communicate
with each other. See "-- Book-Entry Registration" below.
ADMINISTRATION AGREEMENT
ORIX Credit Alliance, Inc., in its capacity as administrator, will enter
into an administration agreement. ORIX Credit Alliance, Inc. will agree, to the
extent provided in the administration agreement, to provide the notices and to
perform other administrative obligations required to be provided or performed by
the trust or the owner trustee under the indenture.
ORIX Credit Alliance, Inc., as the administrator agrees to perform the
accounting functions of the trust which the owner trustee is required to perform
under the trust agreement, including but not limited to:
- maintaining the books of the trust;
- filing tax returns for the trust; and
59
<PAGE> 65
- delivering tax related reports to you, except for Form 1099s.
However, the indenture trustee shall retain responsibility for distributing to
you Form 1099s and the owner trustee shall retain responsibility for
distributing the Schedule K-1s. As compensation for the performance of the
administrator's obligations under the administration agreement and as
reimbursement for its expenses, ORIX Credit Alliance, Inc., as the administrator
will be entitled to a monthly administration fee, which fee will be paid by the
servicer.
BOOK-ENTRY REGISTRATION
You may hold your notes through DTC in the United States or Clearstream
Banking, society anonyme ("Clearstream Luxembourg") (formerly Cedelbank) or
Euroclear System in Europe if you are a participant of those systems, or
indirectly through organizations that are participants in those systems.
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 New York Uniform Commercial Code and a
"clearing agency" registered under Section 17A of the Exchange Act. DTC was
created to hold securities for its direct participants and to facilitate the
clearance and settlement of securities transactions between its direct
participants through electronic book-entries, thereby eliminating the need for
physical movement of certificates. DTC's direct participants include the
underwriters offering the notes to you, securities brokers and dealers, banks,
trust companies and clearing corporations, and may include other organizations.
Indirect access to the DTC system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a direct participant, either directly or indirectly.
To facilitate subsequent transfers, all notes deposited with DTC will be
registered in the name of DTC's nominee, Cede & Co. You will maintain beneficial
ownership of the notes despite the deposit of notes with DTC and their
registration in the name of Cede. DTC has no knowledge of the actual
noteholders; DTC's records reflect only the identity of its direct participants
to whose accounts such notes are credited, which may or may not be the
noteholders. DTC's direct and indirect participants will remain responsible for
keeping account of their holdings on behalf of their customers.
You will not be entitled to receive a physical note representing such
person's interest in a class of notes. As long as the notes are registered in
the name of Cede & Co., any action to be taken by you or any other noteholders
will be taken by DTC upon instructions from DTC's participants, and all
distributions, notices, reports and statements to noteholders will be delivered
to Cede, as the registered holder of the notes, for distribution to noteholders
in compliance with DTC procedures.
You will receive all payments of principal and interest on the notes
through direct participants or indirect participants. DTC will forward such
payments to its direct participants which will forward them to indirect
participants or noteholders. Under a book-entry format, you may experience some
delay in their receipt of payments, since such payments will be forwarded to
Cede as nominee of DTC. You will not be recognized by the indenture trustee as a
noteholder, as such term is used in the indenture. You will be permitted to
exercise the rights of noteholders only indirectly through DTC and its direct
participants and indirect participants. Because DTC can act only on behalf of
direct participants, who in turn act on behalf of indirect participants, and on
behalf of banks, trust companies and other persons approved by it, your ability
to pledge the notes to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to such notes, may be limited due to
the absence of physical notes for such notes.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and by direct
participants and indirect participants to noteholders will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payments by DTC participants to noteholders
will be governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the responsibility of such DTC
participant and not of DTC, the indenture trustee, the owner trustee, the
originator, subject to any statutory or regulatory requirements as
60
<PAGE> 66
may be in effect from time to time. Payment of principal and interest to DTC is
the responsibility of the indenture trustee, disbursement of such payments to
direct participants shall be the responsibility of DTC and disbursement of such
payments to noteholders shall be the responsibility of direct participants and
indirect participants.
Purchases of notes under the DTC system must be made by or through direct
participants, which will receive a credit for the notes on DTC's records. The
ownership interest of each actual noteholder is in turn to be recorded on the
direct participants' and indirect participants' records. Noteholders will not
receive written confirmation from DTC of their purchase, but noteholders are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the direct participant or
indirect participant through which the noteholder entered into the transaction.
Transfers of ownership interests in the notes are to be accomplished by entries
made on the books of DTC's participants acting on behalf of noteholders.
Noteholders will not receive physical notes representing their ownership
interest in notes, except in the event that use of the book-entry system for the
notes is discontinued.
DTC will not comment or vote with respect to the notes. DTC has advised us
that it will take any action permitted to be taken by a noteholder under the
indenture only at the direction of one or more direct participants to whose
accounts with DTC the notes are credited. Additionally, DTC has advised us that
to the extent that the indenture requires that any action may be taken only by
noteholders representing a specified percentage of the aggregate outstanding
principal amount of the notes, DTC will take such action only at the direction
of and on behalf of direct participants whose holdings include undivided
interests that satisfy such specified percentage.
DTC may discontinue providing its services as securities depositary with
respect to the notes at any time by giving reasonable notice to the indenture
trustee. Under such circumstances, in the event that a successor securities
depositary is not obtained, fully registered, certificated notes are required to
be printed and delivered. The originator may decide to discontinue use of the
system of book-entry transfers through DTC or a successor securities depositary.
In that event, fully registered, certificated notes will be delivered to
noteholders. See "-- Issuance of Certificated Notes at a Later Date".
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable, but neither we
nor the trust depositor take any responsibility for the accuracy of this
information.
Clearstream Luxembourg and Euroclear will hold omnibus positions on behalf
of the participants in the Clearstream Luxembourg and Euroclear systems,
respectively, through customers' securities accounts in Clearstream Luxembourg's
and Euroclear's names on the books of their respective depositaries which in
turn will hold such positions in customers' securities accounts in the
depositaries' names on the books of DTC.
Clearstream Luxembourg advises it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream Luxembourg holds securities
for its participating organizations ("Clearstream Participants") and facilitates
the clearance and settlement of securities transactions between Clearstream
Participants through electronic book-entry changes in accounts of Clearstream
Participants, thereby eliminating the need for physical movement of
certificates. Clearstream Luxembourg provides to Clearstream Participants, among
other things, services for safekeeping, administration, clearance and settlement
of internationally traded securities and securities lending and borrowing.
Clearstream Luxembourg interfaces with domestic markets in several countries. As
a professional depositary, Clearstream Luxembourg is subject to regulation by
the Luxembourg Monetary Institute. Clearstream Participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and other
organizations and may include the underwriter. Indirect access to Clearstream
Luxembourg is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Clearstream Participant, either directly or indirectly.
61
<PAGE> 67
Euroclear was created in 1968 to hold securities for participants of
Euroclear ("Euroclear Participants") and to clear and settle transactions
between Euroclear's Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Euroclear includes various other services, including securities lending
and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York, under contract with Euroclear Clearance
Systems S.C., a Belgian cooperative corporation. All operations are conducted by
Euroclear's operator and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with Euroclear's operator. Euroclear
Clearance Systems S.C. establishes policy for Euroclear on behalf of Euroclear
Participants. Euroclear Participants include banks, securities brokers and
dealers and other professional financial intermediaries and may include the
underwriter. Indirect access to Euroclear is also available to other firms that
clear through or maintain a custodial relationship with a Euroclear Participant,
either directly or indirectly.
Morgan Guaranty Trust Company of New York is the Belgian branch of a New
York banking corporation which is a member bank of the Federal Reserve System.
As such, it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with Euroclear operator are
governed by the Terms and Conditions Governing Use of Euroclear and the related
Operating Procedures of the Euroclear System and applicable Belgian law. Those
Euroclear Terms and Conditions govern transfers of securities and cash within
Euroclear, withdrawals of securities and cash from Euroclear, and receipts of
payments with respect to securities in Euroclear. All securities in Euroclear
are held on a fungible basis without attribution of specific certificates to
specific securities clearance accounts. The Euroclear operator acts under the
Euroclear Terms and Conditions only on behalf of Euroclear Participants, and has
no record of or relationship with persons holding through Euroclear
Participants.
Transfers between direct participants will comply with DTC rules. Transfers
between Clearstream Participants and Euroclear Participants will comply with
their rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC in the United States, on the one hand, and directly or indirectly
through Clearstream Luxembourg or Euroclear, on the other, will be effected in
DTC under DTC rules through the relevant European international clearing system
through its Depositary; however, such cross-market transactions will require
delivery of instructions to the relevant European international clearing system
by the counterparty in such system as required by its rules and procedures and
within its established deadlines (European time). The relevant European
international clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its depositary to take action to effect
final settlement on its behalf by delivering or receiving securities in DTC, and
making or receiving payment using its normal procedures for same-day funds
settlement applicable to DTC. Clearstream Participants and Euroclear
Participants may not deliver instructions directly to the depositaries.
Because of time-zone differences, credits of securities in Clearstream
Luxembourg or Euroclear as a result of a transaction with a DTC participant will
be made during the subsequent securities settlement processing day, dated the
business day following the DTC settlement date, and such credits or any
transactions in such securities settled during such processing day will be
reported to the relevant Clearstream Participant or Euroclear Participant on
such business day. Cash received in Clearstream Luxembourg or Euroclear as a
result of transfers of securities by or through a Clearstream Participant or a
Euroclear Participant to a DTC participant will be received with value on the
DTC settlement date but will be available in the relevant Clearstream Luxembourg
or Euroclear cash account only as of the business day following settlement in
DTC.
Although DTC, Clearstream Luxembourg and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of notes among
participants of DTC, Clearstream Luxembourg and Euroclear,
62
<PAGE> 68
they are under no obligation to perform or continue to perform such procedures
and such procedures may be discontinued at any time.
Except as required by law, none of the originator, the owner trustee, the
Trust Depositor or the indenture trustee will have any liability for any aspect
of the records relating to, actions taken or implemented by, or payments made on
account of, beneficial ownership interests in the notes held through DTC, or for
maintaining, supervising or reviewing any records or actions relating to such
beneficial ownership interests.
ISSUANCE OF CERTIFICATED NOTES AT A LATER DATE
The notes will be issued in fully registered, certificated form to
beneficial owners or their nominees rather than to DTC or its nominee, only if:
(1) we advise the indenture trustee in writing that DTC is no longer
willing or able to discharge properly its responsibilities as depository
with respect to such notes, and we or the indenture trustee are unable to
locate a qualified successor or
(2) we elect to terminate the book-entry system.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the indenture trustee is required to notify all beneficial
owners for each class of notes held through DTC of the availability of notes in
fully registered, certificated form. Upon surrender by DTC of the global note
representing the notes and instructions for reregistration, the trust will issue
such fully registered, certificated notes, and the indenture trustee will
recognize the holders of such fully registered, certificated notes as
noteholders under the indenture.
Additionally, upon the occurrence of any such event described above,
distribution of principal of and interest on the notes will be made by the
indenture trustee directly to you as required by the indenture. Distributions
will be made by wire transfer or check, mailed to your address as it appears on
the note register. Upon at least 10 days' notice to noteholders for such class,
however, the final payment on any note will be made only upon presentation and
surrender of such Note at the office or agency specified in the notice of final
distribution to noteholders. The final payment will be made in this manner
whether the notes are fully registered, certificated notes or the note for such
class registered in the name of Cede & Co. representing the notes of such class.
Fully registered, certificated notes of each class will be transferable and
exchangeable at the offices of the indenture trustee, which the indenture
trustee shall designate on or prior to the issuance of any fully registered,
certificated notes with respect to such class. No service charge will be imposed
for any registration of 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 with the transfer or exchange.
THE CERTIFICATES
On the closing date for the sale of the notes, we will also issue the
certificates with an initial certificate balance of $1,442,621. The certificates
will not bear interest and shall have the right to monies in the reserve fund
and to funds remaining after the payment of all principal and interest on the
notes. The certificates will represent a fractional undivided beneficial equity
interest in the trust and will be issued under the trust agreement.
The certificates are not being offered and sold by this prospectus. The
trust depositor is expected initially to retain the certificates, although it
may transfer the certificates at some later date in a transaction separate from
this offering provided the owner trustee and indenture trustee receive an
opinion of independent counsel that such transfer will not cause the trust to
become a taxable entity or otherwise adversely affect the noteholders.
Distributions with respect to the certificates will be subordinated to the
rights of the noteholders to the extent described in "Description of the Notes
and Indenture -- Allocations".
63
<PAGE> 69
THE TRANSFER AND SERVICING AGREEMENT
The following is a summary of all of the material terms of the transfer and
servicing agreement to be dated as of the closing date among the trust
depositor, the originator, the trust and the indenture trustee. You should read
the transfer and servicing agreement, the form of which was filed as an exhibit
to the registration statement of which this prospectus is a part.
CONVEYANCE OF THE CONTRACTS
The contracts and security interests in the equipment will be transferred
to the trust by the trust depositor as required by the transfer and servicing
agreement. The originator has sold, transferred, assigned, set over and
otherwise conveyed to the trust depositor, without recourse all of the
originator's right, title and interest in and to:
- the contracts, including any substitute contracts, and all monies due or
to become due in payment of the contracts on or after the related cutoff
date, including all scheduled payments thereunder due on or after the
cutoff date;
- any prepayment amounts, any payments in respect of a casualty or early
termination, and any recoveries on the contracts but excluding any
scheduled payments due prior to the related cutoff date, any scheduled
payments due after the cutoff date but received on or prior to the cutoff
date and any Excluded Amounts;
- the equipment and the security interest in the related equipment,
including all proceeds from any sale or other disposition of the
equipment;
- any documents delivered to the trust depositor or held by the servicer on
its behalf with respect to each contract;
- all payments made or to be made in the future with respect to each
contract and the obligor thereunder and under any other guarantee or
similar credit enhancement with respect to the contracts;
- all payments made with respect to each contract under any insurance
policy covering physical damage to the related equipment; and
- all income and proceeds of the foregoing.
As of the initial cutoff date or any subsequent cutoff date for substitute
contracts, the trust depositor will transfer and assign the assets described in
the previous seven bullet points to the trust for the benefit of the noteholders
and the trust will grant a lien on the same in favor of the indenture trustee.
Prior to the conveyance of any contracts to the trust depositor, the
originator indicated in its books and records, including the computer files
relating to the contracts, that the contracts have been transferred to the trust
depositor. Prior to each transfer of any assets to the trust, the trust
depositor will file UCC financing statements reflecting the conveyance of the
assets described in the previous seven bullet points to the trust and the grant
of a lien on those assets to the indenture trustee. The trust depositor will
mark its books and records, including the appropriate computer files relating to
the contracts, to indicate that the contracts have been conveyed to the trust.
The trust will give the indenture trustee a list of the contracts transferred to
the trust, identified by account number and by the contract outstanding
principal balance as of the related cutoff date.
REPRESENTATIONS AND WARRANTIES; DEFINITION OF ELIGIBLE CONTRACTS
The originator will make the following representations and warranties in
the transfer and servicing agreement with respect to each contract as of the
closing date. Similarly, the originator will make or be
64
<PAGE> 70
deemed to have made those representations and warranties with respect to each
substitute contract which may be transferred as of its related cutoff date,
including that:
(1) the contract is valid and enforceable, except the enforcement may be
limited by insolvency, bankruptcy, moratorium, reorganization, or other similar
laws affecting enforceability of creditors' rights and the availability of
equitable remedies, and the contract contains a clause that has the effect of
unconditionally obligating the obligor to make periodic contract payments
(including taxes, if any) to the assignee of the contract, notwithstanding any
rights the obligor may have against the assignor;
(2) the contract is noncancellable by the obligor;
(3) all payments payable under the contract are absolute, unconditional
obligations of the obligor and the contract does not provide for offset for any
reason;
(4) the contract requires the obligor to maintain the equipment in good
working order, to bear all the costs of operating the equipment, including
taxes, if any, and insurance relating thereto;
(5) the contract, at the time it was made, did not violate the laws of the
United States or any state, except for any violations which do not materially
and adversely affect the collectibility of the contracts taken as a whole;
(6) the contract requires that (a) the obligor will obtain insurance and
list ORIX Credit Alliance, Inc. as the loss payee in an amount not less than the
outstanding principal balance of the contract; or (b) in the event of a casualty
loss, the servicer may require the obligor (i) to pay at a minimum the
outstanding principal balance of the contract or (ii) to replace the equipment
with like equipment in good repair, acceptable to servicer, at the obligor's
expense;
(7) the contract has been transferred to the trust depositor free and
clear of any liens (except for permitted liens) and is assignable without prior
written consent of the obligor; the originator has transferred its security
interest in the financed equipment interest to the trust depositor, free and
clear of adverse claims, except permitted liens;
(8) the contract has an original maturity of not greater than 84 months;
(9) the contract is a U.S. dollar-denominated obligation and, at
inception, the obligor and the associated equipment were located in the United
States and continue to be located in the United States;
(10) there is not more than one "secured party's original" counterpart of
the contract;
(11) the contract is not a consumer contract or a "consumer lease" as
defined in Section 2A-103(1)(e) of the UCC; and, if such contract is a lease, it
is a lease intended for security within the meaning of Section 1-201(37) of the
UCC;
(12) the contract is not subject to any guaranty by the originator, nor has
the originator established any specific credit reserve with respect to the
related obligor;
(13) the contract was either originated by, or purchased in a true sale
transaction, by the originator in the ordinary course of its business in
accordance with its customary underwriting practices and credit policies and no
adverse selection procedure was used in selecting the contract for transfer to
the trust depositor;
(14) the obligor has represented to the originator or vendor that it has
accepted the equipment where the contract relates to equipment being currently
acquired;
(15) the obligor is not, to the originator's knowledge, subject to
bankruptcy or other insolvency proceedings;
(16) the contract is not a defaulted contract;
(17) the contract is not more than 60 days past due;
(18) the information with respect to the contract and the equipment, where
the contract relates to equipment being currently acquired, is, to the best of
the originator's knowledge, true and correct in all material respects;
(19) no provision of the contract has been waived, altered or modified in
any way, except by instruments or documents contained in the files relating to
the contract;
65
<PAGE> 71
(20) all filings necessary to evidence the conveyance or transfer of the
originator's ownership interest in the contract, and the originator's
corresponding interest in the related equipment, to the trust depositor, have
been made in all appropriate jurisdictions; provided, that (i) UCC financing
statement filings with respect to equipment which name the originator as secured
party have not been amended to indicate either the trust depositor or the trust
as an assignee and (ii) filings or registrations with respect to any title
registry for any equipment which name the originator as lienholder have not been
amended to indicate either the trust depositor or the trust as an assignee;
(21) the contract does not contain any other restriction on the transfer or
assignment of the contract other than those as to which a consent or waiver of
such restriction has been obtained prior to the date on which the contract was
sold to the trust;
(22) the obligor is not the United States or any state or local government
or any agency, department, subdivision or instrumentality of any such
government;
(23) the originator has obtained a first priority perfected security
interest (subject to permitted liens) in the equipment related to the contracts;
(24) the contract, if a lease, has a purchase option amount of no greater
than $102;
(25) if the contract is a lease of equipment subject to certificate of
title statutory requirements, the title is held either in the name of the lessee
and the certificate of title indicates the originator as lienholder or in the
name of the originator as lessor;
(26) the obligor under the contract is required either to maintain casualty
insurance or to self-insure with respect to the related equipment in accordance
with the originator's customary underwriting requirements;
(27) the contract constitutes "chattel paper" as defined under the UCC; and
(28) other customary provisions for this type of transaction.
These representations and warranties will be reaffirmed by the originator
with respect to substitute contracts when it transfers a substitute contract to
the trust depositor. A contract which satisfies all of the above representations
and warranties shall be deemed an "eligible contract". In addition, the
originator will represent and warrant to the trust depositor that it has validly
sold and assigned to the trust depositor all right, title and interest of the
originator in the contracts, the proceeds of the contracts and the related
security interest in the financed equipment.
Permitted liens on the contracts consist of:
(1) liens for state, municipal and other local taxes but only if
(a) such taxes shall not at the time be due and payable or
(b) the trust depositor shall currently be contesting the validity
of those liens in good faith by appropriate proceedings;
(2) liens in favor of the trust depositor created under the transfer
and servicing agreement and transferred to the trust under the transfer and
servicing agreement;
(3) liens in favor of the trust created under the transfer and
servicing agreement; and
(4) liens in favor of the indenture trustee created under the transfer
and servicing agreement and the indenture.
Permitted liens on the equipment securing the contracts consist of:
(1) materialmen's, warehousemen's, mechanics' and other liens arising
by operation of law in the ordinary course of business for sums not due or
sums which are being contested in good faith;
66
<PAGE> 72
(2) liens for state, municipal and other local taxes if:
(A) such taxes shall not at the time be due and payable or
(B) the trust depositor shall currently be contesting the validity
of those liens in good faith by appropriate proceedings;
(3) liens in favor of the trust depositor and transferred to the trust
under the transfer and servicing agreement;
(4) liens in favor of the trust created under the transfer and
servicing agreement;
(5) liens in favor of the indenture trustee created under the transfer
and servicing agreement and the indenture;
(6) other liens which are subordinate to the prior payment of the
contracts on terms described in the transfer and servicing agreement;
(7) liens granted by the end-users or vendors which are subordinate to
the interest of the trust in the equipment; and
(8) liens on items of equipment the acquisition of which was not
specifically financed by the contract unless such equipment is specifically
identified as a financed item in the contract.
The trust depositor will represent and warrant in the transfer and
servicing agreement that:
(1) the transfer of the contracts is a valid transfer and assignment
to the trust of all right, title and interest of the trust depositor in the
contracts;
(2) all filings necessary to evidence the conveyance or transfer of
the contracts to the trust have been made in all appropriate jurisdictions;
(3) that each contract is an eligible contract; and
(4) that the security interest granted on the related contracts by the
trust to the indenture trustee is effective to create in favor of the
indenture trustee a lien on the contracts and that the lien has been duly
perfected.
None of the indenture trustee, the trust, the owner trustee or any of them
in their individual capacities, shall make or be deemed to have made any
representations or warranties, express or implied, regarding the trust's assets
or the transfers of those assets by the originator, the trust depositor or the
trust.
REMEDIES FOR BREACHES OF REPRESENTATIONS AND WARRANTIES; DEFINITION OF
INELIGIBLE CONTRACTS
Under the terms of the transfer and servicing agreement, each contract must
be an eligible contract as of its date of transfer to the trust. Unless a
substitute contract is assigned by the trust depositor to the indenture trustee,
the indenture trustee shall reassign any contract to the trust depositor, upon
the written request of the owner trustee, the trust depositor or the originator,
and the originator will be concurrently obligated to purchase from the trust
depositor, such contract transferred by the originator no later than the next
succeeding determination date after the originator becomes aware, or receives
written notice from the servicer or the trust depositor, of the breach of any
representation or warranty made by the originator in the transfer and servicing
agreement. That transfer and repurchase of the contract is required only if the
breach of the representation or warranty by the originator materially adversely
affects the interests of the trust depositor or the trust or their successors or
assigns in such contract or the documents relating to such contract, which
breach has not been cured or waived in all material respects. This purchase
obligation and the originator's right to provide a substitute contract will
constitute the only remedies against the originator and the trust depositor
available to you for a breach of a representation or warranty under the transfer
and servicing agreement made by the originator with respect to that contract.
An ineligible contract shall be reassigned to the trust depositor and the
trust depositor shall make a deposit in the collection account in immediately
available funds in an amount equal to the contract
67
<PAGE> 73
outstanding principal balance of the ineligible contract together with accrued
interest and any outstanding servicer advances on the contract. Any amount
deposited into the collection account in connection with the reassignment of an
ineligible contract shall be considered payment in full of the ineligible
contract, and that amount shall be treated as an amount available for
distribution to you. In the alternative, the trust depositor may instead obtain
a substitute contract and convey the substitute contract to the trust in
replacement for the affected ineligible contract. We will release the ineligible
contract and the trust depositor will reconvey it to the originator. See
"-- Substitute Contracts".
CONCENTRATION AMOUNTS; DEFINITION OF EXCESS CONTRACT
In addition to the representations and warranties made by the originator
and the trust depositor with respect to the contracts as described above under
"-- Representations and Warranties; Definition of Eligible Contracts", the trust
depositor will represent and warrant as of the closing date as follows:
(1) the aggregate principal balance of all end-user contracts which
finance, lease or are related to trucking industry will not exceed 50% of
the aggregate principal balance of the contracts;
(2) the aggregate principal balance of all end-user contracts with
obligors who comprise the ten largest obligors (measured by aggregate
principal balance) does not exceed 10% of the aggregate principal balance
of the contracts;
(3) the aggregate principal balance of all full and partial recourse
contracts from any single vendor or affiliated group of vendors will not
exceed 1.5% of the aggregate principal balance of the contracts;
(4) the aggregate principal balance of all contracts of each obligor
or affiliated group of obligors shall not exceed 1.5% of the aggregate
principal balance of the contracts; and
(5) the aggregate principal balance of all end-user contracts with
obligors located in a single State of the United States does not exceed 12%
of the aggregate principal balance of the contracts.
On the date a substitute contract is added to the trust's assets the trust
depositor will make with respect to the substitute contract the foregoing
representations and warranties (except those made under (5)) as of the initial
closing date of the transfer of the contracts to the trust. We will treat the
substitute contract as though it, and not the replaced contract, was included in
the contracts on the initial closing date; however, the principal balance of
such substitute contract shall be equal to its principal balance as of the
actual cutoff date.
If there is a breach of any of the foregoing representations or warranties
(an "Excess Contract"), which breach has not been cured or waived in all
material respects, the removal of which shall remedy such breach, the servicer
will select a contract, and the indenture trustee will, upon the written
direction of the servicer, reassign such contract to the trust depositor, and
the originator will be obligated to purchase such contract from the trust
depositor. Such purchase shall occur no later than the next determination date
after the trust depositor or the originator becomes aware, or receives written
notice from the servicer or the trust depositor, of such breach. This purchase
obligation will constitute the sole remedy against the originator and trust
depositor available to you for a breach of one of the foregoing representations
or warranties.
An Excess Contract shall be reassigned to the trust depositor and the trust
depositor shall make a deposit in the collection account in immediately
available funds in an amount equal to the principal balance of the Excess
Contract together with accrued interest and any outstanding servicer advances on
the contract. Any amount deposited into the collection account in connection
with the reassignment of an Excess Contract shall be considered payment in full
of the Excess Contract and shall be treated as an amount available for
distribution to you. In the alternative, the trust depositor may instead cause
the originator to convey to the trust depositor a substitute contract in
replacement for the Excess Contract, which shall thereupon be deemed released by
the trust and reconveyed through the trust depositor to the originator. See
"-- Substitute Contracts".
68
<PAGE> 74
MATERIAL MODIFICATIONS TO CONTRACTS
Under the terms of the transfer and servicing agreement, the servicer may
vary the provisions of a contract, some of which constitute material
modifications. Under the transfer and servicing agreement, only the following
modifications are permitted:
- except as provided below, waivers and other modifications that:
(1) conform with the servicer's customary and usual credit and collection
practices, and
(2) do not have the effect of accelerating, delaying, reducing or
extending the dates for scheduled payments for the contract; however,
the rating agencies may waive this requirement;
- to the extent consistent with the servicer's customary and usual credit
and collection practices, the servicer may grant extensions or
adjustments on any contract; provided, however, that if the servicer (i)
extends a contract by more than three months in any calendar year, (ii)
extends a contract more than twice in the life of such contract, (iii)
reduces the frequency of periodic payments under a contract, (iv) reduces
the unpaid principal balance or the rate of interest with respect to a
contract, or (v) extends a contract in a manner that is inconsistent with
the servicer's customary and usual credit and collection practices, the
servicer shall purchase the affected contract no later than the next
succeeding determination date by either (a) depositing the unpaid
principal balance of the contract (plus any related unreimbursed servicer
advances (unless the servicer waives and releases its rights with respect
to such unreimbursed servicer advances) and accrued and unpaid interest)
in the collection account, or (b) transferring a substitute contract to
the trust in exchange for such contract;
- waivers of any late payment charge and other service fees that may be
collected in the ordinary course of servicing the contract;
- waivers that permit prepayment of a contract that is not otherwise
prepayable by its terms. The prepayment may include, without limitation,
a full or partial buy out of the equipment which is the subject of the
contract, or an equipment upgrade. In the event of an early termination
of a contract which has been prepaid in full, the trust depositor will
have the option to cause the trust to reinvest the proceeds of the
contract in one or more contracts having similar characteristics to the
terminated contract. See " -- Substitute Contracts". The servicer is not
authorized to permit an early termination of a contract, without the
addition to the trust of a substitute contract, unless the amount to be
prepaid, whether by the related obligor, or through a combination of
payments from the related obligor and from the originator or servicer, on
such terminated contract is equal at least to the then outstanding
contract principal balance of the contract, plus accrued and unpaid
interest; or
- waivers that release or subordinate the trust's interest in a portion of
the equipment and/or any additional collateral that is specifically
identified in the contract documents, and/or release obligors,
guarantors, and assignors of a contract, provided that immediately
thereafter the related contract continues to meet the servicer's
customary and usual underwriting standards and the remaining portion of
the equipment and/or any additional collateral that is specifically
identified in the documents for such contract is equal in value, as
determined in accordance with the servicer's normal valuation procedures,
to at least 120% of the outstanding principal balance of such contract.
The servicer shall, in accordance with its customary and usual credit and
collection policies, have the right to release or subordinate ORIX Credit
Alliance, Inc.'s interest in additional collateral (which does not
include the financed equipment) if such additional collateral is not
specifically identified in the contract documents.
Non-material adjustments or modifications in contract terms may be effected by
the servicer on behalf of the trust without your consent and without affecting
the status of the contract as part of the trust.
69
<PAGE> 75
SUBSTITUTE CONTRACTS
In the event we subsequently determine that (i) a contract has become
subject to a casualty loss, a materially modified contract, or a defaulted
contract or (ii) a contract has become a prepaid contract, a contract that is
not an eligible contract or an Excess Contract, the originator will have the
option to substitute for that contract another contract or contracts having
similar characteristics. See "-- Remedies for Breaches of Representations and
Warranties; Definition of Ineligible Contracts," "-- Concentration Amounts;
Definition of Excess Contract" and "-- Material Modifications to Contracts". Our
ability to substitute contracts is limited in the aggregate to with respect to
category (i) to 10% of the original pool balance and with respect to category
(ii) to 20% of the original pool balance; provided, however, that no
substitution of contracts with respect to category (ii) contracts may be made
prior to the time the Class A-1 Notes are paid in full.
The substitute contracts will have (a) an aggregate principal balance equal
to or greater than that of the contract being substituted, (b) a similar
weighted average life and (c) a weighted average yield (annual percentage rate
or APR) of greater than or equal to the yield (APR) on the contract being
replaced. In addition, (1) the final payment on the substitute contract will be
on or prior to and (2) the substitution will not result in a
violation of the concentration limits applicable to the contract pool owned by
the trust.
DEFINITION OF DEFAULTED CONTRACTS
A contract will automatically be deemed to be a defaulted contract on the
earlier occurrence of either (1) or (2) below:
(1) any portion of a contractual payment has not been received from
the obligor for 180 days or a shorter period as the originator may
determine consistent with its collection policy; or
(2) if at any time the servicer determines, under its customary and
usual practices, that the contract is not collectible after taking into
account any available vendor recourse.
The current policy of the servicer with respect to writing off contracts is
described in "ORIX Credit Alliance, Inc. -- Credit Approval, Collection and
Review Process" above.
Upon classification as a defaulted contract, the servicer shall accelerate
all payments due thereunder or take any other action as the servicer reasonably
believes will maximize the amount of recoveries and shall otherwise follow its
customary and usual collection procedures, which may include the repossession
and transfer of any related equipment or other security on behalf of the trust.
INDEMNIFICATION
The transfer and servicing agreement provides that the servicer will
indemnify the trust depositor, the trust, the owner trustee, and the indenture
trustee from and against any loss, liability, expense, damage or injury suffered
or sustained arising out of the servicer's actions or omissions with respect to
the trust.
Under the transfer and servicing agreement, the trust depositor has agreed
to be liable directly to an injured party for the entire amount of any losses,
claims, damages or liabilities arising out of or based on the arrangement
created by the transfer and servicing agreement as though such agreement created
a partnership under the New Jersey Uniform Limited Partnership Act in which the
trust depositor was a general partner. However, the trust depositor is not
liable to you for any losses, claims, damages or liabilities incurred by you in
your capacity as an investor in the notes. In the event a successor servicer is
appointed, the successor servicer will indemnify and hold harmless the trust
depositor for any losses, claims, damages and liabilities of the trust depositor
as described in this paragraph arising from the actions or omissions of the
successor servicer. Except as provided in the preceding paragraph, the transfer
and servicing agreement provides that none of the trust depositor, the servicer
or any of their directors, officers, employees or agents will be under any other
liability to the trust, the owner trustee, the indenture trustee, the
noteholders or any other person for any action taken, or for refraining from
taking any action, in good
70
<PAGE> 76
faith under the transfer and servicing agreement. However, none of the trust
depositor, the servicer or any of their directors, officers, employees or agents
will be protected against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence of any such person
in the performance of their duties or by reason of reckless disregard of their
obligations and duties thereunder.
In addition, the transfer and servicing agreement provides that the
servicer is not under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its servicing responsibilities under the
transfer and servicing agreement. The servicer may, in its sole discretion,
undertake any legal action which it may deem necessary or desirable for the
benefit of the noteholders with respect to the transfer and servicing agreement
and the rights and duties of the parties thereunder.
SERVICING STANDARD AND SERVICER ADVANCES
The servicer is responsible for servicing, collecting, enforcing and
administering the contracts in a manner consistent with its customary and usual
procedures for servicing contracts comparable to the contracts. Although ORIX
Credit Alliance, Inc. has the right to delegate its servicing duties to a sub-
servicer, it remains liable for the performance or non-performance of those
duties.
If the servicer determines that any scheduled payment with respect to any
contract which was due during the collection period was not received in full
prior to the end of that collection period, the servicer has the right to elect,
but is not obligated, to advance the unpaid scheduled payment if it reasonably
believes that the advance will be reimbursed by the related obligor. The
servicer shall be entitled to reimbursement of the servicer advances from
subsequent payments on or with respect to the contract, including collections of
any prepayment amount, amounts deposited in the collection account for the
repurchase of ineligible contracts or recoveries with respect to the contract,
and, if the servicer determines that its advances will not be recovered from the
contracts to which its advances were related, from other contracts included in
the trust.
SERVICER RESIGNATION
The servicer may not resign from its obligations and duties under the
transfer and servicing agreement, except upon determination that its duties are
no longer permissible under applicable law. No such resignation will become
effective until a successor to the servicer has assumed the servicer's
responsibilities and obligations under the transfer and servicing agreement.
Assuming that the action complies with the transfer and servicing agreement
(1) any person into which ORIX Credit Alliance, Inc. or the servicer
may be merged or consolidated;
(2) any person resulting from any merger or consolidation to which
ORIX Credit Alliance, Inc. or the servicer is a party; or
(3) any person succeeding by acquisition or transfer to the business
of ORIX Credit Alliance, Inc. or the servicer
will be permitted to be the successor to ORIX Credit Alliance, Inc., as the
servicer, under the transfer and servicing agreement. ORIX Credit Alliance, Inc.
is required to notify the rating agencies and the indenture trustee within 30
days of the completion of any such merger, consolidation or succession but is
not required to get the consent of either the rating agencies or the holders of
the notes.
SERVICER DEFAULT
In the event of any servicer default, either the indenture trustee or the
Required Holders, by written notice to the servicer and the owner trustee, and
to the indenture trustee, if given by the noteholders, may terminate all of the
rights and obligations of the servicer, as servicer, under the transfer and
servicing agreement. The indenture trustee is entitled to receive upon
reasonable notice after the end of any
71
<PAGE> 77
collection period a copy of the servicer's computer records related to the
contracts. If the indenture trustee within 60 days of receipt of the termination
notice is unable to obtain bids from eligible servicers and the servicer
delivers an officer's certificate to the effect that the servicer cannot in good
faith cure the servicer default which gave rise to the termination notice, then
the indenture trustee shall offer the trust depositor the right at its option to
accept retransfer of the trust's assets on the following note interest and
principal payment date. The purchase price for the retransfer of the trust's
assets shall be equal to the sum of the aggregate principal amount of all notes
and certificate on such payment date plus accrued and unpaid interest at the
applicable interest rate through the date of the retransfer. The purchase price
may also include interest on interest payments that were due but not paid when
due.
The indenture trustee shall, as promptly as possible after giving a
termination notice, appoint a successor servicer and if no successor servicer
has been appointed by the indenture trustee and has accepted the appointment by
the time the servicer ceases to act as servicer, all rights, authority, power
and obligations of the servicer under the transfer and servicing agreement shall
pass to and be vested in the indenture trustee, unless at the time it would be
contrary to law for the indenture trustee to act in such capacity. Prior to any
appointment of the successor, the indenture trustee will seek to obtain bids
from potential servicers meeting the eligibility requirements set forth in the
transfer and servicing agreement to serve as a successor servicer for servicing
compensation not in excess of the servicing fee "Description of the Notes and
Indenture -- Servicing Compensation and Payment of Expenses". The rights and
interest of the trust depositor under the transfer and servicing agreement as
holder of the certificate will not be affected by the termination or appointment
of a successor to the servicer.
A "servicer default" refers to any of the following events:
(a) any failure by the servicer to make any payment, transfer or
deposit or to give instructions or notice to the owner trustee or the
indenture trustee as required by the transfer and servicing agreement on or
before the date occurring two business days after the date the payment,
transfer, deposit, or the instruction or notice or report is required to be
made or given, as the case may be, under the terms of the transfer and
servicing agreement; or
(b) failure on the part of the servicer duly to observe or perform in
any material respect any other covenants or agreements of the servicer set
forth in the transfer and servicing agreement which has a material adverse
effect on the noteholders, which continues unremedied for a period of 30
days after the first to occur of:
(1) the date on which written notice of such failure requiring the
same to be remedied shall have been given to the servicer by the
indenture trustee or to the servicer and the indenture trustee by the
noteholders or the indenture trustee on behalf of the holders of notes
aggregating not less than 25% of the principal amount of any class of
notes adversely affected thereby and
(2) the date on which the servicer becomes aware of the failure and
such failure continues to materially adversely affect the noteholders
for such period; or
(c) any representation, warranty or certification made by the servicer
in the transfer and servicing agreement or in any certificate delivered
under the transfer and servicing agreement shall prove to have been
incorrect when made, which has a material adverse effect on the noteholders
and which continues to be incorrect in any material respect for a period of
30 days after the first to occur of:
(1) the date on which written notice of such incorrectness
requiring the same to be remedied shall have been given to the servicer
and the owner trustee by the indenture trustee, or to the servicer, the
owner trustee and the indenture trustee by noteholders or by the
indenture trustee on behalf of holders of notes aggregating not less
than 25% of the principal amount of any class adversely affected thereby
and
(2) the date on which the servicer becomes aware of the
incorrectness, and such incorrectness continues to materially adversely
affect such holders for such period; or
72
<PAGE> 78
(d) any event relating to bankruptcy, insolvency or receivership shall
occur with respect to the servicer; provided that, in the case of any such
proceeding instituted against the servicer (but not instituted by the
servicer), either such proceedings shall remain undismissed or unstayed for
a period of 60 days, or any actions sought in such proceeding (including an
order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, the servicer or any substantial
part of the servicer's property) shall occur; or the servicer shall take
any corporate action to authorize any of the actions set forth above.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (a) above for a period of five business days or
referred to under clause (b) or (c) for a period of 60 days, in addition to any
period provided in clause (a), (b) or (c), shall not constitute a servicer
default until the expiration of such additional five business days or 60 days,
respectively, if such delay or failure could not be prevented by the exercise of
reasonable diligence by the servicer and such delay or failure was caused by an
act of God or other events beyond servicer's control. Regardless of whether the
events described in clause (a)-(d) have occurred, the servicer is required to
use its best efforts to perform its obligations in a timely manner as required
by the transfer and servicing agreement. The servicer shall provide the owner
trustee, the indenture trustee and the trust depositor prompt notice of such
failure or delay by it, together with a description of its efforts to perform
its obligations. The servicer shall immediately notify the indenture trustee in
writing of any servicer default.
If an event relating to bankruptcy, insolvency or receivership occurs with
respect to the servicer and no other event which would result in a servicer
default has occurred, an unpaid creditor of the servicer or a representative of
creditors of the servicer, such as a trustee in bankruptcy, or the servicer
acting as a debtor-in-possession, would have the power to prevent either the
indenture trustee or the noteholders from appointing a successor servicer.
EVIDENCE AS TO COMPLIANCE
The transfer and servicing agreement provides that on or about June 30 of
each calendar year the servicer will cause a firm of nationally recognized
independent public accountants to furnish a report to the effect that such firm
has applied the procedures agreed upon with the servicer and examined documents
and records relating to the servicing of the related contracts and shall report
thereon as provided in the transfer and servicing agreement. Those accountants
may also render other services to the servicer or the trust depositor.
The transfer and servicing agreement provides for delivery to the indenture
trustee and each rating agency rating the notes on or before July 31 of each
calendar year of a statement signed by an officer of the servicer to the effect
that, to the best of the officer's knowledge, the servicer has performed its
obligations in all material respects under the transfer and servicing agreement
throughout the preceding year or, if there has been a default in the performance
of any obligation, specifying the nature and status of the default.
Copies of all statements, certificates and reports furnished to the
indenture trustee may be obtained by a request in writing delivered to the
indenture trustee.
AMENDMENTS
The transfer and servicing agreement may be amended from time to time by
agreement of the owner trustee, the indenture trustee, the servicer and the
trust depositor without your consent, to cure any ambiguity or to add any
consistent provisions; provided, we obtain an opinion of counsel stating that
the amendment does not adversely affect in any material respect the interests of
any noteholder or holder of the certificate.
The transfer and servicing agreement may also be amended from time to time
by the trust depositor, the servicer, the indenture trustee and the owner
trustee with the consent of the noteholders holding notes evidencing not less
than 66 2/3% of the principal amount of the notes for the purpose of adding any
73
<PAGE> 79
provisions to or changing in any manner or eliminating any of the provisions of
the transfer and servicing agreement or of modifying in any manner your rights.
No amendment, however, may
(1) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any note without the consent
of each noteholder affected thereby; or
(2) change the definition of or the manner of calculating the "Class
A-1 Principal Payment Amount", the "Class A-2 Principal Payment Amount",
the "Class A-3 Principal Payment Amount", the "Class A-4 Principal Payment
Amount", the "Class B Principal Payment Amount", the "Class C Principal
Payment Amount", the "Additional Principal", the "Required Holders", the
amounts available for distribution to noteholders or the principal amount
of the notes without the consent of each noteholder and holder of the
certificate; or
(3) reduce the aforesaid percentage required to consent to any
amendment without the consent of each holder of the security affected
thereby; or
(4) modify, amend or supplement the provisions of the transfer and
servicing agreement relating to the allocation of collections on the
contracts without the consent of each noteholder; or
(5) make any security issued by the trust payable in money other than
U.S. dollars without the consent of each holder of the security affected
thereby.
Promptly following the execution of an amendment that requires the consent
of any noteholder, the owner trustee will furnish written notice of the
substance of such amendment to each affected noteholder.
THE OWNER TRUSTEE
The Bank of New York (Delaware) will be the owner trustee under the trust
agreement. ORIX Credit Alliance, Inc. and its affiliates may from time to time
enter into banking and trustee relationships with the owner trustee and its
affiliates. ORIX Credit Alliance, Inc. and its affiliates may hold notes in
their own names; however, any notes so held shall not be entitled to participate
in any decisions made or instructions given to the owner trustee by the
noteholders as a group.
For purposes of meeting the legal requirements of any jurisdictions in
which any part of the trust's assets may at the time be located, the owner
trustee will have the power to appoint a co-trustee or separate trustee of all
or any part of the trust's assets. To the extent permitted by law, all rights,
powers, duties and obligations conferred or imposed upon the owner trustee will
be conferred or imposed upon and exercised or performed by the owner trustee and
the separate trustee or co-trustee jointly. In any jurisdiction in which the
owner trustee will be incompetent or unqualified to perform specific acts, all
rights, powers, duties and obligations conferred or imposed upon the owner
trustee will be conferred or imposed upon the separate trustee or co-trustee who
shall exercise and perform those rights, powers, duties and obligations solely
at the direction of the owner trustee.
The owner trustee may resign at any time, in which event a successor owner
trustee will be appointed as provided in the transfer and servicing agreement.
The servicer may also remove the owner trustee if the owner trustee ceases to be
eligible to continue as the owner trustee under the transfer and servicing
agreement. In such circumstances, a successor owner trustee will be appointed as
provided in the transfer and servicing agreement. Any resignation or removal of
the owner trustee and appointment of a successor owner trustee does not become
effective until acceptance of the appointment by the successor owner trustee.
74
<PAGE> 80
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
This section describes the material United States federal income tax
consequences of owning the notes we are offering. It is the opinion of Sullivan
& Cromwell, special tax counsel to the trust depositor. It applies to you only
if you acquire notes in the offering and you hold your notes as capital assets
for tax purposes. This section does not apply to you if you are a member of a
class of holders subject to special rules, such as:
- a dealer in securities or currencies,
- a trader in securities that elects to use a mark-to-market method of
accounting for your securities holdings,
- a bank,
- a life insurance company,
- a tax-exempt organization,
- a person that owns notes that are a hedge or that are hedged against
interest rate risks,
- a person that owns notes as part of a straddle or conversion transaction
for tax purposes, or
- a person whose functional currency for tax purposes is not the U.S.
dollar.
This section is based on the Internal Revenue Code of 1986, as amended, its
legislative history, existing and proposed regulations under the Internal
Revenue Code, published rulings and court decisions, all as currently in effect.
These laws are subject to change, possibly on a retroactive basis.
Please consult your own tax advisor concerning the consequences of owning these
notes in your particular circumstances under the Code and the laws of any other
taxing jurisdiction.
CLASSIFICATION OF THE NOTES AND THE TRUST
In connection with the issuance of the notes, Sullivan & Cromwell has
delivered its opinion that, for federal income tax purposes, under existing law
the trust will not be treated as an association or publicly traded partnership
taxable as a corporation, and the notes will be treated as indebtedness. In
rendering these opinions, Sullivan & Cromwell has assumed that the terms of the
various documents relating to the issuance of the notes will be complied with by
all of the parties to the transaction. Those terms include a requirement, which
each investor agrees to by virtue of acquiring ownership of any beneficial
interest in a note, that the trust and the investors in the notes treat the
notes as indebtedness for federal income tax purposes. The opinion of Sullivan &
Cromwell does not foreclose the possibility of a contrary determination by the
IRS or by a court of competent jurisdiction, or of a contrary position by the
IRS or Treasury Department in regulations or rulings issued in the future.
Although it is the opinion of Sullivan & Cromwell that the trust will not
be treated as an association or publicly traded partnership taxable as a
corporation and that the notes will be characterized as indebtedness for federal
income tax purposes, no assurance can be given that this characterization of the
trust or the notes will prevail. If, contrary to the opinion of Sullivan &
Cromwell, the IRS successfully asserted that one or more classes of the notes
did not represent debt for federal income tax purposes, such notes would be
treated as equity interests in the trust. As a result, the trust would be
classified as either a partnership or as a publicly traded partnership. If the
trust were classified as a partnership other than a publicly traded partnership,
the trust itself would not be subject to United States federal income tax.
Similarly, the publicly traded partnership rules provide an exception to the
general rule that for federal
75
<PAGE> 81
income tax purposes a publicly traded partnership shall be treated as a
corporation in cases where at least 90% of the gross income of the publicly
traded partnership consists of certain specified types of "qualifying income."
Interest income such as the income earned by the trust from the contracts and
from the reserve fund and the spread fund will be considered qualifying income
under the publicly traded partnership rules for Unites States federal income tax
purposes. Consequently, even if the trust were classified as a publicly traded
partnership, the trust itself would not be subject to United States federal
income tax. If the trust is classified as either a partnership or a publicly
traded partnership, holders of notes that were determined to be equity interests
in the partnership or publicly traded partnership would be required to take into
account their allocable share of the trust's income and deductions. Such
treatment may have adverse federal income tax consequences for some noteholders.
For example:
(1) income to some tax-exempt entities, including pension funds, may
constitute "unrelated business taxable income,"
(2) income to foreign holders is often subject to U.S. tax and U.S.
tax return filing and withholding requirements,
(3) individual holders might be subject to limits on their ability to
deduct their share of trust expenses, and
(4) income from the trust's assets would be taxable to noteholders
without regard to whether cash distributions are actually made by the trust
or any particular noteholder's method of tax accounting.
The discussion that follows assumes treatment of the notes as indebtedness
for United States federal income tax purposes.
GENERAL TAX TREATMENT OF NOTEHOLDERS
UNITED STATES HOLDERS.
This subsection describes the tax consequences to a United States holder.
You are a United States holder if you are a beneficial owner of a note and you
are:
-- a citizen or resident of the United States,
-- a domestic corporation,
-- an estate whose income is subject to United States federal income tax
regardless of its source, or
-- a trust if a United States court can exercise primary supervision over
the trust's administration and one or more United States persons are
authorized to control all substantial decisions of the trust.
If you are not a United States holder, this section does not apply to you and
you should refer to "-- United States Alien Holders" below.
PAYMENTS OF INTEREST. You will be taxed on any interest on your note as
ordinary income at the time you receive the interest or when it accrues,
depending on your method of accounting for tax purposes.
PURCHASE, SALE AND RETIREMENT OF THE NOTES. Your tax basis in your note
will generally be the U.S. dollar cost, as defined below, of your note. You will
generally recognize gain or loss on the sale or retirement of your note equal to
the difference between the amount you realize on the sale or retirement and your
tax basis in your note. Capital gain of a noncorporate United States holder is
generally taxed at a maximum rate of 20% where the property is held more than
one year.
BACKUP WITHHOLDING AND INFORMATION REPORTING. In general, if you are a
noncorporate United States holder, we and other payors are required to report to
the Internal Revenue Service all payments of principal and interest on your
note. In addition, the proceeds of the sale of your note before maturity within
the United States will be reported to the Internal Revenue Service.
Additionally, backup withholding at a rate of 31% will apply to any payments if
you fail to provide an accurate taxpayer
76
<PAGE> 82
identification number, or you are notified by the Internal Revenue Service that
you have failed to report all interest and dividends required to be shown on
your federal income tax returns.
UNITED STATES ALIEN HOLDERS.
This subsection describes the tax consequences to a United States alien
holder. You are a United States alien holder if you are the beneficial owner of
a note and are, for United States federal income tax purposes:
-- a nonresident alien individual,
-- a foreign corporation,
-- a foreign partnership, or
-- an estate or trust that in either case is not subject to United States
federal income tax on a net income basis on income or gain from a
note.
If you are a United States holder, this section does not apply to you.
Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below, if you are a United States alien
holder of a note:
-- we and other payors will not be required to deduct United States
withholding tax from payments of principal and interest to you if, in
the case of interest:
1. you do not actually or constructively own 10% or more of the total
combined voting power the trust,
2. you are not a controlled foreign corporation that is related to the
trust through stock ownership, and
a. you certify to us or a U.S. payor, under penalties of perjury,
that you are not a United States holder and provide your name
and address, or
b. a non-U.S. securities clearing organization, bank or other
financial institution that holds customers' securities in the
ordinary course of its trade or business and holds the note
certifies to us or a U.S. payor under penalties of perjury that
a similar statement has been received from you by it or by a
similar financial institution between it and you and furnishes
the payor with a copy thereof, and
-- no deduction for any United States federal withholding tax will be
made from any gain that you realize on the sale or exchange of your
note.
Further, a note held by an individual who at death is not a citizen or
resident of the United States will not be includible in the individual's gross
estate for United States federal estate tax purposes if:
-- the decedent did not actually or constructively own 10% or more of the
total combined voting power of the trust at the time of death, and
-- the income on the note would not have been effectively connected with
a United States trade or business of the decedent at the same time.
If you receive a payment after December 31, 2000, recently finalized
Treasury regulations will apply. Under these final withholding regulations,
after December 31, 2000, you may use an alternative method to satisfy the
certification requirement described above. Additionally, if you are a partner in
a foreign partnership, after December 31, 2000, you, in addition to the foreign
partnership, must provide the certification described above, and the partnership
must provide certain information. The Internal Revenue Service will apply a
look-through rule in the case of tiered partnerships.
77
<PAGE> 83
BACKUP WITHHOLDING AND INFORMATION REPORTING.
You are generally exempt from backup withholding and information reporting
with respect to any payments of principal or interest made by us and other
payors provided that you provide the certification described under "-- United
States Alien Holders", and provided further that the payor does not have actual
knowledge that you are a United States person. See "-- United States Alien
Holders" above for a discussion of the rules under the final withholding
regulations. We and other payors, however, may report payments of interest on
your notes on Internal Revenue Service Form 1042-S.
In general, payment of the proceeds from the sale of notes to or through a
United States office of a broker is subject to both United States backup
withholding and information reporting. If, however, you are a United States
alien holder, you will not be subject to information reporting and backup
withholding if you certify as to your non-United States status, under penalties
of perjury, or otherwise establish an exemption. Payments of the proceeds from
the sale by a United States alien holder of a note made to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding. However, information reporting, but not backup withholding, may
apply to a payment made outside the United States of the proceeds of a sale of a
note through an office outside the United States if the broker is:
-- a United States person,
-- a controlled foreign corporation for United States tax purposes,
-- a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified
three-year period, or
-- with respect to payments made after December 31, 2000, a foreign
partnership, if at any time during its tax year:
-- one or more of its partners are "U.S. persons", as defined in U.S.
Treasury regulations, who in the aggregate hold more than 50% of the
income or capital interest in the partnership, or
-- such foreign partnership is engaged in a United States trade or
business unless the broker has documentary evidence in its records
that you are a non-U.S. person and does not have actual knowledge
that you are a U.S. person, or you otherwise establish an exemption.
STATE AND LOCAL TAX CONSIDERATIONS
NEW JERSEY TAX CONSIDERATIONS. The principal place of business of the
servicer is in the State of New Jersey and some of the activities to be
performed by servicer in collecting and servicing the contracts will also take
place there. Also, the obligors on certain of the contracts will be located in
New Jersey. In the opinion of Riker, Danzig, Scherer, Hyland & Perretti, special
New Jersey tax counsel to the trust, the trust will not be subject to New Jersey
Corporation Income Tax or New Jersey Corporation Business Tax and noteholders
that are not otherwise subject to New Jersey taxation on income will not become
subject to New Jersey tax as a result of their ownership of notes.
OTHER STATES. Because of the differences in state and local tax laws and
their applicability to different investors, it is not possible to summarize the
potential state and local tax consequences of purchasing, holding or disposing
of the notes and no opinions of counsel have been obtained regarding state tax
matters, other than with respect to the State of New Jersey. ACCORDINGLY, IT IS
RECOMMENDED THAT EACH PROSPECTIVE INVESTOR CONSULT A TAX ADVISOR REGARDING THE
STATE AND LOCAL TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
NOTES.
LEGAL INVESTMENT
The Class A-1 Notes will be an "eligible security" within the meaning of
Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended.
78
<PAGE> 84
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974 ("ERISA"), as amended,
imposes specific requirements on employee benefit plans subject to ERISA and
prohibits some transactions between ERISA-regulated plans and persons who are
"parties in interest" (as defined under ERISA) with respect to assets of such
plans. Section 4975 of the Internal Revenue Code prohibits a similar set of
transactions between specified plans or individual retirement accounts and
persons who are "disqualified persons" (as defined in the Internal Revenue Code)
with respect to plans exempt from taxation under the Internal Revenue Code. Some
employee benefit plans, such as governmental plans and church plans, if no
election has been made under Section 410(d) of the Internal Revenue Code, are
not subject to the requirements of ERISA or Section 4975 of the Internal Revenue
Code, and assets of such plans may be invested in the notes, subject to the
provisions of other applicable federal and state law.
Investments by ERISA-regulated plans are subject to ERISA's general
fiduciary requirements, including the requirement of investment prudence and
diversification and the requirement that investments comply with the terms of
the documents governing the ERISA-regulated plan. Before investing in the notes,
an ERISA-regulated plan fiduciary should consider, among other factors, whether
to do so is appropriate in view of the overall investment policy and liquidity
needs of the plan.
PROHIBITED TRANSACTIONS
In addition, Section 406 of ERISA and Section 4975 of the Internal Revenue
Code prohibit parties in interest and disqualified persons with respect to
ERISA-regulated plans and plans exempt from taxation under the Internal Revenue
Code from engaging in some transactions involving such plans or "plan assets" of
such plans, unless a statutory or administrative exemption applies to the
transaction. Section 4975 of the Internal Revenue Code and Sections 502(i) and
502(1) of ERISA provide for the imposition of excise taxes and civil penalties
on persons that engage or participate in such prohibited transactions. The trust
depositor, the underwriters, the servicer, the indenture trustee or the owner
trustee or their affiliates may be considered or may become parties in interest
or disqualified persons with respect to a plan. If so, the acquisition or
holding of the notes by, on behalf of or with "plan assets" of such plan may be
considered to give rise to a "prohibited transaction" within the meaning of
ERISA and/or Section 4975 of the Internal Revenue Code, unless an administrative
exemption described below or some other exemption is available.
The notes may not be purchased with the assets of a plan if the trust
depositor, the underwriters, the servicer, the indenture trustee, or the owner
trustee or any of their affiliates either:
(a) has discretionary authority or control with respect to the
investment or management of such assets; or
(b) has authority or responsibility to give, or regularly gives,
investment advice with respect to such assets pursuant to an agreement or
understanding that such advice will serve as a primary basis for investment
decisions with respect to such assets and that such advice will be based on
the particular needs of the plan; or
(c) is an employer of employees covered under the plan unless such
investment is made through an insurance company general or pooled separate
account or a bank collective investment fund and a prohibited transaction
exemption is available.
Depending on the relevant facts and circumstances, some prohibited
transaction exemptions may apply to the purchase or holding of the notes -- for
example, Prohibited Transaction Class Exemption ("PTCE") 96-23, which exempts
transactions effected on behalf of a Plan by an "in-house asset manager;" PTCE
95-60, which exempts transactions between insurance company general accounts and
parties in interest; PTCE 91-38, which exempts transactions between bank
collective investment funds and parties in interest; PTCE 90-1, which exempts
transactions between insurance company pooled separate accounts and parties in
interest; or PTCE 84-14, which exempts transactions effected on behalf of a Plan
by a "qualified professional asset manager."
79
<PAGE> 85
Due to the complexity of these rules and the penalties imposed, any plan
fiduciary or other plan investor who proposes to invest assets of a plan in the
notes should consult with its counsel with respect to the potential consequences
under ERISA and Section 4975 of the Internal Revenue Code of doing so.
PLAN OF DISTRIBUTION
GENERAL
Under the terms of an underwriting agreement for the sale of the notes
offered by this prospectus, the trust depositor has agreed to sell to First
Union Securities, Inc. as the underwriter and the underwriter has agreed to
purchase from the trust depositor, the principal amount of the notes set forth
below.
<TABLE>
<CAPTION>
INITIAL AGGREGATE UNDERWRITING
CLASS OF NOTES PRINCIPAL AMOUNT DISCOUNT PER NOTE
- -------------- ----------------- -----------------
<S> <C> <C>
A-1 $ 95,789,957 %
A-2 $ 50,780,218 %
A-3 $112,957,133 %
A-4 $ 14,570,460 %
B $ 8,655,719 %
C $ 4,327,860 %
------------
$287,081,347
============
</TABLE>
In the underwriting agreement, the underwriter has agreed, subject to the
terms and conditions set forth in the agreements, to purchase all the notes
offered by this prospectus if any of the notes are purchased.
The underwriter has advised the trust and the trust depositor that the
underwriter proposes initially to offer the notes of each of the following
classes to the public at the prices set forth on the cover page hereof and to
dealers at those prices less a selling concession not in excess of the following
percentages of the principal amounts of the notes:
<TABLE>
<CAPTION>
SELLING CONCESSION (AS A PERCENTAGE OF THE
CLASS OF NOTES PRINCIPAL AMOUNT OF THE CLASS OF NOTES)
- -------------- ------------------------------------------
<S> <C>
A-1 %
A-2 %
A-3 %
A-4 %
B %
C %
</TABLE>
Additionally, the underwriter may allow and the dealers may reallow a
concession not in excess of the following percentages of the principal amounts
of the notes:
<TABLE>
<CAPTION>
REALLOWANCE CONCESSION (AS A PERCENTAGE OF
CLASS OF NOTES THE PRINCIPAL AMOUNT OF THE CLASS OF NOTES)
- -------------- -------------------------------------------
<S> <C>
A-1 %
A-2 %
A-3 %
A-4 %
B %
C %
</TABLE>
The expenses of the offering of the notes, exclusive of underwriting
discounts and commissions, are estimated to be approximately $654,000.
80
<PAGE> 86
The underwriting agreement provides that ORIX Credit Alliance, Inc. and the
trust depositor, jointly and severally, will indemnify the underwriter of the
notes against some civil liabilities, including liabilities under the Securities
Act of 1933, as amended, or contribute to payments the underwriters may be
required to make.
There is currently no secondary market for the notes and you should not
assume that one will develop. The underwriter currently expects, but is not
obligated, to make a market in the notes. You should not assume that any such
market will develop, or if one does develop, that it will continue or provide
sufficient liquidity.
Until the distribution of the notes is completed, rules of the Securities
and Exchange Commission may limit the ability of the underwriter to bid for and
purchase the notes. As an exception to these rules, the underwriter is permitted
to engage in some transactions that stabilize the price of the notes. These
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the notes.
Some of the persons participating in this offering may engage in
transactions that affect the price of the notes. These transactions may include
the purchase of the notes to cover syndicate short positions. If the underwriter
creates a short position in the notes in connection with the offering, i.e., if
it sells more notes than are set forth on the cover page of this prospectus, the
underwriter may reduce that short position by purchasing such classes of notes
in the open market. In general, purchases of a security to reduce a short
position could cause the price of the security to be higher than it might be in
the absence of such purchases.
Neither the originator nor the underwriter makes any representations or
prediction as to the direction or magnitude of any effect that the transactions
described above, if engaged in, may have on the prices of the notes. In
addition, neither the originator nor the underwriter makes any representation
that the underwriter will engage in those transactions or that those
transactions, once commenced, will not be discontinued without notice.
In the ordinary course of its business, the underwriter and its affiliates
have engaged and may engage in commercial banking and investment banking
transactions with ORIX Credit Alliance and its affiliates.
RATING OF THE NOTES
It is a condition to the issuance of the notes that they receive the
following ratings from the following rating agencies:
<TABLE>
<CAPTION>
STANDARD & POOR'S
CLASS MOODY'S INVESTORS SERVICE RATINGS GROUP FITCH IBCA, INC.
- ----- ------------------------- ----------------- ----------------
<S> <C> <C> <C>
Class A-1 Notes P-1 A-1+ F1+/AAA
Class A-2 Notes Aaa AAA AAA
Class A-3 Notes Aaa AAA AAA
Class A-4 Notes Aaa AAA AAA
Class B Notes A2 A A
Class C Notes Baa2 BBB BBB
</TABLE>
The rating will reflect only the views of the rating agencies and will be
based primarily on the subordination of some classes of notes to other classes
of notes as described in this prospectus, as well as the value and
creditworthiness of the contracts and equipment. The ratings are not a
recommendation to purchase, hold or sell the notes, since the ratings do not
comment as to market price or suitability for a particular investor. Each rating
may be subject to revision or withdrawal at any time by the assigning rating
agency. There is no assurance that any rating will continue for any period of
time or that it will not be lowered or withdrawn entirely by the rating agency
if, in its judgment, circumstances so warrant. A revision or withdrawal of the
rating may have an adverse affect on the market price of the notes. The rating
of the notes addresses the likelihood of the timely payment of interest and the
ultimate payment of
81
<PAGE> 87
principal on the notes as required by their terms. The rating does not address
the rate of prepayments that may be experienced on the contracts and, therefore,
does not address the effect of the rate of prepayments on the return of
principal to you.
LEGAL MATTERS
Sullivan & Cromwell, New York, New York will provide a legal opinion
relating to the notes in its capacity as special counsel to the trust, the trust
depositor, the originator, the servicer and the administrator. Riker, Danzig,
Scherer, Hyland and Perretti, Morristown, New Jersey will provide a legal
opinion relating to New Jersey tax matters in its capacity as special New Jersey
tax counsel to the trust. Other legal matters for the underwriters will be
passed upon by Moore & Van Allen, PLLC, Charlotte, North Carolina.
EXPERTS
The balance sheet of ORIX Credit Alliance Receivables Trust 2000-A as of
February 1, 2000 included in this prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report on page F-1 and are included in this
prospectus in reliance upon the authority of Arthur Andersen LLP as experts in
giving said report.
82
<PAGE> 88
INDEX OF TERMS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Additional Principal........................................ 49
Class A Percentage.......................................... 49
Class A Principal Payment Amount............................ 49
Class A Target Investor Principal Amount.................... 49
Class B Floor............................................... 49
Class B Percentage.......................................... 49
Class B Principal Payment Amount............................ 49
Class B Target Investor Principal Amount.................... 50
Class C Floor............................................... 50
Class C Percentage.......................................... 50
Class C Principal Payment Amount............................ 50
Class C Target Investor Principal Amount.................... 50
Cumulative Loss Amount...................................... 50
Excess Contract............................................. 68
Excluded Amounts............................................ 46
Monthly Principal Amount.................................... 51
Original Pool Balance....................................... 51
Overcollateralization Balance............................... 51
Pool Balance................................................ 51
Required Holders............................................ 55
Required Reserve Amount..................................... 51
WAN......................................................... 41
Y2K......................................................... 41
</TABLE>
83
<PAGE> 89
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A:
We have audited the accompanying balance sheet of ORIX Credit Alliance
Receivables Trust 2000-A (a Delaware Trust) as of February 1, 2000. This
financial statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of ORIX Credit Alliance Receivables
Trust 2000-A as of February 1, 2000, in conformity with generally accepted
accounting principles.
/S/ ARTHUR ANDERSEN LLP
New York, New York
February 1, 2000
F-1
<PAGE> 90
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
BALANCE SHEET AS OF FEBRUARY 1, 2000
<TABLE>
<S> <C>
Assets -- Cash........................................ $ 0
===
Liabilities........................................... $ 0
Beneficial Equity..................................... 0
---
Total Liabilities and Equity................ $ 0
===
</TABLE>
NOTES TO THE BALANCE SHEET
ORIX Credit Alliance Receivables Trust 2000-A (the "Trust") is a limited
purpose business trust established under the laws of the State of Delaware and
was formed by ORIX Credit Alliance Receivables Corporation III (the "Trust
Depositor"), and The Bank of New York (Delaware) (the "Owner Trustee") pursuant
to the Trust Agreement dated as of January 27, 2000 between the Trust Depositor
and the Owner Trustee. The activities of the Trust are limited by the terms of
the Trust Agreement to acquiring, owning and managing lease, installment sales
and loan contracts and related assets, issuing and making payments on notes and
subordinate securities and other activities related thereto. Prior to and
including January 27, 2000, the Trust did not conduct any activities.
The Trust Depositor will pay all fees and expenses related to the
organization and operations of the Trust (including any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States or any other domestic taxing authority upon
the Trust). The Trust Depositor has also agreed to indemnify the trustees, the
underwriter and certain other persons.
F-2
<PAGE> 91
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS, ALL DEALERS EFFECTING
TRANSACTIONS IN THE SECURITIES OFFERED BY THIS PROSPECTUS, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER THIS PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER THIS PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
$287,081,347
(APPROXIMATE)
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
$ 95,789,957 % CLASS A-1 RECEIVABLE-BACKED NOTES, SERIES 2000-A
$ 50,780,218 % CLASS A-2 RECEIVABLE-BACKED NOTES, SERIES 2000-A
$112,957,133 % CLASS A-3 RECEIVABLE-BACKED NOTES, SERIES 2000-A
$ 14,570,460 % CLASS A-4 RECEIVABLE-BACKED NOTES, SERIES 2000-A
$ 8,655,719 % CLASS B RECEIVABLE-BACKED NOTES, SERIES 2000-A
$ 4,327,860 % CLASS C RECEIVABLE-BACKED NOTES, SERIES 2000-A
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III,
AS TRUST DEPOSITOR
ORIX CREDIT ALLIANCE, INC.,
AS SERVICER
----------------
PROSPECTUS
----------------
FIRST UNION SECURITIES, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 92
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following is an itemized list of the estimated expenses to be incurred
in connection with the offering of the securities being offered hereunder other
than underwriting discounts and commissions.
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 75,792
Printing and Engraving Expenses............................. 50,000
Trustee's Fees and Expenses................................. 20,000
Legal Fees and Expenses..................................... 180,000
Blue Sky Fees and Expenses.................................. 8,000
Accountants' Fees and Expenses.............................. 40,000
Rating Agency Fees.......................................... 260,000
Miscellaneous Fees.......................................... 20,000
Total............................................. $653,792
</TABLE>
- ---------------
* All amounts except the SEC Registration Fee are estimates of expenses incurred
or to be incurred in connection with the issuance and distribution of the
Notes.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of Delaware (Section 145) gives Delaware
corporations broad powers to indemnify their present and former directors and
officers and those affiliated corporations against expenses incurred in the
defense of any lawsuit to which they are made parties by reason of being or
having been such directors or officers, subject to specified conditions and
exclusions; gives a director or officer who successfully defends an action the
right to be so indemnified; and authorizes said corporation to buy directors'
and officers' liability insurance. Such indemnification is not exclusive of any
other right to which those indemnified may be entitled under any bylaw,
agreement, vote of stockholders or otherwise.
Pursuant to agreements which the Registrant may enter into with
underwriters or agents (forms of which will be included as exhibits to this
registration statement), officers and directors of the Registrant, and
affiliates thereof, may be entitled to indemnification by such underwriters or
agents against certain liabilities, including liabilities under the Securities
Act of 1933, as amended, arising from information which has been or will be
furnished to the Registrant by such underwriters or agents that appears in the
registration statement or any prospectus.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Inapplicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS
(a) Exhibits
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement
3.1 Form of Certificate of Incorporation of the trust depositor
3.2 Form of Bylaws of the trust depositor
4.1 Form of Trust Agreement (including form of certificate)
4.2 Form of Indenture (including form of notes)
5.1 Opinion of Sullivan & Cromwell
8.1 Tax opinion of Sullivan & Cromwell (included in Exhibit 5.1)
8.2 Tax opinion of Riker, Danzig, Scherer, Hyland and Perretti
10.1 Form of Transfer and Servicing Agreement
10.2 Form of Administration Agreement
10.3 Form of the OCAI Transfer Agreement
</TABLE>
I-1
<PAGE> 93
<TABLE>
<C> <S>
10.4 Form of Custodian Agreement
10.5 Form of Subordination Agreement
23.1 Consent of Sullivan & Cromwell (included in Exhibit 5.1)
23.2 Consent of Riker, Danzig, Scherer, Hyland and Perretti
(included in Exhibit 8.2)
23.3 Consent of Arthur Andersen LLP
24.1 Power of Attorney (included on signature page)
25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of indenture trustee
</TABLE>
(b) Financial Statements
Balance Sheet of ORIX Credit Alliance Receivables Trust 2000-A
ITEM 17. EXHIBITS AND FINANCIAL STATEMENTS
The undersigned Registrant hereby undertakes:
(a) That 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 Securities Act of 1933 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.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this registration statement as of the time it was declared
effective.
(c) That, 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.
(d) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(e) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
I-2
<PAGE> 94
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this amendment to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Secaucus, State of New Jersey, on February 17, 2000.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST
2000-A
By: ORIX CREDIT ALLIANCE, INC.,
as administrator and servicer
By: /s/ JOSEPH J. MCDEVITT, JR.
------------------------------------
Name: Joseph J. McDevitt, Jr.
Title: Executive Vice President
ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III
By: /s/ JOSEPH J. MCDEVITT, JR.
------------------------------------
Name: Joseph J. McDevitt, Jr.
Title: President
I-3
<PAGE> 95
POWER OF ATTORNEY
The undersigned directors and officers of ORIX Credit Alliance, Inc. do
hereby constitute and appoint Philip D. Cooper, Sandy Kallick, Joseph J.
McDevitt, Jr. and Hal B. Parkerson and any of them, with full power of
substitution, our true and lawful attorneys-in-fact and agents to do any and all
acts and things in our name and behalf in our capacities as directors and
officers, and to execute any and all instruments for us and in our names in the
capacities indicated below which such person may deem necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933 (the "Act"), as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with this registration statement, including
specifically, but not limited to, power and authority to sign for us, or any of
us, in the capacities indicated below and any and all amendments (including
pre-effective and post-effective amendments or any other registration statement
filed pursuant to the provisions of Rule 462(b) under the Act) hereto; and we do
hereby ratify and confirm all that such person or persons shall do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Act, this amendment to the registration
statement has been signed with respect to ORIX Credit Alliance, Inc. by the
following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ PHILIP D. COOPER Chairman and Chief Executive February 17, 2000
- --------------------------------------------------- Officer and Director
(Principal Executive
Officer)
/s/ JOSEPH J. MCDEVITT, JR. Executive Vice President, February 17, 2000
- --------------------------------------------------- Chief Financial Officer and
Director (Principal
Financial and Accounting
Officer)
/s/ SANDY KALLICK Senior Executive Vice February 17, 2000
- --------------------------------------------------- President, Chief Operating
Officer and Director
/s/ HAL B. PARKERSON Executive Vice President, February 17, 2000
- --------------------------------------------------- Secretary and Director
/s/ THOMAS A. JANCI Executive Vice President and February 17, 2000
- --------------------------------------------------- Director
/s/ ROBERT J. SAIGE Executive Vice President and February 17, 2000
- --------------------------------------------------- Director
/s/ MARK S. LASHER Executive Vice President and February 17, 2000
- --------------------------------------------------- Director
Director February , 2000
- ---------------------------------------------------
Kensuke Ishibashi
Director February , 2000
- ---------------------------------------------------
Yoshiski Ishida
Director February , 2000
- ---------------------------------------------------
Yoshihiko Miyauchi
Director February , 2000
- ---------------------------------------------------
John H. Moss
Director February , 2000
- ---------------------------------------------------
Yoshio Ono
</TABLE>
I-4
<PAGE> 96
Pursuant to the requirements of the Act, this registration statement has
been signed with respect to ORIX Credit Alliance Receivables Corporation III by
the following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ PHILIP D. COOPER Chairman and Chief Executive February 17, 2000
- --------------------------------------------------- Officer and Director
by: Joseph J. McDevitt, Jr. as attorney-in-fact (Principal Executive
Officer)
/s/ JOSEPH J. MCDEVITT, JR. President, Chief Operating February 17, 2000
- --------------------------------------------------- Officer, Chief Financial
Officer and Director
(Principal Financial and
Accounting Officer)
/s/ SANDY KALLICK Senior Executive Vice February 17, 2000
- --------------------------------------------------- President and Director
by: Joseph J. McDevitt, Jr. as attorney-in-fact
/s/ HAL B. PARKERSON Executive Vice President, February 17, 2000
- --------------------------------------------------- Secretary and Director
/s/ MARK S. LASHER Executive Vice President and February 17, 2000
- --------------------------------------------------- Director
/s/ WALTER C. MECK Director February 17, 2000
- ---------------------------------------------------
by: Joseph J. McDevitt, Jr. as attorney-in-fact
/s/ MOLLY M. LIEBERMAN Director February 17, 2000
- ---------------------------------------------------
by: Joseph J. McDevitt, Jr. as attorney-in-fact
</TABLE>
I-5
<PAGE> 97
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement
3.1 Form of Certificate of Incorporation of the trust depositor
3.2 Form of Bylaws of the trust depositor
4.1 Form of Trust Agreement (including form of certificates)
4.2 Form of Indenture (including form of notes)
5.1 Opinion of Sullivan & Cromwell
8.1 Tax opinion of Sullivan & Cromwell (included in Exhibit 5.1)
8.2 Tax opinion of Riker, Danzig, Scherer, Hyland and Perretti
10.1 Form of Transfer and Servicing Agreement
10.2 Form of Administration Agreement
10.3 Form of OCAI Transfer Agreement
10.4 Form of Custodian Agreement
10.5 Form of Subordination Agreement
23.1 Consent of Sullivan & Cromwell (included in Exhibit 5.1)
23.2 Consent of Riker, Danzig, Scherer, Hyland and Perretti
(included in Exhibit 8.2)
23.3 Consent of Arthur Andersen LLP
24.1 Power of Attorney (included on signature page)
25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of indenture trustee
</TABLE>
<PAGE> 1
EXHIBIT 1.1
$287,081,347
(approximate)
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
(ISSUER)
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III
(TRUST DEPOSITOR)
ORIX CREDIT ALLIANCE, INC.
(ORIGINATOR)
CLASS A-1
CLASS A-2
CLASS A-3
CLASS A-4
CLASS B
CLASS C
RECEIVABLE-BACKED NOTES, SERIES 2000-A
UNDERWRITING AGREEMENT
February ____, 2000
First Union Securities, Inc.
301 South College Street, TW-9
Charlotte, North Carolina 28288-0610
Ladies and Gentlemen:
ORIX Credit Alliance Receivables Corporation III (the "Trust
Depositor") proposes to transfer certain equipment installment loans and sales
contracts, finance leases, and title retention and other security agreements
with various companies to ORIX Credit Alliance Receivables Trust 2000-A (the
"Trust") and the Trust proposes to issue the Receivable-Backed Notes, Series
2000-A, consisting of Class A-1, Class A-2, Class A-3, Class A-4, Class B and
Class C (the "Notes"). The Notes are to be issued pursuant to the Indenture, to
be dated as of February 25, 2000 (the "Indenture"), between Harris Trust and
Savings Bank, as Indenture Trustee (the "Indenture Trustee") and the Trust, the
form of which Indenture shall substantially be the form filed as an exhibit to
the Registration Statement (as defined herein). Any capitalized terms used
herein but not defined shall have the meaning set forth or referenced in the
Indenture.
<PAGE> 2
The Trust Depositor and Orix Credit Alliance, Inc. ("OCAI") hereby
confirm their agreement through this agreement (the "Underwriting Agreement"),
with First Union Securities, Inc. (the "Underwriter") to sell the Notes to the
Underwriter on the terms and conditions hereof, in the amount set forth opposite
its name on Schedule A. The Notes are more fully described in the Registration
Statement that the Trust Depositor has furnished to the Underwriter.
Simultaneously with the execution of the Indenture, the Trust
Depositor will enter into a transfer and servicing agreement (the "Transfer and
Servicing Agreement") with ORIX Credit Alliance, Inc. (in such capacity, the
"Originator"), pursuant to which the Originator will transfer to the Trust
Depositor all of its right, title and interest in and to the Contract Assets as
of the Cutoff Date and the Trust Depositor will transfer to the Trust all of its
right, title and interest in and to the Contract Assets as of the Cutoff Date.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE TRUST DEPOSITOR.
The Trust Depositor and OCAI, jointly and severally, represent and warrant to
the Underwriter that:
(a) The Trust Depositor has all requisite corporate power, authority
and legal right to own its property and conduct its business as such properties
are presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under the Notes and each of the Transaction
Documents to which it is a party.
(b) The execution and delivery of the Notes and each of the
Transaction Documents to which it is a party, the incurrence of the obligations
herein and therein set forth and the consummation of the transactions
contemplated hereunder and thereunder have been duly authorized by the board of
directors of the Trust Depositor and all other necessary action has been taken.
(c) The Underwriting Agreement has been duly authorized and validly
executed and delivered by the Trust Depositor.
(d) Each of the Transaction Documents (other than the Underwriting
Agreement) to which it is a party and the Notes will be executed and delivered
by the Trust Depositor on or before the Closing Date, and when executed and
delivered by the other parties thereto, will constitute a valid and binding
agreement of the Trust Depositor, enforceable against the Trust Depositor in
accordance with their terms, except to the extent that (i) the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, receivership or other similar laws now or hereafter in effect
affecting the enforcement of creditors' or other obligees' rights in general,
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought and (iii) certain
remedial provisions of the Indenture may be unenforceable in whole or in part
under the Uniform Commercial Code (the "UCC"), but the inclusion of such
provisions does not render the other provisions of the Indenture invalid and,
notwithstanding that such provisions may be unenforceable in whole or in part,
the Indenture Trustee, on behalf of the Noteholders, will be able to enforce the
remedies of a secured party under the UCC.
2
<PAGE> 3
(e) The Notes will be issued pursuant to the terms of the Indenture
and, when executed by the Trust and authenticated by the Indenture Trustee in
accordance with the Indenture and delivered pursuant to the Underwriting
Agreement, will be validly issued and outstanding and entitled to the benefits
of the Indenture. The Notes will be in the form contemplated by the Indenture
and will conform in all material respects to the description thereof contained
in the Prospectus (as defined herein) and Registration Statement, each as
amended or supplemented.
(f) The Trust Depositor is not in violation of any requirement of
law or in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, lease or other instrument to which it is a party or by which it is bound
or to which any of its property is subject, which violations or defaults
separately or in the aggregate would have a material adverse effect on the Trust
Depositor.
(g) Neither the issuance and sale of the Notes, nor the execution
and delivery by the Trust Depositor of the Notes or the Transaction Documents to
which it is a party, nor the incurrence by the Trust Depositor of the
obligations herein and therein set forth, nor the consummation of the
transactions contemplated hereunder or thereunder, nor the fulfillment of the
terms hereof or thereof does or will (i) violate any requirement of law
presently in effect, applicable to it or its properties or by which it or its
properties are or may be bound or affected, (ii) conflict with, or result in a
breach of, or constitute a default under, any indenture, contract, agreement,
deed, lease, mortgage or instrument to which it is a party or by which it or its
properties are bound, or (iii) result in the creation or imposition of any Lien
(as defined herein) upon any of its property or assets, except for those
encumbrances created under the Indenture.
(h) All consents, approvals, authorizations, orders, filings,
registrations or qualifications of or with any court or any other governmental
agency, board, commission, authority, official or body required in connection
with the execution and delivery by the Trust Depositor of the Notes or the
Transaction Documents to which it is a party, or to the consummation of the
transactions contemplated hereunder and thereunder, or to the fulfillment of the
terms hereof and thereof have been or will have been obtained on or before the
Closing Date.
(i) All actions required to be taken by the Trust Depositor as a
condition to the offer and sale of the Notes as described herein or the
consummation of any of the transactions described in the Prospectus, the
Registration Statement and the Transaction Documents have been or, prior to the
Closing Date, will be taken.
(j) The representations and warranties made by the Trust Depositor
in the Transaction Documents and made in any Officer's Certificate of the Trust
Depositor delivered pursuant to the Transaction Documents will be true and
correct of the time made and on and as of the Closing Date as if set forth
herein.
(k) The Trust Depositor agrees that it has not granted, assigned,
pledged or transferred and shall not grant, assign, pledge or transfer to any
Person a security interest in, or any other right, title or interest in, the
Contract Assets except as provided in, or expressly
3
<PAGE> 4
permitted by, the Transfer and Servicing Agreement, and agree to take all action
required by the Transfer and Servicing Agreement in order to maintain the
security interest in the Contract Assets granted pursuant to the Transfer and
Servicing Agreement.
(l) The Trust Depositor possesses all material licenses,
certificates, authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business now
conducted by it and as described in the Prospectus, and the Trust Depositor has
not received notice of any proceedings relating to the revocation or
modification of any such license, certificate, authority or permit that if
decided adversely to the Trust Depositor would, singly or in the aggregate,
materially and adversely affect the conduct of its business, operations or
financial condition.
(m) There are no actions, proceedings or investigations pending
before or, to the knowledge of the Trust Depositor, threatened by any court,
administrative agency or other tribunal to which the Trust Depositor is a party
or of which any of its properties are the subject (i) that if determined
adversely to the Trust Depositor would have a material adverse effect on the
business or financial condition of the Trust Depositor, (ii) asserting the
invalidity of the Notes or any Transaction Document, (iii) seeking to prevent
the issuance of the Notes or the consummation by the Trust Depositor of any of
the transactions contemplated by any Transaction Document or (iv) that would
materially and adversely affect the performance by the Trust Depositor under, or
the validity or enforceability of, any Transaction Document or the Notes.
(n) The Trust Depositor has prepared and filed with the United
States Securities and Exchange Commission (the "Commission") in accordance with
the provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Securities Act"), a
registration statement on Form S-1 (registration number 333-95489), including a
form of preliminary prospectus, relating to the Notes. The registration
statement, and any post-effective amendment thereto, each in the form heretofore
delivered to the Underwriter and, excluding exhibits thereto, have been declared
effective by the Commission. As used in this Underwriting Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission and "Effective Date" means the date of the Effective Time. The
Trust Depositor has furnished to the Underwriter copies of one or more
preliminary prospectuses (each, a "Preliminary Prospectus") relating to the
Notes. Except where the context otherwise requires, the Registration Statement,
as amended at the Effective Time, including all documents filed as a part
thereof, and including any information contained in a prospectus subsequently
filed with the Commission pursuant to Rule 424(b) under the Act and deemed to be
part of the registration statement as of the Effective Time pursuant to Rule
430A under the Securities Act, is herein called the "Registration Statement",
and the prospectus, in the form filed by the Trust Depositor with the Commission
pursuant to Rule 424(b) under the Securities Act or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the time it became effective, is hereinafter called the "Prospectus". There are
no contracts or documents of the Trust Depositor that are required to be
described in the Prospectus, or filed as exhibits to the Registration Statement
pursuant to the Securities Act or the Rules and Regulations that have not been
so described, filed or incorporated by reference
4
<PAGE> 5
therein on or prior to the Closing Date. The conditions for use of Form S-1, as
set forth in the General Instructions thereto, have been satisfied.
(o) The Registration Statement relating to the Notes has been filed
with the Commission and such Registration Statement has become effective. No
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or, to the
knowledge of the Trust Depositor or OCAI, threatened by the Commission.
(p) The Registration Statement conforms, and any amendments or
supplements thereto and the Prospectus will conform, in all material respects to
the requirements of the Securities Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and does not and will not, as of the
Effective Date as to the Registration Statement and any amendment thereto, as of
the applicable filing date as to the Prospectus and any amendment or supplement
thereto, and as of the Closing Date, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to (i) that part of the Registration
Statement that shall constitute the Statement of Eligibility and Qualification
(Form T-1) of the Indenture Trustee under the Trust Indenture Act or (ii) any
Underwriter's Information (as defined in Section 10(d) hereof) contained
therein. The Indenture conforms in all respects to the requirements of the Trust
Indenture Act and the rules and regulations of the Commission thereunder.
(q) Since the respective dates as of which information is given in
the Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the Trust
Depositor, otherwise than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
(r) All the outstanding shares of capital stock of the Trust
Depositor have been duly authorized and validly issued, are fully paid and
nonassessable and, except to the extent set forth in the Registration Statement,
are owned by OCAI directly or indirectly through one or more wholly-owned
subsidiaries, free and clear of any claim, lien, encumbrance, security interest
or any other claim of any third party.
(s) Arthur Anderson LLP are independent public accountants with
respect to the Trust Depositor as required by the Securities Act.
(t) At the time of execution and delivery of the Transfer and
Servicing Agreement, the Trust Depositor will: (i) have good title to the
interest in the Contract Assets conveyed by OCAI, free and clear of any lien,
mortgage, pledge, charge, encumbrance, adverse claim or other security interest
not permitted under the Transfer and Servicing Agreement (collectively,
"Liens"); (ii) not have assigned to any Person (other than the Trust) any of its
right, title or interest in the Contract Assets, or the Transaction Documents;
and (iii) have the power and authority to pledge its interest in the Contract
Assets to the Trust. Upon execution and delivery of the Transfer and Servicing
Agreement by the Indenture Trustee and any related instruments of pledge,
transfer or assignment by the Trust Depositor, the Trust will have a valid
security interest
5
<PAGE> 6
in all of the Trust Depositor's right, title and interest in and to the Contract
Assets. Upon execution of the Indenture, the Indenture Trustee will have a valid
security interest in all of the Trust's right, title and interest in and to the
Contract Assets. Upon delivery to the Underwriter of the Notes, the Underwriter
will have good title to the Notes free of any Liens.
(u) As of the Cutoff Date, the Contracts met the eligibility
criteria described in the Prospectus and conformed to the descriptions thereof
contained in the Prospectus.
(v) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of the Transaction Documents and the
Notes have been paid or will be paid at or prior to the Closing Date.
(w) All OCAI-Provided Information was true and correct in all
material respects as of the date it was provided to the Underwriter. The term
"OCAI-Provided Information" means the information contained on any computer tape
furnished to the Underwriter or provided by other written means, electronic
transmission or computer disk by the Trust Depositor or OCAI concerning the
assets comprising the Trust Estate; and
(x) Neither the Trust nor the Trust Depositor are required to be
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and the rules and regulations of the Commission thereunder.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF OCAI. OCAI represents
and warrants to the Underwriter that:
(a) The execution and delivery of the Notes and each of the
Transaction Documents to which it is a party, the incurrence of the obligations
herein and therein set forth and the consummation of the transactions
contemplated hereunder and thereunder have been duly authorized by the board of
directors of OCAI and all other necessary action has been taken.
(b) The Underwriting Agreement has been duly authorized and validly
executed and delivered by OCAI.
(c) Each of the Transaction Documents (other than the Underwriting
Agreement) to which it is a party will be executed and delivered by OCAI on or
before the Closing Date, and when executed and delivered by the other parties
thereto, will constitute a valid and binding agreement of OCAI, enforceable
against OCAI in accordance with their terms, except to the extent that (i) the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws now or hereafter
in effect affecting the enforcement of creditors' or other obligees' rights in
general, (ii) the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought and (iii)
certain remedial provisions of the Indenture may be unenforceable in whole or in
part under the UCC, but the inclusion of such provisions does not render the
other provisions of the Indenture invalid and, notwithstanding that such
provisions may be
6
<PAGE> 7
unenforceable in whole or in part, the Indenture Trustee, on behalf of the
Noteholders, will be able to enforce the remedies of a secured party under the
UCC.
(d) The representations and warranties made by OCAI in the
Transaction Documents and made in any Officer's Certificate of OCAI delivered
pursuant to the Transaction Documents will be true and correct as of the time
made and on and as of the Closing Date as if set forth herein.
(e) OCAI possesses all material licenses, certificates, authorities
or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now conducted by it and as
described in the Prospectus, and has not received notice of any proceedings
relating to the revocation or modification of any such license, certificate,
authority or permit that if decided adversely to OCAI would, singly or in the
aggregate, materially and adversely affect the conduct of their business,
operations or financial condition.
(f) OCAI has been duly incorporated and is validly existing as
corporation in good standing under the law of its jurisdictions of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its businesses requires such qualification, and has
all power and authority necessary to own or hold properties and to conduct the
businesses in which engaged, except where the failure to so qualify or have such
power or authority could not have, individually or in the aggregate, a material
adverse effect on the condition (financial or otherwise), results of operations,
business or prospects of OCAI taken as a whole, and to execute, deliver and
perform its obligations under the Notes and the Transaction Documents.
(g) There are no actions, proceedings or investigations pending
before or, to the knowledge of OCAI, threatened by any court, administrative
agency or other tribunal to which OCAI is a party or of which any of its
properties are the subject (i) that if determined adversely to OCAI would have a
material adverse effect on the business or financial condition of OCAI, (ii)
asserting the invalidity of the Notes or any Transaction Document, (iii) seeking
to prevent the issuance of the Notes or the consummation by OCAI of any of the
transactions contemplated by any Transaction Document or (iv) that would
materially and adversely affect the performance by OCAI under, or the validity
or enforceability of, any Transaction Document to which OCAI is a party.
(h) OCAI (i) is not in violation of its charter or by-laws, (ii) is
not in default in any material respect, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which any of
its property or assets is subject or (iii) is not in violation in any respect of
any law, ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject, except any violation or default that
would not have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of OCAI.
7
<PAGE> 8
(i) OCAI agrees that it has not granted, assigned, pledged or
transferred and shall not grant, assign, pledge or transfer to any Person a
security interest in, or any other right, title or interest in, the Contract
Assets except as provided in, or expressly permitted by, the OCAI Transfer
Agreement and the Transfer and Servicing Agreement, and agree to take all action
required by the Transfer and Servicing Agreement in order to maintain the
security interest in the Contract Assets granted pursuant to the Transfer and
Servicing Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust,
the Trust Depositor and OCAI, jointly and severally, represents and warrants to
the Underwriter that:
(a) The Trust has full power, authority and legal right to execute,
deliver and sell the Notes to the Underwriter and to perform its obligations
under Notes and the Transaction Documents to which it is a party.
(b) The execution and delivery of the Transaction Documents to which
it is a party and the consummation of the transactions provided for therein have
been duly authorized by all necessary action on its part.
(c) The execution and delivery of the Transaction Documents to which
it is a party, the performance of the transactions contemplated thereby and the
fulfillment of the terms thereof will not conflict with, result in any breach of
any of the materials terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, any indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which the Trust is a
party or by which it or any of its property is bound.
(d) The execution and delivery of the Transaction Documents to which
it is a party, the performance of the transactions contemplated thereby and the
fulfillment of the terms thereof will not conflict with or violate, in any
material respect, any requirements of law applicable to the Trust.
(e) All approvals, authorizations, consents, orders or other actions
of any Person or any governmental authority required in connection with the
execution and delivery of the Transaction Documents to which it is a party, the
performance of the transactions contemplated thereby and the fulfillment of the
terms thereof have been obtained.
(f) The Trust has its chief executive office and place of business
(as such terms are used in Article 9 of the UCC) in Newark, Delaware. The Trust
agrees that it will not change the location of such office to a location outside
of Newark, Delaware, without at least 30 days prior written notice to the OCAI,
the Indenture Trustee and the Rating Agencies.
SECTION 4. PURCHASE AND SALE. Subject to the terms and conditions
and in reliance upon the covenants, representations and warranties herein set
forth, the Trust Depositor agrees to sell to the Underwriter, and the
Underwriter agrees to purchase from the Trust Depositor, the principal amount of
Notes set forth Schedule A hereto. The purchase price for the Notes shall be as
set forth in Schedule A hereto.
8
<PAGE> 9
SECTION 5. DELIVERY AND PAYMENT. The Trust Depositor will deliver
the Notes to the Underwriter against payment of the purchase price in
immediately available funds, paid at the direction of the Trust Depositor, at
the office of Sullivan & Cromwell, 125 Broad Street, New York, New York, New
York City time, on February 25, 2000, or at such other time not later than seven
(7) full business days thereafter as the Underwriter and the Trust Depositor
determine, such time being herein referred to as the "Closing Date." Each of the
Notes to be so delivered shall be represented by one or more Definitive Notes
registered in the name of Cede & Co., as nominee for The Depository Trust
Company ("DTC"). Definitive Notes evidencing the Notes will be available only
under the limited circumstances specified in the Indenture (other than such
Notes issued in the name of Cede & Co. as nominee for of DTC). The Trust
Depositor shall make such Definitive Notes representing the Notes available for
inspection by the Underwriter at the office at which the Notes are to be
delivered no later than five hours before the close of business in New York City
on the business day prior to the Closing Date.
SECTION 6. OFFERING BY UNDERWRITER. It is understood that the
Underwriter proposes to offer the Notes for sale to the public, which may
include selected dealers, as set forth in the Prospectus.
SECTION 7. COVENANTS OF THE TRUST DEPOSITOR AND OCAI. The Trust
Depositor and OCAI, jointly and severally, covenant and agree with the
Underwriter as follows:
(a) The Trust Depositor will prepare the Prospectus in a form
approved by the Underwriter, and will file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the Commission's close of
business on the second business day following the execution and delivery of this
Underwriting Agreement or, if applicable, such earlier time as may be required
by Rule 430A(a)(3) under the Securities Act.
(b) During the period that a prospectus relating to the Notes is
required to be delivered under the Securities Act in connection with sales of
such Notes (such period being hereinafter sometimes referred to as the
"prospectus delivery period"), before filing any amendment or supplement to the
Registration Statement or the Prospectus, the Trust Depositor will furnish to
the Underwriter a copy of the proposed amendment or supplement for review and
will not file any such proposed amendment or supplement to which the Underwriter
reasonably objects.
(c) During the prospectus delivery period, the Trust Depositor will
advise the Underwriter, promptly after it receives notice thereof, (i) when any
amendment to the Registration Statement shall have become effective; (ii) of any
request by the Commission for any amendment or supplement to the Registration
Statement or the Prospectus or for any additional information; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceeding for
that purpose, (iv) of the issuance by the Commission of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or the
initiation or threatening of any proceedings for that purpose and (v) of any
notification with respect to any suspension of the qualification of the Notes
for offer and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and will use its best efforts to prevent the
issuance of any such
9
<PAGE> 10
stop order or suspension and, if any is issued, will promptly use its best
efforts to obtain the withdrawal thereof.
(d) If, at any time during the prospectus delivery period, any event
occurs as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act, the Trust
Depositor will promptly prepare and file with the Commission an amendment or a
supplement that will correct such statement or omission or effect such
compliance.
(e) The Trust Depositor will endeavor to qualify the Notes for offer
and sale under the securities or blue sky laws of such jurisdictions as the
Underwriter shall reasonably request and will continue such qualification in
effect so long as reasonably required for distribution of the Notes; provided,
however, that the Underwriter shall not be obligated to qualify to do business
in any jurisdiction in which they currently are not so qualified; and provided,
further, that the Trust Depositor shall not be required to file a general
consent to service of process in any jurisdiction.
(f) The Trust Depositor will furnish to the Underwriter, without
charge, two copies of the Registration Statement (including exhibits thereto),
one of which will be signed during the prospectus delivery period, as many
copies of the Prospectus and any supplement thereto as the Underwriter may
reasonably request.
(g) For a period from the date of this Underwriting Agreement until
the retirement of the Notes, or until such time as the Underwriter shall cease
to maintain a secondary market in the Notes, whichever first occurs, the Trust
Depositor will deliver to the Underwriter, (i) the annual statements of
compliance, (ii) the annual independent certified public accountants' reports
furnished to the Indenture Trustee, (iii) all documents required to be
distributed to the Noteholders, (iv) all documents filed with the Commission
pursuant to the Exchange Act or any order of the Commission thereunder, in each
case as provided to the Indenture Trustee or filed with the Commission, as soon
as such statements and reports are furnished to the Indenture Trustee or filed
or as soon thereafter as practicable, (v) any order of the Commission under the
Securities Act or the Exchange Act in regard to the Trust, the Trust Depositor
or to OCAI with respect to the Trust or the Trust Depositor, or pursuant to a
"no action" letter obtained from the staff of the commission by the Trust, the
Trust Depositor or OCAI with respect to the Trust or the Trust Depositor and
affecting the Trust, the Trust Depositor or OCAI and (vi) from time to time,
such other information concerning the Trust, the Trust Depositor as the
Underwriter, may reasonably request.
(h) To the extent, if any, that the rating provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes is
conditional upon the furnishing of documents or the taking of any other actions
by the Trust or the Trust Depositor, the Trust Depositor or the Trust, as
applicable shall furnish such documents and take any such other actions.
10
<PAGE> 11
(i) If required by the Securities Act or the rules of the Commission
promulgated hereunder, the Trust Depositor will cause the Indenture Trustee to
make generally available to Noteholders and to the Underwriter, as soon as
practicable an earnings statement covering a period of at least twelve months
beginning with the first fiscal quarter occurring after the Effective Date of
the Registration Statement, which shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 of the Commission promulgated thereunder if
then applicable.
(j) For a period of 90 days from the date hereof, the Trust
Depositor will not offer for sale, sell, contract to sell or otherwise dispose
of, directly or indirectly, or file a registration statement for, or announce
any offering of, any securities collateralized by, or evidencing an ownership
interest in, any asset-backed securities of the Trust Depositor (other than the
Notes purchased hereunder) without the prior written consent of the Underwriter.
SECTION 8. CONDITIONS TO THE UNDERWRITER'S OBLIGATIONS. The
obligations of the Underwriter hereunder are subject, to the accuracy, when made
and on the Closing Date, of the representations and warranties of the Trust, the
Trust Depositor and OCAI contained herein, to the accuracy of the statements of
the Trust, the Trust Depositor and OCAI made in any certificates pursuant to the
provisions hereof, to the performance by the Trust, the Trust Depositor and OCAI
of their respective obligations hereunder and to each of the following
additional terms and conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424 in the manner and within the applicable time period
prescribed for such filing by the rules and regulations of the Commission under
the Securities Act and in accordance with Section 7(a) of this Underwriting
Agreement, and the Underwriter shall have received confirmation of the
effectiveness of the Registration Statement; and, prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceedings for such purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information from the Commission with respect to the Registration
Statement shall have been complied with to the reasonable satisfaction of the
Underwriter.
(b) The Underwriter, shall have received evidence satisfactory to it
that the Class A-1 Notes shall be rated "P-1" by Moody's, "A-1+" by S&P and
"F1+/AAA" by Fitch, the Class A-2 Notes shall be rated no lower than "Aaa" by
Moody's, "AAA" by S&P and "AAA" by Fitch, the Class A-3 Notes shall be rated no
lower than "Aaa" by Moody's, "AAA" by S&P and "AAA" by Fitch, the Class A-4
Notes shall be rated no lower than "Aaa" by Moody's, "AAA" by S&P and "AAA", by
Fitch, the Class B Notes shall be rated no lower than "A2" by Moody's, "A" by
S&P and "A" by Fitch, and the Class C Notes shall be rated no lower than "Baa2"
by Moody's, "BBB" by S&P and "BBB" by Fitch.
(c) (i) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Underwriting Agreement, the
Transaction Documents, the Notes, the Registration Statement, the Preliminary
Prospectus and the Prospectus, and all other legal matters relating to such
agreements and the transactions contemplated hereby and thereby shall be
reasonably satisfactory in all material respects to counsel for the Underwriter,
and the Trust
11
<PAGE> 12
Depositor shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters and
(ii) prior to or contemporaneously with the purchase of Notes hereunder, all
transactions contemplated to be consummated under such Transaction Documents on
the Closing Date (including, without limitation, the issuance and placement of
any subordinated, privately-placed securities) shall have been so consummated to
the reasonable satisfaction of the Underwriter.
(d) Hal B. Parkerson shall have furnished to the Underwriter his
written opinion, as general counsel to OCAI and the Trust Depositor, addressed
to the Underwriter and dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriter (which opinion will also be delivered to the
Rating Agencies, all of whom shall be entitled to rely on such opinion as if an
addressee) substantially to the effect set forth on Annex A.
(e) Sullivan & Cromwell shall have furnished to the Underwriter
their written opinions, as special New York counsel to OCAI, the Trust Depositor
and the Trust, addressed to the Underwriters and dated the Closing Date, in form
and substance reasonably satisfactory to the Underwriter substantially to the
effect of Annexes B-1 and B-2 (which Annex B-1 opinion will also be delivered to
the Rating Agencies, all of whom shall be entitled to rely on such opinion as if
an addressee).
(f) Sullivan & Cromwell shall have furnished to the Underwriter,
their written opinions, as counsel to the Trust Depositor and OCAI, addressed to
the Underwriter and dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriter (which opinion will also be delivered to the
Rating Agencies, all of whom shall be entitled to rely on such opinion as if an
addressee), with respect to the (i) characterization of the transfer of the
Contract Assets by OCAI to the Trust Depositor pursuant to the Transfer and
Servicing Agreement as a sale and the non-consolidation of the Trust Depositor
and OCAI and (ii) such other opinions agreed to by the Trust Depositor, OCAI and
the Underwriter.
(g) Riker, Danzig, Scherer, Hyland and Perretti shall have furnished
to the Underwriter their written opinion, as special New Jersey counsel to OCAI,
the Trust Depositor and the Trust, addressed to the Underwriter and dated the
Closing Date, in form and substance reasonably satisfactory to the Underwriter
(which opinion will also be delivered to the Rating Agencies, all of whom shall
be entitled to rely on such opinion as if an addressee) substantially to the
effect set forth on Annex C.
(h) Riker, Danzig, Scherer, Hyland and Perretti shall have furnished
to the Underwriter their written opinion, as special New Jersey tax counsel to
OCAI, the Trust Depositor and the Trust, addressed to the Underwriter and dated
the Closing Date, in form and substance reasonably satisfactory to the
Underwriter (which opinion will also be delivered to the Rating Agencies, all of
whom shall be entitled to rely on such opinion as if an addressee) substantially
to the effect set forth on Annex D.
(i) Richards, Layton & Finger, P.A. shall have furnished to the
Underwriter their written opinion, as special Delaware counsel to The Bank of
New York (Delaware) ("BNY (DE)"), addressed to the Underwriter and dated the
Closing Date, in form and substance
12
<PAGE> 13
reasonably satisfactory to the Underwriter (which opinion will also be delivered
to the Rating Agencies, all of whom shall be entitled to rely on such opinion as
if an addressee) substantially to the effect set forth on Annex E.
(j) Richards, Layton & Finger, P.A. shall have furnished to the
Underwriter their written opinion, as special Delaware counsel to the Trust
Depositor and the Trust, addressed to the Underwriter and dated the Closing
Date, in form and substance reasonably satisfactory to the Underwriter (which
opinion will also be delivered to the Rating Agencies, all of whom shall be
entitled to rely on such opinion as if an addressee) substantially in form of
Annex F.
(k) Seward & Kissell shall have furnished to the Underwriter their
written opinion, as special counsel to the Indenture Trustee, addressed to the
Underwriter and dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriter (which opinion will also be delivered to the
Rating Agencies, all of whom shall be entitled to rely on such opinion as if an
addressee) substantially to the effect set forth on Annex G.
(l) The Underwriter shall have received from Moore & Van Allen,
PLLC, counsel for the Underwriter, such opinion or opinions, dated the Closing
Date, with respect to such matters as the Underwriter may require, and the Trust
Depositor shall have furnished to such counsel such documents as they reasonably
request for enabling them to pass upon such matters.
(m) Each of the Trust Depositor, the Trust and OCAI shall have
furnished to the Underwriter a certificate, dated the Closing Date, of any of
its Chairman of the Board, President or Vice President and its chief financial
officer stating that (i) such officers have carefully examined the Registration
Statement and the Prospectus, (ii) the Prospectus does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (provided
that each of the Trust Depositor and OCAI may exclude the Underwriter's
Information (as defined in Section 10(d) herein) from such representation),
(iii) the representations and warranties of OCAI or the Trust Depositor, as the
case may be, contained in this Underwriting Agreement and the Transaction
Documents are true and correct in all material respects on and as of the Closing
Date, (iv) OCAI or the Trust Depositor, as the case may be, have complied in all
material respects with all agreements and satisfied in all material respects all
conditions on its part to be performed or satisfied hereunder and under such
agreements at or prior to the Closing Date, (v) no stop order suspending the
effectiveness of the Registration Statement has been issued and is outstanding
and no proceedings for that purpose have been instituted and not terminated or,
to the best of his or her knowledge, are contemplated by the Commission, and
(vi) since the date of its most recent financial statements, there has been no
material adverse change in the financial position or results of operations of
OCAI or the Trust Depositor, as applicable, or any development including a
prospective change, in or affecting the condition (financial or otherwise),
results of operations or business of OCAI or the Trust Depositor except as set
forth in or contemplated by the Registration Statement and the Prospectus.
(n) The Indenture Trustee shall have furnished to the Underwriter a
certificate of the Indenture Trustee, signed by one or more duly authorized
officers of the Indenture Trustee, dated
13
<PAGE> 14
the Closing Date, as to the due authorization, execution and delivery of the
Indenture by the Indenture Trustee and the acceptance by the Indenture Trustee
of the Trust Estate and such other matters as the Underwriter shall reasonably
request.
(o) Subsequent to the date of this Underwriting Agreement, there
shall not have occurred (i) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the over-the-counter market shall
have been suspended or limited, or minimum prices shall have been established on
either of such exchanges or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having jurisdiction, or
trading in securities of the Trust Depositor or OCAI on any exchange or in the
over-the-counter market shall have been suspended; (ii) a general moratorium on
commercial banking activities shall have been declared by Federal or New York
State authorities; or (iii) an outbreak or escalation of hostilities or a
declaration by the United States of a national emergency or war or such a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the Underwriter,
impracticable or inadvisable to proceed with the public offering or the delivery
of the Notes on the terms and in the manner contemplated in the Prospectus.
(p) With respect to the letter of Arthur Andersen LLP, delivered to
the Underwriter, concurrently with the execution of this Underwriting Agreement
(the "initial letter"), the Trust Depositor shall have furnished to the
Underwriter, a letter (the "bring-down letter") of such accountants, addressed
to the Underwriter and dated the Closing Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letter (or with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five days prior to the date of such bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by its initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in its initial letter.
(q) The Underwriter shall receive evidence satisfactory to it that,
on or before the Closing Date, UCC-l financing statements have been or are being
filed in each office in each jurisdiction in which such financing statements are
required (i) to perfect the first priority security interests created by the
Transfer and Servicing Agreement reflecting the interest of the Trust Depositor
in the Contract Assets and the proceeds thereof and (ii) to perfect the first
priority security interest created by the Indenture, reflecting the interest of
the Indenture Trustee in the Contract Assets and the proceeds thereof as
described in the Prospectus.
(r) Subsequent to the execution and delivery of this Underwriting
Agreement, (i) no downgrade, withdrawal or qualification shall have occurred
with respect to the rating accorded the Notes or any of the Trust Depositor's
other debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of Rule
436(g)(2) of the Securities Act and (ii) no such organization shall have
publicly announced that it
14
<PAGE> 15
has under surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Notes or the Trust
Depositor's other debt securities.
If any condition specified in this Section 8 shall not have been
fulfilled when and as required to be fulfilled, this Underwriting Agreement may
be terminated by the Underwriter by notice to the Trust Depositor at any time at
or prior to the Closing Date, and such termination shall be without liability of
any party to any other party except as provided in Section 10.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement shall be deemed to be in compliance
with the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriter.
SECTION 9. PAYMENT AND EXPENSES. If (i) the Trust shall fail to
tender the Notes for delivery to the Underwriter for any reason not permitted
under this Underwriting Agreement or (ii) the Underwriter shall decline to
purchase the Notes for any reason permitted under this Underwriting Agreement,
the Trust Depositor shall reimburse the Underwriter for the fees and expenses of
its counsel and for such other out-of-pocket expenses as shall have been
reasonably incurred by them in connection with this Underwriting Agreement and
the proposed purchase of the Notes, and upon demand the Trust Depositor shall
pay the full amount thereof to the Underwriter.
SECTION 10. INDEMNIFICATION. (a) OCAI, the Trust Depositor and the
Trust shall, jointly and severally, indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the Securities Act against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Underwriter may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof or
supplement thereto, or in any Preliminary Prospectus or the Prospectus or in any
amendment thereof or supplement thereto or (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse the Underwriter
for any legal or other expenses reasonably incurred by the Underwriter in
connection with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that neither OCAI nor the Trust Depositor shall be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any Registration Statement as originally filed or in
any amendment thereof or supplement thereto, or in any Preliminary Prospectus or
the Prospectus or in any amendment thereof or supplement thereto in reliance
upon and in conformity with the Underwriter's Information (as defined in Section
10(d) herein).
(b) The Underwriter shall indemnify and hold harmless OCAI and the
Trust Depositor, against any loss, claim, damage or liability, joint or several,
or any action in respect thereof, to which OCAI and the Trust Depositor or any
one or more thereof may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action
15
<PAGE> 16
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement as
originally filed or in any amendment thereof or supplement thereto, or in any
Preliminary Prospectus or the Prospectus or in any amendment thereof or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with the Underwriter's Information (as
defined in Section 10(d) herein), and shall reimburse OCAI and the Trust
Depositor for any legal or other expenses reasonably incurred by OCAI or the
Trust Depositor directly in connection with investigating or preparing to defend
or defending against or appearing as third party witness in connection with any
such loss, claim, damage or liability (or any action in respect thereof) as such
expenses are incurred.
(c) Promptly after receipt by any indemnified party under this
Section 10 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 10, except to the extent it has
been materially prejudiced by such failure; and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 10 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it that are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially
16
<PAGE> 17
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) at any time for all such indemnified parties, which firm shall be
designated in writing by the Underwriter, if the indemnified parties under this
Section 10 consist of the Underwriter or any of its directors and controlling
persons, or by OCAI or the Trust Depositor, if the indemnified parties under
this Section 10 consist of OCAI or the Trust Depositor or any of the Trust
Depositor's or OCAI's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 10(a) and (b), shall use its best efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent, but if settled with its written consent or
if there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) The Underwriter confirms that the Underwriter's Information, as
defined herein, contained in the Prospectus is correct and constitutes the only
information furnished in writing to the Trust Depositor and OCAI by or on behalf
of the Underwriter specifically for inclusion in the Registration Statement and
the Prospectus. The "Underwriter's Information" includes the following under the
caption "Plan of Distribution": (i) the chart listing the Underwriter of the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes,
the Class B Notes and the Class C Notes, (ii) the paragraph immediately
following the chart described in clause (i), and (iii) the charts listing the
Underwriter's Selling Concession and Reallowance Concession.
(e) The obligations of OCAI, the Trust Depositor and the Underwriter
in this Section 10 are in addition to any other liability that OCAI, the Trust
Depositor or the Underwriter, as the case may be, may otherwise have.
SECTION 11. CONTRIBUTION.
If the indemnification provided for in Section 10 is unavailable or
insufficient to hold harmless an indemnified party under Section 10(a) or (b),
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or any action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by OCAI and the Trust Depositor on the one hand and the
Underwriter on the other from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of OCAI and the
Trust Depositor on the one hand and the Underwriter on the other with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or any action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by OCAI and the Trust
Depositor on the one hand and the Underwriter on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Notes
17
<PAGE> 18
purchased hereunder (before deducting expenses) received by the Trust Depositor
bear to the total underwriting discounts and commissions received by the
Underwriter with respect to the Notes purchased hereunder, in each case as set
forth in the table under the caption "Plan of Distribution" in the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by OCAI or the Trust Depositor on the one hand or the Underwriter on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. OCAI, the Trust Depositor and the Underwriter agrees that it would not
be just and equitable if contributions pursuant to this Section 11 were to be
determined by pro rata allocation (even if the Underwriter were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability referred to above in this Section 11 shall be deemed to include for
purposes of this Section 11, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
claim or any action. Notwithstanding the provisions of this Section 11, the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Notes underwritten by it and
distributed to the public were offered to the public less the amount of any
damages that the Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
SECTION 12. TERMINATION OF AGREEMENT. The Underwriter may terminate
this Underwriting Agreement immediately upon notice to OCAI and the Trust
Depositor, at any time at or prior to the Closing Date if any of the events or
conditions described in Section 8(k) of this Underwriting Agreement shall occur
and be continuing. In the event of any such termination, the covenants set forth
in Section 7, the provisions of Section 9, the indemnity agreement set forth in
Section 10 and the provisions of Sections 11 and this Section 12 shall remain in
effect.
SECTION 13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This
Underwriting Agreement shall inure to the benefit of and be binding upon the
Underwriter, the Trust Depositor, OCAI, and their respective successors. Nothing
expressed or mentioned in this Underwriting Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriter,
the Trust Depositor and OCAI and their respective successors and the controlling
persons and officers and directors, and their heirs and legal assigns, any legal
or equitable right, remedy or claim under or in respect of this Underwriting
Agreement or any provision contained herein.
SECTION 14. EXPENSES. The Trust Depositor and OCAI, jointly and
severally, agree with the Underwriter to pay (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Notes and any
taxes payable in that connection; (ii) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (iii) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof
18
<PAGE> 19
(including, in each case, exhibits), any Preliminary Prospectus and the
Prospectus, all as provided in this Underwriting Agreement; (iv) the costs of
reproducing and distributing this Underwriting Agreement and any other
underwriting and selling group documents by mail, telex or other means of
communications; (v) the fees and expenses of qualifying the Notes under the
securities laws of the several jurisdictions as provided in Section 7(e) and of
preparing, printing and distributing "blue sky memoranda" and "legal investment
surveys" (including the related reasonable and documented fees and expenses of
counsel to the Underwriter); (vi) any fees charged by rating agencies for rating
the Notes; (vii) all fees and expenses of the Indenture Trustee and its counsel;
(viii) any transfer taxes payable in connection with its sale of the Notes
pursuant to this Underwriting Agreement; and (ix) all other costs and expenses
incident to the performance of the obligations of the Trust Depositor and OCAI
under this Underwriting Agreement.
SECTION 15. SURVIVAL. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Trust Depositor,
OCAI and the Underwriter contained in this Underwriting Agreement or made by or
on their behalf, respectively, pursuant to this Underwriting Agreement, shall
survive the delivery of and payment for the Notes and shall remain in full force
and effect, regardless of any termination or cancellation of this Underwriting
Agreement or any investigation made by or on behalf of any of them or any person
controlling any of them.
SECTION 16. NOTICES. All communication hereunder shall be in writing
and, (i) if sent to the Underwriter will be mailed, delivered or telecopied and
confirmed to them at First Union Securities, Inc., Asset Securitization
Division, 301 South College Street, TW-9, Charlotte, North Carolina, 28288-0610,
Telecopy Number: (704) 374-3254; if sent to the Trust Depositor, will be mailed,
delivered or telecopied and confirmed to them at the addresses of the Trust
Depositor set forth in the Registration Statement, Attention: Treasurer; and
(iii) if sent to OCAI, will be mailed, delivered or telecopied and confirmed to
them at the address of OCAI set forth in the Registration Statement, Attention:
Chief Financial Officer. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Trust Depositor and OCAI
shall be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Underwriter.
SECTION 17. GOVERNING LAW, JURY WAIVER.
(a) THIS UNDERWRITING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK; AND
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. EACH PERSON HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER
19
<PAGE> 20
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 17(b).
SECTION 18. COUNTERPARTS. This Underwriting Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall, together constitute one and the same
instrument.
SECTION 19. HEADINGS. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Underwriting Agreement.
SECTION 20. EFFECTIVENESS. This Underwriting Agreement shall become
effective upon execution and delivery.
20
<PAGE> 21
If you are in agreement with the foregoing, please sign the
counterpart hereof and return it to the Trust Depositor, whereupon this letter
and your acceptance shall become a binding agreement among the Trust Depositor,
OCAI, and the Underwriter.
Very truly yours,
ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III
By:
-------------------------------------
Name:
Title:
ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: ORIX Credit Alliance Receivables
Corporation III, as Trust Depositor
By:
------------------------------
Name:
Title:
ORIX CREDIT ALLIANCE, INC.
By:
-------------------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date hereof.
FIRST UNION SECURITIES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
21
<PAGE> 22
SCHEDULE A
<TABLE>
<S> <C>
Date of Underwriting Agreement: February ____, 2000
Underwriter: First Union Securities, Inc.
Underwriter Address: First Union Securities, Inc.
One First Union Center, TW-9
301 South College Street
Charlotte, NC 28288-0610
Title, Purchase Price and Description of Notes:
Class A-1 Notes
---------------
Title: _____________% Class A-1 Receivable-Backed
Notes, Series 2000-A
Price to public: _____________%
Purchase price: _____________%
Underwriting discount: _____________%
Distribution Dates: The 15th calendar day of each month (if such day is
not a Business Day, then next succeeding Business
Day), commencing March 15, 2000
Maturity: March 15, 2001 Distribution Date
Redemption provisions: Notes remaining outstanding may be redeemed in
whole, but not in part, on any Distribution Date at
the Trust Depositor's option if the Aggregate
Contract Principal Balance at such time is less than
15% of the initial Aggregate Contract Principal
Balance as of the Cutoff Date.
Notes remaining outstanding shall be redeemed in
full on any Distribution Date if the aggregate
amounts on deposit in the Collection Account, the
Reserve Fund and the Spread Fund are greater than
or equal to the sum of (i) the entire outstanding note
principal balance, (ii) the interest accrued thereon,
(iii) any accrued and unpaid Servicing Fee
(including therein amounts owed to the Indenture
Trustee) and (iv) unreimbursed Servicer Advances.
</TABLE>
22
<PAGE> 23
<TABLE>
<S> <C>
Class A-2 Notes
---------------
Title: _____________% Class A-2 Receivable-Backed
Notes, Series 2000-A
Price to public: _____________%
Purchase price: _____________%
Underwriting discount: _____________%
Distribution Dates: The 15th calendar day of each month (if such day
is not a Business Day, then next succeeding Business
Day), commencing March 15, 2000
Maturity: April 15, 2002 Distribution Date
Redemption provisions: Notes remaining outstanding may be redeemed in
whole, but not in part, on any Distribution Date at
the Trust Depositor's option if the Aggregate
Contract Principal Balance at such time is less than
15% of the initial Aggregate Contract Principal
Balance as of the Cutoff Date.
Notes remaining outstanding shall be redeemed in
full on any Distribution Date if the aggregate
amounts on deposit in the Collection Account, the
Reserve Fund and the Spread Fund are greater than
or equal to the sum of (i) the entire outstanding note
principal balance, (ii) the interest accrued thereon,
(iii) any accrued and unpaid Servicing Fee
(including therein amounts owed to the Indenture
Trustee) and (iv) unreimbursed Servicer Advances.
Class A-3 Notes
---------------
Title: _____________% Class A-3 Receivable-Backed
Notes, Series 2000-A
Price to public: _____________%
Purchase price: _____________%
Underwriting discount: _____________%
Distribution Dates: The 15th calendar day of each month (if such day is
not a Business Day, then next succeeding Business
Day), commencing March 15, 2000
Maturity: May 15, 2004 Distribution Date
Redemption provisions: Notes remaining outstanding may be redeemed in
whole, but not in part, on any Distribution Date at
the Trust Depositor's option if the Aggregate
Contract Principal Balance at such time is less than
15% of the initial Aggregate Contract Principal
Balance as of the Cutoff Date.
Notes remaining outstanding shall be redeemed in
full on any Distribution Date if the aggregate
</TABLE>
23
<PAGE> 24
<TABLE>
<S> <C>
amounts on deposit in the Collection Account, the
Reserve Fund and the Spread Fund are greater than
or equal to the sum of (i) the entire outstanding note
principal balance, (ii) the interest accrued thereon,
(iii) any accrued and unpaid Servicing Fee
(including therein amounts owed to the Indenture
Trustee) and (iv) unreimbursed Servicer Advances.
Class A-4 Notes
---------------
Title: _____________% Class A-4 Receivable-Backed
Notes, Series 2000-A
Price to public: _____________%
Purchase price: _____________%
Underwriting discount: _____________%
Distribution Dates: The 15th calendar day of each month (if such day is
not a Business Day, then next succeeding Business
Day), commencing March 15, 2000
Maturity: March 15, 2005 Distribution Date
Redemption provisions: Notes remaining outstanding may be redeemed in
whole, but not in part, on any Distribution Date at
the Trust Depositor's option if the Aggregate
Contract Principal Balance at such time is less than
15% of the initial Aggregate Contract Principal
Balance as of the Cutoff Date.
Notes remaining outstanding shall be redeemed in
full on any Distribution Date if the aggregate
amounts on deposit in the Collection Account, the
Reserve Fund and the Spread Fund are greater than
or equal to the sum of (i) the entire outstanding note
principal balance, (ii) the interest accrued thereon,
(iii) any accrued and unpaid Servicing Fee
(including therein amounts owed to the Indenture
Trustee) and (iv) unreimbursed Servicer Advances.
Class B Notes
-------------
Title: _____________% Class B Receivable-Backed
Notes, Series 2000-A
Price to public: _____________%
Purchase price: _____________%
Underwriting discount: _____________%
Distribution Dates: The 15th calendar day of each month (if such day is
not a Business Day, then next succeeding Business
Day), commencing March 15, 2000
Maturity: September 15, 2005 Distribution Date
</TABLE>
24
<PAGE> 25
<TABLE>
<S> <C>
Redemption provisions: Notes remaining outstanding may be redeemed in
whole, but not in part, on any Distribution Date at
the Trust Depositor's option if the Aggregate
Contract Principal Balance at such time is less than
15% of the initial Aggregate Contract Principal
Balance as of the Cutoff Date.
Notes remaining outstanding shall be redeemed in
full on any Distribution Date if the aggregate
amounts on deposit in the Collection Account, the
Reserve Fund and the Spread Fund are greater than
or equal to the sum of (i) the entire outstanding note
principal balance, (ii) the interest accrued thereon,
(iii) any accrued and unpaid Servicing Fee
(including therein amounts owed to the Indenture
Trustee) and (iv) unreimbursed Servicer Advances.
Class C Notes
-------------
Title: _____________% Class C Receivable-Backed
Notes, Series 2000-A
Price to public: _____________%
Purchase price: _____________%
Underwriting discount: _____________%
Distribution Dates: The 15th calendar day of each month (if such day is
not a Business Day, then next succeeding Business
Day), commencing March 15, 2000
Maturity: November 15, 2007 Distribution Date
Redemption provisions: Notes remaining outstanding may be redeemed in
whole, but not in part, on any Distribution Date at
the Trust Depositor's option if the Aggregate
Contract Principal Balance at such time is less than
15% of the initial Aggregate Contract Principal
Balance as of the Cutoff Date.
Notes remaining outstanding shall be redeemed in
full on any Distribution Date if the aggregate
amounts on deposit in the Collection Account, the
Reserve Fund and the Spread Fund are greater than
or equal to the sum of (i) the entire outstanding note
principal balance, (ii) the interest accrued thereon,
(iii) any accrued and unpaid Servicing Fee
(including therein amounts owed to the Indenture
Trustee) and (iv) unreimbursed Servicer Advances.
</TABLE>
25
<PAGE> 26
Closing Date, Time and Location:
<TABLE>
<S> <C>
Date: February 25, 2000
Time: 9:00 a.m.
Location: Sullivan & Cromwell, New York, New York
</TABLE>
26
<PAGE> 1
EXHIBIT 3.1
[FORM OF AMENDED AND RESTATED]
CERTIFICATE OF INCORPORATION
OF
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III
ARTICLE I
The name of the Corporation is ORIX Credit Alliance Receivables
Corporation III (herein sometimes referred to as the "Corporation").
ARTICLE II
The address of its registered office in the state of Delaware is 15
East North Street, City of Dover, Delaware, County of Kent. The name and address
of its registered agent at such address is United Corporate Services, Inc.
ARTICLE III
(a) The nature of the business or purposes to be conducted or promoted
by the Corporation is to engage in the following activities:
(i) to acquire, own, hold, service, sell, assign, pledge,
finance, refinance and otherwise deal with from time to time
installment sale contracts, loan contracts, equipment finance leases
and title retention and other security instruments (the "Contracts")
secured by capital equipment used in such industries as construction,
trucking and transportation, wood and pulp, machine tools and printing
and publishing, among others (the "Financed Equipment"), monies due
thereunder, security interests in the Financed Equipment, proceeds from
claims on insurance policies related thereto and related agreements,
instruments, documents and rights;
(ii) to acquire, own, hold, service, sell, assign, pledge,
finance, refinance and otherwise deal with the Financed Equipment and
other collateral securing the Contracts, related insurance policies,
agreements with equipment dealers or lessors or other originators or
servicers of Contracts and any proceeds or further rights associated
with any of the foregoing;
<PAGE> 2
(iii) to sell, assign, pledge or otherwise transfer Contracts,
Certificates or Notes to trusts originated by the Corporation or one of
its affiliates (the "Trusts");
(iv) to authorize, sell and deliver one or more series or
classes or participation certificates or other evidence of interests
("Certificates") or one or more series or classes of bonds, notes or
other evidences or indebtedness ("Notes"), in either case issued by
Trusts;
(v) to acquire Certificates or Notes;
(vi) to issue, authorize, sell and deliver Notes secured or
collateralized by Contracts, Certificates or Notes;
(vii) to hold and enjoy all of the rights and privileges of
any Certificate or Notes;
(viii) to negotiate, authorize, execute, deliver, assume the
obligations under, and perform, any agreement or instrument or document
relating to the activities set forth in clauses (i) through (vii)
above, including but not limited to any trust agreement, transfer and
servicing agreement, pooling and servicing agreement, indenture,
reimbursement agreement, credit support agreement, receivables purchase
agreement, indemnification agreement or underwriting agreement entered
into by and among, among others, the Corporation as well as certain
other financing entities (collectively hereinafter referred to as the
"Entities"); and
(ix) to engage in any activity and to exercise any powers
permitted to corporations under the laws of the State of Delaware that
are related or incidental to the foregoing and necessary, convenient or
advisable to accomplish the foregoing.
(b) Notwithstanding any other provision of this Amended and Restated
Certificate of Incorporation and any provision of law that otherwise so empowers
the Corporation, the Corporation shall not, without the written consent of each
nationally recognized rating agency which has been requested by the Corporation
to rate any issue of Certificates or Notes and which is then rating such
Certificates or Notes, incur any indebtedness, or assume or guaranty any
indebtedness of any other entity, other than (A) any indebtedness incurred in
connection with any Certificates or Notes, provided that such indebtedness
incurred in connection with any Certificates or Notes must be rated at least in
the same ratings category given any outstanding Certificates or Notes by each
nationally recognized rating agency that has rated the outstanding Certificates
or Notes
2
<PAGE> 3
or, prior to the issuance of such indebtedness, the Corporation shall have
received confirmation from each nationally recognized rating agency that has
rated the outstanding Certificates or Notes that the ratings of the outstanding
Certificates or Notes will not be adversely affected by the issuance of such
future indebtedness, (B) indebtedness not exceeding 1% of the Corporation's
total assets at such time on account of incidentals or services supplied or
furnished to the Corporation in the ordinary course of its business and (C) any
indebtedness to any affiliate of the Corporation incurred in connection with the
acquisition of Contracts, which indebtedness shall be subordinated to any other
obligations of the Corporation and shall be nonrecourse debt of the Corporation.
ARTICLE IV
The total number of shares of stock which the Corporation shall have
authority to issue is two hundred (200) and the par value of each of such shares
is Five Dollars ($5.00) amounting in the aggregate to One Thousand Dollars
($1,000).
ARTICLE V
(a) All corporate powers shall be exercised by the Board of Directors,
except as provided by statute or by this Amended and Restated Certificate of
Incorporation. Notwithstanding any other provision of these Articles, when
acting on matters subject to the vote of the members of the Board of Directors
of the Corporation, notwithstanding that the Corporation is not then insolvent,
all of the members shall take into account the interest of the Corporation's
creditors, as well as those of the other members.
(b) At all times that the Corporation has outstanding obligations to
the Entities relating to the Contracts, the Board of Directors shall include at
least two individuals who are Independent Directors. As used herein, an
"Independent Director" shall be an individual who: (i) is not and has not been
employed by ORIX Credit Alliance, Inc. ("OCAI") or any of its subsidiaries or
affiliates, as a director, officer, employee, partner, attorney or counsel
within the five years immediately prior to such individual's appointment as an
Independent Director, other than as an independent director of special purpose
subsidiaries engaged in financial transactions substantially similar to the
transactions relating to the Certificates or Notes; (ii) is not (and is not
affiliated with a company or a firm that is) a significant advisor or consultant
to OCAI or any of its subsidiaries and affiliates; (iii) is not affiliated with
a significant customer or supplier of OCAI or any of its subsidiaries or
affiliates; (iv) is not affiliated with a company of which OCAI or any of its
subsidiaries and affiliates is a significant customer or supplier, (v) does not
have significant personal services contract(s) with OCAI or any of its
subsidiaries or affiliates; (vi) is not affiliated with a tax-exempt entity that
receives significant contributions from OCAI or any of its subsidiaries or
affiliates; (vii) is not the beneficial owner at the time of such individual's
appointment as an Independent Director,
3
<PAGE> 4
or at any time thereafter while serving as an Independent Director, of such
number of shares of any classes of common stock of OCAI the value of which
constitutes more than 5% of the outstanding common stock of OCAI; (viii) does
not at any time hold any beneficial or economic interest in the Corporation; and
(ix) is not a spouse, parent, sibling or child of any person described in
clauses (i) through (viii).
(c) As used in paragraph (b) of this Article V, the following terms
shall have the following meanings:
(i) an "affiliate" of a person, or a person "affiliated with,"
a specified person, shall mean a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or
is under common control with, the specified person.
(ii) The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") shall mean the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, whether through
the ownership of voting securities, by contract, or otherwise;
provided, however, that a person shall not be deemed to control another
person solely because he or she is a director of such other person.
(iii) The term "person" shall mean any individual,
partnership, firm, corporation, association, trust, unincorporated
organization or other entity, as well as any syndicate or group deemed
to be a person pursuant to Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended, as in effect on the date of incorporation of
the Corporation.
(iv) A "subsidiary" of OCAI shall mean any corporation a
majority of the voting stock of which is owned, directly or indirectly
through one or more other subsidiaries by OCAI.
(v) A person shall be deemed to be, or to be affiliated with,
a company or firm that is a "significant advisor or consultant to OCAI
or any of its subsidiaries or affiliates" if he, she, or it, as the
case may be, received or would receive fees or similar compensation
from OCAI or any of its subsidiaries or affiliates in excess of the
lesser of (A) 3% of the consolidated gross revenues which OCAI and its
subsidiaries received for the sale of their products and services
during the last fiscal year of OCAI; (B) 5% of the gross revenues of
the person during the last calendar year if such person is a
self-employed individual; and (C) 5% of the consolidated gross revenues
received by such company or firm for the sale of its products and
services during its last fiscal year, if the person is a company or
firm; provided, however, that director's fees and expense
4
<PAGE> 5
reimbursements shall not be included in the gross revenues of an
individual for purposes of this determination.
(vi) A "significant customer of OCAI or any of its
subsidiaries or affiliates" shall mean a customer from which OCAI and
any of its subsidiaries or affiliates collectively in the last fiscal
year of OCAI received payments in consideration for the products and
services of OCAI and its subsidiaries or affiliates which are in excess
of 3% of the consolidated gross revenues of OCAI and its subsidiaries
during such fiscal year.
(vii) A "significant supplier of OCAI or any of its
subsidiaries or affiliates" shall mean a supplier to which OCAI and any
of its subsidiaries or affiliates collectively in the last fiscal year
of OCAI made payments in consideration for the supplier's products and
services in excess of 3% of the consolidated gross revenues of OCAI and
its subsidiaries during such fiscal year.
(viii) OCAI or any of its subsidiaries and affiliated shall be
deemed a "significant customer" of a company if OCAI and any of its
subsidiaries and affiliates collectively were the direct source during
such company's last fiscal year of in excess of 5% of the gross
revenues which such company received for the sale of its products and
services during such fiscal year.
(ix) OCAI or any of its subsidiaries and affiliates shall be
deemed a "significant supplier" of a company if OCAI and any of its
subsidiaries and affiliates collectively received in such company's
last fiscal year payments from such company in excess of 5% of the
gross revenues which such company received during such fiscal year for
the sale of its products and services.
(x) A person shall be deemed to have "significant personal
services contract(s) which OCAI or any of its subsidiaries or
affiliates" if the fees and other compensation received by the person
pursuant to personal services contract(s) with OCAI and any of its
subsidiaries or affiliates exceed or would exceed 5% of his or her
gross revenues during the last calendar year.
(xi) A tax-exempt entity shall be deemed to receive
significant contributions from OCAI or any of its subsidiaries or
affiliates if such tax-exempt entity received during its last fiscal
year contributions from OCAI or its subsidiaries or affiliates in
excess of the lesser of (A) 3% of the consolidated gross revenues of
OCAI and its subsidiaries during such fiscal year and (B) 5% of the
contributions received by the tax-exempt entity during such fiscal
year.
5
<PAGE> 6
ARTICLE VI
Limitations on Certain Actions by the Corporation
Notwithstanding any other provision of these Articles and any provision
of law, the Corporation shall not do any of the following:
(a) engage in any business or activity other than as set forth in
Article III hereof;
(b) without the unanimous affirmative vote of the members of the Board
of Directors of the Corporation,(i) dissolve or liquidate, in whole or in part,
or institute proceedings to be adjudicated bankrupt or insolvent, (ii) consent
to the institution of a bankruptcy or insolvency proceeding against it, (iii)
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to bankruptcy, (iv) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Corporation or a substantial part of its property, (v)
make a general assignment for the benefit of creditors, (vi) admit in writing
its inability to pay its debts generally as they become due, or (vii) take any
corporate action in furtherance of the actions set forth in clauses (i) through
(vi) of this paragraph, provided, however, that no director may be required by
any stockholder of the Corporation to consent to the institution of bankruptcy
or insolvency proceedings against the Corporation so long as it is solvent; or
(c) without the unanimous affirmative vote of the members of the Board
of Directors of the Corporation, merge or consolidate with any other
corporation, company or entity or sell, lease or otherwise transfer (except as
contemplated by Article III hereof) all or substantially all of its assets to,
or acquire all or substantially all of the assets or capital stock or other
ownership interest of, any other corporation, company or entity.
ARTICLE VII
Internal Affairs
(a) The Corporation's assets will not be commingled with those of any
direct or ultimate parent of the Corporation or any other person or entity and
will hold all of its assets in its own name;
(b) The Corporation will maintain separate corporate records and books
of account from those of any subsidiaries, affiliates, or the direct or ultimate
parent of the Corporation or any other person or entity;
6
<PAGE> 7
(c) The Corporation will not transfer any direct or indirect ownership
interest of more than a 49% interest therein, unless such transfer is
conditioned upon the delivery of a non-consolidation opinion acceptable to the
Entities;
(d) The Corporation will maintain bank accounts separate from
any other person or entity;
(e) The Corporation will maintain separate financial
statements, showing its assets and liabilities separate and apart from
those of any other person or entity and not to have its assets listed
on the financial statement of any other entity;
(f) The Corporation will pay its own liabilities and expenses
solely out of its own funds;
(g) The Corporation will observe all corporate and other
organizational formalities;
(h) The Corporation will maintain an arm's length relationship
with its affiliates and enter into transactions with affiliates only
on a commercially reasonable basis;
(i) The Corporation will pay the salaries of its own employees
from its own funds;
(j) The Corporation will maintain a sufficient number of
employees in light of its contemplated business operations;
(k) The Corporation will not guarantee or become obligated for
the debts of any other entity or person;
(l) The Corporation will not hold out its credit as being
available to satisfy the obligations of any other person or entity;
(m) The Corporation will not acquire the obligations or
securities of its affiliates or owners, including partners, members or
shareholders, as appropriate;
(n) The Corporation will not make loans to any other person or
entity or to buy or hold evidence of indebtedness issued by any other
person or entity (other than cash, investment grade securities or from
the Entities);
7
<PAGE> 8
(o) The Corporation will allocate fairly and reasonably any
overhead expenses that are shared with an affiliate, including paying
for office space and services performed by any employee of an
affiliate;
(p) The Corporation will hold itself out as a separate entity;
(q) The Corporation will correct any known misunderstanding
regarding its separate identity;
(r) The Corporation will not identify itself as a division of
any other person or entity; and
(s) The Corporation will maintain adequate capital in light of
its contemplated business purposes.
ARTICLE VIII
Amendments
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles in any manner now or hereafter
provided herein or by statue; and, except as provided with respect to the
indemnification of directors, all rights, preferences and privileges conferred
by these Articles upon stockholders, directors or any other person are granted
subject to such right; provided, however, that the Corporation shall not amend,
alter, change or repeal any provision of Articles III, V, VI, VII or VIII (the
"Restricted Articles") without the unanimous affirmative vote of the members of
the Board of Directors and provided, further, that the Corporation shall not
amend or change any Article so as to be inconsistent with the Restricted
Articles.
ARTICLE IX
The Corporation is to have perpetual existence.
ARTICLE X
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the Corporation may provide. The books of the
Corporation may be kept (subject to any provision contained in applicable law)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the by-laws of the Corporation.
8
<PAGE> 9
ARTICLE XI
(a) A director of this Corporation shall not be 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 the law, (iii) under Section 174 of the General Corporation Law of
the State of Delaware, or (iv) of any transaction from which the director
derived an improper personal benefit.
(b) Any repeal or modification or paragraph (a) of this Article XI 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.
ARTICLE XII
In furtherance and not in limitation of the powers conferred by statute, the
Board of Directors of the Corporation is expressly authorized to make, alter or
repeal the by-laws of the Corporation. Election of Directors need not be by
written ballot unless the by-laws of the Corporation so provide.
ARTICLE XIII
The Corporation expressly elects not to be governed by Section 203 of
the General Corporation Law of the State of Delaware.
9
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
-OF-
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III
(A DELAWARE CORPORATION)
-------------------------
ARTICLE I
STOCKHOLDERS' MEETINGS
SECTION 1. Annual Meetings. The annual meeting of stockholders of
the Corporation, shall be held at such place within or without the State of
Delaware and at such time and date as may be determined by the Board of
Directors and as shall be designated in the notice of said meeting, for the
purpose of electing directors and for the transaction of such other business as
may properly be brought before the meeting.
If the election of directors shall not be held on the day
designated herein for any annual meeting, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a special meeting of
the stockholders as soon thereafter as conveniently may be. At such meeting the
stockholders may elect the directors and transact such other business with the
same force and effect as at an annual meeting duly called and held.
SECTION 2. Special Meetings. Special meetings of the stockholders
shall be held at such place within or without the State of Oregon as may be
designated in the notice of said meeting, upon call of the Board of Directors,
the Chairman of the Board or President, and shall be called by the Chairman of
the Board, the President, any Vice President or the Secretary at the request in
writing of stockholders owning at least 35% of the issued and outstanding
capital stock of the Corporation then entitled to vote thereat.
SECTION 3. Notice and Purpose of Meetings. Notice of the purpose or
purposes and of the date, hour and place of every meeting of stockholders shall
be given by the Chairman of the Board, the President, any Vice President, the
Secretary or any Assistant Secretary either personally or by mail or by
telegraph or by any other lawful means of communication not less than ten (10)
nor more than sixty (60) days before the meeting, to each stockholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to have
been given when deposited in the United States mail, postage prepaid, directed
to the stockholder at his address as it appears on the records of the
Corporation. Except as otherwise expressly provided by statute, no notice of any
meeting of stockholders
<PAGE> 2
shall be required to be given to any stockholder who shall attend such meeting
in person or by proxy, or who shall, in person or by attorney thereto
authorized, waive such notice in writing or by telegraph, cable, radio or
wireless either before or after such meeting.
SECTION 4. Adjourned Meetings. No notice need be given of any
adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken. At any adjourned meeting the Corporation may
transact any business which might have been transacted at the original meeting.
If the adjournment is for more than 30 days or if a new record date is fixed for
the meeting, notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the meeting.
SECTION 5. Quorum. A quorum at all meetings of stockholders shall
consist of a majority of the shares of capital stock of the Corporation
outstanding and entitled to vote at the meeting, present in person or
represented by proxy, except as otherwise provided by law in respect of the vote
that shall be required for a specified action. In the absence of a quorum at any
meeting or any adjournment thereof, a majority of the shares of capital stock of
the Corporation present in person or represented by proxy and entitled to vote
may adjourn such meeting to another time or times. At any such adjourned meeting
at which a quorum is present any business may be transacted which might have
been transacted at the meeting as originally called.
SECTION 6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, or in his absence by the President, or in
both of their absences, by a chairman to be chosen by a majority of the
stockholders entitled to vote who are present in person or represented by proxy
at the meeting. The Secretary of the Corporation or in his absence an Assistant
Secretary shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present, a majority of the stockholders present in
person or represented by proxy and entitled to vote at the meeting shall choose
a person to act as secretary of the meeting.
SECTION 7. Voting. Except as otherwise provided by statute or the
Certificate of Incorporation, each holder of record of shares of capital stock
of the Corporation having voting rights shall be entitled at each meeting of
stockholders to one vote for each share of capital stock of the Corporation
standing in his name on the records of the Corporation on the date fixed as the
record date for the determination of stockholders entitled to notice of and to
vote at such meeting. Except as otherwise provided by statute or the Certificate
of Incorporation, any corporate action other than the election of directors to
be taken by vote of the stockholders shall be authorized at a meeting of
stockholders by a vote of the majority of the shares of capital stock present in
person or represented by proxy and then entitled to vote on such action. Except
as otherwise permitted by statute or the Certificate of Incorporation, directors
shall be elected by a plurality of the votes cast at a meeting of
-2-
<PAGE> 3
stockholders by the holders of shares of capital stock of the corporation
present in person or represented by proxy and entitled to vote thereon.
SECTION 8. List of Stockholders. A complete list of the stockholders
entitled to vote at any meeting of stockholders, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder shall be prepared by the Secretary or such other
officer of the Corporation having charge of the stock ledger. Such list shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city, town or village where
the meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
SECTION 9. Inspectors of Election. At all elections of directors,
and in all other matters in which a vote is to be taken, the Chairman of the
meeting shall appoint two inspectors of election. The inspectors of election
shall take and subscribe an oath faithfully to execute the duties of inspectors
at such meeting with strict impartiality and according to the best of their
ability, and shall take charge of the polls and after the vote shall have been
taken on all matters on which the inspectors are to so act shall make a
certificate of the results thereof.
SECTION 10. Written Consent of Stockholders Without a Meeting.
Whenever stockholders are required or permitted to take action by vote, such
action may be taken without a meeting on written consent of stockholders having
not less than the minimum percentage of the total vote required by statute, in
the manner contemplated by the Certificate of Incorporation.
ARTICLE II
DIRECTORS
SECTION 1. Powers, Number, Qualification, Term and Resignation. The
property, affairs and business of the Corporation shall be managed by its Board
of Directors, consisting of not less than three (3) nor more than fifteen (15)
persons. The exact number of directors shall be fixed from time to time by
resolution of the Board of Directors or the stockholders of the Corporation.
Except as provided in the Certificate of Incorporation, and except as
hereinafter provided, directors shall be elected at the annual meeting of the
stockholders and each director shall be elected to serve for one year and until
his successor shall be elected and shall qualify. The directors shall have the
power, from time to time and at any time, when
-3-
<PAGE> 4
the stockholders are not assembled at a meeting, to increase or decrease their
own number by resolution adopted by the Board of Directors. If the number of
directors be increased, all of the additional directors may be elected by a
majority of the directors in office at the time of the increase or, if not so
elected prior to the next annual meeting of stockholders, they shall be elected
by plurality vote by the stockholders at such annual meeting to serve until the
next annual meeting of stockholders and until their respective successors shall
be elected and shall qualify. Directors need not be stockholders. A director may
resign at any time.
SECTION 2. Meetings. Meetings of the Board of Directors shall be
held at such place as may from time to time be fixed by resolution of the Board
of Directors, or as may be specified in the notice of the meeting. Regular
meetings of the Board of Directors shall be held at such times as may from time
to time be fixed by resolution of the Board of Directors, and special meetings
may be held at any time upon call of the Chairman of the Board, the President or
a majority of the directors by oral, telegraphic or written notice duly served
on or sent or mailed to each director not less than one (1) day before the
meeting. Notice need not be given of regular meetings of the Board of Directors.
The organizational meeting of the Board of Directors may be held without notice
immediately after the annual meeting of stockholders in each year. Any meeting
of directors may be held at any time without notice if all the directors are
present, or if at any time before or after the meeting those not present waive
notice of the meeting in writing.
SECTION 3. Quorum. The number of directors which shall constitute a
quorum shall be one-third of the total number of directors, but in no case less
than two directors. The vote of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors.
At any meeting at which there shall not be a quorum present, a majority of the
directors present, although less than a quorum, may adjourn the meeting without
further notice from time to time until a quorum shall be present. Any Director
may attend any meeting by telephonic conference provided that all other
Directors can hear such Director and each such Director can hear all other
Directors.
SECTION 4. Removal of Directors. At any special meeting of
stockholders duly called as provided in these By-Laws, any director or directors
may, by the affirmative vote of the holders of a majority of all the shares of
capital stock outstanding and then entitled to vote for the election of
directors, be removed from office, either with or without cause, and his
successor or their successors may be elected at such meeting or the remaining
directors may to the extent vacancies are not filled by such election, fill any
vacancy or vacancies created by such removal.
SECTION 5. Vacancies. In case one or more vacancies shall occur in
the Board of Directors by reason of death, resignation, increase in number, or
otherwise, except insofar as otherwise provided in these By-Laws, the remaining
directors, although less
-4-
<PAGE> 5
than a quorum, may by majority vote elect a successor or successors to fill such
vacancies for the unexpired term or terms.
SECTION 6. Committees. An Executive Committee of three (3) or more
directors may be designated by resolution passed by a majority of the whole
Board of Directors. The act of a majority of the members of said Committee shall
be the act of the Committee, and said Committee may meet at stated times or on
notice. Whenever the Board of Directors is not in session or whenever a quorum
of the Board of Directors fails to attend any regular or special meeting of the
Board, said Committee shall advise with the aid the office of the Corporation in
all matters concerning its interests and the management of its business and
affairs, and generally perform such duties and exercise such powers as maybe
performed and exercised by the Board of Directors from time to time, and the
Executive Committee shall have the power to authorize the seal of the
Corporation to be affixed to all papers which may require it and, insofar as may
be permitted by law, exercise the powers and perform the obligations of the
Board of Directors. The Board of Directors may also designate one or more
committees in addition to the Executive Committee by resolution or resolutions
passed by a majority of the whole Board of Directors; such committee or
committees to consist of three (3) or more directors of the Corporation and, to
the extent provided in the resolution or resolutions designating them, shall
have or may exercise the specific powers of the Board of Directors in the
management of the business and affairs of the Corporation. The Board of
Directors may designate one or more directors as alternate members of any
Committee, who may replace any absent or disqualified members at any meeting of
the Committee. Such Committee or Committees shall have such name or names as may
be determined from time to time by resolution adopted by the Board of Directors.
SECTION 7. Informal Action. Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee hereof may be
taken without a meeting if prior to such action a written consent thereto is
signed by all members of the Board or of the committee, as the case may be, and
such written consent is filed with the minutes of proceedings of the Board of
the committee.
SECTION 8. Compensation of Directors. Directors may, by resolution
of the Board of Directors, be allowed a fixed sum and expenses of attendance for
attendance at regular or special meetings of the Board of Directors; provided
that nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees and others who attend
pursuant to direction may, by vote of the Board of Directors, be allowed a like
fixed sum and expenses for attending committee meetings.
-5-
<PAGE> 6
ARTICLE III
OFFICERS
SECTION 1. Number. The Board of Directors, as soon as possible after
the election thereof held in each year, shall elect a Chairman of the Board, a
President, one or more Vice Presidents (one or more of which may be designated
by the Board of Directors as Senior Executive, Executive, Senior, Regional,
Assistant or Administrative Vice President or such other classification of Vice
President as the Board of Directors may determine), a Treasurer, a Controller
and a Secretary, and from time to time may appoint such Assistant Treasurers,
Assistant Controllers, Assistant Secretaries and such other officers, agents and
employees as it may deem proper. Any two or more offices may be held by the same
person. The Chairman of the Board and the President shall be chosen from among
the directors.
SECTION 2. Term, Resignation and Removal. The term of office of all
officers shall be one year and until their respective successors are elected and
qualify, but any officer may resign or may be removed from office, either
with or without cause, at any time by the affirmative vote of a majority of
the members of the Board of Directors then in office. A vacancy in any office
arising from any cause may be filled for the unexpired portion of the term by
the Board of Directors.
SECTION 3. Compensation of Officers. The compensation of the
officers of the Corporation for their services as such officers shall be fixed
from time to time by the Board of Directors, provided that the Board may
delegate to the Chairman of the Board the power to fix the compensation of
officers and agents appointed by him.
SECTION 4. Voting Corporation's Securities. Unless otherwise ordered
by the Board of Directors, the Chairman of the Board or the President shall have
full power and authority on behalf of the Corporation, to attend and to act and
to vote at any meeting of security holders of corporations in which the
Corporation may hold securities, and at such meetings shall possess and may
exercise any and all rights and powers incident to the ownership of such
securities, and which as the owner thereof the Corporation might have possessed
and exercised if present. Such officers acting on behalf of the Corporation
shall have full power and authority to execute any instrument expressing consent
to or dissent from any action of any such corporation without a meeting. The
Board of Directors by resolutions from time to time may confer like powers upon
any other person or persons.
-6-
<PAGE> 7
ARTICLE IV
DUTIES OF OFFICERS
SECTION 1. Chairman of the Board. The Directors shall choose from
among their members a Chief Executive Officer of the Corporation who, as such,
shall have general management and control of the business and affairs of the
Corporation. He shall preside at all meetings of the Board of Directors and
stockholders. He shall have such other duties as may be assigned to him from
time to time by the Board of Directors.
SECTION 2. President. The President shall, in the absence of the
Chairman of the Board, preside at all meetings of the Board of Directors and
stockholders. He shall be the chief operating officer of the corporation and
shall have such other duties and powers as may be assigned to him from time to
time by the Board of Directors.
SECTION 3. Vice Presidents. During the absence or disability of the
Chairman of the Board and the President, the Vice Presidents, in the order
designated by the Board of Directors, shall exercise all the functions of the
President. Each Vice President shall have such powers and discharge such duties
as may be assigned to him from time to time by the Board of Directors.
SECTION 4. Treasurer. The Treasurer shall have the custody of all
the funds and securities of the Corporation. When necessary or proper he shall
endorse on behalf of the Corporation, for collection, checks, notes and other
obligations and shall deposit the same to the credit of the Corporation in such
bank or banks or depositories as may be designated by the Board of Directors or
by any officer acting under authority conferred by the Board of Directors. He
shall enter regularly in books to be kept for the purpose, a full and accurate
account of all monies received and paid by him on account of the Corporation.
Whenever required by the Board of Directors, he shall render an account of all
his transactions as Treasurer and of the financial condition of the Corporation.
He shall at all reasonable times exhibit his books and accounts to any director
of the Corporation upon application at the office of the Corporation during
business hours and he shall perform all things incident to the position of
Treasurer, subject to the control of the Board of Directors. He shall give bond
for the faithful discharge of his duties if the Board of Directors so require.
He shall do and perform such other duties as may be assigned to him from time to
time by the Board of Directors.
-7-
<PAGE> 8
SECTION 5. Assistant Treasurers. The Assistant Treasurers, in the
order of their seniority, shall, in the absence of or disability of the
Treasurer, perform the duties and exercise the powers of the Treasurer and shall
perform such other duties as the Board of Directors shall prescribe.
SECTION 6. Secretary. The Secretary need not attend but shall cause
to be recorded the proceedings of the meeting of the stockholders, the Board of
Directors and committees in a book to be kept for that purpose. He shall give or
cause to be given notice of all meetings of stockholders and of the Board of
Directors and of committees and shall perform such other duties as may be
prescribed by the Board of Directors. He shall keep in safe custody the seal of
the Corporation and affix the same to any instrument whose execution has been
authorized. He shall do and perform such other duties as may be assigned to him
from time to time by the Board of Directors.
SECTION 7. Assistant Secretaries. The Assistant Secretaries, in the
order of their seniority, shall, in the absence of or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and shall
perform such other duties as the Board of Directors shall prescribe.
SECTION 8. Inability to Act. In the case of absence or inability to
act of any officers of the Corporation and of any person herein authorized to
act in his place, the Board of Directors may from time to time delegate the
powers and duties of such officer to any other officer or any director or any
other person whom it may select.
ARTICLE V
INDEMNIFICATION AND INSURANCE
SECTION 1. Indemnification. The Corporation may, by action of the
Board of Directors or shareholders, indemnify directors, officers, employees and
agents of the Corporation and their heirs, executors and administrators to the
full extent permitted by law.
SECTION 2. Insurance. The Corporation may, by action of the Board of
Directors, 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
-8-
<PAGE> 9
or not the Corporation would have the power to indemnify him against such
liability under applicable law.
ARTICLE VI
CERTIFICATE OF STOCK
SECTION 1. Form and Transfers. The interest of each stockholder of
the Corporation shall be evidenced by certificates for shares of stock,
certifying the number of shares represented thereby and in such form not
inconsistent with the Certificate of Incorporation as the Board of Directors may
from time to time prescribe.
Transfers of shares of the capital stock of the Corporation shall
be made only on the books of the Corporation by the registered holder thereof,
or by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the Corporation, or with a transfer clerk or a
transfer agent appointed as in Section 4 of this Article provided, and on
surrender of the certificate or certificates for such shares properly endorsed
and the payment of all taxes thereon. The person in whose name shares of stock
stand on the books of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation, provided that whenever any transfer of
shares shall be made for collateral security, and not absolutely, such fact, if
known to the Secretary of the Corporation, shall be as expressed in the entry of
transfer. The Board may, from time to time, make such additional rules and
regulations as it may deem expedient, not inconsistent with these By-Laws,
concerning the issue, transfer and registration of certificates for shares of
the capital stock of the Corporation.
The certificates of stock shall be signed by the Chairman of the
Board, the President or any Vice President and by the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer and sealed with the seal of
the Corporation. Such seal may be a facsimile, engraved or printed. Where any
such certificate is signed by a transfer agent or registered by a registrar, the
signatures of the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer
upon such certificate may be facsimiles, engraved or printed. In case any such
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer at the time of its issue.
SECTION 2. Record Date. The Board of Directors may in its discretion
fix in advance a time not more than sixty (60) nor less than ten (10) days
before the date of any meeting of stockholders, or not more than sixty (60) days
before the last day on which the
-9-
<PAGE> 10
consent or dissent of stockholders may be effectively expressed for any purpose
without a meeting or the date fixed for the payment of any dividend, the making
of any distribution or the delivery of evidences of rights or evidences of
interests arising out of any change, conversion or exchange of capital stock, as
the time as of which stockholders entitled to notice of and to vote at such
meeting or whose consent or dissent is required or may be expressed for any
purpose or entitled to receive any such dividend, distribution, rights or
interests shall be determined; and all persons who are holders of record of
voting stock at such time and no others shall be entitled to notice of and to
vote at such meeting or to express their consent or dissent, as the case may be,
and only stockholders of record at the time so fixed, shall be entitled to
receive such dividends, distributions, rights or interests.
SECTION 3. Lost, Stolen, Destroyed or Mutilated Certificates. No
certificate for shares of stock of the Corporation shall be issued in place of
any mutilated certificate or of any certificate alleged to have been lost,
destroyed or stolen, except on production of such mutilated certificate or on
production of such evidence of such loss, destruction or theft as the Board of
Directors may require, and on delivery to the Corporation, if the Board of
Directors shall so require, of a bond of indemnity in such amount, upon such
terms and secured by such surety as the Board of Directors may in its discretion
deem sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
SECTION 4. Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates of stock to bear the signature or signatures of any of them.
SECTION 5. Examination of Books by Stockholders. The books, accounts
and records of the Corporation, except as may otherwise be required by statute,
may be kept outside of the State of Delaware at such place or places as the
Board of Directors may from time to time determine. The Board of Directors shall
determine whether and to what extent the books, accounts and records of the
Corporation, or any of them, other than the stock ledger, shall be open to the
inspection of stockholders, and no stockholder shall have any right to inspect
any book, account or record of the Corporation except as conferred by statute or
by resolution of the Board of Directors.
ARTICLE VII
CORPORATE SEAL
-10-
<PAGE> 11
The seal of the Corporation shall be circular in form and shall
include the words "ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III, Corporation
Seal, Delaware."
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be such fiscal year as the
Board of Directors shall fix.
-11-
<PAGE> 1
EXHIBIT 4.1
AMENDED AND RESTATED
TRUST AGREEMENT
BY AND BETWEEN
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III
AS TRUST DEPOSITOR,
AND
THE BANK OF NEW YORK (DELAWARE)
AS OWNER TRUSTEE
DATED AS OF FEBRUARY , 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE ONE
DEFINITIONS
<S> <C> <C>
Section 1.01. Capitalized Terms ............................................................. 1
Section 1.02. Other Definitional Provisions ................................................. 4
Section 1.03. Usage of Terms ................................................................ 4
Section 1.04. Section References ............................................................ 4
Section 1.05. Accounting Terms ............................................................. 5
ARTICLE TWO
ORGANIZATION
Section 2.01. Name ......................................................................... 5
Section 2.02. Office ........................................................................ 5
Section 2.03. Purposes and Powers ............................................................ 5
Section 2.04. Appointment of Owner Trustee ................................................. 6
Section 2.05. Capital Contribution of Owner Trust Estate .................................... 6
Section 2.06. Declaration of Trust ......................................................... 6
Section 2.07. Liability of Trust Depositor ................................................. 7
Section 2.08. Title to Trust Property ........................................................ 7
Section 2.09. Situs of Trust ................................................................ 7
Section 2.10. Representations and Warranties of the Trust Depositor ......................... 8
Section 2.11. Federal Income Tax Treatment ................................................. 9
Section 2.12 Covenants of the Trust Depositor ............................................ 10
ARTICLE THREE
TRUST CERTIFICATE AND TRANSFER OF INTERESTS
Section 3.01. Ownership .................................................................... 11
Section 3.02. The Trust Certificate ........................................................ 11
Section 3.03. Authentication and Delivery of Trust Certificate ............................ 12
Section 3.04. Registration of Transfer and Exchange of Trust Certificate ................. 12
Section 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates ..................... 13
Section 3.06. Persons Deemed Owners ........................................................ 13
Section 3.07. Access to List of Certificateholder's Name and Addresses .................... 13
Section 3.08. Maintenance of Office or Agency ............................................. 14
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 3.09. Temporary Trust Certificate ................................................. 14
Section 3.10. Appointment of Paying Agent ................................................. 14
Section 3.11. Ownership by Trust Depositor of Trust Certificate ............................ 15
ARTICLE FOUR
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice to Certificateholder with Respect to Certain Matters ............ 15
Section 4.02. Action by Owner with Respect to Certain Matters ............................. 16
Section 4.03. Action by Owner with Respect to Bankruptcy ................................. 16
Section 4.04. Restrictions on Owner's Power ................................................ 17
ARTICLE FIVE
APPLICATION OF TRUST FUNDS;
CERTAIN DUTIES
Section 5.01. Establishment of Trust Account ............................................. 17
Section 5.02. Application of Trust Funds ................................................. 17
Section 5.03. Method of Payment ............................................................ 18
Section 5.04. No Segregation of Moneys; No Interest ........................................ 18
Section 5.05. Accounting and Reports to the Certificateholder, the
Internal Revenue Service and Others ......................................... 18
Section 5.06. Signature on Returns; Tax Matters Partner .................................... 19
ARTICLE SIX
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority ............................................................ 19
Section 6.02. General Duties ............................................................. 19
Section 6.03. Action Upon Instruction ..................................................... 20
Section 6.04. No Duties Except as Specified in this Agreement or in Instructions ......... 21
Section 6.05. No Action Except Under Specified Documents or Instructions ................. 21
Section 6.06. Restrictions ................................................................ 22
ARTICLE SEVEN
CONCERNING THE OWNER TRUSTEE
Section 7.01. Acceptance of Trusts and Duties ............................................. 22
Section 7.02. Furnishing of Documents ..................................................... 23
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 7.03. Representations and Warranties ............................................. 24
Section 7.04. Reliance; Advice of Counsel ................................................. 24
Section 7.05. Not Acting in Individual Capacity ............................................ 25
Section 7.06. Owner Trustee Not Liable for Trust Certificate, Notes or Contracts ......... 25
Section 7.07. Owner Trustee May Own Trust Certificate and Notes ............................ 26
ARTICLE EIGHT
COMPENSATION OF OWNER TRUSTEE
Section 8.01. Owner Trustee's Fees and Expenses ............................................ 26
Section 8.02. Indemnification ............................................................. 26
Section 8.03. Payments to the Owner Trustee ................................................ 27
ARTICLE NINE
TERMINATION OF TRUST AGREEMENT
Section 9.01. Termination of Trust Agreement ............................................. 27
Section 9.02. Dissolution upon Bankruptcy of Trust Depositor or
Withdrawal or Removal of Trust Depositor .................................... 28
ARTICLE TEN
SUCCESSOR OWNER TRUSTEES AND
ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee ................................. 28
Section 10.02. Resignation or Removal of Owner Trustee ..................................... 29
Section 10.03. Successor Owner Trustee ..................................................... 30
Section 10.04. Merger or Consolidation of Owner Trustee .................................... 30
Section 10.05. Appointment of Co-Trustee or Separate Trustee ................................ 30
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Supplements and Amendments ................................................. 32
Section 11.02. No Legal Title to Trust Estate in Owner ..................................... 33
Section 11.03. Limitations on Rights of Others ............................................. 33
Section 11.04. Notices ..................................................................... 34
Section 11.05. Severability of Provisions ................................................. 36
Section 11.06. Counterparts ................................................................ 36
Section 11.07. Successors and Assigns ..................................................... 36
Section 11.08. No Petition ................................................................. 36
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 11.09. No Recourse ................................................................. 36
Section 11.10. Headings .................................................................... 37
Section 11.11. Governing Law and Jury Waiver ................................................ 37
Section 11.12. Trust Certificate Transfer Restrictions ..................................... 37
Section 11.13. Trust Depositor Payment Obligation ......................................... 38
</TABLE>
EXHIBIT A - Certificate of Trust of ORIX Credit Alliance Receivables
Trust 2000-A
EXHIBIT B - Form of Trust Certificate
-iv-
<PAGE> 6
This AMENDED AND RESTATED TRUST AGREEMENT dated as of February ,
2000, is between ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III, a Delaware
corporation, as Trust Depositor (the "Trust Depositor"), and THE BANK OF NEW
YORK (DELAWARE), a Delaware state chartered bank, as owner trustee (the "Owner
Trustee").
WHEREAS, pursuant to that certain Trust Agreement, dated as of January
27, 2000, the Depositor and the Owner Trustee formed the Trust as a Delaware
statutory business trust;
WHEREAS, the parties wish to amend and restate the original Trust
Agreement to provide more fully for the operation of the Trust;
WHEREAS, in connection herewith, the Trust Depositor
is willing to assume certain obligations pursuant hereto;
and
WHEREAS, in connection herewith, the Trust Depositor is willing to
purchase the Trust Certificate (as defined herein) to be issued pursuant to this
Agreement and to assume certain obligations pursuant hereto;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. CAPITALIZED TERMS. Except as otherwise provided in this
Agreement, whenever used in this Agreement the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
"Administration Agreement" means the Administration Agreement, dated as
of the date hereof, among the Trust, the Trust Depositor, the Indenture Trustee
and ORIX Credit Alliance, Inc., as Administrator.
"Agreement" means this Trust Agreement, as the same may be amended and
supplemented from time to time.
"Benefit Plan" means (i) an employee benefit plan (as such term is
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity.
<PAGE> 7
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as the same may be amended from time to
time.
"Certificate Balance" means $ .
"Certificate Distribution Account" means the account established and
maintained as such pursuant to Section 5.01.
"Certificate of Trust" means the Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Business Trust Statute, substantially
in the form of Exhibit A hereto.
"Certificate Register" and "Certificate Registrar" mean the register
maintained and the registrar (or any successor thereto) appointed pursuant to
Section 3.04.
"Certificateholder" or "Holder" means with respect to a Definitive
Trust Certificate the Person in whose name the Trust Certificate is registered
in the Certificate Register.
"Closing Date" means February , 2000.
"Code" means the Internal Revenue Code of 1986, as amended.
"Definitive Trust Certificate" shall have the meaning set forth in
Section 3.09.
"ERISA" means the Employment Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" shall have the meaning assigned to such term in Section
8.02.
"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,
(iii) an estate the income of which is subject to U.S. federal income taxation
regardless of its source, or (iv) a trust whose administration is subject to the
primary supervision of a court within the United States and which has one or
more U.S. fiduciaries who have authority to control all substantial decisions of
the trust.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.02.
-2-
<PAGE> 8
"Indenture" means the Indenture dated as of the date hereof between the
Trust and Harris Trust and Savings Bank, as Indenture Trustee.
"Note Depository Agreement" means the agreement dated as of the Closing
Date among the Trust, the Indenture Trustee, the Administrator and The
Depository Trust Company, as the Clearing Agency, relating to the Notes, as the
same may be amended and supplemented from time to time.
"Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes in each case
issued pursuant to the Indenture.
"OCAI" means ORIX Credit Alliance, Inc., a New York corporation.
"Owner" means the Holder of the Trust Certificate.
"Owner Trustee" means The Bank of New York (Delaware), a Delaware state
chartered bank, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.
"Owner Trustee Corporate Trust Office" means the office of the Owner
Trustee at which its corporate trust business shall be administered, which
initially shall be 502 White Clay Center, P.O. Box 6973, Newark, Delaware 19714,
Attn: Corporate Trust Administration, or such other office at such other address
as the Owner Trustee may designate from time to time by notice to the
Certificateholder, the Servicer, the Indenture Trustee, the Trust Depositor and
OCAI.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 3.10.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof) unincorporated organization or government or any agency or political
subdivision thereof.
"Record Date" means, with respect to any Distribution Date, the last
Business Day of the preceding calendar month.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Tax Matters Partner" shall have the meaning provided in Section
5.06(b) hereof.
-3-
<PAGE> 9
"Transfer and Servicing Agreement" means the Transfer and Servicing
Agreement, dated as of the date hereof, among the Trust, the Trust Depositor,
OCAI, as Servicer and as Originator and the Indenture Trustee named therein, as
the same may be amended or supplemented from time to time.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the trust established by this Agreement.
"Trust Certificate" means the trust certificate evidencing the
beneficial equity interest of an Owner in the Trust, substantially in the form
of Exhibit B hereto.
"Trust Depositor" means ORIX Credit Alliance Receivables Corporation
III in its capacity as Trust Depositor hereunder, and its successors.
"Trust Estate" means all right, title and interest of the Trust in and
to the property and rights assigned to the Trust pursuant to Article Two of the
Transfer and Servicing Agreement, all funds on deposit from time to time in the
Trust Accounts and the Certificate Distribution Account and all other property
of the Trust from time to time, including any rights of the Owner Trustee and
the Trust pursuant to the Transfer and Servicing Agreement and the
Administration Agreement.
"Underwriter" means First Union Securities, Inc.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. Capitalized terms used
that are not otherwise defined herein shall have the meanings ascribed thereto
in the Transfer and Servicing Agreement or, if not defined therein, in the
Indenture.
SECTION 1.03. USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement; references to Persons include their permitted successors and assigns;
and the term "including" means "including without limitation".
SECTION 1.04. SECTION REFERENCES. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.
-4-
<PAGE> 10
SECTION 1.05. ACCOUNTING TERMS. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.
ARTICLE TWO
ORGANIZATION
SECTION 2.01. NAME. The Trust created hereby shall be known as "ORIX
Credit Alliance Receivables Trust 2000-A", in which name the Owner Trustee may
conduct the activities of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 2.02. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Owner Trustee Corporate Trust Office or at such other
address in Delaware as the Owner Trustee may designate by written notice to the
Owner and the Trust Depositor.
SECTION 2.03. PURPOSES AND POWERS.
(a) The sole purpose of the Trust is, and the Trust shall have the
power and authority, to manage the Trust Estate and collect and disburse the
periodic income therefrom for the use and benefit of the Owner, and in
furtherance of such purpose to engage in the following ministerial activities:
(i) to issue the Notes pursuant to the Indenture
and the Trust Certificate pursuant to this
Agreement and to sell the Notes and the Trust
Certificate;
(ii) with the proceeds of the sale of the Notes
and the Trust Certificate, to purchase the
Contracts and other Trust Assets, and to pay the
balance, if any, to the Trust Depositor pursuant
to the Transfer and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate pursuant to the Indenture
and to hold, manage and distribute to the Owner
pursuant to the Transfer and Servicing Agreement
any portion of the Trust Estate released from the
Lien of, and remitted to the Trust pursuant to,
the Indenture;
-5-
<PAGE> 11
(iv) to enter into and perform its obligations under
the Transaction Documents to which it is to be a
party;
(v) to engage in those activities, including entering
into agreements, that are necessary, suitable or
convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(vi) subject to compliance with the Transaction
Documents, to engage in such other activities as
may be required in connection with conservation
of the Trust Estate and the making of
distributions to the Owner and the Noteholders.
The Trust shall not engage in any activities other than in connection with the
foregoing. Nothing contained herein shall be deemed to authorize the Owner
Trustee to engage in any business operations or any activities other than those
set forth in the introductory sentence of this Section. Specifically, the Owner
Trustee shall have no authority to engage in any business operations, or acquire
any assets other than those specifically included in the Trust Estate under
Section 1.01, or otherwise vary the assets held by the Trust. Similarly, the
Owner Trustee shall have no discretionary duties other than performing those
ministerial acts set forth above necessary to accomplish the purpose of this
Trust as set forth in the introductory sentence of this Section.
SECTION 2.04. APPOINTMENT OF OWNER TRUSTEE. The Trust Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein, and the
Owner Trustee hereby accepts such appointment.
SECTION 2.05. CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE. The Trust
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $10. The Owner Trustee hereby
acknowledges receipt in trust from the Trust Depositor, as of the date hereof,
of the foregoing contribution, which shall constitute the initial Trust Estate
(prior to giving effect to the conveyances described in the Transfer and
Servicing Agreement) and shall be deposited in the Certificate Distribution
Account. The Trust Depositor shall pay organizational expenses of the Trust as
they may arise or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.06. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Trust Estate in trust upon and subject to the conditions
set forth herein for the sole purpose of conserving the Trust Estate and
collecting and disbursing the periodic income therefrom for the use and benefit
of the Owner, subject to the obligations of the
-6-
<PAGE> 12
Trust under the Transaction Documents. It is the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Statute and
that this Agreement constitute the governing instrument of such business trust.
It is the intention of the parties hereto that the Trust be disregarded as a
separate entity for federal income tax purposes pursuant to Treasury Regulation
Section 301.7701-3(b)(1)(ii) as in effect for periods after January 1, 1997. The
parties agree not to take any action inconsistent with such intended federal
income tax treatment. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers and duties set forth herein and in the Business Trust
Statute for the sole purpose and to the extent necessary to accomplish the
purpose of this Trust as set forth in the introductory sentence of Section 2.03.
SECTION 2.07. LIABILITY OF TRUST DEPOSITOR.
(a) Pursuant to Section 3803(a) of the Business Trust Statute, the
Trust Depositor shall be liable directly to and will indemnify any injured party
or any other creditor of the Trust for all losses, claims, damages, liabilities
and expenses of the Trust to the extent that the Trust Depositor would be liable
if the Trust were a partnership under the Delaware Revised Uniform Limited
Partnership Act in which Trust Depositor were a general partner (including any
New Jersey personal property replacement tax that is imposed on the Trust as a
partnership); provided, however, that Trust Depositor shall not be liable for
any losses incurred by a Certificateholder in the capacity of an investor in the
Trust Certificate or a Noteholder in the capacity of an investor in the Notes.
In addition, any third party creditors of the Trust (other than in connection
with the obligations described in the immediately preceding sentence for which
the Trust Depositor shall not be liable) shall be deemed third party
beneficiaries of this paragraph. The obligations of the Trust Depositor under
this paragraph shall be evidenced by the Trust Certificate described in Section
3.11.
(b) Other than to the extent set forth in Section 2.07(a), no Owner,
solely by virtue of its being the Holder of the Trust Certificate, shall have
any personal liability for any liability or obligation of the Trust.
SECTION 2.08. TITLE TO TRUST PROPERTY. Legal title to the Trust Estate
shall be vested at all times in the Trust as a separate legal entity except
where applicable law in any jurisdiction requires title to any part of the Trust
Estate to be vested in an Owner Trustee or Owner Trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 2.09. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware or the State of Illinois. All bank
accounts maintained by the Owner Trustee on behalf of the Trust shall be located
in the State of Illinois or the State of Delaware. The Trust shall not have any
employees in any state other than Delaware;
-7-
<PAGE> 13
provided, however, that nothing herein shall restrict or prohibit the Owner
Trustee from having employees within or without the State of Delaware. Payments
will be received by the Trust only in Delaware or Illinois and payments will be
made by the Trust only from Delaware or Illinois. The only office of the Trust
will be at the Owner Trustee Corporate Trust Office.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE TRUST DEPOSITOR.
The Trust Depositor hereby represents and warrants to the Owner Trustee
that:
(i) The Trust Depositor is duly organized and validly existing as
a corporation organized and existing and in good standing
under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business
and had at all relevant times, and has, power, authority and
legal right to acquire and own the Contracts.
(ii) The Trust Depositor is duly qualified to do business as a
foreign corporation in good standing and has obtained all
necessary licenses and approvals in all jurisdictions in which
the ownership or lease of property or the conduct of its
business requires such qualifications.
(iii) The Trust Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Trust
Depositor has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the
Owner Trustee on behalf of the Trust as part of the Trust
Estate and has duly authorized such sale and assignment and
deposit with the Owner Trustee on behalf of the Trust by all
necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by the
Trust Depositor by all necessary corporate action. This
Agreement constitutes the legal, valid and binding obligation
of the Trust Depositor and is enforceable in accordance with
its terms, except as enforcement of such terms may be limited
by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the
availability of equitable remedies.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse
of time) a default under, the articles of incorporation or
bylaws of the Trust Depositor, or any indenture, agreement or
other instrument to which the Trust Depositor is a party or
-8-
<PAGE> 14
by which it is bound; nor result in the creation or imposition
of any Lien upon any of the properties of the Trust Depositor
pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Transaction
Documents); nor violate any law or any order, rule or
regulation applicable to the Trust Depositor of any court or
of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over
the Trust Depositor or its properties.
(v) All approvals, authorizations, consents, orders or other
actions of any person or any governmental entity required in
connection with the execution and delivery of this Agreement
and the fulfillment of the terms hereof have been obtained.
(vi) There are no proceedings or investigations pending, or to the
Trust Depositor's best knowledge threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Trust Depositor
or its properties: (A) asserting the invalidity of this
Agreement, any of the other Transaction Documents or the Trust
Certificate, (B) seeking to prevent the issuance of the Trust
Certificate or the consummation of any of the transactions
contemplated by this Agreement or any of the other Transaction
Documents, (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Trust
Depositor of its obligations under, or the validity or
enforceability of, this Agreement, any of the other
Transaction Documents or the Trust Certificate or (D)
involving the Trust Depositor and which might adversely affect
the federal income tax or other federal, state or local tax
attributes of the Trust Certificate.
SECTION 2.11. FEDERAL INCOME TAX TREATMENT. It is the intention of the
Trust Depositor that the Trust be disregarded as a separate entity for federal
income tax purposes pursuant to Treasury Regulations Section
301.7701-3(b)(1)(ii) as in effect for periods after January 1, 1997. The Trust
Certificate constitutes the sole equity interest in the Trust and must at all
times be held by either the Trust Depositor or its transferee as sole owner. The
Trust Depositor agrees not to take any action inconsistent with such intended
federal income tax treatment. Because for federal income tax purposes the Trust
will be disregarded as a separate entity, Trust items of income, gain, loss and
deduction for any month as determined for federal income tax purposes shall be
allocated entirely to the Trust Depositor (or subsequent purchaser of the Trust
Certificate) as the sole Certificateholder.
-9-
<PAGE> 15
SECTION 2.12 COVENANTS OF THE TRUST DEPOSITOR. The Trust Depositor
agrees and covenants that during the term of this Agreement, and to the fullest
extent permitted by applicable law, that:
(a) in the event that (i) the Certificate Balance shall be reduced by
realized losses and (ii) any litigation with claims in excess of $1,000,000 to
which the Trust Depositor is a party which shall be reasonably likely to result
in a material judgment against the Trust Depositor that the Trust Depositor will
not be able to satisfy shall be commenced, during the period beginning
immediately following the commencement of such litigation and continuing until
such litigation is dismissed or otherwise terminated (and, if such litigation
has resulted in a final judgment against the Trust Depositor, such judgment has
been satisfied), the Trust Depositor shall not pay any dividend to OCAI, or make
any distribution on or in respect of its capital stock to OCAI, or repay the
principal amount of any indebtedness of the Trust Depositor held by OCAI, unless
(i) after giving effect to such payment, distribution or repayment, the Trust
Depositor's liquid assets shall not be less than the amount of actual damages
claimed in such litigation or (ii) the Rating Agencies shall not downgrade the
then existing rating on the Certificate with respect to any such payment,
distribution or repayment;
(b) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(c) it shall not create, incur or suffer to exist any indebtedness or
engage in any business, except, in each case, as permitted by its articles of
incorporation, by-laws and the Transaction Documents;
(d) it shall obtain from each other party to each Transaction Document
to which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.01(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States; and
-10-
<PAGE> 16
(e) it shall not, for any reason, withdraw or attempt to withdraw from
this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
ARTICLE THREE
TRUST CERTIFICATE AND TRANSFER OF INTERESTS
SECTION 3.01. OWNERSHIP.
(a) Upon the formation of the Trust by the contribution by the Trust
Depositor pursuant to Section 2.05 and until the issuance of the Trust
Certificate, the Trust Depositor shall be the sole beneficiary of the Trust. The
Trust Certificate must at all times be held by either the Trust Depositor or its
transferee as sole owner.
(b) No transfer of the Trust Certificate shall be made unless such
transfer is made in a transaction which does not require registration or
qualification under the Securities Act of 1933 or qualification under any state
securities or "Blue Sky" laws. Neither the Owner Trustee nor the Certificate
Registrar shall effect the registration of any transfer of the Trust Certificate
unless, (i) prior to such transfer the Owner Trustee shall have received a Tax
Opinion, and (ii) following such transfer, there would be no more than one
Holder of the Trust Certificate and the Holder of the Trust Certificate would
not be a Foreign Person, a partnership, Subchapter S corporation or grantor
trust.
SECTION 3.02. THE TRUST CERTIFICATE. The Trust Certificate shall be
substantially in the form of Exhibit B hereto. The Trust Certificate shall be
issued in an amount equal to the Certificate Balance. The Trust Certificate
shall be executed by the Owner Trustee on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee and shall be
deemed to have been validly issued when so executed. The Trust Certificate
bearing the manual or facsimile signature of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Owner
Trustee shall be a valid and binding obligation of the Trust, notwithstanding
that such individuals or any of them have ceased to be so authorized prior to
the authentication and delivery of such Trust Certificate or did not hold such
offices at the date of such Trust Certificate. The Trust Certificate shall be
dated the date of its authentication.
-11-
<PAGE> 17
SECTION 3.03. AUTHENTICATION AND DELIVERY OF TRUST CERTIFICATE. The
Owner Trustee shall cause to be authenticated and delivered upon the order of
the Trust Depositor, in exchange for the Contracts and the other Trust Assets,
simultaneously with the sale, assignment and transfer to the Trust of the
Contracts and other Trust Assets, and the constructive delivery to the Owner
Trustee of the Contract Files and the other Trust Assets, a Trust Certificate
duly authenticated by the Owner Trustee, in the amount of the Certificate
Balance evidencing the entire ownership of the Trust, and Notes issued by the
Owner Trustee and authenticated by the Indenture Trustee in aggregate principal
amount of, in the case of (i) Class A-1 Notes, $ , (ii) Class A-2 Notes,
$ , (iii) Class A-3 Notes $ , (iv) Class A-4 Notes $ ,
(v) Class B Notes, $ and (vi) Class C Notes, $ . No Trust
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Trust Certificate a certificate of
authentication substantially in the form set forth in the form of Trust
Certificate attached hereto as Exhibit B, executed by the Owner Trustee or its
authenticating agent, by manual signature, and such certificate upon any Trust
Certificate shall be conclusive evidence, and the only evidence, that such Trust
Certificate has been duly authenticated and delivered hereunder. Upon issuance,
authorization and delivery pursuant to the terms hereof, the Trust Certificate
will be entitled to the benefits of this Agreement.
SECTION 3.04. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
CERTIFICATE.
(a) The Certificate Registrar shall keep or cause to be kept, a
Certificate Register, subject to such reasonable regulations as it may
prescribe. The Certificate Register shall provide for the registration of the
Trust Certificate and transfers and exchanges of the Trust Certificate as
provided herein. The Owner Trustee is hereby initially appointed Certificate
Registrar for the purpose of registering the Trust Certificate and transfers and
exchanges of the Trust Certificate as herein provided. The Owner Trustee will
arrange to have the Certificate Registrar's duties performed by its affiliate,
The Bank of New York. In the event that, subsequent to the Closing Date, the
Owner Trustee notifies the Servicer that it is unable to act as Certificate
Registrar, the Servicer shall appoint another bank or trust company, having an
office or agency located in New York, New York, agreeing to act in accordance
with the provisions of this Agreement applicable to it, and otherwise acceptable
to the Owner Trustee, to act as successor Certificate Registrar hereunder.
(b) Upon surrender for registration of transfer of any Trust
Certificate at the Owner Trustee Corporate Trust Office, the Owner Trustee shall
execute, authenticate and deliver (or shall cause its authenticating agent to
authenticate and deliver), in the name of the designated transferee, one new
Trust Certificate having the same aggregate principal amount.
-12-
<PAGE> 18
(c) Every Trust Certificate presented or surrendered for registration
of transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Holder thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any registration of transfer or
exchange of the Trust Certificate, but the Owner Trustee may require payment of
a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer of the Trust Certificate.
(e) All Trust Certificates surrendered for registration of transfer
shall be canceled and subsequently destroyed by the Owner Trustee.
SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES.
If (i) any mutilated Trust Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Trust Certificate, and (ii) there is
delivered to the Certificate Registrar and the Owner Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice that such Trust Certificate has been acquired by a bona fide
purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner
Trustee or its authenticating agent shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Certificate, a new Trust Certificate of like tenor and fractional undivided
interest. In connection with the issuance of any new Trust Certificate under
this Section, the Owner Trustee may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute complete and indefeasible evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Certificate shall be found at any time.
SECTION 3.06. PERSONS DEEMED OWNERS. Prior to due presentation of a
Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar and any of their respective agents may treat the Person in
whose name any Trust Certificate is registered as the owner of such Trust
Certificate for the purpose of receiving distributions pursuant to Section 5.02
and for all other purposes whatsoever, and none of the Owner Trustee, the
Certificate Registrar, any Paying Agent or any of their respective agents shall
be affected by any notice of the contrary.
SECTION 3.07. ACCESS TO LIST OF CERTIFICATEHOLDER'S NAME AND ADDRESSES.
The Owner Trustee shall furnish or cause to be furnished to the Servicer and the
Trust Depositor, within 15 days after receipt by the Certificate Registrar of a
written request therefor from the Servicer or the Trust Depositor, the name and
address of the Certificate-
-13-
<PAGE> 19
holder as of the most recent Record Date in such form as the Servicer or the
Trust Depositor may reasonably require. Every Certificateholder, by receiving
and holding a Trust Certificate, agrees with the Servicer, the Trust Depositor
and the Owner Trustee that none of the Servicer, the Trust Depositor or the
Owner Trustee shall be held accountable by reason of the disclosure of any such
information as to the name and address of the Certificateholder hereunder,
regardless of the source from which such information was derived.
SECTION 3.08. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
maintain in Delaware, an office or offices or agency or agencies where the Trust
Certificate may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Owner Trustee in respect of the Trust
Certificate and this Agreement may be served. The Owner Trustee hereby
designates the Owner Trustee Corporate Trust Office as its office for such
purposes. The Owner Trustee shall give prompt written notice to the Trust
Depositor, the Servicer and to the Certificateholder of any change in the
location of the Certificate Register or any such office or agency.
SECTION 3.09. TEMPORARY TRUST CERTIFICATE. Pending the preparation of
the definitive fully registered Trust Certificate (the "Definitive Trust
Certificate"), the Owner Trustee, on behalf of the Trust, may execute,
authenticate and deliver, a temporary Trust Certificate that is printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the Definitive Trust Certificate in
lieu of which it is issued. If a temporary Trust Certificate is issued, the
Trust Depositor will cause the Definitive Trust Certificate to be prepared
without unreasonable delay. After the preparation of the Definitive Trust
Certificate, the temporary Trust Certificate shall be exchangeable for the
Definitive Trust Certificate upon surrender of the temporary Trust Certificate
at the office or agency to be maintained as provided in Section 3.08, without
charge to the Holder. Upon surrender for cancellation of the temporary Trust
Certificate, the Owner Trustee shall execute and authenticate and deliver in
exchange therefor a like principal amount of the Definitive Trust Certificate.
Until so exchanged, the temporary Trust Certificate shall in all respects be
entitled to the same benefits hereunder as a Definitive Trust Certificate.
SECTION 3.10. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make
distributions to the Certificateholder from the Certificate Distribution Account
pursuant to Section 5.02(a) and shall report the amounts of such distributions
to the Owner Trustee. Any Paying Agent shall have the revocable power to
withdraw funds from the Certificate Distribution Account for the purpose of
making the distributions referred to above. The Owner Trustee may revoke such
power and remove the Paying Agent if the Owner Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Agreement in any material respect. The Paying Agent initially shall
be Harris Trust and Savings Bank, and any co-paying agent chosen by the
-14-
<PAGE> 20
Paying Agent that is acceptable to the Owner Trustee. Each Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Owner
Trustee. In the event that Harris Trust and Savings Bank shall no longer be the
Paying Agent, the Owner Trustee shall appoint a successor to act as Paying Agent
(which shall be a bank or trust company). The Owner Trustee shall cause such
successor Paying Agent or any additional Paying Agent appointed by the Owner
Trustee to execute and deliver to the Owner Trustee an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Owner
Trustee that, as Paying Agent, such successor Paying Agent or additional Paying
Agent will hold all sums, if any, held by it for payment to the
Certificateholder in trust for the benefit of the Certificateholder entitled
thereto until such sums shall be paid to such Certificateholder. The Paying
Agent shall return all unclaimed funds to the Owner Trustee and upon removal of
a Paying Agent such Paying Agent shall also return all funds in its possession
to the Owner Trustee. The provisions of Sections 7.01, 7.03, 7.04 and 8.01 shall
apply to the Owner Trustee also in its role as Paying Agent, for so long as the
Owner Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 3.11. OWNERSHIP BY TRUST DEPOSITOR OF TRUST CERTIFICATE. Trust
Depositor shall on the Closing Date purchase from the Trust a Trust Certificate
representing the Certificate Balance.
ARTICLE FOUR
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. PRIOR NOTICE TO CERTIFICATEHOLDER WITH RESPECT TO CERTAIN
MATTERS. Subject to the provisions and limitation of Section 4.04, with respect
to the following matters, the Owner Trustee shall not take action unless at
least 30 days before the taking of such action, the Owner Trustee shall have
notified the Certificateholder in writing of the proposed action, the Indenture
Trustee shall have consented to such action in the event any Notes are
outstanding and the Certificateholder shall not have notified the Owner Trustee
in writing prior to the 30th day after such notice is given that such
Certificateholder has withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except
claims or lawsuits brought in connection with the collection
of the Contracts) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect
to the aforementioned claims or lawsuits for collection of the
Contracts);
-15-
<PAGE> 21
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be
filed under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not
required and such amendment materially and adversely affects
the interest of the Owner;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that
would not materially and adversely affect the interests of the
Owner; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to
this Agreement of a successor Certificate Registrar, or the
consent to the assignment by the Note Registrar, Paying Agent,
Indenture Trustee or Certificate Registrar of its obligations
under the Indenture or the Agreement, as applicable.
SECTION 4.02. ACTION BY OWNER WITH RESPECT TO CERTAIN MATTERS. Subject
to the provisions and limitations of Section 4.04, the Owner Trustee shall not
have the power, except upon the direction of the Owner, to (a) remove the
Administrator pursuant to Section 8 of the Administration Agreement, (b) appoint
a successor Administrator pursuant to Section 8 of the Administration Agreement,
(c) remove the Servicer pursuant to Section 8.02 of the Transfer and Servicing
Agreement, (d) except as expressly provided in the Transaction Documents, sell
the Contracts or other Trust Assets after the termination of the Indenture, (e)
initiate any claim, suit or proceeding by the Trust or compromise any claim,
suit or proceeding brought by or against the Trust, (f) authorize the merger or
consolidation of the Trust with or into any other business trust or entity
(other than in accordance with Section 3.10 of the Indenture) or (g) amend the
Certificate of Trust. The Owner Trustee shall take the actions referred to in
the preceding sentence only upon written instructions signed by the Owner.
SECTION 4.03. ACTION BY OWNER WITH RESPECT TO BANKRUPTCY. Subject to
Section 2.12(b), the Owner Trustee shall not have the power to commence a
voluntary proceeding in a bankruptcy relating to the Trust without the prior
approval of the Owner and the delivery to the Owner Trustee by such Owner of a
certificate certifying that such Owner reasonably believes that the Trust is
insolvent.
-16-
<PAGE> 22
SECTION 4.04. RESTRICTIONS ON OWNER'S POWER. The Owner shall not direct
the Owner Trustee to take or to refrain from taking any action if such action or
inaction would be contrary to any obligation of the Trust or the Owner Trustee
under this Agreement or any of the Transaction Documents or would be contrary to
the purpose of this Trust as set forth in Section 2.03, nor shall the Owner
Trustee be obligated to follow any such direction, if given.
ARTICLE FIVE
APPLICATION OF TRUST FUNDS;
CERTAIN DUTIES
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNT. The Owner Trustee, for
the benefit of the Certificateholder, shall establish and maintain in the name
of the Trust an Eligible Account (the "Certificate Distribution Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholder.
The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Certificate Distribution Account and
in all proceeds thereof. Except as otherwise expressly provided herein, the
Certificate Distribution Account shall be under the sole dominion and control of
the Owner Trustee for the benefit of the Certificateholder. If, at any time, the
Certificate Distribution Account ceases to be an Eligible Account, the Owner
Trustee (or the Trust Depositor on behalf of the Owner Trustee, if the
Certificate Distribution Account is not then held by the Owner Trustee or an
Affiliate thereof) shall within ten Business Days (or such longer period, not to
exceed 30 calendar days, as to which each Rating Agency may consent) establish a
new Certificate Distribution Account as an Eligible Account and shall transfer
any cash and/or any investments to such new Certificate Distribution Account.
SECTION 5.02. APPLICATION OF TRUST FUNDS.
(a) On each Distribution Date, the Paying Agent will deposit in the
Certificate Distribution Account and distribute to the Certificateholder amounts
received pursuant to Section 7.05 of the Transfer and Servicing Agreement with
respect to such Distribution Date.
(b) On each Distribution Date, the Paying Agent shall send to the
Certificateholder the statement or statements provided to the Owner Trustee by
the Servicer pursuant to Section 9.01 of the Transfer and Servicing Agreement
with respect to such Distribution Date.
-17-
<PAGE> 23
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocation of income) to the Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in accordance
with this Section. The Paying Agent is hereby authorized and directed to retain
from amounts otherwise distributable to the Owner sufficient funds for the
payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to the Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution, the Paying Agent may in its sole
discretion withhold such amounts in accordance with this paragraph (c).
SECTION 5.03. METHOD OF PAYMENT. Subject to Section 9.01(c) respecting
the final payment upon retirement of the Certificate, distributions required to
be made to the Certificateholder of record on the related Record Date shall be
made by wire transfer of immediately available funds to the bank account of such
Certificateholder appearing in the Certificate Register.
SECTION 5.04. NO SEGREGATION OF MONEYS; NO INTEREST. Subject to
Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need not
be segregated in any manner except to the extent required by law or the Transfer
and Servicing Agreement and may be deposited under such general conditions as
may be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.
SECTION 5.05. ACCOUNTING AND REPORTS TO THE CERTIFICATEHOLDER, THE
INTERNAL REVENUE SERVICE AND OTHERS. The Administrator shall (a) maintain (or
cause to be maintained) the books of the Trust on a fiscal year basis that is
consistent with the fiscal year basis used by the Originator and on a cash basis
method of accounting, (b) deliver to the Owner, as may be required by the Code
and applicable Treasury Regulations, such information as may be required to
enable the Owner to prepare its federal and state income tax returns, (c) file
such tax returns relating to the Trust and make such elections as from time to
time may be required or appropriate under any applicable state or federal
statute or any rule or regulation thereunder so as to maintain the federal
income tax treatment for the Trust as set forth in Section 2.11, (d) cause such
tax returns to be signed in the manner required by law and (e) collect or cause
to be collected any withholding tax as described in and in accordance with
Section 5.02(c) with respect to income or distributions to Owner. The Owner
Trustee shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Contracts. If
applicable, the Owner Trustee shall not make the election provided under Section
754 or Section 761 of the Code.
-18-
<PAGE> 24
SECTION 5.06. SIGNATURE ON RETURNS; TAX MATTERS PARTNER.
(a) The Trust Depositor shall sign on behalf of the Trust the tax
returns of the Trust.
(b) If Subchapter K of the Code should be applicable to the Trust, the
Certificateholder shall be designated the "tax matters partner" of the Trust
pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
ARTICLE SIX
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. GENERAL AUTHORITY. Subject to the provisions and
limitations of Sections 2.03 and 2.06, the Owner Trustee is authorized and
directed to execute and deliver the Transaction Documents to which the Trust is
to be a party and each certificate or other document attached as an exhibit to
or contemplated by the Transaction Documents to which the Trust is to be a party
and any amendment or other agreement, as evidenced conclusively by the Owner
Trustee's execution thereof. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Transaction Documents. The Owner Trustee is further
authorized from time to time to take such action as the Administrator recommends
with respect to the Transaction Documents.
SECTION 6.02. GENERAL DUTIES. Subject to the provisions and limitations
of Sections 2.03 and 2.06, it shall be the duty of the Owner Trustee to
discharge (or cause to be discharged through the Administrator) all of its
responsibilities pursuant to the terms of this Agreement and the Transaction
Documents to which the Trust is a party and under which it has expressly assumed
any responsibility and to administer the Trust in the interest of the Owner,
subject to the Transaction Documents and in accordance with the provisions of
this Agreement. Without limiting the foregoing, the Owner Trustee shall on
behalf of the Trust file and prove any claim or claims that may exist against
OCAI in connection with any claims paying procedure as part of an insolvency or
receivership proceeding involving OCAI. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Transaction Documents to the extent the Administrator
has agreed in the Administration Agreement to perform any act or to discharge
any duty of the Owner Trustee hereunder or under any Transaction Document, and
the Owner Trustee shall not be held liable for the default or failure of the
Administrator to carry out its obligations under the Administration Agreement.
-19-
<PAGE> 25
SECTION 6.03. ACTION UPON INSTRUCTION.
(a) Subject to Article Four, in accordance with the terms of the
Transaction Documents the Owner may by written instruction direct the Owner
Trustee in the management of the Trust.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any other Transaction Document if the Owner Trustee shall
have reasonably determined, or shall have been advised by counsel, that such
action is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any other Transaction Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or under
any other Transaction Document, the Owner Trustee shall promptly give notice (in
such form as shall be appropriate under the circumstances) to the Owner
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Owner received, the Owner Trustee shall not be liable on
account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within ten days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement and the
other Transaction Documents, as it shall deem to be in the best interests of the
Owner, and shall have no liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
applicability of any provision of this Agreement or any other Transaction
Document or any such provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or in the event
that this Agreement permits any determination by the Owner Trustee or is silent
or incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Owner requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within ten days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Agreement or the other
Transaction Documents, as it shall deem to be in the best interests of the
Owner, and shall have no liability to any Person for such action or inaction.
-20-
<PAGE> 26
(e) Notwithstanding anything contained herein to the contrary, the
Owner Trustee shall not be required to take any action in any jurisdiction other
than in the State of Delaware if the taking of such action will (i) require the
registration with, licensing by or the taking of any other similar action in
respect of, any state or other governmental authority or agency of any
jurisdiction other than the State of Delaware by or with respect to the Owner
Trustee; (ii) result in any fee, tax or other governmental charge under the laws
of any jurisdiction or any political subdivisions thereof in existence on the
date hereof other than the State of Delaware being payable by the Owner Trustee;
or (iii) subject the Owner Trustee to personal jurisdiction in any jurisdiction
other than the State of Delaware for causes of action arising from acts
unrelated to the consummation of the transactions by the Owner Trustee
contemplated in this Agreement. In the event that the Owner Trustee has
determined that any action set forth in clauses (i)-(iii) will result in the
consequences stated therein, the Administrator and the Owner Trustee shall
appoint one or more Persons to act as co-trustee pursuant to Section 10.05.
SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or any document or written instruction received by the Owner
Trustee pursuant to Section 6.03; and no implied duties or obligations shall be
read into this Agreement or any other Transaction Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any other Transaction Document, which shall be the
responsibility of the Administrator pursuant to the Administration Agreement.
The Owner Trustee nevertheless agrees that it will, at its own cost and expense,
promptly take all action as may be necessary to discharge any liens on any part
of the Trust Estate that result from actions by, or claims against, the Owner
Trustee in its individual capacity that are not related to the ownership or the
administration of the Trust Estate.
SECTION 6.05. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Trust Estate except (i) in accordance
with the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Agreement, (ii) in accordance with the other Transaction
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 6.03.
-21-
<PAGE> 27
SECTION 6.06. RESTRICTIONS. The Owner Trustee shall not take any action
(i) that is inconsistent with the purposes of the Trust set forth in Section
2.03 or (ii) that, to the actual knowledge of a Responsible Officer of the Owner
Trustee, would result in the Trust's becoming taxable as a corporation for
federal or state income tax purposes. The Owner shall not direct the Owner
Trustee to take actions that would violate the provisions of this Section.
ARTICLE SEVEN
CONCERNING THE OWNER TRUSTEE
SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Trust Estate upon the terms of the Transaction Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any other Transaction Document under any circumstances, except (i) for its
own willful misconduct or gross negligence or (ii) in the case of the inaccuracy
of any representation or warranty contained in Section 7.03 expressly made by
the Owner Trustee in its individual capacity. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee
which did not result from gross negligence on the part of such
responsible officer;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with
the instructions of the Administrator or any Owner;
(c) no provision of this Agreement or any other Transaction
Document shall require the Owner Trustee to expend or risk
funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder or under
any Transaction Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the
Transaction Documents, including the principal of and interest
on the Notes;
-22-
<PAGE> 28
(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the
due execution hereof by the Trust Depositor or for the form,
character, genuineness, sufficiency, value or validity of any
of the Trust Estate, or for or in respect of the validity or
sufficiency of the Transaction Documents, other than the
certificate of authentication on the Trust Certificate, and
the Owner Trustee shall in no event assume or incur any
liability, duty, or obligation to any Noteholder or to any
Owner, other than as expressly provided for herein or
expressly agreed to in the Transaction Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Trust Depositor, the
Indenture Trustee or the Servicer under any of the Transaction
Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations of the
Trust under this Agreement or the other Transaction Documents
that are required to be performed by the Administrator under
the Administration Agreement, the Indenture Trustee under the
Indenture or the Servicer, or the Trust Depositor under the
Transfer and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by the Agreement, or to
institute, conduct or defend any litigation under this
Agreement or otherwise or in relation to this Agreement or any
other Transaction Document, at the request, order or direction
of the Owner, unless such Owner has offered to the Owner
Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities that may be incurred by the
Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this
Agreement or in any other Transaction Document shall not be
construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence or willful misconduct
in the performance of any such act.
SECTION 7.02. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Owner promptly upon receipt of a written request therefor, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee under the
Transaction Documents.
-23-
<PAGE> 29
SECTION 7.03. REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants to the Trust Depositor and the Owner that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of
Delaware. It has all requisite corporate power and authority
to execute, deliver and perform its obligations under this
Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this
Agreement will be executed and delivered by one of its
officers who is duly authorized to execute and deliver this
Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions
contemplated hereby nor compliance by it with any of the terms
or provisions hereof will contravene any federal or Delaware
law, governmental rule or regulation governing the banking or
trust powers of the Owner Trustee or any judgment or order
binding on it, or constitute any default under its charter
documents or bylaws or any indenture, mortgage, contract,
agreement or instrument to which it is a party or by which any
of its properties may be bound or result in the creation or
imposition of any lien, charge or encumbrance on the Trust
Estate resulting from actions by or claims against the Owner
Trustee individually which are unrelated to this Agreement or
the other Transaction Documents.
SECTION 7.04. RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of determination of
which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken by
it in good faith in reliance thereon.
-24-
<PAGE> 30
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the other
Transaction Documents, the Owner Trustee (i) may, at the expense of the Trust
Depositor, act directly or through its agents or attorneys pursuant to
agreements entered into by any of them, and the Owner Trustee shall not be
liable for the conduct or misconduct of such agents or attorneys as shall have
been selected by the Owner Trustee with reasonable care, and (ii) may, at the
expense of the Trust Depositor, consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it. The
Owner Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons.
SECTION 7.05. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article Seven, in accepting the trusts hereby created, The Bank of New York
(Delaware) acts solely as Owner Trustee hereunder and not in its individual
capacity, and all Persons having any claim against the Owner Trustee by reason
of the transactions contemplated by this Agreement or any other Transaction
Document shall look only to the Trust Estate for payment or satisfaction
thereof.
SECTION 7.06. OWNER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATE, NOTES OR
CONTRACTS. The recitals contained herein and in the Trust Certificate (other
than the signature and countersignature of the Owner Trustee and the certificate
of authentication on the Trust Certificate) shall be taken as the statements of
the Trust Depositor, and the Owner Trustee assumes no responsibility for the
correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, any other Transaction Document or the
Trust Certificate (other than the signature and countersignature of the Owner
Trustee and the certificate of authentication on the Trust Certificate) or the
Notes, or of any Contract or related documents. The Owner Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Contract, or the perfection and priority of
any security interest created by any Contract in any Equipment or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to the Certificateholder under this Agreement or the Noteholders
under the Indenture, including, without limitation, the existence, condition and
ownership of any Equipment; the existence and enforceability of any insurance
thereon; the existence and contents of any Contract on any computer or other
record thereof; the validity of the assignment of any Contract to the Trust or
of any intervening assignment; the completeness of any Contract; the performance
or enforcement of any Contract; the compliance by the Trust Depositor or the
Servicer with any warranty or representation made under any Transaction Document
or in any related document or the accuracy of any such warranty or
representation; or any action of the
-25-
<PAGE> 31
Administrator, the Indenture Trustee or the Servicer or any subservicer taken in
the name of the Owner Trustee.
SECTION 7.07. OWNER TRUSTEE MAY OWN TRUST CERTIFICATE AND NOTES. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of the Trust Certificate or Notes and may deal with the Trust Depositor,
the Administrator, the Indenture Trustee and the Servicer in banking
transactions with the same rights as it would have if it were not Owner Trustee.
ARTICLE EIGHT
COMPENSATION OF OWNER TRUSTEE
SECTION 8.01. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon and which shall be paid consistent with Section 5.19 of
the Transfer and Servicing Agreement. Additionally, the Owner Trustee shall be
entitled to be reimbursed by the Trust Depositor or Servicer for its other
reasonable expenses hereunder, including the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder.
SECTION 8.02. INDEMNIFICATION. The Trust Depositor shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the other Transaction Documents, the Trust
Estate, the administration of the Trust Estate or the action or inaction of the
Owner Trustee hereunder, except only that the Trust Depositor shall not be
liable for or required to indemnify an Indemnified Party from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.01. The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the termination
of this Agreement. In the event of any claim, action or proceeding for which
indemnity will be sought pursuant to this Section, the Owner Trustee's choice of
legal counsel shall be subject to the approval of the Trust Depositor, which
approval shall not be unreasonably withheld.
-26-
<PAGE> 32
SECTION 8.03. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article shall be deemed not to be a part of the
Trust Estate immediately after such payment.
ARTICLE NINE
TERMINATION OF TRUST AGREEMENT
SECTION 9.01. TERMINATION OF TRUST AGREEMENT.
(a) This Trust shall dissolve upon the earlier of (i) the day following
the final distribution by the Owner Trustee of all moneys or other property or
proceeds of the Trust Estate in accordance with the terms of the Indenture, the
Transfer and Servicing Agreement and Article Five, provided that the Trust
Depositor shall have delivered a written notice to the Owner Trustee electing
to terminate the Trust, and (ii) the time provided in Section 9.02. The
bankruptcy, liquidation, dissolution, death or incapacity of any Owner, other
than the Trust Depositor as described in Section 9.02, shall not (i) operate to
terminate this Agreement or the Trust, (ii) entitle such Owner's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or Trust Estate or (iii) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), neither the Trust Depositor
nor any Holder shall be entitled to revoke or terminate the Trust.
(c) Notice of any dissolution of the Trust, specifying the Distribution
Date upon which the Certificateholder shall surrender its Trust Certificate to
the Paying Agent for payment of the final distribution and cancellation, shall
be given by the Owner Trustee by letter to the Certificateholder mailed within
five Business Days of receipt of notice of termination from the Servicer given
pursuant to Section 10.01 of the Transfer and Servicing Agreement, stating (i)
the Distribution Date upon or with respect to which final payment of the Trust
Certificate shall be made upon presentation and surrender of the Trust
Certificate at the office of the Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Trust Certificate at the office of the
Paying Agent therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at
the time such notice is given to the Certificateholder. Upon presentation and
surrender of the Trust Certificates, the Paying Agent shall cause to be
distributed to the Certificateholder amounts distributable on such Distribution
Date pursuant to Section 5.02.
-27-
<PAGE> 33
(d) In the event that the Certificateholder shall not surrender its
Trust Certificate for cancellation within six months after the date specified in
the above mentioned written notice, the Owner Trustee shall give a second
written notice to such Certificateholder to surrender its Trust Certificate for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice the Trust Certificate shall not have been
surrendered for cancellation, the Owner Trustee may take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the Certificateholder
concerning surrender of its Trust Certificates, and the cost thereof shall be
paid out of the funds and other assets that shall remain subject to this
Agreement. Any funds remaining in the Trust after exhaustion of such remedies
shall be distributed by the Owner Trustee to the Trust Depositor.
(e) Upon the winding up of the Trust and payment of all liabilities in
accordance with Section 3808 of the Business Trust Statute, the Owner Trustee
shall cause the Certificate of Trust to be canceled by filing a certificate of
cancellation with the Secretary of State in accordance with the provisions of
Section 3810 of the Business Trust Statute at which time the Trust shall
terminate. The Administrator shall be the liquidator of the Trust.
SECTION 9.02. DISSOLUTION UPON BANKRUPTCY OF TRUST DEPOSITOR OR
WITHDRAWAL OR REMOVAL OF TRUST DEPOSITOR. In the event that an Insolvency Event
shall occur with respect to the Trust Depositor or the Trust Depositor shall
withdraw, liquidate or be removed from the Trust, this Agreement shall be
terminated in accordance with Section 9.01 90 days after the date of such event,
unless within such 90 day period, the Owner Trustee shall have received written
instructions from the Required Holders not to dissolve or terminate the Trust.
Promptly after the occurrence of any Insolvency Event with respect to the Trust
Depositor, the Trust Depositor shall give the Indenture Trustee and Owner
Trustee written notice thereof, and the Indenture Trustee shall give prompt
written notice to the Noteholders thereof. Upon a termination pursuant to this
Section, the Owner Trustee shall direct the Indenture Trustee promptly to sell,
at the expense of the Trust, the Trust Assets in a commercially reasonable
manner and on commercially reasonable terms. The proceeds of such a sale of the
Trust Assets shall be treated as Collections under the Transfer and Servicing
Agreement.
ARTICLE TEN
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise corporate trust
powers; and (a) having a combined capital and surplus of at least $50,000,000
and subject to supervision or
-28-
<PAGE> 34
examination by federal or state authorities; and having (or having a parent that
has) a rating of at least Baa3 by Moody's, BBB- by S&P, and BBB- by Fitch (if
rated by Fitch); or (b) which the Rating Agencies have otherwise indicated in
writing is an entity acceptable to act as Owner Trustee hereunder. If such
corporation shall publish reports of condition at least annually pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.02.
SECTION 10.02. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Administrator. Upon receiving such
notice of resignation, the Administrator shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the successor
Owner Trustee. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee. Any successor
Owner Trustee appointed hereunder shall promptly file an amendment to the
Certificate of Trust to the extent required by Delaware law.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator, may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the authority
of the immediately preceding sentence, the Administrator shall promptly appoint
a successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed and one
copy to the successor Owner Trustee, and shall pay all fees owed to the outgoing
Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee.
-29-
<PAGE> 35
The Administrator shall provide notice of such resignation or removal of the
Owner Trustee to each Rating Agency.
SECTION 10.03. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator, and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or removal
of the predecessor Owner Trustee shall become effective, and such successor
Owner Trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
under this Agreement, with like effect as if originally named as Owner Trustee.
The predecessor Owner Trustee shall upon payment of its fees and expenses
deliver to the successor Owner Trustee all documents and statements and monies
held by it under this Agreement; and the Administrator and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice thereof to the
Certificateholder, the Indenture Trustee, the Noteholders and each Rating
Agency. If the Administrator shall fail to mail such notice within ten days
after acceptance of such appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.
SECTION 10.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant to
Section 10.01 and, provided, further, that the Owner Trustee shall mail notice
of such merger or consolidation to each Rating Agency.
SECTION 10.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate or any
-30-
<PAGE> 36
financed Equipment may at the time be located, the Administrator and the Owner
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Administrator and
Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or separate trustees, of all or any part of the Trust Estate,
and to vest in such Person, in such capacity, such title to the Trust or any
part thereof and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Administrator and the Owner
Trustee may consider necessary or desirable. If the Administrator shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Owner Trustee alone shall have the power to make such appointment.
No co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor Owner Trustee pursuant to Section 10.01
and no notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act),
except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed, the
Owner Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust
Estate or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Owner Trustee;
(b) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this
Agreement; and
(c) the Administrator and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee
-31-
<PAGE> 37
or separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of or affording protection to, the Owner
Trustee. Each such instrument shall be filed with the Owner Trustee and a copy
thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor co-trustee or separate trustee.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. SUPPLEMENTS AND AMENDMENTS.
(a) The Agreement may be amended by the Trust Depositor, and the Owner
Trustee, without the consent of any of the Noteholders or the Certificateholder,
to cure any ambiguity, to correct or supplement any provisions in this Agreement
or to add any other provisions with respect to matters or questions arising
under this Agreement that shall not be inconsistent with the provisions of this
Agreement; provided, however, that any such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder or the Certificateholder.
(b) This Agreement may also be amended from time to time by the Trust
Depositor, and the Owner Trustee, with the consent of the Required Holders, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement, or of modifying in any manner the
rights of the Noteholders or the Certificateholder; provided, however, that no
such amendment shall increase or reduce in any manner the amount of, or
accelerate or delay the timing of, (i) collections of payments on Contracts or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholder, or (ii) eliminate the Certificateholder
consent or reduce the aforesaid percentage of the Outstanding Amount of the
Notes required to consent to any such amendment, without the consent of the
Holders of all outstanding Notes and the Trust Certificate.
-32-
<PAGE> 38
(c) Prior to the execution of any such amendment or consent, the Trust
Depositor shall furnish written notification of the substance of such amendment
or consent, together with a copy thereof, to the Indenture Trustee, the
Administrator and each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder. It shall not be necessary for
the consent of the Certificateholder, Noteholders or the Indenture Trustee
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of the Certificateholder provided for in this Agreement or in any other
Transaction Document) and of evidencing the authorization of the execution
thereof by the Certificateholder shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(f) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall not
be obligated to, enter into any such amendment that affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.02. NO LEGAL TITLE TO TRUST ESTATE IN OWNER. The Owner shall
not have legal title to any part of the Trust Estate. The Owner shall be
entitled to receive distributions with respect to its undivided ownership
interest herein only in accordance with Articles Five and Nine. No transfer, by
operation of law or otherwise, of any right, title or interest of the Owner to
and in its ownership interest in the Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Estate.
SECTION 11.03. LIMITATIONS ON RIGHTS OF OTHERS. Except for Section
2.07, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Trust Depositor, the Owner, the Administrator and, to the extent
expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Agreement (other than Section 2.07), whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Trust Estate or under or in respect of this Agreement or
any covenants, conditions or provisions contained herein.
-33-
<PAGE> 39
SECTION 11.04. NOTICES. All notices, demands, certificates, requests
and communications hereunder ("notices") shall be in writing and shall be
effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or (d)
on the date transmitted by legible telecopier transmission with a confirmation
of receipt, in all cases addressed to the recipient as follows:
(i) If to the Servicer or any Seller:
ORIX Credit Alliance, Inc.
300 Lighting Way
Secaucus, New Jersey
Attention: Chief Financial
Officer/Asset Securitization
Fax No.: (201) 348-2914
(ii) If to the Trust Depositor:
ORIX Credit Alliance Receivables Corporation III
300 Lighting Way
Secaucus, New Jersey
Attention: President/Asset Securitization
Fax No.: (201) 348-2914
(iii) If to the Indenture Trustee:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606
Attention: Indenture Trust Administration
Fax No.: (312) 293-4139
(iv) If to the Owner Trustee:
The Bank of New York (Delaware)
502 White Clay Center
P.O. Box 6973
Newark, Delaware 19714-6973
Attention: Corporate Trust Administration
Fax No.: (302) 283-8279
-34-
<PAGE> 40
With a copy to:
The Bank of New York
101 Barclay Street
12 East
New York, New York 10286
Attn: Asset-Backed Finance Group
Fax No.: (212) 815-4135
(v) If to Moody's:
Moody's Investors Service, Inc.
99 Church Street
4th Floor
New York, New York 10007
Attention: ABS Monitoring Department
Fax No.: (212) 553-0344
(vi) If to S&P:
Standard & Poors Ratings Service
55 Water Street
41st Floor
New York, New York 10041
Attention: Surveillance: Asset Backed Services
Fax No.: (212) 438-2662
(vii) If to Fitch:
Fitch IBCA, Inc.
One State Street Plaza
32nd Floor
New York, New York 10004
Attention: Asset Backed Securities Group
Fax No.: (212) 514-9879
-35-
<PAGE> 41
(viii) If to the Underwriter:
First Union Securities, Inc.
One First Union Center, TW-9
301 South College Street
Charlotte, North Carolina 28288-0610
Attention: Asset Securitization Division
Fax No.: (704) 374-3254
Each party hereto may, by notice given in accordance herewith to each of the
other parties hereto, designate any further or different address to which
subsequent notices shall be sent.
SECTION 11.05. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Trust
Certificate or the rights of the Holder thereof.
SECTION 11.06. COUNTERPARTS. This Agreement may be executed by
facsimile signature and in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 11.07. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
Trust Depositor, and the Owner Trustee and their respective successors and
permitted assigns and each Owner and its successors and permitted assigns, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of such
Owner.
SECTION 11.08. NO PETITION. The Owner Trustee, by entering into this
Agreement, each Certificateholder, by accepting a Trust Certificate, and the
Indenture Trustee and each Noteholder, by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Trust Depositor or the Trust, or join in any institution against the
Trust Depositor, or the Trust of, any bankruptcy proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificate, the Notes, this Agreement or any
of the other Transaction Documents.
SECTION 11.09. NO RECOURSE. Each Certificateholder by accepting a Trust
Certificate acknowledges that such Certificateholder's Trust Certificate
represent
-36-
<PAGE> 42
beneficial interests in the Trust only and do not represent interests in or
obligations of the Trust Depositor, the Servicer, the Originator, the
Administrator, the Owner Trustee, the Indenture Trustee or any of the respective
Affiliates and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated in this Agreement, the
Trust Certificate or the other Transaction Documents. The Owner by accepting the
Trust Certificate (i) acknowledges that such Trust Certificate represents a
beneficial interest in the Trust and Trust Assets only and does not represent an
interest in or an obligation of the Trust Depositor, the Servicer, the
Originator, the Administrator, the Owner Trustee, the Indenture Trustee, or any
Affiliate of the foregoing, and no recourse may be had against any such party or
their assets, except as may be expressly set forth or contemplated in the
Transaction Documents and (ii) enters into the undertakings and agreements
provided for such Certificateholder set forth in Section 13.09 of the Transfer
and Servicing Agreement.
SECTION 11.10. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.11. GOVERNING LAW AND JURY WAIVER. (a) THIS AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS; and
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. Each person hereto (i) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 11.11(b).
SECTION 11.12. TRUST CERTIFICATE TRANSFER RESTRICTIONS. The Trust
Certificate may not be acquired by or for the account of a Benefit Plan. By
accepting and holding a Trust Certificate, the Holder thereof shall be deemed to
have represented and warranted that it is not a Benefit Plan nor will it hold
such Trust Certificate for the account of a Benefit Plan.
-37-
<PAGE> 43
SECTION 11.13. TRUST DEPOSITOR PAYMENT OBLIGATION. The Trust Depositor
shall be responsible for payment of the Administrator's compensation pursuant to
Section 3 of the Administration Agreement and shall reimburse the Administrator
for all expenses and liabilities of the Administrator incurred thereunder.
-38-
<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers hereunto duly authorized, as of the
day and year first above written.
ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III
as Trust Depositor
By:
----------------------------------------------
Printed Name: Joseph J. McDevitt, Jr.
-----------------------------
Title: President
-------------------------------
THE BANK OF NEW YORK (DELAWARE)
By:
-----------------------------------
Printed Name: Cheryl Laser
-----------------------------
Title: Assistant Vice President
------------------------------------
-39-
<PAGE> 45
EXHIBIT A
CERTIFICATE OF TRUST OF
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
This Certificate of Trust of ORIX Credit Alliance Receivables Trust
2000-A (the "Trust"), dated , 2000, is being duly executed and filed by
the undersigned, as trustee, to form a business trust under the Delaware
Business Trust Act (12 Del. Code, Section 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is ORIX
Credit Alliance Receivables Trust 2000-A.
2. Delaware Trustee. The name and business address of the Owner
Trustee of the Trust in the State of Delaware is 502 White Clay Center, Newark,
Delaware 19714-6973 (Attn: Corporate Trust Administration).
3. Effective Date. This Certificate shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust in accordance with Section 3811(e)
of the Act.
THE BANK OF NEW YORK (DELAWARE)
not in its individual capacity but solely
as trustee
By:
---------------------------------
Printed Name:
----------------------------------
Title:
-----------------------------------------
A-1
<PAGE> 46
EXHIBIT B
THIS TRUST CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES TO THE
EXTENT DESCRIBED IN THE TRANSFER AND SERVICING AGREEMENT AND INDENTURE REFERRED
TO HEREIN.
THIS TRUST CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
ORIX CREDIT ALLIANCE CORPORATION, ORIX CREDIT ALLIANCE, INC., OR ANY AFFILIATE
THEREOF, EXCEPT TO THE EXTENT SET FORTH IN THE TRUST AGREEMENT. THIS TRUST
CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED UNLESS THE
CONDITIONS SET FORTH IN SECTION 3.04 OF THE TRUST AGREEMENT HAVE BEEN COMPLIED
WITH.
THIS CERTIFICATE IS TRANSFERRABLE ONLY IN WHOLE AND NOT IN PART.
THIS TRUST CERTIFICATE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS TRUST
CERTIFICATE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A CERTIFICATE
NO. 1 Trust Certificate
Principal Balance $
THIS CERTIFIES THAT ORIX Credit Alliance Receivables Corporation III is
the registered owner of Dollars ($ ) of a nonassessable,
fully-paid, fractional undivided beneficial equity interest in the ORIX Credit
Alliance Receivables Trust 2000-A (the "Trust") formed by ORIX Credit Alliance
Receivables Corporation III, a Delaware corporation (the "Trust Depositor").
The Trust was created pursuant to an Amended and Restated Trust
Agreement, dated as of February , 2000 (as amended, restated and/or
supplemented from time to time, the "Trust Agreement"), among ORIX Credit
Alliance Receivables Corporation III, as Trust Depositor (the "Trust
Depositor"), and The Bank of New York (Delaware), as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in (i) the Trust Agreement, (ii)
the Transfer and Servicing Agreement, dated as of , 2000 (the
"Transfer and Servicing Agreement"), among the Trust, ORIX Credit Alliance
Receivables Corporation
<PAGE> 47
III, as depositor (the "Trust Depositor"), ORIX Credit Alliance Inc. ("OCAI"),
as Servicer (in such capacity, the "Servicer"; in its capacity as the originator
and its successor and assigns, the "Originator"), and Harris Trust and Savings
Bank, as Indenture Trustee (the "Indenture Trustee") or (iii) the Indenture,
dated as of , 2000 (the "Indenture"), between the Trust and the Indenture
Trustee.
This Trust Certificate is the duly authorized Trust Certificate
designated as "ORIX Credit Alliance Receivables-Backed Certificate" (the "Trust
Certificate"). Also issued under the Indenture are six classes of notes
designated as "ORIX Credit Alliance Receivables Trust Class A-1
Receivable-Backed Notes" and "ORIX Credit Alliance Receivables Trust Class A-2
Receivable-Backed Notes", and "ORIX Credit Alliance Receivables Trust Class A-3
Receivable-Backed Notes", and "ORIX Credit Alliance Receivables Trust Class A-4
Receivable-Backed Notes" and "ORIX Credit Alliance Receivables Trust Class B
Receivable-Backed Notes" and "ORIX Credit Alliance Receivables Trust Class C
Receivable-Backed Notes," (collectively, the "Notes"). This Trust Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the Holder of this Trust Certificate by
virtue of its acceptance hereof assents and by which such Holder is bound. The
property of the Trust includes, among other things, all the right, title and
interest of the Trust Depositor and the Originator in the Contract Assets as
defined in Section 2.01(b) of the Transfer and Servicing Agreement and Section
2.01 of the OCAI Transfer and Servicing Agreement.
Under the Trust Agreement, there will be distributed on the fifteenth
day of each month or if such day is not a Business Day the next succeeding
Business Day commencing , 2000 (each, a "Distribution Date"), and
ending no later than the Distribution Date in to the person in whose
name this Trust Certificate is registered at the close of business on the last
day of the immediately preceding calendar month (each, a "Record Date"), the
amount to be distributed to the Certificateholder pursuant to the Trust
Agreement on such Distribution Date.
The Holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders to the extent described in the
Transfer and Servicing Agreement and the Indenture.
It is the intent of the Originator, the Servicer, the Trust Depositor,
Owner Trustee, Indenture Trustee and the Certificateholder that, for purposes of
federal income, state and local income and single business tax and any other
income taxes, the Trust will be disregarded as a separate entity for federal
income tax purposes pursuant to Treasury Regulations Section
301.7701-3(b)(1)(ii) and that all items of income, deduction, gain, loss or
credit of the Trust will be treated as such items of the Certificateholder. The
Trust
-2-
<PAGE> 48
Depositor and any other Certificateholder, by acceptance of a Trust Certificate,
agrees to treat, and to take no action inconsistent with such treatment of, the
Trust for federal, state and local income tax purposes.
Each Certificateholder, by its acceptance of a Trust Certificate or
beneficial interest in a Trust Certificate, covenants and agrees that such
Certificateholder will not at any time institute against the Trust or the Trust
Depositor, or join in any institution against the Trust or the Trust Depositor
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificate, the Notes, the Trust Agreement or any of the other
Transaction Documents.
Distributions on this Trust Certificate will be made as provided in the
Trust Agreement by the Owner Trustee or its Agent by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Trust Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Trust Certificate
at the office or agency maintained for that purpose by the Owner Trustee's
affiliate, The Bank of New York, in the City of New York, State of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the Holder hereof to any benefit under
the Trust Agreement or any other Transaction Document or be valid for any
purpose.
-3-
<PAGE> 49
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
{REVERSE OF CERTIFICATE}
The Trust Certificate does not represent an obligation of, or an
interest in the Trust Depositor, ORIX Credit Alliance, as the Originator or
Servicer, the Owner Trustee, the Indenture Trustee or any of their respective
Affiliates and no recourse may be had against such parties or their assets,
except as expressly set forth or contemplated herein or in the Trust Agreement
or the other Transaction Documents. In addition, this Trust Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in right
of payment to certain collections and recoveries with respect to the Contracts
and certain other amounts, in each case as more specifically set forth herein
and in the Transfer and Servicing Agreement. A copy of each of the Transfer and
Servicing Agreement and the Trust Agreement may be examined by any
Certificateholder upon written request during normal business hours at the
principal office of the Trust Depositor and at such other places, if any,
designated by the Trust Depositor.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trust Depositor and the rights of the Certificateholder under the Trust
Agreement at any time by the Trust Depositor and the Owner Trustee with the
consent of the Required Holders (as defined in the Transfer and Servicing
Agreement). Any such consent shall be conclusive and binding on the Holder and
on all future Holders of this Trust Certificate and of any Trust Certificate
issued upon the transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent is made upon this Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Holder of the Trust Certificate or any Noteholder.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in the
Certificate Register upon surrender of this Trust Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by The Bank of New York, an affiliate of the Owner Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Owner Trustee and the Certificate Registrar in Newark, Delaware executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon a new Trust Certificate evidencing the same aggregate interest in the
Trust will
-4-
<PAGE> 50
be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is the Owner Trustee.
Except as provided in the Trust Agreement, the Trust Certificate is
issuable only as a registered Trust Certificate without coupons. No service
charge will be made for any registration of transfer of such Trust Certificate,
but the Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any of their
respective agents may treat the Person in whose name this Trust Certificate is
registered as the owner hereof for all purposes, and none of the Owner Trustee,
the Certificate Registrar or any such agent shall be affected by any notice to
the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholder
of all amounts required to be paid to such Holder pursuant to the Trust
Agreement and the Transfer and Servicing Agreement and the deposition of all
property held as part of the Trust Estate. The Trust Depositor may at its option
purchase the Trust Estate at the times and at the prices specified in the
Transfer and Servicing Agreement.
The Trust Certificate may not be acquired by a Benefit Plan. By
accepting and holding this Trust Certificate, the Holder hereof shall be deemed
to have represented and warranted that it is not a Benefit Plan and is not
acquiring this Trust Certificate or an interest therein for the account of such
an entity.
-5-
<PAGE> 51
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Trust Certificate to be duly
executed.
Dated: February , 2000 ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK
(DELAWARE), not in its individual capacity
but solely as Owner Trustee
By:
------------------------------------
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Trust Certificate referred to in the within-mentioned Trust
Agreement.
THE BANK OF NEW YORK
(DELAWARE)
not in its individual capacity
but solely as Owner Trustee
By:
-------------------------------
Authorized Signatory
-6-
<PAGE> 52
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- -------------------------------------------------------------------------------
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- --------------------------------------------------------------------------------
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
------------------
Signature Guaranteed:
- -----------------------------------------------
NOTICE: Signature(s) must be guaranteed by an
eligible guarantor institution.
- ---------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name of the registered owner
as it appears on the face of the within Trust
Certificate in every particular, without alteration
or enlargement or any change whatever.
-7-
<PAGE> 1
EXHIBIT 4.2
HARRIS TRUST AND SAVINGS BANK,
NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY IN ITS CAPACITY
AS INDENTURE TRUSTEE
AND
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A,
AS ISSUER
-------------------------
INDENTURE
DATED AS OF FEBRUARY , 2000
------------------------
$ CLASS A-1 RECEIVABLE-BACKED NOTES
$ CLASS A-2 RECEIVABLE-BACKED NOTES
$ CLASS A-3 RECEIVABLE-BACKED NOTES
$ CLASS A-4 RECEIVABLE-BACKED NOTES
$ CLASS B RECEIVABLE-BACKED NOTES
$ CLASS C RECEIVABLE-BACKED NOTES
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
Section 1.01. Definitions...............................................................................2
Section 1.02. Incorporation by Reference of Trust Indenture Act.........................................8
Section 1.03. Rules of Construction.....................................................................9
ARTICLE TWO
THE NOTES
Section 2.01. Form......................................................................................9
Section 2.02. Execution, Authentication and Delivery...................................................10
Section 2.03. Temporary Notes..........................................................................10
Section 2.04. Registration; Registration of Transfer and Exchange......................................11
Section 2.05. Mutilated, Destroyed, Lost or Stolen Notes...............................................13
Section 2.06. Persons Deemed Owner.....................................................................14
Section 2.07. Payment of Principal and Interest; Defaulted Interest....................................14
Section 2.08. Cancellation.............................................................................15
Section 2.09. Book-Entry Notes.........................................................................15
Section 2.10. Notices to Clearing Agency...............................................................16
Section 2.11. Definitive Notes.........................................................................16
Section 2.12. Release of Collateral....................................................................17
Section 2.13. Tax Treatment............................................................................17
Section 2.14. CUSIP Numbers............................................................................17
ARTICLE THREE
COVENANTS; REPRESENTATIONS AND WARRANTIES
Section 3.01. Payment of Principal and Interest........................................................18
Section 3.02. Maintenance of Office or Agency..........................................................18
Section 3.03. Money for Payments to be Held in Trust...................................................18
Section 3.04. Existence................................................................................20
Section 3.05. Protection of Collateral.................................................................20
Section 3.06. {Reserved}...............................................................................21
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 3.07. Performance of Obligations; Servicing of Contracts.......................................21
Section 3.08. Negative Covenants.......................................................................22
Section 3.09. Issuer May Consolidate, etc. Only on Certain Terms.......................................23
Section 3.10. Successor or Transferee..................................................................25
Section 3.11. No Other Business........................................................................26
Section 3.12. No Borrowing.............................................................................26
Section 3.13. Notice of Events of Default..............................................................26
Section 3.14. Further Instruments and Acts.............................................................26
Section 3.15. Compliance with Laws.....................................................................26
Section 3.16. Amendments of Trust Agreement............................................................26
Section 3.17. Removal of Administrator.................................................................26
Section 3.18. Representations and Warranties of Issuer.................................................26
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture..................................................28
Section 4.02. Application of Trust Money...............................................................30
Section 4.03. Repayment of Moneys Held by Paying Agent.................................................30
Section 4.04. Release of Collateral....................................................................30
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default........................................................................30
Section 5.02. Rights Upon Event of Default; Notice.....................................................32
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee; Authority of Indenture Trustee...................................32
Section 5.04. Remedies.................................................................................35
Section 5.05. Optional Preservation of the Contracts...................................................36
Section 5.06. Priorities...............................................................................36
Section 5.07. Limitation of Suits......................................................................40
Section 5.08. Unconditional Rights of Noteholders to Receive Principal and Interest....................40
Section 5.09. Restoration of Rights and Remedies.......................................................41
Section 5.10. Rights and Remedies Cumulative...........................................................41
Section 5.11. Delay or Omission Not a Waiver...........................................................41
Section 5.12. Control by Noteholders...................................................................41
Section 5.13. Waiver of Past Defaults..................................................................42
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 5.14. Undertaking for Costs....................................................................42
Section 5.15. Waiver of Stay or Extension Laws.........................................................42
Section 5.16. Action on Notes..........................................................................43
Section 5.17. Performance and Enforcement of Certain Obligations.......................................44
ARTICLE SIX
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee..............................................................44
Section 6.02. Rights of Indenture Trustee..............................................................45
Section 6.03. Individual Rights of Indenture Trustee...................................................47
Section 6.04. Indenture Trustee's Disclaimer...........................................................47
Section 6.05. Notice of Defaults.......................................................................47
Section 6.06. Reports by Indenture Trustee to Holders..................................................47
Section 6.07. Compensation and Indemnity...............................................................48
Section 6.08. Replacement of Indenture Trustee.........................................................48
Section 6.09. Successor Indenture Trustee by Merger....................................................50
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee........................50
Section 6.11. Eligibility..............................................................................52
Section 6.12. Preferential Collection of Claims Against Issuer.........................................52
Section 6.13. Representations and Warranties of Indenture Trustee......................................53
ARTICLE SEVEN
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders...................54
Section 7.02. Preservation of Information: Communication to Noteholders................................54
Section 7.03. Reports by Issuer........................................................................55
Section 7.04. Reports by Indenture Trustee.............................................................55
ARTICLE EIGHT
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money......................................................................56
Section 8.02. Trust Accounts...........................................................................56
Section 8.03. General Provisions Regarding Accounts....................................................61
Section 8.04. Release of Collateral....................................................................62
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 8.05. Opinion of Counsel.......................................................................62
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders...................................63
Section 9.02. Supplemental Indentures With Consent of Noteholders......................................64
Section 9.03. Execution of Supplemental Indentures.....................................................66
Section 9.04. Effect of Supplemental Indenture.........................................................66
Section 9.05. Conformity With Trust Indenture Act......................................................66
Section 9.06. Reference in Notes to Supplemental Indentures............................................66
ARTICLE TEN
REDEMPTION OF NOTES
Section 10.01. Redemption..............................................................................67
Section 10.02. Form of Redemption Notice...............................................................67
Section 10.03. Notes Payable on Redemption Date........................................................68
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc...............................................68
Section 11.02. Form of Documents Delivered to Indenture Trustee........................................70
Section 11.03. Acts of Noteholders.....................................................................71
Section 11.04. Notices.................................................................................72
Section 11.05. Notices to Noteholders; Waiver..........................................................72
Section 11.06. Alternate Payment and Notice Provisions.................................................73
Section 11.07. Effect of Headings and Table of Contents................................................73
Section 11.08. Successors and Assigns..................................................................73
Section 11.09. Separability............................................................................73
Section 11.10. Benefits of Indenture...................................................................73
Section 11.11. Legal Holidays..........................................................................74
Section 11.12. Governing Law...........................................................................74
Section 11.13. Counterparts............................................................................74
Section 11.14. Recording of Indenture..................................................................74
Section 11.15. Trust Obligation........................................................................74
Section 11.16. No Petition.............................................................................75
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C> <C>
Section 11.17. Inspection..............................................................................76
Section 11.18. Conflict with Trust Indenture Act.......................................................76
Section 11.19. Communication by Note Owners With Other Note Owners.....................................76
</TABLE>
EXHIBITS
EXHIBIT A - Form of Transfer and Servicing Agreement......................A-1
EXHIBIT B - Form of Class A-1 Note........................................B-1
EXHIBIT C - Form of Class A-2 Note........................................C-1
EXHIBIT D - Form of Class A-3 Note........................................D-1
EXHIBIT E - Form of Class A-4 Note........................................E-1
EXHIBIT F - Form of Class B Note..........................................F-1
EXHIBIT G - Form of Class C Note..........................................G-1
EXHIBIT H - Form of Note Assignment.......................................H-1
EXHIBIT I - Form of Note Depository Agreement.............................I-1
-v-
<PAGE> 7
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Trust Indenture
Act of 1939 Indenture
Section Section
- --------------- -------
<S> <C>
310(a)..................................................................6.11
310(b)..................................................................6.11
310(c)..................................................................N.A.
311(a)..................................................................6.12
311(b)..................................................................6.12
311(c)..................................................................N.A.
312(a)............................................................7.01, 7.02
312(b)..................................................................7.02
312(c)..................................................................7.02
313(a)..................................................................7.04
313(b)..................................................................7.04
313(c)............................................................7.03, 7.04
314(a)..................................................................7.03
314(b)..................................................................3.06
314(c)...........................................................4.04, 11.01
314(d)...........................................................8.04, 11.01
314(e).................................................................11.01
314(f)..................................................................N.A.
315(a)..................................................................6.01
315(b)..................................................................6.05
315(c)..................................................................6.01
315(d)..................................................................6.01
315(e)..................................................................5.14
316(a)............................................................2.07, 5.04
316(b)..................................................................9.02
316(c)..................................................................1.01
317(a)..................................................................5.03
317(b)..................................................................3.03
318(a).................................................................11.18
</TABLE>
-vi-
<PAGE> 8
This INDENTURE, dated as of February , 2000 (this
"Indenture"), is between ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A, a
Delaware business trust (the "Issuer"), and HARRIS TRUST AND SAVINGS BANK, in
its capacity as indenture trustee (the "Indenture Trustee") and not in its
individual capacity.
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Issuer's %
Class A-1 Receivable-Backed Notes (the "Class A-1 Notes"), % Class A-2
Receivable-Backed Notes (the "Class A-2 Notes"), % Class A-3 Receivable-Backed
Notes (the "Class A-3 Notes"), % Class A-4 Receivable-Backed Notes (the "Class
A-4 Notes"), % Class B Receivable-Backed Notes (the "Class B Notes") and %
Class C Receivable-Backed Notes (the "Class C Notes" and, together with the
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B
Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby grants, transfers, assigns and otherwise
conveys to the Indenture Trustee on the Closing Date, on behalf of and for the
benefit of the Holders of the Notes, without recourse, all of the Issuer's
right, title and interest in, to and under the Contract Assets as may be held
from time to time by the Issuer (as each such defined term is defined in Section
1.01) (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction and all
other sums owing by the Issuer hereunder or under any other Transaction
Document, and to secure compliance with the provisions of this Indenture, all as
provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Holders of the Notes, acknowledges such Grant, accepts the trust under this
Indenture in accordance with the provisions of this Indenture and agrees to
perform its duties required in this Indenture to the best of its ability.
<PAGE> 9
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
(a) Except as otherwise specified herein or as the context
may otherwise require, the following terms have the respective meanings set
forth below for all purposes of this Indenture.
"Act" shall have the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement,
dated as of the date hereof, among the Administrator, the Issuer, the Trust
Depositor and the Indenture Trustee.
"Administrator" means ORIX Credit Alliance, Inc. or any
successor Administrator under the Administration Agreement.
"Authorized Officer" means, with respect to the Issuer, any
officer of the Owner Trustee who is authorized to act for the Owner Trustee in
matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time thereafter)
and, so long as the Administration Agreement is in effect, any Vice President or
more senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Book-Entry Notes" means a beneficial interest in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.09.
"Business Day" means any day other than a Saturday, Sunday or
other day on which banking institutions in the city of Chicago, Illinois,
Secaucus, New Jersey, Newark, Delaware or New York, New York are authorized or
obligated by law, executive order or governmental decree to be closed.
"Certificate of Trust" means the Trust Certificate of the
Issuer, as defined in the Trust Agreement, substantially in the form of Exhibit
B to the Trust Agreement.
-2-
<PAGE> 10
"Class" means all Notes whose form is identical except for
variation in denomination, principal amount or owner.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Collateral" means the Collateral Granted to the Indenture
Trustee under this Indenture, including all proceeds thereof.
"Commission" means the United States Securities and Exchange
Commission.
"Contract Assets" has the same meaning given such term in the
Transfer and Servicing Agreement.
"Corporate Trust Office" means the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered which office at date of the execution of this Indenture is
located at 311 West Monroe Street, Chicago, Illinois 60606, Attention: Indenture
Trust Administration; or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders and the Issuer, or the
principal corporate trust office of any successor Indenture Trustee (the address
of which the successor Indenture Trustee will notify the Noteholders and the
Issuer).
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Definitive Notes" shall have the meaning specified in Section
2.09.
"DTC" means The Depository Trust Company, and its successors.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" shall have the meaning specified in Section
5.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
-3-
<PAGE> 11
"Executive Officer" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any general
partner thereof.
"General Partner" means the Trust Depositor, which is the
Certificateholder and is obligated to pay the expenses of the Issuer pursuant to
Section 2.07 of the Trust Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, demise, release, convey, assign, transfer, create and grant a lien
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to this Indenture. A Grant of the Collateral or of any
other agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the granting party or otherwise and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Holder" means (i) with respect to a Certificate, the Person
in whose name such Certificate is registered in the Certificate Register, and
(ii) with respect to a Note, the Person in whose name such Note is registered in
the Note Register.
"Indenture Securities" means the Notes.
"Indenture Security Holder" means a Noteholder.
"Indenture Trustee" means Harris Trust and Savings Bank, as
Indenture Trustee under this Indenture, or any successor Indenture Trustee under
this Indenture.
"Independent" means, when used with respect to any specified
Person, that the Person (i) is in fact independent of the Issuer, any other
obligor upon the Notes, the Trust Depositor, the Originator and any of their
respective Affiliates, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Originator or any of their respective Affiliates, and (iii) is not connected
with the Issuer, any such other obligor, the Originator or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
-4-
<PAGE> 12
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, made by
an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Interest Rate" means, as the context may require, the Class
A-1 Interest Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate, the
Class A-4 Interest Rate, the Class B Interest Rate and the Class C Interest
Rate, or any of them, in each case as defined in the Transfer and Servicing
Agreement.
"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"Note Depository Agreement" means the agreement dated as of
the Closing Date, among the Issuer, the Administrator, the Indenture Trustee and
DTC, as the initial Clearing Agency, relating to the Notes, substantially in the
form of Exhibit I hereto.
"Note Owner" means, with respect to a Book-Entry Note, the
Person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency) and with respect to a Definitive Note the Person in whose name a Note is
registered on the Note Register.
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.04.
"Noteholders" means Holders.
"Officer's Certificate" means a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, and
delivered to the Indenture Trustee. Unless otherwise specified, any reference in
this Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, be
internal or outside
-5-
<PAGE> 13
counsel to the Issuer (except as to legal matters relating to Federal securities
laws (including the Trust Indenture Act) or tax laws, who shall be outside
counsel) and who shall be satisfactory to the Indenture Trustee and which shall
comply with any applicable requirements of Section 11.01, and shall be in form
and substance satisfactory to the Indenture Trustee.
"Outstanding" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money
in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Holders of such
Notes (provided, however, that if such Notes are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or
provision for such notice, satisfactory to the Indenture Trustee, has
been made); and
(iii) Notes in exchange for or in lieu of other Notes which
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any other Transaction Document,
Notes owned by the Issuer, the Trust Depositor, the Originator, the Servicer or
any of their respective Affiliates shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of the
Indenture Trustee actually knows to be so owned shall be so disregarded. Notes
so owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Issuer, any other obligor upon the Notes, the Trust Depositor, the
Originator or any of their respective Affiliates.
"Outstanding Amount" means the aggregate principal amount of
all Notes of one Class or of all Classes, as the case may be, Outstanding at the
date of determination.
-6-
<PAGE> 14
"Owner Trustee" means The Bank of New York (Delaware), not in
its individual capacity but solely as Owner Trustee under the Trust Agreement,
or any successor trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 and is authorized by the Issuer to make the distributions from the
Note Distribution Account, including payment of principal of or interest on the
Notes on behalf of the Issuer.
"Predecessor Note" means, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and for the purpose of this definition, any
Note authenticated and delivered under Section 2.05 in lieu of a mutilated,
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Redemption Date" means, in the case of a redemption of the
Notes pursuant to Section 10.01(a) or a payment to Noteholders pursuant to
Section 10.01(b), the Distribution Date specified by the Servicer or the Issuer
pursuant to Section 10.01(a) or 10.01(b), as the case may be.
"Redemption Date Amount" means (i) in the case of a redemption
of the Notes pursuant to Section 10.01(a), an amount equal to the unpaid
principal amount of the Notes redeemed plus accrued and unpaid interest thereon
at the weighted average of the Interest Rate for each Class of Notes being so
redeemed to but excluding the Redemption Date, or (ii) in the case of a payment
made to Noteholders pursuant to Section 10.01(b), the amount on deposit in the
Note Distribution Account, but not in excess of the amount specified in clause
(i) above.
"Registered Holder" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office (or any successor group
of the Indenture Trustee), including any vice president, assistant secretary or
other officer or assistant officer of the Indenture Trustee customarily
performing functions similar to those performed by the people who at such time
shall be officers, respectively, and having direct responsibility for the
administration of this Indenture or, with respect to a particular matter, to
whom any corporate trust matter is referred at the Corporate Trust Office of the
Indenture Trustee because of his knowledge of and familiarity with the
particular subject.
-7-
<PAGE> 15
"State" means any one of the 50 states of the United States,
or the District of Columbia or any of its territories.
"Termination Date" means the date on which the Indenture
Trustee shall have received payment and performance of all amounts and
obligations which the Issuer may owe to or on behalf of the Indenture Trustee
for the benefit of the Noteholders under this Indenture or the Notes.
"Transfer and Servicing Agreement" means the Transfer and
Servicing Agreement, dated as of the date hereof, among the Indenture Trustee,
the Issuer, the Servicer and the Trust Depositor, substantially in the form of
Exhibit A hereto.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of the date hereof, between the Trust Depositor and the
Owner Trustee.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
(b) Except as otherwise specified herein or as the context
may otherwise require, capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in the Transfer and Servicing
Agreement.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT. Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
-8-
<PAGE> 16
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not by its use intended to exclude all other
items;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in
the plural include the singular;
(vi) any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the
case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns; and
(vii) the words "hereof," "herein" and "hereunder" and words
of similar import when used in this Indenture shall refer to this
Indenture as a whole and not to any particular provision of this
Indenture; Section, subsection and Schedule references contained in
this Indenture are references to Sections, subsections and Schedules in
or to this Indenture unless otherwise specified.
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM. The Notes, in each case together with the
Indenture Trustee's certificate of authentication, shall be in substantially the
forms set forth as Exhibits B, C, D, E, F and G to this Indenture with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and
-9-
<PAGE> 17
may have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Notes, as evidenced by their execution of the Notes.
Any portion of the text of any Note may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Note.
Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibits hereto are part of the terms of this
Indenture.
SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The
Notes shall be executed on behalf of the Issuer by any of its Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile. Notes bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.
The Indenture Trustee shall, upon receipt of an Issuer Order,
authenticate and deliver for original issue (i) Class A-1 Notes in an aggregate
principal amount of $ , (ii) Class A-2 Notes in an aggregate principal
amount of $ , (iii) Class A-3 Notes in an aggregate principal amount of $
, (iv) Class A-4 Notes in an aggregate principal amount of $ , (v)
Class B Notes in an aggregate principal amount of $ and (vi) Class C Notes
in an aggregate principal amount of $ . The aggregate principal amount of
such Classes of Notes Outstanding at any time may not exceed such respective
amounts, except as otherwise provided in Section 2.05.
Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes in the minimum denomination of
$1,000 and in integral multiples of $1,000 in excess thereof, except that one
Note of each class will be issued in an incremental denomination of less than
$1,000.
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein by
the Indenture Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.03. TEMPORARY NOTES. Pending the preparation of
Book-Entry Notes or Definitive Notes, the Issuer may execute, and upon receipt
of an Issuer Order the Indenture Trustee shall authenticate and deliver,
temporary Notes that are printed,
-10-
<PAGE> 18
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause
Book-Entry Notes or Definitive Notes to be prepared without unreasonable delay.
After the preparation of Book-Entry Notes or Definitive Notes, the temporary
Notes shall be exchangeable for Book-Entry Notes or Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more Notes, the Issuer shall execute
and the Indenture Trustee shall authenticate and deliver in exchange therefor a
like tenor and principal amount of definitive Notes of authorized denominations.
Until so exchanged, the temporary Notes shall in all respects be entitled to the
same benefits under this Indenture as Book-Entry Notes or Definitive Notes.
SECTION 2.04. REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE. The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
If a Person other than the Indenture Trustee is appointed by
the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an executive
officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and the amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.02, the
Issuer shall execute, and the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, in the name of the
designated transferee or transferees, one or more new Notes of the same Class in
any authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other
Notes of the same Class in any authorized denominations, of a like aggregate
amount, upon
-11-
<PAGE> 19
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located in the city in which the Corporate
Trust Office is located, or by a member firm of a national securities exchange,
and such other documents as the Indenture Trustee may require.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer or the Indenture
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Notes, other than exchanges pursuant to Section 2.03 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
Neither the Trustee nor the Registrar shall have any
responsibility to monitor or restrict the transfer of beneficial ownership in
any Note an interest in which is transferable through the facilities of the
Clearing Agency.
SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If
(i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by them to hold the Issuer and the Indenture
Trustee harmless, then, in the absence of notice to the Issuer, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, the Issuer shall execute and upon its written request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note of the
same Class; provided, however,
-12-
<PAGE> 20
that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall
have become or within seven days shall be due and payable, or shall have been
called for redemption, instead of issuing a replacement Note, the Issuer may pay
such destroyed, lost or stolen Note when so due or payable or upon the
Redemption Date without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section,
the Issuer or the Indenture Trustee may require the payment by the Holder of
such Note of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other reasonable expenses (including
the fees and expenses of the Indenture Trustee or the Note Registrar) connected
therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all of the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. PERSONS DEEMED OWNER. Prior to due presentment
for registration of transfer of any Note, the Issuer, the Indenture Trustee, and
any of their respective agents may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Indenture Trustee nor any of their respective agents
shall be affected by notice to the contrary.
-13-
<PAGE> 21
SECTION 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED
INTEREST.
(a) Each Class of Notes shall accrue interest at the
related Interest Rate, and such interest shall be payable on each Distribution
Date as specified therein, subject to Section 3.01. Any installment of interest
or principal, if any, payable on any Note which is punctually paid or duly
provided for by the Issuer on the applicable Distribution Date shall be paid to
the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date, by wire transfer, if such Person is either DTC or
its nominee or if such Person provides written instructions to the Indenture
Trustee at least ten days prior to the Distribution Date, otherwise by check, in
immediately available funds to the account designated by such Person and except
for the final installment of principal payable with respect to such Note on a
Distribution Date or on the related final Distribution Date, as the case may be
(and except for the Redemption Date Amount for any Note called for redemption
pursuant to Section 10.01(a)), which shall be payable as provided below;
provided, however, that if Definitive Notes are made available under Section
2.11, payments may be made to such Persons by either wire transfer or check. Any
funds returned undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable on each
Distribution Date to the extent provided herein, including as provided in the
form of the related Note set forth as an Exhibit hereto. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable, if not previously paid, on the date on which an Event of Default shall
have occurred and be continuing, unless the Required Holders have waived such
Event of Default in the manner provided in Section 5.02. All principal payments
on each Class of Notes shall be made pro rata to the Noteholders of such Class
entitled thereto. The Indenture Trustee shall notify the Person in whose name a
Note is registered at the close of business on the Record Date preceding the
Distribution Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
within five Business Days of receipt of notice of termination of the Trust
pursuant to Section 9.01(c) of the Trust Agreement and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.02.
(c) If the Issuer defaults in a payment of interest on the
Notes, the Issuer shall pay defaulted interest at the applicable Interest Rate
in any lawful manner. The Issuer may pay such defaulted interest to the Persons
who are Noteholders on any Distribution Date in the manner and to the extent
provided in the Transfer and Servicing Agreement.
-14-
<PAGE> 22
(d) All payments to be made by the Issuer under this
Indenture shall be made only from the income and proceeds from the Trust Estate
and only to the extent that the Issuer shall have sufficient income or proceeds
from the Trust Estate to enable the Issuer to make payments in accordance with
the terms hereof. The Indenture Trustee is not personally liable for any amounts
payable under this Indenture, except to the extent of the Indenture Trustee's
negligence, willful misconduct or bad faith.
SECTION 2.08. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.09. BOOK-ENTRY NOTES. The Notes, upon original
issuance, will be issued in the form of a typewritten Note or Notes representing
the Book-Entry Notes, to be delivered to DTC, the initial depository, by, or on
behalf of, the Issuer. Such Notes shall initially be registered on the Note
Register in the name of Cede & Co., or the nominee of the initial Clearing
Agency, and no Noteholder of such Notes will receive a Definitive Note
representing such Noteholder's interest in such Note, except as provided in
Section 2.11. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Noteholders pursuant to Section 2.11:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole Holder of the Notes, and shall have no obligation to the
Noteholders;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
-15-
<PAGE> 23
(iv) the rights of Noteholders shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Noteholders and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Note
Depository Agreement, unless and until Definitive Notes are issued
pursuant to Section 2.11, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to
be taken based upon instructions or directions of Noteholders
evidencing a specified percentage of the Outstanding Amount, the
Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from Note
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in
the Notes and has delivered such instructions to the Indenture Trustee.
SECTION 2.10. NOTICES TO CLEARING AGENCY. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to Noteholders pursuant to
Section 2.11, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Noteholders of the Notes to the
Clearing Agency, and shall have no obligation to the Noteholders.
SECTION 2.11. DEFINITIVE NOTES. If (i)(A) the Administrator
advises the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities as described in the
Note Depository Agreement, and (B) the Indenture Trustee or the Administrator is
unable to locate a qualified successor, (ii) the Administrator at its option
advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency, or (iii) after the occurrence of
an Event of Default, Note Owners for such Notes representing not less than 66
2/3% of the Outstanding Amount of such Class of Notes advise the Indenture
Trustee and the Clearing Agency through the Clearing Agency Participants in
writing that the continuation of a book-entry system through the Clearing Agency
is no longer in the best interests of the related Note Owners, then the
Indenture Trustee shall notify all Note Owners of the related Class or Classes
of Notes, through the Clearing Agency, of the occurrence of any such event and
of the availability of Definitive Notes of the related Class of Notes to Note
Owners requesting the same. Upon surrender to the Indenture Trustee of the Note
or Notes representing the Book-Entry Notes by the Clearing Agency, accompanied
by registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be
-16-
<PAGE> 24
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Notes of a Class, the Indenture Trustee shall recognize the
holders of the Definitive Notes as Noteholders hereunder.
The Indenture Trustee shall not be liable if the Indenture
Trustee or the Administrator is unable to locate a qualified successor Clearing
Agency. Definitive Notes shall be typewritten, printed, lithographed or engraved
or produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.12. RELEASE OF COLLATERAL. The Indenture Trustee
shall release property from the lien of this Indenture only in accordance with
the provisions of Section 4.04.
SECTION 2.13. TAX TREATMENT. The Issuer and the purchasers of
the Notes intend, and will take all actions consistent with such intention, that
the Notes be treated as indebtedness which is solely secured by the assets of
the Trust for all federal, state, local, and foreign income and franchise tax
purposes and that, pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii)
as in effect for periods after January 1, 1997, the Trust be disregarded as a
separate entity from the Trust Depositor for federal income tax purposes. The
Issuer, by entering into this Indenture, and each Noteholder, by its acceptance
of its Note, agree to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness.
SECTION 2.14 CUSIP NUMBERS. The Issuer in issuing the Notes
may use "CUSIP" or "private placement" numbers (if then generally in use), and,
if so, the Indenture Trustee shall indicate the "CUSIP" or "private placement"
numbers of the Notes in notices of redemption and related materials as a
convenience to Holders of Notes; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of redemption and related materials.
ARTICLE THREE
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 3.01. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer
will duly and punctually pay the principal of and interest, if any, on the Notes
in accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), the Issuer and the Indenture Trustee
will cause to be deposited into the
-17-
<PAGE> 25
Note Distribution Account amounts allocated pursuant to Section 7.05 of the
Transfer and Servicing Agreement, and cause to be distributed all such amounts
on a Distribution Date as deposited therein (i) for the benefit of the Class A-1
Notes, to the Class A-1 Noteholders, (ii) for the benefit of the Class A-2
Notes, to the Class A-2 Noteholders, (iii) for the benefit of the Class A-3
Notes, to the Class A-3 Noteholders, (iv) for the benefit of the Class A-4
Notes, to the Class A-4 Noteholders, (v) for the benefit of the Class B Notes,
to the Class B Noteholders and (vi) for the benefit of the Class C Notes, to the
Class C Noteholders, in each case as further specified herein or therein.
Amounts properly withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal shall be considered as having been paid
by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in Chicago, Illinois an office or agency where Notes may be surrendered
for registration of transfer or exchange, and where notices and demands to or
upon the Issuer in respect of the Notes and this Indenture may be served. The
Issuer hereby initially appoints the Indenture Trustee to serve as its agent for
the foregoing purposes. The Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As
provided in Section 8.02, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Collection
Account and the Note Distribution Account pursuant to Section 8.02(b) shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Collection Account and the Note
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before the Business Day immediately preceding each
Distribution Date and Redemption Date, the Issuer shall deposit or cause to be
deposited in the Note Distribution Account an aggregate sum sufficient to pay
the amounts then becoming due, such sum to be held in trust for the benefit of
the Persons entitled thereto and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee in writing of its action or
failure so to act.
The Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent
-18-
<PAGE> 26
shall agree with the Indenture Trustee (and if the Indenture Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this Section,
that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) in the making of any
payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards required to be
met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds,
any money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged from
such trust and upon receipt of an Issuer Request shall be deposited by the
Indenture Trustee in the Collection Account; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof, and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however, that
if such
-19-
<PAGE> 27
money or any portion thereof had been previously deposited by the Issuer with
the Indenture Trustee for the payment of principal or interest on the Notes, and
provided, further, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Issuer cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to or for the
account of the Issuer. The Indenture Trustee may also adopt and employ, at the
expense of the Issuer, any other reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Holder).
SECTION 3.04. EXISTENCE. The Issuer will keep in full effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States, in
which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the other Transaction Documents,
the Collateral and each other instrument or agreement included in the
Collateral.
SECTION 3.05. PROTECTION OF COLLATERAL. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Indenture
Trustee on behalf of the Noteholders to be prior to all other liens in respect
of the Collateral, and the Issuer shall take all actions necessary to obtain and
maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders,
a first lien on and a first priority, perfected security interest in the
Collateral. In connection therewith, pursuant to Section 2.06 of the Transfer
and Servicing Agreement, the Issuer shall cause to be delivered into the
possession of the Indenture Trustee as pledgee hereunder, indorsed in blank, any
"instruments" (within the meaning of the UCC), not constituting part of chattel
paper, evidencing any Contract which is part of the Collateral. The Indenture
Trustee agrees to maintain continuous possession of such delivered instruments
as pledgee hereunder until this Indenture shall have terminated in accordance
with its terms or until, pursuant to the terms hereof or of the Transfer and
Servicing Agreement, the Indenture Trustee is otherwise authorized to release
such instrument from the Collateral. The Issuer will from time to time execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, all as
-20-
<PAGE> 28
prepared by the Servicer and delivered to the Issuer, and will take such other
action necessary or advisable to:
(i) grant more effectively all or any portion of the
Collateral;
(ii) maintain or preserve the lien and security interest
(and the priority thereof) created by this Indenture or carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Collateral and the
rights of the Indenture Trustee and the Noteholders in such Collateral
against the claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon
the Collateral when due.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute all financing statements, continuation statements or
other instruments required to be executed pursuant to this Section. In no event
shall the Indenture Trustee be responsible for filing or maintaining such
financing statements, continuation statements or other instruments, unless it
shall have become the Successor Servicer.
SECTION 3.06. {RESERVED}.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING OF
CONTRACTS.
(a) The Issuer will not take any action and will use its
best efforts not to permit any action to be taken by others that would release
any Person from any such Person's material covenants or obligations under any
instrument or agreement included in the Collateral or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in the Transaction Documents or such other instrument or
agreement.
(b) The Issuer may contract with other Persons to assist it
in performing its duties and obligations under this Indenture, and any
performance of such duties by a Person identified to the Indenture Trustee in an
Officer's Certificate shall be deemed to
-21-
<PAGE> 29
be action taken by the Issuer. The Indenture Trustee shall not be responsible
for the action or inaction of the Servicer or the Administrator. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of
its obligations and agreements contained in this Indenture, the other
Transaction Documents and in the instruments and agreements included in the
Collateral, including but not limited to filing or causing to be filed all UCC
financing statements and continuation statements required to be filed by the
terms of this Indenture and the Transfer and Servicing Agreement in accordance
with and within the time periods provided for herein and therein. Except as
otherwise expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Transaction Document or any provision thereof
without the consent of the Indenture Trustee or the Required Holders.
(d) If the Issuer shall have knowledge of the occurrence of
a Servicer Default, the Issuer shall promptly notify in writing the Indenture
Trustee and each Rating Agency thereof. Upon any termination of the Servicer's
rights and powers pursuant to the Transfer and Servicing Agreement, the Issuer
shall promptly notify the Indenture Trustee in writing. As soon as a Successor
Servicer is appointed, the Issuer shall notify in writing the Indenture Trustee
and the Rating Agencies of such appointment (to the extent such party has not
already been notified pursuant to the Transfer and Servicing Agreement),
specifying in such notice the name and address of such Successor Servicer.
(e) The Issuer agrees that it will not waive timely
performance or observance by the Servicer or the Originator of their respective
duties under the Transaction Documents if the effect thereof would adversely
affect the Holders of the Notes.
SECTION 3.08. NEGATIVE COVENANTS. Until the Termination Date,
the Issuer shall not:
(i) except as expressly permitted by the Transaction
Documents, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the
Collateral, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code or
applicable state law) or assert any claim against any present or former
Noteholder by reason of the payment of the taxes levied or assessed
upon any part of the Collateral;
-22-
<PAGE> 30
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien created by this Indenture
to be amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Collateral or any part thereof or any interest therein or
the proceeds thereof (other than Permitted Liens), (C) permit the lien
created by this Indenture not to constitute a valid first priority
(other than with respect to any such tax, mechanics' or other lien)
security interest in the Collateral, or (D) amend, modify or fail to
comply with the provisions of the Transaction Documents without the
prior written consent of the Indenture Trustee, except where the
Transaction Documents allow for amendment or modification without the
consent or approval of the Indenture Trustee; or
(iv) dissolve or liquidate in whole or in part.
SECTION 3.09. ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN
TERMS.
(a) The Issuer shall not consolidate or merge with or into
any other Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form and substance satisfactory
to the Indenture Trustee, the due and punctual payment of the principal
of and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture and each other Transaction
Document on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
which shall be delivered to and shall be satisfactory to the Indenture
Trustee to the effect that
-23-
<PAGE> 31
such transaction will not have any material adverse tax consequence to
the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel (which shall
describe the actions taken as required by clause (v) above or that no
such actions will be taken) each stating that such consolidation or
merger and such supplemental indenture comply with this Article Three
and that all conditions precedent herein provided for relating to such
transaction have been complied with; and
(vii) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger has a net worth, immediately
after such consolidation or merger, that is (A) greater than zero and
(B) not less than the net worth of the Issuer immediately prior to
giving effect to such consolidation or merger.
(b) The Issuer shall not convey or transfer all or
substantially all of its properties or assets, including those included in the
Collateral, to any Person (except as expressly permitted by the Transaction
Documents), unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer shall (A) be a United States
citizen or a Person organized and existing under the laws of the United
States or any State, (B) expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form and
substance satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture and each other Transaction Document on the part of the Issuer
to be performed or observed, all as provided herein, (C) expressly
agree by means of such supplemental indenture that all right, title and
interest so conveyed or transferred shall be subject and subordinate to
the rights of Holders of the Notes and (D) unless otherwise provided in
such supplemental indenture, expressly agree to indemnify, defend and
hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
-24-
<PAGE> 32
(iv) the Issuer shall have received an Opinion of Counsel
which shall be delivered to and shall be satisfactory to the Indenture
Trustee to the effect that such transaction will not have any material
adverse tax consequence to the Trust, any Noteholder or any
Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel (which shall
describe the actions taken as required by clause (v) above or that no
such actions will be taken) each stating that such conveyance or
transfer and such supplemental indenture comply with this Article Three
and that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filings required by
Exchange Act); and
(vii) the Issuer has a net worth, immediately after such
conveyance or transfer, that is (A) greater than zero and (B) not less
than the net worth of the Issuer immediately prior to giving effect to
such conveyance or transfer.
SECTION 3.10. SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.09(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with same effect as if such Person has been named as the Issuer
herein.
(b) Upon a conveyance or transfer of all or substantially
all of the assets or properties of the Issuer pursuant to Section 3.09(b), the
Issuer will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee stating
that the Issuer is to be so released.
SECTION 3.11. NO OTHER BUSINESS. The Issuer shall not engage
in any business other than financing, purchasing, owning, selling and managing
the Contracts in the manner contemplated by this Indenture and the other
Transaction Documents and activities incidental thereto.
SECTION 3.12. NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes and (ii) any other Indebtedness permitted
by or arising under the other
-25-
<PAGE> 33
Transaction Documents. The proceeds of the Notes and the Certificates shall be
used exclusively to fund the Issuer's purchase of the Contracts and the other
assets specified in the Transfer and Servicing Agreement, to fund the Reserve
Fund and to pay the transactional expenses of the Issuer.
SECTION 3.13. NOTICE OF EVENTS OF DEFAULT. The Issuer agrees
to give the Indenture Trustee and each Rating Agency prompt written notice of
each Event of Default hereunder and of a Servicer Default under the Transfer and
Servicing Agreement.
SECTION 3.14. FURTHER INSTRUMENTS AND ACTS. Upon request of
the Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
SECTION 3.15. COMPLIANCE WITH LAWS. The Issuer shall comply
with the requirements of all applicable laws, the non-compliance with which
would, individually or in the aggregate, materially and adversely affect the
ability of the Issuer to perform its obligations under the Notes, this Indenture
or any other Transaction Document.
SECTION 3.16. AMENDMENTS OF TRUST AGREEMENT. The Issuer shall
not permit the Owner Trustee to agree to any amendment to Section 11.01 of the
Trust Agreement to eliminate the requirements thereunder that the Indenture
Trustee or the Holders of the Notes consent to amendments thereto as provided
therein.
SECTION 3.17. REMOVAL OF ADMINISTRATOR. So long as any Notes
are issued and outstanding, the Issuer shall not remove the Administrator
without cause unless the Rating Agency Condition shall have been satisfied in
connection with such removal.
SECTION 3.18. REPRESENTATIONS AND WARRANTIES OF ISSUER. The
Issuer represents and warrants as follows:
(a) POWER AND AUTHORITY. It has full power, authority and
legal right to execute, deliver and perform its obligations as Issuer
under this Indenture and the Notes (the foregoing documents, the
"Issuer Documents") and under each of the other Transaction Documents
to which the Issuer is a party.
(b) DUE AUTHORIZATION AND BINDING OBLIGATION. The execution
and delivery of the Issuer Documents and the consummation of the
transactions provided for therein have been duly authorized by all
necessary action on its part. Each of the Issuer Documents and the
other Transaction Documents to which the Issuer is a party constitutes
the legal, valid and binding obligation of the Issuer
-26-
<PAGE> 34
and is enforceable in accordance with its terms, except as enforcement
of such terms may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(c) NO CONFLICT. The execution and delivery of the Issuer
Documents and the other Transaction Documents to which the Issuer is a
party, the performance of the transactions contemplated thereby and the
fulfillment of the terms thereof will not conflict with, result in any
breach of any of the materials terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, any
indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which the Issuer is a party or by which it or any of its
property is bound.
(d) NO VIOLATION. The execution and delivery of the Issuer
Documents and the other Transaction Documents to which the Issuer is a
party, the performance of the transactions contemplated thereby and the
fulfillment of the terms thereof will not conflict with or violate, in
any material respect, any Requirements of Law applicable to the Issuer.
(e) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or any Governmental
Authority required in connection with the execution and delivery of the
Issuer Documents and the other Transaction Documents to which the
Issuer is a party, the performance of the transactions contemplated
thereby and the fulfillment of the terms thereof have been obtained.
(f) NO PROCEEDINGS. No litigation or administrative
proceeding of or before any court, tribunal or governmental body is
currently pending, or to the knowledge of the Issuer, threatened,
against the Issuer or any of its respective properties or with respect
to the Issuer Documents or any other Transaction Document to which the
Issuer is a party that, if adversely determined, would have a material
adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Issuer or the transactions contemplated
by the Issuer Documents or any of the other Transaction Documents to
which the Issuer is a party.
(g) ORGANIZATION AND GOOD STANDING. The Issuer is a
business trust duly organized, validly existing and in good standing
under the laws of Delaware and has the requisite power to own its
assets and to transact the business in which it is currently engaged,
and had at all relevant times, and now has, all necessary power,
authority and legal right to acquire, own and sell the Contract Assets.
-27-
<PAGE> 35
(h) 1940 ACT. The Issuer is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(i) LOCATION. The Issuer has its chief executive office and
place of business (as such terms are used in Article 9 of the UCC) in
Newark, Delaware. The Issuer agrees that it will not change the
location of such office to a location outside of Newark, Delaware,
without at least 30 days prior written notice to the Originator, the
Servicer, the Indenture Trustee and the Rating Agencies.
(j) SECURITY INTEREST IN EQUIPMENT. The Equipment securing
the Contracts is located in the states listed on Schedule 1 to the
Transfer and Servicing Agreement. The Issuer has a perfected security
interest in the Equipment and, upon the transfer and assignment of the
Collateral hereunder, the Indenture Trustee will have a perfected
security interest in the Equipment.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.01,
3.03, 3.04, 3.05, 3.07, 3.08, 3.10, 3.12, 3.13, 3.15 and 3.16, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
written demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and
delivered (other than (i) Notes that have been destroyed, lost
or stolen and that have been replaced or paid as provided in
Section 2.05 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have
been delivered to the Indenture Trustee for cancellation; or
-28-
<PAGE> 36
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the
applicable Maturity Date within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name, and at
the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited
with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States (which will mature
prior to the date such amounts are payable), in trust in an
Eligible Deposit Account (which shall be the Collection
Account or Note Distribution Account) for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness
on such Note not theretofore delivered to the Indenture
Trustee for cancellation when due to the final scheduled
Distribution Date (if Notes shall have been called for
redemption pursuant to Section 10.01(a)), as the case may be;
(B) the Issuer has paid or performed or caused to be paid
or performed all amounts and obligations which the Issuer may owe to or
on behalf of the Indenture Trustee for the benefit of the Noteholders
under this Indenture or the Notes; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel and an Independent
Certificate from a firm of certified public accountants, each meeting
the applicable requirements of Section 11.01(a) and, subject to Section
11.02, stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with and the Rating Agency Condition has been satisfied.
SECTION 4.02. APPLICATION OF TRUST MONEY. All moneys deposited
with the Indenture Trustee pursuant to Section 4.01 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such moneys
-29-
<PAGE> 37
have been deposited with the Indenture Trustee, of all sums due and to become
due thereon for principal and interest; but such moneys need not be segregated
from other funds except to the extent required herein or in the Transfer and
Servicing Agreement or required by law.
SECTION 4.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
SECTION 4.04. RELEASE OF COLLATERAL. Subject to Section 11.01
and the terms of the Transaction Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate and an Opinion of Counsel and
Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or
an Opinion of Counsel in lieu of such Independent Certificates to the effect
that the TIA does not require any such Independent Certificates.
ARTICLE FIVE
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default," wherever
used herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) failure to pay on each Distribution Date the full
amount of accrued interest on any Note;
(b) failure to pay the then outstanding Principal Amount of
any Note, if any, on its related Maturity Date;
(c) (i) failure on the part of the Originator to make any
payment or deposit required under the Transfer and
Servicing Agreement within three Business Days after
the date the payment or deposit is required to be made,
or (ii) failure on the part of the Originator, the
Trust Depositor, the Issuer, the Indenture Trustee or
the Owner Trustee to
-30-
<PAGE> 38
observe or perform any other covenants or agreements of
such entity set forth in the Transfer and Servicing
Agreement or the Indenture, which failure has a
material adverse effect on the Noteholders and which
continues unremedied for a period of 60 days after
written notice; provided, that no such 60-day cure
period shall apply in the case of a failure by the
Originator to perform its agreement to repurchase or
substitute for Ineligible Contracts, and further
provided, that only a five-day cure period shall apply
in the case of a failure by the Originator, the
Indenture Trustee or the Owner Trustee to observe their
respective covenants not to grant a security interest
in or otherwise intentionally create a lien on the
Contracts;
(d) any representation or warranty made by the Originator,
the Trust Depositor, the Indenture Trustee or the Owner
Trustee in the Transfer and Servicing Agreement or the
Indenture or any information required to be given by
the Originator or the Trust Depositor to the Indenture
Trustee to identify the Contracts proves to have been
incorrect in any material respect when made and
continues to be incorrect in any material respect for a
period of 60 days after written notice and as a result
of which the interests of the Noteholders are
materially and adversely affected; provided, however,
that an Event of Default shall not be deemed to occur
thereunder if the Originator has repurchased the
related Contracts through the Trust Depositor during
such period in accordance with the provisions of the
Transfer and Servicing Agreement;
(e) the occurrence of an Insolvency Event relating to the
Trust Depositor or the Issuer;
(f) the occurrence of an Insolvency Event relating to the
Originator or the Servicer; or
(g) the Issuer becomes an "investment company" within the
meaning of the Investment Company Act of 1940, as
amended.
SECTION 5.02. RIGHTS UPON EVENT OF DEFAULT; NOTICE. If an
Event of Default referred to in clause (e) of Section 5.01 has occurred, then
and in every such case the unpaid principal of the Notes, together with interest
accrued but unpaid thereon, and all other amounts due to the Noteholders under
the Indenture, shall immediately and without further act become due and payable.
-31-
<PAGE> 39
In the case of any event described in clause (a), (b), (c),
(d), (f) or (g) of Section 5.01, an Event of Default with respect to the Notes
will be deemed to have occurred provided such Event of Default may be waived if
the Required Holders provide written notice to the Trust Depositor, Indenture
Trustee and the Servicer of such waiver. In the event the Indenture Trustee has
actual knowledge of an Event of Default, it shall give written notice thereof to
the Trust Depositor, the Originator, the Servicer, the Owner Trustee and the
Rating Agencies.
If an Insolvency Event relating to the Trust Depositor occurs,
pursuant to the Trust Agreement and the Transfer and Servicing Agreement, on the
day of such Insolvency Event, the Trust Depositor shall promptly give written
notice to the Indenture Trustee of the Insolvency Event, and the Indenture
Trustee shall, unless notified to the contrary in writing prior to such sale by
the Required Holders, promptly act pursuant to and in accordance with the terms
thereof to sell, dispose of or otherwise liquidate, at the expense of the Trust,
the Collateral in a commercially reasonable manner and on commercially
reasonable terms. The Indenture Trustee shall conclusively rely upon an opinion
of an Independent investment banking or accounting firm of national reputation
as to the commercial reasonableness of its action. The proceeds from any such
sale, disposition or liquidation of Contracts shall be deposited in the
Collection Account and allocated as described in the Transfer and Servicing
Agreement and herein.
Promptly following its receipt of notice hereunder or under
any other Transaction Document of any Event of Default, the Indenture Trustee
shall send a copy thereof to the Issuer and each Rating Agency.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY INDENTURE TRUSTEE; AUTHORITY OF INDENTURE TRUSTEE.
(a) The Issuer covenants that if the Notes are accelerated
following the occurrence of an Event of Default, the Issuer will, upon demand of
the Indenture Trustee, pay to it, for the benefit of the Holders of the Notes,
the whole amount then due and payable on such Notes for principal and interest,
with interest upon the overdue principal, and, to the extent payment at such
rate of interest shall be legally enforceable, upon overdue installments of
interest, at the applicable Interest Rate and in addition thereto such further
amount as shall be sufficient to cover costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.
(b) The Indenture Trustee, following the occurrence of an
Event of Default, shall have full right, power and authority to take, or defer
from taking, any and all acts with respect to the administration, maintenance or
disposition of the Collateral.
-32-
<PAGE> 40
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may in its discretion (except as provided in Section 5.03(d)),
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as shall be deemed most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(d) Notwithstanding anything to the contrary contained in
this Indenture, if an Event of Default shall have occurred and be continuing,
and if the Issuer fails to perform its obligations under Section 10.01(b) when
and as due, the Indenture Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Noteholders by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for specific performance of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law, provided that the
Indenture Trustee shall only be entitled to take any such actions to the extent
such actions (i) are taken only to enforce the Issuer's obligations to redeem
the principal amount of Notes, and (ii) are taken only against the Collateral,
any investments therein and any proceeds thereof.
(e) In case there shall be pending, relative to the Issuer
or any other obligor upon the Notes or any Person having or claiming an
ownership interest in the Collateral, Proceedings under any Insolvency Law, or
in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of
-33-
<PAGE> 41
the Noteholders allowed in such Proceedings in accordance with the
written direction of a majority of the Holders;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings in accordance with the written direction of a majority of
the Holders;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Holders of Notes allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, as administrative expenses associated with
any such proceeding, and, in the event that the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith.
(f) Nothing herein contained shall be deemed to authorize
the Indenture Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or compensation affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(g) All rights of action, and of asserting claims under
this Indenture or under any of the Notes, may be enforced by the Indenture
Trustee without the possession of any of the Notes or the production thereof in
any trial or other Proceedings relative thereto, and any such action or
Proceedings instituted by the Indenture Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Notes.
-34-
<PAGE> 42
(h) In any Proceedings brought by the Indenture Trustee
(including any Proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all of the Holders
of the Notes, and it shall not be necessary to make any Noteholder a party to
any such proceedings.
SECTION 5.04. REMEDIES. If an Event of Default shall have
occurred and be continuing, the Indenture Trustee (subject to Section 5.05) may,
and shall if so directed by the Required Holders in writing:
(i) institute Proceedings in its own name and as or on
behalf of a trustee of an express trust for the collection of all
amounts then payable on the Notes or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such
Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Collateral;
(iii) exercise any remedies of a secured party under the UCC
and any other remedy available to the Indenture Trustee and take any
other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee on behalf of the Noteholders under this
Indenture or the Notes; and
(iv) direct the Owner Trustee to sell the Collateral or any
portion thereof or rights or interest therein, at one or more public or
private sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Collateral following an Event of Default, other than an
Event of Default described in Section 5.01(a) or (b), unless (A) the
Holders of 100% of the Principal Amount of the Notes consent thereto,
(B) the proceeds of such sale or liquidation distributable to the
Noteholders are sufficient to discharge in full all amounts then due
and unpaid upon such Notes for principal and interest or (C) the
Indenture Trustee determines that the Collateral will not continue to
provide sufficient funds for the payment of principal of and interest
on the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee provides prior
written notice to each Rating Agency and obtains the consent of the
Required Holders. In determining such sufficiency or insufficiency with
respect to clauses (B) and (C), the Indenture Trustee may, but need
not, obtain and conclusively rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose and shall in no event be liable for relying
on such opinions; provided, however, upon the occurrence of an Event of
-35-
<PAGE> 43
Default described in Section 5.01(e), caused solely from an event
described in such subparagraph occurring with respect to the Trust
Depositor, the Collateral will be liquidated by the Indenture Trustee,
at the expense of the Trust, and the Trust will be terminated 90 days
after the date of such Insolvency Event, unless, before the end of such
90-day period, the relevant Trustee shall have received written
instructions from the Required Holders, to the effect that such
Required Holders disapprove of the liquidation of such Collateral and
termination of such Trust.
SECTION 5.05. OPTIONAL PRESERVATION OF THE CONTRACTS.
Following an Event of Default and if such Event of Default has not been
rescinded and annulled, and except as otherwise provided above, the Indenture
Trustee may, but need not, elect to maintain possession of the Collateral;
provided, however, that the Indenture Trustee shall at all times maintain
possession of the Collateral, consisting of "instruments" (within the meaning of
the UCC), not constituting part of chattel paper (if any), evidencing any
Contract that had previously been delivered to the Indenture Trustee as part of
the Collateral, unless and until such "instruments" are delivered in connection
with a realization with respect to the Collateral in accordance with the terms
of this Indenture. It is the desire of the parties hereto and the Noteholders
that there be at all times sufficient funds for the payment of principal and
interest on the Notes, and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the
Collateral. In determining whether to maintain possession of the Collateral, the
Indenture Trustee may, but need not, obtain and conclusively rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.
SECTION 5.06. PRIORITIES.
(a) If the Indenture Trustee collects any money or property
pursuant to this Article Five, it shall pay out the money or property in the
following order and priority:
first, so much of such payment as shall be required to
reimburse the Indenture Trustee for any accrued and unpaid
fees, expenses and indemnity payments due it either as
Indenture Trustee or as a paying agent of the Issuer, any tax,
fee, expense, charge or other loss incurred by the Indenture
Trustee (to the extent not previously reimbursed) (including,
without limitation, the expense of sale, taking or other
proceeding, attorneys' fees and expenses, court costs, and any
other expenditures incurred or expenditures or advances made
by the Indenture Trustee in the protection, exercise or
enforcement of any right, power or remedy or any
-36-
<PAGE> 44
damages sustained by the Indenture Trustee, liquidated or
otherwise, upon the Event of Default giving rise to such
expenditures or advances) and the costs and expenses
associated with the appointment of a Successor Servicer and
the transition relating thereto (which amount shall not, taken
in the aggregate with all other amounts withdrawn pursuant to
this Section 5.06(a)(first) and Section 8.02(c)(second),
exceed $100,000) shall be applied by the Indenture Trustee in
reimbursement of such costs and expenses;
second, so much of such payment remaining as shall be
required to reimburse the Noteholders in full for certain
indemnity payments, if any, made by such Noteholders to the
Indenture Trustee (to the extent not previously reimbursed)
shall be distributed to the Noteholders, and, if the aggregate
amount remaining shall be insufficient to reimburse all such
payments in full, it shall be distributed ratably, without
priority of any Noteholder over any other, in the proportion
that the aggregate amount of such unreimbursed indemnity
payments made by each such Noteholder bears to the aggregate
amount of such unreimbursed indemnity payments made by all
Noteholders;
third, so much of such payment remaining as shall be
required to pay to the Servicer its Servicing Fee for the
preceding monthly period, together with any amounts in respect
of the Servicer's Fees that were due in respect of prior
monthly periods that remain unpaid;
fourth, so much of such payment remaining as shall be
required to pay in full the aggregate amount of all accrued
but unpaid interest to the date of distribution on the Class
A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes shall be distributed to the Class A-1
Noteholders, the Class A-2 Noteholders, the Class A-3
Noteholders and the Class A-4 Noteholders and, if the
aggregate amount remaining shall be insufficient to pay all
such amounts in full, it shall be distributed ratably, without
priority of any one Class A-1 Note, one Class A-2 Note, one
Class A-3 Note and one Class A-4 Note over any other Class A-1
Note, over any other Class A-2 Note, over any other Class A-3
Note or over any other Class A-4 Note in the proportion that
the aggregate amount of all accrued but unpaid interest to the
date of distribution on each Class A-1 Note, Class A-2 Note,
Class A-3 Note or Class A-4 Note bears to the aggregate amount
of all accrued but unpaid interest to the date of distribution
on all Class A-1 Notes, Class A-2 Notes, Class A-3 Note and
Class A-4 Notes;
-37-
<PAGE> 45
fifth, so much of such payment remaining as shall be
required to pay in full the aggregate amount of all accrued
but unpaid interest to the date of distribution on the Class B
Notes shall be distributed to the Class B Noteholders, and, if
the aggregate amount remaining shall be insufficient to pay
all such amounts in full, it shall be distributed ratably,
without priority of any one Class B Note over any other Class
B Note, in the proportion that the aggregate amount of all
accrued but unpaid interest to the date of distribution on
each Class B Note bears to the aggregate amount of all accrued
but unpaid interest to the date of distribution on all Class B
Notes;
sixth, so much of such payment remaining as shall be
required to pay in full the aggregate amount of all accrued
but unpaid interest to the date of distribution on the Class C
Notes shall be distributed to the Class C Noteholders, and, if
the aggregate amount remaining shall be insufficient to pay
all such amounts in full, it shall be distributed ratably,
without priority of any one Class C Note over any other Class
C Note, in the proportion that the aggregate amount of all
accrued but unpaid interest to the date of distribution on
each Class C Note bears to the aggregate amount of all accrued
but unpaid interest to the date of distribution on all Class C
Notes;
seventh, the balance, if any, of such payment remaining
thereafter shall be distributed to the Class A-1 Noteholders
in order to pay in full the outstanding aggregate amount of
principal of the Class A-1 Notes, and, if the aggregate amount
remaining shall be insufficient to pay all such amounts in
full, it shall be distributed ratably, without priority of any
one Class A-1 Note over any other Class A-1 Note, in the
proportion that the aggregate unpaid principal amount of each
Class A-1 Note bears to the aggregate unpaid principal amount
of all Class A-1 Notes;
eighth, the balance, if any, of such payment remaining
thereafter shall be distributed ratably to the Class A-2
Noteholders, the Class A-3 Noteholders and the Class A-4
Noteholders in order to pay in full the outstanding aggregate
amount of principal of the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes, and, if the aggregate amount
remaining shall be insufficient to pay all such amounts in
full, it shall be distributed ratably, without priority of any
one Class A-2 Note, one Class A-3 Note or one Class A-4 Note
over any other Class A-2 Note, any other Class A-3 Note or any
other Class A-4 Note, in the proportion that the aggregate
unpaid principal amount of each Class A-2 Note, Class A-3
-38-
<PAGE> 46
Note and Class A-4 Note bears to the aggregate unpaid
principal amount of all Class A-2 Notes, Class A-3 Notes and
Class A-4 Notes;
ninth, the balance, if any, of such payment remaining
thereafter shall be distributed ratably to the Class B
Noteholders to pay in full the aggregate amount of principal
of the Class B Notes then due pursuant to or in respect of the
Class B Notes, and, if the aggregate amount remaining shall be
insufficient to pay all such amounts in full, it shall be
distributed ratably, without priority of any one Class B Note
over any other Class B Note, in the proportion that the
aggregate unpaid principal amount of each Class B Note bears
to the aggregate unpaid principal amount of all Class B Notes;
tenth, the balance, if any, of such payment remaining
thereafter shall be distributed ratably to the Class C
Noteholders to pay in full the aggregate amount of principal
of the Class C Notes then due pursuant to or in respect of the
Class C Notes, and, if the aggregate amount remaining shall be
insufficient to pay all such amounts in full, it shall be
distributed ratably, without priority of any one Class C Note
over any other Class C Note, in the proportion that the
aggregate unpaid principal amount of each Class C Note bears
to the aggregate unpaid principal amount of all Class C Notes;
eleventh, the balance, if any, of such payment
remaining thereafter shall be paid to the Indenture Trustee as
shall be required to reimburse the Indenture Trustee for any
amounts due and not paid under Section 5.06(a) (first); and
twelfth, the balance, if any, of such payments
remaining thereafter shall be distributed to the Owner Trustee
on behalf of the Issuer for application pursuant to the terms
of the Trust Agreement.
(b) The Indenture Trustee may fix a record date and payment
date for any payment to Noteholders pursuant to this Section. At least 15 days
before such record date, the Issuer shall mail to each Noteholder and the
Indenture Trustee a notice that states the record date, the payment date and the
amount to be paid.
SECTION 5.07. LIMITATION OF SUITS. No Holder of any Note shall
have any right to institute any Proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless (and in all events subject to Section 11.16
hereof):
-39-
<PAGE> 47
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Indenture Trustee
to institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has 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 Outstanding Amount of the Notes, voting
together as a single class.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.08. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST. Notwithstanding any other provisions in the Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
on or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.09. RESTORATION OF RIGHTS AND REMEDIES. If the
Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any
-40-
<PAGE> 48
reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Indenture Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Indenture Trustee and the Noteholders shall
continue as though no such Proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE. No right or
remedy herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT A WAIVER. No delay or
omission of the Indenture Trustee or any Holder of any Note to exercise any
right or remedy accruing upon any Default of Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
Five or by law to the Indenture Trustee or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Indenture
Trustee or by the Noteholders, as the case may be.
SECTION 5.12. CONTROL BY NOTEHOLDERS. The Required Holders
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Notes or exercising any trust or power conferred on the Indenture Trustee (in
all events subject to Section 6.02(f)); provided that:
(i) such direction shall not be in conflict with any rule
of law or with any other provision of this Indenture;
(ii) subject to the terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Collateral shall be by
the Holders of Notes representing not less than 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Collateral
pursuant to such Section, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Collateral shall be of no
force and effect; and
-41-
<PAGE> 49
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or might materially and adversely affect the
rights of any Noteholders not consenting to such action.
SECTION 5.13. WAIVER OF PAST DEFAULTS. In the case of any
waiver of an Event of Default, the Issuer, the Indenture Trustee and the Holders
of the Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereto. Upon any such waiver, such
Event of Default shall cease to exist and be deemed to have been cured and not
to have occurred, for every purpose of this Indenture.
SECTION 5.14. UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and each Holder of any Note by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (i) any suit instituted by the
Indenture Trustee, (ii) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (iii) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantages of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
-42-
<PAGE> 50
SECTION 5.16. ACTION ON NOTES. The Indenture Trustee's right
to seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or
by the levy of any execution under such judgment upon any portion of the
Collateral or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.06.
SECTION 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN
OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee
to do so and at the Administrator's expense, the Issuer shall take all such
lawful action as the Indenture Trustee may request to compel or secure the
performance and observance by the Trust Depositor and the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Transfer and Servicing Agreement in accordance with the terms thereof,
and to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Transfer and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Trust
Depositor or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Trust Depositor or the Servicer of each of their obligations under the Transfer
and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing,
the Indenture Trustee may, and at the direction (which direction shall be in
writing, including facsimile) of the Required Holders shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Trust
Depositor or the Servicer under or in connection with the Transfer and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Trust Depositor or the Servicer of each of
their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Transfer and
Servicing Agreement, and any right of the Issuer to take such action shall be
suspended.
-43-
<PAGE> 51
ARTICLE SIX
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
the Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and in the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the factual
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture and the other Transaction Documents to which the Indenture
Trustee is a party.
(c) The Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:
(i) this paragraph does not limit the effect of Section
6.01(b);
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.12.
(d) Every provision of this Indenture that in any way
relates to the Indenture Trustee is subject to paragraphs (a), (b) and (c) of
this Section.
-44-
<PAGE> 52
(e) Money held in trust by the Indenture Trustee need not
be segregated from other funds except to the extent required by law or the terms
of this Indenture or the Transfer and Servicing Agreement.
(f) No provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers, if it shall have reasonable grounds to believe
that repayments of such funds or indemnity satisfactory to it against such risk
or liability is not reasonably assured to it.
(g) The Indenture Trustee shall have no discretionary
duties other than those explicitly set forth in this Indenture.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Indenture
Trustee shall be subject to the provisions of this section and to the provisions
of the TIA.
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may conclusively rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Indenture Trustee need not investigate any fact or matter
stated in the document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may require an Officer's Certificate (with respect to factual
matters) or an Opinion of Counsel, as applicable. The Indenture Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or for
the supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, however, that the Indenture
Trustee's conduct does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or Opinion of Counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any
-45-
<PAGE> 53
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to
institute, conduct or defend any litigation under this Indenture or in relation
to this Indenture, at the request, order or direction of any of the Holders of
Notes, pursuant to the provisions of this Indenture, unless such Holders of
Notes shall have offered to the Indenture Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred therein or thereby; provided, however, that the Indenture Trustee
shall, upon the occurrence of an Event of Default (that has not been cured),
exercise the rights and powers vested in it by this Indenture in a manner
consistent with Section 6.01.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless so requested in writing by the
Holders of Notes evidencing not less than 25% of the Outstanding Amount of the
Notes; provided, however, that if the payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Indenture
Trustee, not reasonably assured to the Indenture Trustee by the security
afforded to it by the terms of this Indenture or the Transfer and Servicing
Agreement, the Indenture Trustee may require indemnity satisfactory to it
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Indenture Trustee, shall be reimbursed by the
Person making such request upon demand.
(h) The Indenture Trustee shall not be required to give any
bond or surety in respect of the performance of its powers and duties hereunder.
(i) The Indenture Trustee shall not be bound to ascertain
or inquire as to the performance or observance of any covenants, conditions or
agreements on the part of the Issuer.
(j) The permissive rights of the Indenture Trustee to do
things enumerated in this Indenture shall not be construed as a duty and the
Indenture Trustee shall not be answerable for other than its negligence or
willful default.
(k) Except for (i) a default under Sections 5.01(a) or (b)
hereof or (ii) any other event of which a Responsible Officer of the Indenture
Trustee has "actual knowledge" and which event, with the giving of notice or the
passage of time or both, would constitute an Event of Default under this
Indenture, the Indenture Trustee shall not be deemed to have notice of any Event
of Default or Servicer Default unless specifically
-46-
<PAGE> 54
notified in writing of such event by the Issuer or any Noteholder; as used
herein, the term "actual knowledge" means the actual fact or statement of
knowing, by a Responsible Officer without any duty to make any investigation
with regard thereto.
(l) In the event that the Indenture Trustee is also acting
as Paying Agent or Transfer Agent and Registrar hereunder, the rights and
protections afforded to the Indenture Trustee pursuant to this Article Six shall
also be afforded to such Paying Agent or Transfer Agent or Registrar.
(m) In no event shall the Indenture Trustee be liable for
the selection of Eligible Investments or for investment losses incurred thereon.
The Indenture Trustee shall have no liability in respect of losses incurred as a
result of the liquidation of any such investment prior to its stated maturity or
the failure of the party directing such investment to provide timely written
investment direction. The Indenture Trustee shall have no obligation to invest
or reinvest any amounts held hereunder in the absence of such written investment
direction.
SECTION 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Indenture Trustee is required to comply with Section 6.11.
SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Collateral or the Notes, it shall
not be accountable for the Issuer's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Issuer in this Indenture or in
any document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is actually known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the redemption of such Notes), the Indenture Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of Noteholders.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS. The
Indenture Trustee shall deliver to each Noteholder such information, including
without limitation,
-47-
<PAGE> 55
IRS Form 1099, as may be required to enable such Holder to prepare its federal
and state income tax returns.
SECTION 6.07. COMPENSATION AND INDEMNITY. The Issuer shall pay
or shall cause the Administrator or Servicer to pay to the Indenture Trustee
from time to time reasonable compensation for its services as Indenture Trustee
and as Paying Agent (if the Indenture Trustee serves as such) to the extent such
compensation is not otherwise paid to the Indenture Trustee. The Indenture
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall or shall cause the Administrator
or the Servicer to reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall
indemnify or shall cause the Administrator or the Servicer to indemnify the
Indenture Trustee against any and all loss, liability or expense (including
attorneys' fees and expenses) incurred by it in connection with the
administration of this Indenture and the performance of its duties hereunder,
under the Transfer and Servicing Agreement, the Administration Agreement, the
Custodian Agreement and any other document or transaction contemplated herewith
or therewith or as a Paying Agent for the Issuer. The Indenture Trustee shall
notify the Issuer and the Administrator promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder. The Issuer shall defend or shall cause the Administrator
or the Servicer to defend any such claim, and the Indenture Trustee may have
separate counsel and the Issuer shall pay or shall cause the Administrator or
the Servicer to pay the fees and expenses of such counsel. Neither the Issuer
nor the Administrator or the Servicer need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Indenture Trustee through
the Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment and indemnification obligations to the
Indenture Trustee pursuant to this Section shall survive the discharge of this
Indenture and the earlier removal or resignation of the Indenture Trustee. When
the Indenture Trustee incurs expenses after the occurrence of a Default
specified in Section 5.01(d), (e) or (f) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under applicable
Insolvency Law.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE. The Indenture
Trustee may resign at any time by so notifying the Issuer and the Servicer. The
Issuer may remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section
6.11;
-48-
<PAGE> 56
(ii) a court having jurisdiction in the premises in respect
of the Indenture Trustee in an involuntary case or proceeding under
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, shall have entered a decree or order
granting relief or appointing a receiver, liquidator, assignee,
custodian, trustee, conservator, sequestrator (or similar official) for
the Indenture Trustee or for any substantial part of the Indenture
Trustee's property, or ordering the winding-up or liquidation of the
Indenture Trustee's affairs, provided any such decree or order shall
have continued unstayed and in effect for a period of 30 consecutive
days;
(iii) the Indenture Trustee commences a voluntary case under
any federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, conservator, sequestrator or other similar official for the
Indenture Trustee or for any substantial part of the Indenture
Trustee's property, or makes any assignment for the benefit of
creditors or fails generally to pay its debts as such debts become due
or takes any corporate action in furtherance of any of the foregoing;
or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
A successor Indenture Trustee shall be appointed by the
Issuer. A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all of the rights, powers and
duties of the Indenture Trustee under this Indenture. The Issuer or the
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer, at the
expense of the Issuer, all property held by it as Indenture Trustee to the
successor Indenture Trustee.
If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.
-49-
<PAGE> 57
Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of appointment by
the successor Indenture Trustee pursuant to this Section and payment of all fees
and expenses owed to the outgoing Indenture Trustee. Notwithstanding the
replacement of the Indenture Trustee pursuant to this Section, the retiring
Indenture Trustee shall be entitled to payment or reimbursement of such amounts
as such Person is entitled pursuant to Section 6.07.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
each Rating Agency prompt notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor Indenture Trustee, and deliver such Notes
so authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE
INDENTURE TRUSTEE.
(a) Notwithstanding any other provision of this Indenture,
at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Collateral may at the time be located, the
Indenture Trustee and the Administrator acting jointly shall have the power and
may execute and deliver all instruments to appoint one or more Persons to act as
a co-Indenture Trustee or co-Indenture Trustees, jointly with the Indenture
Trustee, or separate Indenture Trustee or separate Indenture Trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders, such title to the Collateral, or any
part hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee and the
Administrator may consider necessary or desirable. If the Administrator shall
not have joined in such appointment within 15 days after the receipt by it of a
request so to do, the Indenture Trustee alone shall have the power to
-50-
<PAGE> 58
make such appointment. No co-Indenture Trustee or separate Indenture Trustee
hereunder shall be required to meet the terms of eligibility of a successor
Indenture Trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-Indenture Trustee or separate Indenture Trustee shall be
required under Section 6.08.
(b) Every separate Indenture Trustee and co-Indenture
Trustee shall, to the extent permitted by law, be appointed and act subject to
the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
Indenture Trustee or co-Indenture Trustee jointly (it being understood
that such separate Indenture Trustee or co-Indenture Trustee is not
authorized to act separately without the Indenture Trustee joining in
such act), except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed the Indenture
Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate Indenture Trustee or co-Indenture Trustee, but solely at the
direction of the Indenture Trustee;
(ii) no Indenture Trustee hereunder shall be personally
liable by reason of any act or omission of any other Indenture Trustee
hereunder; and
(iii) the Indenture Trustee and the Administrator may at any
time accept the resignation of or remove any separate Indenture Trustee
or co-Indenture Trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate Indenture Trustees and co-Indenture Trustees, as effectively as if
given to each of them. Every instrument appointing any separate Indenture
Trustee or co-Indenture Trustee shall refer to this Agreement and the conditions
of this Article. Each separate Indenture Trustee and co-Indenture Trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of co-appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all of
the provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee and a copy thereof given to the Administrator.
-51-
<PAGE> 59
(d) Any separate Indenture Trustee or co-Indenture Trustee
may at any time constitute the Indenture Trustee, its agent or attorney-in-fact
with full power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect of this Agreement on its behalf and in its name.
If any separate Indenture Trustee or co-Indenture Trustee shall die, become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Indenture
Trustee, to the extent permitted by law, without the appointment of a new or
successor Indenture Trustee. Notwithstanding anything to the contrary in this
Indenture, the appointment of any separate Indenture Trustee or co-Indenture
Trustee shall not relieve the Indenture Trustee of its obligations and duties
under this Indenture.
SECTION 6.11. ELIGIBILITY. The Indenture Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Indenture Trustee
hereunder shall at all times be a financial institution organized and doing
business under the laws of the United States of America or any state, authorized
under such laws to exercise corporate trust powers, whose long term unsecured
debt is rated at least Baa3 by Moody's, BBB- by S&P and BBB- by Fitch (if rated
by Fitch) and shall have a combined capital and surplus of at least $50,000,000
or shall be a member of a bank holding system the aggregate combined capital and
surplus of which is $50,000,000 and subject to supervision or examination by
federal or state authority, provided that the Indenture Trustee's separate
capital and surplus shall at all times be at least the amount required by
Section 310(a)(2) of the TIA. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of a supervising or
examining authority, then for the purposes of this Section 6.11, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
case at any time the Indenture Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.11, the Indenture Trustee shall resign
immediately in the manner and with the effect specified in Section 6.08. The
Indenture Trustee shall comply with TIA Section 310(b); provided, however, that
there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
ISSUER. The Indenture Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
-52-
<PAGE> 60
SECTION 6.13. REPRESENTATIONS AND WARRANTIES OF INDENTURE
TRUSTEE. The Indenture Trustee in its individual capacity and as Indenture
Trustee represents and warrants as follows:
(a) ORGANIZATION AND CORPORATE POWER. It is a duly
organized and validly existing Illinois banking corporation in good
standing under the laws of each jurisdiction where its business so
requires. It has full corporate power, authority and legal right to
execute, deliver and perform its obligations as Indenture Trustee under
this Indenture and the Transfer and Servicing Agreement (the foregoing
documents, the "Indenture Trustee Documents") and to authenticate the
Notes.
(b) DUE AUTHORIZATION. The execution and delivery of the
Indenture Trustee Documents, the consummation of the transactions
provided for therein and the authentication of the Notes have been duly
authorized by all necessary corporate action on its part, either in its
individual capacity or as Indenture Trustee, as the case may be.
(c) NO CONFLICT. The execution and delivery of the
Indenture Trustee Documents, the performance of the transactions
contemplated thereby and the fulfillment of the terms thereof
(including the authentication of the Notes) will not conflict with,
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default
under, any indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which the Indenture Trustee is a party or by which
it or any of its property is bound.
(d) NO VIOLATION. The execution and delivery of the
Indenture Trustee Documents, the performance of the transactions
contemplated thereby and the fulfillment of the terms thereof
(including the authentication of the Notes) will not conflict with or
violate, in any material respect, any Requirements of Law applicable to
the Indenture Trustee.
(e) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or any Governmental
Authority applicable to the Indenture Trustee, required in connection
with the execution and delivery of the Indenture Trustee Documents, the
performance by the Indenture Trustee of the transactions contemplated
thereby and the fulfillment by the Indenture Trustee of the terms
thereof (including the authentication of the Notes), have been
obtained.
(f) VALIDITY, ETC. Each Indenture Trustee Document
constitutes a legal, valid and binding obligation of the Indenture
Trustee, enforceable against the
-53-
<PAGE> 61
Indenture Trustee in accordance with its terms, except as such
enforceability may be limited by Insolvency Laws and except as such
enforceability may be limited by general principles of equity, concepts
of materiality and reasonableness (whether considered in a suit at law
or in equity) or by an implied covenant of good faith and fair dealing.
ARTICLE SEVEN
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND
ADDRESSES OF NOTEHOLDERS. The Issuer will furnish or cause to be furnished to
the Indenture Trustee (i) not more than five days after the earlier of (a) each
Record Date and (b) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Noteholders as of such Record Date and (ii) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than ten days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
SECTION 7.02. PRESERVATION OF INFORMATION: COMMUNICATION TO
NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of the Noteholders
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Noteholders received by the
Indenture Trustee in its capacity as Note Registrar and shall otherwise comply
with TIA Section 312(a). The Indenture Trustee may destroy any list furnished to
it as provided in such Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section
312(b) with other Noteholders with respect to their rights under this Indenture
or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note
Registrar shall have the protection of TIA Section 312(c).
-54-
<PAGE> 62
SECTION 7.03. REPORTS BY ISSUER.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required (if at all) to file the same with the
Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) that the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations;
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the issuer pursuant to clauses (i) and
(ii) of this Section 7.03(a) and by rules and regulations prescribed
from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year
of the Issuer shall end on March 31 of each year.
SECTION 7.04. REPORTS BY INDENTURE TRUSTEE. (a) If required by
TIA Section 313(a), within 60 days after January 31 beginning with January 31,
2001, the Indenture Trustee shall mail to each Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Issuer, or the Trust Depositor on the Issuer's
behalf, with the Commission and each stock exchange, if any, on which the Notes
are listed. The Issuer shall notify the Indenture Trustee in writing if and when
the Notes are listed on any stock exchange.
The Indenture Trustee shall mail to each Noteholder within a
reasonable period of time after the end of each calendar year, but in no event
later than February 28, commencing in February, 2001, a Form 1099 under the Code
with respect to amounts paid to such Noteholder with respect to the Notes during
the immediately preceding calendar year ending December 31.
-55-
<PAGE> 63
(b) With respect to each Distribution Date and the related
Collection Period, the Indenture Trustee will provide to each Noteholder, on the
related Determination Date, the Monthly Report that it has received from the
Servicer.
ARTICLE EIGHT
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY. Except as otherwise
expressly provided herein, the Indenture Trustee may demand payment or delivery
of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture and the Transfer and Servicing Agreement. The Indenture Trustee shall
apply all such money received by it as provided in this Indenture. Except as
otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the Collateral, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article Five.
SECTION 8.02. TRUST ACCOUNTS.
(a) On or prior to the Closing Date, the Issuer shall cause
the Servicer to establish and maintain, in the name of the Indenture Trustee,
for the benefit of the Noteholders and the Certificateholders, the Trust
Accounts as provided in Section 7.01 of the Transfer and Servicing Agreement.
(b) On or before each Distribution Date, all amounts
required to be disbursed to the Indenture Trustee with respect to the preceding
Collection Period pursuant to Section 7.01 of the Transfer and Servicing
Agreement will be transferred from the Collection Account and/or the Reserve
Fund and deposited by the Indenture Trustee upon receipt to the Note
Distribution Account.
(c) On each Distribution Date prior to the occurrence of an
Event of Default, the Indenture Trustee shall distribute all amounts on deposit
in the Note Distribution Account to Noteholders in respect of the Notes to the
extent of amounts due and unpaid on the Notes for principal and interest as
follows and in the following order of priority:
-56-
<PAGE> 64
first, so much of such installment or payment as shall
be required to reimburse the Servicer for Unreimbursed
Servicer Advances;
second, if a Successor Servicer is being appointed, the
costs and expenses of the Indenture Trustee associated with
such Successor Servicer and the transition relating thereto
(which amount shall not, taken in the aggregate with all other
amounts withdrawn for such purpose, exceed $100,000);
third, so much of such installment or payment as shall
be required to pay the Servicer its monthly Servicing Fee for
the preceding Collection Period, which includes the amounts
payable for the fees and expenses of the Trustees; provided
that the Indenture Trustee may deduct and remit to its own
account any accrued and unpaid fees, and unpaid expenses and
indemnity payments due to it as Indenture Trustee and, if it
is also acting as a paying agent for the Issuer, as Paying
Agent, but only if and to the extent such amounts shall not
have been paid timely by the Servicer and in no event shall
amounts payable on a Distribution Date with respect to the
monthly fee and expenses of the Indenture Trustee exceed
$25,000 per month;
fourth so much of such installment or payment as shall
be required to pay in full the aggregate amount of interest
then due on or in respect of the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes shall
be distributed to the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders and the Class A-4
Noteholders ratably, without priority of any one Class A-1
Note, one Class A-2 Note, one Class A-3 Note or one Class A-4
Note over any other Class A-1 Note, any other Class A-2 Note,
any other Class A-3 Note or any other Class A-4 Note, in the
proportion that the aggregate amount of all accrued but unpaid
interest to the date of distribution on each Class A-1 Note,
each Class A-2 Note, each Class A-3 Note and each Class A-4
Note bears to the aggregate amount of all accrued but unpaid
interest to the date of distribution on all Class A-1 Notes,
all Class A-2 Notes, all Class A-3 Notes and all Class A-4
Notes;
fifth, so much of such installment or payment as shall
be required to pay in full the aggregate amount of interest
then due on or in respect of the Class B Notes shall be
distributed to the Class B Noteholders ratably, without
priority of any one Class B
-57-
<PAGE> 65
Note over any other Class B Note, in the proportion that the
aggregate amount of all accrued but unpaid interest to the
date of distribution on each Class B Note bears to the
aggregate amount of all accrued but unpaid interest to the
date of distribution on all Class B Notes;
sixth, so much of such installment or payment as shall
be required to pay in full the aggregate amount of interest
then due on or in respect of the Class C Notes shall be
distributed to the Class C Noteholders ratably, without
priority of any one Class C Note over any other Class C Note,
in the proportion that the aggregate amount of all accrued but
unpaid interest to the date of distribution on each Class C
Note bears to the aggregate amount of all accrued but unpaid
interest to the date of distribution on all Class C Notes;
seventh, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class A-1 Noteholders to pay in full the aggregate amount
of the Class A Principal Payment Amount then due pursuant to
or in respect of the Class A-1 Notes, without priority of any
one Class A-1 Note over any other Class A-1 Note, in the
proportion that the unpaid principal amount of each Class A-1
Note bears to the aggregate unpaid principal amount of all
Class A-1 Notes;
eighth, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class A-2 Noteholders to pay in full the aggregate amount
of the Class A Principal Payment Amount then due pursuant to
or in respect of the Class A-2 Notes, without priority of any
one Class A-2 Note over any other Class A-2 Note, in the
proportion that the aggregate unpaid principal amount of each
Class A-2 Note bears to the aggregate unpaid principal amount
of all Class A-2 Notes; provided, that the Outstanding Amount
of the Class A-1 Notes is $0;
ninth, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class A-3 Noteholders to pay in full the aggregate amount
of the Class A Principal Payment Amount then due pursuant to
or in respect of the Class A-3 Notes, without priority of any
one Class A-3 Note over any other Class A-3 Note, in the
proportion that the unpaid principal amount of each Class A-3
Note bears to the aggregate
-58-
<PAGE> 66
unpaid principal amount of all Class A-3 Notes; provided, that
the Outstanding Amount of the Class A-1 Notes and Class A-2
Notes is $0;
tenth, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class A-4 Noteholders to pay in full the aggregate amount
of the Class A Principal Payment Amount then due pursuant to
or in respect of the Class A-4 Notes, without priority of any
one class A-4 Note over any other Class A-4 Note, in the
proportion that the aggregate unpaid principal amount of each
Class A-4 Note bears to the unpaid principal amount of all
Class A-4 Notes; provided, that the Outstanding Amount of the
Class A-1 Notes, Class A-2 Notes and Class A-3 Notes is $0;
eleventh, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class B Noteholders to pay in full the aggregate amount of
the Class B Principal Payment Amount then due pursuant to or
in respect of the Class B Notes, without priority of any one
Class B Note over any other Class B Note, in the proportion
that the unpaid principal amount of each Class B Note bears to
the aggregate unpaid principal amount of all Class B Notes;
provided, that the Outstanding Amount of the Class A-1 Notes
is $0;
twelfth, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class C Noteholders to pay in full the aggregate amount of
the Class C Principal Payment Amount then due pursuant to or
in respect of the Class C Notes, without priority of any one
Class C Note over any other Class C Note, in the proportion
that the unpaid principal amount of each Class C Note bears to
the aggregate unpaid principal amount of all Class C Notes;
provided, that the Outstanding Amount of the Class A-1 Notes
is $0;
thirteenth, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class A-2 Noteholders to pay in full the lesser of (i) the
Additional Principal and (ii) the Outstanding Amount of Class
A-2 Notes (after giving effect to the Class A Principal
Payment Amount), without priority of any one Class A-2 Note
over any other Class A-2 Note, in the proportion that the
aggregate unpaid principal
-59-
<PAGE> 67
amount of each Class A-2 Note bears to the aggregate unpaid
principal amount of all Class A-2 Notes; provided, that the
Outstanding Amount of the Class A-1 Notes is $0;
fourteenth, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class A-3 Noteholders to pay in full the lesser of (i) the
Additional Principal and (ii) the Outstanding Amount of Class
A-3 Notes (after giving effect to the Class A Principal
Payment Amount), without priority of any one Class A-3 Note
over any other Class A-3 Note, in the proportion that the
aggregate unpaid principal amount of each Class A-3 Note bears
to the aggregate unpaid principal amount of all Class A-3
Notes; provided, that the Outstanding Amount of the Class A-1
Notes and Class A-2 Notes is $0;
fifteenth, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class A-4 Noteholders to pay in full the lesser of (i) the
Additional Principal and (ii) the Outstanding Amount of Class
A-4 Notes (after giving effect to the Class A Principal
Payment Amount), without priority of any one Class A-4 Note
over any other Class A-4 Note, in the proportion that the
aggregate unpaid principal amount of each Class A-4 Note bears
to the aggregate unpaid principal amount of all Class A-4
Notes; provided, that the Outstanding Amount of the Class A-1
Notes, Class A-2 Notes and Class A-3 Notes is $0;
sixteenth, the balance, if any, of such installment or
payment remaining thereafter shall be distributed ratably to
the Class B Noteholders to pay in full the lesser of (i) the
Additional Principal and (ii) the Outstanding Amount of Class
B Notes (after giving effect to the Class B Principal Payment
Amount), without priority of any one Class B Note over any
other Class B Note, in the proportion that the aggregate
unpaid principal amount of each Class B Note bears to the
aggregate unpaid principal amount of all Class B Notes;
provided, that the Outstanding Amount of the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes and Class A-4 Notes is $0;
seventeenth, the balance, if any, of such installment
or payment remaining thereafter shall be distributed ratably
to the
-60-
<PAGE> 68
Class C Noteholders to pay in full the lesser of (i) the
Additional Principal and (ii) the Outstanding Amount of Class
C Notes (after giving effect to the Class C Principal Payment
Amount), without priority of any one Class C Note over any
other Class C Note, in the proportion that the aggregate
unpaid principal amount of each Class C Note bears to the
aggregate unpaid principal amount of all Class C Notes;
provided, that the Outstanding Amount of the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B
Notes is $0;
eighteenth, if the sum of (i) the remaining Available
Amounts, (ii) any other funds available in the Collection
Account as of the Determination Date (which for purposes of
this subparagraph eighteenth will be deemed to be "Available
Amounts") and (iii) the remaining amounts held in the Reserve
Fund equals or exceeds the sum of the remaining Principal
Amount of the Notes and any accrued and unpaid Servicing Fee,
distribute ratably to the Noteholders an amount equal to such
remaining Principal Amount;
nineteenth, unless the Principal Amount of all Notes
will be fully paid on such Distribution Date, to the Reserve
Fund an amount, if any, that, when so deposited, causes the
balance in the Reserve Fund to equal the Required Reserve
Amount;
twentieth, unless the Principal Amount of all Notes
will be fully paid on such Distribution Date, if a Spread
Event exists, the balance to the Spread Fund;
twenty-first, to the Indenture Trustee, to the extent
of any remaining amounts due and payable to it; and
twenty-second, the balance, if any, shall be paid to
the Owner Trustee on behalf of the Issuer for application
pursuant to the terms of the Trust Agreement.
SECTION 8.03. GENERAL PROVISIONS REGARDING ACCOUNTS.
(a) So long as no Default or Event of Default shall have
occurred and be continuing, all or a portion of the funds in the Trust Accounts
shall be invested in accordance with the provisions of Section 7.03 of the
Transfer and Servicing Agreement. Except as otherwise provided in Section 7.03
of the Transfer and Servicing Agreement, all income or other gain from
investments of moneys deposited in such Trust Accounts
-61-
<PAGE> 69
shall be deposited by the Indenture Trustee in the Collection Account, and any
loss resulting from such investments shall be charged to the related Trust
Account unless the Issuer (or the Servicer on behalf of the Issuer) deposits
funds to such Trust Account to offset any loss realized. The Issuer will not
direct the Indenture Trustee or permit the Servicer to make any investment of
any funds or to sell any investment held in any of the Trust Accounts unless the
security interest granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any direction
to the Indenture Trustee to make any such investment or sale, if requested by
the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall
not in any way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as Indenture Trustee, in
accordance with their terms.
(c) If (i) the Issuer shall have failed to give written
investment directions for any funds on deposit in the Trust Accounts to the
Indenture Trustee by 11:00 a.m., New York City time (or such other time as may
be agreed by the Issuer and Indenture Trustee), on any Business Day or (ii) a
Default or Event of Default shall have occurred and be continuing with respect
to the Notes but the Notes shall not have been declared due and payable pursuant
to Section 5.02 or (iii) if such Notes shall have been declared due and payable
following an Event of Default, but amounts collected or receivable from the
Collateral are being applied in accordance with Section 5.06 as if there had not
been such a declaration, then the Indenture Trustee shall invest funds in the
Trust Accounts in investments meeting the requirements of clause (vi) of the
definition of Eligible Investment in the Transfer and Servicing Agreement and
shall promptly notify the Issuer. The Indenture Trustee shall have no
responsibility for losses on investments made in accordance with this Section
8.03(c), and all income and losses shall be for the account of the related Trust
Account.
SECTION 8.04. RELEASE OF COLLATERAL.
(a) Subject to the payment of its fees and expenses
pursuant to Section 6.07, the Indenture Trustee may, and when required by the
provisions of this Indenture or the Transfer and Servicing Agreement shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
-62-
<PAGE> 70
provided in this Article shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are
no Notes Outstanding and all sums due the Indenture Trustee pursuant to Section
6.07 have been paid, release any remaining portion of the Collateral that
secured the Notes from the lien of this Indenture without representation,
warranty or recourse and release to the Issuer or any other Person entitled
thereto any funds then on deposit in the Trust Accounts. The Indenture Trustee
shall release property from the lien of this Indenture pursuant to this Section
8.04(b) only upon receipt of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA as so stated in
the Opinion of Counsel) Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) and in each case meeting the applicable requirements of
Section 11.01.
SECTION 8.05. OPINION OF COUNSEL. The Indenture Trustee shall
receive at least seven days prior written notice when requested by the Issuer to
take any action pursuant to Section 8.04(a), accompanied by copies of any
instruments involved, and the Indenture Trustee shall also require, as a
condition to such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with
and such action will not materially and adversely impair the security for the
Notes or the rights of the Noteholders in contravention of the provisions of
this Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Collateral. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS.
Without the consent of the Holders of any Notes and with prior
notice to each Rating Agency, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, and the other parties hereto at any time from
time to time, may enter into one or more indentures supplemental hereto (which
shall conform to the provisions of the TIA
-63-
<PAGE> 71
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien created by this Indenture, or to
subject to the lien created by this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or the Transaction Documents or to make any other provisions
with respect to matters or questions arising under this Indenture or in
any supplemental indenture; provided that such action shall not
materially adversely affect the interests of the Holders of the Notes
as evidenced by an opinion of counsel;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor Indenture Trustee with respect to
the Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of the
trusts hereunder by more than one Indenture Trustee, pursuant to the
requirements of Article Six; and
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the
exemption of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained. Any amendment or
supplemental indenture
-64-
<PAGE> 72
entered into pursuant to this Section 9.01 shall not adversely affect the
interests of the Holders of the Notes in any material respect, as evidenced by
an Opinion of Counsel.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF
NOTEHOLDERS. The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to each Rating Agency, and with the consent
of the Required Holders, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that, no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or the Redemption Date Amount with
respect thereto, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the
Collateral to payment of principal of or interest on the Notes, or
change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
Article Five, to the payment of any such amount due on the Notes on or
after the respective due dates thereof (or, in the case of redemption,
on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount 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 this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the definition of
"Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to sell or liquidate the
Collateral pursuant to Section 5.04 or amend the provisions of this
Article which specify the percentage of the Outstanding Amount of the
Notes required to amend this Indenture or the other Transaction
Documents;
-65-
<PAGE> 73
(v) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Transaction Documents cannot
be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(vi) permit the creation of any lien ranking prior to or on
a parity with the lien created by this Indenture with respect to any
part of the Collateral or, except as otherwise permitted or
contemplated herein, terminate the lien created by this Indenture on
any property at any time subject hereto or deprive the Holder of any
Note of the security provided by the lien created by this Indenture;
(vii) alter or modify the provisions of the transfer and
servicing agreement with respect to the order of priorities in which
collections on the contracts shall be paid to noteholders or with
respect to the amount or timing of payments on the notes; or
(viii) reduce, modify or amend any indemnities in favor of any
noteholder or in favor of or to be paid by the trust depositor, or
alter the definition of "Indemnities" to exclude any noteholder, except
as consented to by each person adversely affected by the change.
Neither the Issuer, the Indenture Trustee nor any of their
respective affiliates shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Note Owner
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture, the Transfer and Servicing Agreement or the
Notes unless such consideration is offered to be paid to all Note Owners that so
consent, waive or agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
It shall not be necessary for any Act of Noteholders, as
herein defined, under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Promptly after the execution by the parties hereto of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive,
and subject to Sections 6.01 and 6.02 shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture, that all conditions precedent to
the execution of such supplemental indenture have been met and that such actions
shall not adversely affect the interests of the Holders of the Notes in any
material respect. The Indenture Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Indenture Trustee's
own rights, duties, liabilities or immunities under this Indenture or otherwise.
-66-
<PAGE> 74
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the parties hereto and the Holders of the Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all of the terms and
conditions of any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE TEN
REDEMPTION OF NOTES
SECTION 10.01. REDEMPTION.
(a) In the event that the Trust Depositor pursuant to
Section 11.03 of the Transfer and Servicing Agreement purchases (through the
Trust Depositor) the corpus of the Trust, the Notes are subject to redemption in
whole, but not in part, on the Distribution Date on which such repurchase
occurs, for a purchase price equal to the sum of (i) the outstanding principal,
and accrued interest on the Notes, plus (ii) the amount of Unreimbursed Servicer
Advances (as defined in the Transfer and Servicing Agreement) (if any exist that
have not been effectively waived and released by the Servicer) as well as
accrued and unpaid monthly Servicing Fees (as defined in the Transfer and
Servicing Agreement) to the date of repurchase; provided, however, that the
Issuer has available funds sufficient to pay such amounts. The Originator, the
Trust Depositor, the Servicer or the Issuer shall furnish each Rating Agency
with notice of such redemption. If the Notes
-67-
<PAGE> 75
are to be redeemed pursuant to this Section 10.01(a), the Servicer or the Issuer
shall furnish written notice of such election to the Indenture Trustee not later
than 20 days prior to the Redemption Date and the Issuer shall deposit with the
Indenture Trustee in the Note Distribution Account the Redemption Date Amount of
the Notes to be redeemed whereupon all such Notes shall be due and payable on
the Redemption Date upon the furnishing of a notice complying with Section 10.02
to each Holder of the Notes.
(b) In the event that the assets of the Trust are sold
pursuant to Section 9.02 of the Trust Agreement or Section 5.03(b) of this
Indenture, the proceeds of such sale shall be distributed as provided in Section
5.06. If amounts are to be paid to Noteholders pursuant to this Section
10.01(b), the Servicer or the Issuer shall, to the extent practicable, furnish
written notice of such event to the Indenture Trustee not later than 20 days
prior to the Redemption Date whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.02. FORM OF REDEMPTION NOTICE. Notice of redemption
under Section 10.01(a) shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Date Amount; and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Date Amount (which shall be the office or
agency of the Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.03. NOTES PAYABLE ON REDEMPTION DATE. The Notes or
portions thereof to be redeemed shall, following notice of redemption (if any)
as required by Section 10.02, on the Redemption Date become due and payable at
the Redemption Date Amount and (unless the Issuer shall default in the payment
of the Redemption Date Amount) no interest shall accrue on the Redemption Date
Amount for any period after the
-68-
<PAGE> 76
date to which accrued interest is calculated for purposes of calculating the
Redemption Date Amount.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, and (iii) (if required by the TIA as
so stated in the Opinion of Counsel) an Independent Certificate from a firm of
certified public accountants meeting the applicable requirements of this Section
and TIA Sections 314(c) and 314(d)(1), except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation as
is necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
-69-
<PAGE> 77
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Trustee that is to be made
the basis for authentication and delivery of the Notes or the release
of any property subject to the lien created by this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.01(a)
or elsewhere in this Indenture, furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of the signer
thereof as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so
deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the named matters, if the fair value to
the Issuer of the property to be so deposited and of all other such
property made the basis of any such withdrawal or release since the
commencement of the then current fiscal year of the Issuer, as set
forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Outstanding Amount of the
Notes, but such a certificate need not be furnished with respect to any
property so deposited, if the fair value thereof to the Issuer as set
forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the Notes.
(iii) Other than with respect to any release described in
clause (A) or (B) of Section 11.01(b)(v), whenever any property or
securities are to be released from the lien created by this Indenture,
the Issuer shall also furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such release)
of the property or securities proposed to be released and stating that
in the opinion of such person the proposed release will not impair the
security created by this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property or securities (other
than property described in clauses (A) or (B) of Section 11.01(b)(v))
released from the lien created by this Indenture since the commencement
of the then current fiscal year, as set forth in the certificates
required by clause (iii) above and this clause (iv), equals 10% or more
of the Outstanding Amount of the Notes, but such a certificate need not
be furnished in the case of any release of property or securities if
the fair value thereof as set forth in the related Officer's
Certificate is
-70-
<PAGE> 78
less than $25,000 or less than one percent of the then Outstanding
Amount of the Notes.
(v) Notwithstanding any other provision of this Section,
the Issuer may, without compliance with the other provisions of this
Section, (A) collect, liquidate, sell or otherwise dispose of the
Contracts as and to the extent permitted or required by the Transaction
Documents, (B) make cash payments out of the Trust Accounts as and to
the extent permitted or required by the Transaction Documents, so long
as the Issuer shall deliver to the Indenture Trustee every six months,
commencing , 2000, an Officer's Certificate stating that all the
dispositions of Collateral described in clauses (A) or (B) that
occurred during the preceding six calendar months were in the ordinary
course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Transaction Documents.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE
TRUSTEE. In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Person as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Originator or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Originator or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's
-71-
<PAGE> 79
compliance with any term hereof, it is intended that the truth and accuracy, at
the time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions stated in
such document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to affect
the Indenture Trustee's right to conclusively rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in
Article Six.
SECTION 11.03. ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any manner that the Indenture
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.04. NOTICES. All notices, demands, certificates,
requests and communications hereunder ("notices") shall be in writing and shall
be effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to, with respect to the Indenture Trustee, a Responsible
Officer or an Authorized Officer of any other party to which sent, or (d) on the
date
-72-
<PAGE> 80
transmitted by legible telecopier transmission with a confirmation of receipt,
in all cases addressed to the recipient at the address specified in the Transfer
and Servicing Agreement for such recipient.
Each party hereto may, by notice given in accordance herewith
to each of the other parties hereto, designate any further or different address
to which subsequent notices shall be sent.
SECTION 11.05. NOTICES TO NOTEHOLDERS; WAIVER. Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default or Event of Default.
SECTION 11.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provisions of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement, with the consent of any
Paying Agent, including the Indenture Trustee if acting as Paying Agent, and the
consent of the Indenture Trustee with any Holder of a Note providing for a
method of payment, or notice by the Indenture Trustee or any Paying Agent to
such Holder, that is different from the methods provided for in this Indenture
for such payments or notices. The Issuer will furnish to the Indenture
-73-
<PAGE> 81
Trustee a copy of each such agreement and the Indenture Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
SECTION 11.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.08. SUCCESSORS AND ASSIGNS. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors, co-Indenture
Trustees and agents.
SECTION 11.09. SEPARABILITY. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.10. BENEFITS OF INDENTURE. Nothing in this
Indenture or in the Notes, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, and the Noteholders, and
any other party secured hereunder, and any other Person with an ownership
interest in any part of the Collateral, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 11.11. LEGAL HOLIDAYS. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.12. GOVERNING LAW. (a) THIS INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS INDENTURE. Each party hereto (i) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (ii) acknowledges that
-74-
<PAGE> 82
it and the other parties hereto have been induced to enter into this Indenture
by, among other things, the mutual waivers and certifications in this Section
11.12(b).
SECTION 11.13. COUNTERPARTS. This Indenture may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 11.14. RECORDING OF INDENTURE. If this Indenture is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
SECTION 11.15. TRUST OBLIGATION. (a) No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article Six, Seven and Eight of the Trust
Agreement.
The Bank of New York (Delaware) acts solely as Owner Trustee
of the Trust hereunder and not in its individual capacity, and all Persons
having any claim against the Trust by reason of the transactions contemplated by
this Agreement or any other Transaction Document shall look only to the Trust
Estate for payment or satisfaction thereof. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Contract, or the perfection and priority of
any security interest created by any Contract in any Equipment or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
-75-
<PAGE> 83
distributed to the Noteholders hereunder, including, without limitation, the
existence, condition and ownership of any Equipment; the existence and
enforceability of any insurance thereon; the existence and contents of any
Contract on any computer or other record thereof; the validity of the assignment
of any Contract to the Trust or of any intervening assignment; the completeness
of any Contract; the performance or enforcement of any Contract; the compliance
by the Issuer, the Trust Depositor or the Servicer with any covenant, agreement
or other obligation or any warranty or representation made under any Transaction
Document or in any related document or the accuracy of any such warranty or
representation; or any action of the Administrator, the Indenture Trustee or the
Servicer or any subservicer taken in the name of the Owner Trustee or the Trust.
SECTION 11.16. NO PETITION. The parties hereto, by entering
into this Indenture, and each Noteholder, by accepting a Note or a beneficial
interest in a Note, hereby covenant and agree that they will not at any time
institute against the Originator, the Issuer or any General Partner, or join in
any institution against the Originator, the Issuer or any General Partner
thereof, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Transaction Documents; provided,
however, that nothing herein shall prohibit the Indenture Trustee from filing
proofs of claim or otherwise participating in any such proceedings instituted by
any other person.
SECTION 11.17. INSPECTION. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees and independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
Notwithstanding anything herein to the contrary, the foregoing shall not be
construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Indenture Trustee from
sources other than the Issuer, (ii) disclosure of any and all information (A) if
required to do so by any applicable statute, law, rule or regulation, (B) to any
government agency or regulatory body having or claiming authority to regulate or
oversee any aspects of the Indenture Trustee's business or that of its
affiliates, (C) pursuant to any subpoena, civil investigative demand or similar
demand or request of any court, regulatory
-76-
<PAGE> 84
authority, arbitrator or arbitration to which the Indenture Trustee or an
affiliate or an officer, director, employer or shareholder thereof is a party,
(D) in any preliminary or final offering circular, registration statement or
contract or other document pertaining to the transactions contemplated herein
approved in advance by the Issuer or (E) to any affiliate, independent or
internal auditor, agent, employee or attorney of the Indenture Trustee having a
need to know the same, provided that the Indenture Trustee advises such
recipient of the confidential nature of the information being disclosed, or
(iii) any other disclosure authorized by the Issuer.
SECTION 11.18. CONFLICT WITH TRUST INDENTURE ACT. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
SECTION 11.19. COMMUNICATION BY NOTE OWNERS WITH OTHER NOTE
OWNERS. Note Owners may communicate with other Note Owners with respect to their
rights under this Indenture or the Notes pursuant to Section 312(b) of the TIA.
Every Note Owner, by receiving and holding the same, agrees with the Issuer and
the Indenture Trustee that none of the Issuer and the Indenture Trustee nor any
agent of the Issuer and the Indenture Trustee shall be deemed to be in violation
of any existing law, or any law hereafter enacted which does not specifically
refer to Section 312 of the TIA, by reason of the disclosure of any such
information as to the names and addresses of the Note Owners in accordance with
Section 312 of the TIA, regardless of the source from which such information was
derived, and that the Indenture Trustee shall not be held accountable by reason
of mailing any material pursuant to a request made under Section 312(b) of the
TIA.
The provisions of TIA Sections 310 through 317 that impose
duties on any person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
-77-
<PAGE> 85
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and delivered as of the day and year first above
written.
ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity but
solely on behalf of the Issuer as
Owner Trustee under the Trust
Agreement
By:
------------------------------------
Printed Name: Cheryl Laser
-----------------------
Title: Assistant Vice President
------------------------------
HARRIS TRUST AND SAVINGS BANK, not in its
individual capacity but solely as
Indenture Trustee
By:
------------------------------------
Printed Name: Robert D. Foltz
-----------------------
Title: Vice President
------------------------------
-78-
<PAGE> 86
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
On February , 2000 before me,______________________________________
{Here insert name and title of notary}
personally appeared Robert D. Foltz
{ } personally known to me, or
{ } proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument,
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ties), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which such person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature ____________________{Seal}
-79-
<PAGE> 87
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
On February , 2000 before me,______________________________________
{Here insert name and title of notary}
personally appeared
{ } personally known to me, or
{ } proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument,
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ties), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which such person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature ____________________{Seal}
-80-
<PAGE> 88
EXHIBIT A
FORM OF TRANSFER AND SERVICING AGREEMENT
A-1
<PAGE> 89
EXHIBIT B
FORM OF CLASS A-1 NOTE
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS
NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN FULL ON THE DATE SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
% CLASS A-1 RECEIVABLE-BACKED NOTES
REGISTERED $
No. R-1
ORIX Credit Alliance Receivables Trust 2000-A, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or its registered assigns, the principal sum of ($ ) payable on
the earlier of , 20 (the "Class A-1 Maturity Date") and the Redemption
Date, if any, pursuant to Section 10.01 of the Indenture referred to on the
reverse hereof.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in Section 3.01 of the Indenture. Interest on this
Note will accrue for each Distribution Date from the most recent Distribution
Date on which interest has been paid to but excluding such Distribution Date or,
if no interest has yet been paid, from the Closing Date. Interest will be
computed on the basis of a 360-day year and actual days elapsed. Such principal
of and interest on this Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for
B-1
<PAGE> 90
payment of public and private debts. All payments made by the Issuer with
respect to this Note shall be applied first to interest due and payable on this
Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by an Authorized Officer, as of the date
set forth below.
Date: February , 2000 ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity but solely
on behalf of the Issuer as Owner
Trustee, under the Trust Agreement
By:
----------------------------------
Printed Name:
---------------------
Title:
----------------------------
B-2
<PAGE> 91
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, not
in its individual capacity but
solely as Indenture Trustee
By:
---------------------------------
Authorized Signatory
B-3
<PAGE> 92
{REVERSE OF CLASS A-1 NOTE}
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-1 Receivable-Backed Notes (the "Class A-1
Notes"), all issued under an Indenture, dated as of , 2000 (the
"Indenture"), among the Issuer and Harris Trust and Savings Bank, as Indenture
Trustee (the "Indenture Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Class A-1 Notes are subject to all terms of the
Indenture. All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture, as so supplemented or amended.
The Class A-1 Notes and the other Notes described in the
Indenture (collectively, the "Notes") are and will be equally and ratably
secured by the collateral pledged as security therefor as provided in the
Indenture subject to the priorities of allocations as to interest and principal
payments as described therein and in the Transfer and Servicing Agreement.
Principal of the Class A-1 Notes will be payable on the
earlier of the Class A-1 Maturity Date and the Redemption Date, if any, selected
pursuant to the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Class A-1 Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing unless the
Required Holders have waived such Event of Default.
Payments of interest on this Note due and payable on each
Distribution Date shall be made by wire transfer to the account of the Person
whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date in
the name of nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payments will be made by wire transfer in immediately available funds to
the account designated by such nominee; provided that, if Definitive Notes are
issued pursuant to Section 2.11 of the Indenture, payments may be made by check.
Such checks shall be mailed to the Person entitled thereto at the address of
such Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) affected by any payments made on any Distribution Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal
B-4
<PAGE> 93
amount of this Note on a Distribution Date, then the Indenture Trustee, in the
name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Distribution Date
by notice mailed within five days of such Distribution Date and the amount then
due and payable shall be payable only upon presentation and surrender of this
Note at the Corporate Trust Office of the Indenture Trustee or at the office of
the Indenture Trustee's agent appointed for such purposes located in the City of
Chicago, Illinois.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
eligible guarantor institution which is a participant in the Securities Transfer
Agent's Medallion Program (STAMP) or similar signature guarantee program, and
such other documents as the Indenture Trustee may require, and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that no recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that by accepting the benefits of the
Indenture and such Note that such Noteholder will not at any time institute
against the Trust Depositor or the Issuer, or join in any institution against
the Trust Depositor or the Issuer of, any
B-5
<PAGE> 94
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Transaction
Documents.
The Issuer has entered into the Indenture, and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness
which is solely secured by the Collateral and that the Trust will be disregarded
as a separate entity for federal income tax purposes pursuant to Treasury
Regulations Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a
Note (and each Noteholder by acceptance of a beneficial interest in a Note),
agrees to treat the Notes for federal, state and local income, single business
and franchise tax purposes as indebtedness.
Prior to the due presentment for registration of transfer of
this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer and the Required Holders. The Indenture also contains
provisions permitting the Noteholders representing specified percentages of the
Outstanding Amount of the Notes, on behalf of the Noteholders, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Noteholder (or any one of more Predecessor Notes) shall be
conclusive and binding upon all Holders and upon all future Noteholders and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Noteholders issued thereunder.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, and the obligations, rights and remedies
of the parties hereunder and thereunder shall be determined in accordance with
such laws.
B-6
<PAGE> 95
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
B-7
<PAGE> 96
EXHIBIT C
FORM OF CLASS A-2 NOTE
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS
NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN FULL ON THE DATE SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
% CLASS A-2 RECEIVABLE-BACKED NOTES
REGISTERED $
No. R-1
ORIX Credit Alliance Receivables Trust 2000-A, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or its registered assigns, the principal sum of ($ ) payable on
the earlier of , 20 (the "Class A-2 Maturity Date") and the Redemption
Date, if any, pursuant to Section 10.01 of the Indenture referred to on the
reverse hereof. No payments of principal of the Class A-2 Notes shall be made
until the principal on the Class A-1 Notes has been paid in full.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in the Indenture. Interest on this Note will
accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from the Closing Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
C-1
<PAGE> 97
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer.
Date: February , 2000 ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity but
solely on behalf of the Issuer as
Owner Trustee, under the Trust
Agreement
By:
--------------------------------
Printed Name: Cheryl Laser
-------------------
Title: Assistant Vice President
--------------------------
C-2
<PAGE> 98
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, not in
its individual capacity but solely
as Indenture Trustee
By:
----------------------------------
Authorized Signatory
C-3
<PAGE> 99
{REVERSE OF CLASS A-2 NOTE}
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-2 Receivable-Backed Notes (the "Class A-2
Notes"), all issued under an Indenture, dated as of , 2000 (the
"Indenture"), among the Issuer and Harris Trust and Savings Bank, as Indenture
Trustee (the "Indenture Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A-2 Notes and the other Classes of Notes described
in the Indenture (collectively, the "Notes") are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture subject to the priorities of allocations as to interest and principal
payments as described therein and in the Transfer and Servicing Agreement.
Principal of the Class A-2 Notes will be payable on the
earlier of the Class A-2 Maturity Date and the Redemption Date, if any, pursuant
to Section 10.01 of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Class A-2 Notes shall be due and payable on the
date on which an Event of Default shall have occurred and be continuing unless
the Required Holders waive such Event of Default.
Payments of interest on this Note due and payable on each
Distribution Date shall be made by check mailed to the Person whose name appears
as the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee; provided that, if Definitive Notes are issued pursuant to
Section 2.11 of the Indenture, payments may be made by check. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Distribution Date shall be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal
amount of this Note on a
C-4
<PAGE> 100
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice mailed within five
days of such Distribution Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of Chicago,
Illinois.
As provided in the Indenture, the Notes may be redeemed
pursuant to Section 10.01 of the Indenture, in whole, but not in part, at the
option of the Trust Depositor, on any Distribution Date on or after the date on
which the Pool Balance of all Contracts then in the Contracts Pool is less than
15% of the initial Pool Balance of Contracts in the Contracts Pool as of the
Initial Cutoff Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
eligible guarantor institution which is a participant in the Securities Transfer
Agent's Medallion Program (STAMP) or similar signature guarantee program, and
such other documents as the Indenture Trustee may require, and thereupon one or
more new Class A-2 Notes of authorized denomination and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that no recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for
C-5
<PAGE> 101
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that by accepting the benefits of the
Indenture and such Note that such Noteholder will not at any time institute
against the Trust Depositor or the Issuer, or join in any institution against
the Trust Depositor or the Issuer, of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture, and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness
which is solely secured by the Collateral and that the Trust will be disregarded
as a separate entity for federal income tax purposes pursuant to Treasury
Regulations Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a
Note or of a beneficial interest in a Note, agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of
this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Required Holders.
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all of the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon all Holders and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
C-6
<PAGE> 102
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, and the obligations, rights and remedies
of the parties hereunder and thereunder shall be determined in accordance with
such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
C-7
<PAGE> 103
EXHIBIT D
FORM OF CLASS A-3 NOTE
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS
NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN FULL ON THE DATE SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
% CLASS A-3 RECEIVABLE-BACKED NOTES
REGISTERED $
No. R-1
ORIX Credit Alliance Receivables Trust 2000-A, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or its registered assigns, the principal sum of Dollars ($ )
payable on the earlier of , 20 (the "Class A-3 Maturity Date") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to
on the reverse hereof. No payments of principal of the Class A-3 Notes shall be
made until the principal on the Class A-2 Notes has been paid in full.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in the Indenture. Interest on this Note will
accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from the Closing Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
D-1
<PAGE> 104
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note. reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer.
Date: February , 2000 ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but
solely on behalf of the Issuer as
Owner Trustee, under the Trust
Agreement
By:
-------------------------------
Printed Name: Cheryl Laser
------------------
Title: Assistant Vice President
-------------------------
D-2
<PAGE> 105
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, not
in its individual capacity but
solely as Indenture Trustee
By:
--------------------------------
Authorized Signatory
D-3
<PAGE> 106
{REVERSE OF CLASS A-3 NOTE}
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-3 Receivable-Backed Notes (the "Class A-3
Notes"), all issued under an Indenture, dated as of , 2000 (the
"Indenture"), among the Issuer and Harris Trust and Savings Bank, as Indenture
Trustee (the "Indenture Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A-3 Notes and the other Classes of Notes described
in the Indenture (collectively, the "Notes") are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture subject to the priorities of allocations as to interest and principal
payments as described therein and in the Transfer and Servicing Agreement.
Principal of the Class A-3 Notes will be payable on the
earlier of the Class A-3 Maturity Date and the Redemption Date, if any, pursuant
to Section 10.01 of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Class A-3 Notes shall be due and payable on the
date on which an Event of Default shall have occurred and be continuing unless
the Required Holders waive such Event of Default.
Payments of interest on this Note due and payable on each
Distribution Date shall be made by check mailed to the Person whose name appears
as the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee; provided that, if Definitive Notes are issued pursuant to
Section 2.11 of the Indenture, payments may be made by check. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Distribution Date shall be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Note on a
D-4
<PAGE> 107
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice mailed within five
days of such Distribution Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of Chicago,
Illinois.
As provided in the Indenture, the Notes may be redeemed
pursuant to Section 10.01 of the Indenture, in whole, but not in part, at the
option of the Trust Depositor, on any Distribution Date on or after the date on
which the Pool Balance of all Contracts then in the Contracts Pool is less than
15% of the initial Pool Balance of Contracts in the Contracts Pool as of the
Initial Cutoff Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
eligible guarantor institution which is a participant in the Securities Transfer
Agent's Medallion Program (STAMP) or similar signature guarantee program, and
such other documents as the Indenture Trustee may require, and thereupon one or
more new Class A-3 Notes of authorized denomination and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that no recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for
D-5
<PAGE> 108
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that by accepting the benefits of the
Indenture and such Note that such Noteholder will not at any time institute
against the Trust Depositor or the Issuer, or join in any institution against
the Trust Depositor or the Issuer, of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture, and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness
which is solely secured by the Collateral and that the Trust will be disregarded
as a separate entity for federal income tax purposes pursuant to Treasury
Regulations Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a
Note or of a beneficial interest in a Note, agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of
this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Required Holders.
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all of the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon all Holders and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
D-6
<PAGE> 109
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth. This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, and the obligations, rights and remedies
of the parties hereunder and thereunder shall be determined in accordance with
such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
D-7
<PAGE> 110
EXHIBIT E
FORM OF CLASS A-4 NOTE
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS
NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN FULL ON THE DATE SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
% CLASS A-4 RECEIVABLE-BACKED NOTES
REGISTERED $
No. R-1
ORIX Credit Alliance Receivables Trust 2000-A, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or its registered assigns, the principal sum of Dollars ($ )
payable on the earlier of , 20 (the "Class A-4 Maturity Date") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to
on the reverse hereof. No payments of principal of the Class A-4 Notes shall be
made until the principal on the Class A-3 Notes has been paid in full.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in the Indenture. Interest on this Note will
accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from the Closing Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
E-1
<PAGE> 111
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer.
Date: February , 2000 ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity but
solely on behalf of the Issuer as
Owner Trustee, under the Trust
Agreement
By:
---------------------------------
Printed Name: Cheryl Laser
--------------------
Title: Assistant Vice President
---------------------------
E-2
<PAGE> 112
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, not
in its individual capacity but
solely as Indenture Trustee
By:
---------------------------------
Authorized Signatory
E-3
<PAGE> 113
{REVERSE OF CLASS A-4 NOTE}
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-4 Receivable-Backed Notes (the "Class A-4
Notes"), all issued under an Indenture, dated as of , 2000 (the
"Indenture"), among the Issuer and Harris Trust and Savings Bank, as Indenture
Trustee (the "Indenture Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A-4 Notes and the other Classes of Notes described
in the Indenture (collectively, the "Notes") are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture subject to the priorities of allocations as to interest and principal
payments as described therein and in the Transfer and Servicing Agreement.
Principal of the Class A-4 Notes will be payable on the
earlier of the Class A-4 Maturity Date and the Redemption Date, if any, pursuant
to Section 10.01 of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Class A-4 Notes shall be due and payable on the
date on which an Event of Default shall have occurred and be continuing unless
the Required Holders waive such Event of Default.
Payments of interest on this Note due and payable on each
Distribution Date shall be made by check mailed to the Person whose name appears
as the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment; provided that, if Definitive Notes are issued pursuant to
Section 2.11 of the Indenture, payments may be made by check. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
affected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note
E-4
<PAGE> 114
on a Distribution Date, then the Indenture Trustee, in the name of and on behalf
of the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice mailed within five
days of such Distribution Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of Chicago,
Illinois.
As provided in the Indenture, the Notes may be redeemed
pursuant to Section 10.01 of the Indenture, in whole, but not in part, at the
option of the Trust Depositor, on any Distribution Date on or after the date on
which the Pool Balance of all Contracts then in the Contracts Pool is less than
15% of the initial Pool Balance of Contracts in the Contracts Pool as of the
Initial Cutoff Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
eligible guarantor institution which is a participant in the Securities Transfer
Agent's Medallion Program (STAMP) or similar signature guarantee program, and
such other documents as the Indenture Trustee may require, and thereupon one or
more new Class A-4 Notes of authorized denomination and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that no recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for
E-5
<PAGE> 115
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that by accepting the benefits of the
Indenture and such Note that such Noteholder will not at any time institute
against the Trust Depositor or the Issuer, or join in any institution against
the Trust Depositor or the Issuer, of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture, and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness
which is solely secured by the Collateral and that the Trust will be disregarded
as a separate entity for federal income tax purposes pursuant to Treasury
Regulations Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a
Note or of a beneficial interest in a Note, agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of
this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Required Holders.
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all of the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon all Holders and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
E-6
<PAGE> 116
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, and the obligations, rights and remedies
of the parties hereunder and thereunder shall be determined in accordance with
such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
E-7
<PAGE> 117
EXHIBIT F
FORM OF CLASS B NOTE
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS
NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN FULL ON THE DATE SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
% CLASS B RECEIVABLE-BACKED NOTES
REGISTERED $
No. R-1
ORIX Credit Alliance Receivables Trust 2000-A, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or its registered assigns, the principal sum of Dollars ($ )
payable on the earlier of , 20 (the "Class B Maturity Date") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to
on the reverse hereof. No payments of principal of the Class B Notes shall be
made until the principal on all the Class A-1 Notes has been paid in full. After
the occurrence of an Event of Default or Restricting Event (as defined in the
Transfer and Servicing Agreement), no payments of principal of the Class B Notes
shall be made until the principal on the Class A-1 Notes has been paid in full.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in the Indenture. Interest on this Note will
accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from the Closing Date. Interest will be computed on
the basis of a 360-day
F-1
<PAGE> 118
year of twelve 30-day months. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer.
Date: February , 2000 ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE), not in
its individual capacity but solely on
behalf of the Issuer as Owner Trustee,
under the Trust Agreement
By:
-------------------------------------
Printed Name: Cheryl Laser
------------------------
Title: Assistant Vice President
-------------------------------
F-2
<PAGE> 119
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, not
in its individual capacity but
solely as Indenture Trustee
By:
---------------------------------
Authorized Signatory
F-3
<PAGE> 120
{REVERSE OF CLASS B NOTE}
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class B Receivable-Backed Notes (the "Class B Notes"),
all issued under an Indenture, dated as of , 2000 (the "Indenture"),
among the Issuer and Harris Trust and Savings Bank, as Indenture Trustee (the
"Indenture Trustee"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class B Notes and the other Classes of Notes described in
the Indenture (collectively, the "Notes") are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture subject to the priorities of allocations as to interest and principal
payments as described therein and in the Transfer and Servicing Agreement.
Principal of the Class B Notes will be payable on the earlier
of the Class B Maturity Date and the Redemption Date, if any, pursuant to
Section 10.01 of the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Class B Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing unless the
Required Holders waive such Event of Default.
Payments of interest on this Note due and payable on each
Distribution Date shall be made by check mailed to the Person whose name appears
as the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee; provided that, if Definition Notes are issued pursuant to
Section 2.11 of the Indenture, payments may be made by check. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Distribution Date shall be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Note on a
F-4
<PAGE> 121
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice mailed within five
days of such Distribution Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of Chicago,
Illinois.
As provided in the Indenture, the Notes may be redeemed
pursuant to Section 10.01 of the Indenture, in whole, but not in part, at the
option of the Trust Depositor, on any Distribution Date on or after the date on
which the Pool Balance of all Contracts then in the Contracts Pool is less than
15% of the initial Pool Balance of Contracts in the Contracts Pool as of the
Initial Cutoff Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
eligible guarantor institution which is a participant in the Securities Transfer
Agent's Medallion Program (STAMP) or similar signature guarantee program, and
such other documents as the Indenture Trustee may require, and thereupon one or
more new Class B Notes of authorized denomination and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that no recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for
F-5
<PAGE> 122
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that by accepting the benefits of the
Indenture and such Note that such Noteholder will not at any time institute
against the Trust Depositor or the Issuer, or join in any institution against
the Trust Depositor or the Issuer, of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture, and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness
which is solely secured by the Collateral and that the Trust will be disregarded
as a separate entity for federal income tax purposes pursuant to Treasury
Regulations Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a
Note or of a beneficial interest in a Note, agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of
this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Required Holders.
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all of the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon all Holders and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
F-6
<PAGE> 123
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, and the obligations, rights and remedies
of the parties hereunder and thereunder shall be determined in accordance with
such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
F-7
<PAGE> 124
EXHIBIT G
FORM OF CLASS C NOTE
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS
NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN FULL ON THE DATE SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
% CLASS C RECEIVABLE-BACKED NOTES
REGISTERED $
No. R-1
ORIX Credit Alliance Receivables Trust 2000-A, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or its registered assigns, the principal sum of Dollars ($ )
payable on the earlier of , 20 (the "Class C Maturity Date") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture referred to
on the reverse hereof. No payments of principal of the Class C Notes shall be
made until the principal on all the Class A-1 Notes has been paid in full. After
the occurrence of an Event of Default or Restricting Event (as defined in the
Transfer and Servicing Agreement), no payments of principal of the Class C Notes
shall be made until the principal on the Class A-1 Notes has been paid in full.
The Issuer will pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in the Indenture. Interest on this Note will
accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has
G-1
<PAGE> 125
yet been paid, from the Closing Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months. Such principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer.
Date: February , 2000 ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity but solely
on behalf of the Issuer as Owner
Trustee, under the Trust Agreement
By:
-----------------------------------
Printed Name: Cheryl Laser
----------------------
Title: Assistant Vice President
-----------------------------
G-2
<PAGE> 126
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, not
in its individual capacity but
solely as Indenture Trustee
By:
---------------------------------
Authorized Signatory
G-3
<PAGE> 127
{REVERSE OF CLASS C NOTE}
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class C Receivable-Backed Notes (the "Class C Notes"),
all issued under an Indenture, dated as of , 2000 (the "Indenture"),
among the Issuer and Harris Trust and Savings Bank, as Indenture Trustee (the
"Indenture Trustee"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class C Notes and the other Classes of Notes described in
the Indenture (collectively, the "Notes") are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture subject to the priorities of allocations as to interest and principal
payments as described therein and in the Transfer and Servicing Agreement.
Principal of the Class C Notes will be payable on the earlier
of the Class C Maturity Date and the Redemption Date, if any, pursuant to
Section 10.01 of the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Class C Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing unless the
Required Holders waive such Event of Default.
Payments of interest on this Note due and payable on each
Distribution Date shall be made by check mailed to the Person whose name appears
as the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee; provided that, if Definition Notes are issued pursuant to
Section 2.11 of the Indenture, payments may be made by check. Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without requiring
that this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) affected by
any payments made on any Distribution Date shall be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer,
G-4
<PAGE> 128
will notify the Person who was the Registered Holder hereof as of the Record
Date preceding such Distribution Date by notice mailed within five days of such
Distribution Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's principal
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in the City of Chicago, Illinois.
As provided in the Indenture, the Notes may be redeemed
pursuant to Section 10.01 of the Indenture, in whole, but not in part, at the
option of the Trust Depositor, on any Distribution Date on or after the date on
which the Pool Balance of all Contracts then in the Contracts Pool is less than
15% of the initial Pool Balance of Contracts in the Contracts Pool as of the
Initial Cutoff Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
eligible guarantor institution which is a participant in the Securities Transfer
Agent's Medallion Program (STAMP) or similar signature guarantee program, and
such other documents as the Indenture Trustee may require, and thereupon one or
more new program, and such other documents as the Indenture Trustee may require,
and thereupon one or more new Class C Notes of authorized denomination and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that no recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for
G-5
<PAGE> 129
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder, by acceptance of a Note or a beneficial
interest in a Note, covenants and agrees that by accepting the benefits of the
Indenture and such Note that such Noteholder will not at any time institute
against the Trust Depositor or the Issuer, or join in any institution against
the Trust Depositor or the Issuer of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Issuer has entered into the Indenture, and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness
which is solely secured by the Collateral and that the Trust will be disregarded
as a separate entity for federal income tax purposes pursuant to Treasury
Regulations Section 301.7701-3(b)(1)(ii). Each Noteholder, by acceptance of a
Note or of a beneficial interest in a Note, agrees to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Prior to the due presentment for registration of transfer of
this Note, the Issuer and the Indenture Trustee and any agent of the Issuer and
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Required Holders.
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all of the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such Holders and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this Note.
The Indenture also permits the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
G-6
<PAGE> 130
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, and the obligations, rights and remedies
of the parties hereunder and thereunder shall be determined in accordance with
such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
G-7
<PAGE> 131
EXHIBIT H
FORM OF NOTE ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- --------------------------------------------------------------------------------
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing
- --------------------------------------------------------------------------------
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:
-------------
Signature Guaranteed:
Signature must be guaranteed by an
eligible guarantor institution which is
a participant in the Securities Transfer
Agent's Medallion Program (STAMP) or
similar signature guarantee program.
- ----------------------------------------
(Authorized Officer)
- ----------------------------------------
Notice: The signature(s) on this
assignment must correspond with the
name(s) as it appears on the face of the
within Note in every particular, without
alteration or enlargement or any change
whatsoever.
H-1
<PAGE> 132
EXHIBIT I
FORM OF NOTE DEPOSITORY AGREEMENT
[STANDARD DTC AGREEMENT]
I-1
<PAGE> 1
EXHIBIT 5.1
February 17, 2000
ORIX Credit Alliance Receivables Corporation III,
300 Lighting Way,
Secaucus, New Jersey 07096-1525.
ORIX Credit Alliance Receivables Trust 2000-A,
c/o The Bank of New York (Delaware),
502 White Clay Center,
Newark, Delaware 19714-6973.
Dear Sirs:
In connection with the registration under the Securities Act of 1933
(the "Act") by ORIX Credit Alliance Receivables Corporation III, a Delaware
corporation (the "Company"), as originator of ORIX Credit Alliance Receivables
Trust 2000-A, a Delaware business trust (the "Trust"), of Receivable-Backed
Notes, Classes A-1, A-2, A-3, A-4, B and C (the "Notes"), we, as your special
counsel, have examined such corporate records, certificates and other
<PAGE> 2
ORIX Credit Alliance Receivables Corporation III
ORIX Credit Alliance Receivables Trust 2000-A -2-
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion:
(1) When the Registration Statement on Form S-1, as amended
(File No. 333-95489) (the "Registration Statement"), filed by the
Company on behalf of the Trust with respect to the Notes, has become
effective under the Act, the Indenture relating to the Notes has been
duly authorized, executed and delivered, the terms of the Notes and of
their issuance and sale have been duly established in conformity with
the Indenture so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the
Trust and so as to comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over the Trust,
and the Notes have been duly executed and authenticated in accordance
with the Indenture and issued and sold as
<PAGE> 3
ORIX Credit Alliance Receivables Corporation III
ORIX Credit Alliance Receivables Trust 2000-A -3-
contemplated in the Registration Statement, the Notes will constitute
valid and legally binding obligations of the Trust, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(2) The material Federal income tax consequences of the
purchase, ownership and disposition of the Notes held as capital assets
by initial purchasers who are not subject to special rules are as set
forth under the heading "Material Federal Income Tax Considerations" in
the Registration Statement.
The foregoing opinion is limited to the Federal laws of the
United States and the laws of the State of New York, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the
<PAGE> 4
ORIX Credit Alliance Receivables Corporation III
ORIX Credit Alliance Receivables Trust 2000-A -4-
references to us under the headings "Material Federal Income Tax Considerations"
and "Legal Matters" in the Registration Statement. In giving such consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
/s/ Sullivan & Cromwell
<PAGE> 1
EXHIBIT 8.2
February 17, 2000
ORIX Credit Alliance Receivables Trust 2000-A
c/o The Bank of New York (Delaware)
502 White Clay Center
Newark DE 19714-6973
ORIX Credit Alliance Receivables Corporation III
300 Lighting Way
Secaucus NJ 07096-1525
Orix Credit Alliance, Inc.
300 Lighting Way
Secaucus NJ 07096-1525
Gentlemen:
Reference is made to that certain Securities and Exchange
Commission Form S-1 Registration Statement Number 333-95489 (the "Registration
Statement"). We are special New Jersey tax counsel to ORIX Credit Alliance
Receivables Trust 2000-A, a Delaware business trust.
As special counsel, we have examined such records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of the opinion. Upon the
basis of such examination, we advise you that, in our opinion, the material New
Jersey income tax consequences of the ownership of the Notes by initial
purchasers who are not otherwise subject to taxation of income in New Jersey are
as set forth under the heading "State and Local Tax Considerations -- New Jersey
Tax Considerations" and "Legal Matters" in the Registration Statement.
We hereby consent to the filing of the opinion regarding such
New Jersey state and local tax consideration as an exhibit to the Registration
Statement and to the reference to us under the heading "State and Local Tax
Considerations--New Jersey Tax Considerations" in the Registration Statement. In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended.
/s/RIKER, DANZIG, SCHERER,
HYLAND & PERRETTI LLP
<PAGE> 1
Exhibit 10.1
TRANSFER AND SERVICING AGREEMENT
AMONG
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A, AS ISSUER,
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III, AS TRUST
DEPOSITOR,
ORIX CREDIT ALLIANCE, INC., AS SERVICER AND AS ORIGINATOR
(AND)
HARRIS TRUST AND SAVINGS BANK, AS INDENTURE TRUSTEE
DATED AS OF FEBRUARY ____, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions...............................................................................2
Section 1.02. Usage of Terms...........................................................................33
Section 1.03. Section References.......................................................................33
Section 1.04. Calculations.............................................................................33
Section 1.05. Accounting Terms.........................................................................33
ARTICLE TWO
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACT ASSETS
Section 2.01. Creation and Funding of Trust; Transfer of Contract Assets...............................33
Section 2.02. Conditions to Transfer of Trust Assets to Trust..........................................36
Section 2.03. Acceptance by Owner Trustee..............................................................38
Section 2.04. Conveyance of Substitute Contracts.......................................................38
Section 2.05. Release of Released Amounts..............................................................41
Section 2.06. Delivery of Instruments..................................................................41
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties Regarding the Originator..................................42
Section 3.02. Representations and Warranties Regarding Each Contract and as to
Certain Contracts in the Aggregate...........................................47
Section 3.03. Representations and Warranties Regarding the Initial Contracts in the
Aggregate....................................................................47
Section 3.04. Representations and Warranties Regarding the Contract Files..............................48
Section 3.05. Representations and Warranties Regarding Concentrations of Initial
Contracts....................................................................48
Section 3.06. Representations and Warranties Regarding the Trust Depositor.............................49
Section 3.07. Representations and Warranties Regarding the Servicer....................................52
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE FOUR
PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS
Section 4.01. Custody of Contracts.....................................................................53
Section 4.02. Filing...................................................................................53
Section 4.03. Name Change or Relocation................................................................54
Section 4.04. Chief Executive Office...................................................................54
Section 4.05. Costs and Expenses.......................................................................54
Section 4.06. Sale Treatment...........................................................................54
Section 4.07. Separateness from Trust Depositor........................................................55
ARTICLE FIVE
SERVICING OF CONTRACTS
Section 5.01. Appointment and Acceptance; Responsibility for Contract
Administration...............................................................55
Section 5.02. General Duties...........................................................................55
Section 5.03. Consent to Assignment or Replacement.....................................................56
Section 5.04. Disposition upon Termination of Contract.................................................56
Section 5.05. Subservicers.............................................................................57
Section 5.06. Further Assurance........................................................................57
Section 5.07. Notice to Obligors.......................................................................57
Section 5.08. Collection Efforts; Modification of Contracts............................................57
Section 5.09. Prepaid Contract.........................................................................59
Section 5.10. Acceleration.............................................................................59
Section 5.11. Taxes....................................................................................59
Section 5.12. Insurance Premiums.......................................................................59
Section 5.13. Remittances..............................................................................60
Section 5.14. Servicer Advances........................................................................60
Section 5.15. Realization upon Defaulted Contract......................................................60
Section 5.16. Maintenance of Insurance Policies........................................................60
Section 5.17. Other Servicer Covenants.................................................................61
Section 5.18. Servicing Compensation...................................................................62
Section 5.19. Payment of Certain Expenses by Servicer..................................................62
Section 5.20. Records..................................................................................63
Section 5.21. Inspection...............................................................................63
Section 5.22. Trustees to Cooperate in Releases........................................................63
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE SIX
COVENANTS OF THE TRUST DEPOSITOR
Section 6.01. Corporate Existence......................................................................64
Section 6.02. Contracts Not to Be Evidenced by Promissory Notes........................................64
Section 6.03. Security Interests.......................................................................64
Section 6.04. Delivery of Collections..................................................................64
Section 6.05. Regulatory Filings.......................................................................65
Section 6.06. Compliance with Law......................................................................65
Section 6.07. Activities...............................................................................65
Section 6.08. Indebtedness.............................................................................65
Section 6.09. Guarantees...............................................................................65
Section 6.10. Investments..............................................................................65
Section 6.11. Merger; Sales............................................................................66
Section 6.12. Distributions............................................................................66
Section 6.13. Other Agreements.........................................................................66
Section 6.14. Separate Corporate Existence.............................................................66
Section 6.15. Location; Records........................................................................67
Section 6.16. Liability of Trust Depositor; Indemnities................................................68
Section 6.17. Bankruptcy Limitations...................................................................69
Section 6.18. Limitation on Liability of Trust Depositor and Others....................................69
Section 6.19. Chief Executive Office...................................................................70
ARTICLE SEVEN
ESTABLISHMENT OF ACCOUNTS; DISTRIBUTIONS; RESERVE FUND
Section 7.01. Trust Accounts; Collections..............................................................70
Section 7.02. Reserve Fund Deposit.....................................................................71
Section 7.03. Trust Account Procedures.................................................................71
Section 7.04. Securityholder Distributions.............................................................72
Section 7.05. Allocations and Distributions............................................................72
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE EIGHT
SERVICER DEFAULT; SERVICE TRANSFER
Section 8.01. Servicer Default.........................................................................80
Section 8.02. Servicer Transfer........................................................................81
Section 8.03. Appointment of Successor Servicer; Reconveyance; Successor Servicer
to Act.......................................................................82
Section 8.04. Notification to Securityholders..........................................................83
Section 8.05. Effect of Transfer.......................................................................83
Section 8.06. Database File............................................................................84
Section 8.07. Successor Servicer Indemnification.......................................................84
Section 8.08. Responsibilities of the Successor Servicer...............................................84
Section 8.09. Rating Agency Condition for Servicer Transfer............................................85
ARTICLE NINE
REPORTS
Section 9.01. Monthly Reports..........................................................................85
Section 9.02. Officer's Certificate....................................................................85
Section 9.03. Other Data...............................................................................85
Section 9.04. Annual Report of Accountants.............................................................86
Section 9.05. Annual Statement of Compliance from Servicer.............................................87
Section 9.06. Annual Summary Statement.................................................................87
ARTICLE TEN
TERMINATION
Section 10.01. Sale of Trust Assets....................................................................87
ARTICLE ELEVEN
REMEDIES UPON MISREPRESENTATION; REPURCHASE OPTION
Section 11.01. Repurchases of, or Substitution for, Contracts for Breach of
Representations and Warranties...............................................88
Section 11.02. Reassignment of Repurchased or Substituted Contracts....................................89
Section 11.03. The Trust Depositor's Repurchase Option.................................................89
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE TWELVE
ORIGINATOR INDEMNITIES
Section 12.01. Originator's Indemnification............................................................90
Section 12.02. Liabilities to Obligors.................................................................90
Section 12.03. Tax Indemnification.....................................................................90
Section 12.04. Adjustments.............................................................................91
Section 12.05. Operation of Indemnities................................................................92
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Amendment...............................................................................92
Section 13.02. Protection of Title to Trust............................................................93
Section 13.03. Governing Law...........................................................................95
Section 13.04. Notices.................................................................................95
Section 13.05. Severability of Provisions..............................................................98
Section 13.06. Third Party Beneficiaries...............................................................98
Section 13.07. Counterparts............................................................................98
Section 13.08. Headings................................................................................98
Section 13.09. No Bankruptcy Petition; Disclaimer......................................................98
Section 13.10. Jurisdiction............................................................................99
Section 13.11. Tax Characterization...................................................................100
Section 13.12. Prohibited Transactions with Respect to the Trust......................................100
Section 13.13. Merger or Consolidation of Originator or Servicer......................................100
Section 13.14. Assignment or Delegation by the Originator.............................................101
Section 13.15. Limitation of Liability of Owner Trustee...............................................101
Schedule 1 List of States Where Equipment is Located ...........................................102
EXHIBITS
EXHIBIT A Form of Assignment...................................................................A-1
EXHIBIT B Form of Closing Certificate of Trust Depositor.......................................B-1
EXHIBIT C Form of Closing Certificate of Servicer/Originator...................................C-1
EXHIBIT D Form of Opinion of Counsel for Trust Depositor Regarding
General Corporate Matters (Including Perfection Opinion).............................D-1
</TABLE>
-v-
<PAGE> 7
<TABLE>
<S> <C>
EXHIBIT E Form of Opinion of Counsel for Trust Depositor Regarding
the "True Sale" Nature of the Transaction and Regarding
Non-Consolidation....................................................................E-1
EXHIBIT F Form of Certificate Regarding Repurchased Contracts..................................F-1
EXHIBIT G List of Contracts....................................................................G-1
EXHIBIT H Form of Monthly Report to Noteholders and
Certificateholders...................................................................H-1
EXHIBIT I Form of Subsequent Transfer Agreement................................................I-1
EXHIBIT J Form of Subsequent Purchase Agreement................................................J-1
</TABLE>
-vi-
<PAGE> 8
This TRANSFER AND SERVICING AGREEMENT, dated as of February
___, 2000, is among ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A (together with
its successors and assigns, the "Trust"), ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III, (together with its successor and assigns, the "Trust
Depositor"), HARRIS TRUST AND SAVINGS BANK (solely in its capacity as Indenture
Trustee, together with its successors and assigns, the "Indenture Trustee"),
ORIX CREDIT ALLIANCE, INC. (together with its successors and assigns, "OCAI", in
its capacity as Servicer, together with its successor and assigns, the
"Servicer" and in its capacity as originator, together with its successor and
assigns, the "Originator").
WHEREAS, in the regular course of its business, the
Originator originates and purchases Contracts (as defined herein);
WHEREAS, the Trust Depositor acquired the Initial Contracts
from the Originator and may acquire from time to time thereafter certain
Substitute Contracts (such Initial Contracts and Substitute Contracts, together
with certain related property as more fully described herein, being the Contract
Assets as defined herein);
WHEREAS, it was a condition to the Trust Depositor's
acquisition of the Initial Contracts from the Originator that the Originator
make certain representations and warranties regarding the Contract Assets for
the benefit of the Trust Depositor as well as the Trust;
WHEREAS, on the Closing Date the Trust Depositor will fund the
Trust by selling, conveying and assigning all its right, title and interest in
such Contract Assets and certain other assets to the Trust;
WHEREAS, the Trust is willing to purchase and accept
assignment of the Trust Assets from the Trust Depositor pursuant to the terms
hereof; and
WHEREAS, the Servicer is willing to service the Contracts for
the benefit and account of the Trust pursuant to the terms hereof;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
<PAGE> 9
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Accountant's Report" has the meaning assigned such term in
Section 9.04.
"Accrual Period" means the period from and including the most
recent Distribution Date to but excluding the following Distribution Date,
provided that the initial Accrual Period following the Closing Date shall be the
period from and including the Closing Date to but excluding the first
Distribution Date following the Closing Date.
"Addition Notice" means, with respect to any transfer of
Substitute Contracts to the Trust pursuant to Section 2.04 (and the Trust
Depositor's corresponding prior purchase of such Contracts from the Originator),
a notice, which shall be given at least 5 days prior to the related Subsequent
Transfer Date, identifying the Substitute Contracts to be transferred, the
Principal Balance of such Substitute Contracts and the related Substitution
Event (with respect to an identified Contract or Contracts then in the Contracts
Pool) to which such Substitute Contract relates, with such notice to be signed
both by the Trust Depositor and the Originator.
"Additional Principal" means, with respect to a Distribution
Date (i) if the Class B Target Investor Principal Amount and the Class C Target
Investor Principal Amount exceed the Class B Floor and the Class C Floor,
respectively, an amount of $0; or (ii) if any of the conditions in clause (i)
are not satisfied, an amount equal to the excess, if any, of (A) the Monthly
Principal Amount, over (B) the sum of the Class A Principal Payment Amount,
Class B Principal Payment Amount and Class C Principal Payment Amount for such
Distribution Date.
"Affiliate" of any specified Person means any other Person
controlling or controlled by, or under common control with, such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" or
"controlled" have meanings correlative to the foregoing.
"Aggregate Loss Amount" means the excess, if any, of (x) the
aggregate amount of the Contract Principal Balances (calculated with respect to
a Defaulted
-2-
<PAGE> 10
Contract as of the date immediately before such Contract became a Defaulted
Contract) of all the Contracts that became Defaulted Contracts during all prior
Collection Periods over (y) the aggregate amount of all Recoveries collected by
the Servicer with respect to such Collection Periods.
"Aggregate Principal Amount" means, with respect to any group
of Notes, at any date of determination, the sum of the Principal Amounts of such
Notes on such date of determination.
"Agreement" means this Transfer and Servicing Agreement, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"Assignment" means each Assignment, substantially in the form
of Exhibit A relating to an assignment, transfer and conveyance of Contracts and
related property by the Trust Depositor to the Trust.
"Available Amounts" means, as of any Distribution Date, the
sum of (i) all amounts on deposit in the Collection Account as of the
immediately preceding Determination Date on account of Scheduled Payments due
on or before, and Prepayments received on or before, the last day of the
Collection Period immediately preceding such Distribution Date (other than
Excluded Amounts), (ii) Recoveries on account of previously Defaulted Contracts
received as of the last day of the immediately preceding Collection Period;
(iii) Investment Earnings credited to the Collection Account or the Reserve Fund
as of the last day of the immediately preceding Collection Period, (iv) Late
Charges received on or before the last day of such Collection Period (provided
such late charges were included in the Contract's terms as of the applicable
Cutoff Date); (v) all amounts on deposit in the Spread Fund, and (vi) proceeds
of any of the foregoing.
"Business Day" means any day which is neither a Saturday or a
Sunday, nor another day on which banking institutions in the city of Chicago,
Illinois, Secaucus, New Jersey, Newark, Delaware or New York, New York are
authorized or obligated by law, executive order, or governmental decree to be
closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del Code 3801 et seq., as the same may be amended from time to
time.
"Casualty Loss" means, with respect to any item of Equipment,
the loss, theft, damage beyond repair or governmental condemnation or seizure of
such item of Equipment.
-3-
<PAGE> 11
"Certificate" means the $ aggregate initial principal
amount ORIX Credit Alliance Receivables Trust Certificate, Series 2000-A
representing a beneficial equity interest in the Trust and issued pursuant to
the Trust Agreement.
"Certificate Register" has the meaning specified in the Trust
Agreement.
"Certificateholder" means the registered holder of the
Certificate.
"Class" means any of the group of Notes or the Certificate
identified herein as, as applicable, the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes,
or the Certificate.
"Class A Notes" means the Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes.
"Class A Percentage" means %.
"Class A Principal Payment Amount" means, with respect to a
Distribution Date, (i) while all or any portion of the Class A-1 Notes remain
outstanding after giving effect to payments on such Distribution Date, the
Monthly Principal Amount; (ii) if such Distribution Date is the Class A-1
Maturity Date, the Principal Amount of the Class A-1 Notes; (iii) if the
Principal Amount of the Class A-1 Notes is being reduced to zero on such
Distribution Date, the sum of the amount necessary to reduce the Principal
Amount of the Class A-1 Notes to zero and the amount necessary to reduce the
aggregate Principal Amount of the Class A-2 Notes, Class A-3 Notes, and Class
A-4 Notes to the Class A Target Investor Principal Amount; (iv) if the Principal
Amount of the Class A-1 Notes is zero, the amount necessary to reduce the
aggregate Principal Amount of the Class A-2 Notes, Class A-3 Notes and Class A-4
Notes to the Class A Target Investor Principal Amount; (v) if the Principal
Amount of the Class A-1 Notes and Class A-2 Notes is zero, the amount necessary
to reduce the aggregate Principal Amount of the Class A-3 Notes and Class A-4
Notes to the Class A Target Investor Principal Amount; and (vi) if the Principal
Amount of the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes is zero, the
amount necessary to reduce the Principal Amount of the Class A-4 Notes to the
Class A Target Investor Principal Amount.
"Class A Target Investor Principal Amount" means, with respect
to a Distribution Date, an amount equal to the product (i) the Class A
Percentage and (ii) the Pool Balance as of the last day of the related
Collection Period.
"Class A-1 Interest Rate" means % per annum (calculated
on the basis of a year of 360 days and actual days elapsed in the Accrual
Period).
-4-
<PAGE> 12
"Class A-1 Maturity Date" means the
Distribution Date.
"Class A-1 Noteholder" means the Person in whose name a Class
A-1 Note is registered in the Note Register.
"Class A-1 Notes" means the $ aggregate initial principal
amount ORIX Credit Alliance Receivables Trust, Class A-1 Receivable-Backed
Notes, Series 2000-A, issued pursuant to the Indenture.
"Class A-2 Interest Rate" means % per annum (calculated
on the basis of a year of 360 days and twelve 30-day months).
"Class A-2 Maturity Date" means the
Distribution Date.
"Class A-2 Noteholder" means the Person in whose name a Class
A-2 Note is registered in the Note Register.
"Class A-2 Notes" means the $ aggregate initial principal
amount ORIX Credit Alliance Receivables Trust Class A-2 Receivable-Backed Notes,
Series 2000-A, issued pursuant to the Indenture.
"Class A-3 Interest Rate" means % per annum (calculated
on the basis of a year of 360 days and twelve 30-day months).
"Class A-3 Maturity Date" means the
Distribution Date.
"Class A-3 Noteholder" means the Person in whose name a Class
A-3 Note is registered in the Note Register.
"Class A-3 Notes" means the $ aggregate initial principal
amount ORIX Credit Alliance Receivables Trust Class A-3 Receivable-Backed Notes,
Series 2000-A, issued pursuant to the Indenture.
"Class A-4 Interest Rate" means % per annum (calculated
on the basis of a year of 360 days and twelve 30-day months).
"Class A-4 Maturity Date" means the
Distribution Date.
"Class A-4 Noteholder" means the Person in whose name a Class
A-4 Note is registered in the Note Register.
-5-
<PAGE> 13
"Class A-4 Notes" means the $ aggregate initial principal
amount ORIX Credit Alliance Receivables Trust Class A-4 Receivable-Backed Notes,
Series 2000-A, issued pursuant to the Indenture.
"Class B Floor" means, with respect to a Distribution Date,
(i) % of the Original Pool Balance plus
(ii) the Cumulative Loss Amount as of such date, minus
(iii) the sum of (a) the outstanding Principal Amount of the Class C Notes as
of the immediately preceding Distribution Date after giving effect to
all principal payments made on such date, (b) the Overcollateralization
Balance as of the immediately preceding Distribution Date and (c) the
amount on deposit in the Reserve Fund after giving effect to amounts to
be withdrawn on such date.
"Class B Interest Rate" means % per annum (calculated
on the basis of a year of 360 days and twelve 30-day months).
"Class B Maturity Date" means the
Distribution Date.
"Class B Noteholder" means the Person in whose name a Class B
Note is registered in the Note Register.
"Class B Notes" means the $ aggregate initial principal
amount ORIX Credit Alliance Receivables Trust Class B Receivable-Backed Notes,
Series 2000-A, issued pursuant to the Indenture.
"Class B Percentage" means %.
"Class B Principal Payment Amount" means, with respect to a
Distribution Date,
(i) if the Principal Amount of the Class A-1 Notes is greater than zero,
zero; and
(ii) if the Principal Amount of the Class A-1 Notes is zero, the amount
necessary to reduce the Principal Amount of the Class B Notes to the
greater of (a) the Class B Target Investor Principal Amount or (b) the
Class B Floor.
"Class B Target Investor Principal Amount" means, with respect
to a Distribution Date, an amount equal to the product of (i) the Class B
Percentage and (ii) the Pool Balance as of the last day of the related
Collection Period.
-6-
<PAGE> 14
"Class C Floor" means, with respect to a Distribution Date,
(i) % of the Original Pool Balance plus
(ii) the Cumulative Loss Amount as of such date, minus
(iii) the sum of (a) the Overcollateralization Balance as of the immediately
preceding Distribution Date and (b) the amount on deposit in the
Reserve Fund after giving effect to amounts to be withdrawn on such
date;
provided, however, that if the Principal Amount of the Class B Notes as of such
Distribution Date is less than or equal to the Class B Floor on such date, the
Class C Floor will be an amount equal to the Principal Amount of the Class C
Notes utilized in the calculation of the Class B Floor for such date.
"Class C Interest Rate" means % per annum (calculated on
the basis of a year of 360 days and twelve 30-day months).
"Class C Maturity Date" means the
Distribution Date.
"Class C Noteholder" means the Person in whose name a Class C
Note is registered in the Note Register.
"Class C Notes" means the $ aggregate initial principal
amount ORIX Credit Alliance Receivables Trust Class C Receivable-Backed Notes,
Series 2000-A, issued pursuant to the Indenture.
"Class C Percentage" means %.
"Class C Principal Payment Amount" means, with respect to a
Distribution Date,
(i) if the Principal Amount of the Class A-1 Notes is greater than zero,
zero; and
(ii) if the Principal Amount of the Class A-1 Notes is zero, the amount
necessary to reduce the Principal Amount of the Class C Notes to the
greater of (a) the Class C Target Investor Principal Amount or (b) the
Class C Floor.
"Class C Target Investor Principal Amount" means, with respect
to a Distribution Date, an amount equal to the product of (i) the Class C
Percentage and (ii) the Pool Balance as of the last day of the related
Collection Period.
-7-
<PAGE> 15
"Closing Date" means February , 2000.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning given such term in the "granting
clause" of the Indenture.
"Collection Account" means the Trust Account so designated
established pursuant to Section 7.01.
"Collection Period" means a period beginning on and including
the first day of a calendar month and ending on and including, the last day of
such calendar month, provided that the first Collection Period shall be the
period beginning on the Initial Cutoff Date and ending on and including the last
day of the calendar month in which the Closing Date occurs.
"Collections" means all payments received on or with respect
to the Contracts in the Contracts Pool or the related Equipment, including,
without limitation, Scheduled Payments, Prepayments, Recoveries and Late
Charges, all as related to amounts attributable to the Contracts in the
Contracts Pool or the related Equipment (including any such amounts derived from
Vendor recourse provisions), but excluding any Excluded Amounts.
"Commission" means the United States Securities and Exchange
Commission.
"Computer Records" means the computer records generated by the
Servicer which provide information relating to the Contracts and which was used
by the Originator in selecting the Contracts conveyed to the Trust Depositor
pursuant to Section 2.01 (and any Subsequent Purchase Agreement conveyed to the
Trust Depositor pursuant to Section 2.04).
"Contract" means each End-User Contract, and including both
Initial Contracts and Substitute Contracts.
"Contract Assets" has the meaning assigned in Section 2.01
(and 2.04, as applicable in the case of Substitute Contracts).
"Contract File" means, with respect to each Contract, the
fully executed original counterpart (for UCC purposes) of the Contract, the
original certificate of title or other title document with respect to the
related Equipment (if applicable), and otherwise such documents, if any, that
the Servicer keeps on file in accordance with its customary
-8-
<PAGE> 16
procedures, evidencing ownership of such Equipment (if applicable) and all other
documents originally delivered to the Originator or held by the Servicer with
respect to any Contract.
"Contracts Pool" as of any date means the Initial Contracts
and the Substitute Contracts (if any), other than any such Contracts which (i)
have been reconveyed by the Trust to the Trust Depositor, and concurrently by
the Trust Depositor to the Originator, pursuant to Section 11.02 hereof, or (ii)
have been paid (or prepaid) in full.
"Corporate Trust Office" means, with respect to the Indenture
Trustee or Owner Trustee, as applicable, the office of the Indenture Trustee or
Owner Trustee at which at any particular time its corporate trust business shall
be principally administered, which offices at the date of the execution of this
Agreement are located at the addresses set forth in Section 13.04.
"CSA" means each conditional sales agreement, including, as
applicable, schedules, subschedules, supplements and amendments to a master
conditional sales agreement, pursuant to which specified assets were
conditionally sold to an Obligor at specified monthly, quarterly, semi-annual or
annual payments.
"Cumulative Loss Amount" means, with respect to a Distribution
Date, an amount equal to the excess, if any, of:
(i) the total of
(A) the Principal Amount of the Notes as of the immediately
preceding Distribution Date after giving effect to all
principal payments made on such date, plus
(B) the Overcollateralization Balance as of the immediately
preceding Distribution Date, minus
(C) the lesser of: (1) the Monthly Principal Amount and (2)
Available Amounts remaining after payment of amounts owing to
the Servicer, including Unreimbursed Servicer Advances and
Servicing Fees, and after payment of interest on the Notes on
such date; over
(ii) the Pool Balance as of the last day of the immediately preceding
Collection Period.
"Cumulative Net Loss Percentage" means, with respect to a
Determination Date, the percentage equivalent of a fraction, (a) the numerator
of which is the Aggregate
-9-
<PAGE> 17
Loss Amount as of the last day of the immediately preceding Collection Period
and (b) the denominator of which is the Original Pool Balance.
"Custodian Agreement" means the Custodian Agreement dated as
of the date hereof between OCAI, as custodian, and the Indenture Trustee.
"Cutoff Date" means either or both (as the context may
require) the Initial Cutoff Date and any Subsequent Cutoff Date, as applicable
to the Contract or Contracts in question.
"Date of Processing" means, with respect to any transaction or
Collection, the date on which such transaction or Collection is first recorded
(and, in the case of a transaction or Collection related to a particular
Contract, identified as to such particular Contract) on the Originator's or
Servicer's computer master file of Contracts (without regard to the effective
date of such recordation).
"Defaulted Contract" means a Contract in the Contracts Pool
with respect to which there has occurred one or more of the following: (i) all
or some portion of any Scheduled Payment under the Contract is more than 180
days delinquent or such shorter period as the Originator may determine
consistent with its collection policy or (ii) the Servicer has determined in its
sole discretion, in accordance with its usual and customary practices (and
taking into account any available Vendor recourse), that such Contract is not
collectible.
"Determination Date" means, with respect to any Distribution
Date, the third Business Day prior to such Distribution Date.
"Distribution Date" shall mean the fifteenth day of each
calendar month or, if such fifteenth day is not a Business Day, the next
succeeding Business Day, with the first such Distribution Date hereunder
being , 2000.
"Dollar" and "$" means lawful currency of the United States
of America.
"Eligible Contract" means at any date of determination, each
Contract with respect to which each of the following is true (to the extent
applicable to such type of Contract):
(a) the Contract is a valid and binding payment obligation of
the Obligor, is enforceable in accordance with its terms (except as may
be limited by applicable Insolvency Laws and the availability of
equitable remedies) and contains a clause that has the effect of
unconditionally and irrevocably obligating the Obligor to make periodic
Scheduled Payments (including taxes) to the
-10-
<PAGE> 18
assignee of the Contract, notwithstanding any rights the Obligor may
have against the assignor;
(b) the Contract is noncancellable by the Obligor;
(c) all payments payable under the Contract are absolute,
unconditional obligations of the Obligor and the Contract does not
provide for offset for any reason;
(d) the Contract requires the Obligor to maintain the
Equipment in good working order, to bear all the costs of operating the
Equipment, including taxes and insurance relating thereto;
(e) the Contract, at the time it was made, did not violate the
laws of the United States or any state, except for any such violations
which would not materially and adversely affect the collectibility of
the Contracts in the Contracts Pool taken as a whole;
(f) the Contract requires that (i) the Obligor will obtain
insurance and list OCAI as the loss payee in an amount not less than
the Outstanding Principal Balance of the Contract; and (ii) in the
event of a Casualty Loss, the Servicer may require the Obligor (A) to
pay at a minimum the Outstanding Principal Balance of the Contract or
(B) to replace the Equipment with like Equipment in good repair,
acceptable to the Servicer, at the Obligor's expense;
(g) immediately prior to the transfer of such Contract and any
related Equipment (or security interest therein) to the Trust
Depositor, and immediately prior to the Trust Depositor's concurrent
transfer thereof to the Trust, such Contract was owned by the
Originator (and by the Trust Depositor following the transfer by the
Originator) free and clear of any adverse claim, other than with
respect to any Permitted Liens;
(h) (i) the Contract and any related Equipment or interest
therein have not been sold, transferred, assigned or pledged by the
Originator to any other Person (other than the financed sale of the
Equipment to the End-User effected through the End-User Contract) and
any Equipment related to such Contract is free and clear of any liens
and encumbrances of any third parties other than the Originator and
Permitted Liens, and (ii) such Contract is secured by a fully perfected
lien of the first priority in favor of the Originator on the related
Equipment;
(i) the Contract has an original maturity of not greater than
eighty-four months;
-11-
<PAGE> 19
(j) the Contract is a U.S. dollar-denominated obligation and,
at inception, the Obligor and the associated Equipment were and
continue to be located in the United States;
(k) there is not more than one "secured party's original"
counterpart of the Contract;
(l) the Contract is not a consumer contract or a "consumer
lease" as defined in Section 2A-103(1)(e) of the UCC; and, if such
Contract is a Lease, it is a Lease intended for security within the
meaning of Section 1-201(39) of the UCC;
(m) the Contract is not subject to any guarantee by the
Originator, nor has the Originator established any specific credit
reserve with respect to the related Obligor;
(n) the Contract was either originated or purchased in a true
sale transaction, by the Originator in the ordinary course of its
business in accordance with its customary underwriting practices and
credit policies (and if originated by a Vendor, such Contract was
originated in the ordinary course of its business) and no adverse
selection procedure was used in selecting the Contract for the
Contracts Pool;
(o) the Obligor has represented to the Originator or Vendor
that it has accepted the Equipment where the Contract relates to
Equipment being currently acquired;
(p) the Obligor is not, to the Originator's knowledge, subject
to bankruptcy or other insolvency proceedings;
(q) the Contract did not have a Scheduled Payment that was a
delinquent payment for more than 60 days, and the Contract is not a
Defaulted Contract;
(r) the information with respect to the Contract and the
Equipment, where the Contract relates to Equipment being currently
acquired, subject to the Contract delivered under this Agreement is
true and correct in all material respects;
(s) no provision of the Contract has been waived, altered or
modified in any respect, except by instruments or documents contained
in the Contract File;
-12-
<PAGE> 20
(t) all filings necessary to evidence the conveyance or
transfer of the Originator's ownership interest in the Contract, and
the Originator's corresponding interest in the related Equipment, to
the Trust Depositor (as well as the concurrent conveyance of such
property hereunder from the Trust Depositor to the Trust), have been
made in all appropriate jurisdictions; provided that (i) UCC
financing statement filings with respect to Equipment which name the
Originator as secured party have not been amended to indicate either
the Trust Depositor or the Trust as an assignee and (ii) filings or
registrations with respect to any title registry for any Equipment
which name the Originator as lienholder have not been amended to
indicate either the Trust Depositor or the Trust as an assignee;
(u) the Contract does not require the prior written consent of
an Obligor or contain any other restriction on the transfer or
assignment of the Contract (other than a consent or waiver of such
restriction that has been obtained prior to the Closing Date, with
respect to an Initial Contract, or the Subsequent Transfer Date, with
respect to a Substitute Contract);
(v) the Obligor is not the United States or any state or local
government or any agency, department, subdivision or instrumentality
of any such government;
(w) the Originator has obtained a first priority perfected
security interest (subject to Permitted Liens) in the Equipment;
(x) if such Contract is a Lease, the Lease has a purchase
option amount of no greater than $102;
(y) if the Contract is a lease of Equipment subject to
certificate of title statutory requirements, the title is held either
in the name of the lessee and the certificate of title indicates the
Originator as lienholder or in the name of the Originator as Lessor;
(z) the Obligor under the Contract is required either to
maintain casualty insurance or to self-insure with respect to the
Related Equipment in accordance with the Originator's normal
requirements;
(aa) the Contract constitutes "chattel paper" as defined under
the UCC; and
(bb) the Contract either (i) prohibits the end-user from
altering or modifying the Equipment or (ii) allows end-users to modify
or alter the Equipment only to the extent that the alterations or
modification are readily removable without damage to the Equipment.
"Eligible Deposit Account" means either (a) a segregated
account with a Qualified Institution, or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign
-13-
<PAGE> 21
bank), and acting as a trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit rating
from each Rating Agency in one of its short-term credit rating categories which
signifies investment grade.
"Eligible Investments" with respect to any Distribution Date
means negotiable instruments or securities or other investments maturing on or
before such Distribution Date (a) which, except in the case of demand or time
deposits, investments in money market funds and Eligible Repurchase Obligations,
are represented by instruments in bearer or registered form or ownership of
which is represented by book entries by a Clearing Agency or by a Federal
Reserve Bank in favor of depository institutions eligible to have an account
with such Federal Reserve Bank who hold such investments on behalf of their
customers, (b) which, as of any date of determination, mature by their terms on
or prior to the Distribution Date immediately following such date of
determination, and (c) which evidence:
(i) direct obligations of, and obligations fully guaranteed as
to full and timely payment by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full
faith and credit of the United States of America);
(ii) demand deposits, time deposits or certificates of deposit
of depository institutions or trust companies incorporated under the
laws of the United States of America or any state thereof and subject
to supervision and examination by federal or state banking or
depository institution authorities; provided, however, that at the time
of the Trust's investment or contractual commitment to invest therein,
the commercial paper, if any, and short-term unsecured debt obligations
(other than such obligation whose rating is based on the credit of a
Person other than such institution or trust company) of such depository
institution or trust company shall have a credit rating from each
Rating Agency in the Highest Required Investment Category granted by
such Rating Agency;
(iii) commercial paper, or other short term obligations,
having, at the time of the Trust's investment or contractual commitment
to invest therein, a rating in the Highest Required Investment Category
granted by each Rating Agency;
(iv) demand deposits, time deposits or certificates of deposit
that are fully insured by the FDIC and either have a rating on their
certificates of deposit or short-term deposits from Moody's and S&P of
P-1 and A-1+, respectively, and, if rated by Fitch, from Fitch of F1+,
or otherwise have a rating acceptable to the Rating Agencies;
-14-
<PAGE> 22
(v) notes that are payable on demand or bankers' acceptances
issued by any depository institution or trust company referred to in
(ii) above;
(vi) investments in taxable money market funds or other
regulated investment companies having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating of the
Highest Required Investment Category from each Rating Agency or if
otherwise approved of in writing by the Rating Agencies;
(vii) time deposits (having maturities of not more than 90
days) by an entity the commercial paper of which has, at the time of
the Trust's investment or contractual commitment to invest therein, a
rating of the Highest Required Investment Category granted by each
Rating Agency;
(viii) Eligible Repurchase Obligations with a rating
acceptable to the Rating Agencies; and
(ix) any negotiable instruments or securities or other
investments in which the investment by the Trust therein has been
approved in writing by each Rating Agency.
The Indenture Trustee may purchase or sell to itself or an Affiliate, as
principal or agent, the Eligible Investments described above.
"Eligible Repurchase Obligations" means repurchase obligations
with respect to any security that is a direct obligation of, or fully guaranteed
by, the United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with a depository institution or
trust company (acting as principal) described in clauses (c)(ii) and (c)(iv) of
the definition of Eligible Investments.
"End-User" shall mean any party that uses the Financed Item
pursuant to an End-User Contract.
"End-User Contract" shall mean any CSA, Secured Note, Lease,
or other Financing Agreement covering Financed Items, originated or purchased by
the Originator.
"Equipment" means the tangible assets (including but not
limited to construction, road building, transportation, wood and pulp industry,
machine shop, printing, cranes and related equipment) financed or leased by an
Obligor pursuant to a Contract and the related security interest granted by such
Obligor in such assets.
-15-
<PAGE> 23
"Event of Default" shall have the meaning specified in
Section 5.01 of the Indenture.
"Excess Contract", as of any date of determination, means each
Contract selected by the Servicer in accordance with Section 11.01 at such time
as there shall have been discovered a breach of any of the representations and
warranties set forth in Section 3.05, the removal of which pursuant to Section
11.01 and the Originator's repurchase thereof or substitution of a Substitute
Contract therefor pursuant to Section 11.01, shall remedy such breach.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended or supplemented from time to time.
"Excluded Amounts" means (i) any collections on deposit in the
Collection Account or otherwise received by the Servicer on or with respect to
the Contracts Pool or related Equipment, which collections are attributable to
any taxes, fees or other charges imposed by any Governmental Authority, (ii) any
collections representing reimbursements of insurance premiums or payments for
services that were not financed by the Originator, (iii) other non-contract
charges reimbursable to the Servicer in accordance with the Servicer's customary
policies and procedures, and (iv) any collections with respect to repurchased or
expired Contracts.
"FDIC" shall mean the Federal Deposit Insurance Corporation,
or any successor thereto.
"Financed Items" means, with respect to a Contract, the
specifically identified Equipment and other property, together with all
accessions thereto, securing indebtedness of an Obligor under such Contract.
"Financing Agreement" means each financing agreement covering
Financed Items other than a CSA, a Secured Note or a Lease.
"Fitch" means Fitch IBCA, Inc. or any successor thereto.
"Governmental Authority" means the United States of America,
any state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
"Highest Required Investment Category" means (i) with respect
to ratings assigned by Fitch (if such investment is rated by Fitch), F1+ for
short-term instruments and AAA for long-term instruments, (ii) with respect to
ratings assigned by Moody's, A2 or P-1 for one month instruments, A1 or P-1 for
three month instruments, Aa3 or P-1 for
-16-
<PAGE> 24
six month instruments and Aaa or P-1 for instruments with a term in excess of
six months and (iii) with respect to ratings assigned by S&P, A-1+ for
short-term instruments and AAA for long-term instruments.
"Holder" means (i) with respect to a Certificate, the Person
in whose name such Certificate is registered in the Certificate Register, and
(ii) with respect to a Note, the Person in whose name such Note is registered in
the Note Register.
"Indebtedness" means, with respect to any Person at any date,
(a) all indebtedness of such person for borrowed money or for the deferred
purchase price of property or services (other than current liabilities incurred
in the ordinary course of business and payable in accordance with customary
trade practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under capital leases, (c) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person, and (d) all liabilities secured by any Lien on any
property owned by such Person even though such person has not assumed or
otherwise become liable for the payment thereof.
"Indenture" means the Indenture, dated as of the date hereof,
between the Trust and the Indenture Trustee.
"Indenture Trustee" means the Person acting as Indenture
Trustee under the Indenture, its successors in interest and any successor
trustee under the Indenture.
"Independent", when used with respect to any specified Person,
means such a Person who (i) is in fact independent of each of the Trust, the
Trust Depositor or the Servicer, (ii) is not a director, officer or employee of
any Affiliate of any of the Trust, the Trust Depositor or the Servicer, (iii) is
not a person related to any officer or director of any of the Trust, the Trust
Depositor or the Servicer or any of their respective Affiliates, (iv) is not a
holder (directly or indirectly) of more than 10% of any voting securities of any
of the Trust, the Trust Depositor or the Servicer or any of their respective
Affiliates, and (v) is not connected with any of the Trust, the Trust Depositor
or the Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Ineligible Contract" has the meaning specified in Section
11.01.
"Initial Class A-1 Principal Amount" means $ .
"Initial Class A-2 Principal Amount" means $ .
"Initial Class A-3 Principal Amount" means $ .
-17-
<PAGE> 25
"Initial Class A-4 Principal Amount" means $ .
"Initial Class B Principal Amount" means $ .
"Initial Class C Principal Amount" means $ .
"Initial Contracts" means those Contracts conveyed to the
Trust on the Closing Date.
"Initial Cutoff Date" means , 2000.
"Initial Principal Amount" means, when used in the context of
a reference to an individual Class of Notes, the initial class principal amount
applicable to such Class as defined above, and otherwise means, collectively,
the sum of the Initial Class A-1 Principal Amount, the Initial Class A-2
Principal Amount, the Initial Class A-3 Principal Amount, the Initial Class A-4
Principal Amount, the Initial Class B Principal Amount and the Initial Class C
Principal Amount, i.e., $ .
"Insolvency Event" means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable Insolvency Law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed or undismissed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
person of a voluntary case under any applicable Insolvency Law now or hereafter
in effect, or the consent by such person to the entry of an order for relief in
an involuntary case under such law, taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for such Person
or for any substantial part of this property, or the making by such Person of
any general assignment for the benefit of creditors, or the failure by such
Person generally to pay its debts as such debts become due, or the taking of
action by such Person in furtherance of any of the foregoing.
"Insolvency Laws" means the Bankruptcy Code of the United
States of America and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, or similar debtor relief laws from time to time in
effect affecting the rights of creditors generally.
"Insolvency Proceeds" has the meaning specified in Section
10.01.
-18-
<PAGE> 26
"Insurance Policy" means, with respect to any Contract, an
insurance policy covering physical damage to or loss of the related Equipment.
"Insurance Proceeds" means, depending on the context, any
amounts payable or any payments made, to the Servicer under any Insurance
Policy.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time.
"Investment Earnings" means the investment earnings (net of
losses and investment expenses) on amounts on deposit in the Collection Account
and the Reserve Fund, to be credited to the Collection Account on such
Distribution Date pursuant to Section 7.03.
"Late Charges" means any late payment fees paid by Obligors in
accordance with the Servicer's customary policies.
"Lease" means each agreement, including financing agreements,
and, as applicable, schedules, subschedules, supplements and amendments to a
master lease, pursuant to which the Originator, as lessor, leased specified
assets to a Lessee at a specified monthly, quarterly, semiannual or annual
rental.
"Lessee" means, with respect to any Lease, the Obligor with
respect to such Lease.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), equity interest, participation interest, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing.
"Liquidation Expenses" means, with respect to any Contract,
the aggregate amount of all out-of-pocket expenses reasonably incurred by the
Servicer (including amounts paid to any subservicer) and any reasonably
allocated costs of internal counsel, in each case in accordance with the
Servicer's customary procedures in connection with the repossession,
refurbishing and disposition of any related Equipment upon or after the
expiration or earlier termination of such Contract and other out-of-pocket costs
related to the liquidation of any such Equipment, including the attempted
collection of any amount owing pursuant to such Contract if it is a Defaulted
Contract, but only to the extent gross recoveries with respect to such Contract
provide funds sufficient, after payment of all
-19-
<PAGE> 27
principal and accrued finance charges due with respect to such Contract, to
cover such expenses and costs.
"Liquidation Proceeds" means, with respect to a Defaulted
Contract, proceeds from the sale, lease or re-lease of the Equipment, proceeds
of the related Insurance Policy and any other recoveries with respect to such
Defaulted Contract and the related Equipment, net of Liquidation Expenses and
amounts, if any, so received that are required either to be refunded to the
Obligor on such Contract or paid to a third party other than the Originator.
"List of Contracts" means the list identifying each Contract
constituting part of the Trust Assets, which list shall consist of the initial
List of Contracts reflecting the Initial Contracts transferred to the Trust on
the Closing Date, together with any Subsequent List of Contracts amending the
most current List of Contracts reflecting the Substitute Contracts transferred
to the Trust on the related Subsequent Transfer Date (together with a deletion
from such list of the related Contract or Contracts identified on the
corresponding Addition Notice with respect to which a Substitution Event has
occurred), and which list in each case (a) identifies each Contract included in
the Contracts Pool, and (b) sets forth as to each such Contract (i) the
Outstanding Principal Balance as of the applicable Cutoff Date, and (ii) the
maturity date, and which list (as in effect on the Closing Date) is attached to
this Agreement as Exhibit G.
"Material Modification" means a termination or release
(including pursuant to prepayment), or an amendment, modification or waiver, or
equivalent similar undertaking or agreement, by the Servicer with respect to a
Contract which would not otherwise be permitted under the standards and criteria
set forth in Sections 5.08 and/or 5.09 hereof, as applicable.
"Maturity Date" means, as applicable, the Class A-1 Maturity
Date, Class A-2 Maturity Date, Class A-3 Maturity Date, Class A-4 Maturity Date,
Class B Maturity Date or Class C Maturity Date.
"Monthly Delinquency Percentage" means with respect to any
Distribution Date, the percentage equivalent of a fraction, (a) the numerator of
which is the aggregate Principal Balance of all Contracts which are more than 90
days delinquent as of the last day of the immediately preceding Collection
Period, and (b) the denominator of which is the Pool Balance as of the last day
of the immediately preceding Collection Period.
"Monthly Principal Amount" means, with respect to a
Distribution Date, the difference between (i) the sum of the aggregate Principal
Amount of the Notes and the Overcollateralization Balance both as of the
immediately preceding Distribution Date
-20-
<PAGE> 28
(after making any principal payments on such date) and (ii) the Pool Balance as
of the last day of the related Collection Period.
"Monthly Report" has the meaning specified in Section 9.01.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Note" means any one of the notes of the Trust of any Class
executed and authenticated in accordance with the Indenture.
"Note Distribution Account" means the account established and
maintained as such pursuant to Section 7.01.
"Note Register" has the meaning given such term in Section
2.04 of the Indenture.
"Obligor" means, with respect to any Contract, the Person or
Persons obligated to make payments with respect to such Contract, including any
guarantor thereof.
"OCAI" has the meaning assigned such term in the preamble
hereto.
"OCAI Transfer Agreement" means the OCAI Transfer Agreement,
dated as of the date hereof, between OCAI and the Trust Depositor.
"Officer's Certificate" shall mean a certificate signed by any
officer of the Trust Depositor or the Servicer and delivered to the Owner
Trustee or the Indenture Trustee, as the case may be.
"Opinion of Counsel" means a written opinion of counsel, who
may be outside counsel, or internal counsel (except with respect to Federal
securities law (including the Trust Indenture Act) or tax law matters), for the
Trust Depositor or the Servicer and who shall be reasonably acceptable to the
Owner Trustee or the Indenture Trustee, as the case may be.
"Original Pool Balance" means the aggregate Principal Balance
of the Contracts transferred to the Trust as of , 2000,
equal to $ .
"Originator" means OCAI, in its capacity as Originator of a
Contract under this Agreement (including in respect of a Substitute Contract
pursuant to a Subsequent Purchase Agreement).
-21-
<PAGE> 29
"Outstanding" has the meaning given such term in the
Indenture.
"Overcollateralization Balance" means, with respect to a
Distribution Date, an amount equal to the excess, if any, of (i) the Pool
Balance as of the last day of the related Collection Period over (ii) the
aggregate Principal Amount of the Notes as of such date after giving effect to
all principal payments made to the Noteholders on such date.
"Owner Trustee" means the Person acting, not in its individual
capacity, but solely as Owner Trustee, under the Trust Agreement, its successors
in interest and any successor owner trustee under the Trust Agreement.
"Paying Agent" means as described in Section 3.03 of the
Indenture and Section 3.10 of the Trust Agreement.
"Permitted Liens" means (a) with respect to Contracts in the
Contracts Pool:
(i) Liens for state, municipal and other local taxes if such
taxes shall not at the time be due and payable or if the Trust
Depositor shall currently be contesting the validity thereof in good
faith by appropriate proceedings, (ii) Liens in favor of the Trust
Depositor created by the Originator and transferred to the Trust
pursuant hereto, (iii) Liens in favor of the Trust created pursuant to
this Agreement, and (iv) Liens in favor of the Indenture Trustee
created pursuant to the Indenture and/or this Agreement;
and (b) with respect to the related Equipment:
(i) materialmen's, warehousemen's, mechanics' and other liens
arising by operation of law in the ordinary course of business for sums
not due or sums which are being contested in good faith, (ii) Liens for
state, municipal and other local taxes if such taxes shall not at the
time be due and payable or if the Trust Depositor shall currently be
contesting the validity thereof in good faith by appropriate
proceedings, (iii) Liens in favor of the Trust Depositor created by the
Originator and transferred by the Trust Depositor to the Trust pursuant
to this Agreement, (iv) Liens in favor of the Trust created pursuant to
this Agreement, (v) Liens in favor of the Indenture Trustee created
pursuant to the Indenture and/or this Agreement, (vi) other liens which
are expressly subordinate to the prior payment of the Notes and the
Certificate on terms described herein, (vii) Liens granted by the
End-Users which are subordinate to the interest of the Trust in such
Equipment and (viii) Liens on items of Related Security in favor of
-22-
<PAGE> 30
the Originator that arise by virtue of a blanket lien granted by an
Obligor to the Originator.
"Person" means any individual, corporation, estate,
partnership, business trust, limited liability company, sole proprietorship,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof or other entity.
"Pool Balance" means, with respect to a Distribution Date, an
amount equal to the aggregate remaining Principal Balance of the Contracts as of
the last day of the related Collection Period after giving effect to Defaulted
Contracts, Prepaid Contracts, Ineligible Contracts and Excess Contracts.
"Prepaid Contract" means any Contract that has terminated or
been prepaid in full prior to its scheduled expiration date (including because
of a Casualty Loss), other than a Defaulted Contract.
"Prepayment Amount" has the meaning specified in Section 5.09.
"Prepayments" means any and all partial and full prepayments
on a Contract (including, with respect to any Contract and any Collection
Period, any Scheduled Payment (or portion thereof) which is due in a subsequent
Collection Period which the Servicer has received, and (if such Contract is not
otherwise prepayable by its terms) expressly permitted the related Obligor to
make, in advance of its scheduled due date, and any and all cash proceeds or
rents realized from the sale, lease, re-lease or re-financing of Equipment under
a Prepaid Contract, net of Liquidation Expenses), Liquidation Proceeds, amounts
received in respect of Transfer Deposit Amounts and payments upon an optional
termination pursuant to Section 11.03.
"Principal Amount" means, with respect to a Class of Notes,
the aggregate Initial Principal Amount thereof reduced by (i) the aggregate
amount of any distributions applied in reduction of such principal amount and
(ii) the aggregate amount of any distributions then on deposit in the Note
Distribution Account, if any, for such Class of Notes established in accordance
with the Indenture and to be applied in reduction of such principal amount in
accordance with such Indenture.
"Principal Balance" means, with respect to a Contract at any
time, the sum of the total remaining amounts of principal payable as of such
time to the Originator by the Obligor thereunder, exclusive of finance charges.
"Prospectus" has the meaning given such term in the
Underwriting Agreement.
-23-
<PAGE> 31
"Qualified Eligible Investments" means Eligible Investments
acquired by the Indenture Trustee in its name and in its capacity as Indenture
Trustee at the written direction of the Issuer, which are held by the Indenture
Trustee in the Collection Account or the Reserve Fund and with respect to which
(a) the Indenture Trustee has noted its interest therein on its books and
records, and (b) the Indenture Trustee has purchased such investments at the
written direction of the Issuer for value without notice of any adverse claim
thereto (and, if such investments are securities or other financial assets or
interests therein, within the meaning of Section 8-102 of the UCC as enacted in
Illinois, without acting in collusion with a securities intermediary in
violating such securities intermediary's obligations to entitlement holders in
such assets, under Section 8-504 of such UCC, to maintain a sufficient quantity
of such assets in favor of such entitlement holders), and (c) either (i) such
investments are in the possession of the Indenture Trustee, or (ii) such
investments, (A) if certificated securities and in bearer form, have been
delivered to the Indenture Trustee, or in registered form, have been delivered
to the Indenture Trustee and either registered by the issuer in the name of the
Indenture Trustee or endorsed by effective endorsement to the Indenture Trustee
or in blank; (B) if uncertificated securities, the ownership of which has been
registered to the Indenture Trustee on the books of the issuer thereof (or
another person, other than a securities intermediary, either becomes the
registered owner of the uncertified security on behalf of the Indenture Trustee
or, having previously become the registered owner, acknowledges that it holds
for the Indenture Trustee); or (C) if securities entitlements (within the
meaning of Section 8-102 of the UCC as enacted in Illinois) representing
interests in securities or other financial assets (or interests therein) held by
a securities intermediary (within the meaning of said Section 8-102), a
securities intermediary indicates by book entry that a security or other
financial asset has been credited to the Indenture Trustee's securities account
with such securities intermediary. Any such Qualified Eligible Investment may be
purchased by or through the Indenture Trustee or any of its Affiliates acting at
the written direction of the Issuer.
"Qualified Institution" means (a) the corporate trust
department of the Indenture Trustee, or (b) a depository institution organized
under the laws of the United States of America or any one of the states thereof
or the District of Columbia (or any domestic branch of a foreign bank), (i) (A)
which has either (1) a long-term unsecured debt rating acceptable to the Rating
Agencies, or (2) a short-term unsecured debt rating or certificate of deposit
rating acceptable to the Rating Agencies, (B) the parent corporation of which
has either (1) a long-term unsecured debt rating acceptable to the Rating
Agencies, or (2) a short-term unsecured debt rating or certificate of deposit
rating acceptable to the Rating Agencies, or (C) is otherwise acceptable to the
Rating Agencies, and (ii) whose deposits are insured by the FDIC and have a
rating acceptable to the Rating Agencies.
-24-
<PAGE> 32
"Rating Agency" means each of Moody's, S&P and Fitch, so long
as such Persons maintain a rating on the Notes and the Certificate; and if
either Moody's, S&P or Fitch no longer maintains a rating on the Notes and the
Certificate, such other nationally recognized statistical rating organization
selected by the Trust Depositor.
"Rating Agency Condition" means, with respect to any action or
series of related actions or proposed transaction or series of related proposed
transactions, that each Rating Agency shall have notified the Trust Depositor
and the Owner Trustee and the Indenture Trustee in writing that such action or
series of related actions or the consummation of such proposed transaction or
series of related transactions will not result in a Ratings Effect.
"Ratings Effect" means, with respect to any action or series
of related actions or proposed transaction or series of related proposed
transactions, a reduction or withdrawal of the rating of any outstanding Class
with respect to which a Rating Agency
has previously issued a rating as a result of such action or series of related
actions or the consummation of such proposed transaction or series of related
transactions.
"Record Date" means, with respect to a Distribution Date, the
calendar day immediately preceding a Distribution Date; provided, however, that
if Definitive Notes are issued, the Record Date shall be the last Business Day
of the preceding calendar month.
"Recoveries" means any and all recoveries on account of a
Defaulted Contract, including, without limitation, any and all cash proceeds or
rents realized from the sale, lease, re-lease or re-financing of repossessed
Equipment or other property, Insurance Proceeds, but in each case net of
Liquidation Expenses.
"Related Security" means, with respect to a Contract,
collateral in which a security interest has been granted or is held under or in
connection with such Contract, other than collateral which is a Financed Item.
"Released Amounts" means, with respect to any payment or
collection received with respect to any Contract on any Business Day (whether
such payment or collection is received by the Servicer, the Owner Trustee or the
Trust Depositor), an amount equal to that portion of such payment or collection
constituting Excluded Amounts.
"Required Holders" means (i) prior to the payment in full of
the Class A Notes Outstanding, Class A-1 Noteholders, Class A-2 Noteholders,
Class A-3 Note holders and/or Class A-4 Noteholders evidencing more than 66 2/3%
of the Aggregate Principal Amount of all Class A Notes Outstanding, (ii) from
and after the payment in
-25-
<PAGE> 33
full of the Class A Notes Outstanding, Class B Noteholders evidencing more than
66 2/3% of the Aggregate Principal Amount of all Class B Notes Outstanding, and
(iii) from and after the payment in full of the Class B Notes Outstanding, Class
C Noteholders evidencing more than 66 2/3% of the Aggregate Principal Amount of
all Class C Notes Outstanding.
"Required Reserve Amount" means, with respect to a
Distribution Date, an amount equal to the greater of (a) % of the Outstanding
Principal Amount of the Notes as of the last day of the immediately completed
Collection Period and (b) the lesser of (I) % of the Initial Principal Amount
of the Notes and (II) the Outstanding Principal Amount of the Notes as of the
last day of the related Collection Period.
"Requirements of Law" for any Person means the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
order or determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Reserve Fund" means the Reserve Fund established and
maintained pursuant to Section 7.01 hereof.
"Reserve Fund Initial Deposit" means $ .
"Responsible Officer" means, with respect to the Owner
Trustee, any officer in its Corporate Trust Administration Department (or any
similar group of a successor Owner Trustee) and with respect to the Indenture
Trustee has the meaning given to it in the Indenture.
"S&P" means Standard & Poor's Ratings Services, a division of
the McGraw-Hill Companies.
"Scheduled Payment" means, with respect to any Contract, the
monthly or quarterly or semi-annual or annual rent or financing (whether
interest, principal or principal and interest) payment scheduled to be made by
the related Obligor under the terms of such Contract after the related Cutoff
Date and any such payment received after the related Cutoff Date; it being
understood that Scheduled Payments do not include any Excluded Amounts.
"Secured Note" means each promissory note with a related
security inter est evidenced by written agreement, pursuant to which the
purchase of specified assets by
-26-
<PAGE> 34
an Obligor is financed or provided as collateral security for specified monthly,
quarterly, semiannual or annual payments.
"Securities" means the Notes and the Certificate, or any of
them.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Securityholders" means the Holders of the Notes or the
Certificate.
"Servicer" means initially OCAI, or its successor, until any
Servicer Transfer hereunder and thereafter means the Successor Servicer
appointed pursuant to Article VIII below with respect to the duties and
obligations required of the Servicer under this Agreement.
"Servicer Advance" means, with respect to any Distribution
Date, the amounts, if any, deposited by the Servicer in the Collection Account
for such Distribution Date in respect of Scheduled Payments pursuant to Section
5.14.
"Servicer Default" shall have the meaning specified in
Section 8.01.
"Servicing Fee" has the meaning specified in Section 5.18.
"Servicing Fee Percentage" means %.
"Servicer Transfer" has the meaning assigned in Section
8.02(a).
"Servicing Officer" means any officer of the Servicer involved
in, or responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Indenture Trustee by the Servicer, as the same may be amended
from time to time.
"Solvent" means, as to any Person at any time, that (a) the
fair value of the Property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for
purposes of Section 101(32) of the Bankruptcy Code; (b) the present fair
saleable value of the Property of such Person in an orderly liquidation of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured; (c)
such Person is able to realize upon its Property and pay its debts and other
liabilities (including disputed, contingent and unliquidated liabilities) as
they mature in the normal course of business; (d) such Person does not intend
to, and does not believe that it will, incur debts or
-27-
<PAGE> 35
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in a business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Spread Event" means the occurrence of one or more of the
following: (a) OCAI or a successor to OCAI as described in Section 13.13(b) is
no longer acting as the Servicer; (b) the Three-Month Delinquency Percentage
calculated on the related distribution date is greater than %; or (c) the
Cumulative Net Loss Percentage on the related Distribution Date exceeds the
"loss trigger percentage" set forth below:
<TABLE>
<CAPTION>
LOSS TRIGGER
COLLECTION PERIOD PERCENTAGE
<S> <C>
1st through, and including, the 11th Collection Period: %
12th through, and including, the 17th Collection Period: %
18th through, and including, the 23rd Collection Period: %
24th Collection Period ongoing: %.
</TABLE>
Notwithstanding the foregoing: (i) the Spread Event referred
to in clause (b) above may be cured on any Distribution Date if the Three-Month
Delinquency Percentage for the immediately preceding two Collection Periods is
less than or equal to % and (ii) the Spread Event referenced in clause
(c) may be cured if the Cumulative Net Loss Percentage is less than the
associated "loss trigger percentage" for that Collection Period.
"Spread Fund" means the Spread Fund established and maintained
pursuant to Section 7.01 hereof.
"Subsequent Cutoff Date" means the date specified as such for
Substitute Contracts in the related Subsequent Transfer Agreement.
"Subsequent List of Contracts" means a list, in the form of
the initial List of Contracts delivered on the Closing Date, but listing each
Substitute Contract transferred to the Trust pursuant to the related Subsequent
Transfer Agreement.
"Subsequent Purchase Agreement" means, with respect to any
Substitute Contracts, the agreement between the Originator and the Trust
Depositor pursuant to which the Originator will transfer the Substitute
Contracts to the Trust Depositor, the form of which is attached to hereto as
Exhibit J.
"Subsequent Transfer Agreement" means the agreement described
in Section 2.04 hereof.
-28-
<PAGE> 36
"Subsequent Transfer Date" means any date on which Substitute
Contracts are transferred to the Trust.
"Substitute Contract" means a Contract that is (a) transferred
to the Trust under Section 2.04 with respect to which a related Substitution
Event has occurred with respect to a Contract or Contracts then held in the
Contracts Pool and identified in the related Addition Notice and (b) becomes
part of the Contracts Pool.
"Substitute Contract Qualification Conditions" means, with
respect to any Substitute Contract being transferred to the Trust pursuant to
Section 2.04, the accuracy of each of the following statements as of the related
Cutoff Date for such Contract:
(a) the aggregate Principal Balance of such Substitute
Contract is not less than that of the Contract or Contracts identified
on the related Addition Notice as the Contract or Contracts to be
released by the Trust to the Trust Depositor and reconveyed to the
Originator in exchange for such Substitute Contract; and
(b) for each separate Collection Period which corresponds to a
Collection Period in which a payment would have been owing on the
Contract or Contracts identified on the related Addition Notice as the
Contract or Contracts to be released by the Trust to the Trust
Depositor and reconveyed to the Originator in exchange for such
Substitute Contract, the amount in respect of Scheduled Payments
receivable (assuming Scheduled Payments are paid and received when due)
on the Substitute Contract in such Collection Period is not less than
that of such related Contract or Contracts;
(c) the weighted average life of the Substitute Contract is
similar to the weighted average life of the Contract or Contracts
identified on the related Addition Notice as the Contract or Contracts
to be released by the Trust to the Trust Depositor and reconveyed to
the Originator in exchange for such Substitute Contract;
(d) the weighted average yield (annual percentage rate or APR)
on such Substitute Contracts is not less than the yield (APR) on the
Contract or Contracts identified on the related Addition Notice as the
Contract or Contracts to be released by the Trust to the Trust
Depositor and reconveyed to the Originator in exchange for such
Substitute Contract; and
(e) if, instead of such Substitute Contract being added to the
Contracts Pool on the related Subsequent Transfer Date, such Substitute
Contract had instead been included in the Contracts Pool as of the
Initial Cutoff Date, and the
-29-
<PAGE> 37
related Contract or Contracts identified on the related Addition Notice
were not so included (and assuming such hypothetical inclusion
satisfied the criteria set forth in clause (a) and (b) above that would
have been applicable at such time), the representations of the
Originator set forth in Section 3.05(a)(i)-(iv) concerning
concentrations would not, as a result of such inclusion, have become
inaccurate or incorrect in any material respect;
(f) no adverse selection procedure shall have been employed in
the selection of such Substitute Contract from the Originator's
portfolio;
(g) all actions or additional actions (if any) necessary to
perfect the security interest and assignment of such Substitute
Contract and related Equipment to the Trust Depositor, Trust, and
Indenture Trustee shall have been taken as of or prior to the
Subsequent Transfer Date; and
(h) the maturity date for the last Scheduled Payment due under
such Substitute Contract is not later than , 20 .
"Substitution Event" shall have occurred if one or more
Contracts then held in the Trust and identified in the related Addition Notice
is either (a) a Prepaid Contract, (b) a Contract that becomes subject to a
Material Modification, (c) a Defaulted Contract, (d) an Excess Contract or (e)
the subject of a breach of a representation or warranty under this Agreement or
other provision which breach or other provision, in the absence of a
substitution of a Substitute Contract for such Contract or Contracts pursuant to
Section 2.04, would require the payment of a Transfer Deposit Amount to the
Trust in respect of such Contract pursuant to Section 11.01; provided, however,
that no Substitution Event shall be deemed to occur under clause (a) (if related
to a Casualty Loss), (b) or (c) to the extent Contracts having initial aggregate
Principal Amounts of 10% or greater of the Original Pool Balance have previously
been substituted for under such clauses and provided further, that no
Substitution Event shall be deemed to occur under clause (a) (other than related
to a Casualty Loss), (d) or (e) to the extent (i) the Trust Depositor has not
consented to such substitution, (ii) Contracts having initial aggregate
Principal Amounts of 20% or greater of the Original Pool Balance have previously
been substituted under such clauses or (iii) the Class A-1 Notes are
Outstanding.
"Successor Servicer" has the meaning given such term in
Section 8.02(b).
"Tax Opinion" means, with respect to any action, an Opinion of
Counsel to the effect that, for federal income tax purposes, (i) following such
action the Trust will not be deemed to be an association (or publicly traded
partnership) taxable as a corporation, (ii) following such action the Trust will
be disregarded as a separate entity
-30-
<PAGE> 38
from the Trust Depositor, and (iii) such action will not affect the tax
characterization as debt of Notes of any outstanding Class issued by the Trust
for which an Opinion of Counsel has been provided that such Notes are debt.
"Three-Month Delinquency Percentage" means with respect to any
Distribution Date commencing with the third Distribution Date, the percentage
equivalent of a fraction, (a) the numerator of which is the sum of the Monthly
Delinquency Percentages for such Distribution Date and the two immediately
preceding Distribution Dates, and (b) the denominator of which is three.
"Transaction Documents" means this Agreement, the Indenture,
the Trust Agreement, the Administration Agreement, the OCAI Transfer Agreement,
any Subsequent Transfer Agreement, any Subsequent Purchase Agreement and the
Underwriting Agreement.
"Transfer Date" means the Business Day immediately preceding
each Distribution Date.
"Transfer Deposit Amount" means, with respect to each
Ineligible Contract or Excess Contract, on any date of determination, the sum of
the Principal Balances of such Contracts, together with accrued interest thereon
through such date of determination at the interest rate provided for thereunder,
and any outstanding Servicer Advances thereon that have not been waived by the
Servicer entitled thereto.
"Trust" means the trust created by the Trust Agreement and
funded pursuant to this Agreement, consisting of the Trust Assets.
"Trust Account Property" means the Trust Accounts, all amounts
and investments held from time to time in any Trust Account (whether in the form
of deposit accounts, physical property, book-entry securities, uncertificated
securities or otherwise), including without limitation the Reserve Fund Initial
Deposit, and all proceeds of the foregoing.
"Trust Accounts" means, collectively, the Collection Account,
the Reserve Fund and the Note Distribution Account, or any of them.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of the date hereof, between the Trust Depositor and the
Owner Trustee.
"Trust Assets" has the meaning given to such term in Section
2.01(b) hereof (and in Section 2.04(a) hereof in respect of Substitute Contracts
and related assets transferred to the Trust pursuant to Subsequent Transfer
Agreements).
-31-
<PAGE> 39
"Trust Depositor" has the meaning assigned such term in the
preamble hereunder, or any successor entity thereto.
"Trust Estate" shall have the meaning specified in the Trust
Agreement.
"Trustees" means the Owner Trustee and the Indenture Trustee,
or any of them individually as the context may require.
"UCC" means the Uniform Commercial Code as enacted in New
Jersey; provided, however, in the event that, by reason of mandatory provisions
of law, any and all of the attachment, perfection or priority of the Lien of the
Trust in and to the Trust Assets or the Lien of the Indenture Trustee in and to
the Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New Jersey, the term UCC shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
"UCC Filing Locations" means the States of New Jersey and
Delaware.
"Uncollectible Advance" means with respect to any
Determination Date and any Contract, the amount, if any, advanced by the
Servicer pursuant to Section 5.14 which the Servicer has as of such
Determination Date determined in good faith will not be ultimately recoverable
by the Servicer.
"Underwriting Agreement" means the Underwriting Agreement,
dated , 2000, among First Union Securities, Inc. (as an underwriter thereunder),
the Trust Depositor, and OCAI.
"United States" means the United States of America.
"Unreimbursed Servicer Advances" means, at any time, the
amount of all previous Servicer Advances (or portions thereof) as to which the
Servicer has not been reimbursed as of such time pursuant to Sections 7.01 or
7.05 and which the Servicer has determined in its sole discretion are
Uncollectible Advances, and with respect to which the Servicer has given a
written certification to such effect to each Trustee.
"Vendor" means, with respect to a Contract, the equipment
manufacturer, dealer or distributor, or other Person that provided financing
under such Contract in connection with the acquisition or use by an End-User of
such party's Equipment or other products.
-32-
<PAGE> 40
"Vendor Assignment" means each assignment agreement pursuant
to which an individual End-User Contract originated by a Vendor is assigned to
the Originator.
"Vice President" of any Person means any vice president of
such Person, whether or not designated by a number or words before or after the
title "Vice President," who is a duly elected officer of such Person.
SECTION 1.02. USAGE OF TERMS. With respect to all terms in
this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other genders; references to "writing"
include printing, typing, lithography and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all amendments, modifications and supplements thereto or any changes therein
entered into in accordance with their respective terms and not prohibited by
this Agreement; references to Persons include their permitted successors and
assigns; and the term "including" means "including without limitation."
SECTION 1.03. SECTION REFERENCES. All section references,
unless otherwise indicated, shall be to Sections in this Agreement.
SECTION 1.04. CALCULATIONS. Except as otherwise provided
herein, all interest rate and basis point calculations hereunder will be made on
the basis of a 360-day year and twelve 30-day months and will be carried out to
at least three decimal places.
SECTION 1.05. ACCOUNTING TERMS. All accounting terms used but
not specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.
ARTICLE TWO
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACT ASSETS
SECTION 2.01. CREATION AND FUNDING OF TRUST; TRANSFER OF
CONTRACT ASSETS. (a) The Trust shall be created pursuant to the terms and
conditions of the Trust Agreement, upon the execution and delivery of the Trust
Agreement and the filing by the Owner Trustee of an appropriately completed
Certificate of Trust (as defined in the Trust Agreement) under the Business
Trust Statute. The Trust Depositor, as settlor of the Trust, shall fund and
convey assets to the Trust pursuant to the terms and provisions hereof. The
Trust shall be administered pursuant to the provisions of this Agreement, the
Administration Agreement and the Trust Agreement for the benefit of the
Noteholders and Certificateholder. The Owner Trustee is hereby specifically
recognized by the parties
-33-
<PAGE> 41
hereto as empowered to conduct business dealings on behalf of the Trust in
accordance with the terms hereof and of the Trust Agreement.
(b) Subject to and upon the terms and conditions set forth
herein, the Trust Depositor hereby sells, transfers, assigns, sets over and
otherwise conveys to the Trust, for a purchase price consisting of $ in cash
(less underwriting expenses and certain other expenses associated with the
initial offer and sale of the Notes the proceeds of which represent the
consideration paid by the Trust herein) and the Certificate of the Trust in the
original certificate balance of $ , all the right, title and interest of the
Originator in and to (items (i) - (vi) below, being collectively referred to
herein as the "Contract Assets"):
(i) the Initial Contracts, and all monies received in
payment of such Contracts on and after the Initial Cutoff Date, any
Prepayment Amounts, any payments in respect of a casualty or early
termination, and any Recoveries received with respect thereto, but
excluding any Excluded Amounts;
(ii) the Equipment related to such Contracts,
including the security interest of the Trust Depositor in such
Equipment and all proceeds from any sale or other disposition of such
Equipment (but subject to the exclusion and release herein of Excluded
Amounts) and Related Security;
(iii) the Contract Files;
(iv) all payments made or to be made in the future
with respect to such Contracts or the Obligor thereunder under any
Vendor Assignments and under any guarantee or similar credit
enhancement with respect to such Contracts;
(v) all Insurance Proceeds with respect to each such
Contract; and
(vi) all income from and proceeds of the foregoing.
In addition to the Contract Assets, the Trust Depositor hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trust the remittances, deposits
and payments made into the Trust Accounts from time to time, amounts in the
Trust Accounts from time to time (and any investments of such amounts) and all
proceeds and products of the foregoing, which together with the Contract Assets
constitute the corpus of the Trust and are referred to as the "Trust Assets").
(c) The Originator and the Trust Depositor acknowledge that
the representations and warranties of the Originator in Sections 3.01, 3.02,
3.03, 3.04 and
-34-
<PAGE> 42
3.05 will run to and be for the benefit of the Trust and the Trustees and the
Trust and the Trustees may enforce directly without joinder of Trust Depositor,
the repurchase obligations of the Originator with respect to breaches of such
representations and warranties as set forth herein and in Section 11.01.
(d) The sale, transfer, assignment, set-over and conveyance of
the Trust Assets by the Trust Depositor to the Trust pursuant to this Agreement
does not constitute and is not intended to result in a creation or an assumption
by the Trust Depositor or the Trust of any obligation of the Originator in
connection with the Contract Assets, or any agreement or instrument relating
thereto, including, without limitation, any obligation to any Obligor or
End-User, if any, not financed by the Originator, or (1) any taxes, fees, or
other charges imposed by any Governmental Authority and (2) any insurance
premiums which remain owing with respect to any Contract at the time such
Contract is sold hereunder.
(e) The Originator, Trust Depositor and Trust intend and agree
that (i) the transfer of the Contract Assets to the Trust Depositor and the
transfer of the Trust Assets to the Trust are intended to be a sale, conveyance
and transfer of ownership of the Contract Assets and Trust Assets, as the case
may be, rather than the mere granting of a security interest to secure a
borrowing and (ii) such Contract Assets and Trust Assets shall not be part of
the Originator's or the Trust Depositor's estate in the event of a filing of a
bankruptcy petition or other action by or against such Person under any
Insolvency Law. In the event, however, that notwithstanding such intent and
agreement, such transfers are deemed to be of a mere security interest to secure
indebtedness, the Originator shall be deemed to have granted the Trust Depositor
and the Trust Depositor shall be deemed to have granted the Trust, as the case
may be, a perfected first priority security interest in such Contract Assets or
Trust Assets respectively and this Agreement shall constitute a security
agreement under applicable law, securing the repayment of the purchase price
paid hereunder and the obligations and/or interests represented by the
Securities, in the order and priorities, and subject to the other terms and
conditions of, this Agreement, the Indenture and the Trust Agreement, together
with such other obligations or interests as may arise hereunder and thereunder
in favor of the parties hereto and thereto.
If any such transfer of the Contract Assets is deemed to be
the mere granting of a security interest to secure a borrowing, the Trust
Depositor may, to secure the Trust Depositor's own borrowing under this
Agreement (to the extent that the transfer of the Contract Assets thereunder is
deemed to be a mere granting of a security interest to secure a borrowing)
repledge and reassign (1) all or a portion of the Contract Assets pledged to
Trust Depositor by the Originator and with respect to which the Trust Depositor
has not released its security interest at the time of such pledge and
assignment, and (2) all proceeds thereof. Such repledge and reassignment may be
made by Trust
-35-
<PAGE> 43
Depositor with or without a repledge and reassignment by Trust Depositor of its
rights under any agreement with the Originator, and without further notice to or
acknowledgment from the Originator. The Originator waives, to the extent
permitted by applicable law, all claims, causes of action and remedies, whether
legal or equitable (including any right of setoff), against Trust Depositor or
any assignee of Trust Depositor relating to such action by Trust Depositor in
connection with the transactions contemplated by this Agreement.
SECTION 2.02. CONDITIONS TO TRANSFER OF TRUST ASSETS TO TRUST.
On or before the Closing Date, the Originator or the Trust Depositor, as
applicable, shall deliver or cause to be delivered to the Owner Trustee and
Indenture Trustee each of the documents, certificates and other items as
follows:
(i) A certificate of an officer of the Originator
substantially in the form of Exhibit C hereto;
(ii) Opinions of counsel for the Originator and the
Trust Depositor substantially in the form of Exhibits D and E hereto
(and including as an addressee thereof each Rating Agency);
(iii) Copies of resolutions of the Board of Directors
of the Originator or of the Executive Committee of the Board of
Directors of the Originator approving the execution, delivery and
performance of this Agreement and the transactions contemplated
hereunder, certified in each case by the Secretary or an Assistant
Secretary of the Originator;
(iv) Officially certified recent evidence of due
incorporation and good standing of the Originator under the laws of New
York;
(v) The initial List of Contracts, certified by the
Chairman of the Board, President or any Vice President of the Trust
Depositor, together with an Assignment substantially in the form of
Exhibit A (along with the delivery of any instruments as required under
Section 2.06 below);
(vi) A certificate of an officer of the Trust
Depositor substantially in the form of Exhibit B hereto;
(vii) A letter from Arthur Andersen LLP, or another
nationally recognized accounting firm, addressed to the Originator and
the Trust Depositor, stating that such firm has reviewed a sample of
the Initial Contracts and performed specific procedures for such sample
with respect to certain contract terms and which identifies those
Initial Contracts which do not conform;
-36-
<PAGE> 44
(viii) Copies of resolutions of the Board of
Directors of the Servicer and the Trust Depositor or of the Executive
Committee of the Board of Directors of the Servicer and the Trust
Depositor approving the execution, delivery and performance of this
Agreement and the other Transaction Documents to which any of them is a
party, as applicable, and the transactions contemplated hereunder and
thereunder, certified in each case by the Secretary or an Assistant
Secretary of the Servicer and the Trust Depositor;
(ix) Officially certified, recent evidence of due
incorporation and good standing of the Trust Depositor under the laws
of Delaware;
(x) Evidence of proper filing with appropriate
offices in the UCC Filing Locations in the State of New Jersey of UCC
financing statements executed by the Originator, as debtor, naming the
Trust Depositor as secured party (and the Owner Trustee as assignee)
and identifying the Contract Assets as collateral; and evidence of
proper filing with appropriate officer in the UCC Filing Locations in
the State of New Jersey of UCC financing statements executed by the
Trust Depositor, as debtor, naming the Owner Trustee as secured party
(and the Indenture Trustee as assignee) and identifying the Trust
Assets as collateral; and evidence of proper filing with appropriate
officers in the UCC Filing Locations in the State of Delaware of UCC
financing statements executed by the Trust and naming the Indenture
Trustee as secured party and identifying the Collateral, as collateral;
(xi) An Officer's Certificate listing the Servicer's
Servicing Officers;
(xii) Evidence of deposit in the Collection Account
of all funds received with respect to the Initial Contracts after the
Initial Cutoff Date to the date two days preceding the Closing Date,
together with an Officer's Certificate from the Servicer to the effect
that such amount is correct;
(xiii) Evidence of deposit in the Reserve Fund of the
Reserve Fund Initial Deposit by the Trust Depositor;
(xiv) A fully executed Trust Agreement;
(xv) A fully executed Administration Agreement;
(xvi) A fully executed Indenture;
(xvii) A fully executed OCAI Transfer Agreement;
-37-
<PAGE> 45
(xviii) An opinion of Sullivan & Cromwell to the
effect that for federal income tax purposes, the Class A Notes, Class B
Notes and Class C Notes will be characterized as debt and the Trust
will not be characterized as an association (or publicly traded
partnership) taxable as a corporation; and
(xix) An opinion of Riker, Danzig, Scherer, Hyland
and Perretti to the effect that for New Jersey tax purposes, the Trust
will not be subject to the New Jersey Corporation Income Tax or the New
Jersey Corporation Business Tax.
SECTION 2.03. ACCEPTANCE BY OWNER TRUSTEE. On the Closing
Date, if the conditions set forth in Section 2.02 have been satisfied, the Trust
shall issue to, or upon the order of, the Trust Depositor the Certificate
representing ownership of a beneficial interest in 100% of the Trust and the
Trust shall issue, and the Indenture Trustee shall authenticate, to, or upon the
order of, the Trust Depositor the Notes secured by the Collateral. The Owner
Trustee hereby acknowledges its acceptance, on behalf of the Trust, of the Trust
Assets, and declares that it shall maintain such right, title and interest in
accordance with the terms of this Agreement and the Trust Agreement upon the
trust herein and therein set forth.
SECTION 2.04. CONVEYANCE OF SUBSTITUTE CONTRACTS.
(a) Conveyance of Substitute Contracts to the Trust Depositor.
Subject to Sections 2.01(d) and (e) above and the satisfaction of the conditions
set forth in paragraph (c) below, at the option of the Trust Depositor, the
Originator may at its option (but shall not be obligated to) sell, transfer,
assign, set over and otherwise convey to the Trust Depositor (by delivery of an
executed Subsequent Purchase Agreement substantially in the form attached as
Exhibit J hereto), without recourse other than as expressly provided herein and
therein (and the Trust Depositor shall be required to purchase through payment
by exchange of one or more related Contracts released by the Trust to the Trust
Depositor on the Subsequent Transfer Date), all the right, title and interest of
the Originator in and to (the property in clauses (i)-(vi) below, upon such
transfer, becoming part of the "Contract Assets"):
(i) the Substitute Contracts identified in the
related Addition Notice, and all monies received in payment of such
Substitute Contracts on and after the related Subsequent Cutoff Dates,
any Prepayment Amounts, any payments in respect of a casualty or early
termination, and any Recoveries received with respect thereto, but
excluding any Excluded Amounts;
(ii) the Equipment related to such Contracts,
including the security interest of the Trust Depositor in such
Equipment and all proceeds from
-38-
<PAGE> 46
any sale or other disposition of such Equipment (but subject to the
exclusion and release herein of Excluded Amounts) and Related Security;
(iii) the Contract Files;
(iv) all payments made or to be made in the future
with respect to such Contracts or the Obligor thereunder under any
Vendor Assignments with the Originator and under any guarantee or
similar credit enhancement with respect to such Contracts;
(v) all Insurance Proceeds with respect to each such
Contract; and
(vi) all income from and proceeds of the foregoing.
(b) Subject to Sections 2.01(d) and (e) above and the
conditions set forth in paragraph (c) below, the Trust Depositor shall sell,
transfer, assign, set over and otherwise convey to the Trust, without recourse
other than as expressly provided herein and therein, (i) all the right, title
and interest of the Trust Depositor in and to the Substitute Contracts purchased
pursuant to Section 2.04(a) above, and (ii) all other rights and property
interests consisting of Contract Assets related to such Substitute Contracts
(the property in clauses (i)-(ii) above, upon such transfer, becoming part of
the "Trust Assets").
(c) The Originator and Trust Depositor shall transfer to the
Trust the Substitute Contracts and the other property and rights related thereto
described in paragraphs (a), in the case of the Originator, or (b), in the case
of the Trust Depositor, above only upon the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date (and
the delivery of a related Addition Notice by the Trust Depositor shall be deemed
a representation and warranty by the Trust Depositor and of the Originator, that
such conditions have been or will be, as of the related Subsequent Transfer
Date, satisfied):
(i) the Trust Depositor shall have provided the Owner
Trustee and the Indenture Trustee with a timely Addition Notice
complying with the definition thereof contained herein, which Notice
shall in any event be no later than five days prior to the date of
addition;
(ii) there shall have occurred, with respect to each
such Substitute Contract, a corresponding Substitution Event with
respect to one or more Contracts then in the Contracts Pool;
-39-
<PAGE> 47
(iii) the Substitute Contract(s) being conveyed to
the Trust, satisfy the Substitute Contract Qualification Conditions;
(iv) the Originator shall have delivered to the Trust
Depositor a duly executed written assignment in substantially the form
of Exhibit J hereto (the "Subsequent Purchase Agreement"), which shall
include a Subsequent List of Contracts listing the Substitute
Contracts;
(v) the Trust Depositor shall have delivered to the
Owner Trustee a duly executed written assignment (including an
acceptance by the Owner Trustee) in substantially the form of Exhibit I
hereto (the "Subsequent Transfer Agreement"), which shall include a
Subsequent List of Contracts listing the Substitute Contracts;
(vi) the Trust Depositor shall have deposited or
caused to be deposited in the Collection Account all Collections
received with respect to the Substitute Contracts on or after the
related Subsequent Cutoff Date;
(vii) as of each Subsequent Transfer Date, neither
the Originator nor the Trust Depositor was insolvent nor will either of
them have been made insolvent by such transfer nor is either of them
aware of any pending insolvency;
(viii) no selection procedures believed by the
Originator or the Trust Depositor to be adverse to the interests of the
Noteholders or Certificateholder shall have been utilized in selecting
the Substitute Contracts;
(ix) each of the representations and warranties made
by the Originator pursuant to Sections 3.02, 3.03, 3.04, and 3.05
applicable to the Substitute Contracts shall be true and correct as of
the related Subsequent Transfer Date (provided that, with respect to
clause (e) of the definition of Substitute Contract Qualification
Conditions, the representations with respect to geographical diversity
shall not apply) and the Originator shall have performed all
obligations to be performed by it hereunder on or prior to such
Subsequent Transfer Date;
(x) the Originator shall, at its own expense, on or
prior to the Subsequent Transfer Date, indicate in its Computer Records
that ownership of the Substitute Contracts identified on the Subsequent
List of Contracts in the Subsequent Transfer Agreement has been sold to
the Trust through the Trust Depositor pursuant to this Agreement;
-40-
<PAGE> 48
(xi) the aggregate Principal Balance of all
Substitute Contracts that shall be substituted for Prepaid Contracts
that relate to a Casualty Loss, Defaulted Contracts and Contracts
subject to a Material Modification cannot exceed 10% of the Original
Pool Balance; and
(xii) the aggregate Principal Balance of all
Substitute Contracts that shall be substituted for Prepaid Contracts,
Excess Contracts and Ineligible Contracts cannot exceed 20% of the
Original Pool Balance; provided, however, that no substitution with
respect to such Prepaid Contracts, Excess Contracts and Ineligible
Contracts shall be made prior to the time the Class A-1 Notes are paid
in full.
SECTION 2.05. RELEASE OF RELEASED AMOUNTS. (a) The Indenture
Trustee hereby agrees to release to the Trust from the Trust Assets, and the
Trust hereby agrees to release to the Trust Depositor, an amount equal to the
Released Amounts immediately upon identification thereof and upon receipt of an
Officer's Certificate of the Servicer, which release shall be automatic and
shall require no further act by the Indenture Trustee or the Trust, provided
that the Indenture Trustee or Owner Trustee shall execute and deliver such
instruments of release and assignment, or otherwise confirm the foregoing
release, as may reasonably be requested by the Trust Depositor in writing. Upon
such release, such Released Amounts shall not constitute and shall not be
included in the Trust Assets.
(b) Immediately upon the release to the Trust Depositor by the
Indenture Trustee of the Released Amounts, the Trust Depositor hereby
irrevocably agrees to release to the Originator such Released Amounts, which
release shall be automatic and shall require no further act by the Trust
Depositor, provided that the Trust Depositor shall execute and deliver such
instruments of release and assignment, or otherwise confirming the foregoing
release of any Excluded Amounts, as may be reasonably requested by the
Originator.
SECTION 2.06. DELIVERY OF INSTRUMENTS. The Originator and the
Trust Depositor shall deliver possession of all "instruments" (within the
meaning of Article 9 of the UCC) not constituting part of "chattel paper"
(within the meaning of such Article 9), which evidence any Contract to the Owner
Trustee on behalf of the Trust on the Closing Date (or, if applicable, on the
relevant Subsequent Transfer Date), in each case endorsed in blank without
recourse. Pursuant to Section 3.05 of the Indenture, the Trust is required to
deliver such instruments to the Indenture Trustee as pledgee under the
Indenture. Accordingly, the Trust hereby authorizes and directs the Originator
and the Trust Depositor to deliver possession of any such instruments to the
Indenture Trustee on behalf of and for the account of the Trust, and agrees that
such delivery shall satisfy the condition set forth in the first sentence of
this Section 2.06. The Originator and the Trust
-41-
<PAGE> 49
Depositor shall also identify on the List of Contracts (including any deemed
amendment thereof associated with any Substitute Contracts), whether by attached
schedule or marking or other effective identifying designation, all Contracts
which are or are evidenced by such instruments.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
The Originator makes, and upon execution of each Subsequent
Purchase Agreement is deemed to make, the following representations and
warranties, on which the Trust Depositor will rely in conveying the Contract
Assets on the Closing Date (and on any Subsequent Transfer Date) to the Trust,
and on which the Trust, the Noteholders and Certificateholder will rely. The
Trust Depositor acknowledges that such representations and warranties are being
made by the Originator for the benefit of the Trust.
Such representations and warranties speak as of the execution
and delivery of this Agreement and as of the Closing Date (or Subsequent
Transfer Date, as applicable), but shall survive the sale, transfer and
assignment of the Contract Assets to the Trust. The repurchase obligation or
substitution obligation of the Originator set forth in Section 11.01 constitutes
the sole remedy available for a breach of a representation or warranty of the
Originator set forth in Sections 3.01, 3.02, 3.03, 3.04 or 3.05 of this
Agreement. Notwithstanding the foregoing, the Originator shall not be deemed to
be remaking any of the representations set forth in Section 3.03 or 3.05 on a
Subsequent Transfer Date with respect to the Substitute Contracts, as such
representations relate solely to the composition of the Initial Contracts
conveyed on the Closing Date, provided that any inaccurate representation as to
concentrations contained in any Addition Notice shall be subject to the same
remedies hereunder as if such representation were made under Section 3.05 on the
Closing Date with respect to an Initial Contract.
SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE
ORIGINATOR. By its execution of this Agreement and each Subsequent Purchase
Agreement, the Originator represents and warrants that:
(a) ORGANIZATION AND GOOD STANDING. The Originator is
a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has the
requisite corporate power to own or lease its assets and to transact
the business in which it is currently engaged. The Originator is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and
-42-
<PAGE> 50
in which the failure so to qualify would have a material adverse effect
on the business, properties, assets, or condition (financial or
otherwise) of the Originator or Trust Depositor. The Originator is
properly licensed in each jurisdiction to the extent required by the
laws of such jurisdiction in order to originate, and (if the Originator
is to be the Servicer) service the Contracts in accordance with the
terms of this Agreement.
(b) AUTHORIZATION; BINDING OBLIGATION. The Originator
has the power and authority to make, execute, deliver and perform this
Agreement and the other Transaction Documents to which the Originator
is a party and all of the transactions contemplated under this
Agreement and the other Transaction Documents to which the Originator
is a party, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement and the other
Transaction Documents to which the Originator is a party. This
Agreement and the other Transaction Documents to which the Originator
is a party constitute the legal, valid and binding obligation of the
Originator enforceable in accordance with their terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and by the availability of equitable remedies.
(c) NO CONSENT REQUIRED. The Originator is not
required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with
the execution, delivery, performance, validity or enforceability of
this Agreement and the other Transaction Documents to which the
Originator is a party.
(d) NO VIOLATIONS. The Originator's execution,
delivery and performance of this Agreement and the other Transaction
Documents to which the Originator is a party will not violate any
provision of any existing law or regulation or any order or decree of
any court or the Certificate of Incorporation or Bylaws of the
Originator, or constitute (with or without notice or lapse of time or
both) a material breach of any mortgage, indenture, contract or other
agreement to which the Originator is a party or by which the Originator
or any of the Originator's properties may be bound.
(e) LITIGATION. No litigation or administrative
proceeding of or before any court, tribunal or governmental body is
currently pending, or to the knowledge of the Originator threatened,
against the Originator or any of its respective properties or with
respect to this Agreement or any other Transaction Document to which
the Originator is a party which, if adversely determined, would in the
opinion of the Originator have a material adverse effect on the
-43-
<PAGE> 51
business, properties, assets or condition (financial or other) of the
Originator or the transactions contemplated by this Agreement or any
other Transaction Document to which the Originator is a party.
(f) PLACE OF BUSINESS; NO CHANGES; NO TRADE NAMES.
The Originator's sole place of business or chief executive office
(within the meaning of Article 9 of the UCC) is as set forth in Section
13.04 below. The Originator has not changed its name as set forth
herein, whether by amendment of its Certificate of Incorporation, by
reorganization or otherwise, and has not changed the location of its
chief executive office, within the four months preceding the Closing
Date (or Subsequent Transfer Date, as applicable, except in accordance
with the requirements of Section 4.03). The legal name of the
Originator is as set forth in this Agreement and, within the five years
preceding the Closing Date, the Originator has not used, and currently
does not use, any trade names, fictitious names, assumed names, or
"doing business as" names.
(g) NO BULK SALES. The execution, delivery and
performance of this Agreement by the Originator does not require
compliance with any "bulk sales" laws by the Originator.
(h) SOLVENCY. The Originator on each date of and,
after giving effect to the transfer of the Contracts and any Substitute
Contracts, as the case may be, to the Trust Depositor pursuant to the
transfer agreement, dated as of the date hereof, between the Originator
and the Trust Depositor, is Solvent.
(i) USE OF PROCEEDS. No proceeds of the sale of any
Initial Contract or Substitute Contract hereunder received by the
Originator will be used by the Originator to purchase or carry any
"margin stock" as such term is defined in Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System.
(j) NOT AN INVESTMENT COMPANY. The Originator is not
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (or the Originator is exempt from all
provisions of such Act).
-44-
<PAGE> 52
(k) TAXES. To the best of the Originator's knowledge,
(i) the Originator has filed all tax returns required to be filed in
the normal course of its business and has paid or made adequate
provisions for the payment of all taxes, assessments and other
governmental charges due from the Originator or is contesting any such
tax, assessment or other governmental charge in good faith through
appropriate proceedings, (ii) no tax lien has been filed with respect
thereto, and (iii) no claim is being asserted with respect to any such
tax, fee or other charge.
(l) SALE TREATMENT. The Originator has treated the
transfer of Contract Assets to the Trust Depositor for all purposes
(including financial accounting purposes) as a sale and purchase on all
of its relevant books, records, financial statements and other
applicable documents, except to the extent applicable tax laws require
otherwise.
(m) MARKING OF FILES. The Originator will have, at
its own expense, prior to the close of business on the Closing Date,
(i) indicated in its Computer Records that ownership of the Contracts
transferred by it to the Trust Depositor and identified on the List of
Contracts have been sold to the Trust Depositor and (ii) affixed to the
original copy of each Contract the following legend:
This Contract/Note is subject to a security interest
granted to the ORIX Credit Alliance Receivables Trust
2000-A. UCC-1 Financing Statements covering this
Contract/Note have been filed with the Secretary of
State of the State of New Jersey. Such lien will be
released only in connection with appropriate filings
in such offices. Consequently, potential purchasers
of this Contract/Note must refer to such filings to
determine whether such lien has been released.
(n) SECURITY INTEREST. The Originator has granted a
security interest (as defined in the UCC) to the Trust Depositor, in
the Contract Assets, which is enforceable in accordance with applicable
law upon execution and delivery of this Agreement. Upon the filing of
UCC-1 financing statements naming the Trust Depositor as secured party
and the Originator as debtor, the Trust Depositor shall have a first
priority perfected security interest in the Contract Assets (except for
any Permitted Liens). All filings (including, without limitation, such
UCC filings) as are necessary in any jurisdiction to perfect the
interest of the Trust Depositor in the Contract Assets have been made.
-45-
<PAGE> 53
(o) YEAR 2000 STATUS. (i) Any reprogramming required
to permit the proper functioning during and following the year 2000 of
the Servicer's computer systems has been completed and (ii) the
information set forth in the Prospectus under "ORIX Credit Alliance,
Inc. -- Year 2000 Readiness Disclosure" is accurate in all material
respects.
(p) SECURITY INTEREST IN EQUIPMENT. The Equipment
securing the Contracts is located in the states listed on Schedule 1 to
this Agreement. The Trust Depositor has a perfected security interest
in the Equipment and, upon the sale, transfer and assignment of the
Contract Assets hereunder, the Trust will have a perfected security
interest in the Equipment.
(q) TITLE. If a Contract is a lease of Equipment
subject to certificate of title statutory requirements, the title is
held either in the name of the lessee and the certificate of title
indicates the Originator as lienholder or in the name of the Originator
as Lessor.
(r) SELECTION PROCEDURES. No selection procedures
determined by the Originator to be materially adverse to the interests
of the Trust Depositor were utilized by the Originator in selecting the
Contracts to be sold, assigned, transferred, set-over and otherwise
conveyed hereunder.
(s) NO LIENS. The Trust Depositor owns each Contract
Asset to be sold by it hereunder free and clear of any Liens except as
provided herein, and upon the sale, transfer or assignment hereunder,
the Trust shall (i) become the owner of each Contract Asset then
existing or thereafter arising, free and clear of any Lien except as
provided herein or (ii) acquire a first priority perfected security
interest in such Contract Asset. No effective financing statement or
other instrument similar in effect covering any Contract Asset or the
Collections with respect thereto shall at any time be on file in any
recording office except such as may be filed in favor of the Trust
relating to this Agreement or otherwise as provided under the Transfer
and Servicing Agreement.
(q) VALUE GIVEN. The cash payments received by the
Trust Depositor in respect of the purchase price of each Contract sold
hereunder constitutes reasonably equivalent value in consideration for
the transfer to the Trust of such Contract under this Agreement, such
transfer was not made for or on account of an antecedent debt owed by
the Originator to the Trust Depositor, and such transfer was not and is
not voidable or subject to avoidance under any Insolvency Law.
-46-
<PAGE> 54
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING EACH
CONTRACT AND AS TO CERTAIN CONTRACTS IN THE AGGREGATE. The Originator represents
and warrants (x) with respect to subsections (a)-(c) below, as to each Contract
as of the execution and delivery of this Agreement and as of the Closing Date,
and as of each Subsequent Transfer Date with respect to each Substitute
Contract, and (y) with respect to subsections (d)-(f) below, as to the Contracts
Pool in the aggregate as of the Closing Date, and as of each Subsequent Transfer
Date with respect to Substitute Contracts (after giving effect to the addition
of such Substitute Contracts to the Contracts Pool), that:
(a) LIST OF CONTRACTS. The information set forth in
the List of Contracts (as the same may be amended or deemed amended in
respect of a conveyance of Substitute Contracts on a Subsequent
Transfer Date) is true, complete and correct as of the applicable
Cutoff Date.
(b) ELIGIBLE CONTRACT. Such Contract satisfies the
criteria for the definition of Eligible Contract set forth in this
Agreement as of the date of its conveyance hereunder.
(c) NO "TRUE LEASES". No Contract constituting a
Lease is a "true lease" as distinguished from a financing lease.
(d) NO FRAUD. Each Contract was originated without
any fraud or material misrepresentation by the Originator or, to the
best of the Originator's knowledge, on the part of the Obligor or the
Vendor.
(e) CONTRACTS SECURED BY FIXTURES. No material
portion of the Pool Balance of the Contracts Pool consists of Contracts
secured by Equipment constituting fixtures.
(f) CONTRACTS SECURED BY OTHER REAL PROPERTY. No
material portion of the Pool Balance of the Contracts Pool consists of
Contracts additionally secured by other real property (exclusive of or
in addition to Equipment constituting fixtures).
SECTION 3.03. REPRESENTATIONS AND WARRANTIES REGARDING THE
INITIAL CONTRACTS IN THE AGGREGATE. The Originator represents and warrants, as
of the Closing Date, that:
(a) AMOUNTS. The Pool Balance of the Contracts as of
the Initial Cutoff Date equals the sum of the principal balance of the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes, the Class B Notes, the Class C Notes and the Certificates on
the Closing Date.
-47-
<PAGE> 55
(b) CHARACTERISTICS. The Initial Contracts have the
following additional characteristics: (i) no Contract has a remaining
maturity of more than 84 months; (ii) the final scheduled Distribution
Date on the Contract with the latest maturity is not later than ,
20 ; (iii) no Contract was originated after the Initial Cutoff
Date; (iv) not more than % of the Initial Contracts (as measured by
the Pool Balance) provide for Scheduled Payments due on a basis other
than monthly; and (v) the weighted average yield (APR) of the Contracts
as of the Initial Cutoff Date is greater than the sum as of the Closing
Date of (A) the weighted average interest rates on the Notes and (B)
the Servicing Fee Percentage (which includes therein the amounts
allocable to the fees and expenses of the Trustees).
SECTION 3.04. REPRESENTATIONS AND WARRANTIES REGARDING THE
CONTRACT FILES. The Originator represents and warrants as of the Closing Date
with respect to the Initial Contracts (or as of the Subsequent Transfer Date,
with respect to Substitute Contracts), that (i) immediately prior to such date
(as applicable), the Originator had possession of each original Contract and the
related complete Contract File, and there were no other custodial agreements
relating to the same in effect; (ii) each of such documents which is required to
be signed by the Obligor has been signed by the Obligor in the appropriate
spaces; (iii) all blanks on any form have been properly filled in and each form
has otherwise been correctly prepared; and (iv) the complete Contract File for
each Contract is in the possession of the Servicer.
SECTION 3.05. REPRESENTATIONS AND WARRANTIES REGARDING
CONCENTRATIONS OF INITIAL CONTRACTS. The Originator represents and warrants as
of the Closing Date, as to the composition of the Initial Contracts in the
Contracts Pool as of the Initial Cutoff Date, that:
(i) the Pool Balance of all End-User Contracts with Obligors who
finance, lease or are related to Equipment used in the
trucking industry (measured by the Pool Balance as of the date
of determination) does not exceed % of the aggregate
Principal Balance of the Contracts Pool;
(ii) the Pool Balance of all End-User Contracts with Obligors who
comprise the ten (10) largest Obligors (measured by the Pool
Balance as of the date of determination) does not exceed %
of the aggregate Principal Balance of the Contracts Pool;
(iii) the aggregate Principal Balance of all full recourse and
partial recourse Contracts purchased by the Originator from
any single Vendor or affiliated group of Vendors will not
exceed % of the aggregate Principal Balance of the
Contracts Pool;
-48-
<PAGE> 56
(iv) the aggregate Principal Balance of all Contracts of each
Obligor or affiliated group of Obligors shall not exceed %
of the aggregate Principal Balance of the Contracts Pool; and
(v) the Pool Balance of all End-User Contracts with Obligors
located in a single State of the United States does not exceed
% of the aggregate Principal Balance of the Contracts Pool.
SECTION 3.06. REPRESENTATIONS AND WARRANTIES REGARDING THE
TRUST DEPOSITOR. By its execution of this Agreement and each Subsequent Transfer
Agreement, the Trust Depositor represents and warrants to the Trust, the
Indenture Trustee, the Noteholders and the Certificateholder that:
(a) CONFIRMATION OF THE ORIGINATOR'S REPRESENTATIONS
AND WARRANTIES. The representations and warranties set forth in Section
3.01, Section 3.02, Section 3.03, Section 3.04 and Section 3.05 of this
Agreement and in the OCAI Transfer Agreement are true and correct.
(b) ORGANIZATION AND GOOD STANDING. The Trust
Depositor is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and has the corporate power to own
its assets and to transact the business in which it is currently
engaged. The Trust Depositor is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties
owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the
business, properties, assets, or condition (financial or other) of the
Trust Depositor or the Trust.
(c) AUTHORIZATION; VALID SALE; BINDING OBLIGATIONS.
The Trust Depositor has the power and authority to make, execute,
deliver and perform this Agreement and the other Transaction Documents
to which it is a party and all of the transactions contemplated under
this Agreement and the other Transaction Documents to which it is a
party, and to create the Trust and cause it to make, execute, deliver
and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement and the other Transaction Documents to
which it is a party and to cause the Trust to be created. This
Agreement and the related Subsequent Transfer Agreement, if any, shall
effect a valid sale, transfer and assignment of the Trust Assets from
the Trust Depositor to the Trust, enforceable against the Trust
Depositor and creditors of and purchasers from the Trust Depositor.
This Agreement and the other Transaction Documents to which the Trust
Depositor is a
-49-
<PAGE> 57
party constitute the legal, valid and binding obligation of the Trust
Depositor enforceable in accordance with their terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and by the availability of equitable remedies.
(d) NO CONSENT REQUIRED. The Trust Depositor is not
required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration
with, any Governmental Authority in connection with the execution,
delivery, performance, validity or enforceability of this Agreement or
the other Transaction Documents to which it is a party.
(e) NO VIOLATIONS. The execution, delivery and
performance of this Agreement and the other Transaction Documents to
which it is a party by the Trust Depositor, and the consummation of the
transactions contemplated hereby and thereby, will not violate any
Requirement of Law applicable to the Trust Depositor, or constitute a
material breach of any mortgage, indenture, contract or other agreement
to which the Trust Depositor is a party or by which the Trust Depositor
or any of the Trust Depositor's properties may be bound, or result in
the creation or imposition of any security interest, lien, charge,
pledge, preference, equity or encumbrance of any kind upon any of its
properties pursuant to the terms of any such mortgage, indenture,
contract or other agreement, other than as contemplated by the
Transaction Documents.
(f) LITIGATION. No litigation or administrative
proceeding of or before any court, tribunal or governmental body is
currently pending, or to the knowledge of the Trust Depositor
threatened, against the Trust Depositor or any of its properties or
with respect to this Agreement, the other Transaction Documents to
which it is a party or the Securities (1) which, if adversely
determined, would in the reasonable judgment of the Trust Depositor
have a material adverse effect on the business, properties, assets or
condition (financial or otherwise) of the Trust Depositor or the Trust
or the transactions contemplated by this Agreement or the other
Transaction Documents to which the Trust Depositor is a party or (2)
seeking to adversely affect the federal income tax or other federal,
state or local tax attributes of the Certificate or Notes.
(g) BULK SALES. The execution, delivery and
performance of this Agreement do not require compliance with any "bulk
sales" laws by the Trust Depositor.
-50-
<PAGE> 58
(h) SOLVENCY. The Trust Depositor, at the time of and
after giving effect to each conveyance of Trust Assets hereunder, is
Solvent on and as of the date thereof.
(i) TAXES. The Trust Depositor has filed or caused to
be filed all tax returns which, to its knowledge, are required to be
filed and has put all taxes shown to be due and payable on such returns
or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority (other than any amount of tax due, the
validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in
accordance with generally accepted accounting principles have been
provided on the books of the Trust Depositor); no tax lien has been
filed and, to the Trust Depositor's knowledge, no claim is being
asserted, with respect to any such tax, fee or other charge.
(j) PLACE OF BUSINESS; NO CHANGES. The Trust
Depositor's sole place of business (within the meaning of Article 9 of
the UCC) is as set forth in Section 13.04 below. The Trust Depositor
has not changed its name, whether by amendment of its Certificate of
Incorporation, by reorganization or otherwise, and has not changed the
location of its place of business, within the four months preceding the
Closing Date.
(k) NOT AN INVESTMENT COMPANY. The Trust Depositor is
not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (or the Trust Depositor is exempt from
all provisions of such Act).
(l) SALE TREATMENT. The Trust Depositor has treated
the transfer of Contract Assets to the Trust Depositor for all purposes
(including financial accounting purposes) as a sale and purchase on all
of its relevant books, records, financial statements and other
applicable documents, except to the extent applicable tax laws require
otherwise.
(m) SECURITY INTEREST. The Trust has granted a
security interest (as defined in the UCC) to the Indenture Trustee in
the Contract Assets that is enforceable in accordance with applicable
law upon execution and delivery of this Agreement. Upon the filing of
UCC-1 financing statements naming the Indenture Trustee as secured
party and the Trust as debtor, the Indenture Trustee shall have a first
priority perfected security interest in the Contract Assets (except for
Permitted Liens). All filings (including, without limitation, such UCC
filings) as
-51-
<PAGE> 59
are necessary in any jurisdiction to perfect the interest of both the
Indenture Trustee and the Trust in the Contract Assets have been made.
Such representations speak as of the execution and delivery of this Agreement
and as of the Closing Date in the case of the Initial Contracts, and as of the
applicable Subsequent Transfer Date in the case of the Substitute Contracts, but
shall survive the sale, transfer and assignment of the Contracts to the Trust.
SECTION 3.07. REPRESENTATIONS AND WARRANTIES REGARDING THE
SERVICER. The Servicer represents and warrants to the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholder that:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has the corporate
power to own its assets and to transact the business in which it is
currently engaged. The Servicer is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties
owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the
business, properties, assets, or condition (financial or otherwise) of
the Servicer or the Trust. The Servicer is properly licensed in each
jurisdiction to the extent required by the laws of such jurisdiction to
service the Contracts in accordance with the terms hereof.
(b) AUTHORIZATION; BINDING OBLIGATIONS. The Servicer
has the power and authority to make, execute, deliver and perform this
Agreement and the other Transaction Documents to which the Servicer is
a party and all of the transactions contemplated under this Agreement
and the other Transaction Documents to which the Servicer is a party,
and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and the other
Transaction Documents to which the Servicer is a party. This Agreement
and the other Transaction Documents to which the Servicer is a party
constitute the legal, valid and binding obligation of the Servicer
enforceable in accordance with their terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(c) NO CONSENT REQUIRED. The Servicer is not required
to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with,
any Governmental Authority in connection with the execution, delivery,
performance, validity or
-52-
<PAGE> 60
enforceability of this Agreement and the other Transaction Documents to
which the Servicer is a party.
(d) NO VIOLATIONS. The execution, delivery and
performance of this Agreement and the other Transaction Documents to
which the Servicer is a party by the Servicer will not violate any
Requirements of Law applicable to the Servicer, or constitute a
material breach of any mortgage, indenture, contract or other agreement
to which the Servicer is a party or by which the Servicer or any of the
Servicer's properties may be bound, or result in the creation of or
imposition of any security interest, lien, pledge, preference, equity
or encumbrance of any kind upon any of its properties pursuant to the
terms of any such mortgage, indenture, contract or other agreement,
other than as contemplated by the Transaction Documents.
(e) LITIGATION. No litigation or administrative
proceeding of or before any court, tribunal or governmental body is
currently pending, or to the knowledge of the Servicer threatened,
against the Servicer or any of its properties or with respect to this
Agreement, or any other Transaction Document to which the Servicer is a
party which, if adversely determined, would in the reasonable judgment
of the Servicer have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of the
Servicer or the Trust or the transactions contemplated by this
Agreement or any other Transaction Document to which the Servicer is a
party.
(f) REPORTS. All reports, certificates and other
written information furnished by the Servicer with respect to the
Contracts are correct in all material respects.
ARTICLE FOUR
PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS
SECTION 4.01. CUSTODY OF CONTRACTS. The contents of each
Contract File shall be held in the custody of the Custodian under the Custodian
Agreement for the benefit of, and as agent for, the Indenture Trustee.
SECTION 4.02. FILING. On or prior to the Closing Date, the
Originator, Trust Depositor and Servicer shall cause the UCC financing
statement(s) referred to in Section 2.02(x) hereof to be filed, and from time to
time the Servicer shall take and cause to be taken such actions and execute such
documents as are necessary or desirable or as the Owner Trustee or Indenture
Trustee may reasonably request (it being understood and
-53-
<PAGE> 61
agreed that the Indenture Trustee is under no duty to make any such request) to
perfect and protect the Trust's first priority perfected interest in the Trust
Assets against all other persons, including, without limitation, the filing of
financing statements, amendments thereto and continuation statements, the
execution of transfer instruments and the making of notations on or taking
possession of all records or documents of title.
SECTION 4.03. NAME CHANGE OR RELOCATION. (a) During the term
of this Agreement, none of the Originator, the Servicer and the Trust Depositor
shall change its name, identity or structure or relocate its chief executive
office without first giving at least 30 days' prior written notice to the Owner
Trustee and the Indenture Trustee.
(b) If any change in either the Servicer's, the Originator's
or the Trust Depositor's name, identity or structure or other action would make
any financing or continuation statement or notice of ownership interest or lien
relating to any Contract Asset seriously misleading within the meaning of
applicable provisions of the UCC or any title statute, the Servicer and/or the
Originator, no later than five days after the effective date of such change,
shall file such amendments as may be required to preserve and protect the
Trust's interests in the Trust Assets and the proceeds thereof. In addition,
neither the Originator, the Servicer nor the Trust Depositor shall change the
place of its chief executive office (within the meaning of Article 9 of the UCC)
unless it has first taken such action as is advisable or necessary to preserve
and protect the Trust's interest in the Trust Assets. Promptly after taking any
of the foregoing actions, the Servicer shall deliver to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel reasonably acceptable to the Owner
Trustee and the Indenture Trustee stating that, in the opinion of such counsel,
all financing statements or amendments necessary to preserve and protect the
interests of the Owner Trustee in the trust corpus have been filed, and reciting
the details of such filing.
SECTION 4.04. CHIEF EXECUTIVE OFFICE. During the term of this
Agreement, and subject to the other terms and provisions herein relating to
changes in location, the Originator will maintain its chief executive office in
one of the States of the United States.
SECTION 4.05. COSTS AND EXPENSES. The Servicer agrees to pay
all reasonable costs and disbursements in connection with the perfection and the
maintenance of perfection, as against all third parties, of the Trustees' and
Trust's right, title and interest in and to the Contract Assets (including,
without limitation, the security interest in the Equipment related thereto and
the security interests provided for in the Indenture).
SECTION 4.06. SALE TREATMENT. The Trust Depositor shall treat
the transfer of Trust Assets made hereunder for all purposes (including
financial accounting
-54-
<PAGE> 62
purposes) as a sale and purchase on all of its relevant books, records,
financial statements and other applicable documents. Notwithstanding the
preceding sentence, for federal income tax purposes the transfer of Trust Assets
by the Trust Depositor hereunder shall not be treated as a sale and purchase for
federal income tax purposes so long as the Trust is disregarded as a separate
entity pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii).
SECTION 4.07. SEPARATENESS FROM TRUST DEPOSITOR. The
Originator agrees to take or refrain from taking or engaging in with respect to
the Trust Depositor, as applicable, each of the actions or activities specified
in the "substantive consolidation" opinion of Sullivan & Cromwell (including any
certificates of the Originator attached thereto) delivered on the Closing Date,
upon which the conclusions therein are based.
ARTICLE FIVE
SERVICING OF CONTRACTS
SECTION 5.01. APPOINTMENT AND ACCEPTANCE; RESPONSIBILITY FOR
CONTRACT ADMINISTRATION. OCAI is hereby appointed as Servicer and custodian (as
contemplated in Article IV hereof) pursuant to this Agreement. OCAI accepts the
appointment and agrees to act as the Servicer and custodian pursuant to this
Agreement and also as custodian pursuant to the Custodian Agreement.
The Servicer will have the sole obligation to manage,
administer, service and make collections on the Contracts and perform or cause
to be performed all contractual and customary undertakings of the holder of the
Contracts to the Obligor. The Owner Trustee, at the written request of a
Servicing Officer, shall furnish the Servicer with any powers of attorney or
other documents necessary or appropriate in the opinion of the Owner Trustee to
enable the Servicer to carry out its servicing and administrative duties
hereunder. The Servicer is hereby appointed the servicer hereunder until such
time as any Servicer Transfer may be effected under Article VIII.
SECTION 5.02. GENERAL DUTIES. The Servicer will service,
administer and enforce the Contracts in the Contracts Pool on behalf of the
Trust and will have full power and authority to do any and all things in
connection with such servicing and administration which it deems necessary or
desirable and as shall not contravene the provisions of this Agreement. The
Servicer will manage, service, administer, and make collections on the Contracts
in the Contracts Pool with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to all comparable contracts
that it services for itself or others. The Servicer's duties will include
collection and posting of all payments, responding to inquiries of Obligors
regarding the Contracts in the Contracts Pool, investigating delinquencies,
accounting for collections, furnishing
-55-
<PAGE> 63
monthly and annual statements with respect to collections and payments in
accordance with Article Nine hereof and with its customary standards, policies
and procedures, and using its best efforts to maintain the perfected first
priority security interest of the Indenture Trustee in the Trust Assets. The
Servicer will follow its customary standards, policies, and procedures and will
have full power and authority, acting alone (and consistent with its customary
standards, policies and procedures, in its own name), to do any and all things
in connection with such managing, servicing, administration, and collection,
including, without limitation, litigation that it deems necessary or desirable.
If the Servicer commences a legal proceeding to enforce a Defaulted Contract
pursuant to Section 5.15 or commences or participates in a legal proceeding
(including a bankruptcy proceeding) relating to or involving a Contract in the
Contracts Pool, the Trust will be deemed to have automatically assigned such
Contract to the Servicer immediately prior to commencement of any such legal
proceeding, for purposes of commencing or participating in any such proceeding
as a party or claimant, and the Servicer is authorized and empowered by the
Trust, pursuant to this Section 5.02, to execute and deliver, on behalf of
itself and the Trust, any and all instruments of satisfaction or cancellation,
or partial or full release or discharge, and all other notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such proceedings. If in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce a Contract on the ground
that it is not a real party in interest or a holder entitled to enforce the
Contract, then the Owner Trustee will, at the Servicer's expense and direction,
take steps on behalf of the Trust to enforce the Contract, including bringing
suit in the Trust's name.
SECTION 5.03. CONSENT TO ASSIGNMENT OR REPLACEMENT. At the
request of an Obligor, the Servicer may in its sole discretion consent to the
assignment of the related Contract or the sublease of a unit of the Equipment
relating to a Contract, so long as such Obligor remains liable for all of its
obligations under such Contract. Upon the request of any Obligor, the Servicer
may, in its sole discretion, provide for the substitution or replacement of any
unit of Equipment for a substantially similar unit of Equipment, so long as such
Obligor remains liable for all of its obligations under such Contract.
SECTION 5.04. DISPOSITION UPON TERMINATION OF CONTRACT. Upon
the termination of a Contract included in the Contracts Pool as a result of a
default by the Obligor thereunder, and upon any such Contract becoming a
Defaulted Contract, the Servicer will use commercially reasonable efforts to
dispose of any related Equipment. Without limiting the generality of the
foregoing, the Servicer may dispose of any such Equipment by purchasing such
Equipment or by selling such Equipment to any of its Affiliates for a purchase
price equal to the fair market value thereof as reasonably determined by the
Servicer. The Servicer will deposit any Prepayments of any such disposition in
accordance with Section 7.01.
-56-
<PAGE> 64
SECTION 5.05. SUBSERVICERS. The Servicer may enter into
servicing agreements with one or more subservicers (including any Affiliate of
the Servicer) to perform all or a portion of the servicing functions on behalf
of the Servicer; provided that the Servicer shall remain obligated and be liable
to the Trust for servicing and administering the Contracts in the Contracts Pool
in accordance with the provisions of this Agreement without diminution of such
obligation and liability by virtue of the appointment of such subservicer, to
the same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering such Contracts. The fees and expenses of the
subservicer (if any) will be as agreed between the Servicer and its subservicer
and neither the Owner Trustee, the Trust, the Indenture Trustee nor the Holders
will have any responsibility therefor. All actions of a subservicer taken
pursuant to such a subservicer agreement will be taken as an agent of the
Servicer with the same force and effect as though performed by the Servicer.
SECTION 5.06. FURTHER ASSURANCE. The Owner Trustee and the
Indenture Trustee will, at the written request of the Servicer, furnish the
Servicer, and the Servicer will furnish any subservicer, with any powers of
attorney and other documents necessary or appropriate to enable the Servicer or
a subservicer, as applicable, to carry out its servicing and administrative
duties under this Agreement, the forms of which documents shall be prepared by
the Servicer and submitted for execution to the Owner Trustee or the Indenture
Trustee, as the case may be. The Servicer shall not, nor shall the Servicer
permit any sub-servicer to, initiate any action in the Indenture Trustee's name
if such action were to require the Indenture Trustee to become registered to do
business in any state in which it was not already registered and without both
obtaining the Indenture Trustee's written consent and indicating the Servicer's
or such sub-servicer's representative capacity.
SECTION 5.07. NOTICE TO OBLIGORS. The Servicer will not be
required to notify any Obligor that such Obligor's Contract or related
Equipment, or any security interest in such Contract or such Equipment, has been
sold, transferred, assigned, or conveyed pursuant to this Agreement; provided
that, in the event that the Servicer resigns or is replaced, then if the place
for payment pursuant to any Contract is changed, the Successor Servicer must
give each related Obligor prompt written notice of the appointment of the
Successor Servicer and the place to which such Obligor should make payments
pursuant to each such Contract.
SECTION 5.08. COLLECTION EFFORTS; MODIFICATION OF CONTRACTS.
(a) The Servicer will make reasonable efforts to collect all payments called for
under the terms and provisions of the Contracts in the Contracts Pool as and
when the same become due, and will follow those collection procedures which it
follows with respect to all comparable contracts that it services for itself or
others.
-57-
<PAGE> 65
(b) The Servicer may, subject to Sections 5.09 and 5.10, at
the request of an Obligor and at the Servicer's option, waive, modify or
otherwise vary any other provision of a Contract in accordance with its
customary and usual credit and collection practices; provided, that no such
waiver, modification or variance shall (except as provided in Sections 5.09,
5.10 and 5.15), without the consent of each Rating Agency,
(i) have the effect of accelerating, delaying or
extending the date for or the amount of any payment of Scheduled
Payments with respect to such Contract;
(ii) be inconsistent with the servicing standards set
forth in Section 5.02; or
(iii) have a material adverse effect on the interests
of any of the Trust, the Trustees or the Securityholders.
Notwithstanding the foregoing, to the extent consistent with the Servicer's
customary and usual credit and collection practices, (A) the Servicer may grant
extensions or adjustments on any Contract; provided, however, that if the
Servicer (i) extends a Contract by more than three months in any calendar year,
(ii) extends a Contract more than twice in the life of such Contract, (iii)
reduces the frequency of periodic payments under a Contract, (iv) reduces the
unpaid principal balance or the rate of interest with respect to a Contract, or
(v) extends a Contract in manner that is inconsistent with the Servicer's
customary and usual credit and collection practices, the Servicer shall purchase
the affected Contract no later than the next succeeding Determination Date by
either (a) depositing the unpaid Principal Balance of the Contract (plus any
related Unreimbursed Servicer Advances (unless the Servicer effectively waives
and releases its rights with respect to such Servicer Advances) and plus accrued
and unpaid interest) in the Collection Account, or (b) transferring a Substitute
Contract to the Trust in exchange for such Contract and (B) the Servicer may
grant waivers on any contract that release or subordinate the Trust's interest
in a portion of the Equipment and/or any additional collateral that is
specifically identified in the Contract documents, and/or release obligors,
guarantors, and assignors of a Contract, provided that immediately thereafter
the related Contract continues to meet the Servicer's customary and usual
underwriting standards and the remaining portion of the Equipment and/or any
additional collateral that is specifically identified in the documents for such
Contract is equal in value, as determined in accordance with the Servicer's
normal valuation procedures, to at least 120% of the outstanding Principal
Balance of such contract and the Trust Depositor's interest therein continues to
be perfected. The Servicer shall, in accordance with its customary and usual
credit and collection policies, have the right to release or subordinate OCAI's
interest in additional collateral (which does not include the financed
Equipment) if such additional collateral is not specifically identified in the
Contract documents. Additionally,
-58-
<PAGE> 66
notwithstanding the foregoing, the Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing any Contract in the Contracts Pool.
SECTION 5.09. PREPAID CONTRACT. The Servicer may, at its
option and in accordance with its customary and usual credit and collection
practices, agree to permit a Contract in the Contracts Pool that is not
otherwise contractually prepayable by its terms to (a) prepay in part or (b)
become a Prepaid Contract (which shall not include a Contract that becomes an
Prepaid Contract due to a Casualty Loss); provided that the Servicer will not
permit the early termination or full prepayment of such a Contract unless (i)
such early termination or full prepayment would not result in the Trust
receiving an amount (the "Prepayment Amount") less than the sum of (A) the
outstanding Principal Balance on the date of such prepayment plus any accrued
and unpaid interest payments thereon and (B) any Unreimbursed Servicer Advances
thereon (unless effectively waived and released by the Servicer), or (ii) if
such early termination or full prepayment would result in the Trust receiving a
Prepayment Amount less than the amount set forth in clause (i), either the
Vendor or the Originator shall have agreed to pay the Trust the difference
between the Prepayment Amount actually paid and the amount set forth in clause
(i) (such payment by the Vendor or Originator also to be considered a
"Prepayment Amount"). At the option of the Originator, the Servicer may use the
Prepayment Amount to purchase a Substitute Contract for such Prepaid Contract
from the Originator. The Servicer shall apply each partial prepayment in
accordance with its customary and usual credit and collection policies.
SECTION 5.10. ACCELERATION. The Servicer, in its sole
discretion, may accelerate (or elect not to accelerate) the maturity of all or
any Scheduled Payments under any Contract in the Contracts Pool under which a
default under the terms thereof has occurred and is continuing (after the lapse
of any applicable grace period); provided that the Servicer is required to
accelerate the Scheduled Payments due under any Contract in the Contracts Pool
(and take other action in accordance with the Originator's past practice,
including repossessing the related Equipment, to realize upon the value of such
Contract and the related Equipment) to the fullest extent permitted by the terms
of such Contract, promptly after such Contract becomes a Defaulted Contract.
SECTION 5.11. TAXES. To the extent provided for in any
Contract in the Contracts Pool, the Servicer will make reasonable efforts to
collect (or cause to be collected) all payments with respect to amounts due for
taxes and assessments relating to such Contracts or the Equipment and remit such
amounts to the appropriate Governmental Authority on or prior to the date such
payments are due.
SECTION 5.12. INSURANCE PREMIUMS. To the extent provided for
in any Contract in the Contracts Pool, the Servicer will make reasonable efforts
to collect (or
-59-
<PAGE> 67
cause to be collected) all payments with respect to amounts due for insurance
premiums relating to such Contracts or the Equipment and remit such amounts to
the appropriate insurer on or prior to the date such payments are due.
SECTION 5.13. REMITTANCES. The Servicer will service all
Collections in accordance with Section 7.01 hereof.
SECTION 5.14. SERVICER ADVANCES. For each Collection Period,
if the Servicer determines that any Scheduled Payment (or portion thereof) which
was due and payable pursuant to a Contract in the Contracts Pool during such
Collection Period was not received prior to the end of such Collection Period,
the Servicer has the right to elect, but is not obligated, to make a Servicer
Advance in an amount up to the amount of such delinquent Scheduled Payment (or
portion thereof) if the Servicer reasonably believes that the advance will be
reimbursed by the related Obligor. The Servicer will deposit any Servicer
Advances into the Collection Account on or prior to 11:00 a.m. (New York City
time) on the related Transfer Date, in immediately available funds. The Servicer
will be entitled to be reimbursed for Servicer Advances pursuant to Sections
7.05(a) and 7.05(b).
SECTION 5.15. REALIZATION UPON DEFAULTED CONTRACT. The
Servicer will use its best efforts consistent with its customary and usual
credit and collection practices and procedures in its servicing of contracts to
repossess or otherwise comparably convert the ownership of any Equipment
relating to a Defaulted Contract and will either act as sales agent for
Equipment which it repossesses or retain a sales agent consistent with its
current practices. The Servicer will follow such other practices and procedures
as it deems necessary or advisable and as are customary and usual in its
servicing of contracts and other actions by the Servicer in order to realize
upon such Equipment, which practices and procedures may include reasonable
efforts to enforce all obligations of Obligors and repossessing and selling such
Equipment at public or private sale in circumstances other than those described
in the preceding sentence. Without limiting the generality of the foregoing, the
Servicer may sell any such Equipment to the Servicer or its Affiliates for a
purchase price equal to the then fair market value thereof. In any case in which
any such Equipment has suffered damage, the Servicer will not expend funds in
connection with any repair or toward the repossession of such Equipment unless
it determines in its discretion that such repair and/or repossession will
increase the Liquidation Proceeds by an amount greater than the amount of such
expenses. The Servicer will remit to the Collection Account the Liquidation
Proceeds received in connection with the sale or disposition of Equipment
relating to a Defaulted Contract in accordance with Section 7.01.
SECTION 5.16. MAINTENANCE OF INSURANCE POLICIES. The Servicer
will use its best efforts to ensure that each Obligor maintains an Insurance
Policy with respect to the related Equipment in an amount at least equal to the
sum of the Original Principal
-60-
<PAGE> 68
Balance of the related Contract in the Contracts Pool; provided that the
Servicer, in accordance with its customary servicing procedures, may allow
Obligors to self-insure. Additionally, the Servicer will require that each
Obligor maintain property damage insurance and, in the case of Leases, also
liability insurance, during the term of each Contract in the Contracts Pool in
amounts and against risks customarily insured against. If an Obligor fails to
maintain property damage insurance, the Servicer may, but is under no obligation
to, purchase and maintain such insurance on behalf of, and at the expense of,
the Obligor in accordance with the Servicer's customary practices and policies.
In connection with its activities as Servicer of the Contracts, the Servicer
agrees to present, on behalf of itself, the Trust, the Indenture Trustee and the
Holders, claims to the insurer under each Insurance Policy and any such
liability policy, and to settle, adjust and compromise such claims, in each
case, consistent with the terms of each Contract and the Servicer's customary
practice and policies.
SECTION 5.17. OTHER SERVICER COVENANTS. The Servicer hereby covenants
that:
(a) CONTRACT FILES. The Servicer will, at its own
cost and expense, maintain all Contract Files in accordance with its
customary procedures. Without limiting the generality of the preceding
sentence, the Servicer will not dispose of any documents constituting
the Contract Files in any manner which is inconsistent with the
performance of its obligations as the Servicer pursuant to this
Agreement and will not dispose of any Contract except as contemplated
by this Agreement.
(b) COMPLIANCE WITH LAW. The Servicer will comply, in
all material respects, with all laws and regulations of any
Governmental Authority applicable to the Servicer or the Contracts in
the Contracts Pool and related Equipment and Contract Files or any part
thereof; provided that the Servicer may contest any such law or
regulation in any reasonable manner which will not materially and
adversely affect the value of (or the rights of the Trust on behalf of
the Holders or the Indenture Trustee on behalf of the Noteholders, with
respect to) the Trust Assets.
(c) OBLIGATIONS WITH RESPECT TO CONTRACTS;
MODIFICATIONS. The Servicer will duly fulfill and comply with, in all
material respects, all obligations on the part of the Trust Depositor
to be fulfilled or complied with under or in connection with each
Contract in the Contracts Pool and will do nothing to impair the rights
of the Indenture Trustee and the Holders in, to and under the Trust
Assets. The Servicer will perform such obligations under the Contracts
in the Contracts Pool and will not change or modify the Contracts,
except as otherwise permitted hereby.
-61-
<PAGE> 69
(d) NO BANKRUPTCY PETITION. Prior to the date that is
one year and one day after the payment in full of all amounts owing in
respect of all outstanding Securities, the Servicer will not institute
against the Trust Depositor, or the Trust, or join any other Person in
instituting against the Trust Depositor or the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or
other similar proceedings under the laws of the United States or any
state of the United States. This Section 5.17(d) will survive the
termination of this Agreement.
(e) LOCATION OF CONTRACT FILES. The Contract Files
shall remain at all times in the possession of the Servicer.
SECTION 5.18. SERVICING COMPENSATION. As compensation for its
servicing activities hereunder and reimbursement for its expenses as set forth
in Section 5.19, the Servicer shall be entitled to receive a monthly servicing
fee in respect of any Collection Period (or portion thereof) prior to the
termination of the Trust (with respect to each Collection Period, the "Servicing
Fee") equal to one-twelfth of the product of (A) the Servicing Fee Percentage
and (B) the Pool Balance of the Contracts Pool as of the first day of such
Collection Period. Notwithstanding anything else herein to the contrary, in no
event shall the Indenture Trustee be liable for any Servicing Fee or for any
differential in the amount of the servicing fee paid hereunder and the amount
necessary to induce any Successor Servicer to act as Successor Servicer under
this Agreement and the transactions set forth or provided for herein.
SECTION 5.19. PAYMENT OF CERTAIN EXPENSES BY SERVICER. The
Servicer will be required to pay all expenses incurred by it in connection with
its activities under this Agreement, including fees and disbursements of
independent accountants, the Owner Trustee (including with respect to an
administrator acting on behalf of the Owner Trustee and the Issuer), the
Indenture Trustee, taxes imposed on the Servicer, expenses incurred in
connection with payments and reports pursuant to this Agreement, and all other
fees and expenses not expressly stated under this Agreement for the account of
the Trust or the Trust Depositor, provided, however such amounts with respect to
the Owner Trustee, Indenture Trustee and independent accountants shall only be
payable by the Servicer prior to an Event of Default. The Servicer will be
required to pay all reasonable fees and expenses (including, without limitation,
legal fees and expenses) owing to the Owner Trustee or the Indenture Trustee in
connection with the maintenance of the Trust Accounts. The Servicer shall be
required to pay such expenses for its own account and shall not be entitled to
any payment or reimbursement therefor other than the Servicing Fee, and the
reimbursement for Liquidation Expenses, to the extent funds are available
therefor as provided in the definition of Liquidation Expenses.
-62-
<PAGE> 70
SECTION 5.20. RECORDS. The Servicer shall, during the period
it is Servicer hereunder, maintain such books of account and other records as
will enable the Owner Trustee and the Indenture Trustee to determine the status
of each Contract.
SECTION 5.21. INSPECTION. (a) At all times during the term
hereof, the Servicer shall afford the Owner Trustee and the Indenture Trustee
and their respective authorized agents reasonable access during normal business
hours to the Servicer's records relating to the Contracts and will cause its
personnel to assist in any examination of such records by the Owner Trustee or
the Indenture Trustee, or such authorized agents, and allow copies of the same
to be made. The examination referred to in this Section will be conducted in a
manner which does not unreasonably interfere with the Servicer's normal
operations or customer or employee relations. Without otherwise limiting the
scope of the examination the Owner Trustee or the Indenture Trustee may, using
generally accepted audit procedures, verify the status of each Contract and
review the Computer Records and other records relating thereto for conformity to
Monthly Reports prepared pursuant to Article Nine and compliance with the
standards represented to exist as to each Contract in this Agreement.
(b) At all times during the term hereof, the Servicer shall
keep available a copy of the List of Contracts at its principal executive office
for inspection by Securityholders.
(c) The Servicer shall, if given reasonable notice by the
Indenture Trustee after the end of any Collection Period, provide the Indenture
Trustee with a copy of the Computer Record.
SECTION 5.22. TRUSTEES TO COOPERATE IN RELEASES. At the same
time as (i) any Contract becomes a Prepaid Contract and in connection therewith
the Equipment related to such Prepaid Contract is sold, or (ii) the Servicer
substitutes or replaces any unit of Equipment as contemplated in Section 5.03
(such events in subsections (i) and (ii) to be certified to the Indenture
Trustee by an Authorized Officer of the Servicer), the Owner Trustee, on behalf
of the Trust, and the Indenture Trustee, on behalf of the Noteholders, will to
the extent requested in writing by the Servicer release the Trust's interest in
the Equipment relating to such Expired Lease or Prepaid Contract or such
substituted or replaced Equipment, as the case may be; provided that such
release will not constitute a release of the Trust's interest in the proceeds of
such sale (other than with respect to Equipment that is replaced pursuant to
Section 5.03). In connection with any sale of such Equipment, the Owner Trustee,
on behalf of the Trust, and the Indenture Trustee will execute and deliver to
the Servicer any assignments, bills of sale, termination statements and any
other releases and instruments as the Servicer may request in writing in order
to effect such release and transfer; provided that neither the Owner Trustee nor
the Indenture Trustee will make any representation or warranty, express or
implied, with
-63-
<PAGE> 71
respect to any such Equipment in connection with such sale or transfer and
assignment. Nothing in this Section 5.22 shall diminish the Servicer's
obligations pursuant to Section 7.01 with respect to the proceeds of any such
sale.
ARTICLE SIX
COVENANTS OF THE TRUST DEPOSITOR
SECTION 6.01. CORPORATE EXISTENCE. During the term of this
Agreement, the Trust Depositor will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the other Transaction
Documents and each other instrument or agreement necessary or appropriate to the
proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Trust Depositor
and its Affiliates will be conducted on an arm's-length basis.
SECTION 6.02. CONTRACTS NOT TO BE EVIDENCED BY PROMISSORY
NOTES. The Trust Depositor will take no action to cause any Contract not
originally evidenced by an instrument as described in Section 2.06 hereof, to be
evidenced by an instrument (as defined in the UCC), except in connection with
the enforcement or collection of such Contract.
SECTION 6.03. SECURITY INTERESTS. The Trust Depositor will not
sell, pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on any Contract in the Contracts Pool or
related Equipment, whether now existing or hereafter transferred to the Trust,
or any interest therein. The Trust Depositor will immediately notify the Owner
Trustee and the Indenture Trustee of the existence of any Lien on any Contract
in the Contracts Pool or related Equipment; and the Trust Depositor shall defend
the right, title and interest of the Trust in, to and under the Contracts in the
Contracts Pool and the related Equipment, against all claims of third parties;
provided, however, that nothing in this Section 6.03 shall prevent or be deemed
to prohibit the Trust Depositor from suffering to exist Permitted Liens upon any
of the Contracts in the Contracts Pool or any related Equipment.
SECTION 6.04. DELIVERY OF COLLECTIONS. The Trust Depositor
agrees to pay to the Servicer promptly (but in no event later than two Business
Days after receipt) all Collections received by the Trust Depositor in respect
of the Contracts in the Contracts Pool, for application in accordance with
Section 7.01.
-64-
<PAGE> 72
SECTION 6.05. REGULATORY FILINGS. The Trust Depositor shall
make any filings, reports, notices, applications and registrations with, and
seek any consents or authorizations from, the Commission and any state
securities authority on behalf of the Trust as may be necessary or that the
Trust Depositor deems advisable to comply with any federal or state securities
or reporting requirements laws.
SECTION 6.06. COMPLIANCE WITH LAW. The Trust Depositor hereby
agrees to comply in all material respects with all Requirements of Law
applicable to the Trust Depositor.
SECTION 6.07. ACTIVITIES. The Trust Depositor shall not engage
in any business or activity of any kind, or enter into any transaction or
indenture, mortgage, instrument, agreement, contract, lease or other
undertaking, which is not directly related to the transactions contemplated and
authorized by this Agreement or the other Transaction Documents; provided,
however, that the Trust Depositor may purchase and sell (or grant Liens in
respect of) assets similar to the Contract Assets to other Persons in
securitization or other non-recourse financing transactions involving the
Originator or any of its Affiliates on terms and conditions (with respect to
liabilities and restrictions on its activities, as well as restrictions on its
interactions with the Originator or its Affiliates, relevant to the "bankruptcy
remoteness" or "substantive consolidation" analysis relating to the Trust
Depositor) substantially similar to the terms and conditions applicable to the
Trust Depositor under the Transaction Documents so long as the Securityholders
are not materially adversely affected thereby and the Rating Agency Condition is
satisfied.
SECTION 6.08. INDEBTEDNESS. The Trust Depositor shall not
create, incur, assume or suffer to exist any Indebtedness or other liability
whatsoever, except (i) obligations incurred under this Agreement, (ii)
liabilities incident to the maintenance of its corporate existence in good
standing or (iii) liabilities necessarily incurred to facilitate securitizations
referred to in the proviso in Section 6.07.
SECTION 6.09. GUARANTEES. The Trust Depositor shall not become
or remain liable, directly or contingently, in connection with any Indebtedness
or other liability of any other Person, whether by guarantee, endorsement
(other than endorsements of negotiable instruments for deposit or collection in
the ordinary course of business), agreement to purchase or repurchase, agreement
to supply or advance funds, or otherwise except in connection with the
transactions described in Section 6.07.
SECTION 6.10. INVESTMENTS. The Trust Depositor shall not make
or suffer to exist any loans or advances to, or extend any credit to, or make
any investments (by way of transfer of property, contributions to capital,
purchase of stock or securities or evidences of indebtedness, acquisition of the
business or assets, or otherwise) in, any Person except (i) for purchases of
Contracts from the Originator, (ii) for investments in
-65-
<PAGE> 73
Eligible Investments in accordance with the terms of this Agreement or (iii) as
may be necessary to facilitate securitizations referred to in the proviso in
Section 6.07. Without limiting the generality of the foregoing, the Trust
Depositor shall not: (i) provide credit to any Securityholder for the purpose of
enabling such Securityholder to purchase any Securities or (ii) lend any money
to the Trust.
SECTION 6.11. MERGER; SALES. The Trust Depositor shall not
enter into any transaction of merger or consolidation, or liquidate or dissolve
itself (or suffer any liquidation or dissolution) or acquire or be acquired by
any Person, or convey, sell, lease or otherwise dispose of all or substantially
all of its property or business, except as provided for in this Agreement.
SECTION 6.12. DISTRIBUTIONS. The Trust Depositor shall not
declare or pay, directly or indirectly, any dividend or make any other
distribution (whether in cash or other property) with respect to the profits,
assets or capital of the Trust Depositor or any Person's interest therein, or
purchase, redeem or otherwise acquire for value any of its capital stock now or
hereafter outstanding, except that so long as no Event of Default has occurred
and is continuing and no Event of Default would occur as a result thereof or
after giving effect thereto and the Trust Depositor would continue to be Solvent
as a result thereof and after giving effect thereto, the Trust Depositor may
declare and pay dividends on its capital stock.
SECTION 6.13. OTHER AGREEMENTS. The Trust Depositor shall not
become a party to, or permit any of its properties to be bound by, any
indenture, mortgage, instrument, contract, agreement, lease or other
undertaking, except this Agreement and the other Transaction Documents to which
it is a party and any agreement relating to another securitization transaction
permitted by Section 6.07; nor shall it amend or modify the provisions of its
Certificate of Incorporation or issue any power of attorney except to the Owner
Trustee, the Indenture Trustee or the Servicer except in accordance with the
Transaction Documents.
SECTION 6.14. SEPARATE CORPORATE EXISTENCE. The Trust
Depositor shall:
(i) Maintain its own deposit account or accounts,
separate from those of any Affiliate, with commercial banking
institutions. The funds of the Trust Depositor will not be diverted to
any other Person or for other than corporate uses of the Trust
Depositor.
(ii) Ensure that, to the extent that it shares the
same officers or other employees as any of its stockholders or
Affiliates, the salaries of and the expenses related to providing
benefits to such officers and other employees shall be fairly allocated
among such entities, and each such entity shall bear its fair
-66-
<PAGE> 74
share of the salary and benefit costs associated with all such common
officers and employees.
(iii) Ensure that, to the extent that it jointly
contracts with any of its stockholders or Affiliates to do business
with vendors or service providers or to share overhead expenses, the
costs incurred in so doing shall be allocated fairly among such
entities, and each such entity shall bear its fair share of such costs.
To the extent that the Trust Depositor contracts or does business with
vendors or service providers when the goods and services provided are
partially for the benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose
benefit the goods and services are provided, and each such entity shall
bear its fair share of such costs. All material transactions between
Trust Depositor and any of its Affiliates shall be only on an arm's
length basis.
(iv) To the extent that the Trust Depositor and any
of its stockholders or Affiliates have offices in the same location,
there shall be a fair and appropriate allocation of overhead costs
among them, and each such entity shall bear its fair share of such
expenses.
(v) Conduct its affairs strictly in accordance with
its Certificate of Incorporation and observe all necessary, appropriate
and customary corporate formalities, including, but not limited to,
holding all regular and special stockholders' and directors' meetings
appropriate to authorize all corporate action, keeping separate and
accurate minutes of its meetings, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts.
(vi) Take or refrain from taking, as applicable, each
of the activities specified in the "substantive consolidation" opinion
of Sullivan & Cromwell, delivered on the Closing Date, upon which the
conclusions expressed therein are based.
SECTION 6.15. LOCATION; RECORDS. The Trust Depositor (x) shall
not move outside the State of New Jersey, the location of its chief executive
office, without 30 days' prior written notice to the Owner Trustee and the
Indenture Trustee and (y) shall not move or permit the Servicer to move the
location of the Contract Files from the location(s) thereof on the Closing Date,
without 30 days' prior written notice to the Owner Trustee and the Indenture
Trustee and (z) will promptly take all actions required (including, but not
limited to, all filings and other acts necessary or advisable under the UCC of
each relevant jurisdiction in order to continue the first priority perfected
security
-67-
<PAGE> 75
interest of the Indenture Trustee in all Contracts in the Contracts Pool). The
Trust Depositor will give the Owner Trustee and the Indenture Trustee prompt
notice of a change within the State of New Jersey of the location of its chief
executive office.
SECTION 6.16. LIABILITY OF TRUST DEPOSITOR; INDEMNITIES. The
Trust Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Trust Depositor under this Agreement.
The Trust Depositor shall indemnify, defend and hold harmless
the Trust, the Owner Trustee, the Indenture Trustee and the Servicer from and
against any taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated herein and in the other Transaction
Documents, including any sales, gross receipts, general corporation, tangible
personal property, New Jersey personal property replacement privilege or license
taxes (but, in the case of the Trust, not including any taxes asserted with
respect to, and as of the date of, the sale of the Contracts to the Trust or the
issuance and original sale of the Securities, or asserted with respect to
ownership of the Contracts, or federal or other income taxes arising out of
distributions on the Certificate or the Notes) and costs and expenses in
defending against the same.
The Trust Depositor shall indemnify, defend and hold harmless
the Trust, the Owner Trustee, the Indenture Trustee and the Securityholders from
and against any loss, liability or expense incurred by reason of the Trust
Depositor's willful misfeasance, bad faith or negligence (other than errors in
judgment) in the performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this Agreement.
The Trust Depositor shall indemnify, defend and hold harmless
the Trust, the Owner Trustee, and the Indenture Trustee, their officers,
directors, agents and employees, from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with
the acceptance or performance of the trusts and duties herein and, in the case
of the Owner Trustee, in the Trust Agreement and, in the case of the Indenture
Trustee, in the Indenture and any other document or transaction contemplated in
connection herewith or therewith, except to the extent that such cost, expense,
loss, claim, damage or liability in the case of (i) the Owner Trustee, shall be
due to the willful misfeasance, bad faith or negligence of the Owner Trustee, or
shall arise from the breach by the Owner Trustee of any of its representations
or warranties set forth in Section 7.03 of the Trust Agreement, or (ii) the
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence of the Indenture Trustee.
The Trust Depositor shall be liable directly to and will
indemnify any injured party or any other creditor of the Trust for all losses,
claims, damages, liabilities and expenses of the Trust to the extent that the
Trust Depositor would be liable if the
-68-
<PAGE> 76
Trust were a partnership under the Delaware Revised Uniform Limited Partnership
Act in which the Trust Depositor were a general partner; provided, however, that
the Trust Depositor shall not be liable for any losses incurred by a
Certificateholder in the capacity of an investor in the Certificate or a
Noteholder in the capacity of an investor in the Notes. In addition, any third
party creditors of the Trust (other than in connection with the obligations
described in the immediately preceding sentence for which the Trust Depositor
shall not be liable) shall be deemed third party beneficiaries of this
paragraph. The obligations of the Trust Depositor under this paragraph shall be
evidenced by the Certificate described in the Trust Agreement.
The Trust Depositor shall indemnify, defend and hold harmless
the Owner Trustee and the Indenture Trustee, their officers, directors, agents
and employees, from and against any loss, liability or expense incurred by
reason of the Trust Depositor's or Trust's violation of federal or state
securities laws in connection with the offering and sale of the Notes.
Indemnification under this Section shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Trust Depositor shall have made any indemnity payments pursuant to this
Section and the Person to or on behalf of whom such payments are made thereafter
shall collect any of such amounts from others, such Person shall promptly repay
such amounts to the Trust Depositor, without interest.
SECTION 6.17. BANKRUPTCY LIMITATIONS. The Trust Depositor
shall not, without the affirmative vote of a majority of the members of the
Board of Directors of the Trust Depositor (which must include the affirmative
vote of at least two duly appointed Independent directors) (A) dissolve or
liquidate, in whole or in part, or institute proceedings to be adjudicated
bankrupt or insolvent, (B) consent to the institution of bankruptcy or
insolvency proceedings against it, (C) file a petition seeking or consent to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, (D) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the corporation or a
substantial part of its property, (E) make a general assignment for the benefit
of creditors, (F) admit in writing its inability to pay its debts generally as
they become due, or (G) take any corporate action in furtherance of the actions
set forth in clauses (A) through (F) above; provided, however, that no director
may be required by any shareholder of the Trust Depositor to consent to the
institution of bankruptcy or insolvency proceedings against the Trust Depositor
so long as it is Solvent.
SECTION 6.18. LIMITATION ON LIABILITY OF TRUST DEPOSITOR AND
OTHERS. The Trust Depositor and any director or officer or employee or agent of
the Trust Depositor may rely in good faith on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The
-69-
<PAGE> 77
Trust Depositor and any director or officer or employee or agent of the Trust
Depositor shall be reimbursed by the Indenture Trustee for any liability or
expense incurred by reason of the Indenture Trustee's willful misfeasance, bad
faith or gross negligence (except errors in judgment) in the performance of its
duties hereunder, or by reason of reckless disregard of its obligations and
duties hereunder. The Trust Depositor shall not be under any obligation to
appear in, prosecute or defend any legal action that shall not be incidental to
its obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
SECTION 6.19. CHIEF EXECUTIVE OFFICE. During the term of this
Agree ment, the Trust Depositor will maintain its chief executive office in one
of the States of the United States.
ARTICLE SEVEN
ESTABLISHMENT OF ACCOUNTS; DISTRIBUTIONS; RESERVE FUND
SECTION 7.01. TRUST ACCOUNTS; COLLECTIONS. (a) On or before
the Closing Date, the Trust Depositor shall establish the Collection Account,
Note Distribution Account, Reserve Fund and the Spread Fund (each as herein
defined), each in the name of the Indenture Trustee for the benefit of the
Noteholders and the Certificateholder, respectively. The Servicer and Indenture
Trustee are hereby required to ensure that each of the Trust Accounts is
established and maintained as an Eligible Deposit Account with a Qualified
Institution. If any institution with which any of the accounts established
pursuant to this Section 7.01(a) are established ceases to be a Qualified
Institution, the Servicer, or if the Servicer fails to do so, the Indenture
Trustee (as the case may be) shall within 10 Business Days establish a
replacement account at a Qualified Institution after notice of such event. In no
event shall the Indenture Trustee be responsible for monitoring whether such
Eligible Institution shall remain a Qualified Institution.
(b) The Servicer shall deposit or cause to be deposited,
without deposit into any intervening account, into the Collection Account not
later than two Business Days following actual receipt of such remittance by the
Servicer, all Collections on deposit with the Servicer in the form of available
funds, and all Collections otherwise received by the Servicer.
(c) Notwithstanding Section 7.01(b), the Servicer shall
deposit or cause to be deposited, on the Closing Date and on each Subsequent
Transfer Date thereafter, in immediately available funds into the Collection
Account, all Collections received after the applicable Cutoff Date and through
and including the date two days preceding the Closing Date or Subsequent
Transfer Date, as the case may be, in respect of Contracts being transferred to
the Trust on such date.
-70-
<PAGE> 78
(d) Notwithstanding Sections 7.01(b) and (c), the Servicer
shall not be required to deposit or cause to be deposited Collections on any
Contracts in the Contracts Pool on which (and to the extent that) the Servicer
has previously made a Servicer Advance which has not been reimbursed, which
amounts the Servicer may retain (as reimbursement of such Servicer Advance).
(e) Notwithstanding Sections 7.01(b) and (c), if (i) the
Servicer makes a deposit into the Collection Account in respect of a Collection
of a Contract in the Contract Pool and such Collection was received by the
Servicer in the form of a check which is not honored for any reason, or (ii) the
Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. Any Scheduled Payment in respect of which a dishonored check is
received shall be deemed not to have been paid.
SECTION 7.02. RESERVE FUND DEPOSIT. On the Closing Date, the
Owner Trustee, on behalf of the Trust Depositor, shall deposit the Reserve Fund
Initial Deposit into the Reserve Fund from the net proceeds of the Securities.
SECTION 7.03. TRUST ACCOUNT PROCEDURES. If the Servicer so
directs, in writing, the Indenture Trustee shall accept such directions as
directions of the Trust and shall invest the amounts in the Trust Accounts in
Qualified Eligible Investments of the type specified in such written direction
that mature or are withdrawable not later than one Business Day prior to the
next succeeding Distribution Date, except for investments in Section (vi) of the
definition of Eligible Investments. Once such funds are invested, the Indenture
Trustee shall not change the investment of such funds. Any loss on such
investments shall be deposited in the applicable Trust Account by the Servicer
out of its own funds immediately as realized. Funds in the Trust Accounts not so
invested must be insured to the extent permitted by law by the Bank Insurance
Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation. Subject to the restrictions herein, the Indenture Trustee may
purchase a Qualified Eligible Investment from itself or an Affiliate. Subject to
the other provisions hereof, the Indenture Trustee shall have sole control over
each such investment and the income thereon, and any certificate or other
instrument evidencing any such investment, if any, shall be delivered directly
to the Indenture Trustee or its agent, together with each document of transfer,
if any, necessary to transfer title to such investment to the Indenture Trustee
in a manner which complies with this Section 7.03. All Investment Earnings on
investments of funds in the Trust Accounts shall be deposited in the Collection
Account pursuant to Section 7.01 and distributed on the next Distribution Date
pursuant to Section 7.05. The Trust Depositor and the Trust agree and
acknowledge that the Indenture Trustee is to have "control" (within the meaning
of Section 8-102 of the UCC as enacted in New Jersey) of
-71-
<PAGE> 79
collateral comprised of "Investment Property" (within the meaning of Section
9-115 of the UCC as enacted in New Jersey) for all purposes of this Agreement.
In the absence of timely written direction from the Servicer, the Indenture
Trustee shall invest amounts in the Trust Accounts in Qualified Eligible
Investments of the type specified in clause (vi) of the definition of Eligible
Investments herein.
SECTION 7.04. SECURITYHOLDER DISTRIBUTIONS. (a) Each
Noteholder and Certificateholder as of the related Record Date shall be paid on
the next succeeding Distribution Date by check mailed to such Noteholder or
Certificateholder at the address for such Noteholder or Certificateholder
appearing on the Note Register or Certificate Register or by wire transfer if
such Noteholder or Certificateholder provides written instructions to the
Indenture Trustee, or Owner Trustee, respectively, at least ten days prior to
such Distribution Date.
(b) The Indenture Trustee shall serve as the Paying Agent
hereunder and shall make the payments to the Noteholders and Certificateholder
required hereunder. The Indenture Trustee hereby agrees that all amounts held by
it for payment hereunder will be held in trust for the benefit of the
Noteholders and Certificateholder.
SECTION 7.05. ALLOCATIONS AND DISTRIBUTIONS.
(a) Allocations and Distributions Prior to an Event of
Default. On each Determination Date prior to an Event of Default, the Servicer,
pursuant to written monthly payment instructions and notification, shall
instruct the Indenture Trustee to withdraw, and on such Distribution Date the
Indenture Trustee acting in accordance with such written instructions shall
withdraw, the amounts required to be withdrawn from the Collection Account
pursuant to this Section and deposited to the Note Distribution Account
(pursuant to Sections 3.01 and 8.02(b) of the Indenture) in order to make the
following payments or allocations from the Available Amounts for such
Distribution Date (in each case, such payment or transfer to be made only to the
extent funds remain available therefor after all prior payments and transfers
for such Distribution Date have been made), in the following order of priority:
(i) pay to the Servicer, the amount of any
Unreimbursed Servicer Advance;
(ii) pay to the Indenture Trustee the costs and
expenses associated with the appointment of a Successor Servicer and
the transition relating thereto (which amount shall not, taken in the
aggregate with all other amounts withdrawn for such purpose, exceed
$100,000);
-72-
<PAGE> 80
(iii) pay to the Servicer, the monthly Servicing Fee
for the preceding monthly period together with any amounts in respect
of the Servicing Fee that were due in respect of prior monthly periods
that remain unpaid; provided, however, the Indenture Trustee shall be
permitted to deduct from such amount and apply to its own account any
accrued and unpaid fees, unpaid expenses or indemnity payments due and
unpaid to the Indenture Trustee under the Indenture if the Servicer
shall fail to make timely payment of such amounts to the Indenture
Trustee; and provided, further, however, in no event shall the
Indenture Trustee be entitled to deduct at this priority level amounts
with respect to a monthly fee and expenses in excess of $25,000 per
month;
(iv) pay to the Indenture Trustee on behalf of the
Class A-1 Noteholders, Class A-2 Noteholders, Class A-3 Noteholders and
Class A-4 Noteholders an amount equal to interest accrued in respect of
the related Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class
A-4 Notes at the Class A-1 Interest Rate, Class A-2 Interest Rate,
Class A-3 Interest Rate and Class A-4 Interest Rate, respectively, for
the Accrual Period immediately preceding such Distribution Date,
together with any such amounts that accrued in respect of prior Accrual
Periods for which no allocation was previously made; provided that if
the Available Amounts remaining to be allocated pursuant to this clause
are less than the full amount required to be so allocated, such
remaining Available Amounts shall be allocated to each Holder of a
Class A Note pro rata based upon the outstanding Principal Amount
thereof;
(v) pay to the Indenture Trustee on behalf of the
Class B Noteholders an amount equal to the interest accrued thereon at
the Class B Interest Rate for the Accrual Period immediately preceding
such Distribution Date, together with any amounts that accrued in
respect of prior Accrual Periods for which no allocation was previously
made; provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amount shall be paid to each Class B
Noteholder pro rata based on the outstanding Principal Amount thereof;
(vi) pay to the Indenture Trustee on behalf of the
Class C Noteholders, an amount equal to the interest accrued thereon
at the Class C Interest Rate for the Accrual Period immediately
preceding such Distribution Date, together with any such amounts that
accrued in respect of prior Accrual Periods for which no allocation was
previously made; provided that if the Available Amounts remaining to be
allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be paid
to each Class C Noteholder pro rata based on the outstanding Principal
Amount thereof;
-73-
<PAGE> 81
(vii) pay to the Indenture Trustee, on behalf of the
Class A-1 Noteholders, the Class A Principal Payment Amount for such
Distribution Date; provided that if the Available Amounts remaining to
be allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be
allocated to each Class A-1 Note pro rata based on the outstanding
principal amount thereof;
(viii) pay to the Indenture Trustee, on behalf of the
Class A-2 Noteholders, (A) $0 until the Distribution Date on which the
Principal Amount of the Class A-1 Notes is $0; (B) on the Distribution
Date on which the Principal Amount of the Class A-1 Notes is being
reduced to $0, the excess of the Monthly Principal Amount over the
amount necessary to reduce the Principal Amount of the Class A-1 Notes
to $0 on such date, but only up to the amount of the Class A Principal
Payment Amount, and (C) on each subsequent Distribution Date, the Class
A Principal Payment Amount; provided that if the Available Amounts
remaining to be allocated pursuant to this clause are less than the
full amount required to be so paid, such remaining Available Amounts
shall be allocated to each Class A-2 Note pro rata based on the
outstanding principal amount thereof;
(ix) pay to the Indenture Trustee, on behalf of the
Class A-3 Noteholders, (A) $0 until the Distribution Date on which the
Principal Amount of the Class A-1 Notes and Class A-2 Notes is $0, (B)
on the Distribution Date on which the Principal Amount of the Class A-2
Notes is being reduced to $0, the excess of the amount necessary to
reduce the Principal Amount of the Class A-2 Notes to $0 on such date,
but only to the amount of the Class A Principal Payment Amount and (C)
on each subsequent Distribution Date, the Class A Principal Payment
Amount; provided that if the Available Amounts remaining to be
allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be
allocated to each Class A-3 Note pro rata based on the outstanding
principal amount thereof;
(x) pay to the Indenture Trustee, on behalf of the
Class A-4 Noteholders, (A) $0 until the Distribution Date on which the
Principal Amount of the Class A-1 Notes, Class A-2 Notes and Class A-3
Notes is $0, (B) on the Distribution Date on which the Principal Amount
of the Class A-3 Notes is being reduced to $0, the excess of the amount
necessary to reduce the Principal Amount of the Class A-3 Notes to $0
on such date, but only to the amount of the Class A Principal Payment
Amount and (C) on each subsequent Distribution Date, the Class A
Principal Payment Amount; provided that if the Available Amounts
remaining to be allocated pursuant to this clause are less than the
full amount required to be so paid, such remaining Available Amounts
shall be allocated to each Class A-4 Note pro rata based on the
outstanding principal amount thereof;
-74-
<PAGE> 82
(xi) pay to the Indenture Trustee, on behalf of the
Class B Noteholders, (A) $0 until the Distribution Date on which the
Principal Amount of the Class A-1 Notes is $0, (B) on the Distribution
Date on which the Principal Amount of the Class A-4 Notes is being
reduced to $0, the excess of the amount necessary to reduce the
Principal Amount of the Class A-4 Notes to $0 on such date, but only to
the amount of the Class A Principal Payment Amount and (C) on each
subsequent Distribution Date, the Class B Principal Payment Amount;
provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amounts shall be allocated to each Class
B Note pro rata based on the outstanding principal amount thereof;
(xii) pay to the Indenture Trustee, on behalf of the
Class C Noteholders, (A) $0 until the Distribution Date on which the
Principal Amount of the Class A-1 Notes is $0 and (B) on each
subsequent Distribution Date, the Class C Principal Payment Amount;
provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amounts shall be allocated to each Class
C Note pro rata based on the outstanding principal amount thereof;
(xiii) pay to the Indenture Trustee,
(A) on behalf of the Class A-2 Noteholders, (1)
$0 until the Distribution Date on which the Principal Amount
of the Class A-1 Notes is $0 and (2) on each subsequent
Distribution Date, the Additional Principal, if any, until the
Principal Amount of the Class A-2 Notes is $0; provided that
if the Additional Principal exceeds the amount needed to
reduce the Principal Amount of the Class A-2 Notes to $0, then
such excess shall be paid to the Class A-3 Noteholders;
(B) on behalf of the Class A-3 Noteholders,
(1) $0 until the Distribution Date on which the Principal
Amount of the Class A-1 Notes and Class A-2 Notes is $0 and
(2) on each subsequent Distribution Date, the Additional
Principal, if any, until the Principal Amount of the Class A-3
Notes is $0; provided that if the Additional Principal exceeds
the amount needed to reduce the Principal Amount of the Class
A-3 Notes to $0, then such excess shall be paid to the Class
A-4 Noteholders;
(C) on behalf of the Class A-4 Noteholders,
(1) $0 until the Distribution Date on which the Principal
Amount of the Class A-1 Notes, Class A-2 Notes and Class A-3
Notes is $0 and (2) on each subsequent Distribution Date, the
Additional Principal, if any, until the
-75-
<PAGE> 83
Principal Amount of the Class A-4 Notes is $0; provided that
if the Additional Principal exceeds the amount needed to
reduce the Principal Amount of the Class A-4 Notes to $0,
then such excess shall be paid to the Class B Noteholders;
(D) on behalf of the Class B Noteholders,
(1) $0 until the Distribution Date on which the Principal
Amount of the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 Notes is $0 and (2) on each subsequent
Distribution Date, the Additional Principal, if any, until the
Principal Amount of the Class B Notes is $0; provided that if
the Additional Principal exceeds the amount needed to reduce
the Principal Amount of the Class B Notes to $0, then such
excess shall be paid to the Class C Noteholders;
(E) on behalf of the Class C Noteholders,
(1) $0 until the Distribution Date on which the Principal
Amount of the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes and Class B Notes is $0 and (2) on each
subsequent Distribution Date, the Additional Principal, if
any, until the Principal Amount of the Class C Notes is $0;
and
(F) if the sum of (i) the remaining
Available Amounts, (ii) any other funds available in the
Collection Account as of the Determination Date (which for
purposes of this subparagraph (F) will be deemed to be
"Available Amounts") and (iii) the remaining amounts held in
the Reserve Fund equals or exceeds the sum of the remaining
Principal Amount of the Notes and any accrued and unpaid
Servicing Fee, pay to the Indenture Trustee on behalf of the
Noteholders an amount equal to such remaining Principal
Amount;
(xiv) unless the Principal Amount of all Notes will
be fully paid on such Distribution Date, pay to the Indenture Trustee,
for deposit into the Reserve Fund, such remaining Available Amounts up
to such amount as may be required to cause the amounts on deposit in
the Reserve Fund to equal the Required Reserve Amount;
(xv) unless the Principal Amount of all Notes will be
fully paid on such Distribution Date, if a Spread Event shall have
occurred and be continuing, pay to the Indenture Trustee for deposit
into the Spread Fund, such remaining Available Amounts;
-76-
<PAGE> 84
(xvi) pay to the Indenture Trustee and the Owner
Trustee, such remaining Available Amounts up to the amount of any fees,
expenses or indemnity payments due to the Indenture Trustee and the
Owner Trustee remain unpaid; and
(xvii) pay any remaining Available Amounts to the
Holder of the Certificate.
Prior to the occurrence of an Event of Default, if the
Available Amounts are less than the amount required to make in full the payments
and allocations set forth in Sections 7.05(a)(i)-(xiii) above or to make
principal payments due with respect to any payment at final maturity of any
Notes, amounts held in the Reserve Fund shall be withdrawn in order for any of
such payments or allocations to be made and such amounts will be considered as
Available Amounts for such purpose only.
(b) Allocations and Payments after an Event of Default. On
each Determination Date after the occurrence and during the continuance of an
Event of Default, the Servicer, pursuant to monthly payment instructions and
notification, shall instruct the Indenture Trustee in writing to withdraw, and
on such Distribution Date the Indenture Trustee acting in accordance with such
instructions shall withdraw, the amounts required to be withdrawn from the
Collection Account pursuant to this Section and deposited to the Note
Distribution Account (pursuant to Sections 3.01 and 8.02(b) of the Indenture) in
order to make the following payments or allocations from the Available Amounts
for such Distribution Date (in each case, such payment or transfer to be made
only to the extent funds remain available therefor after all prior payments and
transfers for such Distribution Date have been made), in the following order of
priority:
(i) pay, first, to the Indenture Trustee the amount
of any unpaid fees, expenses (including legal fees and expenses) and
indemnity payments to which the Indenture Trustee is entitled under
this Section 7.05(b)(i), including the costs and expenses associated
with the appointment of a Successor Servicer and the transition
relating thereto (which amount shall not, taken in the aggregate with
all other amounts withdrawn in accordance with this Section 7.05(b)(i)
or Section 7.05(a)(ii), exceed $100,000) and, then, to the Noteholders,
pro rata, an amount equal to any indemnity payments that Noteholders
may have elected to pay in accordance with the terms of the Indenture;
(ii) pay to the Servicer, the monthly Servicing Fee
for the preceding monthly period together with any amounts in respect
of the Servicing Fee that were due in respect of prior monthly periods
that remain unpaid;
-77-
<PAGE> 85
(iii) pay to the Indenture Trustee on behalf of the
Class A-1 Noteholders, Class A-2 Noteholders, Class A-3 Noteholders and
Class A-4 Noteholders an amount equal to interest accrued in respect of
the related Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class
A-4 Notes at the Class A-1 Interest Rate, Class A-2 Interest Rate,
Class A-3 Interest Rate and Class A-4 Interest Rate, respectively, for
the Accrual Period immediately preceding such Distribution Date,
together with any such amounts that accrued in respect of prior Accrual
Periods for which no allocation was previously made; provided that if
the Available Amounts remaining to be allocated pursuant to this clause
are less than the full amount required to be so allocated, such
remaining Available Amounts shall be allocated to each Holder of a
Class A Note pro rata based upon the outstanding Principal Amount
thereof;
(iv) pay to the Indenture Trustee on behalf of the
Class B Note holders an amount equal to the interest accrued thereon at
the Class B Interest Rate for the Accrual Period immediately preceding
such Distribution Date, together with any amounts that accrued in
respect of prior Accrual Periods for which no allocation was previously
made; provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amount shall be paid to each Class B
Noteholder pro rata based on the outstanding Principal Amount thereof;
(v) pay to the Indenture Trustee on behalf of the
Class C Noteholders, an amount equal to the interest accrued thereon at
the Class C Interest Rate for the Accrual Period immediately preceding
such Distribution Date, together with any such amounts that accrued in
respect of prior Accrual Periods for which no allocation was previously
made; provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amounts shall be paid to each Class C
Noteholder pro rata based on the outstanding Principal Amount thereof;
(vi) pay to the Indenture Trustee, on behalf of the
Class A-1 Noteholders, the Principal Amount of the Class A-1 Notes;
provided that if the Available Amounts remaining to be allocated
pursuant to this clause are less than the full amount required to be so
paid, such remaining Available Amounts shall be allocated to each Class
A-1 Note pro rata based on the outstanding principal amount thereof;
(vii) pay to the Indenture Trustee, on behalf of the
Class A- 2 Noteholders, Class A-3 Noteholders and Class A-4
Noteholders, the Principal Amounts of the Class A-2 Notes, Class A-3
Notes and Class A-4 Notes; provided
-78-
<PAGE> 86
that if the Available Amounts remaining to be allocated pursuant to
this clause are less than the full amount required to be so paid, such
remaining Available Amounts shall be allocated to each Class A-2 Note,
Class A-3 Note and Class A-4 Note pro rata based on the outstanding
principal amount of each such Class of Notes;
(viii) pay to the Indenture Trustee, on behalf of the
Class B Noteholders, the Principal Payment Amount for such Distribution
Date; provided (i) that if the Available Amounts remaining to be
allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be
allocated to each Class B Note pro rata based on the outstanding
principal amount thereof, and (ii) if the amount to be allocated
pursuant to this clause exceeds the amount needed to repay outstanding
Class B Note principal in full, then such excess shall be applied in
repayment of principal on the Class C Notes;
(ix) pay to the Indenture Trustee, on behalf of the
Class C Noteholders, the Principal Payment Amount for such Distribution
Date; provided (i) that if the Available Amounts remaining to be
allocated pursuant to this clause are less than the full amount
required to be so paid, such remaining Available Amounts shall be
allocated to each Class C Note pro rata based on the outstanding
principal amount thereof, and (ii) if the amount to be allocated
pursuant to this clause exceeds the amount needed to repay outstanding
Class C Note principal in full, then such excess shall be applied in
repayment of principal on the Certificates;
(x) pay to the Indenture Trustee all amounts due it
and not paid pursuant to Section 7.05(b)(i) by reason of the limitation
in such clause; and
(xi) pay all other remaining Available Amounts to the
Holder of the Certificates.
Following the occurrence and during the continuance of an
Event of Default, if the Available Amounts are less than the amount required to
make in full the payments and allocations set forth in Sections 7.05(b)(i)-(ix)
above, amounts held in the Reserve Fund shall be withdrawn in order for the
payments or allocations set forth in Sections 7.05(b)(i)-(ix) to be made and
such amounts will be considered as Available Amounts for such purpose only.
Amounts withdrawn from the Reserve Fund pursuant to the preceding sentence shall
be applied to repay principal of such Notes in such order of priority set forth
in 7.05(b)(i)-(ix) until the Reserve Fund is exhausted.
-79-
<PAGE> 87
ARTICLE EIGHT
SERVICER DEFAULT; SERVICE TRANSFER
SECTION 8.01. SERVICER DEFAULT. "Servicer Default" means the
occurrence of any of the following:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the Owner
Trustee or the Indenture Trustee pursuant to this Agreement on or
before the date occurring two Business Days after the date such
payment, transfer, deposit, or such instruction or notice or report is
required to be made or given, as the case may be, under the terms of
this Agreement; or
(b) failure on the part of the Servicer duly to
observe or perform in any material respect any other covenants or
agreements of the Servicer set forth in this Agreement which has a
material adverse effect on the Noteholders or Certificateholder, which
continues unremedied for a period of 30 days after the first to occur
of (i) the date on which written notice of such failure requiring the
same to be remedied shall have been given to the Servicer by the
Indenture Trustee or to the Servicer and the Indenture Trustee by the
Noteholders or Certificateholder or the Indenture Trustee on behalf of
such Noteholders of Notes aggregating not less than 25% of the
Principal Amount of any Class adversely affected thereby and (ii) the
date on which the Servicer becomes aware thereof and such failure
continues to materially adversely affect such Noteholders or
Certificateholder for such period; or
(c) any representation, warranty or certification
made by the Servicer in this Agreement or in any certificate delivered
pursuant to this Agreement shall prove to have been incorrect when
made, which has a material adverse effect on the Noteholders or
Certificateholder and which continues to be incorrect in any material
respect for a period of 30 days after the first to occur of (i) the
date on which written notice of such incorrectness requiring the same
to be remedied shall have been given to the Servicer and the Owner
Trustee by the Indenture Trustee, or to the Servicer, the Owner Trustee
and the Indenture Trustee by Noteholders or Certificateholder or by the
Indenture Trustee on behalf of Noteholders of Notes aggregating not
less than 25% of the Principal Amount of any Class adversely affected
thereby and (ii) the date on which the Servicer becomes aware thereof,
and such incorrectness continues to materially adversely affect such
Holders for such period; or
-80-
<PAGE> 88
(d) an Insolvency Event shall occur with respect to
the Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to under clause (a) above for a period of five Business
Days or referred to under clause (b) or (c) for a period of 60 days (in addition
to any period provided in clause (a), (b) or (c)) shall not constitute a
Servicer Default until the expiration of such additional five Business Days or
60 days, respectively, if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or other events beyond the Servicer's control. Upon the
occurrence of any such event the Servicer shall not be relieved from using its
best efforts to perform its obligations in a timely manner in accordance with
the terms of this Agreement and the Servicer shall provide the Owner Trustee,
the Indenture Trustee and the Trust Depositor prompt notice of such failure or
delay by it, together with a description of its efforts to so perform its
obligations. The Servicer shall immediately notify the Indenture Trustee in
writing of any Servicer Default.
SECTION 8.02. SERVICER TRANSFER. (a) If a Servicer Default has
occurred and is continuing, (x) the Required Holders, or (y) the Indenture
Trustee may, by written notice (a "Termination Notice") delivered to the parties
hereto, terminate all (but not less than all) of the Servicer's management,
administrative, servicing, custodial and collection functions.
(b) Upon delivery of the notice required by Section 8.02(a)
(or, if later, on a date designated therein), and on the date that a successor
Servicer shall have been appointed pursuant to Section 8.03 (such appointment
being herein called a "Servicer Transfer"), all rights, benefits, fees,
indemnities, authority and power of the Servicer under this Agreement, whether
with respect to the Contracts, the Contract Files or otherwise, shall pass to
and be vested in such successor (the "Successor Servicer") pursuant to and under
this Section 8.02; and, without limitation, the Successor Servicer is authorized
and empowered to execute and deliver on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do any and all acts or things necessary or appropriate to effect the purposes
of such notice of termination. The Servicer agrees to cooperate with the
Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, the transfer to
the Successor Servicer for administration by it of all cash amounts which shall
at the time be held by the Servicer for deposit, or have been deposited by the
Servicer, in the Collection Account, or for its own account in connection with
its services hereafter or thereafter received with respect to the Contracts. The
Servicer shall transfer to the Successor Servicer (i) all records held by the
Servicer relating to the Contracts in such electronic form as the Successor
Servicer may reasonably request and (ii) any Contract Files in the Servicer's
possession. In addition,
-81-
<PAGE> 89
the Servicer shall permit access to its premises (including all computer records
and programs) to the Successor Servicer or its designee, and shall pay the
reasonable transition expenses of the Successor Servicer. Upon a Servicer
Transfer, the Successor Servicer shall also be entitled to receive the Servicing
Fee for performing the obligations of the Servicer.
SECTION 8.03. APPOINTMENT OF SUCCESSOR SERVICER; RECONVEYANCE;
SUCCESSOR SERVICER TO ACT. Upon delivery of the notice required by Section
8.02(a) (or, if later, on a date designated therein), the Servicer shall
continue to perform all servicing functions under this Agreement until the date
specified in the Termination Notice or, if no such date is specified, until a
date mutually agreed by the Servicer and the Indenture Trustee. The Indenture
Trustee shall as promptly as possible after the giving of or receipt of a
Termination Notice, appoint a Successor Servicer, and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Indenture Trustee and Owner Trustee. If within 60 days of delivery of a
Termination Notice the Indenture Trustee is unable to obtain any bids from
eligible servicers and the Servicer shall have yet to cure the Servicer Default,
then the Indenture Trustee shall offer the Trust Depositor, and the Trust
Depositor shall offer the Originator, the right to accept retransfer of all the
Trust Assets, and such parties may accept retransfer of such Trust Assets in
consideration of the Trust Depositor's delivery to the Collection Account on or
prior to the next upcoming Distribution Date of a sum equal to the Aggregate
Principal Amount of all Securities (other than the Certificates) then
outstanding, together with accrued and unpaid interest thereon through such date
of deposit (provided that the Indenture Trustee, if so directed by the Required
Holders in writing, need not accept and effect such reconveyance in the absence
of evidence (which may include valuations of an investment bank or similar
entity) reasonably acceptable to such Trustee or Required Holders that such
retransfer would not constitute a fraudulent conveyance of the Trust Depositor
or the Originator).
In the event that a Successor Servicer has not been appointed
and has not accepted its appointment at the time when the then Servicer has
ceased to act as Servicer, the Indenture Trustee without further action shall
automatically be appointed the Successor Servicer. Notwithstanding the
foregoing, if the Indenture Trustee is legally unable or prohibited from so
acting, it shall petition a court of competent jurisdiction to appoint any
established financial institution having a net worth of at least $50,000,000 and
whose regular business includes the servicing of contracts similar to the
Contracts as the Successor Servicer hereunder. On or after a Servicer Transfer,
the Successor Servicer shall be the successor in all respects to the Servicer in
its capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and the terminated Servicer shall be relieved of such responsibilities,
duties and liabilities arising after such Servicer Transfer; provided,
-82-
<PAGE> 90
however, that (i) the Successor Servicer will not assume any obligations of the
Servicer described in Section 8.02 and (ii) the Successor Servicer shall not be
liable for any acts or omissions of the Servicer occurring prior to such
Servicer Transfer or for any breach by the Servicer of any of its
representations and warranties contained herein or in any related document or
agreement. As compensation therefor, the Successor Servicer shall be entitled to
receive reasonable compensation equal to the monthly Servicing Fee. The Owner
Trustee, Securityholders and the Indenture Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession. To the extent the terminated Servicer has made Servicer
Advances, it shall be entitled to reimbursement of the same notwithstanding its
termination hereunder, to the same extent as if it had continued to service the
Contracts hereunder. In addition, it is understood and agreed that if an Event
of Default has occurred and a Servicer Transfer is being effected by action of
the Indenture Trustee hereunder, any documented expenses reasonably incurred by
the Indenture Trustee in connection with effecting such Servicer Transfer shall
be deemed expenses reimbursable from Available Amounts after an Event of Default
pursuant to Section 7.05(b)(i) hereof and Section 5.06(a)(first) of the
Indenture.
SECTION 8.04. NOTIFICATION TO SECURITYHOLDERS. (a) Promptly
following the occurrence of any Servicer Default, the Servicer shall give
written notice thereof to the Trustees, the Trust Depositor and each Rating
Agency at the addresses described in Section 13.04 hereof and to the Noteholders
and Certificateholder at their respective addresses appearing on the Note
Register and the Certificate Register, respectively.
(b) Within 10 days following any termination or appointment of
a Successor Servicer pursuant to this Article VIII, the Indenture Trustee shall
give written notice thereof to each Rating Agency and the Trust Depositor at the
addresses described in Section 13.04 hereof, and to the Noteholders and
Certificateholder at their respective addresses appearing on the Note Register
and the Certificate Register, respectively.
SECTION 8.05. EFFECT OF TRANSFER. (a) After a Servicer
Transfer, the terminated Servicer shall have no further obligations with respect
to the management, administration, servicing, custody or collection of the
Contracts and the Successor Servicer appointed pursuant to Section 8.03 shall
have all of such obligations, except that the terminated Servicer will transmit
or cause to be transmitted directly to the Successor Servicer for its own
account, promptly on receipt and in the same form in which received, any amounts
(properly endorsed where required for the Successor Servicer to collect them)
received as payments upon or otherwise in connection with the Contracts.
(b) A Servicer Transfer shall not affect the rights and duties
of the parties hereunder (including but not limited to the indemnities of the
Servicer) other than
-83-
<PAGE> 91
those relating to the management, administration, servicing, custody or
collection of the Contracts.
SECTION 8.06. DATABASE FILE. Upon reasonable request by the
Indenture Trustee, the Servicer will provide the Successor Servicer with a
magnetic tape containing the database file for each Contract (i) as of the
Cutoff Date, (ii) the Subsequent Cutoff Dates, (iii) thereafter, as of the last
day of the preceding Collection Period on the Determination Date prior to a
Servicer Default and (iv) on and as of the Business Day before the actual
commencement of servicing functions by the Successor Servicer following the
occurrence of a Servicer Default.
SECTION 8.07. SUCCESSOR SERVICER INDEMNIFICATION. The original
Servicer shall defend, indemnify and hold the Successor Servicer and any
officers, directors, employees or agents of the Successor Servicer harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, fees, and expenses that the
Successor Servicer may sustain in connection with the claims asserted at any
time by third parties against the Successor Servicer which result from (i) any
willful or grossly negligent act taken or omission by the Servicer or (ii) a
breach of any representations of the Servicer in Section 3.07 hereof. The
indemnification provided by this Section 8.07 shall survive the termination of
this Agreement and the removal or resignation of the Successor Servicer.
SECTION 8.08. RESPONSIBILITIES OF THE SUCCESSOR SERVICER. The
Successor Servicer will not be responsible for delays attributable to the
Servicer's failure to deliver information, defects in the information supplied
by the Servicer or other circumstances beyond the control of the Successor
Servicer.
The Successor Servicer will make arrangements with the
Servicer for the prompt and safe transfer of, and the Servicer shall provide to
the Successor Servicer, all necessary servicing files and records, including (as
deemed necessary by the Successor Servicer at such time): (i) microfiche loan
documentation, (ii) servicing system tapes, (iii) Contract payment history, (iv)
collections history and (v) the trial balances, as of the close of business on
the day immediately preceding conversion to the Successor Servicer, reflecting
all applicable Contract information. The current Servicer shall be obligated to
pay the costs associated with the transfer of the servicing files and records to
the Successor Servicer.
The Successor Servicer shall have no responsibility and shall
not be in default hereunder nor incur any liability for any failure, error,
malfunction or any delay in carrying out any of its duties under this Agreement
if any such failure or delay results from the Successor Servicer acting in
accordance with information prepared or supplied by a Person other than the
Successor Servicer or the failure of any such Person to prepare
-84-
<PAGE> 92
or provide such information. The Successor Servicer shall have no
responsibility, shall not be in default and shall incur no liability (i) for any
act or failure to act by any third party, including the Servicer, the Trust
Depositor or the Trustees or for any inaccuracy or omission in a notice or
communication received by the Successor Servicer from any third party or (ii)
which is due to or results from the invalidity, unenforceability of any Contract
with applicable law or the breach or the inaccuracy of any representation or
warranty made with respect to any Contract.
If the Indenture Trustee or any other Successor Servicer
assumes the role of Successor Servicer hereunder, such Successor Servicer shall
be entitled to the benefits of (and subject to the provisions of) Section 5.05
concerning delegation of duties to subservicers.
SECTION 8.09. RATING AGENCY CONDITION FOR SERVICER TRANSFER.
Not withstanding the foregoing provisions relating to a Servicer Transfer, no
Servicer Transfer shall be effective hereunder unless prior written notice
thereof shall have been given to the Rating Agencies, and the Rating Agency
Condition shall have been satisfied with respect thereto.
ARTICLE NINE
REPORTS
SECTION 9.01. MONTHLY REPORTS. With respect to each
Distribution Date and the related Collection Period, the Servicer will provide
to each Trustee, each Rating Agency and First Union Securities, Inc., on the
related Determination Date, a monthly statement (a "Monthly Report")
substantially in the form of Exhibit H hereto.
SECTION 9.02. OFFICER'S CERTIFICATE. Each Monthly Report
delivered pursuant to Section 9.01 shall be accompanied by a certificate of a
Servicing Officer certifying the accuracy of the Monthly Report and that no
Servicer Default or event that with notice or lapse of time or both would become
a Servicer Default has occurred, or if such event has occurred and is
continuing, specifying the event and its status.
SECTION 9.03. OTHER DATA. In addition, the Servicer shall,
upon the request of any Trustees, or any Rating Agency, furnish such Trustee or
Rating Agency, as the case may be, such underlying data used to generate a
Monthly Report as may be reasonably requested. The Servicer will also forward to
the Indenture Trustee, the Owner Trustee, each Rating Agency and First Union
Securities, Inc. (a) within 120 days after each calendar quarter, commencing
with the quarter ending March 31, 2000, the unaudited quarterly financial
statement of the Servicer and (b) within 120 days after each fiscal year of the
Servicer, commencing with the fiscal year ending March 31, 2000, the
-85-
<PAGE> 93
unaudited annual financial statement of the Servicer, together with the related
report of the independent accountants to the Servicer. On the Distribution Date
following the receipt of each such financial statements and report, the
Indenture Trustee will forward to each Noteholder of record a copy of such
financial statements and report.
SECTION 9.04. ANNUAL REPORT OF ACCOUNTANTS.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "Independent Accountants"), who
may also render other services to the Servicer or its Affiliates, to deliver to
the Indenture Trustee, the Owner Trustee and each Rating Agency, on or before
June 30 (90 days after the end of the Servicer's fiscal year) of each year,
beginning on June 30, 2000, a report addressed to the Board of Directors of the
Servicer, the Indenture Trustee and the Owner Trustee indicating that (i) with
respect to the twelve months ended the immediately preceding March 31 to the
effect that such Independent Accountants have audited the financial statements
of the Servicer, that as part of that audit, nothing came to the attention of
such Independent Accountant that causes them to believe that the Servicer was
not in compliance with any of the terms, covenants, provisions or conditions of
the relevant sections of the Agreement, insofar as they relate to accounting
matters, except for such exceptions as such Independent Accountants shall
believe to be immaterial and such other exceptions as shall be set forth in such
report, (ii) in connection with Independent Accountant's audit of the Servicer,
there were no exceptions or errors in records related to equipment leases and
loans serviced by the Servicer, except for such exceptions as such Independent
Accountants shall believe to be immaterial and such other exceptions as shall be
set forth in such report, and (iii) the Independent Accountant has performed
certain procedures as agreed by the Servicer, the Indenture Trustee (subject to
the provisions of this Section 9.04(a)) and Owner Trustee, whereby the
Independent Accountant will obtain the Monthly Report for four months with
respect to the twelve months ended the immediately preceding March 31 and for
each Monthly Report the Independent Accountant will agree all amounts in the
Monthly Report to the Servicer's computer, accounting and other reports, which
will include in such report any amounts which were not in agreement. In the
event such firm of Independent Accountants requires the Indenture Trustee to
agree to the procedures performed by such firm of Independent Accountants, the
Servicer shall direct the Indenture Trustee in writing to so agree; it being
understood and agreed that the Indenture Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and the
Indenture Trustee will not make any independent inquiry or investigation as to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
-86-
<PAGE> 94
(b) The Independent Accountant's report shall also indicate
that the firm is independent of the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
SECTION 9.05. ANNUAL STATEMENT OF COMPLIANCE FROM SERVICER.
The Servicer will deliver to the Trustees, and each of the Rating Agencies, on
or before July 31 of each year commencing July 31, 2000, an Officer's
Certificate stating that (a) a review of the activities of the Servicer during
the prior calendar year and of its performance under this Agreement was made
under the supervision of the officer signing such certificate and (b) to such
officer's knowledge, based on such review, the Servicer has fully performed or
cause to be performed in all material respects all its obligations under this
Agreement and no Servicer Default has occurred or is continuing, or, if there
has been a Servicer Default, specifying each such default known to such officer
and the nature and status thereof and the steps being taken or necessary to be
taken to remedy such event. A copy of such certificate may be obtained by any
Securityholder by a request in writing to the Indenture Trustee, with respect to
any Noteholder, or the Owner Trustee, with respect to any Certificateholder.
SECTION 9.06. ANNUAL SUMMARY STATEMENT. On or prior to July 31
of each year, commencing July 31, 2000, the Servicer shall prepare and provide
to each Trustee, and each Rating Agency, a cumulative summary of the information
required to be included in the Monthly Reports for the Collection Periods ending
during the immediately preceding calendar year.
ARTICLE TEN
TERMINATION
SECTION 10.01. SALE OF TRUST ASSETS.
(a) Upon any sale of the assets of the Trust pursuant to
Section 9.02 of the Trust Agreement, the Servicer shall instruct the Indenture
Trustee in writing to deposit the proceeds from such sale after all payments and
reserves therefrom have been made (the "Insolvency Proceeds") in the Collection
Account. On the Distribution Date on which the Insolvency Proceeds are deposited
in the Collection Account (or, if such proceeds are not so deposited on a
Distribution Date, on the Distribution Date immediately following such deposit),
the Servicer shall instruct the Indenture Trustee in writing to allocate and
apply (after the application on such Distribution Date of Available Amounts and
funds on deposit in the Reserve Fund pursuant to Section 7.04) the Insolvency
Proceeds as if (and in the same order of priority as) the Insolvency Proceeds
were Available Amounts being allocated and distributed on such date pursuant to
Section 7.04(b).
-87-
<PAGE> 95
(b) As described in Article Nine of the Trust Agreement,
notice of any termination of the Trust shall be given by the Servicer to the
Owner Trustee and the Indenture Trustee as soon as practicable after the
Servicer has received notice thereof.
(c) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Certificateholder will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of the Indenture Trustee pursuant
to this Agreement.
ARTICLE ELEVEN
REMEDIES UPON MISREPRESENTATION; REPURCHASE OPTION
SECTION 11.01. REPURCHASES OF, OR SUBSTITUTION FOR, CONTRACTS
FOR BREACH OF REPRESENTATIONS AND WARRANTIES. Upon a discovery by the Servicer,
the Trust Depositor or the Trustees of a breach of a representation or warranty
of the Originator as set forth in Section 3.01, Section 3.02, Section 3.03,
Section 3.04, and Section 3.05 or as made or deemed made in any Addition Notice
or any Subsequent Purchase Agreement relating to Substitute Contracts that
materially adversely affects the Trust's interest in such Contract (without
regard to the benefits of the Reserve Fund) (an "Ineligible Contract"), or of an
inaccuracy with respect to the representations as to concentrations of the
Initial Contracts made under Section 3.05, the party discovering the breach
shall give prompt written notice to the other parties (and the Servicer shall,
with respect to an inaccuracy concerning concentrations, select one or more
Contracts, without employing adverse selection, to be the related Excess
Contract for purposes of this Section), provided, that the Trustees shall have
no duty or obligation to inquire or to investigate the breach by the Originator
of any of such representations or warranties. The Originator shall repurchase
each such Ineligible Contract or Excess Contract, at a repurchase price equal to
the Transfer Deposit Amount, not later than the next succeeding Determination
Date following the date the Originator becomes aware of, or receives written
notice from any Trustee, the Servicer or the Trust Depositor of, any such breach
or inaccuracy and which breach or inaccuracy has not otherwise been cured;
provided, however, that if the Originator is able to effect a substitution for
any such Ineligible Contract or Excess Contract in compliance with Section 2.04,
the Originator may, in lieu of repurchasing such Contract, effect a substitution
for such affected Contract with a Substitute Contract not later than the date a
repurchase of such affected Contract would be required hereunder, and provided
further that with respect to a breach of representation or warranty relating to
the Contracts in the aggregate and not to any particular Contract the Originator
may select Contracts (without adverse selection) to repurchase (or substitute
for) such that had such Contracts not been included as part of the Trust Assets
(and, in the case of a substitution, had such Substitute Contract been included
as part of the Trust Assets instead of the selected Contract) there would have
been no breach of
-88-
<PAGE> 96
such representation or warranty. Notwithstanding any other provision of this
Agreement, the obligation of the Originator described in this Section 11.01
shall not (a) terminate or be deemed released by any party hereto upon a
Servicer Transfer pursuant to Article VIII or (b) include any obligation to make
payment on account of a breach of a Contract by an Obligor subsequent to the
date on which such Contract was transferred to the Trust. The repurchase
obligation described in this Section 11.01 is in no way to be satisfied with
monies in the Reserve Fund.
SECTION 11.02. REASSIGNMENT OF REPURCHASED OR SUBSTITUTED
CONTRACTS. Upon receipt by the Indenture Trustee for deposit in the Collection
Account of the amounts described in Section 11.01 or Section 11.03 (or upon the
Subsequent Transfer Date related to a Substitute Contract described in Section
11.01), and upon receipt of an Officer's Certificate of the Servicer in the form
attached hereto as Exhibit F, the Indenture Trustee shall assign to the Trust
Depositor and the Trust Depositor shall assign to the Originator all of the
Trust's (or Trust Depositor's, as applicable) right, title and interest in the
repurchased or substituted Contract and related Trust Assets without recourse,
representation or warranty. Such reassigned Contract shall no longer thereafter
be included in any calculations of Principal Balances required to be made
hereunder or otherwise be deemed a part of the Trust.
SECTION 11.03. THE TRUST DEPOSITOR'S REPURCHASE OPTION. On
written notice to the Owner Trustee and the Indenture Trustee at least 20 days
prior to a Distribution Date, and provided that the Pool Balance of all
Contracts in the Contracts Pool is then less than % of the Pool Balance of such
Contracts as of the Initial Cutoff Date, the Trust Depositor, may (but is not
required to) repurchase from the Trust Depositor (and the Trust Depositor
concurrently from the Trust) on that Distribution Date all outstanding Contracts
at a price equal to the aggregate outstanding Principal Amount of the Securities
(other than the Certificates) and accrued and unpaid interest thereon as of the
current Distribution Date thereon, the amount of Unreimbursed Servicer Advances
(if any exist that have not been effectively waived and released by the
Servicer) as well as accrued and unpaid monthly Servicing Fees and any unpaid
fees, expenses (including legal fees and expenses) or other payments owed to the
Indenture Trustee under the Indenture to the date of such repurchase. Such price
is to be deposited in the Collection Account not later than one Business Day
before such Distribution Date, against the Owner Trustee's and Indenture
Trustee's release of the Contracts and the Contract Files to the Trust
Depositor.
-89-
<PAGE> 97
ARTICLE TWELVE
ORIGINATOR INDEMNITIES
SECTION 12.01. ORIGINATOR'S INDEMNIFICATION. The Originator
will defend and indemnify the Trust Depositor, the Trust, the Trustees, any
agents of the Trustees and the Certificateholder and Noteholders (any of which,
an "Indemnified Party") against any and all costs, expenses, losses, damages,
claims and liabilities, joint or several, including reasonable fees and expenses
of counsel and expenses of litigation (collectively, "Costs") arising out of or
resulting from (i) this Agreement, the Transaction Documents or any document or
transaction contemplated in connection herewith or therewith or the use,
ownership or operation of any Equipment by the Originator or the Servicer or any
Affiliate of either, (ii) any representation or warranty or covenant made by the
Originator in this Agreement being untrue or incorrect (subject to the
limitations described in the preamble to Article Three of this Agreement), and
(iii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or in any amendment thereto or the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement was made in conformity with information
furnished to Trust Depositor by the Originator specifically for use therein;
provided, however, that the Originator shall not be required to so indemnify any
such Indemnified Party for such Costs to the extent that such Cost shall be due
to or arise from the willful misfeasance, bad faith or negligence of such
Indemnified Party. Notwithstanding any other provision of this Agreement, the
obligation of the Originator under this Section 12.01 shall not terminate upon a
Servicer Transfer pursuant to Article Eight of this Agreement and shall survive
any termination of that agreement or this Agreement and the earlier removal or
resignation of the Indenture Trustee.
SECTION 12.02. LIABILITIES TO OBLIGORS. No obligation or
liability to any Obligor under any of the Contracts is intended to be assumed by
the Trustees, the Trust, the Noteholders or the Certificateholder under or as a
result of this Agreement and the transactions contemplated hereby.
SECTION 12.03. TAX INDEMNIFICATION.
(a) The Originator agrees to pay, and to indemnify,
defend and hold harmless the Trust Depositor, the Trust, the Trustees,
the Noteholders or the Certificateholder from, any taxes which may at
any time be asserted with respect to, and as of the date of, the
transfer of the Contracts to the Trust Depositor and the transfer by
the Trust Depositor of the Contracts to the Trust and the further
pledge by the Trust to the Indenture Trustee, including, without
limitation, any
-90-
<PAGE> 98
sales, gross receipts, general corporation, personal property,
privilege or license taxes (but not including any federal, state or
other taxes arising out of the creation of the Trust and the issuance
of the Notes and Certificates) and costs, expenses and reasonable
counsel fees in defending against the same, whether arising by reason
of the acts to be performed by the Originator or the Servicer under
this Agreement or imposed against the Trust, a Noteholder, a
Certificateholder or otherwise. Notwithstanding any other provision of
this Agreement, the obligation of the Originator under this Section
12.03 shall not terminate upon a Servicer Transfer pursuant to Article
Eight of this Agreement and shall survive any termination of this
Agreement.
(b) The Originator agrees to pay and to indemnify,
defend and hold harmless the Trust and the Trustees, on an after-tax
basis (as hereinafter defined), from any state or local personal
property taxes, gross rent taxes, leasehold taxes or similar taxes
which may at any time be asserted with respect to the ownership of the
Contracts (including security interests therein) and the receipt of
rentals therefrom by the Trust, and costs, expenses and reasonable
counsel fees in defending against the same, excluding, however, taxes
based upon or measured by gross or net income or receipts (other than
taxes imposed specifically with respect to rentals). As used in this
Section, the term "after-tax basis" shall mean, with respect to any
payment to be received by an indemnified person, that the amount to be
paid by the Originator shall be equal to the sum of (i) the amount to
be received without regard to this sentence, plus (ii) any additional
amount that may be required so that after reduction by all taxes
imposed under any federal, state and local law, and taking into account
any current credits or deductions arising therefrom, resulting either
from the receipt of the payments described in both clauses (i) and (ii)
hereof, such sum shall be equal to the amount described in clause (i)
above.
SECTION 12.04. ADJUSTMENTS. The Originator agrees that, with
respect to each Contract (i) which provides for a prepayment amount less than
the amount calculated in accordance with the definition thereof and (ii) as to
which the related Vendor has not agreed to indemnify the Trust Depositor or any
assignee of the Trust Depositor in an amount at least equal to the excess of the
Prepayment Amount as calculated in accordance with the definition thereof over
the amount otherwise payable upon prepayment of such Contract, the Originator
shall indemnify the Trust Depositor or the Trust as assignee thereof, in an
amount equal to the amount specified in the foregoing clause (ii).
-91-
<PAGE> 99
The Originator hereby further agrees that if any real property
collateral securing any Contract described in Section 3.02(e) hereof becomes the
subject of any claims, proceedings, liens or encumbrances with respect to any
material violation or claimed material violation of any federal or state
environmental laws or regulations, such Contract shall for all purposes
hereunder be, at and following the time of discovery by the Originator, the
Trust Depositor, the Servicer or any Trustee (it being understood and agreed
that such Trustee is under no duty of investigation) of such fact, deemed an
Ineligible Contract subject to the same remedial and recourse provisions
hereunder as other Contracts determined to be Ineligible Contracts hereunder.
SECTION 12.05. OPERATION OF INDEMNITIES. Indemnification under
this Article Twelve shall include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation. If the Originator has made any
indemnity payments to the Trust Depositor or the Trustees pursuant to this
Article Twelve and the Trust Depositor or the Trustees thereafter collects any
of such amounts from others, the Trust Depositor or the Trustees will repay such
amounts collected to the Originator, except that any payments received by the
Trust Depositor or the Trustees from an insurance provider as a result of the
events under which the Originator's indemnity payments arose shall be repaid
prior to any repayment of the Originator's indemnity payment.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. AMENDMENT.
(a) This Agreement may be amended by the Originator, the Trust
Depositor, the Servicer, the Indenture Trustee and the Owner Trustee on behalf
of the Trust, collectively, without the consent of any Securityholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement which
are inconsistent with the provisions herein, or to add any other provisions with
respect to matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement, provided, however that any
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Securityholder.
(b) This Agreement may also be amended from time to time by
the Originator, the Trust Depositor, the Servicer, the Indenture Trustee and the
Owner Trustee on behalf of the Trust, with the consent of the Required Holders,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholder; provided,
however, that no such amendment shall (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of or change the
-92-
<PAGE> 100
method of calculating (A) Collections of payments on the Contracts or
distributions that shall be required to be made on any Note or Certificate
(including by way of amendment of related definitions), or (B) the manner in
which the Reserve Fund is applied, or (ii) change in any manner (including
through amendment of related definitions), the Holders which are required to
consent to any such amendment, or (iii) make any Note or Certificate payable in
money other than Dollars, without the consent of the Holders of all Notes and
Certificates of the relevant affected Class then outstanding.
(c) Prior to the execution of any such amendment or consent,
the Indenture Trustee shall furnish written notification of the substance of
such amendment or consent, together with a copy thereof, to each Rating Agency.
(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee and the Indenture Trustee, as the case may be, shall
furnish written notification of the substance of such amendment or consent to
each Certificateholder and Noteholder, respectively. It shall not be necessary
for the consent of Noteholders and Certificateholder pursuant to Section
13.01(b) to approve the particular form of any proposed amendment or consent,
but it shall be sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents and of evidencing the authorization by
Noteholders and Certificateholder of the execution thereof shall be subject to
such reasonable requirements as the Owner Trustee or the Indenture Trustee may
prescribe.
(e) Prior to the execution of any amendment to this Agreement,
the Owner Trustee and the Indenture Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized and permitted by this Agreement. Such Trustee may, but
shall not be obligated to, enter into any such amendment which affects such
Trustee's own rights, duties, indemnities or immunities under this Agreement or
otherwise.
SECTION 13.02. PROTECTION OF TITLE TO TRUST.
(a) The Servicer shall execute and file such financing
statements and cause to be executed and filed such continuation statements, all
in such manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Trust, the Securityholders, the
Indenture Trustee and the Owner Trustee in the Contracts and in the proceeds
thereof. The Servicer shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
-93-
<PAGE> 101
(b) Neither the Originator, the Trust Depositor nor the
Servicer shall change its name, identity or corporate structure in any manner
that would, could or might make any financing statement or continuation
statement filed in accordance with Section 4.02(a) seriously misleading within
the meaning of Section 9-402(7) of the UCC, unless it shall have given the
Trust, the Owner Trustee and the Indenture Trustee at least 30 days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) The Originator, the Trust Depositor and the Servicer shall
give the Trust, the Owner Trustee and the Indenture Trustee at least 30 days'
prior written notice of any relocation of the principal executive office of the
Originator, or the Trust Depositor or the Servicer if, as a result of such
relocation, the applicable provisions of the UCC would require filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement, and the Servicer shall promptly file or cause to be
filed any such amendment or new financing statement. The Servicer shall at all
times maintain each office from which it shall service Contracts, and its
principal executive office, within the United States.
(d) The Servicer shall maintain or cause to be maintained
accounts and records as to each Contract accurately and in sufficient detail to
permit (i) the reader thereof to know at any time the status of such Contract,
including payments and recoveries made and payments owing (and the nature of
each) and (ii) reconciliation between payments or recoveries on (or with respect
to) each Contract and the amounts from time to time deposited in or credited to
the Collection Account in respect of each Contract.
(e) The Servicer shall maintain or cause to be maintained its
computer systems so that, from and after the time of sale under this Agreement
of the Contracts, the Servicer's master computer records (including any backup
archives) that shall refer to a Contract indicate clearly the interest of the
Trust and the Indenture Trustee in such Con tract and that such Contract is
owned by the Trust and has been pledged to the Indenture Trustee. Indication of
the Trust's ownership of and the Indenture Trustee's interest in a Contract
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the related Contract shall have been paid in full or repurchased or
substituted for.
(f) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency promptly after the execution and
delivery of this Agreement and of each amendment hereto, an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
the Indenture Trustee and reciting the details of each filing or
-94-
<PAGE> 102
referring to prior Opinions of Counsel in which such details are given, or (B)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest.
SECTION 13.03. GOVERNING LAW. (a) This Agreement shall be
construed in accordance with the laws of the State of New York and the
obligations, rights, and remedies of the parties under the Agreement shall be
determined in accordance with such laws, except that the duties of the Owner
Trustee shall be governed by the laws of the State of Delaware.
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT. Each party hereto (i) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 13.03(b).
SECTION 13.04. NOTICES. All notices, demands, certificates,
requests and communications hereunder ("notices") shall be in writing and shall
be effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or (d)
on the date transmitted by legible telecopier transmission with a confirmation
of receipt, in all cases addressed to the recipient as follows:
(i) If to the Servicer or Originator:
ORIX Credit Alliance, Inc.
300 Lighting Way
Secaucus, New Jersey 07096-1525
Attention: Chief Financial Officer -
Asset Securitizations
Fax No.: (201) 348-2914
-95-
<PAGE> 103
(ii) If to the Trust Depositor:
ORIX Credit Alliance Receivables III
300 Lighting Way
Secaucus, New Jersey 07096-1525
Attention: President
Fax No.: (201) 348-2914
(iii) If to the Indenture Trustee:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606
Attention: Indenture Trust Administration
Fax No.: (312) 293-4139
(iv) If to the Owner Trustee:
The Bank of New York (Delaware)
502 White Clay Center
P.O. Box 6973
Newark, Delaware 19714-6973
Attention: Corporate Trust Administration
Fax No.: (302) 283-8279
with a copy to:
The Bank of New York
101 Barclay Street
12 East
New York, New York 10286
Attention: Asset-Backed Finance Group
Fax No.: (212) 815-4135
-96-
<PAGE> 104
(v) If to Moody's:
Moody's Investors Service, Inc.
99 Church Street
4th Floor
New York, New York 10007
Attention: ABS Monitoring Department
Fax No.: (212) 553-0344
(vi) If to S&P:
Standard & Poor's Ratings Service
55 Water Street
41st Floor
New York, New York 10014
Attention: Surveillance: Asset Backed
Services
Fax No.: (212) 438-2662
(vii) If to Fitch:
Fitch IBCA, Inc.
One State Street Plaza
32nd Floor
New York, New York 10004
Attention: Asset Backed Securities Group
Fax No.: (212) 514-9879
(viii) If to the Underwriter:
First Union Securities, Inc.
One First Union Center, TW-9
301 South College Street
Charlotte, North Carolina 28288-0610
Attention: Asset Securitization Division
Fax No.: (704) 374-3254
-97-
<PAGE> 105
Each party hereto may, by notice given in accordance herewith to each of the
other parties hereto, designate any further or different address to which
subsequent notices shall be sent.
SECTION 13.05. SEVERABILITY OF PROVISIONS. If one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or
Certificates or the rights of the Holders thereof.
SECTION 13.06. THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided herein, the parties hereto hereby manifest their intent
that no third party, other than each Trustee, shall be deemed a third party
beneficiary of this Agreement, and specifically that the Obligors are not third
party beneficiaries of this Agreement.
SECTION 13.07. COUNTERPARTS. This Agreement may be executed by
facsimile signature and in several counterparts, each of which shall be an
original and all of which shall together constitute but one and the same
instrument.
SECTION 13.08. HEADINGS. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 13.09. NO BANKRUPTCY PETITION; DISCLAIMER. (a) Each of
the Originator, the Indenture Trustee, the Servicer, the Trust acting through
the Owner Trustee and each Holder (by acceptance of the applicable Securities)
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all amounts owing in respect of all outstanding
Securities, it will not institute against the Trust Depositor, or the Trust, or
join any other Person in instituting against the Trust Depositor or the Trust,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United States or
any state of the United States provided, however, that nothing herein shall
prohibit the Indenture Trustee from filing proofs of claim or otherwise
participating in any such proceedings instituted by any other Person. This
Section 13.09 will survive the termination of this Agreement.
(b) The Trust acknowledges and agrees that the Certificates
represent a beneficial interest in the Trust and Trust Assets only and the
Securities do not represent an interest in any assets (other than the Trust
Assets) of the Trust Depositor (including by virtue of any deficiency claim in
respect of obligations not paid or otherwise satisfied
-98-
<PAGE> 106
from the Trust Assets and proceeds thereof). In furtherance of and not in
derogation of the foregoing, to the extent that the Trust Depositor enters into
other securitization transactions as contemplated in Section 6.07, the Trust
acknowledges and agrees that it shall have no right, title or interest in or to
any assets (or interests therein), other than the Trust Assets, conveyed or
purported to be conveyed (whether by way of a sale, capital contribution or by
the granting of a Lien) by the Trust Depositor to any Person other than the
Trust (the "Other Assets").
To the extent that notwithstanding the agreements contained in
this Section, the Trust or any Securityholder, either (i) asserts an interest in
or claim to, or benefit from any Other Assets, whether asserted against or
through the Trust Depositor or any other Person owned by the Trust Depositor, or
(ii) is deemed to have any interest, claim or benefit in or from any Other
Assets, whether by operation of law, legal process, pursuant to applicable
provisions of Insolvency Laws or otherwise (including without limitation
pursuant to Section 1111(b) of the federal Bankruptcy Code, as amended) and
whether deemed asserted against or through the Trust Depositor or any other
Person owned by the Trust Depositor, then the Trust and each Securityholder by
accepting a Note or Certificate further acknowledges and agrees that any such
interest, claim or benefit in or from the Other Assets is and shall be expressly
subordinated to the indefeasible payment in full of all obligations and
liabilities of the Trust Depositor which, under the terms of the documents
relating to the securitization of the Other Assets, are entitled to be paid
from, entitled to the benefits of, or otherwise secured by such Other Assets
(whether or not any such entitlement or security interest is legally perfected
or otherwise entitled to a priority of distribution under applicable law,
including Insolvency Laws, and whether asserted against the Trust Depositor or
any other Person owned by the Trust Depositor) including, without limitation,
the payment of post-petition interest on such other obligations and liabilities.
This subordination agreement shall be deemed a subordination agreement within
the meaning of Section 510(a) of the Bankruptcy Code. Each Securityholder is
deemed to have acknowledged and agreed that no adequate remedy at law exists for
a breach of this Section 13.09 and that the terms and provisions of this Section
13.09 may be enforced by an action for specific performance.
(c) The provisions of this Section 13.09 shall be for the
third party benefit of those entitled to rely thereon and shall survive the
termination of this Agreement.
SECTION 13.10. JURISDICTION. Any legal action or proceeding
with respect to this Agreement may be brought in the courts of the United States
for the Southern District of New York, and by execution and delivery of this
Agreement, each party hereto consents, for itself and in respect of its
property, to the non-exclusive jurisdiction of those courts. Each such party
irrevocably waives any objection, including any objection to the laying of venue
or based on the grounds of forum non conveniens, which it may now or
-99-
<PAGE> 107
hereafter have to the bringing of any action or proceeding in such jurisdiction
in respect of this Agreement or any document related hereto.
SECTION 13.11. TAX CHARACTERIZATION. Notwithstanding the
provisions of Section 2.01 and Section 2.04 hereof, the Trust Depositor and
Owner Trustee agree that pursuant to Treasury Regulations Section
301.7701-3(b)(1)(ii), the Trust is to be disregarded as a separate entity from
the Trust Depositor for federal and State of New Jersey income tax purposes.
SECTION 13.12. PROHIBITED TRANSACTIONS WITH RESPECT TO THE
TRUST. The Originator shall not:
(a) Provide credit to any Noteholder or Certificateholder for
the purpose of enabling such Noteholder or Certificateholder to
purchase Notes or Certificates, respectively;
(b) Purchase any Notes or Certificates in an agency or trustee
capacity; or
(c) Except in its capacity as Servicer as provided in this
Agreement, lend any money to the Trust.
SECTION 13.13. MERGER OR CONSOLIDATION OF ORIGINATOR OR
SERVICER. (a) Each of the Originator and the Servicer will keep in full force
and effect its existence, rights and franchise as a New York corporation, and
each of the Originator and the Servicer will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and of any of the Contracts and to perform its
duties under this Agreement.
(b) Any person into which the Originator or the Servicer, as
the case may be, may be merged or consolidated, or any corporation resulting
from such merger or consolidation to which the Originator or the Servicer, as
the case may be, is a party, or any person succeeding by acquisition or transfer
to substantially all of the assets and the business of the Originator or the
Servicer, as the case may be, shall be the successor to the Originator or the
Servicer, as the case may be, hereunder, without execution or filing of any
paper or any further act on the part of any of the parties hereto,
notwithstanding anything herein to the contrary.
(c) Upon the merger or consolidation of the Originator or the
Servicer, as the case may be, as described in this Section 13.13, the Originator
or the Servicer, as the case may be, shall provide the Indenture Trustee and the
Rating Agencies notice of
-100-
<PAGE> 108
such merger, consolidation or transfer of substantially all of the assets and
business within thirty (30) days after completion of the same.
SECTION 13.14. ASSIGNMENT OR DELEGATION BY THE ORIGINATOR.
Except as specifically authorized hereunder, the Originator may not convey and
assign or delegate any of its rights or obligations hereunder absent the prior
written consent of the Trust Depositor and the Trustees, and any attempt to do
so without such consent shall be void.
SECTION 13.15. LIMITATION OF LIABILITY OF OWNER TRUSTEE. The
Bank of New York (Delaware) acts on behalf of the Issuer solely as Owner Trustee
hereunder and not in its individual capacity, and all Persons having any claim
against the Trust by reason of the transactions contemplated by this Agreement
or any other Transaction Document shall look only to the Trust Estate under the
Trust Agreement for payment or satisfaction thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, any other
Transaction Document or the Notes, or of any Contract or related documents. The
Owner Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Contract, or the
perfection and priority of any security interest created by any Contract in any
Equipment or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust Estate under the Trust Agreement or its
ability to generate the payments to be distributed to the Certificateholder
under the Trust Agreement or the Noteholders under the Indenture, including,
without limitation, the existence, condition and ownership of any Equipment; the
existence and enforceability of any insurance thereon; the existence and
contents of any Contract on any computer or other record thereof; the validity
of the assignment of any Contract to the Trust or of any intervening assignment;
the completeness of any Contract; the performance or enforcement of any
Contract; the compliance by the Issuer, the Trust Depositor or the Servicer with
any covenant, agreement or other obligation or any warranty or representation
made under any Transaction Document or in any related document or the accuracy
of any such warranty or representation; or any action of the Administrator, the
Indenture Trustee or the Servicer or any subservicer taken in the name of the
Owner Trustee or the Issuer.
-101-
<PAGE> 109
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE), not in its
individual capacity but solely as Owner Trustee
on behalf of the Trust
By: ____________________________________________
Printed Name: Cheryl Laser
Title: Assistant Vice President
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III,
as Trust Depositor
By: ____________________________________________
Printed Name: Joseph J. McDevitt, Jr.
Title: President
ORIX CREDIT ALLIANCE, INC.,
as Servicer and as Originator
By: ____________________________________________
Printed Name: Joseph J. McDevitt, Jr.
Title: Executive Vice President
HARRIS TRUST AND SAVINGS BANK, not in its individual
capacity but solely as Indenture Trustee
By: ____________________________________________
Printed Name: Robert D. Foltz
Title: Vice President
-102-
<PAGE> 110
SCHEDULE 1
LIST OF STATES WHERE EQUIPMENT IS LOCATED
<TABLE>
<S> <C>
Alabama...............................................................
Arizona...............................................................
Arkansas..............................................................
California............................................................
Colorado..............................................................
Connecticut...........................................................
Delaware..............................................................
District of Columbia..................................................
Florida...............................................................
Georgia...............................................................
Idaho.................................................................
Illinois..............................................................
Indiana...............................................................
Iowa..................................................................
Kansas................................................................
Kentucky..............................................................
Louisiana.............................................................
Maine.................................................................
Maryland..............................................................
Massachusetts.........................................................
Michigan..............................................................
Minnesota.............................................................
Mississippi...........................................................
Missouri..............................................................
Montana...............................................................
Nebraska..............................................................
Nevada................................................................
New Hampshire.........................................................
New Jersey............................................................
New Mexico............................................................
New York..............................................................
North Carolina........................................................
Ohio..................................................................
Oklahoma..............................................................
Oregon................................................................
Pennsylvania..........................................................
Rhode Island..........................................................
South Carolina........................................................
South Dakota..........................................................
Tennessee.............................................................
Texas.................................................................
Utah..................................................................
Vermont...............................................................
Virginia..............................................................
Washington............................................................
West Virginia.........................................................
Wisconsin.............................................................
Wyoming...............................................................
</TABLE>
-103-
<PAGE> 111
EXHIBIT A
FORM OF ASSIGNMENT
In accordance with the Transfer and Servicing Agreement (the
"Transfer and Servicing Agreement") dated as of , 2000 made by and
between the undersigned, as Trust Depositor ("Trust Depositor"), ORIX Credit
Alliance, Inc., as Servicer and as Originator, Harris Trust and Savings Bank, as
Indenture Trustee and the ORIX Credit Alliance Receivables Trust 2000-A (the
"Trust"), as assignee thereunder, the undersigned does hereby sell, transfer,
convey and assign, set over and otherwise convey to the Trust (i) all the right,
title and interest of the Trust Depositor in and to the Initial Contracts listed
on the initial List of Contracts delivered on the Closing Date (including,
without limitation, all rights to receive Collections with respect thereto on or
after the Initial Cutoff Date, but excluding any rights to receive payments
which were collected pursuant thereto prior to the Initial Cutoff Date), and
(ii) all other Contract Assets relating to the foregoing.
Capitalized terms used herein have the meaning given such
terms in the Transfer and Servicing Agreement.
This Assignment is made pursuant to and in reliance upon the
representation and warranties on the part of the undersigned contained in
Article III of the Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment
to be duly executed this day of February, 2000.
ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III
By: ________________________________
Printed Name: __________________
Title: _________________________
A-1
<PAGE> 112
EXHIBIT B
FORM OF CLOSING CERTIFICATE OF TRUST DEPOSITOR
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III
OFFICER'S CERTIFICATE
The undersigned certifies that he/she is [ ] of ORIX
Credit Alliance Receivables Corporation III, a Delaware corporation (the "Trust
Depositor"), and that as such is duly authorized to execute and deliver this
certificate on behalf of the Trust Depositor in connection with the Transfer and
Servicing Agreement (the "Agreement") dated as of , 2000 (the "Effective Date")
by and among the Trust Depositor, Harris Trust and Savings Bank (the "Indenture
Trustee"), as Indenture Trustee, ORIX Credit Alliance, Inc. ("OCAI"), as
Servicer and as Originator, and the ORIX Credit Alliance Receivables Trust
2000-A ("Trust") (all capitalized terms used herein without definition having
the respective meanings set forth in the Agreement), and further certifies as
follows:
(1) Attached hereto as Exhibit I is a true and
correct copy of the Certificate of Incorporation of the Trust
Depositor, together with all amendments thereto as in effect on the
date hereof.
(2) There has been no other amendment or other
document filed affecting the Certificate of Incorporation of the Trust
Depositor since , 2000 and no such amendment has been authorized by the
Board of Directors or shareholders of the Trust Depositor.
(3) Attached hereto as Exhibit II is a Certificate of
the Secretary of State of the State of Delaware dated , 2000
stating that the Trust Depositor is duly incorporated under the laws of
the State of Delaware and is in good standing.
(4) Attached hereto as Exhibit III is a true and
correct copy of the Bylaws of the Trust Depositor, as amended, which
were in full force and effect on , 2000, and at all times
subsequent thereto.
(5) Attached hereto as Exhibit IV is a true and
correct copy of resolutions adopted pursuant to the unanimous written
consent of the Board of Directors of the Trust Depositor relating to
the execution, delivery and performance of (among other things) the
Agreement; the Trust Agreement dated as of the Effective Date between
the Trust Depositor and The Bank of New York
B-1
<PAGE> 113
(Delaware) (the "Owner Trustee"), as Owner Trustee; the Administration
Agreement dated as of the Effective Date among the Trust Depositor, the
Trust, the Indenture Trustee, and OCAI, as Administrator; and the
Underwriting Agreement (as defined in the Agreement) (collectively, the
"Transaction Agreements"). Said resolutions have not been amended,
modified, annulled or revoked, and are on the date hereof in full force
and effect and are the only resolutions relating to these matters which
have been adopted by the Board of Directors.
(6) No event with respect to the Trust Depositor has
occurred and is continuing which would constitute an Event of Default
or an event that, with notice or the passage of time or both, would
become an Event of Default as defined in the Agreement. To the best of
my knowledge after reasonable investigation, there has been no
material adverse change in the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Trust
Depositor, whether or not arising in the ordinary course of business
since the respective dates as of which information is given in the
Prospectus and except as set forth therein.
(7) All federal, state and local taxes of the Trust
Depositor due and owing as of the date hereof have been paid.
(8) All representations and warranties of the Trust
Depositor contained in the Transaction Agreements or any other related
documents, or in any document, certificate or financial or other
statement delivered in connection therewith are true and correct as of
the date hereof.
(9) There is no action, investigation or proceeding
pending or, to our knowledge, threatened against the Trust Depositor
before any court, administrative agency or other tribunal (a) asserting
the invalidity of the Transaction Agreements; (b) seeking to prevent
the consummation of any of the transactions contemplated by the
Transaction Agreements; or (c) which is likely materially and adversely
to affect the Trust Depositor's performance of its obligations under,
or the validity or enforceability of, the Transaction Agreements.
(10) No consent, approval, authorization or order of,
and no notice to or filing with, any governmental agency or body or
state or federal court is required to be obtained by the Trust
Depositor for the Trust Depositor's consummation of the transactions
contemplated by the Transaction Agreements, except such as have been
obtained or made and such as may be required under the
B-2
<PAGE> 114
blue sky laws of any jurisdiction in connection with the issuance and
sale of the Securities.
(11) The Trust Depositor is not a party to any
agreements or instruments evidencing or governing indebtedness for
money borrowed or by which the Trust Depositor or its property is bound
(other than the Transaction Agreements). Neither the Originator's
transfer and assignment of the Contract Assets to the Trust Depositor,
the Trust Depositor's concurrent transfer and assignment of the Trust
Assets to the Trust, nor the concurrent transfer and assignment of the
Collateral by the Trust to the Indenture Trustee nor the issuance and
sale of the Certificates and the Notes, nor the execution and delivery
of the Transaction Agreements, nor the consummation of any other of the
transactions contemplated therein, will violate or conflict with any
agreement or instrument to which the Trust Depositor is a party or by
which it is otherwise bound.
(12) In connection with the transfer of Contracts and
related collateral contemplated in the Agreement, (a) the Trust
Depositor has not made such transfer with actual intent to hinder,
delay or defraud any creditor of the Trust Depositor, and (b) the Trust
Depositor has not received less than a reasonably equivalent value in
exchange for such transfer, is not on the date thereof insolvent (nor
will become insolvent as a result thereof), is not engaged (or about to
engage) in a business or transaction for which it has unreasonably
small capital, and does not intend to incur or believe it will incur
debts beyond its ability to pay when matured.
(13) Each of the agreements and conditions of the
Trust Depositor to be performed on or before the Closing Date pursuant
to the Transaction Agreements have been performed in all material
respects.
* * * *
In Witness Whereof, I have affixed my signature hereto this
day of February, 2000.
By: ________________________________
Printed Name: __________________
Title: _________________________
B-3
<PAGE> 115
EXHIBIT C
[FORM OF CLOSING CERTIFICATE OF SERVICER/ORIGINATOR]
ORIX CREDIT ALLIANCE, INC.
OFFICER'S CERTIFICATE
The undersigned certifies that he/she is of ORIX
Credit Alliance, Inc. ("OCAI"), and that as such he/she is duly authorized to
execute and deliver this certificate on behalf of OCAI, as Servicer, in
connection with the Transfer and Servicing Agreement (the "Agreement") dated as
of , 2000 (the "Effective Date") by and among OCAI, as Servicer and
Originator, ORIX Credit Alliance Receivables Corporation III ("OCARC"), Harris
Trust and Savings Bank as Indenture Trustee, and ORIX Credit Alliance
Receivables Trust 2000-A ("Trust"), and as the Originator (all capitalized terms
used herein without definition having the respective meanings set forth in the
Agreement), and further certifies as follows (it being understood that these
certifications are being relied upon by, among others, Sullivan & Cromwell in
connection with its delivery of a legal opinion (the "Opinion") required in
connection with the subject transactions addressing, among other things,
enforceability and UCC perfection issues, and by the Underwriters in connection
with their undertakings in connection with the subject transactions):
(1) Attached hereto as Exhibit I is a true and
correct copy of the Certificate of Incorporation of OCAI, together with
all amendments thereto as in effect on the date hereof.
(2) There has been no other amendment or other
document filed affecting the Certificate of Incorporation of OCAI since
, 199 , and no such amendment has been authorized by the
Board of Directors or shareholders of OCAI.
(3) Attached hereto as Exhibit II is a Certificate of
the Secretary of State of the State of New York dated ,
2000 stating that OCAI is duly incorporated under the laws of the State
of New York and is in good standing.
(4) Attached hereto as Exhibit III is a true and
correct copy of the Bylaws of OCAI which were in full force and effect
on , 2000 and at all times subsequent thereto.
C-1
<PAGE> 116
(5) Attached hereto as Exhibit IV is a true and
correct copy of resolutions adopted pursuant to a unanimous written
consent of the Executive Committee of the Board of Directors of OCAI
and relating to the authorization, execution, delivery and performance
of (among other things) the Agreement; the Underwriting Agreements (as
defined in the Agreement); and the Administration Agreement dated as of
the Effective Date among OCAI, OCARC, the Trust and Harris Trust and
Savings Bank as Indenture Trustee (the "Indenture Trustee") (the
"Administration Agreement"). Said resolutions have not been amended,
modified, annulled or revoked, and are on the date hereof in full force
and effect and are the only resolutions relating to these matters which
have been adopted by the Board of Directors.
(6) No event with respect to OCAI has occurred and is
continuing which would constitute an Event of Default or Servicer
Default or an event that, with notice or the passage of time, would
constitute an Event of Default or Servicer Default as defined in the
Transfer and Servicing Agreement. To the best of my knowledge after
reasonable investigation, there has been no material adverse change in
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of OCAI, whether or not arising in the
ordinary course of business, since the respective dates as of which
information is given in the Prospectus and except as set forth therein.
(7) All federal, state and local taxes of OCAI due
and owing as of the date hereof have been paid.
(8) All representations and warranties of OCAI
contained in the Agreement, the Underwriting Agreements and the
Administration Agreement (collectively, the "Transaction Agreements")
or in any document, certificate or financial or other statement
delivered in connection therewith are true and correct as of the date
hereof.
(9) There is no action, investigation or proceeding
pending or, to my knowledge, threatened against OCAI before any court,
administrative agency or other tribunal (a) asserting the invalidity of
any Transaction Agreement to which OCAI is a party; or (b) which is
likely materially and adversely to affect OCAI's performance of its
obligations under, or the validity or enforceability of, the
Transaction Agreements.
(10) No consent, approval, authorization or order of,
and no notice to or filing with, any governmental agency or body or
state or federal court is required to be obtained by OCAI for OCAI's
consummation of the transactions contemplated by the Transaction
Agreements, except such as have been obtained
C-2
<PAGE> 117
or made and such as may be required under the blue sky laws of any
jurisdiction in connection with the issuance and sale of the Notes or
Certificates.
(11) Neither OCAI's transfer and assignment of the
Contract Assets to OCARC, OCARC's concurrent transfer and assignment of
the Trust Assets to the Trust, nor the concurrent transfer and
assignment by the Trust of the Collateral to the Indenture Trustee, nor
the issuance and sale of the Notes or Certificates or the entering into
of the Transaction Agreements, nor the consummation of any other of
the transactions contemplated therein, will violate or conflict with
any agreement or instrument to which OCAI is a party or by which it is
otherwise bound.
(12) In connection with the transfers of Contracts
and related assets contemplated in the Agreement, (a) OCAI has not made
such transfer with actual intent to hinder, delay or defraud any
creditor of OCAI, and (b) OCAI has not received less than a reasonably
equivalent value in exchange for such transfer, is not on the date
hereof insolvent (nor will OCAI become insolvent as a result thereof),
is not engaged (or about to engage) in a business or transaction for
which it has unreasonably small capital, and does not intend to incur
or believe it will incur debts beyond its ability to pay when matured.
(13) Each of the agreements and conditions of OCAI to
be per formed or satisfied on or before the Closing Date under the
Transaction Agreements has been performed or satisfied in all material
respects.
(14) OCAI has not executed for filing any UCC
financing statements listing the Contract Assets as collateral other
than financing statements relating to the transactions contemplated in
the Agreement.
* * * * * *
C-3
<PAGE> 118
IN WITNESS WHEREOF, I have affixed my signature hereto this
day of February, 2000.
By: ________________________________
Printed Name: __________________
Title: _________________________
C-4
<PAGE> 119
EXHIBIT D
FORM OF OPINION OF COUNSEL FOR TRUST DEPOSITOR
REGARDING GENERAL CORPORATE MATTERS
(INCLUDING PERFECTION OPINION)
D-1
<PAGE> 120
EXHIBIT E
FORM OF OPINION OF COUNSEL FOR TRUST
DEPOSITOR REGARDING THE "TRUE SALE" NATURE
OF THE TRANSACTION AND REGARDING NON-CONSOLIDATION
E-1
<PAGE> 121
EXHIBIT F
FORM OF CERTIFICATE REGARDING REPURCHASED CONTRACTS
ORIX CREDIT ALLIANCE, INC.
CERTIFICATE REGARDING REPURCHASED CONTRACTS
The undersigned certifies that he/she is a of
ORIX Credit Alliance, Inc., a New York corporation (the "Servicer"), and that as
such he/she is duly authorized to execute and deliver this certificate on behalf
of the Servicer pursuant to Section 11.02 of the Transfer and Servicing
Agreement (the "Agreement") dated as of , 2000 by and among ORIX
Credit Alliance Receivables Corporation III, as Trust Depositor, the Servicer,
ORIX Credit Alliance, Inc. as Originator, Harris Trust and Savings Bank, as
Indenture Trustee, and ORIX Credit Alliance Receivables Trust 2000-A (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Contracts on the attached schedule are to be repurchased
by the Originator on the date hereof, or substituted for by
the Originator, pursuant to and in accordance with Section
11.01 of the Agreement.
2. Upon deposit of the Transfer Deposit Amount for such Contracts
(or the effective conveyance of one or more Substitute
Contracts therefor), such Contracts may, pursuant to Section
11.02 of the Agreement, be assigned by the Owner Trustee to
the Originator.
IN WITNESS WHEREOF, I have affixed hereunto my signature this
day of , .
ORIX CREDIT ALLIANCE, INC.
By:
------------------------------
Printed Name:
-----------------
Title:
------------------------
F-1
<PAGE> 122
EXHIBIT G
LIST OF CONTRACTS
G-1
<PAGE> 123
EXHIBIT H
[FORM OF MONTHLY REPORT TO NOTEHOLDERS AND CERTIFICATEHOLDERS]
H-1
<PAGE> 124
EXHIBIT I
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT (the "Agreement"), dated as of
[ ], by and among ORIX Credit Alliance Receivables Trust 2000-A (the "Trust"),
ORIX Credit Alliance Receivables Corporation III, a Delaware corporation (the
"Trust Depositor"), Harris Trust and Savings Bank, as Indenture Trustee (the
"Indenture Trustee") and ORIX Credit Alliance, Inc., a Delaware corporation, as
Servicer and as Originator, pursuant to the Transfer and Servicing Agreement
referred to below.
WITNESSETH:
WHEREAS, the Trust, the Trust Depositor, the Servicer, the
Originator and the Indenture Trustee, are parties to the Transfer and Servicing
Agreement, dated as of , 2000 (the "Transfer and Servicing Agreement");
WHEREAS, pursuant to the Transfer and Servicing Agreement, the
Trust Depositor wishes to sell the Substitute Contracts to the Trust, and the
Trust wishes to purchase the same, for the consideration described in the
Transfer and Servicing Agreement; and
WHEREAS, the Servicer has timely delivered an Addition Notice
related to such conveyance as required in by Section 2.04(b) of the Transfer and
Servicing Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Capitalized terms used herein shall have the
meanings ascribed to them in the Transfer and Servicing Agreement unless
otherwise defined herein.
"Subsequent Cutoff Date" shall mean, with respect to
the Substitute Contracts transferred hereby, .
"Substitute Contracts" shall mean, for purposes of
this Agreement, the Substitute Contracts listed in the
Subsequent List of Contracts attached hereto as Exhibit A.
"Subsequent Transfer Date" shall mean, with respect
to the Substitute Contracts transferred hereby, .
I-1
<PAGE> 125
SECTION 2. SUBSEQUENT LIST OF CONTRACTS. The Subsequent List
of Contracts attached hereto as Exhibit A is an amendment to the initial List of
Contracts attached as Exhibit G to the Transfer and Servicing Agreement, as
contemplated in the definition of List of Contracts set forth therein. The
Subsequent List of Contracts separately identifies the Substitute Contracts to
be transferred pursuant to this Agreement on the Subsequent Transfer Date, and
also further separately identifies the related Contract or Contracts with
respect to which a Substitution Event has occurred and which Contracts are being
deleted from the List of Contracts by virtue of the delivery of the Subsequent
List of Contracts.
SECTION 3. TRANSFER OF SUBSTITUTE CONTRACTS. Subject to and
upon the terms and conditions set forth in Section 2.04(b) of the Transfer and
Servicing Agreement and this Agreement, the Trust Depositor hereby sells,
transfers, assigns, sets over and otherwise conveys to the Trust all of the
Trust Depositor's rights, title and interest in:
(i) the Substitute Contracts identified in the
related Addition Notice, and all monies received in payment of
such Contracts on and after the related Subsequent Cutoff
Dates, any Prepayment Amounts, any payments in respect of a
casualty or early termination, and any Recoveries received
with respect thereto, but excluding any Excluded Amounts;
(ii) the Equipment related to such Contracts,
including all proceeds from any sale or other disposition of
such Equipment (but subject to the exclusion and release
herein of Excluded Amounts);
(iii) the Contract Files;
(iv) all payments made or to be made in the future
with respect to such Contracts or the Obligor thereunder under
any Vendor Assignments with the Originator;
(v) all Insurance Proceeds with respect to each such
Contract;
(vi) all rights (but not the obligations) of the
Trust Depositor under the Transfer and Servicing Agreement
related to such Contracts (to the extent not already conveyed
under Section 2.01(b) of the Transfer and Servicing
Agreement), as well as all rights, but not the obligations, of
the Trust Depositor under the Subsequent Purchase Agreement
related to such Contracts; and
(vii) all income from and proceeds of the foregoing.
I-2
<PAGE> 126
It is the intention of the Trust Depositor and Owner Trustee that the transfer
contemplated by this Agreement shall constitute an absolute assignment and sale
of the Substitute Contracts from the Trust Depositor to the Trust, conveying
good title thereto free and clear of any Liens.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
DEPOSITOR. (a) The Trust Depositor hereby represents and warrants to the Trust
that the representations and warranties of the Trust Depositor set forth in
Section 3.06 of the Transfer and Servicing Agreement are true and correct as of
the Subsequent Transfer Date.
(b) The Trust Depositor hereby repeats and remakes with
respect to the Substitute Contracts as of the Subsequent Transfer Date the
representations and warranties set forth in Section 3.01 of the Transfer and
Servicing Agreement and deemed to be made with respect to the Substitute
Contracts thereunder.
(c) The Trust Depositor hereby represents and warrants that
(a) the Pool Balance of the Substitute Contracts listed on the Subsequent List
of Contracts and conveyed to the Trust Depositor pursuant to this Agreement is
$ as of the Subsequent Cutoff Date, and (b) the conditions set forth in
Section 2.04(b) of the Transfer and Servicing Agreement have been satisfied as
of the Subsequent Transfer Date.
SECTION 5. RATIFICATION OF AGREEMENT. As supplemented by this
Agreement, the Transfer and Servicing Agreement is in all respects ratified and
confirmed and, as so supplemented by this Agreement, shall be read, taken and
construed as one and the same instrument.
SECTION 6. COUNTERPARTS. This Agreement may be executed by
facsimile signatures and in two or more counterparts (and by different parties
in separate counterparts), each of which shall be an original but all of which
together shall constitute one and the same instrument.
SECTION 7. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
SECTION 8. AUTHORIZATION OF TRUSTEE. By its execution hereof,
the Trust Depositor hereby authorizes and directs the Owner Trustee to execute
and deliver this Agreement on behalf of the Trust.
I-3
<PAGE> 127
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first written above.
ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III
By: _____________________________________
Printed Name: _______________________
Title: ______________________________
ORIX CREDIT ALLIANCE, INC., as Servicer and
as Originator
By: _____________________________________
Printed Name: _______________________
Title: ______________________________
ORIX CREDIT ALLIANCE RECEIVABLES TRUST
2000-A
By: THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity but solely
as Owner Trustee on behalf of the
Trust
By: ________________________________
Printed Name: __________________
Title: _________________________
HARRIS TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture
Trustee
By: ______________________________________
Printed Name: ________________________
Title: _______________________________
I-4
<PAGE> 128
EXHIBIT J
[FORM OF SUBSEQUENT PURCHASE AGREEMENT]
SUBSEQUENT PURCHASE AGREEMENT (the "Agreement"), dated as of
[ ], [ ], by and among ORIX Credit Alliance Receivables
Corporation III, a Delaware corporation (the "Trust Depositor"), and ORIX Credit
Alliance, Inc., a Delaware corporation ("OCAI" or the "Originator"), pursuant
to the Transfer and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS, the Trust Depositor and the Originator are parties to
the Transfer and Servicing Agreement, dated as of , 2000 (the "Transfer and
Servicing Agreement");
WHEREAS, pursuant to the Transfer and Servicing Agreement, the
Originator wishes to sell the Substitute Contracts to the Trust Depositor, and
the Trust Depositor wishes to purchase the same, for the purchase price set
forth in Section 3 below; and
WHEREAS, the Originator has timely delivered an Addition
Notice related to such conveyance as required in the Transfer and Servicing
Agreement).
NOW, THEREFORE, the Originator and the Trust Depositor, hereby
agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used herein shall
have the meanings ascribed to them in the Transfer and Servicing Agreement
unless otherwise defined herein.
"Subsequent Cutoff Date" shall mean, with respect to
the Substitute Contracts transferred hereby, .
"Substitute Contracts" shall mean, for purposes of
this Agreement, the Substitute Contracts listed in the
Subsequent List of Contracts attached hereto as Exhibit A.
"Subsequent Transfer Date" shall mean, with respect
to the Substitute Contracts transferred hereby, .
J-1
<PAGE> 129
SECTION 2. SUBSEQUENT LIST OF CONTRACTS. The Subsequent List
of Contracts attached hereto as Exhibit A is an amendment to the initial List of
Contracts attached as Exhibit G to the Transfer and Servicing Agreement, as
contemplated in the definition of List of Contracts set forth therein. The
Subsequent List of Contracts separately identifies (by attached schedule, or
marking or other effective identifying designation) the Substitute Contracts to
be transferred pursuant to this Agreement on the Subsequent Transfer Date, and
also further separately identifies (by attached schedule, or marking or other
effective identifying designation) the related Contract or Contracts with
respect to which a Substitution Event has occurred and which Contracts are being
deleted from the List of Contracts by virtue of the delivery of the Subsequent
List of Contracts.
SECTION 3. TRANSFER OF SUBSTITUTE CONTRACTS. Subject to and
upon the terms and conditions set forth in Section 2.04 of the Transfer and
Servicing Agreement and this Agreement, the Originator hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trust Depositor, in
consideration of the Trust Depositor's (x) payment of $ as the purchase
price therefor, representing the prepayment proceeds received with respect to
the related Substitution Event (if applicable) or (y) release and redelivery to
the Originator of the related Contract Assets with respect to which a
Substitution Event has occurred (if applicable), all of the Originator's rights,
title and interests in:
(i) the Substitute Contracts identified in the
related Addition Notice, and all monies received in payment of
such Contracts on and after the related Subsequent Cutoff
Dates, any Prepayment Amounts, any payments in respect of a
casualty or early termination, and any Recoveries received
with respect thereto, but excluding any Excluded Amounts;
(ii) the Equipment related to such Contracts,
including all proceeds from any sale or other disposition of
such Equipment (but subject to the exclusion and release
herein of Excluded Amounts);
(iii) the Contract Files;
(iv) all payments made or to be made in the future
with respect to such Contracts or the Obligor thereunder under
any Vendor Assignments with the Originator;
(v) all Insurance Proceeds with respect to each such
Contract; and
(vi) all income from and proceeds of the foregoing.
J-2
<PAGE> 130
It is the intention of the Originator and the Trust Depositor
that the transfer contemplated by this Agreement shall constitute a sale of the
Substitute Contracts from the Originator to the Trust Depositor, conveying good
title thereto free and clear of any Liens, and that the Substitute Contracts
shall not be part of the Originator's estate in the event of the filing of a
bankruptcy petition by or against the Originator under any bankruptcy or similar
law.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR.
(a) The Originator hereby represents and warrants to the Trust Depositor that
the representations and warranties of the Originator in Section 3.01 of the
Transfer and Servicing Agreement are true and correct as of the Subsequent
Transfer Date.
(b) The Originator hereby repeats and remakes with respect to
the Substitute Contracts as of the Subsequent Transfer Date, the representations
and warranties set forth in the Transfer and Servicing Agreement and deemed to
be made with respect to such Substitute Contracts thereunder.
(c) The Originator hereby represents and warrants that (i) the
Pool Balance of the Substitute Contracts listed on the Subsequent List of
Contracts and conveyed to the Trust Depositor pursuant to this Agreement is
$ as of the Subsequent Cutoff Date, and (ii) the conditions set forth
in Section 2.04(b) of the Transfer and Servicing Agreement have been satisfied
as of the Subsequent Transfer Date.
SECTION 5. RATIFICATION OF AGREEMENT. As supplemented by this
Agreement, the Transfer and Servicing Agreement is in all respects ratified and
confirmed and, as so supplemented by this Agreement, shall be read, taken and
construed as one and the same instrument.
SECTION 6. COUNTERPARTS. This Agreement may be executed by
facsimile signatures and in two or more counterparts (and by different parties
in separate counterparts), each of which shall be an original but all of which
together shall constitute one and the same instrument.
SECTION 7. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
[remainder of page intentionally blank]
J-3
<PAGE> 131
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first written above.
ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III
By: _____________________________________
Printed Name: _______________________
Title: ______________________________
ORIX CREDIT ALLIANCE, INC.
By: _____________________________________
Printed Name: _______________________
Title: ______________________________
J-4
<PAGE> 1
EXHIBIT 10.2
ADMINISTRATION AGREEMENT
AMONG
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A,
AS ISSUER,
ORIX CREDIT ALLIANCE, INC.,
AS ADMINISTRATOR
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III,
AS TRUST DEPOSITOR,
AND
HARRIS TRUST AND SAVINGS BANK,
AS INDENTURE TRUSTEE
DATED AS OF FEBRUARY , 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 1. Duties of the Administrator...............................................2
Section 2. Records...................................................................8
Section 3. Compensation..............................................................8
Section 4. Additional Information to be Furnished to the Issuer......................9
Section 5. Independence of the Administrator.........................................9
Section 6. No Joint Venture..........................................................9
Section 7. Other Activities of Administrator.........................................9
Section 8. Term of Agreement; Resignation and Removal of Administrator...............9
Section 9. Action upon Termination, Resignation or Removal...........................11
Section 10. Notices...................................................................11
Section 11. Amendments................................................................12
Section 12. Successors and Assigns....................................................13
Section 13. Governing Law, Jury Waiver and No Petition................................13
Section 14. Headings..................................................................14
Section 15. Counterparts..............................................................14
Section 16. Severability..............................................................14
Section 17. Not Applicable to OCAI in Other Capacities................................14
Section 18. Limitation of Liability of Owner Trustee and Indenture Trustee............14
Section 19. Third-party Beneficiary...................................................15
Section 20. Survivability.............................................................15
</TABLE>
<PAGE> 3
EXHIBITS
<TABLE>
<S> <C> <C>
EXHIBIT A - Limited Power of Attorney..........................................................A-1
</TABLE>
<PAGE> 4
This ADMINISTRATION AGREEMENT, dated as of February , 2000, is among ORIX
CREDIT ALLIANCE RECEIVABLES TRUST 2000-A (the "Issuer"), ORIX CREDIT ALLIANCE,
INC. ( together with its successors and assigns "OCAI") in its capacity as
administrator (the "Administrator"), ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III (together with its successors and assigns, the "Trust
Depositor") and HARRIS TRUST AND SAVINGS BANK, not in its individual capacity
but solely as Indenture Trustee (together with its successors and assigns, the
"Indenture Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer is issuing Class A-1 Receivable-Backed Notes, Class A-2
Receivable-Backed Notes, Class A-3 Receivable-Backed Notes, Class A-4
Receivable-Backed Notes, Class B Receivable-Backed Notes, and Class C
Receivable-Backed Notes (collectively, the "Notes") pursuant to the Indenture,
dated as of the date hereof (the "Indenture"), between the Issuer and the
Indenture Trustee (capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Transfer and Servicing Agreement
as defined herein or in the Indenture);
WHEREAS, the Issuer has entered into certain agreements in connection with
the issuance of the Notes and of certain beneficial ownership interests of the
Issuer, including (i) a Transfer and Servicing Agreement, dated as of the date
hereof (the "Transfer and Servicing Agreement"), among the Issuer, the Indenture
Trustee, the Trust Depositor, and OCAI, as Originator and Servicer thereunder,
and (ii) the Indenture, and (iii) the other Transaction Documents;
WHEREAS, pursuant to the Transaction Documents, the Issuer and the Owner
Trustee are required to perform certain duties in connection with (i) the Notes
and the Collateral therefor pledged pursuant to the Indenture and (ii) the
beneficial ownership interests in the Issuer evidenced by the Certificates (the
registered holders of such interests being referred to herein as the "Owners");
WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator
perform certain of the duties of the Issuer and the Owner Trustee referred to in
the preceding clause and to provide such additional services consistent with the
terms of this Agreement and the Transaction Documents as the Issuer and the
Owner Trustee may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;
<PAGE> 5
NOW, THEREAFTER, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DUTIES OF THE ADMINISTRATOR.
(a) DUTIES WITH RESPECT TO THE INDENTURE.
(i) The Administrator agrees to perform all its duties as
Administrator and the duties of the Issuer and the Owner Trustee under the
Transaction Documents. In addition, the Administrator shall consult with
the Owner Trustee regarding the duties of the Issuer or the Owner Trustee
under the Indenture. The Administrator shall monitor the performance of the
Issuer and shall advise the Owner Trustee when action is necessary to
comply with the respective duties of the Issuer and the Owner Trustee under
the Indenture. The Administrator shall prepare for execution by the Issuer
or shall cause the preparation by other appropriate persons of all such
documents, reports, filings, instruments, certificates and opinions that it
shall be the duty of the Issuer or the Owner Trustee to prepare, file or
deliver pursuant to the Indenture. In furtherance of the foregoing, the
Administrator shall take all appropriate action that the Issuer or the
Owner Trustee is required to take pursuant to the Indenture including,
without limitation, such of the foregoing as are required with respect to
the following matters under the Indenture (references are to Sections of
the Indenture):
(A) the duty to cause the Note Register to be kept and to give the
Indenture Trustee notice of any appointment of a new Note Registrar and the
location, or change in location, of the Note Register (Section 2.04);
(B) the notification of Noteholders of the final principal payment on
their Notes (Section 2.07(b));
(C) the preparation of or obtaining of the documents and instruments
required for execution and authentication of the Notes and delivery of the
same to the Indenture Trustee (Section 2.02);
(D) the preparation, obtaining or filing of the instruments, opinions
and certificates and other documents required for the release of Collateral
(Section 2.12);
-2-
<PAGE> 6
(E) the maintenance of an office in Chicago, Illinois, or the
appointment of the Indenture Trustee as its agent therefor, for
registration of transfer or exchange of Notes (Section 3.02);
(F) the duty to cause newly appointed Paying Agents, if any, to
deliver to the Indenture Trustee the instrument specified in the Indenture
regarding funds held in trust (Section 3.03);
(G) the direction to the Indenture Trustee to deposit monies with
Paying Agents, if any, other than the Indenture Trustee (Section 3.03);
(H) the obtaining and preservation of the Issuer's qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Indenture, the
Notes, the collateral and each other instrument and agreement included in
the Collateral (Section 3.04);
(I) the preparation of all supplements and amendments to the Indenture
and all financing statements, continuation statements, instruments of
further assurance and other instruments and the taking of such other action
as is necessary or advisable to protect the Collateral other than as
prepared by the Servicer (Section 3.05);
(J) the delivery of certain statements as to compliance with the
Indenture (Sections 3.09);
(K) the identification to the Indenture Trustee in an Officer's
Certificate of a Person with whom the Issuer has contracted to perform its
duties under the Indenture (Section 3.07(b));
(L) the notification of the Indenture Trustee and each Rating Agency
of a Servicer Default under the Transfer and Servicing Agreement;
(M) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10(b));
(N) the monitoring of the Issuer's obligations as to the satisfaction
and discharge of the Indenture and the preparation of an
-3-
<PAGE> 7
Officer's Certificate and the obtaining of the Opinion of Counsel and the
Independent Certificate relating thereto (Section 4.01);
(O) the compliance with any written directive of the Indenture Trustee
with respect to the sale of the Collateral in a commercially reasonable
manner if an Event of Default shall have occurred and be continuing
(Section 5.04);
(P) the preparation and delivery of notice to Noteholders of the
removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee (Section 6.08);
(Q) the preparation of any written instruments required to confirm
more fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or removal
of the Indenture Trustee or any co-trustee or separate trustee (Sections
6.08 and 6.10);
(R) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee is
not the Note Registrar (Section 7.01);
(S) the opening of one or more accounts in the Indenture Trustee's
name, the preparation and delivery of Issuer Orders, Officer's Certificates
and Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections 8.02
and 8.03);
(T) the preparation of an Issuer Request and Officer's Certificate and
the obtaining of an Opinion of Counsel and Independent Certificates, if
necessary, for the release of the Collateral (Sections 8.04 and 8.05);
(U) the preparation of Issuer Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures and the
mailing to the Noteholders of notices with respect to such supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(V) the execution and delivery of new Notes conforming to any
supplemental indenture (Section 9.06);
-4-
<PAGE> 8
(W) the duty to notify Noteholders of redemption of the Notes or to
cause the Indenture Trustee to provide such notification (Section 10.02);
(X) the preparation and delivery of all Officer's Certificates,
Opinions of Counsel and Independent Certificates with respect to any
requests by the Issuer to the Indenture Trustee to take any action under
the Indenture (Section 11.01(a));
(Y) the preparation and delivery of Officer's Certificates and the
obtaining of Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.01(b));
(Z) the notification of the Rating Agencies, upon the failure of the
Issuer, the Owner Trustee or the Indenture Trustee to provide notification
as required under the Transaction Documents;
(AA) the preparation and delivery to Noteholders and the Indenture
Trustee of any agreements with respect to alternate payment and notice
provisions (Section 11.06); and
(BB) the recording of the Indenture, if applicable (Section 11.14).
(ii) The Administrator will, except as paid pursuant to or otherwise
expressly provided in the Indenture or the Transfer and Servicing
Agreement:
(A) pay the Indenture Trustee's fees and reimburse the Indenture
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Indenture Trustee in accordance with any
provision of the Indenture (including the reasonable compensation, expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith;
(B) indemnify the Indenture Trustee and its agents for, and hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the transactions contemplated by the
Transaction Documents, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the
-5-
<PAGE> 9
exercise or performance of any of their powers or duties under the
Transaction Documents; and
(C) pay the Owner Trustee's fees and reimburse the Owner Trustee upon
its request for all reasonable expenses, disbursements and advances
incurred or made by the Owner Trustee in accordance with the Transaction
Documents and indemnify the Owner Trustee and its agents for, and hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the transactions contemplated by the
Trust Agreement, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise
or performance of any of their powers or duties under the Trust Agreement
(and including without limitation, an indemnity as described above with
respect to the Trust Depositor's obligations in favor of the Owner Trustee
under Section 8.02 of the Trust Agreement).
(b) ADDITIONAL DUTIES.
(i) In addition to the duties set forth in Section 1(a), the
Administrator shall perform such calculations and shall prepare or shall
cause the preparation by other appropriate persons of, and shall execute on
behalf of the Issuer or the Owner Trustee, all such documents, reports,
filings, instruments, investment instructions, certificates and opinions
that the Issuer or the Owner Trustee is required to prepare, file or
deliver pursuant to the Transaction Documents or under Section 5.05 of the
Trust Agreement, and at the request of the Owner Trustee shall take all
appropriate action that the Issuer or the Owner Trustee is required to take
pursuant to the Transaction Documents. In furtherance thereof, the Owner
Trustee shall, on behalf of the Issuer, execute and deliver to the
Administrator and to each successor Administrator appointed pursuant to the
terms hereof, one or more powers of attorney substantially in the form of
Exhibit A hereto, appointing the Administrator the attorney-in-fact of the
Issuer for the purpose of executing on behalf of the Owner Trustee and the
Issuer all such documents, reports, filings, instruments, certificates and
opinions. Subject to Section 5, and in accordance with the directions of
the Issuer, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Transaction Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Issuer and are
reasonably within the capability of the Administrator.
-6-
<PAGE> 10
(ii) Notwithstanding anything in this Agreement or the Transaction
Documents to the contrary, the Administrator shall be responsible for
promptly notifying the Owner Trustee in the event that any withholding tax
is imposed on the Trust's payments (or allocations of income) to an Owner
as contemplated in Section 5.02(c) of the Trust Agreement. Any such notice
shall specify the amount of any withholding tax required to be withheld by
the Owner Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Transaction
Documents to the contrary, the Administrator shall be responsible for
performance of the duties of the Owner Trustee set forth in Section
5.05(a), (b), (c) and (d), the penultimate sentence of Section 5.05 and
Section 5.06(a) of the Trust Agreement with respect to, among other things,
accounting and reports to Owners; provided, however, that the Owner Trustee
shall retain responsibility for the distribution of information forms
necessary to enable each Owner to prepare its federal and state income tax
returns.
(iv) The Administrator shall satisfy its obligations with respect to
clauses (ii) and (iii) above by retaining, at the expense of the Trust
payable by the Administrator, a firm of independent public accountants (the
"Accountants") acceptable to the Owner Trustee, which shall perform the
obligations of the Administrator thereunder.
(v) The Administrator shall perform the duties of the Administrator
specified in Sections 6.02, 9.01(d) and 10.02 of the Trust Agreement
required to be performed in connection with the filing of claims, the
termination of the Trust and the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the
Administrator under the Trust Agreement.
(vi) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in
the Administrator's opinion, no less favorable to the Issuer than would be
available from unaffiliated parties.
-7-
<PAGE> 11
(c) NON-MINISTERIAL MATTERS.
(i) With respect to matters that in the reasonable judgment of the
Administrator are non-ministerial, the Administrator shall not take any
action unless within a reasonable time before the taking of such action,
the Administrator shall have notified the Owner Trustee of the proposed
action and the Owner Trustee shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Contracts);
(C) the amendment, change or modification of any other Transaction
Documents;
(D) the appointment of successor Note Registrars, successor Paying
Agents and successor Indenture Trustees pursuant to the Indenture or the
appointment of successor Administrators or a successor Servicer, or the
consent to the assignment by the Note Registrar, Paying Agent or Indenture
Trustee of its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (A) make any
payments to the Noteholders under the Transaction Documents, (B) sell the
Collateral otherwise than pursuant to Section 1(a)(i)(O) above and clause
(iv) of Section 5.04 of the Indenture, (C) take any other action that the
Issuer directs the Administrator not to take on its behalf or (D) take any
other action which may be construed as having the effect of varying the
investment of the Holders.
SECTION 2. RECORDS. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Indenture Trustee,
the Issuer and the Owner Trustee at any time during normal business hours.
-8-
<PAGE> 12
SECTION 3. COMPENSATION. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to a monthly fee
which shall be solely an obligation of the Servicer as contemplated in Section
5.19 of the Transfer and Servicing Agreement and which shall be in an amount as
shall be agreeable to the Trust Depositor and the Administrator.
SECTION 4. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
SECTION 5. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer or the Owner
Trustee.
SECTION 6. NO JOINT VENTURE. Nothing contained in this Agreement (i) shall
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
SECTION 7. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other business or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other Person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.
SECTION 8. TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR.
This Agreement shall continue in force until the termination of the Issuer, upon
which event this Agreement shall automatically terminate.
(a) Subject to Section 8(d) and Section 8(e),
the Administrator may resign its duties
hereunder by providing the Issuer with at
least 60 days' prior written notice.
-9-
<PAGE> 13
(b) Subject to Section 8(d) and Section 8(e),
the Issuer may remove the Administrator
without cause by providing the Administrator
with at least 60 days' prior written notice.
(c) Subject to Section 8(d) and Section 8(e), at
the sole option of the Issuer, the
Administrator may be removed immediately
upon written notice of termination from the
Issuer to the Administrator if any of the
following events shall occur:
(i) the Administrator shall default in the
performance of any of its duties under
this Agreement and, after notice of
such default, shall not cure such
default within ten days (or, if such
default cannot be cured in such time,
shall not give within ten days such
assurance of cure as shall be
reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the
premises shall enter a decree or order
for relief, and such decree or order
shall not have been vacated within 60
days, in respect of the Administrator
in any involuntary case under any
applicable bankruptcy, insolvency or
other similar law now or hereafter in
effect or appoint a receiver,
liquidator, assignee, custodian,
trustee, sequestrator or similar
official for the Administrator or any
substantial part of its property or
order the winding-up or liquidation of
its affairs; or
(iii) the Administrator shall commence a
voluntary case under any applicable
bankruptcy, insolvency or other similar
law now or hereafter in effect, shall
consent to the entry of an order for
relief in an involuntary case under any
such law, or shall consent to the
appointment of a receiver, liquidator,
assignee, trustee, custodian,
sequestrator or similar official for
the Administrator or any substantial
part of its property, shall consent to
the taking of possession by any such
official of any substantial part of its
property, shall make any general
assignment for the benefit of creditors
or shall fail generally to pay its
debts as they become due.
The Administrator agrees that if any of the events specified in clauses
(ii) or (iii) above shall occur, it shall give written notice thereof to the
Issuer and the Indenture Trustee within seven days after the occurrence of such
event.
-10-
<PAGE> 14
(d) No resignation or removal of the
Administrator pursuant to this Section shall
be effective until (i) a successor
Administrator shall have been appointed by
the Issuer and (ii) such successor
Administrator shall have agreed in writing
to be bound by the terms of this Agreement
in the same manner as the Administrator is
bound hereunder.
(e) The appointment of any successor
Administrator shall be effective only after
the satisfaction of the Rating Agency
Condition with respect to the proposed
appointment.
(f) Subject to Section 8(d) and 8(e), the
Administrator acknowledges that upon the
appointment of a Successor Servicer pursuant
to the Transfer and Servicing Agreement, the
Administrator shall immediately resign
(subject to Section 8(d) hereof).
SECTION 9. ACTION UPON TERMINATION, RESIGNATION OR REMOVAL. Promptly upon
the effective date of termination of this Agreement pursuant to Section 8 or the
resignation or removal of the Administrator pursuant to Section 8(a), (b), (c)
or (f) respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to Section 8 deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to Section
(a), (b), (c) or (f), respectively, the Administrator shall cooperate with the
Issuer and take all reasonable steps requested to assist the Issuer in making an
orderly transfer of the duties of the Administrator.
SECTION 10. NOTICES. All notices, demands, certificates, requests and
communications hereunder ("notices") shall be in writing and shall be effective
(a) upon receipt when sent through the U.S. mails, registered or certified mail,
return receipt requested, postage prepaid, with such receipt to be effective the
date of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or
-11-
<PAGE> 15
(d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient as follows:
(i) If to the Administrator:
ORIX Credit Alliance, Inc.
300 Lighting Way
Secaucus, New Jersey 07096-1525
Attention: Chief Financial Officer/Asset Securitizations
Fax No.: (201) 601-9100
(ii) If to the Trust Depositor:
ORIX Credit Alliance Receivables Corporation III
300 Lighting Way
Secaucus, New Jersey 07096-1525
Attention: President/Asset Securitizations
Fax No.: (201) 348-2914
(iii) If to the Indenture Trustee:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606
Attention: Indenture Trust Administration
Fax No.: (312) 293-4139
(iv) If to the Issuer or the Owner Trustee:
The Bank of New York (Delaware)
502 White Clay Center
P.O. Box 6973
Newark, Delaware 19714-6973
Attention: Corporate Trust Administration
Fax No.: (302) 283-8279
with a copy to:
The Bank of New York
101 Barclay Street
12 East
New York, New York 10286
-12-
<PAGE> 16
Attention: Asset-Backed Finance Group
Fax No.: (212) 815-4135
Each party hereto may, by notice given in accordance herewith to each of the
other parties hereto, designate any further or different address to which
subsequent notices shall be sent.
SECTION 11. AMENDMENTS. This Agreement may be amended from time to time by
a written amendment duly executed and delivered by the parties hereto, with the
written consent of the Owner Trustee but without the consent of the Noteholders
and the Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders or Certificateholders;
provided that such amendment will not, in the Opinion of Counsel satisfactory to
the Indenture Trustee, materially and adversely affect the interest of any
Noteholder or Certificateholder. This Agreement may also be amended by the
parties hereto with the written consent of the Owner Trustee and the Required
Holders for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of Noteholders or the Certificateholders; provided, however,
that no such amendment may (i) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on the Contracts
or distributions that are required to be made for the benefit of the Noteholders
or Certificateholders or (ii) reduce the aforesaid percentage of the holders of
Notes and Certificates which are required to consent to any such amendment,
without the consent of the Issuer and the holders of all outstanding Notes and
Certificates. Notwithstanding the foregoing, the Administrator may not amend
this Agreement without the permission of the Trust Depositor, which permission
shall not be unreasonably withheld.
SECTION 12. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
the Administrator unless such assignment is previously consented to in writing
by the Issuer, the Indenture Trustee and the Owner Trustee and subject to the
satisfaction of the Rating Agency Condition in respect thereof. An assignment
with such consent and satisfaction, if accepted by the assignee, shall bind the
assignee hereunder in the same manner as the Administrator is bound hereunder.
Notwithstanding the foregoing, this Agreement may be assigned by the
Administrator without the consent of the Issuer, the Indenture Trustee or the
Owner Trustee to a corporation or other organization that is a successor (by
merger, consolidation or purchase of assets) to the Administrator; provided that
such successor organization executes and delivers to the Issuer, the Owner
Trustee and the Indenture Trustee an agreement, in form and substance reasonably
satisfactory to the Issuer, the Owner Trustee and the Indenture Trustee, in
which such corporation or other organization agrees to be bound hereunder by the
terms
-13-
<PAGE> 17
of said assignment in the same manner as the Administrator is bound hereunder.
Subject to the foregoing, this Agreement shall bind any successors or assigns of
the parties hereto.
SECTION 13. GOVERNING LAW, JURY WAIVER AND NO PETITION. (a) THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS;
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. Each party hereto (i) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 13(b); and
(c) Each of the Administrator and the Indenture Trustee covenants and
agrees that, prior to the date that is one year and one day after the payment in
full of all amounts owing in respect of all outstanding Notes, it will not
institute against the Trust Depositor or the Trust, or join any other Person in
instituting against the Trust Depositor or the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States, provided, however, that nothing herein shall prohibit the
Indenture Trustee from filing proofs of claim or otherwise participating in any
such proceedings instituted by any other person. This Section 13(c) will survive
the termination of this Agreement.
SECTION 14. HEADINGS. The section and subsection headings hereof have been
inserted for convenience of reference only and shall not be construed to affect
the meaning, construction or effect of this Agreement.
SECTION 15. COUNTERPARTS. This Agreement may be executed by facsimile
signature and in several counterparts, each of which shall be an original and
all of which shall constitute but one and the same agreement.
SECTION 16. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and
-14-
<PAGE> 18
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 17. NOT APPLICABLE TO OCAI IN OTHER CAPACITIES. Nothing in this
Agreement shall affect any obligation OCAI may have in any other capacity.
SECTION 18. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE TRUSTEE.
(a) Notwithstanding anything contained herein to the contrary, this
instrument has been countersigned by The Bank of New York (Delaware) not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall The Bank of New York (Delaware) in its individual capacity
or any beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles Six, Seven and Eight of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Harris Trust and Savings Bank not in its
individual capacity but solely as Indenture Trustee and in no event shall Harris
Trust and Savings Bank have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
SECTION 19. THIRD-PARTY BENEFICIARY. The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
SECTION 20. SURVIVABILITY. The obligations of the Administrator described
in Section 1(a)(ii) hereof shall survive termination of this Agreement.
{this portion of page intentionally left blank}
-15-
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By: THE BANK OF NEW YORK (DELAWARE), not in its individual
capacity but solely as Owner Trustee
By:
---------------------------------------------------
Printed Name: Cheryl Laser
-----------------------------
Title: Assistant Vice President
-----------------------------------
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III, as Trust
Depositor
By:
---------------------------------------------------
Printed Name: Joseph J. McDevitt, Jr.
-----------------------------
Title: President
------------------------------------
HARRIS TRUST AND SAVINGS BANK, not in its individual capacity
but solely as Indenture Trustee
By:
---------------------------------------------------
Printed Name: Robert D. Foltz
-----------------------------
Title: Vice President
------------------------------------
ORIX CREDIT ALLIANCE, INC., as Administrator
By:
---------------------------------------------------
Printed Name: Joseph J. McDevitt, Jr.
----------------------------
Title: Executive Vice President
------------------------------------
-16-
<PAGE> 20
EXHIBIT A
LIMITED POWER OF ATTORNEY
State of New York )
) SS.
County of New York )
KNOW ALL PERSONS BY THESE PRESENTS, that The Bank of New York (Delaware), a
Delaware state chartered bank (the "Owner Trustee"), by and through its duly
elected and authorized officer, _____________________, a _____________, on
behalf of ORIX Credit Alliance Receivables Trust 2000-A (the "Trust") as Issuer
under the Administration Agreement, dated as of February , 2000 (the
"Administration Agreement"), among the Trust, ORIX Credit Alliance Receivables
Corporation III, Harris Trust and Savings Bank, as Indenture Trustee, and ORIX
Credit Alliance, Inc., as Administrator, does hereby nominate, constitute and
appoint ORIX Credit Alliance, Inc., a New York corporation, each of its officers
from time to time and each of its employees authorized by it from time to time
to act hereunder, jointly and each of them severally, together or acting alone,
its true and lawful attorney-in-fact, for the Issuer in their name, place and
stead, in the sole discretion of such attorney-in-fact, to perform such
calculations and prepare or cause the preparation by other appropriate persons
of, and to execute on behalf of the Issuer, all such documents, reports,
filings, instruments, certificates and opinions that the Issuer or the Owner
Trustee is required to prepare, file or deliver pursuant to the Administration
Agreement, and to take any and all other action, as such attorney-in-fact may
deem necessary or desirable in accordance with the directions of the Owner
Trustee and in connection with its duties as Administrator or successor
Administrator under the Administration Agreement. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in the
Administration Agreement.
The Owner Trustee on behalf of the Trust hereby ratifies and confirms the
execution, delivery and performance (whether before or after the date hereof) of
the above-mentioned documents, reports, filings, instruments, certificates and
opinions, by the attorney-in-fact and all that the attorney-in-fact shall
lawfully do or cause to be done by virtue hereof.
The Owner Trustee on behalf of the Trust hereby agrees that no person or
other entity dealing with the attorney-in-fact shall be bound to inquire into
such attorney-in-fact's power and authority hereunder and any such person or
entity shall be fully protected in relying on such power of authority.
A-1
<PAGE> 21
This Limited Power of Attorney may not be assigned without the prior
written consent of the Owner Trustee. It is effective immediately and will
continue until it is revoked.
This Limited Power of Attorney shall be governed and construed in
accordance with the laws of the State of Delaware.
Executed as of this day of February, 2000.
THE BANK OF NEW YORK (DELAWARE), not in its individual
capacity but solely as Owner Trustee,
By:
-------------------------------------------
Printed Name: Cheryl Laser
----------------------------
Title: Assistant Vice President
-----------------------------------
A-2
<PAGE> 22
CERTIFICATE OF ACKNOWLEDGMENT OF
NOTARY PUBLIC
State of New York )
) SS.
County of New York )
On February , 2000 before me,__________________________________
{insert date} ________________
{ } personally known to me, or
{ } proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ties), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature {SEAL}
--------------------------------------
A-3
<PAGE> 1
EXHIBIT 10.3
OCAI TRANSFER AGREEMENT
BETWEEN
ORIX CREDIT ALLIANCE, INC., AS ORIGINATOR
AND
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III, AS TRUST
DEPOSITOR
DATED AS OF FEBRUARY , 2000
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions......................................................1
Section 1.02. Usage of Terms...................................................2
Section 1.03. Section References...............................................2
Section 1.04. Calculations.....................................................2
Section 1.05. Accounting Terms.................................................2
ARTICLE TWO
TRANSFER OF CONTRACT ASSETS
Section 2.01. Transfer of Contract Assets......................................2
Section 2.02. Conditions to Transfer of Contract Assets to the Trust
Depositor.....................................................4
Section 2.03. Acceptance by the Trust Depositor................................6
Section 2.04. Conveyance of Substitute Contracts...............................6
Section 2.05. Delivery of Instruments..........................................7
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties Regarding the Originator..........8
Section 3.02. Representations and Warranties Regarding Each Contract
and as to Certain Contracts in the Aggregate.................12
Section 3.03. Representations and Warranties Regarding the Initial Contracts
in the Aggregate.............................................13
Section 3.04. Representations and Warranties Regarding the Contract Files.....13
Section 3.05. Representations and Warranties Regarding Concentrations of
Initial Contracts............................................13
Section 3.06. Representations and Warranties Regarding the Trust Depositor....14
i
<PAGE> 3
Page
----
ARTICLE FOUR
PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS
Section 4.01. Custody of Contracts............................................16
Section 4.02. Filing..........................................................16
Section 4.03. Name Change or Relocation.......................................16
Section 4.04. Chief Executive Office..........................................17
Section 4.05. Costs and Expenses..............................................17
Section 4.06. Sale Treatment..................................................17
Section 4.07. Separateness from Trust Depositor...............................17
ARTICLE FIVE
COVENANTS OF THE ORIGINATOR
Section 5.01. Corporate Existence.............................................17
Section 5.02. Contracts Not to Be Evidenced by Promissory Notes...............18
Section 5.03. Security Interests..............................................18
Section 5.04. Compliance with Law.............................................18
Section 5.05. Liability of Originator; Indemnities............................18
Section 5.06. Limitation on Liability of Originator and Others................19
Section 5.07. Chief Executive Office..........................................19
ARTICLE SIX
REMEDIES UPON MISREPRESENTATION; REPURCHASE OPTION
Section 6.01. Repurchases of, or Substitution for, Contracts for Breach of
Representations and Warranties...............................19
Section 6.02. Reassignment of Repurchased or Substituted Contracts............20
ARTICLE SEVEN
ORIGINATOR INDEMNITIES
Section 7.01. Originator's Indemnification....................................21
Section 7.02. Liabilities to Obligors.........................................21
ii
<PAGE> 4
Section 7.03. Tax Indemnification.............................................21
Section 7.04. Adjustments.....................................................22
Section 7.05. Operation of Indemnities........................................23
ARTICLE EIGHT
MISCELLANEOUS
Section 8.01. Amendment.......................................................23
Section 8.02. Governing Law...................................................24
Section 8.03. Notices.........................................................25
Section 8.04. Severability of Provisions......................................27
Section 8.05. Third Party Beneficiaries.......................................27
Section 8.06. Counterparts....................................................27
Section 8.07. Headings........................................................27
Section 8.08. No Bankruptcy Petition; Disclaimer..............................27
Section 8.09. Jurisdiction....................................................28
Section 8.10. Prohibited Transactions with Respect to the Trust...............28
Section 8.11. Merger or Consolidation of Originator...........................28
Section 8.12. Assignment or Delegation by the Originator......................29
EXHIBITS
EXHIBIT A Form of Assignment........................................A-1
iii
<PAGE> 5
This OCAI TRANSFER AGREEMENT, dated as of February , 2000, is between
ORIX CREDIT ALLIANCE, INC. (together with its successors and assigns, "OCAI",
and in its capacity as originator, together with its successor and assigns, the
"Originator") and ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III (together
with its successor and assigns, the "Trust Depositor") (the "Agreement").
WHEREAS, in the regular course of its business, the Originator originates
and purchases Contracts (as defined in the Transfer and Servicing Agreement);
WHEREAS, the Trust Depositor desires to acquire the Initial Contracts from
the Originator and may acquire from time to time thereafter certain Substitute
Contracts (such Initial Contracts and Substitute Contracts, together with
certain related property as more fully described in the Transfer and Servicing
Agreement, being the Contract Assets as defined herein);
WHEREAS, it is a condition to the Trust Depositor's acquisition of the
Initial Contracts from the Originator that the Originator make certain
representations and warranties regarding the Contract Assets for the benefit of
the Trust Depositor;
WHEREAS, the Trust Depositor is willing to purchase and accept assignment
of the Contract Assets from the Originator pursuant to the terms hereof; and
WHEREAS, on the Closing Date, the Trust Depositor will sell, convey and
assign all its right, title and interest in the Contract Assets to ORIX Credit
Alliance Receivables Trust 2000-A, a Delaware business trust (the "Trust")
pursuant to a Transfer and Servicing Agreement, dated as of the date hereof (the
"Transfer and Servicing Agreement") among the Originator, the Trust Depositor,
the Trust and Harris Trust and Savings Bank.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. Whenever capitalized terms are used but not
defined in this Agreement, such terms shall have the meanings attributed to such
terms in the Transfer and Servicing Agreement, unless the context otherwise
requires.
<PAGE> 6
SECTION 1.02. USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement; references to Persons include their permitted successors and assigns;
and the term "including" means "including without limitation."
SECTION 1.03. SECTION REFERENCES. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.
SECTION 1.04. CALCULATIONS. Except as otherwise provided herein, all
interest rate and basis point calculations hereunder will be made on the basis
of a 360-day year and twelve 30-day months and will be carried out to at least
three decimal places.
SECTION 1.05. ACCOUNTING TERMS. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.
ARTICLE TWO
TRANSFER OF CONTRACT ASSETS
SECTION 2.01. TRANSFER OF CONTRACT ASSETS. (a) The Originator shall sell,
assign and convey assets to the Trust Depositor pursuant to the terms and
provisions hereof.
(b) Subject to and upon the terms and conditions set forth herein, the
Originator hereby sells, transfers, assigns, sets over and otherwise conveys to
the Trust Depositor, for a purchase price of $ in cash, all the right,
title and interest of the Originator in and to (items (i) - (vi) below, being
collectively referred to herein as the "Contract Assets"):
(i) the Initial Contracts, and all monies received in payment of
such Contracts on and after the Initial Cutoff Date, any Prepayment
Amounts, any payments in respect of a casualty or early termination, and
any Recoveries received with respect thereto, but excluding any Excluded
Amounts;
(ii) the Equipment related to such Contracts, including the
related security interest granted by the Obligor under such Contracts and
all
2
<PAGE> 7
proceeds from any sale or other disposition of such Equipment (but subject
to the exclusion and release herein of Excluded Amounts) and Related
Security;
(iii) the Contract Files;
(iv) all payments made or to be made in the future with respect
to such Contracts or the Obligor thereunder under any Vendor Assignments
and under any guarantee or similar credit enhancement with respect to such
Contracts;
(v) all Insurance Proceeds with respect to each such Contract;
and
(vi) all income from and proceeds of the foregoing.
In addition to the Contract Assets, the Originator hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trust Depositor the remittances,
deposits and payments to be made by the Originator pursuant to the Transfer and
Servicing Agreement into the Trust Accounts from time to time, amounts in the
Trust Accounts from time to time (and any investments of such amounts) and all
proceeds and products of the foregoing, which together with the Contract Assets
will constitute the corpus of the Trust and are referred to as the "Trust
Assets".
(c) The Originator and the Trust Depositor acknowledge that the
representations and warranties of the Originator in Section 3.01, 3.02, 3.03,
3.04 and 3.05 will run to and be for the benefit of the Trust and the Trustees
and the Trust and the Trustees may enforce directly without joinder of the Trust
Depositor, the repurchase obligations of the Originator with respect to breaches
of such representations and warranties as set forth herein and in Section 5.01.
(d) The sale, transfer, assignment, set-over and conveyance of the
Trust Assets by the Originator to the Trust Depositor pursuant to this Agreement
does not constitute and is not intended to result in a creation or an assumption
by the Trust Depositor of any obligation of the Originator in connection with
the Contract Assets, or any agreement or instrument relating thereto, including,
without limitation, any obligation to any Obligor or End-User, if any, not
financed by the Originator, or (1) any taxes, fees, or other charges imposed by
any Governmental Authority and (2) any insurance premiums which remain owing
with respect to any Contract at the time such Contract is sold hereunder.
(e) The Originator and Trust Depositor intend and agree that (i) the
transfer of the Contract Assets and Trust Assets from the Originator to the
Trust Depositor and the transfer of the Contract Assets and the Trust Assets
from the Trust
3
<PAGE> 8
Depositor to the Trust are intended to be a sale, conveyance and transfer of
ownership of the Contract Assets and Trust Assets, as the case may be, rather
than the mere granting of a security interest to secure a borrowing and (ii)
such Contract Assets and Trust Assets shall not be part of the Originator's or
the Trust Depositor's estate in the event of a filing of a bankruptcy petition
or other action by or against such Person under any Insolvency Law. In the
event, however, that notwithstanding such intent and agreement, such transfers
are deemed to be of a mere security interest to secure indebtedness, the
Originator shall be deemed to have granted the Trust Depositor and the Trust
Depositor shall be deemed to have granted the Trust, as the case may be, a
perfected first priority security interest in such Contract Assets or Trust
Assets respectively and this Agreement shall constitute a security agreement
under applicable law, securing the repayment of the purchase price paid
hereunder and the obligations and/or interests represented by the Securities, in
the order and priorities, and subject to the other terms and conditions of, this
Agreement, the Transfer and Servicing Agreement, the Indenture and the Trust
Agreement, together with such other obligations or interests as may arise
hereunder and thereunder in favor of the parties hereto and thereto.
If any such transfer of the Contract Assets is deemed to be the mere
granting of a security interest to secure a borrowing, the Trust Depositor may,
to secure the Trust Depositor's own borrowing under this Agreement (to the
extent that the transfer of the Contract Assets thereunder is deemed to be a
mere granting of a security interest to secure a borrowing) repledge and
reassign (1) all or a portion of the Contract Assets pledged to the Trust
Depositor by the Originator and with respect to which the Trust Depositor has
not released its security interest at the time of such pledge and assignment,
and (2) all proceeds thereof. Such repledge and reassignment may be made by the
Trust Depositor with or without a repledge and reassignment by the Trust
Depositor of its rights under any agreement with the Originator, and without
further notice to or acknowledgment from the Originator. The Originator waives,
to the extent permitted by applicable law, all claims, causes of action and
remedies, whether legal or equitable (including any right of setoff), against
the Trust Depositor or any assignee of the Trust Depositor relating to such
action by the Trust Depositor in connection with the transactions contemplated
by this Agreement.
SECTION 2.02. CONDITIONS TO TRANSFER OF CONTRACT ASSETS TO THE TRUST
DEPOSITOR. On or before the Closing Date, the Originator shall deliver or cause
to be delivered to the Trust Depositor, the Owner Trustee and the Indenture
Trustee each of the documents, certificates and other items as follows:
(i) A certificate of an officer of the Originator substantially
in the form of Exhibit C to the Transfer and Servicing Agreement;
4
<PAGE> 9
(ii) Opinions of counsel for the Originator substantially in the
form of Exhibits D and E to the Transfer and Servicing Agreement (and
including as an addressee thereof each Rating Agency) which relate to the
transfer of the Trust Assets from the Trust Depositor to the Trust;
(iii) Copies of resolutions of the Board of Directors of the
Originator or of the Executive Committee of the Board of Directors of the
Originator approving the execution, delivery and performance of this
Agreement and the transactions contemplated hereunder, certified in each
case by the Secretary or an Assistant Secretary of the Originator;
(iv) Officially certified recent evidence of due incorporation
and good standing of the Originator under the laws of New York;
(v) The initial List of Contracts, certified by the Chairman of
the Board, President or any Vice President of the Originator, together with
an Assignment substantially in the form of Exhibit A (along with the
delivery of any instruments as required under Section 2.05 below);
(vi) A letter from Arthur Andersen LLP, or another nationally
recognized accounting firm, addressed to the Originator and the Trust
Depositor, stating that such firm has reviewed a sample of the Initial
Contracts and performed specific procedures for such sample with respect to
certain contract terms and which identifies those Initial Contracts which
do not conform;
(vii) Copies of resolutions of the Board of Directors of the
Servicer or of the Executive Committee of the Board of Directors of the
Servicer approving the execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Servicer is a
party, as applicable, and the transactions contemplated hereunder and
thereunder, certified in each case by the Secretary or an Assistant
Secretary of the Servicer;
(viii) Evidence of proper filing with appropriate offices in the
UCC Filing Locations in the State of New Jersey of UCC financing statements
executed by the Originator, as debtor, naming the Trust Depositor as
secured party (and the Owner Trustee as assignee) and identifying the
Contract Assets as collateral;
(ix) An Officer's Certificate listing the Servicer's Servicing
Officers;
5
<PAGE> 10
(x) Evidence of deposit in the Collection Account of all funds
received with respect to the Initial Contracts after the Initial Cutoff
Date to the date two days preceding the Closing Date, together with an
Officer's Certificate from the Servicer to the effect that such amount is
correct;
(xi) A fully executed Trust Agreement;
(xii) A fully executed Administration Agreement;
(xiii) An opinion of Sullivan & Cromwell to the effect that for
federal income tax purposes, the Class A Notes, Class B Notes and Class C
Notes will be characterized as debt and the Trust will not be characterized
as an association (or publicly traded partnership) taxable as a
corporation; and
(xiv) An opinion of Riker, Danzig, Scherer, Hyland and Perretti to
the effect that for New Jersey tax purposes, the Trust will be classified
as a partnership and will not be subject to the New Jersey Corporation
Income Tax or the New Jersey Corporation Business Tax.
SECTION 2.03. ACCEPTANCE BY THE TRUST DEPOSITOR. On the Closing Date, if
the conditions set forth in Section 2.02 have been satisfied, the Originator
shall deliver, on behalf of the Trust Depositor, to the Trust the Trust Assets
and such delivery to and acceptance by the Trust shall be deemed to be delivery
to and acceptance by the Trust Depositor.
SECTION 2.04. CONVEYANCE OF SUBSTITUTE CONTRACTS.
(a) Subject to Sections 2.01(d) and (e) and the satisfaction of the
conditions set forth in paragraph (c) of this Section 2.04, the Originator may
at its option (but shall not be obligated to) sell, transfer, assign, set over
and otherwise convey to the Trust Depositor (by delivery of an executed
Subsequent Purchase Agreement substantially in the form attached as Exhibit J to
the Transfer and Servicing Agreement), without recourse other than as expressly
provided herein and therein (and the Trust Depositor shall be required to
purchase through payment by exchange of one or more related Contracts released
by the Trust to the Trust Depositor on the Subsequent Transfer Date), all the
right, title and interest of the Originator in and to (the property in clauses
(i)-(vi) below, upon such transfer, becoming part of the "Contract Assets"):
(i) the Substitute Contracts identified in the related Addition
Notice, and all monies received in payment of such Substitute Contracts on
and after the related Subsequent Cutoff Dates, any Prepayment Amounts, any
6
<PAGE> 11
payments in respect of a casualty or early termination, and any Recoveries
received with respect thereto, but excluding any Excluded Amounts;
(ii) the Equipment related to such Contracts, including the
related security interest granted by the Obligor under such Contracts and
all proceeds from any sale or other disposition of such Equipment (but
subject to the exclusion and release herein of Excluded Amounts) and
Related Security;
(iii) the Contract Files;
(iv) all payments made or to be made in the future with respect
to such Contracts or the Obligor thereunder under any Vendor Assignments
with the Originator and under any guarantee or similar credit enhancement
with respect to such Contracts;
(v) all Insurance Proceeds with respect to each such Contract;
and
(vi) all income from and proceeds of the foregoing.
(b) Subject to Sections 2.01(d) and (e) of this Agreement and the
conditions set forth in Section 2.04(c) of this Agreement, the Originator shall
sell, transfer, assign, set over and otherwise convey to the Trust Depositor,
without recourse other than as expressly provided in this Agreement (i) all the
right, title and interest of the Originator in and to the Substitute Contracts
purchased pursuant to Section 2.04(a) of this Agreement and (ii) all other
rights and property interests consisting of Contract Assets related to such
Substitute Contracts (the property in clauses (i)-(ii) above, upon such
transfer, becoming part of the "Trust Assets").
(c) The Originator shall transfer, on behalf of the Trust Depositor, to
the Trust the Substitute Contracts and the other property and rights related
thereto described in paragraphs (a) above, in the case of the Originator, or
(b), in the case of the Trust Depositor, only on the terms and subject to the
conditions set forth in Section 2.04(c) of the Transfer and Servicing Agreement.
SECTION 2.05. DELIVERY OF INSTRUMENTS. The Originator shall deliver, on
behalf of the Trust Depositor, possession of all "instruments" (within the
meaning of Article 9 of the UCC) not constituting part of "chattel paper"
(within the meaning of such Article 9), which evidence any Contract to the Owner
Trustee on behalf of the Trust Depositor on the Closing Date (or, if applicable,
on the relevant Subsequent Transfer Date), in each case endorsed in blank
without recourse. The Originator shall also identify on the List of Contracts
(including any deemed amendment thereof associated with any
7
<PAGE> 12
Substitute Contracts), whether by attached schedule or marking or other
effective identifying designation, all Contracts which are or are evidenced by
such instruments.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
The Originator makes, and upon execution of each Subsequent Purchase
Agreement is deemed to make, the following representations and warranties, on
which the Trust Depositor will rely in conveying the Contract Assets on the
Closing Date (and on any Subsequent Transfer Date) to the Trust, and on which
the Trust, the Noteholders and Certificateholder will rely. The Trust Depositor
acknowledges that such representations and warranties are being made by the
Originator for the benefit of the Trust.
Such representations and warranties speak as of the execution and delivery
of this Agreement and as of the Closing Date (or Subsequent Transfer Date, as
applicable), but shall survive the sale, transfer and assignment of the Contract
Assets to the Trust. The repurchase obligation or substitution obligation of the
Originator set forth in Section 6.01 constitutes the sole remedy available for a
breach of a representation or warranty of the Originator set forth in Sections
3.01, 3.02, 3.03, 3.04 or 3.05 of this Agreement. Notwithstanding the foregoing,
the Originator shall not be deemed to be remaking any of the representations set
forth in Section 3.03 or 3.05 on a Subsequent Transfer Date with respect to the
Substitute Contracts, as such representations relate solely to the composition
of the Initial Contracts conveyed on the Closing Date, provided, that any
inaccurate representation as to concentrations contained in any Addition Notice
shall be subject to the same remedies hereunder as if such representation were
made under Section 3.05 on the Closing Date with respect to an Initial Contract.
SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE ORIGINATOR. By
its execution of this Agreement and each Subsequent Purchase Agreement, the
Originator represents and warrants that:
(a) ORGANIZATION AND GOOD STANDING. The Originator is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has the requisite
corporate power to own or lease its assets and to transact the business in
which it is currently engaged. The Originator is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which
the failure so to qualify would have a material adverse effect on the
business, properties, assets, or condition (financial or otherwise) of the
Originator. The
8
<PAGE> 13
Originator is properly licensed in each jurisdiction to the extent required
by the laws of such jurisdiction in order to originate, and (if the
Originator is to be the Servicer) service the Contracts in accordance with
the terms of the Transfer and Servicing Agreement.
(b) AUTHORIZATION; BINDING OBLIGATION. The Originator has the
power and authority to make, execute, deliver and perform this Agreement
and the other Transaction Documents to which the Originator is a party and
all of the transactions contemplated under this Agreement and the other
Transaction Documents to which the Originator is a party, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement and the other Transaction Documents to which
the Originator is a party. This Agreement and the other Transaction
Documents to which the Originator is a party constitute the legal, valid
and binding obligation of the Originator enforceable in accordance with
their terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable remedies.
(c) NO CONSENT REQUIRED. The Originator is not required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement and the other
Transaction Documents to which the Originator is a party.
(d) NO VIOLATIONS. The Originator's execution, delivery and
performance of this Agreement and the other Transaction Documents to which
the Originator is a party will not violate any provision of any existing
law or regulation or any order or decree of any court or the Certificate of
Incorporation or Bylaws of the Originator, or constitute (with or without
notice or lapse of time or both) a material breach of any mortgage,
indenture, contract or other agreement to which the Originator is a party
or by which the Originator or any of the Originator's properties may be
bound.
(e) LITIGATION. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Originator threatened, against the Originator or any
of its respective properties or with respect to this Agreement or any other
Transaction Document to which the Originator is a party which, if adversely
determined, would in the opinion of the Originator have a material adverse
effect on the business, properties, assets or condition (financial or
other) of the Originator or
9
<PAGE> 14
the transactions contemplated by this Agreement or any other Transaction
Document to which the Originator is a party.
(f) TITLE. If a Contract is a lease of Equipment subject to
certificate of title statutory requirements, the title is held either in
the name of the lessee and the certificate of title indicates the
Originator as lienholder or in the name of the Originator as Lessor.
(g) PLACE OF BUSINESS; NO CHANGES; NO TRADE NAMES. The
Originator's chief executive office (within the meaning of Article 9 of the
UCC) is as set forth in Section 8.03 below. The Originator has not changed
its name as set forth herein, whether by amendment of its Certificate of
Incorporation, by reorganization or otherwise, within the five years
preceding the Closing Date, and has not changed the location of its chief
executive office, within the four months preceding the Closing Date (or
Subsequent Transfer Date, as applicable, except in accordance with the
requirements of Section 4.03). The legal name of the Originator is as set
forth in this Agreement and, within the five years preceding the Closing
Date, the Originator has not used, and currently does not use, any trade
names, fictitious names, assumed names, or "doing business as" names.
(h) NO BULK SALES. The execution, delivery and performance of
this Agreement by the Originator does not require compliance with any "bulk
sales" laws by the Originator.
(i) SOLVENCY. The Originator on each date of and, after giving
effect to the transfer of the Contracts and any Substitute Contracts, as
the case may be, to the Trust Depositor, is Solvent.
(j) USE OF PROCEEDS. No proceeds of the sale of any Initial
Contract or Substitute Contract hereunder received by the Originator will
be used by the Originator to purchase or carry any "margin stock" as such
term is defined in Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
(k) SELECTION PROCEDURES. No selection procedures determined by
the Originator to be materially adverse to the interests of the Trust
Depositor were utilized by the Originator in selecting the Contracts to be
sold, assigned, transferred, set-over and otherwise conveyed hereunder.
(l) NOT AN INVESTMENT COMPANY. The Originator is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (or the Originator is exempt from all provisions of such
Act).
10
<PAGE> 15
(m) TAXES. To the best of the Originator's knowledge, (i) the
Originator has filed all tax returns required to be filed in the normal
course of its business and has paid or made adequate provisions for the
payment of all taxes, assessments and other governmental charges due from
the Originator or is contesting any such tax, assessment or other
governmental charge in good faith through appropriate proceedings, (ii) no
tax lien has been filed with respect thereto, and (iii) no claim is being
asserted with respect to any such tax, fee or other charge.
(n) SALE TREATMENT. The Originator has treated the transfer of
Contract Assets to the Trust Depositor for all purposes (including
financial accounting purposes) as a sale and purchase on all of its
relevant books, records, financial statements and other applicable
documents, except to the extent applicable tax laws require otherwise.
(o) MARKING OF FILES. The Originator will have, at its own
expense, prior to the close of business on the Closing Date, (i) indicated
in its Computer Records that ownership of the Contracts transferred by it,
on behalf of the Trust Depositor, to the Trust and identified on the List
of Contracts have been sold to the Trust Depositor and (ii) affixed to the
original copy of each Contract the following legend (including any
instrument constituting part of chattel paper):
This Contract/Note is subject to a security interest granted to
The Bank of New York (Delaware), as Owner Trustee for the ORIX
Credit Alliance Receivables Trust 2000-A. UCC-1 Financing
Statements covering this Contract/Note have been filed with the
Secretary of State of the State of New Jersey. Such lien will be
released only in connection with appropriate filings in such
offices. Consequently, potential purchasers of this Contract/Note
must refer to such filings to determine whether such lien has
been released.
(p) NO LIENS. The Originator owns each Contract Asset to be sold
by it hereunder free and clear of any Liens except as provided herein, and
upon the sale, transfer or assignment hereunder, the Trust Depositor shall
(i) become the owner of each Contract Asset then existing or thereafter
arising, free and clear of any Lien except as provided herein or (ii)
acquire a first priority perfected security interest in such Contract
Asset. No effective financing statement or other instrument similar in
effect covering any Contract Asset or the Collections with respect thereto
shall at any time be on file in any recording office
11
<PAGE> 16
except such as may be filed in favor of the Trust Depositor relating to
this Agreement or otherwise as provided under the Transfer and Servicing
Agreement.
(q) VALUE GIVEN. The cash payments received by the Originator in
respect of the purchase price of each Contract sold hereunder constitutes
reasonably equivalent value in consideration for the transfer to the Trust
Depositor of such Contract under this Agreement, such transfer was not made
for or on account of an antecedent debt owed by the Originator to the Trust
Depositor, and such transfer was not and is not voidable or subject to
avoidance under any Insolvency Law.
(r) SECURITY INTEREST. The Originator has granted a security
interest (as defined in the UCC) to the Trust Depositor in the Contract
Assets, which is enforceable in accordance with applicable law upon
execution and delivery of this Agreement. Upon the filing of UCC-1
financing statements naming the Trust Depositor as secured party and the
Originator as debtor, the Trust Depositor shall have a first priority
perfected security interest in the Contract Assets (except for any
Permitted Liens). All filings (including, without limitation, such UCC
filings) as are necessary in any jurisdiction to perfect the interest of
the Trust Depositor in the Contract Assets have been made.
(s) YEAR 2000 STATUS. (i) Any reprogramming required to permit
the proper functioning during and following the year 2000 of the Servicer's
computer systems has been completed and (ii) the information set forth in
the Prospectus under "ORIX Credit Alliance, Inc. - Year 2000 Readiness
Disclosure" is accurate in all material respects.
(t) SECURITY INTEREST IN EQUIPMENT. The Equipment securing the
Contracts is located in the states listed on Schedule 1 to the Transfer and
Servicing Agreement. The Originator has a perfected security interest in
the Equipment and, upon the sale, transfer and assignment of the Contract
Assets hereunder, the Trust Depositor will have a perfected security
interest in the Equipment.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING EACH CONTRACT AND
AS TO CERTAIN CONTRACTS IN THE AGGREGATE. The Originator represents and
warrants (x) with respect to subsections (a)-(c) below, as to each Contract as
of the execution and delivery of this Agreement and as of the Closing Date, and
as of each Subsequent Transfer Date with respect to each Substitute Contract,
and (y) with respect to subsections (d)-(f) below, as to the Contracts Pool in
the aggregate as of the Closing Date, and as of each Subsequent Transfer Date
with respect to Substitute Contracts (after giving effect to the addition of
such Substitute Contracts to the Contracts Pool), that:
12
<PAGE> 17
(a) LIST OF CONTRACTS. The information set forth in the List of
Contracts (as the same may be amended or deemed amended in respect of a
conveyance of Substitute Contracts on a Subsequent Transfer Date) is true,
complete and correct as of the applicable Cutoff Date.
(b) ELIGIBLE CONTRACT. Such Contract satisfies the criteria for
the definition of Eligible Contract set forth in the Transfer and Servicing
Agreement as of the date of its conveyance hereunder.
(c) NO "TRUE LEASES". No Contract constituting a Lease is a
"true lease" as distinguished from a financing lease.
(d) NO FRAUD. Each Contract was originated without any fraud or
material misrepresentation by the Originator or, to the best of the
Originator's knowledge, on the part of the Obligor or the Vendor.
(e) CONTRACTS SECURED BY FIXTURES. No material portion of the
Pool Balance of the Contracts Pool consists of Contracts secured by
Equipment constituting fixtures.
(f) CONTRACTS SECURED BY OTHER REAL PROPERTY. No material
portion of the Pool Balance of the Contracts Pool consists of Contracts
additionally secured by other real property (exclusive of or in addition to
Equipment constituting fixtures).
SECTION 3.03. REPRESENTATIONS AND WARRANTIES REGARDING THE INITIAL
CONTRACTS IN THE AGGREGATE. The Originator represents and warrants, as of the
Closing Date, that its representations and warranties in Section 3.03 of the
Transfer and Servicing Agreement are correct.
SECTION 3.04. REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACT FILES.
The Originator represents and warrants as of the Closing Date with respect to
the Initial Contracts (or as of the Subsequent Transfer Date, with respect to
Substitute Contracts), that its representations and warranties in Section 3.04
of the Transfer and Servicing Agreement are correct.
SECTION 3.05. REPRESENTATIONS AND WARRANTIES REGARDING CONCENTRATIONS OF
INITIAL CONTRACTS. The Originator represents and warrants as of the Closing
Date, as to the composition of the Initial Contracts in the Contracts Pool as of
the Initial Cutoff Date, that its representations and warranties in Section 3.05
of the Transfer and Servicing Agreement are correct.
13
<PAGE> 18
SECTION 3.06. REPRESENTATIONS AND WARRANTIES REGARDING THE TRUST DEPOSITOR.
By its execution of this Agreement and each Subsequent Purchase Agreement, the
Trust Depositor represents and warrants to the Originator that:
(a) ORGANIZATION AND GOOD STANDING. The Trust Depositor is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware and has the corporate power to own its assets and to
transact the business in which it is currently engaged. The Trust Depositor
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Trust Depositor or the Trust.
(b) AUTHORIZATION; VALID SALE; BINDING OBLIGATIONS. The Trust
Depositor has the power and authority to make, execute, deliver and perform
this Agreement and the other Transaction Documents to which it is a party
and all of the transactions contemplated under this Agreement and the other
Transaction Documents to which it is a party, and to create the Trust and
cause it to make, execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party and
has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and the other Transaction
Documents to which it is a party and to cause the Trust to be created. The
Transfer and Servicing Agreement and the related Subsequent Transfer
Agreement, if any, shall effect a valid sale, transfer and assignment of
the Trust Assets, enforceable against the Trust Depositor and creditors of
and purchasers from the Trust Depositor. This Agreement and the other
Transaction Documents to which the Trust Depositor is a party constitute
the legal, valid and binding obligation of the Trust Depositor enforceable
in accordance with their terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and by the availability of equitable
remedies.
(c) NO CONSENT REQUIRED. The Trust Depositor is not required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any Governmental
Authority in connection with the execution, delivery, performance, validity
or enforceability of this Agreement or the other Transaction Documents to
which it is a party.
(d) NO VIOLATIONS. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party
by
14
<PAGE> 19
the Trust Depositor, and the consummation of the transactions
contemplated hereby and thereby, will not violate any Requirement of Law
applicable to the Trust Depositor, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Trust
Depositor is a party or by which the Trust Depositor or any of the Trust
Depositor's properties may be bound, or result in the creation or
imposition of any security interest, lien, charge, pledge, preference,
equity or encumbrance of any kind upon any of its properties pursuant to
the terms of any such mortgage, indenture, contract or other agreement,
other than as contemplated by the Transaction Documents.
(e) LITIGATION. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Trust Depositor threatened, against the Trust
Depositor or any of its properties or with respect to this Agreement, the
other Transaction Documents to which it is a party or the Securities (1)
which, if adversely determined, would in the reasonable judgment of the
Trust Depositor have a material adverse effect on the business, properties,
assets or condition (financial or other) of the Trust Depositor or the
Trust or the transactions contemplated by this Agreement or the other
Transaction Documents to which the Trust Depositor is a party or (2)
seeking to adversely affect the federal income tax or other federal, state
or local tax attributes of the Certificate or Notes.
(f) BULK SALES. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" laws by the Trust
Depositor.
(g) SOLVENCY. The Trust Depositor, at the time of and after
giving effect to each conveyance of Trust Assets under the Transfer and
Servicing Agreement, is Solvent on and as of the date thereof.
(h) TAXES. The Trust Depositor has filed or caused to be filed
all tax returns which, to its knowledge, are required to be filed and has
put all taxes shown to be due and payable on such returns or on any
assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any amount of tax due, the validity of
which is currently being contested in good faith by appropriate proceedings
and with respect to which reserves in accordance with generally accepted
accounting principles have been provided on the books of the Trust
Depositor); no tax lien has been filed and, to the Trust Depositor's
knowledge, no claim is being asserted, with respect to any such tax, fee or
other charge.
15
<PAGE> 20
(i) PLACE OF BUSINESS; NO CHANGES. The Trust Depositor's sole
place of business (within the meaning of Article 9 of the UCC) is as set
forth in Section 8.03 below. The Trust Depositor has not changed its name,
whether by amendment of its Certificate of Incorporation, by reorganization
or otherwise, and has not changed the location of its place of business,
within the four months preceding the Closing Date.
(j) NOT AN INVESTMENT COMPANY. The Trust Depositor is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (or the Trust Depositor is exempt from all provisions of
such Act).
(k) SALE TREATMENT. The Trust Depositor has treated the transfer
of Contract Assets to the Trust Depositor for all purposes (including
financial accounting purposes) as a sale and purchase on all of its
relevant books, records, financial statements and other applicable
documents, except to the extent applicable tax laws require otherwise.
Such representations speak as of the execution and delivery of this Agreement
and as of the Closing Date in the case of the Initial Contracts, and as of the
applicable Subsequent Transfer Date in the case of the Substitute Contracts, but
shall survive the sale, transfer and assignment of the Contracts to the Trust.
ARTICLE FOUR
PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS
SECTION 4.01. CUSTODY OF CONTRACTS. The contents of each Contract File
shall be held in the custody of the Custodian under the Custodian Agreement for
the benefit of, and as agent for, the Indenture Trustee.
SECTION 4.02. FILING. On or prior to the Closing Date, the Originator
shall cause the UCC financing statement(s) referred to in Section 2.02(viii)
hereof to be filed.
SECTION 4.03. NAME CHANGE OR RELOCATION. (a) During the term of this
Agreement, the Originator shall not change its name, identity or structure or
relocate its chief executive office without first giving at least 30 days' prior
written notice to the Trust.
(b) If any change in the Originator's name, identity or structure or
other action would make any financing or continuation statement or notice of
ownership
16
<PAGE> 21
interest or lien relating to any Contract Asset seriously misleading within the
meaning of applicable provisions of the UCC or any title statute, the
Originator, no later than five days after the effective date of such change,
shall file such amendments as may be required to preserve and protect the Trust
Depositor's and the Trust's interests in the Trust Assets and the proceeds
thereof. In addition, the Originator shall not change the place of its chief
executive office (within the meaning of Article 9 of the UCC) unless it has
first taken such action as is advisable or necessary to preserve and protect the
Trust Depositor's and the Trust's interest in the Trust Assets.
SECTION 4.04. CHIEF EXECUTIVE OFFICE. During the term of this Agreement,
and subject to the other terms and provisions herein relating to changes in
location, the Originator will maintain its chief executive office in one of the
States of the United States.
SECTION 4.05. COSTS AND EXPENSES. The Originator hereby confirms that the
Servicer will pay all reasonable costs and disbursements in connection with the
perfection and the maintenance of perfection, as against all third parties, of
the Trustees' and Trust's right, title and interest in and to the Contract
Assets (including, without limitation, the security interest in the Equipment
related thereto and the security interests provided for in the Indenture).
SECTION 4.06. SALE TREATMENT. The Originator shall treat the transfer of
Trust Assets made hereunder for all purposes (including financial accounting
purposes) as a sale and purchase on all of its relevant books, records,
financial statements and other applicable documents. Notwithstanding the
preceding sentence, for federal income tax purposes the transfer of Trust Assets
by the Originator hereunder shall not be treated as a sale and purchase for
federal income tax purposes so long as the Trust is disregarded as a separate
entity pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii).
SECTION 4.07. SEPARATENESS FROM TRUST DEPOSITOR. The Originator agrees to
take or refrain from taking or engaging in with respect to the Trust Depositor,
as applicable, each of the actions or activities specified in the "substantive
consolidation" opinion of Sullivan & Cromwell (including any certificates of the
Originator attached thereto) delivered on the Closing Date, upon which the
conclusions therein are based.
ARTICLE FIVE
COVENANTS OF THE ORIGINATOR
SECTION 5.01. CORPORATE EXISTENCE. During the term of this Agreement, the
Originator will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and
17
<PAGE> 22
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Transaction Documents and each other
instrument or agreement necessary or appropriate to the proper administration of
this Agreement and the transactions contemplated hereby. In addition, all
transactions and dealings between the Originator and its Affiliates will be
conducted on an arm's-length basis.
SECTION 5.02. CONTRACTS NOT TO BE EVIDENCED BY PROMISSORY NOTES. The
Originator will take no action to cause any Contract not originally evidenced by
an instrument as described in Section 2.05 hereof, to be evidenced by an
instrument (as defined in the UCC), except in connection with the enforcement or
collection of such Contract.
SECTION 5.03. SECURITY INTERESTS. The Originator will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on any Contract in the Contracts Pool or related
Equipment, whether now existing or hereafter transferred to the Trust Depositor,
or any interest therein. The Originator will immediately notify the Trust
Depositor of the existence of any Lien on any Contract in the Contracts Pool or
related Equipment; and the Originator shall defend the right, title and interest
of the Trust Depositor in, to and under the Contracts in the Contracts Pool and
the related Equipment, against all claims of third parties; provided, however,
that nothing in this Section 5.03 shall prevent or be deemed to prohibit the
Originator from suffering to exist Permitted Liens upon any of the Contracts in
the Contracts Pool or any related Equipment.
SECTION 5.04. COMPLIANCE WITH LAW. The Originator hereby agrees to comply
in all material respects with all Requirements of Law applicable to the
Originator.
SECTION 5.05. LIABILITY OF ORIGINATOR; INDEMNITIES. The Originator shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Originator under this Agreement.
The Originator shall indemnify, defend and hold harmless the Trust
Depositor from and against any taxes that may at any time be asserted against
any such Person with respect to the transactions contemplated herein and in the
other Transaction Documents, including any sales, gross receipts, general
corporation, tangible personal property, New Jersey personal property
replacement privilege or license taxes (but, in the case of the Trust Depositor,
not including any taxes asserted with respect to, and as of the date of, the
sale of the Contracts to the Trust or the issuance and original sale of the
Securities, or asserted with respect to ownership of the Contracts, or federal
or other income taxes arising out of distributions on the Certificate or the
Notes) and costs and expenses in defending against the same.
18
<PAGE> 23
The Originator shall indemnify, defend and hold harmless the Trust
Depositor from and against any loss, liability or expense incurred by reason of
the Originator's willful misfeasance, bad faith or gross negligence (other than
errors in judgment) in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this Agreement.
Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Originator shall have made any indemnity payments pursuant to this Section and
the Person to or on behalf of whom such payments are made thereafter shall
collect any of such amounts from others, such Person shall promptly repay such
amounts to the Originator, without interest.
SECTION 5.06. LIMITATION ON LIABILITY OF ORIGINATOR AND OTHERS. The
Originator and any director or officer or employee or agent of the Originator
may rely in good faith on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Originator and any director or officer or employee or agent of the
Originator shall be reimbursed by the Trust Depositor for any liability or
expense incurred by reason of the Trust Depositor's willful misfeasance, bad
faith or negligence (except errors in judgment) in the performance of their
respective duties hereunder, or by reason of reckless disregard of their
respective obligations and duties hereunder. The Originator shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability.
SECTION 5.07. CHIEF EXECUTIVE OFFICE. During the term of this Agreement,
the Originator will maintain its chief executive office in one of the States of
the United States.
ARTICLE SIX
REMEDIES UPON MISREPRESENTATION; REPURCHASE OPTION
SECTION 6.01. REPURCHASES OF, OR SUBSTITUTION FOR, CONTRACTS FOR BREACH OF
REPRESENTATIONS AND WARRANTIES. Upon a discovery by the Servicer, the Trust
Depositor or the Trustees of a breach of a representation or warranty of the
Originator as set forth in Section 3.01, Section 3.02, Section 3.03, Section
3.04, and Section 3.05 or as made or deemed made in any Addition Notice or any
Subsequent Purchase Agreement relating to Substitute Contracts that materially
adversely affects the Trust's interest in such Contract (without regard to the
benefits of the Reserve Fund) (an "Ineligible Contract"), or of an inaccuracy
with respect to the representations as to
19
<PAGE> 24
concentrations of the Initial Contracts made under Section 3.05, the party
discovering the breach shall give prompt written notice to the other parties
(and the Servicer shall, pursuant to Section 11.01 of the Transfer and Servicing
Agreement, with respect to an inaccuracy concerning concentrations, select one
or more Contracts, without employing adverse selection, to be the related Excess
Contract for purposes of this Section), provided, that the Trustees shall have
no duty or obligation to inquire or to investigate the breach by the Originator
of any of such representations or warranties. The Originator shall repurchase
each such Ineligible Contract or Excess Contract, at a repurchase price equal to
the Transfer Deposit Amount, not later than the next succeeding Determination
Date following the date the Originator becomes aware of, or receives written
notice from any Trustee, the Servicer or the Trust Depositor of, any such breach
or inaccuracy and which breach or inaccuracy has not otherwise been cured;
provided, however, that if the Originator is able to effect a substitution for
any such Ineligible Contract or Excess Contract in compliance with Section 2.04,
the Originator may, in lieu of repurchasing such Contract, effect a substitution
for such affected Contract with a Substitute Contract not later than the date a
repurchase of such affected Contract would be required hereunder, and, provided
further that, with respect to a breach of representation or warranty relating to
the Contracts in the aggregate and not to any particular Contract the Originator
may select Contracts (without adverse selection) to repurchase (or substitute
for) such that had such Contracts not been included as part of the Trust Assets
(and, in the case of a substitution, had such Substitute Contract been included
as part of the Trust Assets instead of the selected Contract) there would have
been no breach of such representation or warranty. Notwithstanding any other
provision of this Agreement, the obligation of the Originator described in this
Section 6.01 shall not (a) terminate or be deemed released by any party hereto
upon a Servicer Transfer pursuant to Article VIII of the Transfer and Servicing
Agreement or (b) include any obligation to make payment on account of a breach
of a Contract by an Obligor subsequent to the date on which such Contract was
transferred to the Trust. The repurchase obligation described in this Section
6.01 is in no way to be satisfied with monies in the Reserve Fund.
SECTION 6.02. REASSIGNMENT OF REPURCHASED OR SUBSTITUTED CONTRACTS. Upon
receipt by the Indenture Trustee for deposit in the Collection Account of the
amounts described in Section 6.01 or Section 6.03 (or upon the Subsequent
Transfer Date related to a Substitute Contract described in Section 6.01), and
upon receipt of a certificate of a Servicing Officer in the form attached as
Exhibit F to the Transfer and Servicing Agreement, the Indenture Trustee is
required under the Transfer and Servicing Agreement to assign to the Trust
Depositor and the Trust Depositor shall assign to the Originator all of the
Trust's (or Trust Depositor's, as applicable) right, title and interest in the
repurchased or substituted Contract and related Trust Assets without recourse,
representation or warranty. Such reassigned Contract shall no longer thereafter
be included in any calculations of Principal Balances required to be made
hereunder or otherwise be deemed a part of the Trust.
20
<PAGE> 25
ARTICLE SEVEN
ORIGINATOR INDEMNITIES
SECTION 7.01. ORIGINATOR'S INDEMNIFICATION. The Originator will defend
and indemnify the Trust Depositor, the Trust, the Trustees, any agents of the
Trustees and the Certificateholder and Noteholders (any of which, an
"Indemnified Party") against any and all costs, expenses, losses, damages,
claims and liabilities, joint or several, including reasonable fees and expenses
of counsel and expenses of litigation (collectively, "Costs") arising out of or
resulting from (i) this Agreement or the use, ownership or operation of any
Equipment by the Originator or the Servicer or any Affiliate of either, (ii) any
representation or warranty or covenant made by the Originator in this Agreement
being untrue or incorrect (subject to the limitations described in the preamble
to Article III of this Agreement), and (iii) any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus or in any
amendment thereto or the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement was made in conformity with information furnished to the Trust
Depositor by the Originator specifically for use therein; provided, however,
that the Originator shall not be required to so indemnify any such Indemnified
Party for such Costs to the extent that such Cost shall be due to or arise from
the willful misfeasance, bad faith or negligence of such Indemnified Party, or
the failure of such Indemnified Party to comply with any express undertaking,
agreement or covenant made by such Indemnified Party in a Transaction Document
to which it is a party or the breach subsequent to the Closing Date by an
Obligor under a Contract. Notwithstanding any other provision of this Agreement,
the obligation of the Originator under this Section 7.01 shall not terminate
upon a Servicer Transfer pursuant to Article VIII of the Transfer and Servicing
Agreement and shall survive any termination of that agreement or this Agreement.
SECTION 7.02. LIABILITIES TO OBLIGORS. No obligation or liability to any
Obligor under any of the Contracts is intended to be assumed by the Trustees,
the Trust, the Noteholders or the Certificateholder under or as a result of this
Agreement and the transactions contemplated hereby.
SECTION 7.03. TAX INDEMNIFICATION.
(a) The Originator agrees to pay, and to indemnify, defend and
hold harmless the Trust Depositor, the Trust, the Trustees, the Noteholders
or the Certificateholder from, any taxes which may at any time be asserted
with respect to, and as of the date of, the transfer of the Contracts to
the Trust Depositor and the transfer by the Trust Depositor of the
Contracts to the Trust and the further
21
<PAGE> 26
pledge by the Trust to the Indenture Trustee, including, without
limitation, any sales, gross receipts, general corporation, personal
property, privilege or license taxes (but not including any federal, state
or other taxes arising out of the creation of the Trust and the issuance of
the Notes and Certificates) and costs, expenses and reasonable counsel fees
in defending against the same, whether arising by reason of the acts to be
performed by the Originator or the Servicer under this Agreement or imposed
against the Trust, a Noteholder, a Certificateholder or otherwise.
Notwithstanding any other provision of this Agreement, the obligation of
the Originator under this Section 7.03 shall not terminate upon a Servicer
Transfer pursuant to Article VIII of the Transfer and Servicing Agreement
and shall survive any termination of this Agreement.
(b) The Originator agrees to pay and to indemnify, defend and
hold harmless the Trust and the Trustees, on an after-tax basis (as
hereinafter defined), from any state or local personal property taxes,
gross rent taxes, leasehold taxes or similar taxes which may at any time be
asserted with respect to the ownership of the Contracts (including security
interests therein) and the receipt of rentals therefrom by the Trust, and
costs, expenses and reasonable counsel fees in defending against the same,
excluding, however, taxes based upon or measured by gross or net income or
receipts (other than taxes imposed specifically with respect to rentals).
As used in this Section, the term "after-tax basis" shall mean, with
respect to any payment to be received by an indemnified person, that the
amount to be paid by the Originator shall be equal to the sum of (i) the
amount to be received without regard to this sentence, plus (ii) any
additional amount that may be required so that after reduction by all taxes
imposed under any federal, state and local law, and taking into account any
current credits or deductions arising therefrom, resulting either from the
receipt of the payments described in both clauses (i) and (ii) hereof, such
sum shall be equal to the amount described in clause (i) above.
SECTION 7.04. ADJUSTMENTS. The Originator agrees that, with respect to
each Contract (i) which provides for a Prepayment Amount less than the amount
calculated in accordance with the definition thereof and (ii) as to which the
related Vendor has not agreed to indemnify the Trust Depositor or any assignee
of the Trust Depositor in an amount at least equal to the excess of the
"Prepayment Amount" as calculated in accordance with the definition thereof over
the amount otherwise payable upon prepayment of such Contract, the Originator
shall indemnify the Trust Depositor or the Trust as assignee thereof, in an
amount equal to the amount specified in the foregoing clause (ii).
The Originator hereby further agrees that if any real property collateral
securing any Contract described in Section 3.02(e) hereof becomes the subject of
any claims, proceedings, liens or encumbrances with respect to any material
violation or
22
<PAGE> 27
claimed material violation of any federal or state environmental laws or
regulations, such Contract shall for all purposes hereunder be, at and following
the time of discovery by the Originator, the Trust Depositor, the Servicer or
any Trustee of such fact, deemed an Ineligible Contract subject to the same
remedial and recourse provisions hereunder as other Contracts determined to be
Ineligible Contracts hereunder.
SECTION 7.05. OPERATION OF INDEMNITIES. Indemnification under this
Article VII shall include, without limitation, reasonable fees and expenses of
counsel and expenses of litigation. If the Originator has made any indemnity
payments to the Trust Depositor or the Trustees pursuant to this Article VII and
the Trust Depositor or the Trustees thereafter collects any of such amounts from
others, the Trust Depositor or the Trustees will repay such amounts collected to
the Originator, except that any payments received by the Trust Depositor or the
Trustees from an insurance provider as a result of the events under which the
Originator's indemnity payments arose shall be repaid prior to any repayment of
the Originator's indemnity payment.
ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.01. AMENDMENT.
(a) This Agreement may be amended by the Originator and the Trust
Depositor, without the consent of any Securityholders, to cure any ambiguity, to
correct or supplement any provisions in this Agreement which are inconsistent
with the provisions herein, or to add any other provisions with respect to
matters or questions arising under this Agreement that shall not be inconsistent
with the provisions of this Agreement, provided, however, that any such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Securityholder.
(b) This Agreement may also be amended from time to time by the
Originator and the Trust Depositor, with the consent of the Servicer, the
Indenture Trustee and the Owner Trustee on behalf of the Trust, and the consent
of the Required Holders, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of the Notes or the
Certificateholder; provided, however, that no such amendment shall (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of or
change the method of calculating Collections of payments on the Contracts
(including by way of amendment of related definitions), or (ii) change in any
manner (including through amendment of related definitions), the Holders which
are
23
<PAGE> 28
required to consent to any such amendment, without the consent of the Holders of
all Notes and Certificates of the relevant affected Class then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Originator shall cause the Indenture Trustee to furnish written notification of
the substance of such amendment or consent, together with a copy thereof, to
each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Originator shall cause the Owner Trustee and the Indenture Trustee, as the case
may be, to furnish written notification of the substance of such amendment or
consent to each Certificateholder and Noteholder, respectively. It shall not be
necessary for the consent of Noteholders and Certificateholder pursuant to
Section 8.01(b) to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization by Noteholders and Certificateholder of the execution thereof
shall be subject to such reasonable requirements as the Owner Trustee or the
Indenture Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Owner Trustee and the Indenture Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. Such Trustee may, but shall not be
obligated to, consent to any such amendment which affects such Trustee's own
rights, duties or immunities under this Agreement or otherwise.
SECTION 8.02. GOVERNING LAW. (a) This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights,
and remedies of the parties under the Agreement shall be determined in
accordance with such laws.
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. Each party hereto (i) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 8.02(b).
24
<PAGE> 29
SECTION 8.03. NOTICES. All notices, demands, certificates, requests and
communications hereunder ("notices") shall be in writing and shall be effective
(a) upon receipt when sent through the U.S. mails, registered or certified mail,
return receipt requested, postage prepaid, with such receipt to be effective the
date of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date transmitted by
legible telecopier transmission with a confirmation of receipt, in all cases
addressed to the recipient as follows:
(i) If to the Originator:
ORIX Credit Alliance, Inc.
300 Lighting Way
Secaucus, New Jersey 07096-1525
Attention: Chief Financial Officer - Asset Securitizations
Fax No.: (201) 348-2914
(ii) If to the Trust Depositor:
ORIX Credit Alliance Receivables III
300 Lighting Way
Secaucus, New Jersey 07096-1525
Attention: President
Fax No.: (201) 348-2914
(iii) If to the Indenture Trustee:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606
Attention: Indenture Trust Administration
Fax No.: (312) 293-4139
(iv) If to the Owner Trustee:
The Bank of New York (Delaware)
502 White Clay Center
P.O. Box 6973
Newark, Delaware 19714-6973
25
<PAGE> 30
Attention: Corporate Trust Administration
Fax No.: (302) 283-8279
(v) If to Moody's:
Moody's Investors Service, Inc.
99 Church Street
4th Floor
New York, New York 10007
Attention: ABS Monitoring Department
Fax No.: (212) 553-0344
(vi) If to S&P:
Standard & Poor's Ratings Service
55 Water Street
41st Floor
New York, New York 10014
Attention: Surveillance: Asset Backed Services
Fax No.: (212) 438-2662
(vii) If to Fitch:
Fitch IBCA, Inc.
One State Street Plaza
32nd Floor
New York, New York 10004
Attention: Asset Backed Securities Group
Fax No.: (212) 514-9879
26
<PAGE> 31
(viii) If to the Underwriter:
First Union Securities, Inc.
One First Union Center, TW-9
301 South College Street
Charlotte, North Carolina 28288-0610
Attention: Asset Securitization Division
Fax No.: (704) 374-3254
Each party hereto may, by notice given in accordance herewith to each of the
other parties hereto, designate any further or different address to which
subsequent notices shall be sent.
SECTION 8.04. SEVERABILITY OF PROVISIONS. If one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or
Certificates or the rights of the Holders thereof.
SECTION 8.05. THIRD PARTY BENEFICIARIES. Except as otherwise specifically
provided herein, the parties hereto hereby manifest their intent that no third
party, other than each Trustee, shall be deemed a third party beneficiary of
this Agreement, and specifically that the Obligors are not third party
beneficiaries of this Agreement.
SECTION 8.06. COUNTERPARTS. This Agreement may be executed by facsimile
signature and in several counterparts, each of which shall be an original and
all of which shall together constitute but one and the same instrument.
SECTION 8.07. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 8.08. NO BANKRUPTCY PETITION; DISCLAIMER. (a) Each of the
Originator and the Trust Depositor covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all amounts owing in
respect of all outstanding Securities, it will not institute against the Trust
Depositor (in the case of the Originator), or the Trust, or join any other
Person in instituting against the Trust Depositor or the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States
27
<PAGE> 32
or any state of the United States. This Section 8.08 will survive the
termination of this Agreement.
(b) The provisions of this Section 8.08 shall be for the third party
benefit of those entitled to rely thereon, including the Holders of the Notes,
and shall survive the termination of this Agreement.
SECTION 8.09. JURISDICTION. Any legal action or proceeding with respect
to this Agreement may be brought in the courts of the United States for the
Southern District of New York, and by execution and delivery of this Agreement,
each party hereto consents, for itself and in respect of its property, to the
non-exclusive jurisdiction of those courts. Each such party irrevocably waives
any objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any action or proceeding in such jurisdiction in respect of this
Agreement or any document related hereto.
SECTION 8.10. PROHIBITED TRANSACTIONS WITH RESPECT TO THE TRUST. The
Originator shall not:
(a) Provide credit to any Noteholder or Certificateholder for the
purpose of enabling such Noteholder or Certificateholder to purchase Notes
or Certificates, respectively;
(b) Purchase any Notes or Certificates in an agency or trustee
capacity; or
(c) Except in its capacity as Servicer as provided in the Transfer and
Servicing Agreement, lend any money to the Trust.
SECTION 8.11. MERGER OR CONSOLIDATION OF ORIGINATOR. (a) The Originator
will keep in full force and effect its existence, rights and franchise as a New
York corporation, and the Originator will obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and of any of the Contracts and to perform its
duties under this Agreement.
(b) Any person into which the Originator may be merged or consolidated,
or any corporation resulting from such merger or consolidation to which the
Originator is a party, or any person succeeding by acquisition or transfer to
substantially all of the assets and to the business of the Originator shall be
the successor to the Originator hereunder, without execution or filing of any
paper or any further act on the part of any of the parties hereto,
notwithstanding anything herein to the contrary.
28
<PAGE> 33
(c) Upon the merger or consolidation of the Originator or transfer of
substantially all of its assets and its business as described in this Section
8.11, the Originator shall provide the Rating Agencies notice of such merger or
consolidation within thirty (30) days after completion of the same.
SECTION 8.12. ASSIGNMENT OR DELEGATION BY THE ORIGINATOR. Except as
specifically authorized hereunder, the Originator may not convey and assign or
delegate any of its rights or obligations hereunder absent the prior written
consent of the Trust Depositor and the Trustees, and any attempt to do so
without such consent shall be void.
29
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
ORIX CREDIT ALLIANCE, INC., as Originator
By:
-------------------------------------------
Printed Name: Joseph J. McDevitt, Jr.
------------------------------
Title: Executive Vice President
-------------------------------------
ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III, as Trust Depositor
By:
-------------------------------------------
Printed Name: Joseph J. McDevitt, Jr.
------------------------------
Title: President
-------------------------------------
30
<PAGE> 35
EXHIBIT A
FORM OF ASSIGNMENT
In accordance with the OCAI Transfer Agreement (the "OCAI Transfer
Agreement") dated as of , 2000 made by and between the undersigned, ORIX
Credit Alliance, Inc., as Originator, and the ORIX Credit Alliance Receivables
Corporation III (the "Trust Depositor"), as assignee thereunder, the undersigned
does hereby sell, transfer, convey and assign, set over and otherwise convey to
the Trust, on behalf of the Trust Depositor, (i) all the right, title and
interest of the Originator in and to the Initial Contracts listed on the initial
List of Contracts delivered on the Closing Date (including, without limitation,
all rights to receive Collections with respect thereto on or after the Initial
Cutoff Date, but excluding any rights to receive payments which were collected
pursuant thereto prior to the Initial Cutoff Date), and (ii) all other Contract
Assets relating to the foregoing.
Capitalized terms used herein have the meaning given such terms in the OCAI
Transfer Agreement.
This Assignment is made pursuant to and in reliance upon the representation
and warranties on the part of the undersigned contained in Article III of the
OCAI Transfer Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this day of February, 2000.
ORIX CREDIT ALLIANCE, INC.
By:
--------------------------------------
Printed Name:
-------------------------
Title:
--------------------------------
A-1
<PAGE> 1
EXHIBIT 10.4
CUSTODIAN AGREEMENT
AMONG
ORIX CREDIT ALLIANCE, INC.,
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III,
AS TRUST DEPOSITOR,
AND
HARRIS TRUST AND SAVINGS BANK,
AS INDENTURE TRUSTEE
DATED AS OF FEBRUARY ,2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Appointment as Custodian; Acknowledgment of Receipt............................1
2. Maintenance at Office..........................................................2
3. Duties of Custodian............................................................2
4. Instructions; Authority to Act.................................................3
5. Indemnification by the Custodian...............................................3
6. Advice of Counsel..............................................................4
7. Effective Period, Termination and Amendment and Interpretive
and Additional Provisions......................................................4
8. Governing Law..................................................................4
9. Notices........................................................................4
10. Binding Effect.................................................................5
</TABLE>
<PAGE> 3
CUSTODIAN AGREEMENT
Custodian Agreement, dated as of February ,2000 (the "Custodian
Agreement") among ORIX CREDIT ALLIANCE, INC., a New York corporation ("OCAI"),
ORIX CREDIT ALLIANCE RECEIVABLES CORPORATION III, a Delaware corporation (the
"Trust Depositor") and HARRIS TRUST AND SAVINGS BANK, as Indenture Trustee (the
"Indenture Trustee").
WHEREAS, OCAI and the Trust Depositor have entered into a Transfer
Agreement, dated as of the date hereof (the "OCAI Transfer Agreement") and OCAI,
the Trust Depositor, the Indenture Trustee and ORIX Credit Alliance Receivables
Trust 2000-A (the "Issuer") have entered into a Transfer and Servicing
Agreement, dated as of the date hereof (the "Agreement", the capitalized terms
defined therein being used herein with the same meaning as set forth therein or
in the Indenture); and
WHEREAS, pursuant to the OCAI Transfer Agreement, OCAI shall sell,
transfer and assign to the Trust Depositor without recourse all of OCAI's right,
title and interest in and to the Contracts and related security interests, and
pursuant to the Agreement, the Trust Depositor shall simultaneously sell,
transfer and assign its right, title and interest in and to the Contracts and
related security interests to the Issuer; and
WHEREAS, simultaneously with the purchase of the Contracts by the Issuer,
the Issuer is assigning the Contracts to and granting a security interest in and
a lien upon the Contracts and related security interests in favor of the
Indenture Trustee under the terms of the Indenture; and
WHEREAS, in connection with such sales and the assignments, the Agreement
provides that the Indenture Trustee shall hold the Contract Files directly or
through a Custodian acting as agent of the Indenture Trustee under the Custodian
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. APPOINTMENT AS CUSTODIAN; ACKNOWLEDGMENT OF RECEIPT. Subject to
the terms and conditions hereof, the Indenture Trustee hereby revocably appoints
OCAI, and OCAI hereby accepts such appointment, to act as agent of the Indenture
Trustee as Custodian (the "Custodian") to maintain custody of the Contract Files
relating to the Contracts. In performing its duties hereunder, the Custodian
agrees to act with reasonable care, using that degree of skill and attention
that the Custodian
<PAGE> 4
exercises with respect to the contract files relating to all comparable
equipment contracts that the Custodian services for itself or others. The
Custodian hereby acknowledges receipt of the Contract File for each Contract
listed in the List of Contracts.
2. MAINTENANCE AT OFFICE. The Custodian agrees to maintain each
Contract File at its offices as shall be specified to the Trust Depositor, the
Issuer and the Indenture Trustee. The Custodian shall make available to the
Trust Depositor, the Issuer and the Indenture Trustee or their respective duly
authorized representatives, attorneys or auditors a list of locations of the
Contract Files and the related accounts, records and computer systems maintained
by the Custodian at such times as the Trust Depositor, the Issuer or the
Indenture Trustee shall instruct.
3. DUTIES OF CUSTODIAN.
(a) SAFEKEEPING. The Custodian shall hold the Contract Files on behalf
of the Indenture Trustee and shall maintain such accurate and complete accounts,
records and computer systems pertaining to each Contract File as will comply
with the terms and conditions of the Agreement. The Custodian shall at all times
maintain the original of each fully executed Contract and store such original
Contract in a fireproof vault. Within 60 days of the Closing Date (or Subsequent
Transfer Date, as the case may be), the Custodian shall deliver an Officer's
Certificate to the Owner Trustee and the Indenture Trustee certifying that as of
a date no earlier than the Closing Date (or Subsequent Transfer Date, as the
case may be) it has conducted an inventory of the Contract Files (which in the
case of Substitute Contracts, need be only of the Contract Files related to such
Substitute Contracts) and that there exists a Contract File for each Contract
and stating all exceptions to such statement, if any. The Custodian shall
conduct, or cause to be conducted, periodic (at least annually) physical
inspections of the Contract Files held by it under this Custodian Agreement, and
of the related accounts, records and computer systems, in such a manner as shall
enable the Trust Depositor and the Indenture Trustee to verify the accuracy of
the Custodian's inventory and record keeping. The Custodian shall promptly
report to the Trust Depositor, the Issuer, and the Indenture Trustee any failure
on its part to hold the Contract Files and maintain its accounts, records and
computer systems as herein provided and promptly take appropriate action to
remedy any such failure.
(b) ACCESS TO RECORDS. Subject only to the Custodian's security
requirements applicable to its own employees having access to similar records
held by the Custodian, the Custodian shall permit the Indenture Trustee or its
duly authorized representatives, attorneys or auditors to inspect the Contract
Files and the related accounts, records and computer systems maintained by the
Custodian pursuant hereto at such times as the Indenture Trustee may reasonably
request. The Custodian shall implement or maintain policies and procedures in
writing and signed by a Servicing
-2-
<PAGE> 5
Officer with respect to persons authorized to have access to the Contract Files
on the Custodian's premises and with respect to the receipting for Contract
Files taken from their storage area by an employee of the Custodian for purposes
of servicing or any other purposes.
(c) RELEASE OF DOCUMENTS. Upon instruction from the Indenture Trustee,
the Custodian shall release any Contract File to the Indenture Trustee, the
Indenture Trustee's agent, or the Indenture Trustee's designee, as the case may
be, at such place or places as the Indenture Trustee may designate, as soon as
practicable and upon the release and delivery of any such document in accordance
with the instructions of the Indenture Trustee, the Custodian shall be released
from any further liability and responsibilities under this Custodian Agreement
with respect to such documents unless and until such time as such document may
be returned to the Custodian.
(d) ADMINISTRATION; REPORTS. In general, the Custodian shall attend to
all non-discretionary details in connection with maintaining custody of the
Contract Files on behalf of the Indenture Trustee. In addition, the Custodian
shall assist the Indenture Trustee generally in the preparation of routine
reports to regulatory bodies, to the extent necessitated by the Custodian's
custody of the Contract Files.
(e) MAINTAINING THE ISSUER'S PERFECTED SECURITY INTEREST. The
Custodian will take all action necessary to maintain the perfection of the
Issuer's interest in the Contracts and the proceeds thereof. For all purposes of
Article Four of the Agreement, the Trustees shall be deemed to have possession
of the Contract Files for purposes of Section 9-305 of the Uniform Commercial
Code of the State in which the Contract Files are located.
4. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian shall be deemed to
have received proper instructions with respect to the Contract Files upon its
receipt of written instructions signed by a Responsible Officer of the Indenture
Trustee. A certified copy of a bylaw or of a resolution of the Board of
Directors of the Indenture Trustee may be received and accepted by the Custodian
as conclusive evidence of the authority of any such officer to act and may be
considered as in full force and effect until receipt of written notice to the
contrary by the Indenture Trustee. Such instructions may be general or specific
in terms.
5. INDEMNIFICATION BY THE CUSTODIAN. The Custodian agrees to
indemnify the Trust Depositor, the Issuer and the Indenture Trustee and its
officers, directors, agents and employees for any and all liabilities,
obligations, losses, damages, payments, costs or expenses of any kind
whatsoever, including, without limitation, fees and expenses of counsel, that
may be imposed on, incurred by or asserted against the Trust Depositor, the
Issuer and the Indenture Trustee as the result of any act or omission
-3-
<PAGE> 6
in any way relating to the maintenance and custody by the Custodian of the
Contract Files; provided, however, that the Custodian shall not be liable to the
Trust Depositor, the Issuer or the Indenture Trustee for any portion of any such
amount resulting from the willful misfeasance, bad faith or negligence of the
Trust Depositor, the Issuer or the Indenture Trustee. This Section 5 shall
survive the termination of the Custodian Agreement and the earlier removal or
resignation of the Indenture Trustee.
6. ADVICE OF COUNSEL. The Custodian, the Trust Depositor and the
Indenture Trustee further agree that the Custodian shall be entitled to rely and
act upon advice of counsel with respect to its performance hereunder and shall
be without liability for any action reasonably taken pursuant to such advice,
provided that such action is not in violation of applicable federal or state
law.
7. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT AND INTERPRETIVE AND
ADDITIONAL PROVISIONS. This Custodian Agreement shall become effective as of the
Cutoff Date and shall continue in full force and effect until terminated
pursuant to this Section. If OCAI shall resign as Servicer in accordance with
the provisions of the Agreement or if all of the rights and obligations of any
Servicer shall have been terminated under Article Eight of the Agreement, the
appointment of OCAI as custodian shall be terminated by the Indenture Trustee or
by the Holders of Notes in the same manner as the Indenture Trustee or such
Holders may terminate the rights and obligations of the Servicer under Article
Eight of the Agreement. The Indenture Trustee may terminate OCAI's appointment
as custodian, with cause, at any time upon written notification to OCAI, and
without cause upon 30 days' prior written notification to OCAI and the Rating
Agencies. As soon as practicable after any termination of such appointment, OCAI
shall deliver the Contract Files to the Indenture Trustee or the Indenture
Trustee's agent at such place or places as the Indenture Trustee may reasonably
designate. If OCAI shall be terminated as custodian hereunder for any reason but
shall continue to serve as Servicer, the Indenture Trustee shall, or shall cause
its agent to, make the Contract Files available to OCAI during normal business
hours upon reasonable notice so as to permit OCAI to perform its obligations as
Servicer hereunder.
8. GOVERNING LAW. This Custodian Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
9. NOTICES. All demands, notices and communications hereunder shall
be in writing, personally delivered or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Custodian, at the following address: ORIX Credit Alliance, Inc., 300
Lighting Way, Secaucus, New Jersey 07096, Attn: Executive Vice
President-Finance, (b) in the case of the Indenture Trustee, at the following
address: Harris Trust and Savings Bank, 311 West Monroe Street, Chicago,
Illinois 60606, Attn: Indenture Trust Administration, Fax
-4-
<PAGE> 7
number: 312-293-4139 and (c) in the case of the Trust Depositor, at the
following address: ORIX Credit Alliance Receivables Corporation III, 300
Lighting Way, Secaucus, New Jersey 07096, Attn: President, or at such other
address as shall be designated by such party in a written notice to the other
party.
10. BINDING EFFECT. This Custodian Agreement shall be binding upon and
shall inure to the benefit of the Trust Depositor, the Indenture Trustee, the
Custodian and their respective successors and assigns.
-5-
<PAGE> 8
IN WITNESS WHEREOF, each of the parties hereto has caused this Custodian
Agreement to be executed in its name and on its behalf by a duly authorized
officer as of the day and year first above written.
ORIX CREDIT ALLIANCE, INC.,
as Custodian
By:
-----------------------------------
Name: Joseph J. McDevitt, Jr.
Title: Executive Vice President
HARRIS TRUST AND SAVINGS BANK, not in
its individual capacity but solely as
Indenture Trustee
By:
----------------------------------
Name: Robert D. Foltz
Title: Vice President
ORIX CREDIT ALLIANCE RECEIVABLES
CORPORATION III, as Trust Depositor
By:
---------------------------------
Name: Joseph J. McDevitt, Jr.
Title: President
-6-
<PAGE> 1
EXHIBIT 10.5
SUBORDINATION AGREEMENT
BETWEEN
ORIX CREDIT ALLIANCE, INC.,
AS SERVICER
AND
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A,
AS ISSUER
DATED AS OF FEBRUARY ,2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Subordination of Security Interests............................................1
2. Governing Law..................................................................2
3. Term of Agreement..............................................................2
4. Notices........................................................................2
5. Binding Effect.................................................................2
6. Limitation of Liability........................................................2
</TABLE>
<PAGE> 3
SUBORDINATION AGREEMENT
Subordination Agreement, dated as of February ,2000, between ORIX
CREDIT ALLIANCE, INC., a New York corporation ("OCAI" or the "Servicer") and
ORIX CREDIT ALLIANCE RECEIVABLES TRUST 2000-A, a Delaware business trust (the
"Issuer").
WHEREAS, OCAI and the Issuer have entered into a Transfer and Servicing
Agreement, dated as of ,2000 (the "Agreement"), among OCAI, the Issuer,
Harris Trust and Savings Bank (the "Indenture Trustee") and ORIX Credit Alliance
Receivables Corporation III (the "Trust Depositor") (the capitalized terms
defined therein being used herein with the same meaning as set forth therein);
and
WHEREAS, pursuant to the Agreement, the Trust Depositor has assigned to
the Issuer certain Contracts secured by Financed Items and other collateral of
the Obligors (together, the "Collateral"); and
WHEREAS, OCAI in the ordinary course of its equipment finance business
may, subsequent to entering into such Contracts, enter into additional financing
agreements with Obligors and pursuant thereto take a security interest in the
additional financed equipment ("Subsequently Financed Items"); and
WHEREAS, the contracts resulting from such additional financing
agreements with Obligors may provide that in addition to the Subsequently
Financed Items, the Obligor grant OCAI a security interest in other equipment
owned by the Obligor, which could include the Collateral as well as the
Subsequently Financed Items; and
WHEREAS, certain of the Contracts assigned to the Issuer by the Trust
Depositor may include Obligors entering into such additional financing
agreements with OCAI which could be secured by Collateral and Subsequently
Financed Items; and
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. SUBORDINATION OF SECURITY INTERESTS. OCAI's security interests in
the Collateral (other than the Subsequently Financed Items) shall be and hereby
are made junior in priority to all security interests of the Issuer in such
Collateral; the Issuer's security interests in the Subsequently Financed Items
shall be and hereby are made junior in priority to the security interests of
OCAI in such Collateral; provided, however, that the security interests of OCAI
and the Issuer in the Collateral other than the Financed Items
<PAGE> 4
or the Subsequently Financed Items shall be pari passu in right of payment and
equivalent in priority in proportion to the amounts owed by the Obligor if and
for so long as the value of the Financed Items securing a Contract shall be
determined, in accordance with OCAI's normal valuation procedures, to exceed at
least 120% of the Principal Balance of the Contract owned by the Issuer.
2. GOVERNING LAW. This Subordination Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
3. TERM OF AGREEMENT. This Agreement shall continue in force until
all amounts due and payable with respect to the Contracts have been paid in
full, upon which event this Agreement shall automatically terminate. The
priorities specified herein are applicable irrespective of the time or order of
attachment or perfection of security interests or the time or order of filing of
financing statements or the giving or failure to give notice of the acquisition
or expected acquisition of purchase money or other security interests. Except as
herein specifically provided, priority shall be determined in accordance with
applicable law.
4. NOTICES. All demands, notices and communications hereunder shall
be in writing, personally delivered or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of OCAI, at the following address: ORIX Credit Alliance, Inc., 300 Lighting
Way, Secaucus, New Jersey 07096, Attn: Executive Vice President-Finance, (b) in
the case of the Issuer, at the following address: c/o Bank of New York
(Delaware), 502 White Clay Center, P.O. Box 6973, Newark, Delaware 19714-6973,
Attn: Corporate Trust Administration, or at such other address as shall be
designated by such party in a written notice to the other party.
5. BINDING EFFECT. This Subordination Agreement shall be binding upon
and shall inure to the benefit of OCAI and the Issuer and their respective
successors and assigns.
6. LIMITATION OF LIABILITY. The Bank of New York (Delaware) acts on
behalf of the Issuer solely as Owner Trustee hereunder and not in its individual
capacity, and all Persons having any claim against the Trust by reason of the
transactions contemplated by this agreement or any other Transaction Document
shall look only to the Trust Estate under the Trust Agreement for payment or
satisfaction thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this agreement, any other Transaction Document or the
Notes, or of any Contract or related documents. The Owner Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Contract, or the perfection and priority of
any security interest created by any Contract in any Equipment or the
maintenance of any
-2-
<PAGE> 5
such perfection and priority, or for or with respect to the sufficiency of the
Trust Estate under the Trust Agreement or its ability to generate the payments
to be distributed to the Certificateholder under the Trust Agreement or the
Noteholders under the Indenture, including, without limitation, the existence,
condition and ownership of any Equipment; the existence and enforceability of
any insurance thereon; the existence and contents of any Contract on any
computer or other record thereof; the validity of the assignment of any Contract
to the Trust or of any intervening assignment; the completeness of any Contract;
the performance or enforcement of any Contract; the compliance by the Issuer,
the Trust Depositor or the Servicer with any covenant, agreement or other
obligation or any warranty or representation made under any Transaction Document
or in any related document or the accuracy of any such warranty or
representation; or any action of the Administrator, the Indenture Trustee or the
Servicer or any subservicer taken in the name of the Owner Trustee or the
Issuer.
-3-
<PAGE> 6
IN WITNESS WHEREOF, each of the parties hereto has caused this
Subordination Agreement to be executed in its name and on its behalf by a duly
authorized officer as of the day and year first above written.
ORIX CREDIT ALLIANCE, INC.,
By:
--------------------------------------
Name: Joseph J. McDevitt, Jr.
Title: Executive Vice President
ORIX CREDIT ALLIANCE RECEIVABLES
TRUST 2000-A
By THE BANK OF NEW YORK (DELAWARE), not in
its individual capacity but solely as Owner Trustee,
By:
--------------------------------------
Name: Cheryl Laser
Title: Assistant Vice President
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To ORIX Credit Alliance Receivables Trust 2000-A:
As independent public accountants, we hereby consent to the use of our
report dated February 1, 2000, on the balance sheet of ORIX Credit Alliance
Receivables Trust 2000-A as of February 1, 2000, included in this registration
statement and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
New York, New York
February 16, 2000
<PAGE> 1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Marian Onischak, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2532 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
Orix Credit Alliance Receivables Corporation III
(Exact name of obligor as specified in its charter)
Delaware 22-3693707
(State of Incorporation) (I.R.S. Employer Identification No.)
300 Lighting Way
Secaucus, New Jersey 07096
(Address of principal executive offices)
Orix Credit Alliance Receivables Trust 2000-A Receivable-Backed Notes
(Title of indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association,
164 West Jackson Boulevard, Chicago, Illinois Federal Deposit
Insurance Corporation, Washington, D.C.;
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 15th day of February,2000.
HARRIS TRUST AND SAVINGS BANK
By:
--------------------------------------
Marian Onischak
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By:
--------------------------------------
Marian Onischak
Assistant Vice President
2
<PAGE> 4
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[HARRIS BANK LETTERHEAD]
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin .................... $ 1,139,804
Interest bearing balances .............................................. $ 223,943
Securities:
a. Held-to-maturity securities ...................................................... $ 0
b. Available-for-sale securities .................................................... $ 5,773,313
Federal funds sold and securities purchased under agreements to resell ............... $ 148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income ............................... $ 9,752,500
LESS: Allowance for loan and lease losses ............................. $ 111,660
-----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b) ................................................... $ 9,640,840
Assets held in trading accounts ...................................................... $ 193,520
Premises and fixed assets (including capitalized leases) ............................. $ 271,847
Other real estate owned .............................................................. $ 339
Investments in unconsolidated subsidiaries and associated companies .................. $ 0
Customer's liability to this bank on acceptances outstanding ......................... $ 44,067
Intangible assets .................................................................... $ 245,968
Other assets ......................................................................... $ 1,328,114
-----------
TOTAL ASSETS ......................................................................... $19,010,405
===========
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices ............................................................. $ 9,579,731
Non-interest bearing ................................................... $ 2,953,755
Interest bearing ....................................................... $ 6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's .................. $ 1,396,781
Non-interest bearing ................................................... $ 21,682
Interest bearing ....................................................... $ 1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase ............. $ 3,951,113
Trading Liabilities .................................................................. 91,252
Other borrowed money:
a. With remaining maturity of one year or less ...................................... $ 1,978,203
b. With remaining maturity of more than one year ..................................... $ 0
Bank's liability on acceptances executed and outstanding ............................. $ 44,067
Subordinated notes and debentures .................................................... $ 225,000
Other liabilities .................................................................... $ 481,642
============
TOTAL LIABILITIES .................................................................... $ 17,747,789
============
</TABLE>
<TABLE>
<CAPTION>
EQUITY CAPITAL
<S> <C> <C>
Common stock ......................................................................... $ 100,000
Surplus .............................................................................. $ 609,913
a. Undivided profits and capital reserves ........................................... $ 657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ........... ($ 105,002)
------------
TOTAL EQUITY CAPITAL ................................................................. $ 1,262,616
============
Total liabilities, limited-life preferred stock, and equity capital .................. $ 19,010,405
============
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
Directors.
4
